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

Good morning, and welcome to CEMEX day 2024. Thank you all for joining us today. I'm going to go through a few housekeeping details before we join the -- before the webcast joins us, let's say it's that. Today's event is being webcast. The exits are at the back of the room. So for your safety, please look around and locate the exit closest to you. We're trying to keep to a pretty tight schedule today, yet still provide time for all of you to engage with management on a more casual basis. So you should have time during the breaks and lunch to speak with whoever you would like from CEMEX. [Operator Instructions] Additionally, some of you in the audience may have privileged and private information regarding CEMEX. And we would like to remind all of you that this is a public forum. In the Q&A and in your informal discussions during breaks and lunch, we ask you to avoid any disclosure of private information. Now we'll move on to our webcast transmission. Good morning, and welcome. My name is Lucy Rodriguez, and I'm the Chief Communication Officer for CEMEX. Whether you are here with us in New York today live or online, I want to thank you on behalf of CEMEX for attending this event. In some of the discussions I was having this morning as we mingled before the event, some of the more skeptical attendees were questioning the timing of last week's investment-grade upgrade and today's analyst event. I want to assure you that it was pure coincidence. While we are really good at executing Analyst Days, we aren't that good. And if we were that good, the M&Ms on the table in front of you would have a BBB- on them. So the last time we met at CEMEX Day, I mentioned this concept of velocity of global events that seem to be shaking the world and that, at least, in my opinion, seem to have increased exponentially. 1.5 years later with another war, even more elevated geopolitical tensions, climate events, the explosion of artificial intelligence and numerous crucial national elections that await us this year, I am even more convinced of this. And to me, from a management perspective, it means one thing, prepare for velocity. Over the last 4 years, through unrelenting volatility, that is exactly what we have done at CEMEX. As you are about to hear, we have had outstanding performance, not just over the last year, but over the last 4 years, and we've delivered on all of our strategic priorities. Paraphrasing a very wise investor who knows us well, who knew that the pandemic, inflation, rising geopolitical tensions and climate action were the secret sauce. We have managed well through all the extremes the world has thrown at us. We have a strategy in place, but we've pivoted best and adjusted when necessary. And we look forward while velocity will surely be a constant, we also see macro trends that are hugely supportive of our industry around the world, and we are well prepared to meet those opportunities and adjust when necessary. My colleagues on the Executive Committee are typically more restrained and definitely less cheeky than I am. But in preparing for today's Analyst Day, one thought kept coming back to me. In the words of the iconic movie Ghostbusters, there only seems one answer in our markets to the pressing question of, who you're going to call. I will leave you all to answer that question today. And now for some housekeeping details. Slides are now available on our website. We have Q&A sessions scheduled for each of our presenters. In the case of our CEO, Fernando Gonzalez, 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. [Operator Instructions] Please keep in mind that we have a limited amount of time today and may not be able to cover every question submitted. If for any reason your questions not addressed, please feel free to contact CEMEX Investor Relations, and we will be happy to help. As usual, there are no questions that are off-limits, except for those that present disclosure or confidentiality issues. Finally, please note that the presentations today may include forward-looking statements and assumptions based on currently available information. As market conditions change, our views and forward-looking statements will adjust to incorporate such information. Unless the context indicates otherwise, all references to pricing initiatives, pricing increases or decreases refer to prices for our products. We invite you to read the disclaimer section included at the beginning of each presentation. And now without further delay, it is my pleasure to introduce our first speaker, our CEO, Fernando Gonzalez.

Thank you, Lucy, and thank you all for joining us this 2024 CEMEX Day. Thanks for the people connecting through the webcast. I was commenting with a few of you this morning that I don't remember the CEMEX Day in which we were going to share so many positive events. And as Lucy said, who knew that the number of challenges that we have had in the previous year, it happened to be part of the recipe or part of the solution. Okay. Let's start. Perhaps this is something that you all know. What's the outlook of the construction industry as a whole. I think it's a very positive one in general terms. And of course, I'm not necessarily referring to 2024. I'm referring to a sort of a midterm 3 to 5 years' time horizon. But there are many reasons that make us believe that the construction industry is going to have a sort of a golden age in the years to come. Demographics, you know the story. We are about 8 billion people, getting to close to 10 billion by 2050. That's more than 20% growth, people that is moving more and more into large cities, meaning urbanization, the process itself that we have lived for decades, continues and that urbanization plus population growth, it's commanding a city like New York to be built every month from now to 2050. So in general terms, we see that as a very positive indication of the construction industry moving forward. Climate transition. I think, at least, in our case, we've seen little by little. But clearly, we see a much convincing story that our industry, which is an essential industry for society as many other industries, needs to make an effective transition towards a net zero CO2 economy or a green and circular economy. And now we know this transition is feasible. It's already happening. We're going to be sharing the most recent results we had after defining in 2020, our vision and action strategy. So the transition that we need to do is feasible, and it's already happening. And the other relevant element also that, again, through time is getting clearer and clearer is that this transition or the transition needed to get to net zero creates value. It doesn't destroy value. It creates value, and we can comment and we can share information on very specific examples we have in which we've been creating value by reducing our CO2 generation per tonne of [ cement ] referring to Scope 1 in particular. So we can elaborate also in that process. And there are other trends and issues that also support growth in construction, particularly in the case of the U.S. and Mexico, first, with the pandemic and afterwards with the geopolitical considerations going on. Mexico, because of the issues between the U.S. and China, it happens to be the largest exporter to the U.S. last year and that is integrating more and more Mexico's economy with U.S. economy. So it's onshoring in the U.S. -- nearshoring on that new industrial activity in the U.S. Nearshoring in Mexico is making particularly in the north part of the country really booming. And that process, we believe is going to continue basically because of -- again, because of pandemic and other geopolitical considerations, I think there is a, let's say, a reconsideration of how supply chains were designed globally with the purpose of making an economic optimization, which nowadays it's not necessarily the first criteria. We've seen how the first criteria is to have a more reliable supply chain. It might cost a little bit more to produce chips in the U.S. yes, but it's happening. And that is the way to go from now and in the near future. And digitalization, it's another factor. Digitalization continues moving forward. We call it digitalization. Years ago, we called it IT. Now we are calling it AI or generative AI, but the thing is that all technologies related to computers, telecommunications, automation continues its progress and that requires lots of infrastructure resources, particularly AI, which requires much more electricity in capacity in terms of what was needed before. So a very positive outlook for the construction industry as a whole. Now let me switch specifically to our company and our strategy. You might remember that in year 2020, precisely the year of the pandemic, it was early 2020, we decided to make some adjustments to our strategy. We didn't call it a change in strategy really because I don't think it's really changing our strategy. But yes, we did some adjustments to our strategy. And since then, what we've been saying is that -- and also taking into account that our financial situation started to improve in years before 2020, and we, of course, were expecting for things to continue improving. So what we said, okay, we're going to start investing in growth. And that growth is going to happen primarily or first priority, we mentioned that since then, in the U.S. because we believe that the U.S. is a market with high potential for us to grow the need in different businesses, we will comment that. And it's also a market in which these type of assets, and I suppose, orders are more valuable than other markets. So we started since then, prioritizing our investments of growth in the U.S., and you will see how much progress we have done in that regard in 2 years. Now if you -- I clearly remember when communicating that strategy, how is it that we were going to execute. And we said, considering our balance sheet position in 2020. We're going to start doing it little by little bolt-on type of acquisitions and bolt-on type of growth CapEx and that's what we've been doing in the last 3 years, again, mainly in the U.S., not only, but mainly, about 55% of our growth investments in the last 3 years have been done in the U.S. Others are more related to CO2 strategies in the case of Europe, which is the following topic. I think it was also in 2020 when we communicated 2020, '21, when we communicated our fair sharing action strategy. CEMEX traditionally -- since ages, CEMEX has been focused on climate change, biodiversity and other issues. I just visited Del Carmen, which is already this year or next year is going to be 25 years that was founded, a beautiful place. But in 2020, '21, what we thought it was better for us to capture the momentum of climate change being something that was going on, but it was, in our opinion, transformed into a systematic approach. It was a systemic new approach to climate change, and there were many stakeholders, not a few, many stakeholders already engaged in the effectiveness of policies and actions in order to reduce CO2. Examples, we have a few banks started getting engaged into the idea of financing or providing certain conditions regarding [ decarbonation ] of certain industries, investors also started putting certain criteria of their investments according to CO2 generation per type of activity, customers, customers demanding lower carbon products in the market. So since then, we thought -- we saw and we thought this is a new approach to climate change. These many stakeholders now working and demanding industries like ours. We are responsible for 6% to 8% of generation of CO2 in general terms. And we thought that this was a different type of process that needed to be followed. And since then, we put this Future in Action in place and it's been very, very helpful. I will be commenting some specific data about it. The other element we introduced in our strategy in 2020 was what we call urbanization solutions. Urbanization solutions is the name we use for certain activities that might be related -- it's a combination of a few sectors of the lightweight sector plus some activities that we believe -- that because of this transformation process happening, we believe are going to be more and more related to the heavy construction material sector, simple examples construction, demolition and excavation material. It seems like in a few countries, this material is starting to be considered to make it -- to circulate to recover. Historically, as many other type of waste, we struck materials, you produce and you start with demolition and you throw them away, which that is not necessarily the type of system that will continue happening. So we see in Europe and U.S. and a few other countries, how this demolition material is recovered. You can use it as a pace for -- as an extender for cement. You can use it as alternative aggregates. Basically, there is a term that I started hearing and I like it, which is it's the new urban mining. So now we are going to have new queries, which are not necessarily natural materials, but our materials coming from this demolition or some excavation, and they clearly can be used in the process of producing cement or materials that can be used in ready-mix as substitution, particularly in the case of aggregates. So we have businesses like mortars, concrete products, construction systems, some logistics services, admixtures and this type of new activities, new adjacent businesses to cement and ready mix coming from economies that are more and more aligned to the idea of a circular economy. So that was the guide we started using, starting 2020, again, little by little. And these are the numbers, you've seen them. So they've been reported some time ago. But we are very pleased with these numbers. We're using the comparison of the year before the pandemic. But 2020 was already sort of distorted, let's put it that way. So we think [ '19 ] is a good base. So our EBITDA has been growing at a CAGR of 9%. Our free cash flow, it's 1.7x higher, almost 2x, very convenient. And our return on capital also improved by 4 percentage points. As I mentioned, since then, we are starting to prioritize investments in the U.S. So the U.S. has been moving from about a quarter of total EBITDA generation to close to 30%. And of course, in our plans, that process will continue in the years to come. Capital allocation, as Lucy mentioned, as you can imagine, we are all very happy because we already got from Standard & Poor's, our investment grade, BBB-. And what does that mean? Well, 2 type of comments. We're referring to the past. It means that, finally, our strategy and our efforts and our discipline in the direction of getting investment grade, they pay off. And here we are. It took some time, but here we are. But the other thing is what is -- that is going to be happening in CEMEX because of this new phase after getting investment grade. Well, this is what you can expect, a balanced approach. We want to continue investing with the same criteria. It's a bolt-on type of investment. So if any of you in the room or in the webcast is believing that we are going to be doing something weird just because we got a good investment grade, sorry, but we're going to disappoint you. We are going to continue with the discipline of investing in projects, investing meaning CapEx or acquisitions, small ones, the bolt-on type of investments. So that's one thing. And the U.S. will continue being the main recipient of these investments. If we -- if in the last 3 years, we have invested about 55% of our resources -- available resources to invest in the U.S., what you can expect in the years to come is that an IP perhaps 2/3, meaning it's more than half. On the other part, I refer to how pleased we are with investment grade, making comments about the past, but what about the future? We are pleased with the investment grade. Of course, we want to maintain it, but we don't want only to maintain it. We want to improve it. So that's the next phase, BBB- to BBB. So in the midterm, we want to continue reducing our leverage ratio by at least 0.5 turn, again, aligned with the idea of investment -- investing through bolt-on type of investments. And the flexibility that this investment grade is providing us is to start systematically providing or returning cash to investors. And as you know, we are proposing a dividend, which is going to be voted in our AGM next Friday. But we are starting with a dividend that is going to be systematic and progressive, meaning -- by the way, we started the dividend in '19 also, but we interrupted because of the pandemic. We thought that the pandemic was going to have a terrible impact, but we are resuming it now, and we think it's going to be systematic and progressive. And at the same time and in a sort of an opportunistic way, we will be also making buybacks. As you might have noticed, every year, we request to our shareholders, the authorization to proceed with a buyback of $500 million. It doesn't mean -- that's what is required for us to have the flexibility. It doesn't mean that we are going to do it every year, but we want to permanently have that flexibility so we can opportunistically buy shares if convenient on top of the dividend program that we are going to be announcing every year. So that's what you can expect on capital allocation. Now drilling down on main markets. U.S. fastest growth in the regions we are participating. As I mentioned before, 55% of the growth investments, we have done other type of investments, like margin improvement on the lines. But investments did record portfolio growth, more than 50% have been done in the U.S. And that has resulted in what we consider high growth. It's 13% of EBITDA growth in these few years. And because of the strategy that I already described, will continue supporting growth in the U.S. We believe that in the years to come, midterm, this growth is going to be in the low teens, similar to what we had in this past years. We are very pleased with the results of the development of our urbanization solutions in the U.S. And as you can see in the data, this segment, urbanization solution is growing at about 28% per year. So what you can expect is for this sector to continue growing. We started with the admixtures, concrete products, and we will expand our development or our strategy in the U.S. to excavation and demolition materials or other use of residues and waste and other type of activities. So we're very positive in the development of our urbanization solutions. We will continue prioritizing our investments as I mentioned. And again, we will continue focusing in growth in the -- in the U.S. And what are the type of opportunities and Jaime is going to be elaborating in that strategy. But we think that aggregates, the aggregate business continue providing opportunities to grow. It's buying small to midsized businesses that we can bring to integrate to our operations, we can get significant synergies, and we can grow our aggregate business, which is what we've been doing in the last few years. And again, Jaime is going to elaborate on that. The other opportunity is in cement, as cement is a more long-term type of option. But compared to the volumes we sell in the U.S., our capacity is fully sold out, meaning we are importing a relevant portion of the cement we sell in our markets. So there are 2 types of opportunities for us to grow in cement, which is adding capacity in places in which we are short. I'm not saying we are not going to continue importing cement because there are some markets in which we definitely want to keep the system of bringing cement from other parts of the world, of course, including Mexico. But that's one opportunity. And the other type of opportunity is a kind of a double whammy, which is enlarging our grinding mill capacity is kind of when you compare the investment in grinding mill capacity to an integrated cement facility. That part, we can qualify it as a light type of investment. And by doing that type of investment, we will be able to produce lower carbon cements. In the case of the U.S., little by little, but the rules of the type of cement and ready mix you can sell in the market are changing. So it was like 2 years ago -- 2, 3 years ago, that limestone cement was accepted, and now the whole industry is producing limestone cement. But if you have a given clinker capacity, if you want to produce limestone cement and some other tenure cements that are going to be able to be sold in the market in the near term like pozzolan cement, like slag cement, fly ash cement or a combination of additions. That means that with the same clinker capacity, we will be able to produce, who knows, 15% 30% more in this type of cements with additions. So that's another opportunity. And the third one, as I mentioned, is a different segments of our urbanization solutions strategy. So I think it's -- in the last few years, it has been a great story. And in the future, I think it will be even better. Mexico. Speaking about growth, Mexico, we -- the crown jewel, the signature of CEMEX, our home, our origin. Mexico is performing greatly. So in the last 3 years -- and we all know how concerned we all have been with Mexico's economy and because of a number of reasons. But what has happened is what you see in this slide. Mexico has been growing at 11% CAGR. And it will continue growing more or less at that pace, from high single digit, around that level. But Mexico has consistently the highest margins. Mexico is mainly a cement portfolio, but high margins, high free cash flow, high free cash flow conversion, about 90%. I mean it depends on the year, but it's very high free cash flow conversion. And Mexico as an economy, I already mentioned before, Mexico's economy is more and more tied to the variables, that some of the relevant variables that is making the U.S. economy also to grow, plus the demographics we have in the country with wages that are rising, strong employment and a young population that has been incorporated into the, let's say, working force or society in general. And we are very well positioned. Our portfolio in Mexico covers the whole country. And we are able to realize several advantages. So we can grow, let's say, in the last few years, in the Southeast because of all the infrastructure that is putting in place in that part of the country, new airports, trains, roads and you name it. But we are also positioned in the north part of the country from Baja to Tamaulipas. So we are in a position to participate in all the growth that is going on in the north part of the country. Because of our size, in Mexico, we have a nice position, a good position in the country. We've been sort of easily developing our urbanization solution strategy in the country. The scaling certain businesses, new businesses for us, like waste and other mortars and other businesses, we can do that at a speed, and that's why urbanization solutions in Mexico has been growing at sixfold. I mean it's really very fast. I'm going to steal an example from Ricardo. Just to mention that as of today, we are managing about 1/3 of Mexico City's waste. You know the story in Mexico City, 25 million evidence, and we are taking care of 1/3 of the waste produced in that city. We recover, we use part of it as alternative fuels with contents of biomass, and we dispose of the rest with other users. So that is the type of activity, and that is the type of scale that we can do to this type of activity because of our position in Mexico. We are very happy with the results of Regenera. You remember, we launched recently Regenera, which is our arm in order to deal with this new adjacent type of business, particularly residues and wastes. And we have done -- as I mentioned, taking care of 1/3 of the waste in Mexico City is huge. But we have done some other smaller things that do have an impact, not as large as that one, but we have been through Regenera making agreements with different local associations to participate in how to recover and clean, let's put it that way, certain areas in which we can take the waste that it's recovered and we can use that or part of that in our kiln. So we have our associations to participate in cleaning the Nile River. We have done also some -- I don't know why you said that there is -- in the West Coast of Mexico, there is a place in which tires are dumped to the sea. So we are recovering together with an association, all of that waste that it's put in the sea. And there are many other examples. And through time, we will do more and more of that type of recoveries. And then Europe, I already mentioned that in 2020, we sort of took the pieces of what we used historically to do in the company, and we developed, I think, a very comprehensive strategy to move forward on [ decarbonizing ] the company. Now let me start by saying, why are we positive in Europe? It's we believe is the region with the most upside -- price upside potential, mainly because there will be material modifications in prices because of [ decarbonation ] that might affect prices. But also when comparing prices with other regions, we believe that the price -- the cement price in Europe still has an upside potential regardless of how much has increased in the last couple of years. We have increased 1 percentage point of margin while reducing our carbon in 17%. Nowadays, what we think is that Europe is the region that is more advanced in aligning the economy to the idea of a circular one with the idea of a green one. So the opportunities in urbanization solutions, at least the ones related to waste recovery, most of those opportunities will come in Europe. And we have already done several jobs, Sergio is going to elaborate. But I do remember 2 or 3, the Line 15 of the Metro in Paris, millions of tonnes of material to be recovered. I remember the example of the Tesla plant in Bradenburg, also about 1 million tonne of material recovered, and also the H2S (sic) [ HS2 ] train in the U.K. So it is more and more activity on recovering these materials that can be used again as an alternative materials in the production of cement. And this is a trend that is going to be sort of generalized. Very recently, we started working with Tec de Monterrey. They are making, I don't know exactly what type of buildings, but they are demolishing and they are -- they want to -- for the whole project, they want for that material to be fully reutilized in whatever they are going to build. Not that different to the project that is called Madrid Norte in Spain, which is also a very ambitious urbanization project, including the recovery of the material that is going to be demolished or the excavation that they are going to be making. So that's on the economics, we believe that, that is going to be supporting our -- the growth of our industry in Europe. And we still have the objective of the -- how is it called the green wave or the -- which is refurbishing and improving the isolation of at least 30 million buildings. So there are lots of resources that -- in Europe to be devoted to this type of projects from now to 2030, and for sure, even beyond. Now achievements regarding CO2. Again, I mentioned, on top of our industry being essential, transition is feasible and is profitable. So by now, more than 90%. I think the exact figure is like 93%, Sergio will correct. But more than 90% of the product we sell has a reduction of 45% of CO2. So this is not a plan. That has already happened in the last 3, 4 years. So achieving a 45% reduction of CO2 generation in our cement, 90% or 93% of cement, I think, is a very material achievement and an indication that the transition is doable. And again, this has been a profitable process. Again, a couple of examples. I already said that Europe might be the region which is more aligned to the idea of a circular economy. So that has given us a very -- us or the industry a very good opportunity because our traditional highest production cost, which is fuels, went up to $200 per tonne now it's about $60, something or whatever, but that's what we pay for primary fuels. So -- but alternative fuels in Europe because of the waste directives and trying to recover the value of waste. So our highest production cost is converted into an income stream. We are paid in Europe in order to use this material, material that otherwise would be landfills. And you know the story, whatever your landfill and it has an organic content and this material has a biomass content of about 50%, you produce methane and methane produces lots of CO2. So that's the part of the equation that we are avoiding by using these materials. So if you want to find examples on how profitable the new low carbon or carbon-neutral economies, think on converting our highest production cost into an income stream, and that is what we need to make happen all over the world. Right now it's happening only in Europe at that level. Investing in alternative fuels is profitable in other regions, but not as convenient or as profitable as it is in the case of Europe. And we are very pleased because sometimes we don't find info reliable info, but we wanted to share. 70% of our fuel we used to produce cement in Europe is alternative fuel with an average of 50% of biomass. We believe that's best in class in a region that we consider that is best-in-class in the [ decarbonation ] process. So we are very, very pleased with that. And on the volumes, more than 90% of the volumes with this 45% reduction, we are providing customers, they did demand it, environmental declarations. So our customers do buy these materials, and they get a certificate on how much CO2 is produced per tonne of cement they are going to use. Our customers are feeling the pressure from their customers to reduce CO2 in building their developments and the operation of their developments. So again, I told you we think that this is now a systematic -- I think this time is really happening. So we have to be very, very serious. And this achievement in Europe, this 90 plus with a reduction of 45 has allowed CEMEX to produce more than half of cement with 43% reduction of CO2, which is at a consolidated level also a great achievement. We used to have a target by 2025 of about 50% reduction. Vicente Saiso is going to tell us more about that. And we are achieving that target 2 years in advance, meaning in 2023. So we are very pleased and confident that we will continue delivering in our decarbonation strategy. Now if you seen the title, we are developing our reduce before capture. We believe that there are 2 phases in the decarbonation process in our industry. The first phase, let's call the phasing we use as much as possible in as many places as possible the traditional levers. What are the traditional levers. Reduce your clinker factor using other cementitious materials, increase the use of alternative fuels with high contents of biomass, increase or start using the carbonated raw materials to produce cement. Now we know that we have a chance there to get to about 10 percentage points of that type of material. Of course, in Scope 2, electricity or renewal and green. And in the case of Scope 3, working on lower carbon emission type of mobile equipment, either electric or gas based type of vehicles. So we have a number of levers we've been developing, and we will continue developing. We still have levels of, let's say, 20% for instance, in the case of the U.S., I think it's 20%, 25%. And I think through time, that's a potential, that's an opportunity for us to increase. Mexico is much higher. I already mentioned the -- how much we -- how much waste we are getting from Mexico City. And of course, we do that as an alternative fuel. So we need to continue doing that, and that process is already -- technologies for those processes is available. Of course, there are many -- there's lots of innovation around them, but the basics of that technology is known, it's proof, so there is nothing at risk, let's put it that way. If I have to mention a challenge on the full deployment of these traditional levers is the challenge of public policies we need, I suppose, as well. So the industry for public policies to be aligned to the basic idea of a circular and green economy. We cannot continue landfilling waste with high contents of energy. It doesn't make sense and it damages the air. We cannot continue extracting materials producing using demolishing and landfilling them again, that needs to be changed. We cannot continue producing energy with primary fuels. We need to continue the process of moving to green and renewable or low-carbon type of energies. And that takes adjustments to public policies in different manners in different countries. That's a challenge. And of course, you can imagine one of the pillars of our Future in Action strategies precisely working on those challenges in our main markets. And then the other phase is the carbon capture phase. But as you can imagine, if a 1 million-tonne plant -- cement plant, traditionally used to generate 800 kilos per tonne, and you need to capture that, that's 800,000 tonne of CO2. But right now, we are producing about 500. And the target, for instance, in Europe is including capturing CO2 from one of our plants, it's 280. But if without capturing in CEMEX or the number in general, our target for 2030 is 430 without any capture. So we find much more convenient to start making investments in carbon capture once we get to this level of CO2 generation, meaning our investments are going to be lower. At the same time, in the case of carbon capture, different -- the technology used for the traditional levers, we think there is still some way to go. Meaning currently, there are technologies to capture and to transport and to store, but we think that technology through time is going to be perfected and the cost of that technology is going to go down. So if we can manage and that's what we have done and that's our aspiration, if we can manage the process to reduce CO2 generation by 2030 to 430 tonne without capturing, we are going to be preparing ourselves for whatever it is needed in carbon capture already. We have 6 projects, 4 in Europe and 2 in the U.S., for carbon capture, industrial level type of projects. And of course, in the case of Europe, we are applying the same for the U.S. for grants, which is what the whole industry is doing. So we are going to continue with that process. But our scenario by 2030, that is aligned and certify -- is aligned to the 1.5-degree scenario and is certified by SBTi does not include a single tonne of carbon capture by 2030. So whatever we do before 2030 is going to adopt to our current target. Urbanization solutions. As I mentioned, it's a sector or the segment that is growing. Again, we started in 2020, thinking on growing this segment as you can see. The relevance on our EBITDA, little by little, but it's growing from 5% to 9%. And what you can expect is that, that will continue being the case in the years to come. So as a sort of a summary, although my colleagues are going to be explaining this much better than what I'm doing right now. But by going through each region and through urbanization solutions, we do see because of maybe different reasons. I mean, each region has its own characteristics, and they together there are synergies with all of them together. Well, we believe that there is potential to continue growing at high single digit, let's put it more or less in the range of high single-digit, and we believe that with this combination with what we have seen in the last 3, 4 years and what is we are expecting in the years to come, but there is lots of value to be realized for our shareholders. What expect from us? Although I've been more or less saying it, we're going to continue investing our resources mainly coming from the U.S. Are we going to increase our leverage ratio in order to invest more in the U.S.? Not at all. I already said, we are going to improve our rating through time. What is it that we're going to do? Well, we are going to use our own free cash flow and the proceeds from divestments we're trying to do from other regions, mainly emerging markets. We are going to continue the decarbonization process in Europe. Again, we have found that decarbonization process being profitable. So we are not done. We have done lots of progress, but there is still much to be done. We are going to continue leveraging our position in Mexico, which we believe, again, is unique, and it's the sale or the signature of CEMEX, and we will continue developing our urbanization solutions platform. So with that, thank you very much for listening to the explanation of our recent results and our strategy. And as Lucy said, at the end of the event and after everything is exposed, I will be available here for any conversation or Q&A. So thank you very much.

Thank you, Fernando. And now I'm pleased to present Vicente Saiso VP of Global Sustainability for CEMEX.

Lucy. It's working Yes. Thank you, Fernando. Very nice introduction to then further explain what is our sustainability strategy. I'm very happy to be here and to share the very good results that we have achieved in 2023 after 3 years of working at this in our Future in Action strategy. As Fernando was explaining the dynamics in sustainability accelerated in the last years, the expectation from shareholders increased dramatically. As an industry and as CEMEX, we have been working at sustainability for more than 2 decades. But in the last 4 to 5 years, the pressure to take action has increased, and we have reacted to that. In 2020, we decided to launch the Future in Action program that specifically addresses climate action and all the topics related to climate that have an impact in society and that we can do something about them as CEMEX. I'm very happy to show that after 3 years of the launch of Future in Action program, we have been able to reduce our CO2 emissions by 13%. This is a huge achievement because it used to take us more than 15 years at the previous space to achieve that type of CO2 reduction. And we are proud that we have been able to mobilize the whole organization towards achieving this goal. All the different regions within CEMEX are working at this. This is trying to replicate in a fast track and in a fast way, all the learnings that we have taken from Europe, where, as you know, there is a strong regulatory framework in place that facilitates that these things go faster. But we are not stopping there, and we are trying to replicate those in all of our markets. Fernando explained the concept of the reduce before capture. We think there's a huge potential in our traditional levers, existing technologies that we can still push a lot further to reduce CO2 and then the remaining CO2 that we will have to capture at some point in time, we will do with that, and we will deal with that with new technologies. By 2030, we have a target of reaching 430 kilograms of CO2 per tonne. Given the results of these first years and how fast we have been able to achieve this, we are quite confident that we are going to be able to achieve this target. We are one of the few companies in our sector that has been verified under the science-based target initiative, the 1.5-degree scenario, which is the most ambitious available for our industry. We certified both our 2030 target as well as our net zero 2050 roadmap. So both of them are verified by SBTI, and we are quite confident that we are aligned with the latest science, and we're going to be fulfilling the expectations that are targeted to our industry, given the impact that it has on climate change. After 2030 and moving forward and going all the way to carbon neutrality, we will definitely need new technologies. But there's a lot to be done before we need to use them in a massive way. I'm showing here that we have a comprehensive plan to address the different scopes of emissions. We are working on all of them. We have targets for the main categories in these 3 scopes. In Scope 1, which is the direct emissions related to our process, we have been able to reduce 13% our emissions. In green, you see the different levers that are available to us. Everything reflected in this slide is proven technologies, proven levers that are already available, and we are just fast tracking how we are dealing with them in the different geographies, obviously, at a different pace. In Scope 2, which is the emissions related to electricity, we are also moving very fast, and we were able to reduce by 12% the emissions. We are also working in Scope 3. That was the latest addition to the set of targets that we have defined, and we have set some targets for some of the main categories under that, which is the purchase clinker and cement that we acquired from third parties in markets where we don't have enough capacity to deal with what the market expects. We are also working and acquiring and purchasing fuels and trading fuels for all of our operations. We are hiring transportation services for delivering all of our product. And these 3 and all these categories within Scope 3 also have targets, and we are also showing great progress, as you can see here. Going deeper into Scope 1 and Scope 2 emissions, which represent around 70% of the total equation of emissions that we have in our value chain. I'm showing here which are the main levers that Fernando already mentioned and the ones that give us the biggest bang for the buck. And one relevant aspect of what we want to communicate today is that these traditional levers or proven technologies are also quite profitable in the way in which we are implementing them, and they provide a positive contribution to our EBITDA. In alternative fuels, we reached a record high of almost 37% of our total fuels, I believe that is either the highest or one of the highest in the industry. We have increased more than 11% points in the last 3 years, which is a huge achievement. We are doing it in all of our markets. And every percent point that we get as a plus comes with an impact of approximately $4 million, calculated at the current prices and cost in 2023. Clinker factor, which provides one of the biggest levers to reduce CO2 because it's associated with using less clinker that is the part, that is more intensive in energy use in our process is contributing with $16 million per every percentage point that we improved, and we have been able to improve it by close to 5% points in the last 3 years, also quite an impressive result. Alternative raw materials is the enabler of reducing the clinker factor, and we have been able to incorporate more waste materials from different processes, from different industries, and these alternative raw materials are contributing both to alternative fuels and also as alternative materials to reduce the clinker factor. We are reaching close to 13% of the total need of alternative raw materials in our mix, which is also one of the highest numbers in our industry. And finally, clean electricity, we are now more than 1/3 of our electricity consumption using clean sources, free of CO2, and we will continue to pursue that even further. In parallel to fixing and to elaborating on what we can do to our production process, it's very important that we translate this into a value offer to our customers, and we have been very successful with the launch of the Vertua global brand, that I'm happy to say with the '23 results, it's reaching more than $7 billion in sales, which is quite impressive to build up in 3 years. In cement, more than 50% of our sales are already Vertua. This is already fulfilling the target that we have set for ourselves by 2025. In ready-mix, we have reached 48%, which is almost at 50% and also well in advance of the 2025 target that we have defined. On average, the cement and the concrete that we are putting out of the market has a reduction of CO2 compared to a traditional cement or a traditional concrete of 44% or 45%, which is quite significant. In addition to lower carbon products, which was our first wave of Vertua, now we are working in an extended family of products to provide the construction sector with a lot of different solutions and building materials that can create low-impact buildings, low-impact infrastructure that has additional attributes relevant, like using recycled materials, design optimization with high-strength cement that can reduce the use of concrete in some of these buildings, insulating concrete that helps to have better-performing buildings, et cetera. We are also trying to be very transparent with the market, and we are already offering our customers environmental product declarations of 100% of all of our cement products throughout the world. And now we are working in our concrete business to reach the same level, currently at 60%. By the end of the year, 80% of all of our concrete products offering the market will have an environmental product declaration for our customers to make their calculation on what is the impact that they are having with their projects. Circularity, a very important addition to the future in action program. Through Regenera, we are being able to tap into 3 different types of waste streams that reinforce our decarbonization strategy. In each one of them, the volumes are growing. They are growing very healthy and they are helping us to reinforce the strategy to decarbonize. Overall, in 2023, we have used 28 million tonnes of waste and we have repurposed it into our cement and concrete business. In addition to that, there's 4 million tonnes of additional own ways that we generate and that we repurpose internally also in our value chain. For this pillar in future in action, we have an ambitious strategy of taking those 28 million tonnes to become more than 40 million tonnes by 2030, and that will support the traditional levers that you saw, alternative fuels, clinker factor and provide the additional value creation opportunities of getting ourselves involved in the business of dealing with construction, demolition and excavation waste, which is a problem and a headache of the construction sector, which is our main customer. Before, I was explaining the concept of having to reduce CO2 before capturing. There's also innovation happening in the traditional levers that we are using. And I'm going to show you here 3 examples of this innovation happening in alternative fuels and clinker factor. We have a portfolio of more than 200 projects. I just brought here 5 or 6 examples that I'm going to take you through. In this side, you can see waste gasification that could boost to 20% to 30% the use of alternative fuels. We were the pioneers in our sector in the use of hydrogen. First, as a combustion enhancer in our process that allows us to use a lot more alternative fuels. Now we are going deeper into hydrogen use and exploring with some brands in Europe the use of hydrogen as a potential alternative fuel that could substitute some of the fossil fuels that we are using. And a very interesting recent innovation internal from our R&D in CEMEX, possibility of micronizing clinker that combined with some admixtures can provide a lot of reactiveness to that clinker, and that could help us to reduce the level of clinker that we require, and that will be substituted by additional supplementary cementitious materials, bringing down clinker factor even further than what we are achieving already. Now very interesting opportunity. And we are now going for the industrial scale project in Alcanar in Spain. Going beyond 2030 and thinking of the full carbon neutrality equation, there's a lot of possibilities of what we can do with CO2 to turn it into a productive input or to use that CO2 to be mineralized and store permanently in some of building -- in some of the building materials that we deal with. We have this interesting project in our plant in Rugby in the U.K. where the clinker [indiscernible] that comes out of our process and that we normally recycle and get it in, we will put it through a chamber of CO2, so that it can absorb CO2 mineralize and have that clinker already be incorporated with some additional CO2. That's an interesting area of opportunity, and there are different streams of CO2 mineralization that we are exploring. The other project highlighted here is how you turn CO2 into carbon black or other type of materials there are nano materials that are used in the automotive sector, the aviation sector, very interesting opportunities of converting CO2 into this type of materials, highly advanced and highly technological that can provide solutions for other sectors. Finally, in the innovation arena, very important to get involved in carbon capture by the beginning of 2025. We are going to have our first semi-industrial scale carbon capture unit in Victorville in California, and we will start to learn directly all the different aspects of carbon capture that we need to take into consideration to move to higher scale. Synhelion is another example of a very transformative technology in which we have solar concentrated panels that reach -- can allow us to reach high temperatures in the calcination process and potentially could replace the whole use of fossil fuels in our process and the CO2 becomes the conductor of the heat within the process. Relevant to convey here also what Fernando mentioned that we are pursuing 6 industrial scaled projects related to carbon capture utilization and storage, 4 in Europe and 2 in the U.S. We are focusing in those 2 markets because there is funds available to help these technologies being scaled up. In the U.S., you have the Department of Energy and you have the inflation reduction at supporting that. In Europe, you have a well-established mechanisms like the EU innovation fund that we are also preparing ourselves to take advantage of those opportunities and help our sector scale up these technologies that will be hit to get to the net-zero equation. We cannot leave out of climate program, some aspects of nature that are being impacted by climate change, such as water and biodiversity there's scarcity problems of water in several regions in the world, and that's going to have a big impact in industries like us that we are a user of water and as well biodiversity, given that we are integrated into the quarrying of our limestone. We have an impact on the ecosystems related to that, and we have to preserve those. In water, a key element and a key topic is fresh water, which is the water that can be used for human consumption or for agricultural purposes. We don't want to compete as an industry with those uses. And we have established a very ambitious strategy within CEMEX to reduce significantly the use of fresh water in all of our markets. As I was explaining, we are a user of water in our 3 businesses in different ways. But we definitely depend on water for our production. And we think this is relevant. In 2023, we were quite successful in reducing a significant amount of fresh water in our 3 business lines, about 12% in cement, 11% in our ready-mix business, which is quite relevant. We have set some targets for this. These targets may evolve over time depending on how fast we can do this reduction. Overall, in CEMEX, we were able to substitute the use of fresh water by 9% in 2023, and that's up from 5% in 2022. And we hope that in years to come, you will start to see this indicator become more relevant, and you will start to see it move in the right direction of achieving higher levels of substitution. Biodiversity is relevant for us because it's our quarrying operations, and we have to deal with it in a very responsible manner. We have a 100% of our active quarries in the world, having rehabilitation plans that take into consideration biodiversity conservation. We are happy with this achievement because that gives us peace of mind of being responsible in the way that we are dealing with the quarrying that we are doing there. And we have enhanced approach regarding biodiversity in those sites where the nature is considered by NGOs as high biodiversity value. We have some enhanced biodiversity action plans that make sure that we preserve nature in the way that it should be preserved as defined by scientists. In addition to that, for those quarries that are located in key cities and in key markets, we have an additional layer of protection with third-party certification from entities like the Wildlife Habitat Council and other NGOs that are helping us to make sure that we have the right programs in place to take care of this. The latest addition to our strategy regarding biodiversity is a concept called Nature Positive, which means that you take one land that will be quarried and by the end of the life of that quarry, you deliver an enhance ecosystem after it stops operation. And you have to demonstrate that you have turned it into a positive, even better than what you have received on the first hand. We are starting with a baseline of all of our quarries. We manage to develop that baseline in 40 quarries located in Europe during 2023. And now we are going to start to cover the rest of the quarries in the CEMEX system to have by 2025, a baseline and then actions that we'll guarantee that by 2030, we are going to have the first nature-positive quarries in the CEMEX system. And to wrap up the presentation and the conversation and open up for Q&A, just to very quickly summarize the 4 main aspects that we touch on today, decarbonized with a strong focus on reducing CO2 emissions before we need to capture so that the capture is led for the remaining portion, given that it will have a cost. And that cost, as Fernando was explaining, will take some time to come down after scaling up happens. Circular economy is a strong reinforcer of our decarbonization pathway, contributing with all these 3 waste streams that are growing very rapidly. Innovation, very important, both for the short-term and also in the longer-term and to provide the scaling up of these technologies. And finally, preserving nature is very important. It's a key aspect to avoid disruptions and to be completely in line with what society is expecting from a responsible business. Fernando said, a very relevant topic, which is supportive regulatory framework in all these different elements can allow us to go faster. We are going fast but with a strong regulatory framework in relays, we could even go faster. If we have something equivalent or similar to what we have in Europe. And you will see in Sergio's presentation that in Europe, we are going very fast because of these virtual cycles that have been created by strong regulatory framework. If we manage to create or to recreate that type of framework in all of our geographies, we will certainly go -- go much faster. And that's it on my side. Thank you.

We're trying to get back on schedule, but maybe if we have time for one question, if that's okay. Ben, I think I see your hand raised.

Yes. Actually, a quick one and the combined one. So you showed in the presentation that alternative fuels has quite a meaningful impact, obviously, on EBITDA same with the clinker factor reduction. So the question is what are the limitations in the different markets as it relates to, a, increase alternative fuel and b, actually get the clinker factor down even more as this seems to have a very meaningful impact on financials.

Yes. For alternative fuels waste directives -- directives that make it very expensive for the waste to be landfill with directives that restrict the sending of waste to the landfills as it has happened in Europe for many years. Gradually landfills in Europe cannot take certain types of waste by certain periods of time. And on top of that, very high cost of landfilling. So that has created in Europe, this virtual cycle of us getting paid for actually dealing with that waste because it's cheaper than we deal with it, then it goes to the final destination. And in clinker factor, the key element is policies that support implementation of lower carbon cements and concrete that have blended supplementary materials included in them. And that's going to be key. There are some places like the U.S., where there is restrictions in the market. Market practices, departments of transportation that don't allow for these type of products to be implemented, and that's the biggest subset of that. And low carbon product standards are adopted widely across all the different geographies and the public works will be the price to be the ones promoting the use of this product and not obstructing it like it's happening in some places.

Thank you, Vicente. And just maybe to just be specific construction codes, particularly and customer acceptance of lower carbon products. Thank you very much, Vicente. And now I'm pleased to welcome to the stage, Jaime Muguiro, President of CEMEX U.S.

I'm very happy to be here to share with you the mid-term outlook for the U.S. business. I will first provide you with an overview of our business portfolio. I will then take a deeper dive into our aggregate business because it has become a material part of what we do. I will then share with you my views on the potential strong pricing characteristics and the positive demand outlook over the medium-term, and I will finish with our growth strategy. In the U.S. we operate a vertically integrated portfolio of cement, aggregates, ready-mix concrete and Urbanization Solution businesses, primarily admixtures, on concrete block manufacturing. Most of the states where we serve our customers enjoy very favorable demographics, strong population growth and household formation. These are states that have vibrant economies and very healthy DOT budgets. And in our view, are disproportionately benefiting from the $1.2 trillion of infrastructure spending under the infrastructure bill and from the $300 billion of clean tech spending under the IR rate. And it in this stage where a lot of the reinsuring and the redefinition of supply chain is taking place or occurring. Last year, CEMEX USA delivered an EBITDA of $1.04 billion growing at a companion or growth rate of 13% and with a margin of 19.5% percent, which has expanded by 2.9 percentage points. This performance results from a well-executed strategy center around our customer needs, our pricing strategy, portfolio optimization and from our growth investments. Please note that last year, the combined EBITDA of our cement and aggregate businesses accounted for 71% of total EBITDA. The rest was made up by the contributions from the ready-mix and urbanization solutions businesses. Now let me zoom into our aggregate business, an operation that I believe is not fully appreciated yet by the market. The aggregate business delivered an EBITDA of $417 million last year growing at a compounded annual growth rate of 16% and with a margin over 30%, which has expanded by 5 percentage points since 2019. In addition, last year's aggregates EBITDA accounted for 35% of total USA EBITDA. This performance results from strong pricing, volume growth, from our growth pipeline, accretive investments and from our operational excellence operations. Let me share with you 2 examples of recent transactions in aggregates, a greenfield project and an acquisition. Both of them very accretive. The Greenfield project is in [indiscernible], that I talked to you about in the last CEMEX day. This greenfield project delivered great results. I'm happy to report that in its first year of operations, we achieved the targeted incremental EBITDA that we were expecting. With regards to the acquisition, which is very material, we invested in a very high-quality limestone mineral reserves in Newfoundland, Canada. And this is a very relevant acquisition because of the following reasons. First, it is strengthening our leadership position in aggregates in the state of Florida, which is one of the largest consumer of aggregates in the country. Second, because it's adding more than 200 million tonnes of high-quality limestone reserves from which we can produce Florida DOT approved products, which is not something easy to do. And third, it's been profitable since day 1 because we started importing material into Jacksonville, Florida and also into Georgia. We are planning to start shipping very soon into Tampa. We're expecting this operation to generate $15 million of EBITDA by 2025. And it will grow very fast from there as we open new import facilities along the East Coast. I'd like to share with you the following video to show you the new operations. Please, can we run the video? [Presentation]

I hope you liked it. It's really very exciting. This is an operation that has remarkable strategic maritime capabilities. Very good. Let me now move on with my presentation and share with you the demand outlook over the medium term, which I believe could be very positive, mainly driven by 3 market segments. First, after a significant downturn of the residential segment in 2023, I believe that this segment will accelerate and recover fast as affordability improves. In fact, when you look at current data, about permits, on new starts and the existing homes for sales inventory, I think that the recovery is already underway. But nevertheless, it's going to accelerate its recovery as affordability improves in 2025. There continues to be a deficit for housing and pent-up demand across our key states driven by strong population growth and household formation and also domestic migration. The second segment that is going to do great is infrastructure. The best is yet to come because the federal government has only deployed around 34% of the $1.2 trillion of infrastructure investment under the bipartisan infrastructure bill. And the third segment that we'll do well is the industrial, the manufacturing segment because the private sector will accelerate investments in areas such as semiconductors, clean tech, value chains and energy. All of that underpinned by the chips Act, the IRA and because of geopolitical concerns. And to support my statement about the positive industrial and infrastructure segments, I want to share with you the projects that are coming on our way to our key states. I'm not going to read them all. Just bear with me, take a look at them. I'm going to start from the west and finishing in the East. Let's go. California, 10, 11 projects, $45 billion, all of them names and budgets. You'll see in their infrastructure, bridges, roads, highways, water management, so on and so forth. And in manufacturing, I'd like to highlight Applied Materials investing $4 billion or Bosch semiconductors $1.2 billion. Let's move to Arizona, another 10 to 12 projects. Remarkable TSMC, Intel microprocessors, $60 billion of investments, Chang Chun Group and a lot of the DOT infrastructure work coming. Texas, $95 billion, LNG project in Rio Grande Valley, the I-35 amazing corridor right between San Antonio, Austin and Houston, which is booming. Manufacturing, take a look at Texas Instruments, $36 billion coming to our key states, Samsung Electronics, 73 -- $17.3 billion. Let's move to Atlanta and Georgia, $13 billion, a lot of DOT work, but also manufacturing Hyundai with a $7.6 billion investment in Atlanta. And then in Florida, a lot of DOT projects to support the strong population growth that is happening in that state. And let me now share with you a little bit about our -- my views on the potentially strong pricing characteristics that I see over the medium term is because of this positive demand outlook that I'm expecting solid pricing fundamentals over the medium term. Because in my view, the supply and demand for all our products will tighten. We will see that tightness back to what we enjoyed in 2021 and 2022. And when that market situation happens, our very talented teams know how to execute our pricing strategy, the numbers that you see speak by themselves, right? Very good. Let me now tell you why I think that I see the strong pricing characteristics over the medium term, 2 more things. First, I believe that the cement industry will continue operating at full capacity. And in aggregates, the entry barriers to developing new mineral reserves and the multiples paid for these assets will also support resilient pricing. Let me now bring you a little bit closer to 2024 and tell you about -- and give you about data points of our current pricing strategy because of a much lower inflation and a slow start to the year because of difficult weather in California, Texas, and the mid-South. We implemented a cement price increase in the Florida market effective January 1. I'm expecting $5 per metric tonne or 3% growth sequentially from our average Florida cement price. In addition, we executed in January 1, an aggregate price increase in Texas, California and in Florida from $1 to $2 per metric tonne, which leads to increases between 5% to 11% sequentially from an average aggregate price in those 3 states. Let me give you a few more data points. As of February closing, our U.S.A. average [ grow ] cement price moved sequentially by 1% since December '23, while our aggregates prices moved by 6%. In addition, we have communicated cement, aggregates and ready-mix price increases for the rest of our markets to all our customers effective April 1, where we expect much better weather and solid demand. And now let me start finishing the presentation by talking about something that excites me a lot, which is our growth strategy. You heard Fernando saying that CEMEX will devote cash and proceeds from divestitures to accelerate growth in the U.S. as we target low teens EBITDA CAGR in line with what we have delivered from 2019 to 2023. First, we are completing growth investments as we speak for $815 million. As you can see, the majority are in aggregates. These are accretive greenfield projects. And in cement, we're investing in improving the operational efficiency of our plants in adding supply chain capabilities in alternative fuels and also in debottlenecking our Balcones cement plant in Texas. This investment will lead to an increase of 12% capacity in that plant. That means it will add 210,000 metric tonnes in this very fast-growing market. And we're doing that investment at an investment cost of only $73 per tonne. The investments in ready-mix and urbanization solutions are to support organic growth. We plan to finish all these projects by late 2027. When that happens, this pipeline will contribute with incremental annual EBITDA of $120 million on top of some incremental EBITDA that some of them have already provided to us last year and before. But beyond this short-term growth investment pipeline and as we get access to the proceeds from divestitures, we plan to accelerate growth in the U.S. around aggregates, urbanization solutions and cement. Please note that our investments that we're planning in aggregates and urbanization solutions will contribute to the targeted EBITDA CAGR over the medium term while our investments in cement will do so from 2029 onwards. What are we going to do in aggregates? What's different? Beyond accretive greenfield projects, we're going to be using the proceeds from divestments to acquire a small to medium-sized ongoing aggregate operations, which means we'll be accretive to EBITDA since day 1. In addition, we will continue investing to increase the reserves -- the mineral reserves bank from current 45 years to at least no less than 50 years at current annual aggregates production. In urbanization solutions, we plan to use the proceeds from divestments, not only to continue expanding admixtures and concrete block manufacturing. But we will be acquiring ongoing construction demolition waste businesses and exploring investments in Dry Mortars, [ stucco ], plasters, renders and flooring [indiscernible] solutions. And in cement, I'm very excited because we have a great opportunity to grow as we decarbonize the value chain, to achieve our 2030 commitments. We are planning to invest in the U.S. in cement to increase materially low CO2 for cements targeting a clinker factor of 75%. For this reason, we will be investing, adding 3 million tonnes of cement capacity, which means 20% more of our current cement capacity. And we will do that at a cost of between $200 to $300 per tonne. It's very simple. We're going to be producing 3 million tonnes more with the same clinker we produce today. What does this mean? It means a significant reduction in variable and fixed cost per tonne. It means that we will be able to increase our volumes, supporting organic growth, but at the same time, replacing expensive imports which will lead to a significant margin expansion of this business. At the end, our investments in cement will deliver double-digit returns on investment. I'm very excited about that. But as I said, because it takes time to permit and build, right, these investments in cement will contribute to our EBITDA CAGR from 2029 and beyond. So in summary, I'm really excited about the midterm outlook for the U.S. business. The positive demand outlook. And my views on the strong pricing characteristics will allow us to grow our EBITDA organically, which we will accelerate even further as we deploy available cash and proceeds from the divestments, targeting a low-teens EBITDA and [ CAGR ] in line with what we have delivered from 2019 to 2023. Thank you so much, and I'm now open to your questions.

Thank you, Jaime. We have some questions. Adrian, can we get a mic to....

Yes. On the outlook for pricing, what can you share with us regarding import parity prices? How the spread between local prices versus import parity has evolved over the last 3 years given the large increases that we have seen in the U.S. on prices. And is that a bit different depending on the ports that is coming from?

Yes. Good question. The import parity cost dramatically increased in 2021 and 2022, right? And the gap between that cost and manufacturing cost on market -- the local market prices has narrowed very material. Since then, this year, we've seen a reduction in import parity cost of potentially between $15 to $20 per tonne, okay? And that's what we've seen. And particularly, we've seen it in the Pacific Coast, Adrian, coming from Asia. That's where we see the more competitive imports. Nevertheless, as you highlighted about the ports, right, in the case of California, it's almost impossible to permitting new terminals -- maritime terminals to increase imports into that market. The rest, that parity has widened a bit, as I said, $15 primarily from Turkey and Saudi Arabia. But there are 2 -- a few events, the scarcity of water in the Panama Canal and then the attacks in the Red Sea in the Suez Canal. And that is limiting the further reductions in cost because many of the vessels have to do the complete round not using neither the Panama Canal nor the Suez Canal. I hope I answered your question, Adrian.

Yes, Ali, please go ahead from Modern Stanley.

So thank you, Jaime. So I guess my question is -- so you mentioned 2 very interesting data points. Number one, you mentioned that you're importing aggregates into Florida from Canada from this new acquisition and that you're planning to invest into terminals. So I was hoping if you could elaborate perhaps on the economics and the supply demand dynamics for aggregates that are making perhaps a product that did not travel much before now economical to maybe do so into further distances.

Yes. Well, first, it's not easy to find very high-quality materials that meet U.S. specifications and every particular DOT state. So finding offshoring aggregate operations is very difficult. Then you need significant maritime capabilities. The economics today are very favorable, and they will continue to improve. I'm expecting no less than between $8 to $10 per tonne of EBITDA, okay, from that operation. And this means that as we open import yards along the East Coast in selected markets where we see tightness between supply and demand, we're going to take full advantage of that opportunity. This was a long-term shot because we can not only enjoy the 200 million tonnes that are permitted, but we could add an additional 400 million tonnes. I mean this is huge, of super good quality. And you know what happens in Florida is supply constrained, not anymore because of Newfoundland. And the issue is that the quarries in the Lake belt around Miami will be depleted in 25 years. We are one of the very few players who now can say, I'm going to keep my reserves of my quarries in the south, which is [indiscernible], while I import from Newfoundland. And we have unmatched rail supply chain capabilities to move very competitively the product from north to south. I hope I have answered your question.

I think we have time for one more, Paco...

From this call. And I will be available for later further conversations. Gori?

The question is regarding the competitive environment in the U.S. now with some companies like Holcim making some aggressive plans for expanding. How do you see this in terms of market share and also in terms of how the price will be in the next few years.

Okay. Let me first talk about cement. You asked about market share. We lost a bit of market share last year around 1.3 percentage points that we will responsibly recover. I'm not concerned about that. In my view, no matter what other competitors do in the marketplace, my view right now is that we're going to see a very solid demand coming to us. And let me reiterate, we will see tightness in supply and demand. Think about this scenario. I think that the infrastructure will lead demand growth peaking in that cycle around 2026, 2027. When that happens, maybe the residential single-family homes skyrockets around the same time. And what if all of the projects that are coming our way in industrial happen at the same time. Tightness of supply and demand is what will create the conditions for a strong pricing characteristics. The last time that you were here with me in 2022, I told you that I was expecting a strong pricing characteristics. I don't want to sound arrogant, but I was bloody right. Let's hope that I'm also right this time. So no matter what others do, I think that the multiples paid in the U.S. whether it's cement or aggregates if you want to deliver a solid return on capital employed above your cost of capital, you need to be very disciplined with prices. And that's what we're going to do. I hope I have answered your question.

Okay. And I'm pleased to welcome to the stage Sergio Menendez to discuss Europe.

Hello. Thanks, Lucy. Good morning, everyone. My name is Sergio Menendez. I am the President of CEMEX in EMEA. And today, I'm going to give you an update of our operations in Europe, which represents around 75% of our business in EMEA. Let me start with a recap of our footprint in Europe. We are present in 7 countries, and we operate in more than 40 European metropolitan markets from Madrid and London to Berlin and Warsaw. We also have a relevant position in CEMEX 4 business lines. We have a strong position in cement, but also in aggregates and urbanization solutions and ready-mix as well. In cement, if you recall, by 2019, we completed our One Europe strategy where we streamlined our operations we have operations across the 7 countries. We consolidated our operations in Europe into one unit. As a result of that, we multiple [indiscernible] 4 cement plants. We operate now 10 cement plants in Europe and that includes the largest cement kiln in the U.K., the largest cement kiln in Germany and the largest cement kiln in Croatia. And that is relevant because it give us economies of scale, less plants and larger kilns for all the investments in this [ carbonization ] help us to have a lighter footprint. Aggregates and urban solutions are our fastest-growing business lines. They represent today around 30% of our business on a consolidated basis and we keep investing in those 2 business lines. In the last few years, we have invested in more than 40 bolt-on and growth investments in aggregates and urbanization solutions. Now ready-mix is an essential part of our portfolio in Europe. It give us access to more than 50,000 builders in Europe. And at the same time, ready-mix is an important vehicle for our cement, for our aggregates, for our mixtures and for the urbanization solution products that we sell. We have also streamlined our ready-mix business in Europe as well. We reduced 25% of our ready-mix plant. So we have a much more efficient footprint now following the implementation of One Europe. Now looking at our results, we have delivered significant EBITDA growth. For the last 5 years, we have grown after the implementation of One Europe, we have grown at an average of 9%. And we have delivered as well 300 basis points of margin improvement in this period. Now this -- we have been able to achieve these results through first our One Europe strategy, achieving additional efficiencies but also through our growth investments, our pricing strategy and increasing our circularity activities. Now going forward, 2024, our EBITDA might decrease slightly because of the lower volumes that we saw last year, but we expect to resume similar growth rates in the next 5 years of around 9% and to deliver another 300 basis points margin improvement in the next 5 years. Now these results we achieved while reducing our emissions a record 22% in this period. We are leading the race on decarbonization in Europe. So with this performance and the progress on decarbonization were demonstrated that the transition to a green economy is not only essential, but it's also possible and can be profitable. Our pricing has also improved significantly. In this same period, we have improved prices by 61%, and that has allowed us to recover input cost inflation and also improve our return on capital even during a period of slow volume growth or even declining as it happened last year. Now the fundamentals for pricing in Europe are strong, as Fernando mentioned, and those will be driven by our strategy, our value before volume strategy. But at the same time, we see further capacity rationalization, the same way that we did with our 4 cement plants, we could expect more of our competitors to rationalize capacity. Also, the price will reflect the cost to decarbonized investments to decarbonized and we see higher CO2 costs going forward as the free allowances are reduced and also the implementation of the carbon border tax starts in 2026 that will cost to [ prices ]. So there's a further pricing upside in Europe basically to reflect these levers. Now another driver for growth in Europe, as mentioned before, is circularity. Circularity is a fast-growing business and is also essential for this organization. In Europe, we operate more than 60 Regenero centers where we manage and process municipal and solid waste, construction and demolition waste and alternative raw materials and by products from other industries. For example, last year, we managed 11 million tonnes, almost half of CEMEX volumes, 35% growth versus the previous 3 years, and we expect to triple that volume by the end of this decade by 2030. This includes, for example, in municipal and solid waste similar to example, Fernando mention for Mexico City. In our operations in Europe, we manage every year, the equivalent total waste of a city like Madrid or Berlin in our facilities. So imagine that all the waste of a year of Madrid -- of Berlin process in CEMEX facilities. Now construction and demolition materials, as Fernando mentioned, this is the new urban mining. These are all the demolition waste that can be integrated into ready-mix or aggregates. Last year, we did 6 million tonnes, again, a growth of more than 40% over the last 3 years, and we expect to multiply this by 4x by 2030. These materials not only extend the useful life of our aggregates reserve but also help us satisfy increasing demand for ready-mix and aggregates with recycled content. We see more and more customers requesting ready-mix and aggregates that have some recycled content. So it's a limited resource to have access to this construction and demolition waste. So circularity is essential for -- to decarbonize, but it's also a margin enhancer in our 4 business lines, not from the alternative fuels that we use in cement to the recycled materials that we use in ready-mix and in aggregates. Now getting deeper into decarbonization in Europe. We are leading the industry. If you recall, we were the first company to align with a European Union target of 55% reduction in emissions by 2030. By last year, we have already achieved 44%. So we're way on track to get to the 55%, and we achieved this 2 years ahead of target. Now the way we are achieving this performance is through the leverage that I mentioned here and Vicente explained as well. We have record rates in Europe for alternative fuels, clinker factor and alternative raw materials. Just to give an idea, the average alternative fuels in Europe are around 50%. We are at 70%. Why? Because we have invested diligently in our cement plants. We have executed thousands of projects on those 3 levers with IRRs above 20%. And as you see, the targets for 2030, we still have work to do to get to the levels that we aspire. For -- now in addition to that, we are also working on CCUS, as Fernando mentioned, we have developed already 4 CCUS projects that are ready for application for EU grants. We expect to get at least one of those projects and execute that project by 2030. So with only one CCUS project, we will be achieving grades of decarbonization of below 65% reduction in emissions. And that's an industry-leading performance by 2030 only with one CCUS project that we expect to get. So in summary, we're accelerating the coverage in Europe, it's a race. And for example, one, a clear result of that is our surplus credit position. We have one of the strongest surplus position in the industry that now take us until 2028. It means that we don't need to buy credits in the next 4 years because of this performance. Now our mantra to decarbonize is reduced before capture, that was explained before by Fernando and Vicente. And what we aim is to be a leader on innovating in these traditional proven technologies, but they are also the most profitable ones. So CEMEX is one of the most active companies, for example, receiving grants from Europe in developing these technologies. We have received already 25 grants to apply on these 3 technologies. So the technologies keep moving. For example, in alternative fuels, we were the first company to introduce hydrogen in all our teams in Europe. And as Vicente mentioned, we're doing now hydrogen hyper injections, increased rates of hydrogen, increase more alternative fuels and reduce fossil fuels. We're delivering also a modular biogas production system from organic waste, that is also a carbon-neutral fuel. So we'll keep testing it with different ways of using alternative fuels across our operations in Europe. In clinker factor and alternative raw materials, basically, we're developing new formulations for clinker and cement that incorporate, for example, the micronization technologies, incorporate calcinated clay and other alternative raw materials. Now a key element in our strategy that none of our top competitors have is the integration of our admixtures business with the rest of the business lines that allows to develop proprietary admixtures that help us reduce the clinker factor further and those admixtures are designed for each one of our cement plants that have different processes or even different materials. So that is something that is helping us advance faster on clinker factor and it's increasingly becoming a key element to decarbonize. It's not the use of chemical admixtures in the whole process. So with the use of all of these technologies, we are -- by 2030, we will be reducing before capturing more than 5 million tonnes of CO2. So you can make the calculation of all the savings and investments we get versus a carbon capture project by reducing those 5 million tonnes per year. And another important factor is that Europe is rapidly becoming a hub for circularity and the development of clean tech. So all this know-how is shared in the rest [indiscernible] mix through our R&D centers and through our innovation center group. Now these developments in the carbonization are reflected in the marketplace through our Vertua brand. Vertua was introduced in Europe in 2018 and became the first global sustainability brand in our industry in 2020. Adoption of Vertua has been increasingly fast. Three years ago, in Europe, we were around 50% adoption. By the end of this year, we are above 90%, meaning more than 90% of our concrete and more than 90% of our cement complies with the Vertua characteristics. In the case of ready-mix, we have at least 35% emissions reductions for Vertua. In the case of cement, that Vertua has more than 45% emissions reduction. And we don't stop there. For example, this year, we're switching in the U.K. to a high strength blended cement and that will take us from 93% to 98% adoption across Europe. This is something that we are currently implementing. And also, we are launching new solutions. For example, last year, we also introduced a category called Vertua Supreme. Vertua Supreme, [ we say ] is 2030 ready because it has more than 55% emissions reduction. So that category already represented 25% of our sales by the fourth quarter last year. And of course, it's a product that keeps increasing in customers are increasingly asking for these products with lower emissions. Also, as it was mentioned before, 100% of our cement and concrete comes with full carbon and sustainability disclosures. So totally transparent on what we're doing and the missions that we have in each one of these products. Also, something interesting to look at is the emissions per cubic meter of concrete. Today, in Europe, we are already comparable to timber or wood construction materials, not in terms of life cycle and emissions per unit of material, but comparable and were much better than many other materials. What it means is that concrete is becoming increasingly the sustainable material of choice for builders. When builders look for different materials and their impact, the sustainability impact, concrete is ranking better and better. And in the future, with this plan of the carbonization, it will continue to improve. So we see a bright future for concrete as well in this performance. Well, finally, last slide, let me just summarize. Sustainability in Europe is an advantage for our industry and it's our essence, moving forward. What we expect is to continue the performance momentum to deliver high single-digit EBITDA growth rates and over 300 basis point margin improvement, together with increasing rates of free cash flow conversion. Second, circularity has to be in our DNA in our industry. It drives decarbonization. It also helps profitability in our business. And lastly, we aim to lead the industry in Europe in decarbonization. It's a race. So we expect to accelerate our reduced before capture program. Also, that program enables to bring more sustainable solutions to the market and also to keep leveraging all these capabilities across them. There's no share, the know-how across the company. So that's my gimmick. May I ask to open to any questions you may have.

We have some time for some questions for Sergio. Oh, sorry I didn't see -- I'm barely seeing anything. Yes, please go ahead, Adam.

Adam Thalhimer with Thompson Davis. Curious on the emerging markets piece of your portfolio. What's the plan for those markets?

Well, we see, in the case of the Philippines, recovery in volumes. So we are basically implementing similar strategies to decarbonize, to manage our prices to increase EBITDA and return on capital in [indiscernible]. So we have a similar strategy that we are applying in the Philippines. Egypt, after the recent devaluation has been also an income of capital from the Emirates now announced from Europe. So we expect also, hopefully, a recovery in Egypt as well. In Israel on the difficult circumstances but also at some point, the fundamentals for the money in Israel as good. So at some point, we expect to recovery as well there.

Okay. Thanks, Adam. And we have time for one last question, I think, Gordon.

Yes. Sorry. My question was sort of related to that, which is to given what's happening in Israel and obviously, the volatility in Egypt, let's put it that way. What -- when you mentioned EBITDA would decline this year, how much of that is attributable to the non-European portion of your portfolio? And how much is Europe?

The decline I mentioned is for Europe, a slight decline this year because of the reduction in volumes we saw last year. But yes, in the case of the rest of the portfolio, Israel is the main business we have and will drag down results as well. We expect mainly in the first half of this year, for the second half of this year, both for Europe and Israel and the rest of the portfolio, we expect to resume growth. So it's really the first half of the year.

And could you remind us on that...

Yes. In the case of EMEA, it's around 15%.

And I think at the consolidated level, it's less than 2% of total. Thank you all. Thanks, Sophia. And now a well-deserved break for 15 minutes. So 10:25. Actually, Sergio did a great job of getting us back on schedule. So full break. [Break]

So I'm happy to invite to the stage, Ricardo Naya, President of CEMEX Mexico.

Thank you, Lucy. Okay. So like my colleagues, it is a pleasure to be back here again with you in this lovely room and addressing this audience. The last time I was here, we were navigating through some very challenging times, very turbulent times. We were battling with hyperinflation and also reduced commercial activities. And back then, I argued with confidence that we were going to perform and deliver good results despite the tough circumstances. And now as I'm standing here in front of you with much more favorable conditions, I can assure and said once again, that we will perform and deliver great results. This isn't the first time I have highlighted how CEMEX Mexico delivers good results in tough times and great results in much, much favorable conditions. And I hope that by the end of my presentation today, you will appreciate even more the unique past that CEMEX Mexico has, the great present, but most importantly, the better future that lies ahead. So if you have been following CEMEX Mexico or investing in CEMEX or analyzing CEMEX, you have witnessed the concrete results that we have delivered consistently over time. And actually, the past 5 years serve as a clear testament on how we have a unique past and also a great present. But now let me highlight 4 key elements at different time horizons that underscore our great performance. And first one is growth. We have achieved double-digit EBITDA growth in the last 5 years -- in 5 years, double-digit EBITDA growth. Second, cash. In the last 10 years, our free cash flow conversion has been consistently close to 90%. Third is resiliency because in the last 20 years, our cash flow generation has been unmatched and unparalleled. Fourth, very important, and Fernando already mentioned that we are -- the crown jewel is the high returns measured in ROCE. We have not only the best returns in our portfolio but I'm confident in saying that we set a benchmark in our industry. Now these outstanding results do not happen by chance. They are the result of our purpose-driven commitment to always perform. And now I would like to elaborate a little bit deeper into the house, the house, which are sometimes overlooked or underappreciated. And from my point of view, they make the big difference. In CEMEX, we focus on the values we control where we can make a significant impact. And we start internally because the way we develop our teams to have the finest people in our industry is quite unique. And that is expressed by the high engagement index expressed by our collaborators. We are dedicated to creating the best work environment because we believe that this empowers our company to serve our customers in a unique way because we do have a distinctive commercial strategy. We believe in differentiation, and that is what supports our successful pricing strategy which has proven to be quite successful in battling and managing input cost inflation, while at the same time, safeguarding our market position. Our teams are also relentless in the pursuit of cost efficiencies and productivity enhancements. We really like to measure almost everything real-time. We have KPIs that can let us understand the performance of the different business processes, and this allows us to improve continuously. We embrace the culture of micro progress, even if it means improving 1% each time, and that is reflected into our DNA. But I also want to emphasize the disciplined approach we have towards capital deployment because we not only safeguard assets but we also find unique opportunities of high-growth investments where only CEMEX in Mexico can capitalize. Now the year 2023 laid a solid foundation for an even more promising 2024. And this is why I insist that CEMEX Mexico has a unique past and a great present. But now let me elaborate on why I believe the future is even brighter. The potential to continue creating value in Mexico is far from over. And my optimism is rooted in 2 things. And the confidence I place in our team's ability to always adapt and find opportunities and also on the positive trajectory that we anticipate for the Mexican economy. We are witnessing a unique moment, which is characterized by the alignment of external and internal forces that, in my opinion, are presenting a once-in-a-lifetime opportunity. First one, Mexico is very well positioned to capitalize on the reshoring and nearshoring opportunity. The fact that Mexico is the #1 trade partner to the U.S. that is undeniable. Now the trade intensity between the 2 economies measured by the number of exports and imports has no comparison anywhere else in the world. And the geopolitical tensions are positioning Mexico as a safer investment destination, a more reliable link in the supply chain and an even better place to retire for some Americans. Last year alone, there were more than $100 billion of investments announced throughout the country. And the correlation of GDP growth between the U.S. and Mexico is stronger than ever. It's even surpassing the correlation between Canada and the U.S. Now this is a key message. If you are optimistic about the U.S., your enthusiasm for Mexico should be even greater because the internal forces are complementing external ones. Now demographics are very important because the demographic landscape in Mexico is complementing the forces of the globalization. Demographics are complementing the globalization. Most of you know that Mexico is home to more than 130 million people, which converts Mexico in the tenth largest in terms of population. But what is unique about Mexico's population and where the competitive advantage is, is in the demographic dividend that we have. Mexicans have a median age of 29 years old, which is significantly younger than that of the U.S. or even China by 10 years. So this means that the largest and youngest majority is now entering their peak consumption years. There is an abundant pool of young and talented labor force. And our demographic dividend will be at its optimal level during the current decade. So this is very important. Now on top of that, stable macroeconomics are complementing the strength of the domestic demand. Unemployment rate is at historic low. And on top of that, wages have been increasing in real terms over the last years. Now as a lower inflation and also eventually lower interest rates capitalized, this will have impact on the disposable income to increase the demand dynamics. Now the last point I want to emphasize is that Mexico is already taking steps towards decarbonization. It is a topic that sometimes is overlooked or undervalued by the media. But actually, I want to emphasize a very important point. We are already in the preoperative phase of the emissions trading system, which is enabling Mexico to move towards the decarbonization. The legislation was put in place even before other developed economies. And this legislation is conducive to a more circular economy. And let me give you one example. The fact that co-processing and the use of alternative fuels is already at federal law. This is a very good example on how the legislation will be conducive to a more circular economy. Now the construction sector will receive some of the tailwinds that I've been elaborating. So the tailwinds of the Mexican government are already translating into substantial windfalls in the construction industry. We are currently seeing the impacts of nearshoring into the demand of our products. The first wave of nearshoring is translated into investments of companies that already had a capacity in Mexico that are expanding their capacity. For example, we have Ternium, a steel manufacturer in the northeast of Mexico that recently announced an expansion of the capacity in the coming years. The second wave of nearshoring investments is coming from new companies in new industries. Amazon recently announced a $5 billion investment in Queretaro for a data center. So that's the good example of the second wave of nearshoring investments. So that is translating into occupancy rates in the industrial spaces in Mexico at historic lows. But the windfall is not only limited to industrial spaces. It's also translated into housing, infrastructure and other commercial areas. So nearshoring will have a lever greater impact into the housing deficit that most of you are aware. In Mexico, there's about 0.5 million households formed on a yearly basis. However, there's only about 200,000 houses built or constructed. So we know how the huge deficit that we have in housing. And nearshoring will accelerate the housing deficit, and we expect a resurgence in the housing sector in the coming years. Now Mexico has also consolidated as a global tourist powerhouse. There's no doubt that Mexico is one of the most attractive destinations in tourists and hubs like Los Cabos, La Paz, Puerto Vallarta, Punta Mita or Cancun, Tulum are becoming of one the most attractive places to invest in hospitality. Now CEMEX has a unique platform to seize all these tailwinds because no other company in Mexico has our infrastructure and reach. We have, by far, the largest assets in the industry, whether it's cement, ready-mix or aggregates. No other company has our reach. We have more than 100 distribution centers that allows us to get to all the process in Mexico. And on top of that, we have close to 2,500 Construrama retailers that allows us to get to the last mile delivery in a unique way. Let me -- thanks so much, yes, thank you [indiscernible]. Okay. So we complement our operational platform with a set of sustainable construction solutions. Like my colleagues, we rapidly scaled up the Vertua brand in cement and in ready-mix. And we offer the best and the lowest CO2 emissions products in the industry by far. But on top of that, we are also offering the best use of water, especially in the ready-mix products. We have about 10 places in Mexico where 100% of the water needed to produce ready-mix is using non-fresh water, that is quite unique. Places like in Monterrey, Queretaro or La Paz, again, 100% of the water needed is produced with non-freshwater, leaving drinkable and potable water for the population. Now most importantly, why we think that we are very well positioned to capitalize on the tailwinds? Because I believe that we have the best teams in the industry. We are able to develop long-lasting partnerships with our customers because we are reliable, because we offer the best technical expertise complemented with the best products and solutions. But most importantly, also, we have the best digital experience that we offer to our customers. Now the fourth cylinder of CEMEX Mexico is urbanization solutions that has achieved a tremendous success over the last years. The business has grown 6x in the last 5 years. This business already reaches sales of $1 billion in Mexico, $1 billion and EBITDA in excess of $100 million. And we know that there is still a lot of growth potential in continued developing urbanization solutions in Mexico. Let me elaborate on 3 of the different verticals that we are trying to develop. On circularity, we have Regenera, and Regenera is offering, let's say, waste solutions for many municipalities in Mexico. As you know, most municipal and industrial waste in Mexico is landfilled. And we are offering a unique solution for these municipalities. Fernando already mentioned that in Mexico City alone, we are managing 35% of all the waste produced in Mexico City, 35%. And about 1/3 of that waste is converted into alternative fuels for our cement plants. And we have examples like Tepeaca, which is close to Mexico City, where 60% of all the energy needs are coming from alternate fuels. Now in Queretaro, this is another example. We are solving 80% of all the municipal waste challenge. So this is a clear testament on how we are developing Regenera and solving the municipal waste challenge and also, let's say, building a better footprint in terms of alternative fuels for our cement plants. Now the second business that I want to elaborate is our admixtures business. the victors business has become a key player in Mexico because we not only serve our direct bolt customers offering them admixtures, but we are reaching more and more external customers. And we estimate that we already have close to 40% market share in the precast and ready-mix subsegment. The admixture business in Mexico has the highest profitability that we have in our network and is breaking records of EBITDA year after year. Multiplast is the best example that we have in the high-performance materials. It is a product that we designed especially for internal and external coatings, and it has very quickly positioned as one of the leaders in these high-performance materials. Now going forward, we are investing in developing and increasing the amount of products in this division by leveraging our research and development capabilities. Now in closing, this is my last slide. I want to emphasize that the success of CEMEX in Mexico is not because of one particular condition. It is thanks to our proven ability to deliver value. Our history is distinguished by resiliency, continuously delivering results throughout the different cycles. And we have developed a unique set of assets, thanks to the innovative drive of our teams. We really like to serve our customers, and we serve them with a lot of passion because we want to meet the most rigorous construction demands. And we adapt quickly like no other company. A good example is what we were able to accomplish last year, redesigning completely our supply chain in the Southeast of Mexico, capitalizing like no other company, the demand that came from the Yucatan Peninsula. Now when you look across the board on the different KPIs that we manage, whether they are commercial, operational or financial, you either see progress, positive progress over time or very healthy levels that we need to sustain. Now we are very happy with our performance, but we're never satisfied. And we are very happy to not only proud to have this unique past, great presence, but most importantly, we're very optimistic about the future. Now I believe that timing is very essential because I want to emphasize this message that there are external forces that are aligning with internal forces that are creating this unique opportunity for Mexico. Now we also exercised prudence while maintaining this optimism. And I am convinced, along with my team that we will continue the growth trajectory that we have seen in the last years and the years to come. But most importantly, what drives our performance and our commitment is our purpose to always build a better future. Thank you very much.

Thank you, Ricardo. Do we have some questions for Ricardo? Gordon?

Well, you paint obviously a very optimistic picture on Mexico. Often, optimistic pictures in Mexico have been tripped up by competitive behavior. So I was wondering if you could tell us what you're seeing in terms of expansions from competitors? And also, I guess since you last presented here, Slim is now a player in the industry having taken over Fortaleza's assets, right? So I was wondering whether you've seen any change in behavior there?

Well, Fortaleza has been in the market for many, many years. And there's a new, let's say, ownership, but I don't see any major changes in terms of, let's say, the competitive landscape. Now addressing your first point is capacity expansions. We have seen capacity expansions, especially in the Southeast. There were a couple of grinding facilities invested by Holcim and also by Fortaleza, and an independent player also in the Yucatan Peninsula. There is already a new expansion going on in Fortaleza in one of their plants in the center of Mexico. But when you look at a 40 million ton demand that is growing, I don't know, 2, 3 percentage on an annual basis, what I've been seeing is that those capacity expansions are more or less riding the wave of growth in the future. But we are vigilant on always defending our market position. And we exercise also with prudence our pricing strategy because we not only want to defend our margins, but also we want to defend our market share. But going back to your comments, we don't see any major [ disruptions ] in the competitive landscape. It is very strong. But I think, as I mentioned earlier, we exercised with a lot of prudence or the way we manage our position.

Thanks, Gordon. [ Paco ]?

My question is on this very positive outlook for the next few years. What is -- what are the main challenges? Are those from the -- in the regulatory front or the competitive landscape? And the second part of the question will be on the growth plans. Where or in what part of the value chain will you invest in the coming years?

Yes. First of all, we feel very happy with the asset base that we have that is enabling the company to capture the growth trajectory. We have invested timely in our cement capacity. We invested in Tepeaca, an investment that came at the right time exactly when we need it. We are in the process of expanding and debottlenecking our cement capacity in Merida, which eventually, let's say, needed this debottlenecking. But we're also trying to develop the aggregate business along with the Urbanization Solutions division. That's where we see, let's say, capital being deployed. And on top of that, we have a program in place to address the future in actual challenge. That is in terms of our investment portfolio. Going back to your question of some of the challenges that we see ahead, of course, this year is an electoral year. Typically, the last year of any, let's say, term tends to be quite positive, and we expect that to materialize in 2024. Also, in 2025, we are expecting the change that typically happens. When there is a change in political parties, there tends to be major disruptions from one term to the other. However, that does not happen when there is a continuation of the same political party. We are prepared for any scenario. We don't have the crystal ball. But as always, we should count from CEMEX that we will adapt as quickly as possible to whatever challenge we face. In terms of regulatory environment, of course, we would like to have a stronger regulatory framework that is conducive to the circular economy that we are trying to promote. Actually, there is already a circular economy proposal that is in Congress that is being discussed. However, given the current political, let's say, environment, we don't see that happening until the next term.

I think we might have time for one more question. [ Vanessa ], did you have a question? Okay. Vanessa [indiscernible].

So a question about your FX exposure in your cost structure. Right now, the peso is very strong. I mean, it's been, and we don't know exactly what may happen with the FX, of course, but in case there is a depreciation, would you say that CEMEX Mexico is better hedged or protected for depreciation in operation -- at the operational level?

Well, I'll leave the financial hedging to Maher, but what I will address is the operational hedge. Of course, right now, we are leaving the consequences of the strong peso. On one hand, you can see it in our results expressed in dollars, and we're also mindful of the strength that our cement prices are showing. Our cement prices are quite healthy. And that is also preventing us to export more to the U.S. That is one of the collateral effects of the strength of the Mexican peso. I think you have seen in the last 20 years, appreciations and depreciations of the Mexican peso, but what you have always seen from a, let's say, point of view is our ability to deliver results. We always adapt. If there is a change in the, let's say, in the environment, of course, we will be adapting as soon as possible. I don't want to, let's say, speculate on what will happen to the FX. We're consciously managing the business, but we have a financial strategy in place that probably Maher can elaborate later on.

Do you want to do that later on, Maher?

Yes.

Okay. Great. All right. Great. Well, thank you very much, Ricardo.

Thank you.

So I'm pleased to introduce our last Regional President, Jesus Gonzalez from South, Central America and the Caribbean. Jesus?

Thank you, Lucy. It's good to present after the crown jewel. In my region, in the South, Central America and Caribbean region, we always look at Mexico as the big brother. And many of the things that you're going to hear from me are similar to what you heard from Ricardo because the dynamics are pretty similar in our markets compared to Mexico. And one common similarity is the capacity to generate free cash flow. These 2 regions are free cash flow machines, and I'm -- and that's very important for the company to sustain our investment plans. So let me start with our history in terms of growth, EBITDA growth, where in emerging markets, volatility is part of the game. You see the rebound on our EBITDA after the pandemic in 2021, and we were very affected by the hyperinflation period. In our countries in the region, most of the things are imported, and we suffer a hyperinflation of more than 20% that we were able to compensate with a very aggressive price increase strategy. And as a result of that strategy, we regained EBITDA growth starting in the second quarter of last year, and our margins are starting to pick up. So overall, when you compare 2024 -- '23 versus 2019, our EBITDA grew by 15%, and we expect this trend to continue in the coming quarters. On the other side of the slide, you see the composition of our portfolio, comparing our current portfolio versus what we had in 2013, 10 years ago, and you see that the portfolio has evolved to a more diversified portfolio, which is something that help us to manage industry downturns in each of our markets. You see that back in 2013, 70% of the EBITDA generation was concentrated in 2 single markets, Colombia and Panama. And now you can see that we are more diversified with no more -- no country with more than 35% of the EBITDA generation. As you can see in the slide, our 2 powerhouses in terms of creating value in the region are the Dominican Republic. I remember back in 2021 when I presented here in CEMEX Day, I introduced you to the Dominican Republic as a potential operation to create a lot of value, and you see that now is the largest operation in the region. And TCL is the second largest, which is our operations in the English Caribbean, and I will deep dive on that operation later. Let me move to explain a little bit more how we work in this region. We consider -- we operate in 12 different markets in the region, but we operate as a one single entity, integrated entity. This is a huge value for CEMEX in the region because there is no other network of assets that can say that they operate like us. The system is interconnected, very agile to react to market conditions. In fact, we use Panama, Dominican Republic and Trinidad & Tobago as exports hubs. Last year, we exported more than 600,000 tons from those 3 markets to the rest of the region. And also, this is a network that now is working at a very high level of capacity utilization. You see the squares with numbers, those are the capacity utilization in our markets. Overall, we are running at more than 90% of capacity -- clinker capacity utilization. So that is why we put in place a very aggressive capacity expansion plan because we are now buying a lot of cement and clinker from third parties. Last year, we bought 1 million tons of clinker and 500,000 tons of cement from the third parties. So these projects are going to be accretive since day 1 because we are going to displace third-party purchases. So overall, 2.7 million tons of additional capacity. Already -- we put in place already the first part of the expansion program in the Dominican Republic. We started a cement kiln there and we will continue with projects in Colombia, in Guatemala and Jamaica, and we will be finished by the second quarter of next year. Overall, as I said, 2.7 million tons of additional capacity that will give us incremental $50 million of EBITDA on a steady state once these capacity additions are put in place. So as I explained to you, this is very accretive projects. And also, I would like to comment also in our operations in Peru. We have been operating in Peru for many years already. We started importing cement in that market, and we recently closed an agreement to rent a grinding mill facility. So we're going to be able to also to produce cement in Peru or we have already started to do it that way. The region, I'm very optimistic about the region and -- basically for 3 reasons: the regional drivers in terms of demand, our competitive advantages and also we see opportunities as the rest of the regions with sustainability. In terms of regional drivers, most of our cement in the region is sold in bags, is 2/3 of our market. And we rely a lot in these countries on remittances. Remittances strong, reaching an all-time record last year of $50 billion in these markets. Remittances have been growing 13% per year in the past 5 years. And why is so important remittance is because with that money, people buy the bags of cement in the store. So that has driven a lot of demand in the countries of the region. Some of the countries in the region, like Nicaragua or Jamaica, more than 20% of the GDP comes from remittances. So extremely, extremely important. That's on the bag cement. On the formal sector, bulk cement, we're optimistic on -- in terms of public infrastructure, projects like the next generation of infrastructure projects in Colombia, what they call 5G. Also in Bogota, projects expanding the first Metro line in the city and other transportation systems in the city. In the Dominican Republic, $3 billion announced on infrastructure projects. And very recently in Panama, building the third line of the Metro line in Panama, plus a tunnel under the Panama Canal that is going to bring us additional demand. We are participating in all those projects. And it's around all these projects is more than 5 million cubic meters of concrete. So a good deficit of infrastructure that is covered with these projects. And then third, I would like to talk about tourism. Tourism after COVID rebounded very, very importantly in the region, especially in the Caribbean area. Similar to Cancun and the places that Ricardo mentioned in Mexico, for example, the Dominican Republic is booming in terms of tourism and there is a lot of construction, more than 15,000 hotel units are being built as we speak in the Dominican Republic to attract that tourism to the island. So overall, in terms of regional demand very good outlook, competitive advantages. I commented on the value of having an integrated supply chain system in the previous slide. I'm going to focus on 2 other aspects that I consider very important for the region. First of all, our Construrama network. As you know, Construrama is our franchise of retail stores for the distribution segment. We have almost 500 stores in this franchise system in the region in 6 different countries. And this represents 1/3 of the cement that we're selling through the distribution segment. So we have a very solid presence in the distribution segment through our Construrama system, which has been developed based on the introduction of Construrama in Mexico several years ago. And then our digital platform, I think we have the best, while I believe we have the best digital platform in the region, Cemex Go with a high level of adoption rates with our customers. More than 80% of the sales that we're doing in the region, go through the Cemex Go digital channel, which is also a very important competitive advantage compared to our competitors. And finally, why we believe is our commitment to sustainability is important in the region. I think there is a huge challenge in the region in terms of sustainability, but also great opportunities in this area. And I'm going to highlight 3 aspects that I could see there very unique to this region. First of all, Regenera, which is not unique to the region, we have also Regenera business in other regions. But the issue in this region is that waste is a huge problem. Every day, in Latin America, there are 500,000 tons of waste are generated every day in Latin America. And a minor part of that, the waste is properly disposed. So this is a huge challenge, but it's a massive opportunity for CEMEX because we believe that we can occupy our space in the value chain of waste to create value through our Urbanization Solutions business line, but also to supply using that waste, alternative fuels to our cement kilns. We believe that we can recover more than 30% of the waste entering into a landfill through our alternative fuels strategy. So a big opportunity for CEMEX and is growing very fast. There are some cities in the region like Bogota that now are increasing or requiring to reduce 25%, at least 25% of the construction and demolition waste into projects in the city. So this is a huge opportunity, as I mentioned, that will help us to capture value. By the way, Urbanization Solutions now in the region is the second largest business line after cement. It's even larger than aggregates or ready-mix. Second unique opportunity for our region is the possibility to develop nature-based solutions. What is a nature-based solution is a possibility to use to capture CO2, but not with carbon capture technologies, but using nature, like forestry. The region creates a lot of opportunities in that sense. We're working specifically in one project connected to our Maceo expansion plan to develop 20,000 hectares of forestry that will be able to capture 25% of the total CO2 emissions that we have in Colombia, in our whole country in Colombia, CO2 emissions. So this is a project that we're developing in the region to test this additional capacity to capture CO2 using nature for that purpose, obviously, at a much lower cost per ton capture. And finally, clean energy. This is another area where we excel in the region. We have more than 40% of our sources of energy are coming from renewables, including, of course, solar, wind and hydro. Hydro capacity is very relevant in our markets, especially in Colombia. And we have a very robust road map to get to 85% by 2030. So overall, I'm optimistic for these 3 reasons. And again, this is a region that I would like to highlight the takeaway with a very strong free cash flow, very strong free cash flow conversion, more than 85% and very high return on capital employed, above 25%. So it's a region that is able to create a lot of cash for the company. I was mentioning before that I would like to introduce to you our operations -- TCL operations. TCL stands for Trinidad Cement Limited. We acquired these operations back in 2017, the majority ownership. We have 70% of ownership in these assets. And since then, we have executed a very successful turnaround. These operations are mainly focused on 4 markets: Jamaica, which is the largest operation. We have an integrated cement plant there. We're the largest producer or the only producer in the island. We have another integrated plant in Trinidad & Tobago. We are the only domestic producer in the island as well. We have a grinding mill in Barbados, the only one. And we have an import -- cement terminal in Guyana. So that system is working also as a mini network within the region. We're using Trinidad & Tobago to export cement from Trinidad & Tobago to the Eastern Caribbean Islands to Guyana and to Barbados, close to 300,000 tons per year. And we complement as part of our supply chain network with exports from Dominican Republic and Panama mainly into Guyana. A little bit of information about this market. Jamaica, as I commented before, is booming, especially on industrial and commercial and tourism. That's why we're expanding capacity in Jamaica. We're sold out there. Trinidad is the export powerhouse of the system. And then Guyana, I don't know if you've heard about what's going on in Guyana, but it's massive growth in terms of GDP, close to 40% last year because of the discovery of oil fields in the island. So that country is booming, and we are supporting the growth in that market. So you see the evolution of the EBITDA very nicely, increasing 6% per year since we acquired this asset. And hopefully, next year, when we meet, I will be able to tell you that these assets can deliver more value as we did with the Dominican Republic. So finally, just to wrap up, these are the 4 key messages that I would like you to leave with this presentation: first, again, the value of the region is the interconnected system and supply network system and a diversified portfolio, which protects us from downturns. Very strong market positions in each of the markets that we operate. We are either #1 or #2 in each of those markets. As an example, our TCL operations, we are a cash machine. We create free cash flow, which is a very important part of our role in CEMEX. And I believe we have very good fundamentals for growth in the region. So that is my presentation. I will be happy to take questions from you.

I think we may have time for 1 question. Maybe 2 -- but 1. Gordon? Okay.

Dominican Republic -- the Dominican Republic has become, as you mentioned, the power house. Haiti is having pretty significant issues. Have you seen any spillover in terms of either what you're seeing now or what you think might happen going forward?

Yes, the situation in Haiti is very volatile. We -- most of the cement that is sold in Haiti comes from the Dominican Republic, complemented with some imports from Turkey. We've been able to continue exporting to Haiti during these turbulent times. There were some issues with the border, but we have resolved those issues. And the situation has not spilled over into Dominican Republic. We have just increased prices in January. And we believe that so far, so good. There is plenty of demand in the Dominican Republic to be absorbed with the cement that is not going to Haiti. So at this point of time, we think that the situation is under control. And what has happened is imports from Turkey are the ones that have been reduced because of the situation mainly, not so much from the Dominican Republic.

Maybe we have time for one more. [ Jacob ]?

I was wondering if you can explain the strategy of why you divested from Guatemala and El Salvador.

Well, we divested from Costa Rica and El Salvador.

Costa Rica, sorry.

It's part of a portfolio rebalancing strategy that, in fact, Jose Antonio Gonzalez is going to present right after me. It's a decision that has nothing to do with -- well, Costa Rica and El Salvador's more an overall strategy that Jose Antonio will elaborate on that.

Thank you very much, Jesus. And I'm now pleased to present Jose Antonio Gonzalez, our EVP of Planning and Business Development.

Thank you very much, Lucy. Well, yes, I'm Jose Antonio Gonzalez. I'm responsible for Strategic Planning and Business Development. Very happy to be here with you today, and welcome as my colleagues have mentioned. So I will focus on our growth strategy. You have heard so far during the day from Fernando and Vicente as well as my colleagues, the regional presidents. And I think we've gotten a picture already of sort of what we're trying to accomplish, which is basically, as Fernando described, we expect or we want CEMEX to continue growing at a similar sort of high single-digit growth that we have been having. We also want to expand our footprint and to grow our business in the U.S., and we want the U.S. to grow in the low teens. And we also want to continue in this profitable decarbonization journey. So how do we want to accomplish all of that, and this is what I would like to address. So first, sort of to recap, 5 pillars underpin the development of the company as we think of developing the company going forward. The U.S. represents the place where we want to grow, and we want to have the U.S. become a bigger portion of our portfolio. We are very excited about the opportunities that we have been taking advantage of and also the many opportunities that we expect will become available for CEMEX. By virtue of having an interesting footprint in the U.S., we are well positioned to identify and materialize investment opportunities like we have been doing. Mexico. Mexico, we have a leading market position in a market that has a great story, and it is a strong free cash flow generation business, which will also play into the equation when we think about developing the company going forward. In Europe, we want to lead the way in profitable decarbonization. And in the rest of the world, we have very valuable building material franchises that will also help us accomplish our objectives. And across all our geographies, emphasis, the U.S., Mexico and Europe, we aim to expand our Urbanization Solutions building, so -- Urbanization Solutions business. So this is what we want to do. Of course, part of the strategy involves capital allocation and capital recycling. So for that purpose, very high level, this is our framework. On the one hand, we want to pursue portfolio rebalancing opportunities, which basically means looking at our portfolio, identifying, let's say, assets, which we believe could be better placed in hands of other investors with a more focus on certain geographies and redeploy that capital in our areas of priority, which have been mentioned already. And so we have done some of that. You were asking about that, Jacob, and that is the answer. When we think about where we want to take our portfolio? We think that there's a few things we want to accomplish. Simplify the portfolio, be in less number of markets where we have strong leading positions, also increase the weight of the U.S. in the overall portfolio. So that's an important strategy. We have gone in the U.S., a few years ago was 24% of total EBITDA in 2019; in 2023, 29%, and we want to take the U.S. to 40% of our overall portfolio. We like that market, its fundamentals, it's trajectory and the opportunities that we think we will be able to develop. So we think that by accomplishing that or pursuing that kind of portfolio, we will have a company that is much more attractive with better prospects for the future and attractive for investors, et cetera. Now capital allocation, how do we think about capital allocation? So our capital allocation framework considers 3 key areas: number one is not necessarily in that order, but we want to deploy capital and invest for growth or to grow. And the focus is the U.S. Expanding Urbanization Solutions platform and decarbonization. Also, debt paydown, we have used and we will continue using capital that we generate free cash flow, et cetera, to reduce our debt. We have accomplished a very interesting milestone for the company, which is investment-grade credit rating. But as Fernando mentioned, we want to improve that. So BBB-, next is BBB. So Maher will elaborate on that, but we will continue strengthening our capital structure, and that means improving our leverage or reducing our leverage ratio. And also, we want to return capital to shareholders. I mean that's something that we have been doing for a while. We have done share buybacks in the past. We also, as Fernando mentioned, paid a dividend in 2019. But now tomorrow -- day after tomorrow in the shareholders' meeting, we will present for consideration of the shareholders the approval of a dividend, which we expect is now a dividend program, and we expect that to be recurrent and progressive, meaning that over time, it should be improving. And we will also keep the flexibility to implement share buybacks if the conditions are there, and if it meets the overall picture. So in 2020, we adjusted our strategy to devote more attention and to focus on growing the business, growing the company. And since then, as you can see here, the company has been growing at a high single-digit pace, which we want to continue in the future. These 3 markets that we have been focusing on today, the U.S., Europe and Mexico, accounted for 77% of the overall EBITDA. Now in 2023, it was 84%. And we believe going forward, it will continue in this trajectory. For example, as the U.S., as we work to having the U.S. reach this 40% weight to the portfolio similar to Mexico. Since 2019, we have divested $2 billion worth of assets. And we currently have -- since we launched this in 2020, a $2 billion capital deployment program consisting of small sort of bolt-on and growth investments. And this $2 billion ongoing program consists of a number of projects that are already completed and currently generating benefits for CEMEX, a portion of projects, which are under implementation and will contribute to increased benefits into the next few years. And this is the status as of today. This is not sort of -- the program is ongoing, meaning that as we continue to identify investment opportunities. We will consider them for allocation of capital. And we have a process in place to generate investment opportunities, evaluate investment opportunities, rank them in order to allocate capital to what we consider to be the most attractive opportunities. And so we have been focused on growing on free cash flow generation and on decarbonization. More details on this $2 billion capital deployment, which has been in line with our priorities. As you can see, the U.S. has been assigned the bulk or the greatest portion of this capital deployment program. The projects that we are allocating capital to, can allow us to grow our footprint or to produce efficiencies. When it comes to projects designed to grow our footprint to grow our business, the U.S. has actually been allocated more than half of all the capital for this purpose. And just to give you more details, well, after the U.S., you can see that sustainability. So all the projects related to reducing carbon footprint, all of them very profitable, the second biggest portion. And then we highlight here Urbanization Solutions. Urbanization Solutions, which has been growing at a very attractive pace, has not been the recipient of huge capital. We have been focused more on growing internally on taking the assets and the footprint that we had. Yes, we have been very -- on a very selective basis, deploying capital, which has contributed to growing the business, but we think there's a big opportunity to further expand this business and then there's other. So 409 projects, out of which [ 200 ] have been completed and have allowed us to increase our EBITDA by $321 million as 2023. And as we -- as these projects ramp up and as we complete the pending projects, there's another $320 million in EBITDA that will increase our EBITDA performance in the next few years. And again, this is the status as of today, but the project -- the initiative is ongoing, meaning that over the next weeks and months, we will continue adding new projects in the priorities that have been mentioned. So examples on the U.S. The U.S., 74 projects with an average IRR almost 30% that will contribute -- have been contributing and will contribute a total $260 million EBITDA when the projects ramp up and finish. And for example, when we think about what this has done for our footprint in the U.S., with this initiative, we have been able to significantly strengthen our Texas position. I would highlight significant investments within these parameters in our Balcones plant to produce to enhance the production of aggregates to be able to produce blended cements to reduce alternatives -- to increase the use of alternative fuels, selective -- very selective investments in ready-mix so that we can have a presence and a footprint in key metro areas, increasing our vertical integration with our cement plant to name a few. And in the case of Florida, similar story, you see a similar amount of capital allocated. And what has this done for us in Florida? Well, Jaime already explained it, but we now have a significant source of aggregates in Canada to supply aggregates for our Florida market, which is our biggest market in the U.S. And we've done other investments in aggregates in Florida. We've also invested in Urbanization Solutions to take advantage of the high demand for block. So we have a few block plants in Florida that have contributed to the growth in Urbanization Solutions to name a few examples. In the case of sustainability, $400 million, 172 projects, average IRRs of 48%. So these are projects, as Vicente explained this morning, Fernando, Sergio. These are projects that either reduce our clinker factor, allow us to increase the use of alternative fuels that reduce our CO2 footprint, but also allow us to be much more efficient in costs. So it makes a lot of sense to make these investments. We get quick rewards. Our EBITDA grows and we make progress towards our sustainability goals. So here a couple of examples. In our plant in the U.K. in Rugby, we invested $29 million such that we -- for -- in a project that allows us to increase significantly the use of alternative fuels currently in the mid-70s, but we expect to bring it all the way up to 90%. And then a plant in Alicante with grants from the European Union Innovation Fund, a small investment as an example that will allow us to produce [ interim gas ] from municipal industrial waste and that is a fuel for our plant. So very attractive projects across our businesses, emphasis in Europe but also in the U.S., Mexico and elsewhere that are contributing in many ways, allowing us to make progress in our sustainability goals, reduce costs, increase EBITDA. And then Urbanization Solutions. We have been making a lot of emphasis on Urbanization Solutions. Urbanization Solutions has been growing significantly. It's our fastest-growing unit or business or category in CEMEX with 24% compounded annual growth rate since 2019. You saw that we have invested a moderate amount of capital relative to the total. Why is this growing? I mean this is growing for a number of reasons: one, it is addressing the needs of construction, construction because -- needs urbanization, labor shortages, decarbonization, all of these products contribute to these sort of pain points in the deployment of construction. So we're well positioned to complement our existing footprint in heavy building materials with complementary products that have all these attributes and are quite demanded. So you can see here how the regions with the most growth has been the U.S., Mexico, that's where we have invested. And within Urbanization Solutions, our circularity business, Regenera, growing at 75% compounded growth rate. Our mortars business where we have invested, I will give you an example, growing at almost 30%. Our admixture business, which, as Sergio mentioned, is a very important component as we think about advancing the qualities of our concrete products growing at 26%. And industrialized construction, I mentioned the block business in Florida where we invested. Also sleeper production in the U.K., growing at 24% compounded annual growth rate, used to represent 11% of our sales now represent 14% of our sales. And here are some examples of investments that through this initiative that I have described we have put together. For example, in Mexico, new Regenera facility, where we are processing waste. Ricardo mentioned how we are now processing 35% of the waste in Mexico City. In Germany, we acquired a mortars business, a small family-owned company, and we expect to do more of this. But suddenly, we have something that we can integrate to our mortar platform. Product lines are complementary, but there's a lot of efficiencies to be gained by combining procurement, combining R&D. These products have a big component of R&D as we think about putting new products with these attributes I described into market. The admixtures plant in California, admixtures has been growing, experienced significant growth for us in the U.S. And industrialized construction, I mentioned the railway sleepers. This is an expansion that we did in our plant in the U.K. So just to give a few examples. And then Regenera, which is our business in circularity. We are focused in developing a supply chain along 3 material for waste streams, municipal and industrial waste, which we expect by 2030 to double what we are processing to 7 million tons as we go from 37% alternative fuel substitution rate to 55% in 2030. Construction demolition, excavation materials, we have 100 sites in the U.S. and Europe, where we have some activity of processing construction demolition and excavation materials. And we want to expand or we aim to expand by 2x what we are processing in this materials stream to 18 million tons. And finally byproducts. Byproducts are products that are, let's say, a waste from other residual materials from other industries that we can use to replace a clinker or limestone in our cement production process, reducing cost and reducing the CO2 footprint. And we want to increase by 30% the use of byproducts between now and 2030. So all of this is very aligned to our strategy. It's something that we expect will grow. And it is important to us to develop the supply chain so that we can be an active participant in each one of these waste streams. Advocacy and regulations play a key role in developing these businesses, and we are, of course, it's part of our strategy. So what do we -- how do we expect to deploy capital in the future along the lines of the priorities that I mentioned? Also, we believe that in the next few years, we will have significant free cash flow generation last year, $1.2 billion. But we will continue to pursue divestments as part of this portfolio rebalancing strategy. That will be -- that will provide a source of capital so that we can redeploy and meet our objectives. So on the right hand, the uses -- and we don't have percentages, but we -- and this is not fixed, but we try to represent sort of the proportions that we think over time and in the medium term, this is going to be accomplished. So one element is to deploy capital to grow, emphasis the U.S., emphasis decarbonization and emphasis in expanding the organization solutions platform. The next segment is return capital to shareholders, either through dividends or buybacks. And we are, as mentioned, beginning this systematic progressive dividend program, after having been active in share buybacks and dividends in the past. And finally, debt pay down. We still are aiming to enhance our capital structure, reduce our leverage and strengthen or improve still our credit rating. Also the proportions will vary over time depending on the progress we're making on each front. But this is a good guide, I think, in terms of how we think about allocating capital. So sort of in summary, objectives of our growth strategy to reach high-single or to maintain high single-digit growth over the midterm, to have the U.S. grow at a superior pace, which is low teens such that it can reach 40% of our total EBITDA, continue driving sustainability, especially in Europe, where we aim to have leadership, leverage our leading position in Mexico, as has been said before, and we have an aspiration to grow Urbanization Solutions from $300 million EBITDA in 2023 to $1 billion. And that's a summary of our growth strategy. And according to the clock is 1 minute for questions. Thank you.

It looks like it might be more than 1 minute for questions. Maybe we'll start with Carlos Peyrelongue.

Thank you, José Antonio. A couple of questions related -- the first one on the possibility of listing the U.S. division. Some of your global players have been doing that? Do you see value in unlocking that? And what would be the challenge in doing that probably taxes might be an issue, but that would be one. And then you talked about reducing the number of countries in which you are involved. If you could comment why are the [Audio Gap]. Just to get a sense of what are the areas where you could deemphasize?

Yes. So question number one, look, yes, there's clearly a lot of emphasis right now in the U.S. market from a value unlock standpoint. And we agree with that. Now there's value to be unlocked. Capital markets are not being efficient or are not efficiently valuing in portfolios like the one we have, for example, our U.S. assets, and Maher will elaborate on that. Now -- I mean, what -- how do we approach that? Or what do we do about it, right? I think our strategy is precisely trying to -- by enhancing the presence in the U.S. by having the U.S. reach 40% of the overall by investing the majority of our available resources into the U.S., we aim to shine a light on the attractiveness of this market and the value of this business and we think that will contribute to capital markets sort of understanding better between that and what -- everything that is going on and all the actions taken by some of the competitors you mentioned. So we think our strategies precisely about that. It's about growing the U.S. and sort of shining a light and with that, have that become a much more visible part of the equation. Now in addition to that, is there something a transaction or something more? Maybe. And we will evaluate or analyze those -- I don't think there is a -- interesting that what we have seen in the market so far, is not like a specific formula everybody is doing like a different approach, which is resulting in different outcomes and different implications. From our standpoint is continue doing what we embarked on since 2020, prioritized the U.S. for growth, shine a light on it and -- because of everything that is happening, should contribute to this closing of this gap. Now the second question is very simple. We think that as you see all from the presentations today, we're focusing a lot on U.S., Mexico, Europe, meaning emerging markets would be candidates for divestments.

Adrian?

José Antonio, a couple of years ago, the company aim to try to have a door open in order to issue shares at some point if that could be used as a way of banking investments. Now with investment in back then, there were many concerns of some people thinking that the company needed capital, which was not the case, obviously. Now given the investment grade, et cetera, when would you think it will be appropriate to have the door open again so that you can issue equity when needed for investments?

I cover the growth strategy. And as you might have noticed, there's no mention or no discussion, let's say, on raising equity capital. So I think our strategy, we think our growth strategy, as we articulated today, can be accomplished because of free cash flow generation, as I mentioned, $1.2 billion, $1.3 billion last year, but also the result of portfolio rebalancing, meaning liberating or unlocking capital and redeploying that capital -- recycling that capital, for example, into the U.S. into Urbanization Solutions, decarbonation. So any equity issuances completely right now out of the radar or horizon.

Follow-up with Ben, please?

It's been more than a minute, Louisa.

I know. I'll take you off the hot seat in a second.

I will keep it short. Just a follow-up on these divestitures. Obviously, there was some EBITDA attached to it. Can you remind us maybe how much was EBITDA loss because of divestiture and then redeploy it into some of the investments you made in the U.S. Urbanization Solutions? Like kind of what's the balance of the net gain in EBITDA over the last couple of years, if you have it?

Look, I think when we think about divestments of assets, I think a good indication of, I think, what we have accomplished, of course, is some variance, but probably 10x. And if you saw in my presentation, I mentioned the capital deployment program of $2 billion and associated benefits of around $640 million. So you can see the $640 million compared to the $2 billion is slightly higher than 3x. So that would be the equation. I should also mention that divestments, you get the proceeds and deconsolidate the EBITDA immediately. This capital investment program, there's some, but not a lot of acquisitions. So it's mostly internally generated projects, that have a ramp-up period. So it's not even -- the multiple that I mentioned, $640 million compared to the $2 billion, which is slightly more than 3x, does not happen immediately. There's a ramp-up period as we deploy the capital, go through the investment or -- yes, the investment that we're embarking on. And then over time, we will see those benefits on.

Okay. One last question from Paco.

Mr. Antonio. Just a question on this divestment plan and the rebalancing of the portfolio. I know it is a medium-term plan, but when can we see CEMEX with a more simplified portfolio structure? Because when you see the operating outlook of the different geographies. It is very positive outlook. So I will assume that this rebalancing may happen sooner than later. So when can we see that?

Yes. Look, we're working on it. We've made some progress. Somebody mentioned recently -- well, not -- the disposals of Costa Rica Salvador. I can tell you that at the moment, for example, there are multiple conversations going on as is normally the case. So hopefully, some of those conversations will lead to progress on this front. So we're aiming to make progress as long as we meet the conditions and our thresholds, but that's all I can say. When we have something, let's say, more specific, we will surely communicate.

I would just add that we have made significant inroads. I mean right now, 85% of the EBITDA that you've seen are generated in U.S., Europe and Mexico.

In terms of simplifying the portfolio. Yes. Yes, that's true. Thank you, Louisa.

Alright. well, thank you very much, José.

Thank you, everybody. Thank you very much.

And now it's always my pleasure to Maher Al-Haffar the CFO to the stage.

Thanks, Lucy. Unfortunately, that's not what she tells me in private. Now good to see you, everybody. And this is -- for me, it's a really exciting day. I hope you are absorbing all of these messages because there's a confluence, I think, of positive outlook. I mean when I hear the stories this morning, I couldn't help myself texting everybody saying, what a great presentation, everybody, and what a great story, everybody is saying. I hope that by the end of the day and especially as you go back to your office and you reflect on the material that you saw in the Q&A and the conversations we'll have, that you realize that we are the best positioned company in the most attractive markets and that we do and will provide a very significant equity upside for our shareholders. I will address -- you've heard from my colleagues on the first 2 items, I will talk about the last item very shortly. As you've seen, as José Antonio mentioned, we're kind of talking a lot about U.S., Mexico and Europe. Those 3 pieces are 85%. In the very medium term they could be up to 90-plus percent of our portfolio. It's very important because it has to do also with how you look at the value CEMEX is commanding. We're looking at single-digit growth, and we've demonstrated historically very strong growth in virtually all of the blocks, all of the building blocks of our business. In my view, and as you've seen from everybody else, there is absolutely a historic confluence of conditions that are very procyclical for our business. Whether it's the unprecedented fiscal stimulus in the U.S., in Europe, the kind of the collateral impact -- positive impact into Mexico that we have seen. Strong demographics that all of my colleagues have talked about, huge gaps in residential in Mexico, in the U.S., in other markets. We're also coming to the top of an interest rate cycle. And all of our central banks in our major markets have huge firepower in terms of incentivating growth as things slow down. And we're seeing very healthy credit conditions in most of our markets. And so we do believe that as things -- as interest rates go down, monetary policies ease, there's going to be very procyclical increase in demand for housing. Infrastructure -- and in our case, everybody can say there's capacity for infrastructure. But if you take a look at what infrastructure looks like, the state of infrastructure in the U.S., frankly, it's sucks. And so while we're spending a huge amount of money on it, there's tremendous capacity to spend more money. The same goes from Mexico to a lesser extent, the same thing is in Europe. And then the other thing that is also very important, it's not a need without the ability to fund. All of these 3 major business blocks that we have, have a major need, pent-up demand and a very significant material way and developed capital markets to fund these expansions. So we're very excited about that at the end of the day. The other thing that I want to mention is that we're in a privileged situation. Contrary to some other businesses, there's no potential disruptive products in our business. And in fact, as we've heard in terms of sustainability, we're as comparable, if not more comparable than would and some of the other items. The other thing that we need to mention also is because of the very fact of climate change, our products are becoming even more demanded because of resilient construction needs all over the world, which is very important. And if we take a look at the supply-demand dynamics, either because of tightness or because of demand or because of supply chains. We have been able to reflect or more than reflect, in fact, inflation in our pricing strategy. Just as a -- I'm just going to use cement as a proxy. In '22, we raised prices in cement 13%. That's on a reported basis. Last year, we brought up prices about 18% on a reported basis. In '19 -- I'm sorry, in '22, the percentage of inflation that we covered was in excess of 100%. In '23, the coverage of inflation was close to 170%. And we see momentum going forward, not because we can increase prices, but because there's persistent inflation, persistent higher cost of decarbonization, all of these things are going to force the trend for upward pricing. The other thing that is also very important, we're seeing a tremendous amount of M&A activity in many of our markets, which is setting at the margin, a very high benchmark for return on capital employed. Which means you've got to have pricing in order to justify these investments, right? So that means other players in the industry are forced to serve their shareholders to behave in a rational way. And then the other thing that is extremely important from our perspective, our industry is also very privileged that decarbonization for us has a double materiality. We not only can improve our footprint in emissions and in general, in terms of our future and action program, but also the transition process is actually making us more profitable which is very powerful. Not many industries can do that. And CEMEX, I think, is at the leading edge of that double materiality impact. Now as far as the upside, I will talk about that in a few minutes. Now if we take a look at -- what is this? Ah okay. So I think that there is something wrong with the slides here. Can you move that? Let me see -- yes, great, here we go. Okay. And if we take a look at our performance last year, which is very important. As you can see, we have been rewarded. I mean on the fixed income side, as you can see, as our credit improved as the dynamics of the market improved as our discipline is being detected, you see how our spreads. And if you take a look at the dark blue line, that's our spread, the green line in the bottom of the slide, is the BBB index. And you can see how our spreads have consistently narrowed. Now there's still tremendous upside from especially as we have improved into investment grade. Of course, we're looking forward to the second investment-grade action from our rating agencies. Hopefully, that will happen soon. This is very positive because when I compare our cost of funding to our peers' cost of funding, there's still a lot of room for improvement at the end of the day. And of course, as you know, this will impact weighted average cost of capital, volatility and all of that, and that will translate also to a difference in the way that we are valued. Now if we take a look at the right-hand side of the slide, you take a look at, how the market has rewarded us. We were up 91% last year. We outperformed our global peers, the Mexican Bolsa, which is -- I don't want to compare us to there because the Mexican Bolsa, as many of you know, here is highly concentrated in terms of its ownership and it's much less liquid than the markets that we trade in. We also outperformed the S&P. We outperformed the Europe STOXX 600. Now having said this, somebody may say, "Oh my God, this is absolutely the wrong time to be coming into CEMEX? And the interesting thing that even at these valuations, we're trading at almost more than 30% discount to our historic multiples. And frankly, I think -- we think that because of the improvements in the sector, because of the improvements in the company's conditions, we actually command a higher premium than our 10-year average. And I will go through that in a second. Before I go there, I want to just briefly talk about forward-looking guiding principles of our financial strategy. As Fernando said this morning, for us, investment grade he didn't say that, but implying that, certainly for me and for all of us on the ExCo, investment grade is personal. We really all worked extraordinarily hard, and not just the ExCo, but 43,000 people in our company, worked extraordinarily hard together for so many years to get us here. So it is personal. We intend to keep it. We intend to get it -- to make it better over time and make sure that we live all of the conditions and terms to make sure that, that is the case. So that's very important. Now in terms of the elements of our guiding principles financial strategy, most important is having the best and most efficient capital structure. In my view and the strategy that we're managing, that is a BBB capital structure. Why is that? Why do we not want to be BBB+ or single A? Because we think that is the most efficient, the sweet spot of leverage, returns towards risk through the cycle, which is extremely important. We need to make sure that also at the same time, as Fernando said, that we get more comfortable and move towards that BBB structure. And as a consequence of that, we're focused on actually reducing our leverage around another 0.5 turn from here during the medium term. How are we going to do that? Of course, we're going to do that through a reduction in the stock of debt of the company, but also, as you've seen, probably an enormous amount of improvement in our EBITDA. And so the combination of the 2, perhaps may take us even beyond the 0.5 point turn but at least that is the target from our perspective. Why is that? Because we know we are in a cyclical business. We want to make sure that if things go wrong, we don't get caught on the wrong side of ratings. We want to maintain that investment grade liquidity. One of the things that is at the hallmark of our strategy is maintaining the right comfortable level of liquidity. As you all know, today, we have about $2 billion of committed facilities. We are currently in the market and about to close in the first part of April, renegotiation of one of our facilities. We should increase our committed lines to up to $2.25 billion. We think that, that should be more than sufficient to take us through any cyclical downturn. This is plus, of course, $400 million to $500 million of cash that we typically maintain. And this should be sufficient for seasonal as well as potentially cyclical downturns. We also want to make sure that we have flexible access to the capital markets. We want to go to the capital markets on our terms not their terms. We don't want to be in a situation where we have to refinance something, even if we are an investment grade at the wrong time, when the markets happen. So if you take a look at our maturity schedules and especially if you pro forma those maturity schedules to the most recent transactions that we've done earlier this year and by April, we're going to have the best maturity schedule ever, and we're very proud of that. And we will continue to work on that. The fourth element of our financial strategy and guiding principles is prudent risk management. And what I mean by that and what's driven by is the targeting of dampening any volatility and potentially improving free cash flow generation. And in that vein, we have systematically hedged almost 3/4 of our emerging market currencies, and we'll talk about that. Today -- and it is mostly the Mexican peso to Vanessa's question. Today, on average, our forward positions go out 24 months. And our current FX hedging position, just to give you an idea, can actually tolerate anything from an appreciation of the peso of 10% to a depreciation of the peso of 40% and sustain that depreciation for a full year and the maximum impact on our leverage is slightly over 1/4 of a turn. That's how powerful that hedging strategy is. And at the same time, it is being done at an extremely affordable, efficient manner. We are doing so at roughly half of the cost of carry. So very efficient strategy in delivering that. We are also hedging about 60% of our total energy exposure. This is including electricity, fuels, transportation fuels and maritime shipping. For the first time, we started also hedging not just our own transportation fuels, but we're also hedging third-party transportation fuels. But the first time we started actually hedging our Coke Petcoke position. As you know, many of you realize that, that's a difficult thing to do, but we are beginning to do that in a very prudent manner. The third item of the risk management strategy is a very healthy mix between fixed and floating. Why is that important? Because we're about to probably start a monetary easing cycle. I don't know when it's going to be in a quarter or 2 or 3. But for sure, we're going to -- rates are going to start going down. And we want to make sure to be positioned so that we could benefit from that monetary easing cycle in our structure. Today, we are 70-30, 70 fixed, 30 floating. We can very quickly change that through our exposure either with the banks or through the derivatives position. And then the last item, which I will not talk a lot about is sustainable return of capital. I think Fernando already discussed that, José Antonio already discussed that. And then the last item of our financial strategy is putting our money where our mouth is in terms of future in action. So we are the company that has the tightest commitment to aligning our debt stack to sustainability KPIs. We've committed to a 50% achievement by 2025. We're already ahead of that, and we are committed to 85% by 2030, and I'm confident that we will get there. Now let me take a sip of water before I start this section because this is kind of an interesting section, not that the rest was not, but this is particularly interesting. Yes. So listen, so before I start talking about why we think -- why our management thinks that we present a significant equity upside for our shareholders? I'd like to say that the next few slides are based on our opinions based on publicly available data. It is not our view on valuations of M&A transactions. It's based on traded information out there in the market for some of the peers or the comps that we will use, not liquid and not indicative. So it's very important that you keep that in mind -- it's -- and none of the multiples that we will be talking about right now are our opinion of the multiples. They just happen to be the comps that we think we should be comped by. So first thing I would like to talk about is the U.S. You heard the terrific story of the U.S. I'm not going to go through it. But it represents 30% of our portfolio today in terms of EBITDA. It's expected to go to 40%. It's growing double digits and expect it to grow, you heard what Jaime said, and you've heard and seen the underpinning -- the strong underpinnings of that part of the portfolio. When we take a look at the unpacking the valuation of our U.S. business, we need to take a look at the components of our business. Our business, as you saw from Jaime, 35% is ags, and we're investing more in ags. Those businesses today based on comparables is somewhere between 17 to 18x. So 35% of our EBITDA ideally should be worth somewhere between 17 to 18x. The other 35% is cement. U.S. cement players are trading somewhere between 9 to 10x. So we should take that into consideration. The other piece of the business is urbanization solutions. Urbanization Solutions is a business not just in the U.S. and in Mexico, we think is an area where we could be super scalers in and we've seen the level of growth. It has been growing 25% per annum on a CAGR basis, and we think we can continue to do that. The other thing with the Urbanization Solutions business is that it has a 2x operating leverage. We are growing consistently EBITDA twice the level that we're growing top line, which is absolutely amazing. And so I forget if José Antonio said anything about his vision of Urbanization Solutions. So $1 billion in the medium term. Again, you got to throw that into the pack when you start looking at the U.S. business and the Mexican business. And for those of you who are not familiar how those businesses are valued, they're 12, 13x multiple. So you could just do the math. Of course, we have a small ready-mix business. And people might say, well, yes, the ready-mix business is worth low single-digit multiple. Yes, if you are an independent company. If you happen to be part of a global business with a fantastic brand, then it's worth much more than that. So our speculation and our -- this is for illustrative purposes only, the lawyers told me that I have to say that, that we think our U.S. business is worth -- should be worth on a mid-level basis to a high-end basis, 10 to 13x, okay? 10 to 13x. $1 billion growing to maybe $1.5 billion in the medium term. Mexico. Mexico was a difficult one because we really don't have comps in Mexico that we can comp our business to. I mean people say, Mexico, let's talk about X, I don't want to talk about names, but the names that we could talk about are maybe trade by appointment and for a couple of bucks a day. I don't think they are really good comps. We think as the U.S. -- as Mexico matures and develops, our cement business in Mexico is really deserves a valuation like the U.S. business in our view. And why is that? We just heard from Ricardo it is the premier brand. It is the dominant position. It is throwing 90% free cash flow consistently. It's growing double digits. We have the best innovation, the best staff, the best NPS in the market. We think we deserve a premium. I'm not suggesting that we should trade at U.S. levels, maybe take it a turn or 2 because of the ZIP code. That gives you a multiple of 7x to 9x for the Mexican business for $1.5 billion EBITDA growing. And then I'm not going to go through this analysis for every region. What -- I'm talking about rest of world, and we're going through the same comparables and we're going from 4 to 6. Now in the rest of world, and for every one of these, as I highlighted earlier, this analysis is not for M&A purposes. We think when you start talking about M&A, the multiples are much higher than that. And of course, we're not -- we don't think that that's what necessarily the business should be worth right now, and that's 30% of our EBITDA. Now if you take a look at this analysis and you adjust it properly for all of the components that we just talked about, some of parts are somewhere at the mid-level 7x at the high level 9x. We are currently trading at 6x. That translates, if you do the math, back of the envelope, about 50% to 80% upside in terms of our capital cost of -- I mean, not cost of capital, our capitalization in the market today, which we're very excited about. And we think that shareholders should, over time, benefit from this upside as either additional transactions as people appreciate more of the different pieces of our business model and also as people start unpacking the different building blocks of our businesses because of all other transactions that are happening out in the market, which is very important. So this is just food for thought. I know that this is not going to happen overnight. We know that companies don't trade 100% of some of parts. It's supposed to be thought provoking for all of the people here in the room and the webcast. And of course, we will be communicating these messages more consistently as we talk to our shareholders and other capital markets players. I would like to just leave with one last slide, which is kind of a, again, a thought that goes with the rest of the conversation. CEMEX offers a leading brand around the world and especially in the U.S. and Mexico, but everywhere in the world. We have the best NPS in the industry. Our latest NPS was 73 -- for those of you who are familiar with NPS, NPS of 73 is by far the highest in the industry and also comparable to an Amazon and an Apple. That happens because of a superior commercial model. What is the most important part of that superior commercial model? Obviously, our salespeople, but more importantly, the use of technology. Today, 60% of our sales are being conducted on our e-commerce platform. That is super powerful from a customer perspective. We have the fastest-growing markets. We have significant tailwinds as we talked about, because of fiscal stimilus and potential downturn in -- or, let's say, easing and monetary policy, positive pricing dynamics historically and going forward, increasing free cash flow generation and on top of all of this significant equity upside. And with that thought, I leave you. Thank you very much.

I don't think you are leaving.

Sorry, Q&A.

He tried to make an exit, but we're going to make him take 1 or 2 questions before Fernando comes up. Carlos Peyrelongue, do you want to start?

Maher. The question is on the cost side and margins. We saw last year, a reduction in cost after a sharp increase the previous 2 years. You talked about some of the hedges that you put in place. If you could just comment on overall how you see the cost side and whether there is room for margin expansion, considering some increases in prices that we're expecting?

Well, I mean, I think when you talk about hedging and margins, 2 different things, right? I mean, because our hedging -- most of it goes below the line. It's not -- does not receive an accounting hedge. So it does not -- except for one part of the hedging, which is our transportation, the diesel hedge, everything is below the line. So you may see an impact at the EBITDA margin that is not being shown because of the hedging. I think when you talk -- when you want to take a look at the positive impact of hedging, you have to take a look at free cash flow after everything, and that's where you see the positive.

But in terms of the reduction we've seen in costs over last year trickling down into this year, combined with price increases, margins for the consolidated -- how are you seeing that for this year?

I mean, we haven't given guidance on margins for this year, right? I mean...

No, we haven't. But I think we could talk maybe about health energy...

Yes. I mean I think, look, when we take a look at our energy costs, for instance, virtually all items are down almost 25%. And I mean, if we talk about petcoke, nat gas, coal, transportation fuels, all of that is somewhere between 20% to 25% reduction. And we see downward momentum. And we're hedged out, I would say, for this year, almost 75% of our fuels are hedged out. And we are also hedged out close to 75% for '25. So I think that we're benefiting and of course, as we see energy markets weaken we have a rolling effect that impacts the -- how much the hedge is actually positively impacting us? Again, I'm very cautious on not being -- giving any kind of feedback that is different from the kind of guidance that we gave at our quarterly. But clearly, we see deceleration in improvement in our cost structure.

I think one thing to remember, Carlos, is that we do have a lag between what you're seeing in spot prices and when that translates through inventory, and we use in, in our average cost accounting for inventory. So there's typically about 3 to 4 months, and we're still very much enjoying that energy decline.

Yes. And the other thing that is happening that is a little bit as an opportunity for -- like in Mexico and other places, for instance, where we were overweighting alternative fuels is that natural gas has really dropped. And in many places in the U.S. and certainly in Mexico, we're privileged to be near natural gas sources. Our facilities are able to use natural gas. And so we're switching. And in particular, in Mexico, some of our alternative fuels on a gigacalorie basis were actually quite high because of the type of sources that we have. So we're switching -- so that's switching along with the general recession in energy prices should be helping us as we go on this year and potentially next year.

Maybe we have one more question for Maher and then we'll go into a general Q&A. Gordon, please?

Maher, a quick question on the sort of the -- the some of the parts that you presented plus the share buyback. During the course of the day, that sort of share buyback allowance has been described as to be used opportunistically. But if the numbers you've shared with us are right, why would you not buy back shares more systematically, if it's that cheap?

Yes. It's a very -- thanks a lot for that question. Very good question. I think when we take a look at share buybacks you have to take a look at all investments, right? And to me, one of the things that should hopefully is not escaped the attention of everybody else here, is that we're spending and have been over the last 3 years, $2 billion, essentially buying EBITDA at 3x. So EBITDA -- we're buying EBITDA at 3x, $2 billion worth, right? That is a super attractive place to allocate capital, right? So we're going to allocate capital there first. We are -- we started or we initiated a dividend payment program. Of course, opportunistically, we may consider to do that. But we also -- we need to be very conscious of our ratings and what does that do to our leverage ratio to the extent that we do that, but it's not off the table. But I think the most important point is that in the order of importance is if you have the ability to buy EBITDA at 3x, that is the priority for the time being. And of course, we also want to reduce our stock of debt as well. So it's a delicate balance. I'm not so sure -- I mean, maybe I'll put it to ChatGPT to find out if I can get an optimization to that question. But the reality is, for us, we look at order of priority, and that's the order of priority that we have right now.

Great. I think we're going to move on, if that's okay. So if we could have Fernando Gonzalez, our CEO, come to the stage for Q&A.

Okay. So it's me and the rest of my colleagues. So it's not only me for the final Q&A. Pay attention, guys.

Does anybody have any questions? Anne, would you like to start. If we could get a microphone right here.

They were excellent presentations today, really great. And it was very clear the role of the U.S., the role of Europe and Mexico. In Europe, it's really strong. The sustainability and reduction of CO2 emissions. How do you see that evolving into, let's say, the U.S. markets? Will it be always lower? Will it be more expensive? Where do you see that going?

Well, I think it's very challenging to imagine how is it that things are going to be evolving. I think, again, I already said -- I think -- we think Europe is the region setting the direction and the pace because of how much their economy, true public policies has been aligned to the idea of a very low carbon and the idea of being a circular economy. Now when we -- let's say, if I try to imagine how that can be compared or translate it into the U.S., it's a very complex thing. And it was even more complex before IRA. But solutions like IRA can take perhaps with somehow different schemes, but can take the possibility of decarbonizing the U.S. economy, again, slightly different than Europe, but speeding up that process. For instance, do we believe that there is going to be an ETS out of the level in the U.S.? Most probably not. But IRA is kind of playing a role all over the U.S., meaning because of the tax benefits that IRA provides for projects decarbonizing different industries. I think I mentioned before that particularly on what we call the traditional levers of decarbonizing although there is -- there are lots of innovation around the traditional levers. But I think the public policies related to those are much easier to implement in different countries or in the case of the U.S. in different states. That doesn't mean that we don't need to make a huge effort on trying to advocate for these public policies, but it might be easier. Now there are -- how to say -- there might be a number of ways to decarbonize in the U.S., but there are a few that are pretty significant. So for instance, I think we mentioned -- I mentioned that in the case of the U.S., ASTM, which rules for the type of cement and ready mix that can be sold in the market, traditionally has been following a recipe-type of formula, meaning if you use X amount of this material and X amount of that material, then what you produce can be [ cold ] cement and can be sold in the market. In other places, in other geographies, Europe and others, -- it is a combination of the composition of the materials plus the performance of the end combination. In the case of the U.S., whenever tenure cements are widely accepted. We can easily imagine moving from, let's say, 85% to 90% clinker factor to 70%. That's the figure, 75%. So that's like 10, 15 points of reduction. What is needed for that to happen? Well, for these cements and ready mixes to be accepted in the market by whoever -- whatever the authority that needs to authorize that we use, is that complex? Well, politically or it might be complex. Technically, it's very simple. Because those cements and ready-mix has been used in other geographies for 30, 40, 50 years, and you can easily understand that those cements do have the same characteristics than the traditional Portland cement -- Type 1 cement that we all used to produce. So I'm making a very long answer to your question. It's not the same thing. That's why it's much easier to move faster in the case of Europe. And I do believe that the rest of the world, U.S., Mexico and other markets are going to be following. Perhaps different formulas, but are going to be following the same steps.

And just [indiscernible] like you see private sector often being the leader that [indiscernible].

It is. And in this case, I think I mentioned U.S. is using already like 20% of alternative fuels. So we're not waiting for certain policies to be in place. but we are advocating through the cement association ourselves, other business associations for the rules currently existing or the policies existing on how to dispose of waste in the U.S., to be modified so we can recover all the energy value that it's being landfilled. Again, that's going to take time. But for sure, it's going to happen. Ben?

Well, sorry, Alex, hold on.

Oh sorry. Sorry I didn't see.

Okay. Maybe Alex first and then [indiscernible].

I know it's our job as an analyst to explain the mispricing of the shares and the valuation, as Maher you just said, but I just wanted to hear from you guys from management -- why do you think the shares are trading at 6x when you're saying that the valuations or at least the peers when your assets are premium assets or quality assets trade between higher? And the other question would be, we tend to think that Mexico's as a whole, the market, it's being punished by governance. What can you say on the G-side of the ESG?

By government, you...

Governance.

Ah. Governance. Okay. So let me refer to -- there might be a number of reasons, governance affair to 2 reasons. The first one, it's widely known, which is we believe and others believe that the value of our assets or the value of assets in the U.S., when they belong to a global company, they are not fully recognized. And that's why you see Argos joint venturing, you see CRH listing in the U.S. and you see [ wholesome decided ] to spin off their U.S. assets. So that might be one of the reasons. At [ current ] valuations, perhaps our assets in the U.S. are valued at 6x, same than the rest of the portfolio. So that might be one relevant reason. The other one is Mexico. As Maher mentioned, Mexico is challenging to benchmark or difficult to compare, let's put it that way. At least in our industry, we don't have a clear reference of other public companies with liquidity enough so we can really compare our notes. But we believe that with certain considerations, the value of Mexico also, which is our largest business unit, 40% of the business is higher than the 6x. So you have those 2 reasons. Then on governance, we have our own structure that we have our own governance. It's been changing through time. Certain aspects of the governments have been changing. Others have not changed, like our share structure, CPO ADR, and that will continue for the time being, being the same. But we do not believe that it has been impacting value at all. When you look at historical not necessarily the recent multiples, but historical multiples, we have -- or we used to have the same multiples, not the rest of the companies with different type of structures and governance. So we think that is more related to the perception of the value assigned to our businesses in the U.S., again, widely more or less widely understood. And then the difficulties on how to benchmark or compare the value of assets in Mexico.

And now Ben, if we can get a microphone to him.

Fernando, thanks for the presentation and time for questions. So you've started your journey as CEO almost 10 years ago. And one of the key focuses was always getting the investment grade. Get -- now we did that -- Maher said, it's personal, it's a congress on that. Now if you could give us a sneak preview for the next maybe 5 to 10 years, what would you like to accelerate within the next coming years as it's now potentially possible to be accelerated? And where do you think CEMEX is going to stand by the end of the decade?

Sure. Interesting. Yes, 10 years ago, were like -- on a couple of times, a couple of CEO of banks told me, what is this obsession? On investment grade. Well, it was not really an obsession. It was a way to clearly guide the company to a specific purpose, which was improving our capital structure. So what is it that I would like to see, what is that I think CEMEX is going to be evolving in the future? It might it might sound kind of boring to some. But I think what you can expect in the next 5 years, 10 years, okay, or 10 years, but let's say, in the near future is what I mentioned before. We won a balanced approach. A balanced approach, meaning the boarding a portion of our resources to growth and growing mainly in the U.S. and also growing or applying or improving EBITDA or margins because of decarbonation process that is going to be happening in the next 5 years, mainly in Europe replicating to the rest of the company. And the other part is the dividends or potential share buybacks. And when I say potential is we kind of describe it as opportunistic. For instance, Gordon was asking why not buying 6 shares, we're now at 6x, if you believe that the value is much higher? Well, it happens that for 14 years, we didn't explore, identify and develop attractive projects that were adjacent to our current footprint. So it happens that we have found hundreds of opportunities in aggregates, in organization solutions and in certain aspects in cement in which we can invest at a much lower multiple, as Maher suggested. Now is that going to last forever? Hopefully, yes, but most probably not. So that is going to be changing through time. So balance in growth balance in sharing value to shareholders and continue our leading position in decarbonation. And what I'm saying, it might sound boring because from time to time, I've still been asked, are you going to go back to your former strategy on growing the business? Of course, not. It's been already 15 years in which we have clearly managed the company with a different -- with a different strategy and with a different idea in mind on how is it that we can consistently create value.

Other questions? Gordon?

Thanks Louisa. Thanks Fernando. A quick question thinking about the Urbanization Solutions business. I mean, I think we've learned today that it's already a true and proper business and that it's -- the outlook is very exciting. And also that it's sort of instrumental to the decarbonization efforts that you're doing as well. But I also wonder and thinking particularly about the circularity part of the business, whether it also carries with it regulatory/political exposure that maybe you wouldn't have had before? And maybe also in the long run, some contingent to environmental exposure as well, which is maybe at a different level than what you've managed as a business before. How do you manage that? What do you think about that? And how do you factor that into your capital allocation decisions?

It's a very interesting question because no doubt, that the idea of moving towards a circular and green economy, which is not only decarbonation, is really transforming our industry and others, perhaps, but referring to ours. So for instance, on secularity in particular, what -- why are we and other companies, as you know, interested on bringing or integrating certain type of waste management businesses. About from 70% to 80% of the waste we humans produce is construction demolition and excavation material and municipal waste, which is mainly household waste, meaning the waste we produce at home. That's 70% to 80%. And it happens that those -- that, that type of waste is the one we can incorporate into either energy or materials, we need to produce cement or aggregates, meaning now that we see more and more activity and norms, and incentives to deal with waste in a different manner than just landfilling it. It happens that our industry is going to be a back on cleaner in the future. We cannot take as an industry. We cannot take the 70%, 80% of the total, but we will take a significant chunk of it. And so that's why we are in early stages, trying to bring pieces and to learn from those businesses and integrating and getting the synergies in production as well as energy. Now what are the risks? Because of the type of waste, I don't even want to call it waste, it's residues or by products from other activities. I think, for instance, construction demolition is a leaner type of waste. So we are not dealing with hazard -- those materials, and we are not taking them to be in landfill somewhere else. We do a little bit of landfilling, but it's always inner type of materials. So I don't see any major environmental or legal risk unless we do something really wrong, but that is not the idea. And in the case of municipal waste, is also kind of safe or is very safe because what you do is you get this material, you're using it as energy. And the emissions coming from a material with an average of 50% biomass are more benign than the traditional emissions from coal pet coal gas or other primary fuels. So I don't see, let's say, an additional type of environmental risk. So in summary, decarbonation or the idea of getting into a circular economy is transforming ours and is bringing this type of activities. What you can expect is that, this is going to be growing and growing the same way we try to do it in the last 3 or 4 years.

And Gordon, I would also add, it's almost providing a social benefit. I think we heard from Jesus exactly what it's doing in South Central America and the Caribbean. And that's true in many other places as well.

So again, in the future, we're thinking in the cement and ready-mix or heavy construction materials, I think on how this industry is going to clean our society in the future.

Am I missing -- sorry -- Adrian?

All of you spoke a lot about the U.S. exposure and how that business is going to be growing going forward. How would you compare your business in the U.S. versus your peers? Or basically, what are the opportunities on that business? You see that there's a large opportunity on margins. Is it on being more vertically integrated in the regions where you are. It's more about opening new markets. How do you see that business going forward? Where the opportunities are?

Well, I think the -- on the one hand, the geographical footprint of different players is different when you think on ours compared, for instance, with GCC, it's a completely different type of footprint. So different business might have different performances depending on the economic development of each and every state that you are present. On the other hand, there are also significant differences in the composition of the portfolio. So in our case, we have cement aggregates, ready-mix and now urbanization solutions. And for instance, when compared to other global players in the U.S. our ready-mix portion proportionally is much larger than others. If you recall, our business in the U.S. mainly came through the acquisitions of [ Southern Armund sea ] and then [ Rinker ], the last 2 being mainly ready-mix companies. Now what is it that we have been doing through time is trying to balance that portfolio. So we have been reducing our portfolio in ready mix with a very simple criteria: profitability and integration. If a ready-mix business, in the U.S. and in other parts of our portfolio, if our ready-mix business is not really fully part of the an integrated system, we are not interested in keeping it. And as Jaime mentioned, when he said about our potential to grow, what's our potential to grow? First, aggregates. Second, aggregates. Third, Urbanization Solutions. And maybe I'm using a little bit of the timing in what I'm saying. And then cement because cement are more long-term type of projects to be developed. Because in cement, what we are thinking is green and brownfield type of projects. Jaime described, like grinding mids to large our grinding capacity using the same amount of clinker. So that's what you can expect on the way we are going to be evolving our portfolio in the U.S.

I think we're done more or less. Well, I think in wrapping up, I'd like to come back to something that Maher said that I probably should have said at the beginning, which is that the investment grade rating is very personal, I think, to the company. And it really is the accomplishment of everyone that works at CEMEX, but it particularly has happened obviously under your leadership, Fernando. Congratulations.

Very well. Thank you all. Thank you very much.

Okay. So I hope you enjoyed the day. This was an opportunity for everyone to be much better informed about CEMEX and our strategic plans. We also hope it was -- it's been an opportunity to hear from the executive committee, which is not something our investors and our analysts always get to do. If you have any additional questions, please feel free to reach out to the IR team at CEMEX. Finally, you will be receiving a survey to evaluate the event. We hope that you will participate in that. It's always a way to improve on what we do. Thank you very much, and we look forward to seeing you again soon, hopefully. Thank you.