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

Good morning, and welcome to CEMEX Day 2026. My name is Lucy Rodriguez, and I am the Chief Communications Officer for CEMEX. Whether you braved this week's bomb cyclone in New York to make it here today or you're a chicken and joining us from the online, I want to thank you for taking the time to hear our Analyst Day. I usually introduce CEMEX Day by stepping back and looking at what has changed since we last met, which was March 2024. At that time, in March of 2024, I talked about the velocity of change and how it has accelerated and so much was happening so fast. Now when I look back at that time, it almost seems like it was dial-up Internet. The speed of change that we're experiencing is absolutely unprecedented. I never could have imagined what would have happened over the last 2 years. We've seen geopolitical disruption at a pace not experienced for decades. While many of us initially thought this would be temporary, it certainly seems as though it's structural, signaling a very broad shift in how the global economy operates. The globalization model that shaped trade as well as investment flows for years, 50 years, in fact, is evolving towards a much more multipolar and regionally oriented system. At the same time, the rapid advancement of artificial intelligence is reshaping productivity, competitiveness and national priorities, reinforcing the importance of domestic, industrial and digital infrastructure. Governments are once again leaning into industrial policy, placing greater emphasis on economic security, energy independence, supply chain resilience, technological leadership and local manufacturing capacity. And ultimately, all of these trends influence capital allocation, manufacturing investment and infrastructure spending, all key drivers of construction demand. Now you all are very lucky. That's all I'm going to say on these topics, and I'm not going into detail. But the real point I want to bring you is that against that backdrop, it would be very easy to think that geopolitics has been the primary force shaping CEMEX's outlook. But I think if you were to ask most of our employees, what has been most important in the development of the past few years, it has been internal. Strengthening our capital structure, appointing a new CEO and launching our transformation plan. Together, these actions have brought renewed clarity, focus and visibility to CEMEX, positioning us to deliver best-in-class operational performance and shareholder return excellence. Now for some housekeeping duties. Slides are available on our website. We have Q&A sessions scheduled at the end of the European decarbonization landscape and the U.S. aggregate presentations. In the case of our CEO, Jaime Muguiro; our CFO, Maher Al-Haffar; and our EVP of Strategic Planning, José Antonio González. We will not have Q&A at the end of their presentations, but rather have a wrap-up Q&A as the final event of the day. We ask that you hold your questions until the Q&A sessions. During this session, we ask that you wait to be recognized and handed a microphone prior to asking the question. And we would suggest finally that you stand up to ask the question so you can be captured on the webcast. For those joining us through the webcast, you can submit your questions via e-mail to [email protected]. Please keep in mind that we have a limited amount of time and may not be able to cover every question. You're welcome to reach out to IR, and we will try to get answers back to you. As usual, there are no questions that are off limits, except for those that present disclosure or confidentiality issues. Finally, and I am coming to the end. Please note that our presentations today may include forward-looking statements and assumptions based on currently available information. As market conditions change, our views and our forward-looking statements will adjust to incorporate such information. 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. I dare you to do it. And now without further delay, it is my pleasure to introduce our first speaker, Jaime Muguiro, our CEO.

Good morning, everybody, and it's great to have you all here. It's a pity that many more were coming, but I think that their traveling arrangements were disrupted because of the weather. Normally, when we organize something in New York, and I'm coming, it always snows or something goes wrong. That's why my wife this year decided not to come with me. And I'm very excited to be here in my new capacity together with the rest of my teams. Others from the ExCo didn't come because of our transformation because we're truly focusing on cost containment. And I think that sense an important message. I want to introduce myself. Some of you do know me, but not everybody and many connected on the webcast. I'm Jaime, a simple person. Happily married to Conchita. We have three adults, two grand children, two of [Foreign Language] live in New York and my eldest daughter lives in Spain. She's the one married. And there is a third baby coming, [ Future Ana ] in May. We have been an expat family for 24 years. And I've given my life and that of my family to CEMEX. Next month, I will be celebrating 30 years serving my employees, my colleagues, the Board, our customers and more importantly, our investors. And I have had the privilege of doing business in most of our portfolio. And I think that, that gives me as the new leader in CEMEX, a competitive advantage that when you combine it with a very talented group of managers who have also enjoyed and experienced a vast, right, living experience, both in corporate functions and in the business, it sets us as a strong talented team to drive this transformation, which, as I will elaborate in a minute, it all puts -- is all about putting the investor at the center on how we manage the company. When I was appointed the CEO, which was a surprise and it is indeed an honor to take the job, the first thing I did was to spend a lot of time talking to people. I talked to customers, I talked to investors. and I talk to employees and all of my colleagues relentlessly. And we learned many things in that discussion. It was a very candid discussion because we were talking about our strengths and we were talking about our weaknesses. We were talking about what type of company were we taking over after I set up my new team. There were great things from the past, but we understood that there were also things that needed to change. And in that journey, right, I'm going to start by telling you today that we have one of the best talented teams in the industry to deliver superior shareholder returns. Number two, I took the baton of a company that had recently reached investment credit rating, a much stronger balance sheet, not yet enough, but a much stronger balance sheet, right, and that was undergoing a portfolio rebalancing effort, concentrating geographically in Mexico, the United States and Europe and operating additionally in some other positions in the Middle East and LatAm because they deliver above-average growth and very strong free cash flow. Today, I come here to tell you that CEMEX will continue to be a heavy building material provider, concentrated geographically in mainly Mexico, the United States and Europe. serving our customers across all end markets. And we are pursuing this strategy because of the following: we believe we have great teams, very strong positions in well-structured attractive markets in the short and medium term. First, Mexico, think about it. It's a country that has one of the best demographic pyramid in the world, very young population, eager to make progress in life and in need for housing, shelter, schooling infrastructure. Mexico, fixing a few things, is one of the countries that has the great potential to become a great country and deliver very strong growth. Through the cycle, CEMEX has always delivered very strong free cash flow in dollar terms. And in the very short term, we do see, right, the recovery of the demand that was affected last year. We began to see that recovery in the second half of 2025, but we do see that momentum is building. We do see social housing, and we do see infrastructure. When you think about the United States, we believe that it's one of the markets with the strongest -- still with the strongest economic fundamentals. The economy is very resilient, and the midterm outlook continues to be very solid. There is pent-up demand for housing, and I'm pretty sure that as affordability recovers, we will begin to enjoy the single-family home segment of the market in the short term. I don't know long term where the new starts will stabilize depending on domestic migration and immigration trends. But for the time being, there is pent-up demand, and we do expect in the short term, not in 2026, though, but we do expect the recovery of the residential sector in the United States. We also think that infrastructure will continue. And therefore, growth for heavy building materials will be underpinned by infrastructure. And we're also very excited because we do see opportunities to deploy our growth bolt-on strategy under a new capital allocation framework that I will share with you in a minute around aggregates and additional adjacent synergetic businesses such as Omega, and we will elaborate about that, that strengthens our value proposition to the targeted end markets. And then Europe, where we do see recovering volumes underpinned by infrastructure and also residential. But what I'm most excited about, despite all the noise about the ETS, and José Antonio Cabrera will elaborate more about that, is that in the short term, we do see a buildup of significant pricing characteristics, favorable pricing characteristics. And we do see -- we are very strong positioned because of what we did in the past, and we are -- we have a very competitive CO2 carbon cost curve relative to the industry and more so importers as CBAM, right, has been introduced. So after confirming who we want to be and where we want to play, also in my conversations, right, we did recognize that there were significant opportunities to improve. And one of my main concerns when I took over was that we were not generating any free cash flow. And that needed to change and needed to change immediately. And the other aspect was that we were not producing good shareholder returns. And finally, we were not a lean company, and we had excessive cost, okay? With this in mind, right, we began our transformation April 1. And I took -- when I took over, I took advantage that we had announced project cutting edge, which back then aimed at saving $350 million recurring savings -- EBITDA savings by 2027. But I decided together with my team to leverage project cutting edge to transform, not just to cut cost that is going to come back again, but to substantially transform the company. And the transformation is simple. Its about managing the company, putting the investors at the center on how we allocate capital and the decisions we take. And this transformation is underpinned by a relentless focus on operational excellence. The transformation is built around four pillars. First one, we want to grow like we used to in the past, which means become the best-in-class operator, managing properly the top line, which means being expert on every end market, having our teams understand what is the profitability per customer per ton, per cubic yard, per cubic meter per site and being very fast and agile moving from residential to infrastructure using the right data and moving fast and on real time. But also being best-in-class operator means becoming very lean, being able to eliminate non-value-added activities and always keep competitive cost base and pursue margin expansions, leveraging technology. The second pillar is how we assess internally our performance. And we introduced new metrics that are more aligned with shareholders. We're not looking anymore only at top line growth and EBITDA and EBITDA margin. Now we're managing the business using EBIT, EBIT growth, EBIT margin, free cash flow conversion from operations, fully loaded free cash flow and ROIC over WACC. And something new that I did was I decided to run away from 5-year business plans because everything that we were putting in front of us first and then in front of you, we never met it because of uncertainty. So what I decided to do was to introduce Formula 1, 3-year sprints. And what I'm doing is together with my team, we're engaging with the line, relentlessly driving operational excellence in a 3-year sprint where everybody needs to be feet, looking for shareholder returns, maximizing free cash flow and keeping us very feet, very lean and very agile. In those business performance reviews, we put every business to test through those new metrics, and particularly ROIC over WACC through the cycle and free cash flow conversion. I will elaborate a little bit later what it means and the opportunities that come along with that effort. The third pillar of our transformation is our new capital allocation framework, and I'm really very excited about it. I can tell you right now two things, but then I'll elaborate more. That capital allocation framework is anchored on two things. First, all cash uses compete for risk-adjusted best shareholder returns. That's new to CEMEX. We're not managing the company that way. This is the new way. This is the only way. And the second aspect is that investment-grade rating status, which it took us so long, is nonnegotiable, right? And that is there to stay. And Maher will elaborate much more about our capital allocation framework and about our investment-grade rating. And finally, we are committed and it's another pillar of our transformation, right, to set a robust shareholder return platform with progressive dividends and share buybacks. And as we announced, right, we're making progress because we announced and we will subject to the shareholders meeting in March, the approval for an increase of close to 40% in dividends, and we have already begun share buybacks. In fact, as of yesterday, we had already purchased $100 billion, right? And that -- I think that it demonstrates that we are saying and executing what we said. Okay. But this transformation is not just about finance. It's not about numbers. It's also about our culture because if we didn't transform how we operate, how we feel, right, what makes us proud and our culture, we wouldn't be transforming, right? And then we would be seeing costs coming back. So what is it that I look for, right? CEMEX is and will become a very agile company, very lean, relentless focus on cost and operational excellence, continue putting the customer and our job sites at the center of what we do, okay? Killing bureaucracy, automating processes, killing non-value-added activities. And you know what's very exciting, adopting the owner's mentality, right? And that -- what does that mean? It means allocate capital as if you were the owner right? And that is critical. We are going to pursue operational excellence, which means benchmarking against best-in-class in every business, in every macro market, against our peers, but beyond because there are good benchmarks outside of our industry when it comes to overhead, SG&A, so on and so forth. And we are, right, bringing those benchmarks to our business performance reviews, top down and bottom up, as I will explain in a minute. I want a company, an organization and employees who want to change, who want to adapt, who are not scur from change and technology. We will continue. We've done great in the past using technology. Now is the time to continue adopting AI to boost productivity to support operational excellence through margin expansion, right? And for sure, this transformation continues to put safety as our first core value. Let's continue with my presentation. One of the first things that we did when I took over was to move very fast, again, taking advantage of project cutting edge, right, to propel a structural savings. We had announced a target of $350 million. And today, I want to confirm to you all that we're going to deliver $400 million. But what's more exciting is that in the next quarter calls, I'll be updating you that we will be surpassing this target. By how much? I cannot give you today the number, but bear with me, we will do so at least in the second quarter call, okay? And I feel very comfortable that there will be more and it will be material. With that in mind, why am I so sure that at least we're going to deliver $400 million? Very simple because the job is done for 50% of the savings, $200 million results from a 23% reduction on global overhead. The job is done. And of that, incrementally, $125 million is already happening. We saw it in January big time, and it's secured. The other $200 million are operating efficiencies linked to operational excellence. And José Antonio González will provide more color on that bucket. We are expecting incrementally $40 million and an additional $35 million by 2027. So do expect more savings as we continue our transformation and be patient, I'll provide you color in the 2Q call. I also want to share with you how exciting our business performance reviews are as part of our Sprint. What happens there? My operating colleagues, my regional presidents, right, again, I'm one of them, right, together with the rest of the -- some of the rest of the ExCo members, right, working with me in the staff, travel and go boots on the ground to the line. And in those engagements, I always engage with a customer at least to continue learning. One of the things that I'm concerned about is that I end up trapping offices, losing the understanding of what is going on in the marketplace. That's not going to happen. I use my business reviews to have boots on the ground, understanding whether we are delivering the right value propositions to the right market segments to the right customers. The other thing that happens is that we review our performance through the lenses of the new metrics, EBIT, free cash flow conversion from operations fully loaded free cash flow and ROIC over our WACC. We were not doing that in the past, okay? And we do that by business, but also by micro market. We go very detailed. And as a result of these reviews, we have identified incremental opportunities that would bring incremental EBITDA between $80 million to $120 million and would free up free cash flow between $100 million to $150 million. Please note that we have included very little of this lever, if you will, in our commitment by 2027. And the reason for that is because some -- to turn around some of this business, we need to continue transforming and lowering the cost because our assessment comes fully loaded with overhead by business, which we were not doing in the past, okay? So more cost transformation, right? But the other thing is that we need a little bit of tailwind, okay, in volumes. Having said that, there will be structurally certain businesses that are not meeting today are much more demanding financial thresholds, we will let them go. Most of the opportunities are in ready-mix in Europe, followed by some in the U.S. The rest of the work in the rest of the portfolio for the most part is done. And as you can imagine, the low-hanging fruit, which means shut the thing down has been done. Now it will take a little bit of time, and that's why it's not included in our first spring because we have vertically integrated positions. And therefore, deconsolidating as divesting requires delicate move. It requires transacting with others to continue protecting what we have upstream, right, which is admixtures, cement, cementitious and aggregates. But rest assured that this is a self-help lever. And please note that from this effort, we will bring profits that we will recirculate helping improve the earnings quality of our portfolio. Okay. Allow me now to share with you the new capital allocation framework that, as I said, right, is anchored around two critical things, right? Investment-grade rating status is not negotiable. And all cash uses compete, again, I'll say it loudly for risk-adjusted based shareholder return. Maher, you're going to explain later in more detail our capital allocation framework. Allow me to take you with me through our journey, right? What have we been doing? We've been relentlessly working in the past to pay debt because we were highly levered. You know the story, right? And that's the only thing we did. We divested and all proceeds and free cash flow went to pay debt. From 2020 onwards, we began -- CEMEX began approving significant strategic CapEx. And back then, we continue paying debt to delever, aiming at getting investment-grade rating, which we did end of '24, right? And because of that, when you look at '22 to '25, 35% of our cash sources went to pay debt. Before '22, it was almost everything. But 59% went to strategic CapEx to fuel growth. That strategic CapEx is something else that we learned when I had so many conversations, right? Because there are two types of strategic CapEx, margin expansion and greenfields. And when you think about risk-adjusted decisions, right, there could be some that maybe we shouldn't have done because they were exposed to volume. And then you have strategic CapEx related to margin expansion, which we tend to control more, right? But if you look at '22 to '25, we barely provided cash to shareholders. Now is the time for shareholders in CEMEX. That is our transformation, and that is our commitment. I want a capital allocation that by 2030, it provides between 40% to 50% of the free cash flow we generate to the shareholders through progressive dividends and share buybacks. And I mean it, and we're doing it. In addition, in the very short term, we will continue paying debt because when you look at our interest expenses per year relative to our EBITDA, it still is high. So it is accretive to shareholders to continue to pay debt to boost free cash flow, which at the end is going to go 40%, 50% by 2030 to shareholders. okay? And then there is a fundamental change on our growth strategy. No more strategic CapEx. We're going to be reducing it and will only be used for margin expansion to support operational excellence and for profitable decarbonization at the speed dictated by CO2 prices. And José Antonio Cabrera will elaborate more about that because not all this noise is -- we like the noise, the market doesn't. We will explain why we think we had a great opportunity in Europe on our pricing. Allow me to elaborate a little bit more on growth, but then José Antonio will expand. So we're going to be materially reducing CapEx, and we're going to use cash, 40%, 50% for bolt-ons. And we're going to do them primarily in the U.S. in aggregates and adjacent synergetic businesses. That complement and strengthens our value proposition to the end market segment. I would like to be more exposed to infrastructure in the U.S., which is a less cyclical end market, while also pursuing a value proposition for the building environment, which brings higher earnings quality businesses, less volatile with much higher free cash flow conversion. Omega is a great example of that. And José Antonio will elaborate more about that. And finally, after the bolt-ons, as I said a second ago, we will use some strategic CapEx just for margin expansion for the most part and for profitable decarbonization, where in Europe and California. Why? Because those are the regions that provide the necessary regulation for continuous profitable decarbonization. And finally, right, we will continue our portfolio rebalancing. I do expect, right, at least $1 billion of divestitures in this sprint, and that will be recycled into bolt-ons in the United States for the time being. But we will not let go a once-in-a-lifetime opportunity if we see a very good opportunity for M&A in Mexico and in Europe. Although, again, I don't want to confuse my team, I don't want to confuse you, priority is the United States for the time being. I want to make a pause here for a second to thank my team for what they did last year. When I took over and this new team took over, we were facing a very difficult 2025 because our two main markets, the United States and Mexico were facing, right, a material reduction in the demand for our building materials. And in the case of the U.S., 2 years, if not 3, of soft demand in a row. It was a very difficult year, right? When I was saying, "Oh my gosh, I've been appointed. And I was like, did it, right? What am I going to say in the first call?" No. We had a plan, we set it up, and we did what we said. And one strength that we do have is our capability to execute and that is very relevant. And that's the reason why the second half of the year, right, our top line grew by 8%, but our EBITDA and our EBITDA grew disproportionately by 17% and 25%, right, as you well know. And our EBITDA margin expanded by 160 basis points at times when volumes were dropping. And this demonstrated that we were capturing the synergies we promised. And this is exactly what's happening right now. But furthermore, last year, we also boosted free cash flow, one of my main concerns, because since I took over, in fact, as I was transitioning in March, I was able already to take some decisions. And the first one I did was stop all capital allocation. And we reviewed every CapEx, and we stopped a lot of them, okay? And because of that, right, we kept doing what it made sense according with our new capital allocation framework. And the rest gone. And because of that, we were able to improve free cash flow conversion from operations by 15 percentage points when adjusted by the one-off several payments, which were material, $180 million last year and discontinued operations. And please note that, that sets us strong to a path to achieving at least 50% free cash flow conversion from operations. I will show you the numbers in a minute. But furthermore, we already guided you that in 2026 compared to 2024, our CapEx and interest expenses are reducing by $500 million, of which $160 million is interest -- annual interest expenses, and Maher will continue to do the job to reduce that number over time. And the rest is CapEx, which will be reduced by $327 million in 2026. And that will continue to boost free cash flow conversion from operations. And please note, that we are transitioning from free cash flow conversion from operations to fully loaded free cash flow, which means free cash flow before discretionary capital allocation, which means growth, debt, shareholders. And I will provide the equivalent of what we're targeting for 2027 in a minute. So allow me to say kudos as we say that in the U.S., right, kudos to the team. I think we delivered. But the message here is we are, as a team, fully committed to delivering best-in-class shareholder returns. And one -- I want to share with you a personal question that I asked myself when I was appointed that I think some investors have also asked themselves, which is can a management team with a long tenure in a company change? I think we can. And an incumbent has an advantage. And that advantage is that you know the business inside out. And when you have the mentality to say enough of mediocracy, we must transform, we can do it. And this team here and those who didn't travel to save cost are fully committed to changing, transforming and executing and doing what's necessary to achieve best-in-class shareholder returns. Allow me to share with you our targets for, again, first to sprint, 3 years, which began in 2025 and is going to finish in 2027. And then what we do is that we roll it up 12 months. This is a race. I like to combine Formula 1 with 3-year, right? So we're already working on 2028, bottom up, top down, where we have operating KPIs connected to financial KPIs and personally to a share price target, which I will not tell you today. What are the targets we're looking for to deliver? We want to deliver $3.7 billion of EBITDA by 2027. That is a compounded annual growth rate of 10% from '25, a disproportionately CAGR growth for EBIT, 14%, an expansion of ROIC of 170 basis points and EBITDA and an EBIT expansion margin of 190 points and sales mid-single-digit CAGR. And what is very relevant is that 55% of this growth relies on self-help measures. Little relies on organic growth. José Antonio will provide more color on the organic growth and the self-help. And please note, I said it before that we're working, and I'm expecting that by the second quarter, we'll provide more color on structural transformation savings. And what those will do is to increase that percent from 55% to something else. And we have done very conservative assumptions on organic growth. And please note that we have only considered Couch and Omega in this target. But as I will comment in a minute, we will continue to pursue accretive bolt-ons under a very disciplined capital allocation framework that recently -- that I just shared with you. But the free cash flow, right, will grow exponentially, significantly higher than the rate of our EBITDA and our EBIT, achieving at least 47% free cash flow conversion from operations, which translates into a 38% free cash flow fully loaded before paying debt, growth, returning cash to shareholders. We aim at a cumulative free cash flow of $3.3 billion from operations. And please also note that we will have $5 billion of available financial capacity to support our strategy. I'm saying this, right? But at the same time, I want to clarify that we're going to be very disciplined, and we're not going to be using $5 billion to do big deals, right? Here, we are including $1 billion of divestitures process that will be recycled. So the amount, right, of capital that we can use for our growth strategy is around $2 billion, Maher, José Antonio, both of them will elaborate more later. But please note that all our decisions, again, will be based on our framework, which commits and have already committed 40% to 50% cash return to shareholders by 2030. In the shorter term, I want to continue paying a bit of debt, lower interest, boost free cash flow and get us to 50% by 2030. So to summarize it, what should investors expect from us? Investors should expect from us that I am together with my team at your service and that we're here to deliver best-in-class shareholder returns that my team at CEMEX is relentlessly focused on operational excellence, shoemaker, do shoes, don't get distracted, continue serving your customers, be very close to the end markets to the job sites and provide the right value propositions. You have my promise that we will turn around those businesses that are not meeting our new financial metrics. And those that we think that we will not make it because volumes might not be there and structurally, there might be a better business and asset for somebody else, we will divest. Just be patient, it's delicate. It will take a bit of time, but it's a self-help lever that has a tremendous upside potential to our EBITDA and free cash flow and will bring profits that we will recycle, improving the earnings quality of our portfolio. My team and I are totally committed to working relentlessly to boost free cash flow conversion. And we are committed to providing to shareholders 40%, 50% of our cash, right, through dividends and share buybacks. And we will deploy a very disciplined capital allocation for M&A under strict financial metrics that José Antonio González will share later in the U.S. around aggregates and a few other adjacent synergetic businesses, direct synergies, upstream, direct synergies, customers and some logistics synergies in between. In the building environment, some of which we have exposure to renovation, okay? Stucco is a good example. It's for both new construction and renovation, right, and then infrastructure. And with that, I'll leave you, and I'm going to pass the word to you, Lucy, who will introduce to José Antonio. And I'll come back later with Maher and José Antonio to answer your questions. And then I have here Jeff Bobles. Jeff Bobles runs the U.S. aggregates. He'll talk more about aggregates. So I didn't elaborate much. José Antonio won't elaborate too much because Jeff has very exciting things to share with you. And I look forward also, José Antonio, to your presentation about our CO2 cost competitiveness, the great job that the team did in Europe and why we're so excited about our pricing in Europe. Okay. So thank you so much for your interest. I'll be back later. Thank you.

So this will be very quick, but I am pleased to introduce probably someone who many of you know, José Antonio González, who's Head of Planning and Corporate Development for us to take us into a little more detail into Jaime's business plan.

Thank you. Thank you very much, Lucy, and thank you, Jaime. Well, it's great to be here this morning. Thank you, everybody, for joining us. Also those who are joining via the webcast, welcome, and thank you for being here. I'm glad to see quite a few familiar faces, also looking forward to meeting some of you that I haven't met before. So great to be here. And I will -- during my presentation, which is about our growth strategy, I will build and elaborate on many of the points that Jaime was just made in his presentation. So I'd like to focus on two things today. These are -- the way we see it is two main levers of our transformation, of our ongoing transformation, which have a direct -- we believe have a direct impact in our potential to deliver attractive shareholder returns. So one of them is operational excellence and how we are driving to become a best-in-class operator with improvement in metrics, improvement in free cash flow, free cash flow conversion spread between our cost of capital and the returns we get out of our businesses. So that's a big topic in our ongoing transformation. And the second one has to do with our growth strategy. So we have included in our sprint, in our 3-year sprint a few investments that are already executed, most notably Omega, which was announced this morning, and I will elaborate a little bit more on that as well as an investment in aggregates in Southern United States. But we will build or we will develop in our sprint financial capacity to undertake additional initiatives for growth under a very strict investment criteria and a very clear capital allocation framework in which capital is competing for the best options that are -- we can comfortably link to shareholder return. So those are the two things that I will elaborate a little bit more on. The business performance reviews, which we have been talking about, I would like to share a little bit of my personal experience undertaking those because they are quite they're an important component culturally of the transformation that we are going through right now. So first, we had this conceptual view that was developed by this consultation process that Jaime followed with many people in the company together with own views. So we started on the left side here, establishing metrics that we thought were required to deploy across the company, deep down to each operating unit that could really tell us how each unit is performing from a shareholder return, from a value creation standpoint. We also established targets. There was a lot of benchmarking going on. There was a lot of data mining in tons of public information available. And also comparison against internal benchmarks. So all of this allowed us to establish top-down targets, very ambitious targets, but brought down to a very detailed level, almost plant by plant or cluster by cluster in the case of ready-mix. So the combination of this establishment of these top-down targets as well as the rollout of these metrics are tremendous tools that allow us to understand how the business is performing, identify performance gaps and then through the business performance reviews, establish the action plans to close these gaps. Other things that go into the business performance review are how we're doing with our capital deployment. We did allocate substantial CapEx or capital in multiple projects across our businesses a few years ago. There's a lot of successes, and there are some that haven't worked out yet as we were planning, either because of shortfalls in volumes or changes versus the original assumption. So there's a very deep discussion about how we are doing or how we have done to inform our decisions going forward. And very importantly, it is about establishing very specific action plans and commitments to close these performance gaps. And it's been quite a process. We -- a few people from the staff or supporting areas join our colleagues in the operations. We sit around the table for a few days, and we have very deep and detailed discussions micro market by micro market, business by business. And inevitably, we identify opportunities. And that creates the basis for an action plan and agenda that we then follow up and track going into the future. And these performance reviews happen twice a year in each one of our regions, and it's -- we already performed last year, two of them in each of the regions, except for SCAC, only one. And it's very interesting to see how the quality of the conversation, especially given all this information and the methodology, how the quality of the conversation improves as everybody sort of -- as we're leveling our understanding of the business and being able to -- based on benchmarks comparisons [indiscernible], come up with very attractive improvement plans. So that's a big component of this ongoing transformation, and it's been quite exciting. And on a personal note, while we are doing all of this and while the conversations are ongoing, while we identify this opportunity space, we create a sprint, which has 10% CAGR for 2 years. We changed the narrative with the markets. And of course, inevitably, we get excited about how we see our share price performing, for example, last year. But we realize that a lot of that is an anticipation of the results of all of this. So in a way, we're getting paid a little bit in advance. So that creates in ourselves a higher degree of commitment to make all of this a reality. So on the one hand, it's exciting, but it's a realization that we need to deliver. Now what happens when we see units that have important performance gaps. Down below, you can see we've identified assets, units in our portfolio that have an opportunity for improvement. We have estimated the size of the opportunity to be between $80 million to $120 million of EBITDA, $100 million to $150 million in free cash flow. And a very small portion of this has been already sort of, let's say, has already a plan attached to it and therefore, has made it towards sprint, but it's only a small portion because normally, the complete solution of a unit that has an opportunity for improvement, it takes a lot of time. So we go through -- again, part of the review methodology, we go through an analysis of how these businesses are doing relative to the cycle because, as you know, we have been seeing softish volumes in some of our markets over the last few years. So some assets have a performance gap probably just because of where they are in the cycle. So it's very important to understand that. And also that in these assets, we're taking actions to confront profitability challenges because of low part of the cycle. We also look at the vertical integration. We want to see the performance of the assets each one of them on a stand-alone basis, but we cannot ignore that in some instances, these assets, for example, in ready-mix, we're selling cement and aggregates through them, which have important profitability, but we don't want to subsidize businesses just because of vertical integration. But it's very important to understand for this set of assets what is going on from a vertical integration standpoint. So then we look at performance improvement plans, like I already mentioned, in some instances, we've already accounted for some of those improvements in the sprint, a small portion, not the full amount that you see here below. And ultimately, for some assets, sometimes the best solution involves third parties or a more, let's say, drastic solution. Eventually, we've closed down some assets. Some assets are really -- when we look at them, we look at all these analysis and the best conclusion is, you know what, just close them down, you close them down, and we've done some of that. Others is a little bit more complicated. Probably some assets are better owned by other parties because they have more synergies or more vertical integration. So we might decide to divest, and there's some of that already happening. And in some instances, the solution might be a joint venture because there's probably a great operator that runs assets on a very efficient basis and putting them together with us, their synergies, et cetera. And in joint ventures, is a preferred solution whenever we want to retain the vertical integration part of this angle. So also a very well-structured methodology to address assets that have performance gaps and that can be improved. And we think that there's a lot of -- a very significant opportunity by approaching this and closing these gaps. So that was a little bit of a summary or a little bit more color in terms of how we are approaching operational excellence and how we want to drive performance and value creation in that process. And now I'd like to address a little bit more detail on how we have built our sprint. This is what we consider to be an attractive sprint. It considers growth 2 years in a row of around 10%. And very interestingly, a little bit more than half of this improvement in performance over 2 years is measures that are more under our control or self-help measures. A very important component here is Project Cutting Edge, which I'm sure you're familiar with. It's a $400 million cost reduction program, out of which $200 million, we've already taken the benefit from in 2025, but there's $200 million that we will still allow us to benefit in the sprint. So that's an important component inside the self-help. Additionally, we have been making investments in the past. There are some investments that are allowing us to get margin enhancement, meaning they're not reliant on volumes or other significant elements outside of our control. So we've also taken into account the benefits that we expect to get from those investments as part of this self-help bucket. And additionally, we included here executed M&A, so businesses that are up and running, that we have acquired, and that with a relatively low risk, we believe will be contributing. And most importantly, inside this bucket, we have 2 important investments. One is Omega, that we announced this morning, and I will describe in a little more detail. And the other one is Couch Aggregates, which we began consolidating late last year after having begun with a 49% stake that we did not consolidate and later investing an additional -- making an additional investment in order to consolidate that business. And on the far right, we have organic growth. And organic growth explains 1/2 or a little bit less than 1/2 of this 10% CAGR, so maybe 5% or a little bit less. And 5% CAGR over 2 years, basically behind this is an assumption that volumes are going to grow low single digit and that our pricing strategy will allow us to compensate for input cost inflation. So that explains this assumption of 5% organic growth in 2 years. Now also supporting the organic growth component is we did complete some investments over the last couple of years that are allowing us to capture the benefits of recovering volumes. Most notably, there's a number of projects in the U.S. in aggregates that will allow us to increase our volumes. And I will not say much about that because Jeff will be making -- addressing our aggregates position in the U.S. But we have that under organic growth because it's investments that will allow us to benefit from a more robust volume environment. So going back, again, a little bit more details in terms of the elements included in the 3-year sprint. So here, you see $200 million operational efficiencies. So I mentioned Project Cutting Edge, $400 million. Now out of the $400 million, $200 million have to do with overhead reductions, so personnel reductions. Those are done, but they were implemented in the middle of last year. So we'll have the benefit -- part of the benefit, we will get between '25, '26 -- sorry, '26, '27. But there's another component which is not overhead or personnel reduction, which is just operational efficiency. That's another $200 million. Part of that, we already accomplished in 2025, about $120 million, but an $80 million incremental benefit from operational efficiencies are included in this sprint from '25 to '27. Some examples, we will have a breakdown. Cost optimization, activities related to our procurement efforts, optimizing our network, reducing our fixed costs, the business improvement plans that I described, which a small portion of this is already embedded in our 3-year sprint, and reduction in cost in energy and fuels. So for example, in the U.S., we have increased our production, which is allowing us to reduce imports, and the equation there is very attractive. So 6% increase in cement production compared to prior years, allowing us to benefit from the lower cost of production versus imports. Rail network optimization in the U.S., we reviewed the way we are paying for railway services. We used a shoot cost approach, conduct negotiations with a lot of information in our hands that allows us to accomplish some savings in the cost of -- that we spend on rail carriers. We're transforming our procurement model, both from a capabilities standpoint, but also a process whereby we're looking at every single item we buy or we procure with a -- under a very robust methodology consisting of a lot of benchmarking and a lot of information where we can compare costs across different suppliers, et cetera. We're accomplishing cost savings from that as well. And from the business performance reviews, we've already included some components which has to do with consolidation of ready-mix plants, reduction of fixed costs, et cetera. And finally, in Mexico, we'll continue to find opportunities that we're taking actions in order to reduce fuel costs and the mix in Mexico, and that also contributes to these savings. Now going to the organic growth component of our sprint. As I mentioned, we're assuming low single-digit volume growth across the board after having a couple of years with softish volumes in our main markets. We think this is a conservative assumption. In Mexico, demand is beginning to pick up after a very soft year last year, thanks to a resumption in infrastructure spending. Also the social housing program from the government that is targeting 1.8 million units, we believe some of that will also be supporting low single-digit demand growth in Mexico. In the United States, continue to be very positive on infrastructure and how that will underpin or support demand growth in the U.S. And as you all know, the investments in chip manufacturing facilities, data centers, all of that is continuing to support demand. Residential spending has been somewhat subdued. We don't think that, at least in the very near term, is going to be driving resumption of growth in the U.S. But thankfully, infrastructure and private investment, we think, is going to be providing very interesting support. In Europe -- in Europe, the story is also recovery. We're very positive on our portfolio in Eastern Europe: Poland, Czech Republic, Croatia. We think those -- even Spain, we see very robust activity levels driven by infrastructure, European Union-backed investments. The German infrastructure bill, we believe, will provide some tailwinds. And very importantly, in Europe -- and Jose Antonio Cabrera, my colleague, will elaborate. But we see a robust pricing environment driven by ETS and CBAM. I won't get into that. So we think that considering low single-digit volume growth in our 2-year, '26 and '27, coupled with a pricing strategy that allows us to offset inflation is realistic, is somewhat conservative. And we're, at this stage, very positive on our ability to -- or on that materializing and supporting the overall sprint, which, as you know, has 10% growth in '26, 10% growth in '27. Now additionally, I did mention that our growth investments from the past are also allowing us to support our 2-year sprint. I have here, a few examples. But growth investments from the past which are already contributing a significant amount of EBITDA in 2025, we think are going to contribute an additional or incremental $200 million between '26 and '27. We have mentioned how we are pivoting away from growth CapEx into M&A. So we're going to be -- we are being, since last year and going forward, very selective with our growth CapEx. We expect to see very moderate amounts of growth CapEx into the future. But we do have this tailwind of the projects that we have been completing since a few years ago and we're still completing with a much lower CapEx that we're spending -- investing this year. But we have sort of these 3 buckets, projects that are allowing us to benefit from margin expansion, like in our Knoxville plant in the United States. We have -- because of investment we made, we have reduced significantly the clinker factor to maximize the production of 1L cement, reducing CO2 emissions, but allowing us important savings. In Huichapan, which is a low-temperature clinker with a Mexican flag, similar story. We have redesigned the clinker chemistry, adding more gypsum. That allows us to reduce the temperature at the kiln, reducing the clinker factor. Also with a very moderate investment, we get significant savings. Those are only two examples. In the case of growth, we have commissioned the Four Corners Sand Plant, allowing us to sell -- or to produce and sell an incremental 1.2 million tons of commercial sand. Jeff will elaborate on all our investments that we have made to allow us to sell more aggregates in the U.S. In Jamaica, we completed a debottlenecking. By the way, in the organic growth, I did not -- and Ben pointed out to something interesting this morning. I didn't mention -- I mentioned our organic growth assumptions for Mexico, Europe, the United States, but also in SCAC. In SCAC, we're also very, let's say, confident that a low single-digit volume growth assumption is the right one. There's more confidence and also infrastructure investment. And to that end, we're also very happy that we have completed a debottlenecking in our Jamaica cement plant. Jamaica is booming. We were not being able to satisfy the market needs, so we invested in debottlenecking the plant. We're adding 30% additional capacity to reach about 1.2 million tons, and plant is going. So we've been able to replace some imports that we're having to make because of the tightness in supply. And also, we get a little bit more flexibility to export into our system in the Caribbean. So very excited about the Jamaica plant and the incremental EBITDA that we will get. And if you recall, this component of growth is supporting our organic growth. So again, so investments that will allow us to capture the growth in volumes because of market growth. And finally, bolt-on M&A. Two main acquisitions that we have completed: Couch Aggregates, in which we own a majority stake since late last year; and Omega, which is a stucco, the leading stucco producer in Western United States, that we announced the acquisition this morning and we expect to close by the end of March. So again, all of these elements are supporting our 3-year sprint. So now moving on, I would like to elaborate a little more going forward, how we are aligning our efforts to produce incremental growth through our bolt-on M&A efforts. And the priorities are investing in the U.S. primarily, very selectively in other markets. So we're also looking into opportunities with Mexico, Europe and elsewhere. But overwhelmingly, the priority is going to be the United States, focusing on aggregates as a high priority in the U.S., selectively potentially in other markets. And then adjacent businesses. This is again for bolt-on M&A. Adjacent businesses, I will get into a little more details shortly. So I won't say a lot about aggregates. Again, Jeff will do it later. But we're very excited about, of course, the fundamentals of aggregates, especially in the U.S. Some key highlights. Still highly fragmented with a lot of opportunities with the privately-owned businesses. And we look at Couch as an example of the flexibility that we can provide for partnering with small aggregate producers or privately-run companies. Using Couch as an example, the entrepreneurs behind it wanted to run the business still for a few years. That's fine. So we reached an agreement where we invested a minority stake. We established some goalposts in terms of the performance. And we have supported the management team, the sellers, in this multiyear period in which they're running the business with a very ambitious business plan. And we had incorporated in the contract, a pathway to control to consolidation and eventual control and ownership. So that's the kind of flexibility we want to run with as we approach these private companies or privately family-run businesses in aggregates in the U.S., which is there's a lot of that. Of course, an industry with high entry barriers because of permitting restrictions and the regulations related to the land use and the environment. It is an essential material with very attractive pricing discipline that we have seen in the markets with a very positive demand outlook. Now in terms of adjacent businesses, we are simplifying, I guess, is the right word, simplifying the way we look at our urbanization solutions businesses. We want to focus or we will focus going forward in 4 key businesses that meet a number of criteria that we have determined. Number one, highly complementary to our legacy activities. And by that, I mean also highly synergistic because of vertical integration, because we might share customers, distribution or logistics. So highly complementary. The other thing is potential for growth. So these are businesses that we think we can scale up and create a larger platform. Number three is that it allows -- having this business in our portfolio. And because the products are highly complementary to our legacy products, we believe that we will be able to expand our offering to our customer base and, therefore, be a much more valuable supplier and partner. So it's also about being able to enhance our product offering to our customers. And finally, end markets. We believe that through these particular businesses, we will be able to increase our exposure to end markets that we want to increase our exposure to, such as infrastructure and repairs and renovations. Now we used to be organized by verticals. I didn't mention, for example, alternative fuels or construction demolition and excavation materials. We're not stopping those activities. Those activities continue to be very important and core to the things we do. But we have embedded those in the businesses where they are mostly related to, like alternative fuels in cement, and construction demolition and excavation has gone back or is being run by our materials businesses, ready-mix aggregates. So it's about simplifying. It's about focus. And it's about deploying our energy and our resources to grow these businesses: construction chemicals, concrete products, mortars and asphalt and aggregates, which all of them comply with this set of criteria that I mentioned. Construction chemicals, for example, is admixtures. Admixtures is a great business, highly complementary to our legacy business. We -- as a very large ready-mix producer, having admixtures allows us to optimize our mixes, optimize our costs, reduce CO2 emissions of our mixes. And when we think about the cement we sell to other ready-mix companies, it allows us to enhance the product offering to our customers. So that's very attractive in concrete products. We have a starting base with concrete products in the U.S., in Europe, in Israel. And again, allows us to enhance the product offering to our customers, but also allows us to gain exposure to infrastructure. And this is a very attractive segment that is growing at a very attractive pace. Mortars, highly complementary to our business, allows us to enhance the product offering to our customers. And in the case of asphalt aggregates, this is another avenue to pursue as we think about growing our aggregates business, for example, in the U.S., also Europe, that is more related to infrastructure activity. So when we consider these businesses we're focusing on, this is going to be sort of the baseline for 2025. As you can see, we have been growing in these particular businesses, growing sales at 7%, EBITDA at 12%. The most important one is, from a size standpoint, is construction chemicals or admixtures. The second one right now is concrete products, but with the acquisition we announced this morning, mortars is going to become much more important, which is the dark blue. And asphalt is very small, and it's just a platform where we already have an attractive activity in the U.K., but we think that this is an opportunity -- there's an opportunity there for us to expand as we think about, again, developing our aggregate business in the U.S. Immediate efforts that are underway at the moment. In construction chemicals or admixtures, we're focused on increasing third-party sales. We have significant activity of third-party sales in admixtures in Mexico and Europe and a huge opportunity to do the same in the United States, which is currently underway. In mortars, announced this morning the acquisition of Omega, which is a very attractive platform that we can use as a base to grow. We also have an interesting platform with our Multiplast product in Mexico, which is a specialized mortar, which is very attractive and has a lot of draw in the market. That is also a platform from which to grow our Mexican mortar business. And in concrete products, continue building the platform in the United States and EMEA. Mortars, because we announced this morning Omega, just a few words on that. In the U.S., the broad mortars family and the acquisition this morning, Omega, is one member of the mortars family, which is stuccos. But mortars is $13 billion industry in the United States growing at a 6% CAGR between '21 and '24, so grows at a faster pace than cement. It includes stuccos or materials to prepare the base so that then the final flooring can be placed on top of it. Adhesives for tile setting; dry mortars, which go in walls, et cetera; and concrete repairs, to name a few members of the stuccos family. So this is all highly complementary and synergistic with our legacy businesses. So again, Omega is now a starting base from which to grow. These businesses have significant vertical integration. So for example, the acquisition this morning, Omega, which has 4 mortars plants, consume the equivalent amount to cement of 8 ready-mix facilities on average -- average size ready-mix facilities. So we like the vertical integration coming with much lower capital intensity relative to a concrete plant, for example. And they have higher free cash flow conversion, low capital intensity. So very interested or very attractive business, highly complementary to the legacy businesses. And a little bit more details. So Omega is the leading stucco producer in the Western United States, has the #1 recognized brand. And it has national brand recognition, which is very important because as we think about expanding this platform, it has $110 million revenue, $23 million EBITDA before synergies, 65% free cash flow conversion, 150 employees and 5 locations, 4 plants in California, Nevada, -- 2 in California, 1 in Nevada and 1 in Colorado. Again, very strong vertical integration, synergies related to logistics and procurement and a cross-selling opportunity with our customer base. The acquisition multiple after synergies is going to be below 7x. And this is a business with 50 years in operation. So in closing, we're very excited about our ongoing transformation. We're very excited about our sprint between '25 and '27. We are committed to delivering 10% EBITDA growth every year over the next 2 years. We're very comfortable in the fact that more than half of this will come from self-help measures, things that are more under our control, and a little bit less than 1/2 coming from organic growth, where we believe we've made some conservative assumptions. It's all about improving our margins, generating more free cash flow through more free cash flow conversion, increasing our ROIC by almost 200 basis points through decisive actions that we are taking through this methodology and platform of the business performance reviews. We have a very focused growth strategy around aggregates in the U.S. and highly synergistic businesses. And we're pivoting away from CapEx and into M&A. We will ensure that we take the benefits of our investments in growth CapEx in the past, but we will pivot into very accretive M&A. And this, we will do while we have a highly disciplined capital allocation framework. And that's it for me. So thank you very much, and I look forward to interacting with you during the day. And Lucy, I think -- thank you very much. I think I went over by 2 or 3 minutes, so sorry about that. Thank you very much.

One point I just want to highlight besides the conservative assumptions on organic growth that Jose Antonio just walked us to, is that we are using a peso rate of 18.25 to 18.50, consistent with our guidance for '26 for the 2-year period. So just to keep that in mind. Well, I think probably the next speaker has the most topical subject to cover. I'm very pleased to introduce Jose Antonio Cabrera, Head of EMEA, to discuss the European decarbonization landscape.

Thank you, Lucy. So thank you very much, Lucy. Good morning to everyone. So this is my first time here in this event. So I will do the same, I will introduce myself. I have been working in CEMEX for more than 25 years across different functions, from mainly cement operations, commercial, strategic planning, general management. And I had the opportunity to visit and to be involved in many operations. I began in Europe, but I was working also in the Middle East. I spent 6 years in Latin America. And now I'm back in Europe and I have the privilege to run this operation in these, I would say, very exciting times in which this region will continue to deliver growth for CEMEX. The drivers, as Jaime and Jose Antonio mentioned before, strong demand recovery, very good operating leverage that we have in the region, more so after our Cutting Edge efforts, and a very strong pricing environment. But today, I will focus my presentation on decarbonization, on the ETS, on CBAM. And so my objective today with you is to have -- to ensure a clear understanding on regulatory developments in Europe regarding ETS and CBAM, how we see those and why CEMEX is in a privileged position to continue creating value in this environment. But let me go one step back and remind everyone how the ETS works. So the ETS has been in place since 2005. It's the largest carbon trade, carbon market in the world. And many sectors are included in the ETS, from heating system, power generation, to heavy industries like glass, refineries, chemicals, steel and, of course, cement. Some of the sectors receive free CO2 allocations in order to operate or have been receiving free CO2 allocations to operate. And these allowances are tradable in the carbon trade market. So these free CO2 allocations are based in a specific benchmark for each and every sector. And that benchmark is calculated just with the 10% best performers in each sector. We have a clinker benchmark that is being reduced. Every phase has been reduced, tightening the supply of the allowances, of the CO2 allowances, and then pushing CO2 prices up. But what is happening this year? Why 2026 is so important and everybody talks about more than the noise about the ETS and what is happening in Europe this year? So 3 events happening at the same time. The first one is that in this phase, again, the benchmark will be reduced. It will be published at the end of the quarter or beginning of second quarter. But we estimate that the benchmark maybe will be reduced between 4% to 9% compared to the clinker benchmark that we used to have in the previous phase. But also this year, 2 new events are happening for the first time. One of them is the phasing out of the free CO2 allocations for the industries. This means that even if you're running your plants in the 10% best performers, you are not going to have the full 100% allowances of CO2 that you need. So that is the first one. This means that the industries will have a carbon cost from this year or a growing carbon cost from this year. And the second very important event that is happening this year is the introduction of CBAM. The Carbon Border Adjustment Mechanism is phasing in and is increasing with the same pace as the gradual removal of the free CO2 allocations for the European Union producers. In practical terms, this means that the importers for the first time are going to face an import carbon cost as well. So let me also comment on how we see this noise or some rumors in the recent weeks regarding the ETS. So the ETS was designed since the beginning in phases because it's a noble scheme in order to assess and adjust. And this has been happening since 21 years ago and is the case right now. So for example, CBAM was not in place since the beginning of the ETS. So it was because of the demand of some sectors, for example, the steel sector or the cement industry that the CBAM now is in place and is favorable for the industries in Europe. So probably, there will be some adjustments to the system. It has always been there, but probably, this will happen in the phases from 2030 onwards, not in the current phase is what we see. So what we know right now is that the current phase in 2026, this system is giving a really competitive advantage to the low carbon producers and to the most efficient producers. But what is the size of that advantage? So we made this exercise. So here, you can see, in the blue bars, you can see the estimated carbon cost for an average European Union producer from 2026 onwards. In the green one, you can see the estimated carbon cost for an import coming into the European Union if the customs in the European Union is accepting the verified emissions. If not, the regulation says that what applies is emission factor by default, depending on the country of origin of that product. That is the dotted line that is even much higher. So here, what we can see is that there is a gap between the average producers and the average importer of around EUR 9 per ton at a CO2 cost of around EUR 70. But the question is, is this going to be sustainable in the short to midterm? So we think that for the most part, yes, it's going to be sustainable. It's just not a matter of CapEx that it takes resources, it takes investment. It's a matter of changing your process itself in order to adapt, for example, in the case of alternative fuels, to adapt to the new fuels that you are using. But it's also a matter of regulatory. In order to have a regulation, a local regulation, for example, the one that we have in Europe that limits the disposal in the landfill is not happening in the short to midterm, and it takes time. And finally, in order to develop the supply chain of the alternative fuels to reduce your carbon emissions or your carbon cost, it will take a lot of time. Believe me, I was working in the cement operations 2 decades back just when introducing this, and it takes a lot of time to state these regulations, local regulations and to develop the value chain. So we think -- and the same happened with other levers like clinker factor. So we think that the majority of this advantage from European Union producers to importers is going to be sustainable in the midterm. But we have another, I will say, a very relevant aspect to understand the dynamics of the industry in the midterm. That is the overcapacity. So currently, in Europe, this means the European Union, Switzerland and the U.K., the capacity -- the clinker capacity is around 200 million tons. But the clinker needs currently are around 120 million tons, so a 30% to 40% overcapacity. So this overcapacity has been because of the incentives related to maximizing the free CO2 allowances that we can get or the industry can get. In 2, 3 years from now, the market will grow, but as the clinker factor will be reduced, the clinker demand in the European Union probably will be very similar to the current one. What is going to happen? What is the difference? So the difference is like, unlike in the past, after 2028 or 2029, it's no longer worthwhile to keep all the plants running because the fixed cost to keep those plants running is higher than the benefits of the free CO2 allocations that you can get after that year. So this will trigger or will accelerate rationalization, probably first among large players, that represents 50% of the clinker capacity right now in Europe. And CEMEX, for example, has already begun. We have shut down 3 plants in the last years, and we will continue to optimize our cement footprint in the future and we are expecting the rest of the players that probably will do the same. Again, this is independent on the discussions on what happened in the next phase of the ETS because this is happening in the current phase, at the end of the current phase. But what has CEMEX been done in -- doing in during these years? I mean, CEMEX has been quite a long time, decarbonizing. For CEMEX, decarbonization has always been a strategic value, more than just a compliance issue. So we have reduced our emissions by 38% compared to the baseline on 1990, and it has been accelerated in the last years. In the 5 -- in the last 5 years, we have reduced our emissions by 19%. So our current emissions is 507 kilos of CO2 per ton of cement. This figure that is around 430 kilos in net terms, because it's 507 in gross, 430 around in net terms, is the objective of the Cement Europe Association in 2030, without considering any carbon capture technology. So we are right now, 5 years ahead of the average of the cement industry in Europe. How we got here? Well, first, excelling in alternative fuels. Our alternative fuels substitution in our kilns in Europe right now is close to 70%. 7-0, 70%. Our decarbonated raw materials that we're using in our kilns right now goes from 10% to 20% depending on the kiln, also with efficiency and clinker factor. Our current clinker factor in the European Union plants is 67%. And we still have some room for improvement because we can go down to 50% in the midterm. So another important -- very important piece of evidence of our leading position is our bank of European Union allowances, free CO2 allowances, that we have. We have always had a surplus in each and every year. And currently, we have 2.9 million allowances of CO2 that is equivalent to around EUR 200 million that we have in the bank. This has been obtained just because of our decarbonization efforts and because of properly managing our supply chain in order to maximize our CO2 allowances. This bank will cover our deficit for the next 4 years. I mean deficit because remember that with the phasing out of the free CO2 allocation, every year, we are not going to get free CO2 allocations for the 100% of our emissions. So this will cover the next 4 years. However, given that we made the efforts upfront, it will not influence how we are going to set our cement prices currently and in the future. I think this waterfall represents very well, how we are going to make that. As you can clearly see here, we have a cost advantage versus the -- not only versus the importers in the European Union, but also versus the average of the European Union producers. So our pricing is reflecting our cost, of course, but also our efforts in decarbonization that we did in the past and we have to continue doing in the future because we want to maintain our competitive advantage. What I can tell you is that as we speak, we are seeing really strong pricing characteristics in many European Union markets in the ones that we already announced at the end of last year or January this year. Mainly in Southern Europe, we are seeing these very good characteristics. And in Central and Northern Europe, after the very harsh winter that we have had in the beginning of this year, probably, we will see a similar behavior. And also the U.K., the U.K., remember that we'll have in place, a similar system as CBAM, but from 2027, not from this year. So as I mentioned before, we will continue to keep our competitive advantage in Europe and we will continue to invest in profitable decarbonization projects. Which projects? Well, we have what we call the traditional levers that is alternative fuels. We still have some room for improvement, from 70%, go up to 80% of alternative fuels with our current footprint. And we also, we will be reducing our clinker factor. For example, we are using -- and I think it's another competitive advantage that we have -- we are using our own admixtures that have state-of-the-art products to decarbonize in our road map of decarbonization of cement. But we are also partnering with our customers in order to use novel concrete mixes that use cement with as low as 50% clinker factor, not only with the slag, but also with calcined clays. We have a couple of projects in Europe and in Egypt, and also with micronization. These 2 technologies, calcined clay and micronization, the good thing of these 2 technologies is that, of course, reduces the emission factor, but also we are repurposing idle clinker kilns or idle raw mill grinding mills in order to produce those. So lowering our CapEx needs and contributing to the free cash flow conversion that -- objective that we have. So for the long run and for the long term, we will also -- we are also developing our options in carbon capture. We have 2 or 3 projects in Europe. The most advanced, you know it very well, is Rudersdorf in our plant in Germany, and we are advancing on that. But a very clear message is that we are not going to undertake any decarbonization project that is not going to create value. So financial metrics will be there before we have a positive FID. So as a summary, this industry in Europe, the dynamics of the industry will improve because of rationalization, because of the introduction of CBAM. And CEMEX Europe has a lower carbon cost curve compared to importers and compared to the rest of the European Union producers. So both levers will help us to expand our margins. So as a result, decarbonization in Europe will continue to be a source of value creation for the company. So that was everything. Lucy, I think I will remain for some Q&A, right?

Yes. Okay. So I'm hoping for a lively but short discussion here. So we could open it up to Q&A, either from the webcast or within the room. Come on. Ben? Ben Theurer from Barclays. Oh, please say who you are and where you're from.

Lucy, you just did. Ben Theurer, Barclays. Jose Antonio, thank you very much for that presentation. Obviously, there's a lot of news going on in the back-and-forth. And it seems like that nobody really knows what the European Union actually should aim for, is aiming for. I mean, you have certain member states that are pushing back on the different initiatives. So maybe help us understand what are those -- how do these different positions affect you on your decision-making process and how you prepare for that? I mean clearly, you do have the balance. I mean, we're seeing price reactions short term. But just to understand a little bit better what the different nations want and what's the big complication under debate right now.

Yes. Thank you for the question. I think, of course, we have volatility in the very short term because of the discussions. What we do when we are analyzing projects for the future, of course, is sensitivity analysis with different CO2 prices that we have to take. But this is not new. I mean 5 years back, the CO2 price was EUR 5, now it's around EUR 70. So because in the end, the supply-demand is working, is tightening the supply of CO2 allowances and is pushing prices up. What is the level? We don't know. Nobody knows, but we make those scenarios in order to see what are the profitable projects that we can undertake. Also take into account that some of the projects that we have, mainly in the traditional levers, are accretive for the company even in a scenario with other different CO2 prices, very low CO2 prices. For example, some alternative fuels are really accretive for us, clinker factor reduction or efficient programs. But yes. So we don't see in the short term, we think CBAM is in place, CBAM is working. And any adjustments that will come, probably will come, will be more for the phase after 2030. And it's not necessarily bad because that will give us visibility and predictability to make a proper capital allocation.

Alejandra. Excuse me. Right here in the middle.

Alejandra Obregon from Morgan Stanley. I was wondering if you can talk about what is the sort of level of pricing that you're thinking for the industry with everything that's moving, if there's any sort of indication inside of the company, where that could trend going forward? And more importantly, there's a big exports business for CEMEX in Europe. So I was just wondering if you can talk about whether CBAM is an opportunity for pricing outside or whether that's a challenge? And what percentage of your business is exported today?

Well, we don't have that much business exporting outside of the European Union because many of the export that we are doing is inside the European Union. That, by the way, they are benefiting this year from the CBAM. So our exports within the European Union are increasing and expanding margins just because of the introduction of CBAM and the cost, the carbon cost, that the importers will face. So that's why we are not -- I think you have another first question before the exports? Yes. And regarding pricing, what I can tell you, I mean, it's very early in the year. What I can tell you is that we are seeing in the countries that we already announced, in the Southern European countries because of weather conditions that we already announced, we are seeing really good traction, price traction. And probably in future calls, quarterly calls, Jaime and Lucy can update you on how this develops. But so far, it's taking very good traction.

Those are, of course, our January pricing increases. We still have other countries that are -- that they announced pricing increases for April.

Correct.

We could pass it to Yassine quickly. Okay.

Yassine from On Field Investment Research. Just two quick questions on Europe. What is European cement as a percentage of CEMEX EBITDA, if you could give us a ballpark figure? The European cement EBITDA as a percentage of the group, would be good to get a sense of what it is. And the second question on the U.K. I think the CBAM here is delayed until 2027. Any update there? And any expected impact in the context where there is a bit of Turkish imports?

Yes. Well, the share of the -- I mean, the percentage of the European cement business in CEMEX is around 12% with the U.K. Continental Europe is 8% without the U.K. So I mean, the U.K. is progressing the conversations. CBAM will be in place from next year, and the conversations with the government and the different sectors. I'm very positive that in the short to midterm, we can have in the U.K., a similar scheme and converging the scheme to the one that we have in the European Union.

If I could just maybe interject here. I believe that the 8% that you gave was for EU total. He was asking specific to cement, I believe.

Cement?

Yes, which I think is probably about 4%. Because it's about 50%, I think, of total EBITDA.

Cement, yes, it's around 8% without the U.K.

That's cement itself?

Yes.

Oh, sorry.

Antonio, if you could tell us, if pricing power improves due to rationalization, do you see an opportunity to increase volume market share instead of protecting price? And if such, where do you see more opportunities in specific countries or regions where this could happen?

Well, this is -- we are seeing opportunities in the cement business in Europe. I think we are enjoying very good margins, and these margins will continue to improve. And we will be part of the rationalization for sure. Being part of the consolidation, that is what I mean that probably, we will have some opportunities. We don't have anything clear right now, but we will be definitely part of the rationalization.

I think we have time for one last question. Did you want to...

[indiscernible] that if we have solid market shares that are around what we're targeting in every market, well, the good news is that [indiscernible] as we exercise our pricing [indiscernible]. And we will continue to work on lowering our CO2 cost curve relative to the rest so that in the next phase, when they review that 10% of plants in the U.S., we continue to widen the gap between our benchmark, right, the European new future benchmarks and those of importers' and average local players'. Does that make sense? So that's what we're doing. We're not going to give up our opportunity on pricing just for the sake of volume. But we're going to retain market shares, right, and move forward. Would we ever gain market share? Well, that might happen only if others just shut down capacity because they just lose money. Somebody else will need, right, to supply that. But it is too early to conclude whether that is going to happen or not, right? So I hope that, that provides a little bit more of color to your question.

I think we may have time for one last question, if there is one, a fairly quick one. Do we have -- no? Okay. Great. Then it's time for a break. So if we could come back at 11:00, that would be great.

Thank you. Thank you very much.

Thank you very much. Okay. [Break]

Okay. Well, thank you for coming back. And I'm very pleased to introduce you to a new face for many of you at CEMEX. Not new to us, however. Jeff Bobolts, who runs our U.S. Aggregates business. Jeff?

Good morning. I'm Jeff Bobolts. I'm the Senior Vice President for our U.S. Aggregates business. Prior to this role, actually, let me say that we recently reorganized this way shortly after Jaime's appointment. Prior to this role, I've run our Arizona aggregates business, our Florida aggregates business and was most recently the Regional President of our integrated Florida business. So that was cement, ready-mix -- excuse me, not cement, ready-mix and aggregate. On behalf of CEMEX's U.S. aggregate team and our 8,000 employees, thank you for being with us today. So I'll start with an introduction to the business. I'll point out some strengths, and then I'll make a comparison with public data. There's a lot of really good public data available in the aggregate space. After that, I'm going to talk about operational excellence. You've heard of that from Jaime. We'll talk about how we expand margins organically and then how capital improvement makes a big difference in our business. Following that, we'll get into growth. So in terms of an introduction, CEMEX is the sixth largest aggregate producer in the United States. We produce about 54 million tons of aggregate annually from the footprint that you see on the screen, starting in coastal Georgia, around to Florida, which is the #1 position for us, into the Alabama and Florida Gulf Coast area. This is new with our joint venture in Couch that José Antonio spoke about. Then in Texas, where we have our largest quarry Balcones, into Arizona and a solid position in California. I can't forget our operation in Newfoundland, Canada. This is a newer acquisition in 2024 of Atlantic Minerals. I'll talk more about that, but this material travels from Canada by water as far as Brazil. Over that footprint, we're generally vertically integrated into ready-mix. About 29% of our volume goes into that ready-mix business. We have 90 total sites, 50 of which are operating mines, about the other 40 are terminals generally, so marine and rail terminals. When you look at the aggregates business, size matters and breadth, overall count and network matters. But in many cases, what matters more is individual quarry size. The USGS coined the term mega quarry in the U.S. about 7 or 8 years ago. This is to signify a quarry that produces over 5 million tons per year. There are about 15 of these throughout the United States. CEMEX operates 2. Our FEC quarry in Miami and then our Balcones quarry in Texas. Balcones is one of the largest construction aggregate quarries in the United States. This all leads to an EBITDA contribution of 40% of the U.S.'s total EBITDA. I'll jump right into a comparison. This is all produced with public data. I'll explain the slide first on the vertical access, the rows that you see, I think the first 3 are generally pretty self-explanatory. The fourth row, cash gross margin. So this is unit gross margin for aggregate. You will see this reported in many of our competitors' public releases. Across the horizontal axis, so the first column on the left is going to be an average of 2 of the larger pure-play aggregate producers in the U.S. On the right-hand side is an average of some of the larger public regional players. And we've got CEMEX right in the middle. And we believe that we sit comfortably in between these 2 sets of competitors. Primary reason for that is along the bottom, is margins. We believe that our asset base, our vertical integration and an excellent team provide us with a fantastic margin that has separated us from many of the regional players, and we're closing the gap to some of the blue bloods. Next, I'm going to talk about operational excellence, 2 elements here, organic and then project-based. So first, the comparisons that you're going to see, we're going to do an evolution in many of these is going to be sort of 2020 to 2025, right? Over the period, our aggregates business grew our cash gross margin by unit by over 10% on a compound annual growth rate. So how do we do that? We look at it from 2 elements: commercial and operational. On the commercial side, the most visible is obviously price. Over the period, we've grown the average selling price by 8% on a compound aggregate annual growth rate, please. So the next step for us is optimizing product market fit. So I told you that we move a lot of material into our ready-mix business. But when we go to produce aggregate for the ready-mix business, we don't just get that type of aggregate. If we put 100 tons of feed into an aggregate plant, we probably get 60 tons of aggregate that's suitable for ready-mix. What our team excels at is finding the best and highest use for that other 40 tons. We might blend material together, blend different sizes to produce a specific aggregate for precast. We can scout the top off and produce a landscape rock or we might take the bottom end of a natural sand and produce something that makes a beach renourishment sand in Florida. This helps maximize our revenue and improves our working capital. On the operational end, our cost has grown at 4% over this period. Keep in mind, this is going to be one of the heaviest inflationary cycles that many of us have seen. The 4% number is comparable or favorable to many of the public data that we see out there. As I mentioned, we recently reorganized the business. This has allowed us to streamline things to look at aggregate-specific best practices, operational efficiency, are we keeping our equipment operating at maximum throughput at all times. We're also very excited about technology. Our teams developed digital road map. We're using drones to fly our stockpiles, ensure that we're sticking to our mine plans. We have semiautonomous haul trucks running right now. And we're using AI to develop maintenance task lists and push them directly to our operators' tablets in the field so they can get the work done right there. Why does that matter? So technology is extremely important in the last 2, I'll use an example. So haul trucks and maintenance. Two of the largest cost categories in any quarry are going to be labor and maintenance. We're using this to leverage that. Now what does that do for us? Over the period, we've increased our price/cost spread, and we've increased our EBITDA margin from 28% to 33%. Next, I want to talk about a success story with capital improvement. So first off, Balcones. This is, again, our largest quarry, one of the largest in the United States. This covers 4,000 acres. On site, we have a cement plant. We have an aggregate plant. We have a customer line film. We have customer ready-mix plants, asphalt plants. We load hundreds of railcars every day, and we load thousands of trucks. So this is an extremely impactful site for us. Before I talk about the project, real quick and forgive me if this is redundant for anybody. But the aggregates mining process. So generally, we're starting on the upper left, and we have to extract reserves from the ground, from the mining phase. Then it's hauled to our primary crusher and keep this in mind, it's called a primary crusher for a reason. Once we go through that process, we're going to go to a secondary crusher. We're going to reduce the size to something that's more suitable for the end use. We're going to sort it, we're going to wash it and put it in product piles. The 2 important things I want you to take away from this is, number one, this is a sequential process. You can't go to step 3 without having done step 2 and 1. And at a site and at a major site, everything goes through the primary crusher. So at our Balcones facility, we replaced and upgraded that primary crusher. That's provided tremendous improvement in overall cost. I'm going to get to that in a second. One of the other things that's done has allowed us to optimize our reserve. So we are taking the full depth of our permitted reserve at this facility. When you look at the geology at Balcones, you can see this when you're in the pit. It looks like a layer cake. The top is suitable for construction aggregate. The next layer goes to cement feed. The layer after that third layer is suitable for lime. And then the final layer goes to road base and infrastructure, but all of it has to get through the primary. The upgrade of the primary crusher allows us to work through this sequentially on a regular basis so that we're not double handling material, which costs money. It gives us the ability to take that primary down on a scheduled basis because we have enough throughput so that we can do preventative maintenance. Preventative maintenance is going to cost 3x less than corrective maintenance if we have a problem. So there's a tremendous value in just that. When we look at variable costs, these are generally -- this is labor, this is power, and this is maintenance again. We're saving 28% in the first full year of production with our new primary. This has led to almost a 10-point increase in EBITDA margin at our largest facility. Capital improvement makes a tremendous difference in the Agri business. And I'll finish with growth. So you heard José Antonio and Jaime talk about growth and how our team is excited to be part of that. One of the first things we think about is reserve base. And up until about 2020, as you know, CEMEX was working hard to improve our capital position to get back to investment grade. So many of -- most of this journey started right around 2020. Start on the left-hand side of the screen, and we work our way to today. Over this period of time, when we think about accelerating aggregate replenishment. This is effectively acquiring raw land adjacent to our current quarries that we can then convert into mineable land. The next step, projects. So this is an aggregate project in a market we're already doing business. Raw land away from an existing quarry, we're building a plant there. Many of these are just coming online right now. We've got a video we're going to show you. We think we're very excited about these projects. And then as you've heard, we've begun an M&A activity. So in 2023, moving into '24, our first opportunity was the acquisition of Atlantic Minerals. The combination of these 3 avenues have led to a net improvement and a net add to our reserve bank of over 400 million tons. Now keep in mind, this is net of the 50 million, 55 million tons we're consuming every single year. We're very proud of that. When we think about reserves, the first thing we present, we have Jaime has talked about the business performance review. We've got our business performance review next week. The first thing we will prevent -- present is safety. The very next thing we present is reserves, every single time. So going over to the left-hand side of the screen, replenishment. Again, 2 pieces: acquiring raw land, and then we have to convert that land into mineable proven reserves. That takes permitting, that takes drilling, that takes various different environmental approvals. We have geologists and we have experts in permitting on staff available to do that, and we've demonstrated the ability to move that. Next, projects, and we're very excited about these. As I mentioned, we started a few years ago on this. This adds to our reserve bank and also gives us growth. I told you that size matters in aggregates. Location matters, too. So our 4 quarter sand mine is just outside of Orlando, Florida. It's the closest site to many of Orlando's biggest theme parks. You can actually see the castle at one of the theme parks from the top of the tower. So location matters here. Buckeye, Arizona. This is a site that will be operational in the third quarter of this year. It supports the west side of Phoenix. Our ready-mix business in that area does many high-tech chip plants, so we're excited about this. And the next one is Immokalee, Florida. This is a sand mine in South Florida, and we're highlighting some of those sand mines because the margin is so strong. These are some of our best businesses. And next, moving over to M&A. A big focus for us right now. So we have a dedicated U.S.-based aggregate-focused M&A team on staff working things through this pipeline. We're focused on small to midsized companies. We have demonstrated the ability to be flexible and work through acquisitions with small family businesses. That's an important piece for us. And I'll highlight 2 of them, Atlantic Minerals and Couch. So before I do, let me just comment on some of the synergies that we believe we can bring. Beyond typical operational savings from a synergy basis, which we've demonstrated the ability to execute on some of these, we can also bring 2 unique elements. Number one, we have a -- excuse me, we have a big ready-mix business. We consume a lot of aggregate. I told you that 30% of the aggregate that is produced from our business gets consumed by our internal ready-mix business. That only satisfies about 60% of their demand. So there's another 40% out there. This is millions of tons that we purchase on the external market. When we think about acquisitions like this, we have the ability, number one, to be a customer, so we can approach in a little bit different fashion, right? Next, we can provide volume, which can reduce fixed costs and provide leverage and performance there. We've done that in both of these cases, Atlantic Minerals and Couch. The other thing we can provide is logistics and cross-selling. We talked about 40 terminals total. The other piece is when you think about it, a customer that buys cement, most customers that are buying cement will buy rock and sand as well. This provides us an opportunity to sell to a customer base that we already have. Two great examples of this, Atlantic Minerals. And Atlantic Minerals, the East Coast of the United States coming from Canada. The example here is Savannah, Georgia. We've had a sand mine in Savannah, Georgia for years. Our customers asked us, can we buy rock from you? We now land Atlantic Minerals rock in the Port of Savannah. We've increased our revenue stream in this market. Couch Aggregates. This business starts in the Alabama area and connects by barge into the Gulf Coast of Florida. Couch was working their way east along the Panhandle Coast of Florida, east of Panama City, they were looking for another avenue and another port to come into. CEMEX already has a cement terminal in an area called Freeport. We now land couches aggregate at that terminal as well, combine it with cement, and we've increased the market base there. So that's a tremendous opportunity for us to drive down the multiples of these acquisitions. I should also comment that this isn't necessarily just a short-term growth story. When we think about Atlantic Minerals, it has a tremendous reserve base, number one. Number two, it's unique in the fact that it's one of the only large-scale production facilities on that entire East Coast that is directly on water, as you can see in the picture, has a ship loader. So this material can travel even farther than if you're moving it from inland. And again, it goes as far as Brazil. A quick video to highlight some of our aggregates projects. [Presentation]

So what to expect from us and looking forward? Number one, we believe we've got a very solid foundation with the current aggregates business in the United States. We've got a great asset base. Vertical integration makes a difference, and we've got a fantastic team of mining engineers, geologists, miners, commercial and logistic folks on the ground making this work. Next, those individuals and those teams have been focused and will continue to focus on operational excellence, improving our margins at both an organic basis and then working for capital investment and improvement from that side of things and we're committed to continue to drive growth. We love the footprint that we have. We're excited about that opportunity to grow, and we believe that we provide some unique opportunities to drive synergies and reduce those purchase multiples. Thank you. With that, I think Lucy is going to take us through some questions.

Thank you, Jeff. Before we begin on the Q&A, this is just a great example of that earnings quality and improving earnings quality that Jaime was talking about. And I know you all saw that number of 40% of U.S. EBITDA in the first, but aggregates is rapidly becoming our biggest business. So just to keep that in mind. And now if we could take some fairly quick Q&A. Ben, and then I'll get to you, Paco.

Ben Theurer, Barclays. Real quick on the M&A side in order to expand and you've talked about the need to replenish, how would you describe yourself the positioning of CEMEX and the ability to execute on M&A? Just -- given the valuation discrepancy between where CEMEX is trading at versus some of like the pure-play national peers obviously do get different multiples. So where is the competitive edge that you try to play in order to be active on M&A?

Sure. Thanks for the question, Ben. As I mentioned, we're trying to drive that purchase multiple down through network synergies and through many of the things that we're doing. Are we going to go and make a big large-scale acquisition? Perhaps not. We may bolt-on individual elements within most of the footprint. We have the opportunity to go outside as well. But we think we have that opportunity with the synergies that we laid out, specifically and then with the expertise that our team brings.

And if we get a microphone over to the corner to Paco.

Francis Suarez from Scotiabank. So the question is, to what extent you are kind of constrained of doing acquisitions within your footprint or adjacent to your footprint? And to what extent would it be worthwhile building new ecosystems away from this footprint and considering potentially perhaps the connections and the connectivity on the river system in the U.S.?

No, thank you. That's a great question. I think when you think about connectivity, it varies from region to region depending on what that logistics network looks like. And the one thing we're encouraged to think about is not right next to you in a network. How far can material travel? How do you connect to that? And perhaps, is there a step in between that needs to be filled in?

I think Anne Milne over here on the right.

Okay. Just following up on some of the other questions, and I think a lot of this you discussed in your presentation, which was very enlightening, thank you very much, was some of the other conditions for expanding in the aggregates business. You're at 29% now. How much higher do you think you can go in that number? Are some of these people clients of yours? And how big do you think is the universe for acquisitions or bolt-ons in the U.S.? And I know this is the U.S., if there's anyone that can comment on outside of the U.S. aggregates business, that would be helpful, too.

Maybe take the first point and then Jaime can cover the rest of the world.

Sure. So first off, when we think about vertical integration into ready-mix, I mentioned that they're consuming 60% of their material from CEMEX's aggregate business. I don't think we want that to be 100%, but there are specific areas where that's obviously an average, right? In certain areas of the United States, it's much higher. In certain areas, it's much lower. It's an easy way to look at where those opportunities are to integrate in that level. The other piece as it relates to the ability to acquire is the vast majority of the aggregates business is still a fragmented independent base of operators throughout the United States. There are certainly some large markets that have been consolidated. But what we are really looking at is some of those smaller areas in which you haven't seen that enormous consolidation cycle. So we believe that, that provides plenty of opportunity out there. And then I'll defer on the ...

Can we get a microphone ...

Regarding elsewhere, we have a very solid aggregate business in Europe, and that's the region that because of similar regulatory environments, there are entry barriers and we have a very good team, good assets, and we do see opportunity, right? Why shouldn't we not become the Vulcans and Martins in Europe? So we're also assessing those opportunities. However, for the time being, priority is the U.S.

And maybe if we could just pass the microphone to Alejandra.

Alejandra, Morgan Stanley. I guess a follow-up on vertical integration. So you mentioned all these analysis into making the most value out of your reserves out of the rock. So just wondering, I mean, we're seeing a lot of pricing power in aggregates. I'm assuming free cash flow conversion is higher for this product, maybe returns as well. So when do you think vertical integration makes sense into the downstream when perhaps pricing power is not as high? And when and where will it not? And what are the reasons or the rationale for vertically integrating if that sort of makes sense?

Sure. That's actually -- it's a great question. You saw something in José Antonio's presentation when he was talking about urbanization solutions. He mentioned asphalt. So one of the other largest consumers of aggregates is going to be asphalt. CEMEX is not in the asphalt business. Generally, the aggregate that is used for ready-mix and asphalt depends on regionally, sometimes it's the same, sometimes it's different. So it's important from a product mix standpoint that we're focusing on multiple different segments and end uses. We also think about just our overall segmentation, how much is going to infrastructure, how much is going to residential, how much is going to public. And we're constantly balancing all of that when we think about what is the best and highest use. As I mentioned, we don't necessarily want to -- or we don't want to sell 100% of our aggregates into our internal ready-mix business. Right now, we sell 29%. So we see we've demonstrated that flexibility in that respect.

Thanks, Jeff. And if we could get a mic to Garrett Greenblatt from JPMorgan in the back row, please.

As we think about the next 5-year outlook or so, how are you thinking about the price/cost spread, the puts and takes to drive that forward and close that gap you have versus national peers?

Great question. We continue to push. We've seen that price/cost spread. We've seen a positive variation in that. We don't see that closing to nothing in any way, shape or form. As I mentioned, our teams worked very, very hard on the pricing side of things. You've seen the outlook there, I think those outlooks are generally different than some of our other product lines. The largest concentration that we have, I believe, in the United States in infrastructure sits in aggregates. So that's generally supportive of top line price. And then on the cost side, I think over the period, we've demonstrated solid cost control. It's focus for our teams up and down. And I think we also have the ability to continue to leverage some capital improvement and technology in the business to maintain that spread.

Okay. The last question is Gordon.

Gordon Lee from BTG. A quick question. A competitor of yours that used to be in the U.S. market that's no longer in the U.S. market is speaking or initiating a project where they intend to basically from quarries in the Dominican Republic and Puerto Rico sell to U.S. Gulf Coast markets. And they think that business can be $100 million, $250 million in EBITDA by 2030. So one, I wonder whether you think that's feasible. And two, whether there are similar assets or assets in CEMEX's SCAC footprint where you could maybe think of replenishment through them?

Sure. Thanks for the question. I won't comment on what our competitors specific plans are. What I will say is that CEMEX ran through a similar analysis some years ago. As you know, we have operations in the SCAC region and in those areas. And after going through that analysis, the determination was to acquire the Atlantic Minerals Quarry in Canada. So at that time, we found that, that was a better avenue for investment than making that move.

Thanks, Gordon. I think you're at the wrong Analyst Day. Okay. Thank you very much, Jeff. Okay. And to wrap up, I'm very happy to welcome to the stage, Maher Al-Haffar, our CFO.

Thank you very much, Lucy. Good to see everyone. It's a very nice intimate room, a smaller number of people since we have another meeting afterwards, but it's very good to be here with all of you. This has got to be one of the most exciting analyst meeting that I have attended. And I can tell you, I've attended many of these over the last 25 years of my being at CEMEX. So it's a really exciting time. Not only are we coming from a period where several of our markets have underperformed and now are positioned to outperform, but also because of all the things that my colleagues discussed from our CEO to all of my colleagues discussed on the things that we are doing. Today, I would like to talk about our financial strategy and center stage of our financial strategy is capital allocation. This business is a I don't want to say a cash printing machine, but if you manage it properly, it is a cash printing machine. And the challenge becomes how do you allocate capital for maximum value to shareholders on a per share basis, which is very important. Now before I get into that, I thought I would like to -- and maybe at the risk of being a little redundant, highlight some of the levers that we are managing in this 3-year sprint. And we have 6 of them. We have many, of course, but these are the 6 levers that are moving the needle the most. Number one is managing growth; number two, earnings quality; number three, free cash flow; number four, improving return on capital employed. And then, of course, capital allocation discipline and then the balance sheet, which, as Jaime said, the maintaining an investment-grade capital structure through the cycle is absolutely nonnegotiable. Now in terms of growth, because of all the things that we're doing, because of project cutting edge, there's tremendous operating leverage that is embedded in our business model throughout the sprint. If you take a look at top line growth, we're expecting 5% growth per annum for sales. That is delivering 10% growth in EBITDA, 14% in EBIT but very importantly, 20% of free cash flow growth during the period. And it's very important to note that, that free -- and I will talk about free cash flow in a second. And then earnings quality. 85% of our operating cash flow is coming from the U.S., Europe and Mexico. That's not to say that we're not -- we don't have a fantastic business in SCAC, but those are businesses where we see maximum amount of growth in the future and where we see earnings quality being the highest in the future. And if we take a look at the components, both the U.S. and Europe have been growing over the last 5 years by mid- to high single digits. underpinned by very important demand in infrastructure and residential in those markets. If we take a look at Mexico, which some investors sometimes have there -- have a little difficulty with, that has been -- that has proven to be a terrific market actually. If you take a look at our EBITDA growth over the last decade, it's been a CAGR of 4%. If we take a look at the CAGR EBITDA growth of Mexico, this is in dollar terms, by the way, because everybody is concerned sometimes about the currency risk and volatility and all of that. In dollar terms, Mexican EBITDA over the last 5 years has grown by 9%. And of course, the pricing of our products have been performing very reasonably in excess of some of these numbers in Mexico. Now if we take a look at free cash flow, as Jaime mentioned and as several other my colleagues mentioned, we're targeting a 47% free cash flow conversion by the end of '27. This is free cash flow from operations, okay? This is not the free cash flow number that Jaime highlighted. I wish Jaime was with us here in the room. There you are. Sorry, I didn't see you. I was looking over here, I didn't see you. And as Jaime mentioned, my favorite free cash flow number is the free cash flow number that is available to distribute to shareholders, to lenders and to invest in. And that's what Jaime said. And if we take a look at that free cash flow conversion rate, the equivalent of the 47%, it's actually 38%, okay? So we're looking at 38% conversion. Now I think it's very important to put it into perspective because if we take a look at where we're coming from, in 2024, that number was $650 million. So 21% conversion. That number in 2025 was actually up to $960 million. And I don't want to go through every year, but if we go from '25 to '27, we're talking about slightly under 50% growth in that free cash flow period. The cumulative amount from the '25 to '27 is close to $2.5 billion, and I will talk about that. So these are powerful numbers that are going to fuel and will continue to fuel our growth going forward. Now very importantly, and something I did not mention in the growth, which Jaime mentioned and several other people alluded to, is that more than half of our growth is coming from self-help programs. That is extremely important because it turbocharges the free cash flow conversion because after initial investments in order to put into place those self-help programs, we essentially -- everything goes down to free cash flow in the following years. So it's very important that, that is one very important tool of really improving the leverage of growth and free cash flow. And of course, we are going to expand margins by close to 200 basis points for the period. So top line growth, earnings quality, free cash flow conversion rates and healthy growth very important. And then we take a look at return on capital employed. As Jaime mentioned, we're looking -- we're targeting about 170 basis points improvement. And of course, we're working on both sides of the ratio, right, the numerator and the denominator. I'm not going to go through the BPRs. I've been fortunate that Jaime has asked me to participate. It's translating one of the biggest contributions is that I'm adding a lot of miles to my flight programs because we have 8 of these things during the year. I have never learned and gotten a feel for the business as much as I've gotten through my participation in the BPRs. It's extremely -- it is -- this whole process, in my view, is translating into a very exciting foundational transformation of the way we do business in the company. I feel that everybody is behaving and adopting a very strong owner's mentality. And it's terrifically rewarding when we see all of us benefiting from how the market is valuing our stock. I don't know if you're aware, but roughly 750 people in the company, top levels of management, both at the global level and in the U.S. received stock compensation, 750 people. And all those people must be ecstatic over last year because they feel like owners. They're making money like owners, and they are impacting that process, which is extremely important. It's a very positive reinforcement on management across the company. In terms of the return on capital employed, as of the end of last year, we have now data, granular data, ROIC, NOPAT, statutory tax on a per asset basis, per plant basis. We never had that before. So in the past, when we looked at some parts of our ready-mix business, we looked at it as clusters or our aggregates business as clusters. Now we are able to go down to plant by plant and able to make surgical decisions on what to do with some of these assets with a view of substantially improving return, which is happening. Capital allocation, as Jaime said, center stage at the capital allocation is returning capital to shareholders. And also center stage is making sure that we are looking at total shareholder returns on a per share basis. That has really never been on the radar screen of management in the company. And that's extremely important because it makes a very different way of looking at the business. Then balance sheet. Balance sheet, we have been working very hard over the years to reduce debt, improve our investment-grade ratings. We think we have more to come. My belief is that we should be a solid BBB-rated company through the cycle, through the cycle, very important, and that is also nonnegotiable. Now in terms of the capital allocation framework, it really starts by anchoring our position by saying that we need to always have an investment-grade capital structure that actually improves. We want to be -- we aspire and we want to be and we're aligning people to be best-in-class stewards of capital. We have -- we are going to undertake bolt-on M&A acquisitions and very selective growth investments, as Jaime mentioned and several of my colleagues also have mentioned, based on very strict return criteria. And whatever that criteria is, we will always benchmark. It's like having an angel on our shoulder. We will always check with the angel, how does that compare to buying back our stock. Now that does not mean that we are going to, for long periods of time, not do anything and buy our stock. We'll have a balanced approach, of course. But clearly, we are not going to chase deals, and we're not going to invest in transactions that do not compete with the return of our stock. Now we also realize that we also are very conscious of the fact that when we're buying back our stock, that has an immediate impact to shareholders. This is the lowest risk activity that we can take in terms of deploying capital. So anything else that we do, we have to make sure that we have a proper buffer of higher return in order to make the cut to be investing. So that's a conversation that will be an extraordinarily difficult, tough conversation, and it will be had at very -- at the most senior levels of the company. Jaime said risk-adjusted. That's what I mean by risk-adjusted, not risk-adjusted because of currency, of course, currency is one of them, but risk-adjusted by execution, adjacency, pricing strategies and so forth and so on. Always, like I said, we'll talk to the little angel on our right shoulder, -- does it make sense when we compare it to investing in our own stock based on metrics, which we can address in the Q&A. Then the other thing that is also very new foundational in my view, it's a structural pillar, as Jaime said, is returning cash to shareholders. We -- as you saw this year, we announced a 40% increase. We did not grow 40%. As you saw, we barely grew, but yet we increased dividends by 40% for the year. We announced a $500 million share buyback. As Jaime said this morning, we're happy it's actually not $100 million. Unfortunately, I got a little upset with our Treasurer this morning. I said, why couldn't you bought a little bit more? It was $99.9 that we bought. That's roughly at an average price of $12.70. I just did the math on the back of the envelope based on our -- the most recent FX rates. But $100, we did. We continue to believe there's tremendous value in our stock, which we will take a look at in a second. And lastly, we are super committed, as Jaime mentioned, to return by 2020 -- 2030, I'm sorry, returning between 40% to 50% of our free cash flow to shareholders through the combination of growing -- stable growing dividends and share buybacks. Now in terms of investment strategy or financing strategy, like I said, investment grade, nonnegotiable. We've done a lot. And I know there's a lot of shareholders that have been very frustrated with us because we've paid a lot to our debt. Just to put into perspective, in the last decade, we reduced our interest expense by $850 million on an annualized basis. In the last 5 years, we've reduced it by $200 million. And I expect that we should be able to, in the foreseeable future in the next 2, 3 years to reduce it by another $200 million. That will be due to a combination of gross debt reduction, improvement credit risk, liability management that reprices our debt stack. And all of that should hopefully translate to a solid BBB rating. One of the key metrics with one of our rating agencies, S&P, is funds from operations. We are probably going to get to that metric in the BBB category by probably the first half of '27. And I'm very excited. I'm looking forward to maybe getting them to cross over. The other thing is that given the sprint and the results of the sprint, that is likely to mean that we will no longer need the subordinated notes as part of our cap structure in the medium term. So that will also be another source of saving. Interest expense has been the big kind of steel ball in the ankles, frankly, for so long. And last year was 16% of EBITDA. Most of our competitors are well below 10%, so that's what we're shooting for. We need to get to below 10% as a percentage of EBITDA, and we should be making an important step in that direction. Now you might say, well, why is this so important? And of course, we're targeting 1.5 to 2x leverage more on the lower end of the side. And you may say, well, why is that so important for our shareholders? It's super important. Everything else being equal, every dollar of debt we pay should go to shareholder value, right, unless our multiples start going down, right? If they're going up, there's even more leverage. The other thing is lower leverage is lower risk, lower beta, higher -- lower cost of equity, more access to a broader shareholder base. So it's super important and that all should translate to a better total shareholder return for our shareholders over time. We think we have a very clear plan to get there. We're looking at transforming our maturity profile more in line with an IG investment grade. We're looking this year to double the average life of our debt. Our average life right now is somewhere around 4 years. We're looking to probably be 8-plus years, very much in line with most of our global peers, especially our U.S. aggregate peers. How do we do that? We need to do that through proactive liability management. We need to do that by deemphasizing funding through banks, which also is an IG characteristic, by the way, and going to the debt capital markets. And for that, we think it's extremely important to become an SEC-registered issuer. So we are planning to go to the SEC registered market. Now you may say, why do you need that? I mean you've been very successful in getting debt in the 144A market. The 144A market is about $6 trillion to $7 trillion. That's a total market. The SEC registered market is 10x that much. It's $60 trillion to $70 trillion with a much broader investor base, especially at the retail level. So we think we're going to get much better risk price discovery in the SEC registered market, not to mention speed of execution, lower cost of execution and tenor. We think we should be able to get very important tenor. Now on the FX risk, we will continue to manage our currency exposure through our hedging strategies. Now it's very important to highlight here, what is the philosophy of CEMEX's hedging strategy? Our strategy is to dampen the volatility that is given to our operators from a pricing perspective. So it's giving our operators in Mexico giving Sergio and his team 12 to 18 months to recover prices in dollars. That's what we are trying to do. If you take a look interestingly enough at earnings out of Mexico, they have been substantially dollarized. I mean if you take a look at the peso FX behavior in the last decade, it has depreciated by 0.4% CAGR, 0.4% CAGR for 10 years. In the last 5 years, it's actually appreciated by 2%, right? So it has not been a headwind. It's been a tailwind. And if it has been a headwind, it's been a minor headwind. So quality of earnings in Mexico are super high, super positive, and we're very excited about that. And then if we take a look at the blueprint for our capital deployment, I am purposefully not going to address the criteria that we're going to use for growth CapEx because growth CapEx has been substantially deemphasized. We can address that in the Q&A. I think bolt-on M&A is really where we want to be for a number of reasons. One important reason is it's much -- has a much higher certainty of adding to EBITDA of transforming our portfolio and improving our free cash flow and making sure that we go to markets where we want to be in the shortest period of time. Obviously, if we take a look at the right-hand side of this slide, the first thing is strategic fit, right? I mean -- and I'm not going to go through that because I think all my colleagues exhausted that. But clearly, first thing we're going to do, we're not going to do anything crazy. We're not going to do anything beyond the strategies that you heard this morning. And then when we get to financial criteria in making investments #1 criteria. We need to have earnings per share accretion and free cash flow per share accretion in year 1, very powerful filter for investments that we're going to make. The other criteria that is extremely important for us is return on capital employed being over weighted average cost of capital within 3 years of acquisition. For virtually all investments with some exceptions. If we're talking about aggregates investments in the U.S. in particular, depending on strategic importance, fit, quality, many other things that may be very localized, we may tolerate slightly longer than 3 years achieving that target. And then lastly, we don't want to be in a situation where we're paying higher than single-digit multiple EBITDA after we get synergies. And when we took a look at the Omega transaction that Jose Antonio was announcing today, we literally ticked all of the above. including the comparison to accretiveness to the profitability of our stock price given where we stand today and given our valuation levels today in the market. And then the next thing is, of course, the shareholder commitment. As Jaime said, it's -- again, it's another one of those nonnegotiables, 40% to 50% distributions to shareholders by 2030 in the form of dividends and share buybacks. And we're putting our money where our mouth is, like you said, after the -- we literally started -- I think we reported on a Thursday. And on Monday, our quiet period, was over, and we've already bought $100 million worth or $99.9 million worth. We are committed to having a steady, reliable and progressive dividend payouts in the future. Of course, when we do buybacks, we're always keeping an eye on are we buying within intrinsic value? Are we delivering real value to our shareholders? How does that compare to alternative investment strategies. But clearly, there is a preordained balance that we want to deliver to shareholders, which is a 40% to 50% return to cash to shareholders. That's something that is almost preordained, right? It's not if we have this -- we are going to do that as a primary as a primary objective. Now the story doesn't end here. What I wanted to share with you also is that there's ample capacity to accelerate growth of shareholder returns in the next couple of years. We're expecting, as I mentioned earlier, that free cash flow number, we're expecting to generate $2.5 billion, I'm sorry, free cash flow in '26 and '27. I'm expecting that we would end the Sprint period with leverage that is more on the lower end of our leverage target, around closer to the 1.5x. So if we want, for whatever reason, to releverage because there's an absolutely fantastic opportunity to be had or opportunities to be had that would add another $2.5 billion of leverage capacity. I'm not suggesting that that's what we plan, intend or have something to do. But if you're wondering what else can we do, how much capacity do we have? We have close to $5 billion that is for discretionary use for investments, for return of capital to shareholders, either through dividends or through share buybacks. So we feel, in addition to the Sprint improvement and growth organically and through our self-help, we have this additional very powerful lever to do that. Bottom line and summarizing, as I said earlier, we are -- I believe we are going through a really profound transformation in the company, changing how people behave. And I think that by having best-in-class operational KPIs, and we are doing that, by the way, I mean we can't go to quarry managers and ready-mix managers -- ready-mix plant managers and say, I need you to give me this TSR. We have very clear KPIs, operational KPIs that translate or that map back to all of our EBITDA, EBIT, free cash flow conversion and growth and return on capital employed. We believe, if we achieve all of these things, we should demonstrate to the world a much more capital allocation discipline, and that should hopefully translate and be recognized by the market through improved valuations and that should contribute very favorably to total shareholder return. My last slide, I would like to share with you -- this is not just a slide that I like very much, but I think everybody likes this slide. Not only we've beaten the market, we've also delivered 106% of TSR in the year. Now we definitely don't want to be overly smug or overly happy. We want to be cautious. We're coming from a lousy valuation that we had Fortunately, we've improved the valuation by 2 turns. We have a lot to do. We have a lot to prove. We have a lot to be consistent of over the next 2 and beyond that. And hopefully, as we do that, we should be able to converge to the players that are doing most of the things that we are aspiring or targeting to do. I really believe that we have a very powerful strategy. We have a fantastic team. I think we have a very precise plan to deliver, and I really believe -- we believe that the best is yet to come, and especially in the Sprint. Thank you very much.

Don't go anywhere. So if we could get the chairs up and if we could ask Jaime and Jose Antonio to join us on stage.

[indiscernible] In terms of deploy investments, what the expectation for next couple of years in terms of employee investments. The criteria that Maher mentioned seems very solid. Obviously, that might limit some opportunities. Aggregates in the U.S. is quite fragmented. But most likely, you have to go for family businesses. So relatively, like you said, bolt-on acquisitions, smaller acquisitions. So any color you can provide as to the opportunities that you are seeing and the ability to deploy some of that firepower that was mentioned by Maher in the presentation.

Yes, I'd like to elaborate on that. Carlos, thanks for the question. We are developing the muscle. In the past, we didn't do any M&A as we were delevering. We have rebuilt the teams -- and we have a strong team in Monterrey and even a stronger team with Jesus. We hired an M&A head separate from strategic planning, solely dedicated to knocking on the doors and execute deals. We've been working in the last years to build the top line and using the same tools as anyone interested in our space, right? We are locating and identifying appropriate partners to target. And we have a list of 100 plus. And our idea is to continue strengthening that pipeline. And as my team and I elaborated today, we buy a lot of aggregate that give us a direct relationship and we know the quality because we're consuming it in our ready mix. That gives us a little bit of momentum, at least opportunity, right, to relate to those partners who supply today, right? So that will allow us to engage meaningfully, right? And hopefully, we will make good strides. And then we're also looking beyond where we do business today because in aggregates, although the most synergetic things are the ones closer to home, as Jeff highlighted, we do want to grow beyond our footprint. So we need a bit of time. We are developing and sooner or later, we will gain traction, Carlos, and that's what we're working on.

Can I just add one from this. The one other comment -- this is an open discussion -- the one other comment is that we have broader options in addition to aggregates, although aggregates is a priority. The U.S. is a priority. We did mention that in adjacent business, we're looking at developing and growing 4 different businesses, construction chemicals, concrete products, mortars and aggregate asphalt. So that gives us more avenues to pursue. In the case of mortars, for example, we announced the acquisition today of Omega $23 million. We have a plan in place to scale that up, and the ambition is in a relatively short period of time to grow that from $20 million-plus to $100 million EBITDA. So I think that by broadening our options also gives us, let's say, more optionality in terms of how to pursue the objective that you described, Carlos.

A follow-up, if I may. Jaime, you mentioned also that in Europe, obviously, you are very strong in that regard. And that you're not ruling out the possibility of becoming the Vulcan or Martin Marietta of Europe. So does that mean that you're also looking, I guess, at opportunities in Europe, and I would presume that's a much more consolidated market? Or do you think there's also some family businesses that you could consolidate?

In our markets where we operate in Europe, the aggregate industry, if your question is around aggregates is more fragmented, even more fragmented than in the U.S. Having said that, you need to go micro market by micro market. Unlike in the U.S. because of the scale of some of the quarries where the aggregates travel further. That's not the case in Europe. There are very few large quarries. It's a different game and specs differ. While in the U.S., we watch, not necessarily is the case in Europe. So when you look at micro market by micro market, the way we think, Carlos is look at a metropolis where demand, right, exists, the growth demand expectation, and then we look around it, and we try to consolidate by micro market. That's how you build, right, a strong portfolio. But that, in Europe, right, it provides ample opportunity. The reason why today, we're first prioritizing the U.S. right, is because we have a great footprint because we don't want to be late, right, in that process. We have more time to do that in Europe. And also because, again, for a great reason, which is growing in the U.S., we want to dilute, right, the weighted of Mexico to our portfolio in terms of EBITDA, EBITDA and free cash flow. And we want to grow in dollars in the U.S. We have the team. We're developing the muscle. It will take a little bit of time. but we know our targets, and we are actively engaging. In fact, I'm going to -- next week, in the next 2 weeks, I'll be on the road engaging personally as well with many family-owned owning aggregate assets and a few others around mortars. So that's how we are beginning the journey. Thanks for your question, Carlos.

I think, Jose Espitia, did you have a question, if we can get a mic over here. Thank you.

Jose Espitia from BBVA. Well, my question is in the context of CEMEX transformational change, what specific milestones in terms of operation or market signals is the company monitoring to determine if a structural move, such as U.S. listing will be appropriate for the portfolio in this region?

Allow me to take that question. I am aware of capital market structures. And we are following what others have done. The way I think is that for the time being, there is no best substitute to strong shareholder returns, but to deliver in our Chapter 1 transformation on the metrics that we are -- we have provided to you. So relentlessly, for the time being, we're going to be working on delivering strong TSR through operational excellence, maximizing free cash flow fully loaded, right, getting to our best peers benchmark performers. There is a Chapter 2. And in that Chapter 2, there is a toolkit. And that toolkit, there exists some capital market structures, right? Today, they're not on the table. But in our journey, everything we're doing will prepare the company, right, that at the right time that type of capital market structures could be an option. But today, we're not deviating our attention. We don't want to get distracted. We're going to deliver on what we said we would. Thanks for the question.

Okay. Maybe we could just go right next to Paco, that would be great.

Francisco Suarez once again. Congrats on this wonderful transformation on business culture in CEMEX, it's amazing. It's exciting. I think that my question relates precisely with that. To what extent if you can elaborate to what is similar and what is different to what Holcim does in terms of the P&L leadership and what worries me a little bit in these times where lots of your peers have also substantial free cash flow generation. To what extent this empowerment at the macro level that you are creating within CEMEX, do you feel comfortable with how you are precisely giving enough compensation for these leaders that you have in CEMEX? And how is your engagement on the ground when you see these guys and the response on them and if you think that they are properly compensated?

Francisco, thanks for the question. I think in CEMEX, we have a best-in-class approach to compensation. I think that beyond our industry, we have access to the right data. We define our compensation based on market compensation and market practices, right? We use bands, and then we use penetration, right? And we have, obviously, basic and then short-term and long-term incentives. And I'm very happy that you asked the question. Because in my presentation, I said that as part of transformation, we are changing, effective January 1, our compensation scheme for the close to 800 owners of our stock. And what we did was to introduce the new metrics, EBIT, free cash flow conversion, ROIC over WACC okay, and CO2. But also for the executive committee, that's short term. Cash and then for the executive committee, we also introduced free cash flow per share, all right? Why? Because again, right, we're benchmarking cash usage, risk adjusted, right, for shareholder returns. So the executive committee members, right, will apply that capital allocation framework, understanding that free cash flow per share matters, and that connects to share buybacks as a benchmark. So that's already in place. Furthermore, we have short-term cash, short-term restricted stock, and then we have long-term restricted stock. The long-term restricted stock is a 3-year performance totally linked to total shareholder return, TSR, relative to a bunch of peers and then the Mexico Bolsa. So with that -- with all those modifications, right, we are no longer looking at EBITDA and top line. It's about EBIT, it's about managing the asset base. Owners mentality is about ROIC, free cash flow conversion and then TSR.

And just a follow-up on that. If any differences or similarities with what Holcim is doing on their P&L leadership program because it kind of resembles in how they empower as well their leaders.

Although I read a lot about our competitors, I might not have the details to be able to respond to that. But what, Francisco, you need to understand on our end is now our P&L leaders have EBIT, free cash flow conversion targets and ROIC over WACC targets unlike in the past. And now they have received, as you explained, Maher, all those details and their asset base, which we were not managing the same way we're managing today, right? Now everyone knows that these are your assets you're responsible for and you better get that return on asset high. Otherwise, get rid of it because it penalizes your pocket. And the other important thing is that all of a sudden, our managers hate CapEx. Oh, interesting. Well, that's a behavioral change. And the reason for that is that CapEx is not for free anymore. When you only look at EBITDA growth, right, you can spend a lot of CapEx, grow your EBITDA, but you're not improving free cash flow. Fully loaded conversion. That's gone. And therefore, the owner's mentality is I need to get to my free cash flow conversion rate. I need to get my ROIC above WACC through the cycle structurally, and I'm now managing my asset base. I understand my depreciation, and I understand that the decisions on -- what the decisions on CapEx do to my depreciation and my asset base. And we're also providing the thresholds, again, when benchmarking to risk-adjusted share buybacks so that everybody understands that either you bring a proposal that is above the threshold or don't even come. So that's the transformation that is happening right now. It will take a bit of time, but we're getting there and moving very fast.

Maybe if we could get a mic to Alejandra first, and then we can -- read here in the middle. Okay.

I guess my question is you both mentioned this very unique analysis from the bottom up, where you now have details into ROIC and free cash flow at the asset level. So I was just wondering if we could get a sneak peek of what that analysis is revealing. And when I double click on that $1 billion of divestments, is that including any sort of decision at the asset-by-asset level? Is that an exit from a full country? What is included in that $1 billion divestment and if we could have potentially timing around that? I know many moving parts, but...

Yes. So there's 2 angels to your question. In terms of the information bottom up, I think it's revealing very interesting data that allows for very insightful and deep discussions around the business. But ultimately, the way I would describe it to you, we now can see the look at the dispersion, right? One thing is to look at how is ready mix in Mexico doing? The other thing is to be able to map out how is each single plant in the ready-mix business in Mexico doing, right? And as always, there's a normal distribution. You have outliers, but then we can identify the outliers that are underperforming, where the performance gap is and then -- because then discussion evolves around not only the performance but also the market, the conditions, the competitive dynamics, vertical integration, et cetera, et cetera, et cetera. So it's just -- it's like being able to double or triple or quadruple click into the performance so that we can see much more detail. And to your second question, definitely, I mean, when we think about -- I think Maher presented as an assumption. When we think about $5 billion investment capacity for either share buyback, dividends, M&A, pay down debt, $1 billion definitely picks up on this theme because when we describe the toolkit that we are using to evaluate assets that have performance gaps, maybe in some of those instances, we will find that one of the best outcomes for some of those assets is that they're probably better in the hands of somebody else because they have a different operating model or they have better vertical integration or some other reason. And therefore, yes, the $1 billion in divestments covers the possibility of disposing or divesting some of those assets that meet that criteria. So I hope I answered your question.

The $1 billion, you asked about the timing, Alejandra, we should do that in the next 12 to 14 months. So do expect that very soon.

If I can just add one comment Again, this is not to be the bean counter in me. But having that granular data on a monthly basis, part of our executive committee review plant by plant, region by region, business by business. Let me tell you, it puts an incredible amount of focus on what is going well and what should be going better. And that's very powerful, I think. And having that at hand is really a game changer, I think.

Regional presidents, please jump in at any time, if you want to provide some color on how you drive the business performance reviews together with us as one team.

All right. Can we get a mic to Yassine right here?

First question, I'm just trying to understand a bit better your fully loaded free cash flow by 2027. I think could you give us some color on what kind of investment in intangible assets that you plan for 2027? I think it was $210 million that you're planning for 2026? And also the growth CapEx. I think you're targeting $300 million gross CapEx in 2026, what kind of gross CapEx do you plan for 2027 or midterm? So intangible CapEx investments 2027 and midterm and growth CapEx 2027 and midterm would be very useful? And my second question is on the organic EBITDA growth that you're targeting over the next 2 years. It's about $300 million. It suggests approximately 5% organic EBITDA growth per year. Do you see upside to that number if you manage to increase prices more than cost inflation in U.S. aggregates in Mexico and in European CEMEX?

All right. I'm going to take advantage of your first question and pass the word to Maher to first repeat what we said about free cash flow conversion fully loaded. I want to please, Maher, to describe the definition so that there is no misunderstanding with investors, okay? And then I'll give you guidance on what we expect for total CapEx as we transition from free cash flow from operations as we used to report all the way to free cash flow before discretionary decisions. And why don't you refresh again, right, the percent that we will achieve in '27, right, which will be not yet where we want to be, okay? But over time, we will get there. And I will give you guidance on total CapEx?

Right. So the -- historically, what we have reported is free cash flow from operations. And then below that, we had things like the coupons that we pay on the subordinated notes, for instance, there could be some pension fund top-ups. There potentially could be some investments into intangibles and a few other things, right? Not many things mostly on the financial side. And when you back all of those, which are really not discretionary, okay, most of those investments are not discretionary. We have to use free cash flow to -- so in reality, any analyst looking at our numbers would be better guided to take a look at the lower number, which is essentially taking everything away that is truly nondiscretionary and leaving the cash that is available to distribute to shareholders, make investments or pay down debt. And there's a big difference, right, from the -- between the free cash flow from operations number and that number. To address what Jaime was suggesting, if you recall, we're targeting 47% free cash flow conversion by '27. That is the free cash flow conversion from EBITDA to free cash flow from operations. If we take out -- if we subtract all of those effectively nondiscretionary uses of cash, it takes us down to 38% free cash flow conversion. Now if we were to take a look at the growth of that free cash flow. That specific type of -- that specific definition of free cash flow, then we're talking from the beginning of 2025 to '27, a 50% growth in that period of that particular free cash. And the cumulative number there is about $2.5 billion.

$2.5 billion.

So we would be more than happy to give you the exact details, frankly, of all the different things, but there's a few items that are large, and it's a big difference, right? I mean when you go from the cash flow conversion from free cash flow from operations down to the, what I would call, the clean free cash flow number. It's a big difference, going from 47% conversion to 38%. So it's a big number, right. I don't know if there is...

Yes. Regarding -- so I hope that is clear. Regarding guidance, we will continue -- I said in my presentation that when compared to '24, we guided for 2026, a reduction of $500 million. That includes $160 million of less interest payments and $327 million less CapEx, including intangible investments. Please note that we will continue with that journey. And we will only provide strategic CapEx for the most part for margin expansion, profitable decarbonization in Europe in California, and we will continue to do some investments in process and IT to bring technology and AI to boost operational excellence, but it's not going to be as large as it used to be. When I think about '27 and beyond, right, the total fully loaded CapEx including intangibles, right, is going to be around $1 billion, $1.1 billion, no more. But we used to come from what was the number? That number was...

More than $1.5 billion.

$1.5 billion, $1.6 billion. And in intangibles, IT, we were investing $250 million to $200 million, the days that we were deploying CEMEX Go. That is already there. That is a sunk cost. It doesn't require anything and the future technology investments are related to artificial intelligence to boost yield and margins. So do expect a very strong reduction in free cash flow. And another key thing, right? I took over in April. In months, we boosted free cash flow. Are we where I want to be? No. We need to do more work, right? And we brought to you great visibility in the very short term, '26 guided and '27 targets, but the journey continues, right? And I do expect to continue improving free cash flow conversion and I see no reason as we improve our earnings quality, no reason not to match the best-in-class free cash flow conversion of our peers. And that's our mandate, and that's what we're going to be pursuing. And again, we will be transitioning from free cash flow from operations to free cash flow. And we will consult with investors, right, to understand what is exactly the definition that they want us to use, right? And we will move to that one. Thanks for the question.

On the question on the organic EBITDA growth?

Sorry?

The question on the organic EBITDA growth, is there is upside to the upside in organic?

Right. There is upside. What are your estimates, right? What are your estimates? Give me your estimates, and then I'll answer you. This is how we see it. Where are the risks of our target, right? The risk of our target is on the organic side because the 55% of growth is under our control, right? So first thing, what are the upside levers that we're working on, more structural savings out of our transformation we will provide you more color about that in the second Q. That's my commitment to you, okay? We're making progress and do expect a bit of upside risk, right, even in '26 because of our transformation, we're going to bring more savings, okay? So that's going to happen. And second, in organic growth, on prices, right, we are targeting to at least recover input cost inflation. But there are certain pockets where we might do better than that, and that could be another upside risk, okay? For the same reason, right, there is volatility, there could be some, I don't know, right? And there will always be on the organic side outside of our control, volume driven, whether it's a hurricane or bad weather, such as this first quarter in Europe, right, that is out of our control. But the important thing is that, yes, there is some upside risk, all right? But we will continue increasing the percent of the self-help transformation to get to our target. And you'll hear more from us in the 2Q and 3Q calls as we make progress.

Just one point on that. We're assuming low single-digit volume growth, and that's across the entire portfolio. But most of our markets are at a very low point at the moment. So I think we are expecting recovery. If we could pass the mic to Ben Theurer.

I guess that's one for Maher, on the share buybacks, Maher, $99.9 million. As you look at it, and the announcement was about to repurchase up to $500 million over the next 3 years what you had in your presentation. So obviously, having done almost $100 million at early stage is kind of like already 20% of that. So it's a very fast pace. How do you think about going forward in terms of buying back shares? Is this going to be like on a pro rata basis when you're basically able to buy shares that you just constantly buy no matter where the price is? Or is it more going to be approach in terms of opportunistic share buybacks versus maybe on a more pro rata basis. What's like the approach that you...

Yes. I really never liked the word opportunistic. Share buybacks should be programmatic investors should almost be able to account for how much free cash is being returned to them as a package, both in the form of dividends, which, of course, we know doesn't really impact necessarily the enterprise valuation, right? So I'm a big believer that we should be programmatic. We should be constantly taking advantage of undervaluation. I mean, of course, we're not going to go out there and buy stock if we don't think there's intrinsic value, but you saw the valuation parameters. We have a significant upside between now -- and obviously, we're not going to advertise what levels we believe is the right valuation because the world may change by the time that we get there. And of course, as you know, the approval for our program is an annual basis. And to the extent that we think there's opportunity, and we think that from a strategic allocation, we are not investing the capital at rates that we like. I mean, maybe we may reconsider the amount of share buybacks that we are undertaking. Right now, we don't need to do that. We have $500 million limit. I can't comment whether we're done or not done, we're going to do more because the lawyers will kill me. And so I can't do that. But obviously, we're going to -- and there are very clear corridors and restrictions on when, how, what percentage of the daily float we are undertaking. And we're not just widely going in and just buying back, obviously, we're selective. We wanted to be very categorical after the quiet period. And so we systematically -- and again, we were buying at a pretty attractive, in my view, pretty attractive valuations, right, pretty attractive free cash flow yield at the end of the day.

If I could just tack on a question from the webcast. We got a question asking if we would be canceling the shares. It seems like a good time to...

Yes. I mean, look...

Yes, we are. Yes. Yes, we are. Thanks for your question.

And Anne Milne here on the side. I think there's a mic.

Anne Milne from Bank of America. I have a question for Jaime and a question for Maher. Jaime, fully aware that CEMEX's strategy is on Mexico, the U.S. and Europe. A lot of people are asking now if you would consider going back into Venezuela, given that you did have a large presence there in the past and there is a big reopening in the oil sector at the moment. I'll let you ask, and I'll ask you.

Yes, allow me to answer that question. Thanks for the question. We involuntarily left Venezuela. And we did it in a way that we were not properly compensated for the excellent talent pool and assets that we run in Venezuela. We were the only company to produce oil well cement, which is necessary to drill, may be drilled. And we had very competitive well locally positioned assets, particularly our Pertigalete plant, very well connected to our Caribbean and the U.S. presence. Under the rule of law, number one, right? And you all understand what that means, right? I should not rule out the possibility to at least take a look at our former assets, right, and see if it makes sense at the right time and always under, again, predictable environments, whether we should recover those operations and whether doing so will comply with our capital allocation commitments, right? I like Pertigalete, at least, and we would first need to confirm whether the business would enjoy very competitive natural gas costs, which is what made us very strong in the past. When I was leading this SCAC, I did send -- I had the chance to send a very small team to visit some of our former plants. And they were really destroyed. In horrible shape, dusting everywhere. Safety was a total disaster, and there was population invading the areas of the mineral reserves. It will be very complex, right? And we will take it a little slow, but at least we want to take a look at the right time and when appropriate and see what happens. We will not enter if it does not make any sense neither because of uncertainty, right, or because of financial commitments, financial metrics. Thanks for the question.

That's very clear. Maher, you've made the life of fixed income analysts and investors a little boring with your reduction in leverage right now. After many years of volatility. But congratulations. One question -- one comment that you made here, I just -- I know that there will be a lot of questions on this. There's 2 words in particular, that on the -- that you're not likely to need subordinated notes in the medium term. Could you please define medium term?

I mean I think within -- it's very difficult to do that, right? But to me, I'm thinking really within the framework of our Sprint, right? We're not thinking beyond the Sprint. So I think there should be an impact within the Sprint as we improve free cash flow generation as we improve FFO for somebody like S&P, for instance, that will make a huge difference, right? And so that's going to happen.

Sorry? Yes, exactly, yes. Yes, exactly. Yes. Thank you.

Emilio Fuentes from GBM. And regarding earnings quality and importance the Urbanization Solutions business has within that. Can you give us a rough estimate on the medium term, how much you expect it to represent for your EBITDA on a consolidated basis, also especially given the role it has on your free cash flow returns platform?

We -- I don't think I can answer that question today, and I apologize because I don't think what we have detailed concrete numbers for the midterm. And the reason for that, again, is because as I introduced this discussion today, instead of doing 5-year business plans, I'm thinking beyond our reach. I wanted to bring forward immediate performance under our new transformation and capital allocation. We will need to provide -- we will need to do more work to provide you with an answer to your question. Having said that, right, I also said that we will continue to be a heavy building materials company. So cement and cementitious aggregates, ready-mix concrete with some adjacent right, businesses that enhance our value proposition to every market segment. And what I can reiterate of what Jose Antonio said, is that in the U.S. for our Mortars family of solutions that are very synergetic with cement, sand admixtures, logistics and customers, we have a very concrete plan to build through roll-up and a few greenfields in Florida around $100 million of EBITDA platform with a free cash flow conversion of around 65% to 70%. That's what I can tell you today about Urbanization Solutions within right, the next years.

And if I may add touching on a really hot topic right now, AI. I know you talked on it on aggregates, but could you give us a little more detail on how this could impact your other businesses?

You mean AI, artificial intelligence?

Yes. And when would you expect a material impact? I assume it's not incorporated into your metrics for the current Sprint?

No. They're not incorporated into our metrics. We have a -- Jesus, you may want to elaborate a little bit about our flagship project in Balcones, Texas, right? So why don't you explain a little bit what we're doing on AI for the cement business. And then I'll tell you a little bit about how we're going to scale it. And then I'm going to elaborate very fast about certain lines of cost where we will deploy AI to boost margins. But it's a little bit too early to provide specifics within this Sprint, but we're working on it. Jesus, why don't you provide some light?

Yes. We selected our Balcones plant in San Antonio, Texas as a flagship project for developing all our AI projects. So what we're doing there is twofold. We're trying to implement AI in 2 categories of margin improvement opportunities. So one of them is maximizing production out of our facilities. So we have implemented already, and we are working with those algorithms that help us to maximize production. And this is very relevant in our Balcones plant because remember that we are importing cement into Houston. So by increasing production in Balcones we're going to be able to displace imports. So that's ongoing. I mean, we have been able to run the plant in autonomous AI autopilot condition for several hours already for the whole plant. So that's one aspect of what we're doing there. The other aspect is using AI to minimize cost. We can program these algorithms to reduce energy consumption to reduce electricity consumption, et cetera. So depending on the market conditions, we can adjust these algorithms to maximize production and reduce cost and increase efficiencies. The idea is to -- once we finish with this pilot in Balcones, we're going to start deploying those algorithms based on artificial intelligence to other plants, not only in the U.S. but across all other operations. So that's mainly what we're doing with AI focus on operations, cement operations. There are more examples that Jaime can elaborate.

Yes. And to be more specific, in the case of Balcones, we're getting a 10% to 15% increase in yield, all right, which is very meaningful. And I think, Jesus, that your next plan is going to be Miami and then you have another which is Brooksville, I believe, you proposed. So that's how impactful it becomes. You and your team produced incrementally last year, 500,000 short tons, right? This year, you're targeting incrementally from the same assets, 700,000 tons. Some of that is a result -- will be a result of AI because what AI does in the cement plant is that it adjust chemistry and operating parameters on real time, and we don't need to wait to see the results of breaking a model to see strength performance waiting for days. So we -- the system adjusts and that provides more reliable operation and lower specific heat consumption and then higher production. We don't know yet what it means for every plan because you need to go one by one but that's one of the applications. And then we do see AI on 2 fronts: back office, overhead boost productivity, starting with third-party spend, right, and doing more in-house with the same head count powered by artificial intelligence, right? And so that should drive a continuous improvement on overhead cost, right? And then we do see AI on network optimization, logistics network, delivery network optimization, cement, aggregates, right, AI optimizing concrete mixes? We don't know yet, right, by how much, it's too early, right, so on and so forth. So we have already identified every line. We have hypotheses. Now based on our commitment to fully loaded free cash flow, we will be deploying these things, right, based on business cases unlike in the past, and if there isn't a robust business case that meets the shareholder return thresholds, we will not pursue it. So that's how we're thinking about it. So I hope that I have answered your question, but because I see interest, we will elaborate in the next months about that as we engage with you.

Sadly, I think that we have gone over already.

Gentlemen has done his best effort raising his hand. He deserves it, I apologize very fast. Lucy, I'm sorry that I'm overriding.

Jorel Guilloty from Goldman Sachs. Hopefully, it is a fast question, but I wanted to parse out the 50% free cash flow conversion target. Specifically, I want to think a bit from a market basis. So what are the medium-term free cash flow conversion targets per market? I recall that in the 2024 Investor Day, there was a 90% target for Mexico, for example, and free cash conversion. So I wanted to see if there's a proxy to...

We're not going to provide free cash flow conversion by market. I don't think we've ever...

I think we've said in the past that Mexico does have an extremely low...

Oh, yes, Okay. we're not -- I apologize, but we're not going to be providing a specific free cash flow conversion by region right now.

Maybe a proxy for that, where do you see the biggest improvement?

The question is where we see the biggest improvement?

Rather that can answer, where do you see the biggest improvement in free cash flow conversion in the different markets?

Yes. I can tell you where we see the largest improvements are in the U.S., right, EMEA, followed by SCAC. Mexico, right, operates at a very solid free cash flow conversion. That's -- those are where we have the largest opportunity.

Okay. So thank you all. Let's do a round of applause.

Thank you very much for your questions. Thanks for your questions and your interest. Thanks.

Please take advantage of finding them in the next few minutes if you have additional questions. I hope that you found today's events informative and an opportunity to get to know part of our senior management team a little better. You will be receiving a survey to evaluate this event. We hope you fill it out. We try to listen to respondents and improve on CEMEX Day. Thank you again for joining us, and we look forward to connecting with you again soon. This finalizes the webcast. And for those of you that are here, we do have lunch. I think that if you look on the back of your name tags, you have assigned seats. There will be someone from CEMEX senior management team at every table. And of course, you can use that opportunity also.