This article first appeared on GuruFocus .
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Consolidated EBITDA:Exceeded $1 billion, including a $42 million one-off settlement in Europe.
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Sales Growth:Adjusted sales grew 11%, with EBITDA expanding 19% and EBIT growing 29%.
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EBITDA Margin:Expanded 1.4 percentage points to 21.4% after adjustments.
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Free Cash Flow from Operations:Reached a record $651 million, up over $400 million year-on-year.
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EBITDA Growth:18% on a like-to-like basis, driven by efficiencies and organic growth.
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Cost Savings Program:Achieved 80% of the $400 million target, with a new target of $475 million.
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Net Debt:Increased by approximately $270 million due to acquisitions, buybacks, and dividends.
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Net Financial Leverage:Stood at 2.08x, a decrease of 0.22x from the previous quarter.
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Interest Expense:Expected to decline by about $40 million compared to last year.
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EBITDA Guidance:Raised to a 16% to 17% year-over-year growth range.
Release Date: July 23, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Cemex SAB de CV ( NYSE:CX ) reported strong second quarter results with consolidated EBITDA exceeding $1 billion, reflecting significant progress in their transformation efforts.
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The company achieved a record free cash flow from operations of $651 million, up more than $400 million year-on-year after adjustments.
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Project Cutting Edge has delivered $60 million in efficiencies during the quarter, contributing to an 18% EBITDA growth on a like-to-like basis.
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Cemex SAB de CV ( NYSE:CX ) raised its full-year EBITDA guidance to a range of 16% to 17% year-over-year growth.
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The company is advancing its decarbonization efforts, achieving a 1% reduction in CO2 emissions year-to-date, supported by a lower clinker factor.
Negative Points
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Disruptions in operations due to bad weather in Texas and rising materials and freight costs negatively impacted EBITDA and margins in the US.
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In Europe, softer demand and a severe heat wave led to restrictions on construction work, affecting volumes and raising concerns about the expected recovery.
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The company anticipates a small drop in margins in Mexico in the second half of the year due to temporary market share gains and less favorable energy tailwinds.
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There is a lack of visibility on demand in Europe due to geopolitical uncertainties, which could impact future performance.
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Despite strong free cash flow generation, net debt plus subordinated notes increased by approximately $270 million since December due to acquisitions, share buybacks, and dividends.
Q & A Highlights
Q: Can you elaborate on the additional $75 million in savings announced under Project Cutting Edge and the $300 million opportunity at the free cash flow level? A: Maher Al-Haffar, CFO, explained that Project Cutting Edge is a comprehensive transformation focusing on operational excellence, cultural change, and improving earnings quality. The $475 million savings target by 2027 includes $230 million from overhead reduction and $245 million from operational efficiencies. The program also involves asset pruning and optimizing free cash flow, with AI playing a role in future improvements.
Q: How sustainable are the volume trends and margin expansions in Mexico as we move into the second half of 2026 and into 2027? A: Jaime Muguiro Dominguez, CEO, noted that while margins in Mexico may see a slight drop in the second half, they will remain solid. Temporary market share gains due to competitor disruptions and a favorable bag-to-bulk mix contributed to first-half performance, but these factors may not persist. Additionally, energy cost tailwinds may weaken.
Q: Could you explain the drivers behind the EMEA region's performance, particularly in Europe, and the impact of the $42 million one-off benefit? A: Maher Al-Haffar, CFO, stated that EMEA's performance was affected by difficult weather conditions and market softening. Project Cutting Edge savings are materializing, but a $6 million write-off of engineering projects impacted results. The region should benefit from operating leverage if weather normalizes and geopolitical uncertainties stabilize.
Q: What are the key risks and opportunities in Europe and Mexico, particularly regarding the ETS review proposal and competitive dynamics in Mexico? A: Maher Al-Haffar, CFO, expressed optimism about the European Union's ETS proposal, which supports value creation for decarbonization leaders like Cemex. In Mexico, potential new capacity is being monitored, but infrastructure growth and resilient informal and formal sectors should help absorb it.
Q: How confident are you that energy costs will only rise by a low single-digit percentage in 2026 despite geopolitical uncertainties? A: Jaime Muguiro Dominguez, CEO, attributed the confidence to strong first-half fuel cost performance, with a 10% reduction in fuel costs per ton. While less favorable fuel costs are expected in the second half, alternative fuels can hedge against primary fuel increases, supporting the low single-digit guidance.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
