Cemex NYSE: CX reported a first-quarter 2026 performance management characterized as a strong start to the year, highlighting record quarterly EBITDA, margin expansion, and improved free cash flow generation, while also addressing the near-term uncertainty created by the Iran war and the company’s exposure to energy-price volatility.
Iran war: limited direct impact so far, focus on energy protection and pricing
Chief Executive Officer Jaime Muguiro opened the call by noting the company had seen “limited direct impact” from the conflict to date. Cemex’s operations in Israel and the UAE together represent “around 4% of consolidated EBITDA,” Muguiro said, adding that after temporary disruptions early in the war, construction activity has “largely normalized.”
The most immediate exposure is energy, where management emphasized its hedging and operational flexibility. Muguiro said approximately 60% of 2025 total energy spend has been hedged for 2026 using financial derivatives, annual contracts, and regulated pricing frameworks. Cemex also maintains “two to three months of fossil fuel inventories across our network” and can switch kiln fuels among petcoke, natural gas, coal, and alternative fuels depending on economics.
Management said it has begun implementing fuel surcharges on ready-mix and is reviewing additional pricing actions across its portfolio to offset energy inflation. Muguiro also said supply-chain disruption is raising import costs and could create “relevant pricing opportunities in several U.S. markets” over time as pressures build on cement importers.
Record EBITDA, expanding margins, and a positive first-quarter free cash flow from operations
Muguiro said Cemex delivered record quarterly EBITDA of $794 million, up 34% year over year, with EBITDA margin expanding by more than 300 basis points. Net sales grew 3%, supported by higher consolidated pricing and a cement volume recovery in Mexico, despite difficult weather in the U.S. and Europe.
On a like-for-like basis, Muguiro said EBITDA increased 23% and EBIT expanded 40%, which he described as a key metric in the company’s transformation program. He also said nearly half of the EBITDA growth came from “self-help initiatives,” with additional contribution from pricing and foreign exchange.
Free cash flow from operations increased by nearly $300 million and was positive at $29 million, a result management highlighted as notable for a quarter that has historically been negative due to seasonal working-capital needs. On a trailing 12-month basis, and adjusting for severance payments and discontinued operations, the company’s free cash flow from operations conversion rate reached 51%, up from 31% a year earlier, according to Muguiro.
Chief Financial Officer Maher Al-Haffar said the cash improvement reflected “exceptional EBITDA growth,” along with lower capital expenditures, reduced working-capital investment, and lower interest and other cash expenditures. He added that the working-capital investment in the quarter was $31 million lower than the prior year and is expected to “largely reverse throughout the rest of the year.”
Project Cutting Edge: structural savings and an expected upsizing
Management repeatedly pointed to its “Project Cutting Edge” transformation program as a key driver of margin improvement. Muguiro said Cemex delivered $60 million in incremental recurring savings in the quarter and expects an additional $105 million in savings during the rest of 2026, as part of its previously announced $400 million savings commitment for 2025–2027. He said roughly three-quarters of those savings relate to overhead reduction decisions taken last year.
Muguiro also told investors the $400 million savings target will likely be increased. “You should expect that the $400 million…will be upsized when I address this in July,” he said, adding that he plans to provide more detail on the next phase of savings and reorganization on the second-quarter call.
Portfolio actions: Colombia divestment and Omega acquisition
Chief Communications Officer Lucy Rodriguez clarified accounting treatment for recent portfolio moves. Cemex expects to close the sale of certain operating assets in Colombia by year-end and will continue to fully consolidate those operations in its P&L until closing, she said. The company also announced the purchase of Omega on Feb. 26 and began consolidating the business as of April 1, Rodriguez said.
On Colombia, Muguiro said Cemex announced the divestment of several assets for total proceeds of approximately $485 million and is in discussions to divest related non-operational assets for around $70 million. The transactions are expected to close by the end of the year and represent “a combined multiple of 10x 2025 EBITDA,” he said.
Addressing why the Colombia sale is partial, Muguiro said the “right time” to divest the announced perimeter was this year, while the remaining portfolio “need[s] to increase activity as the demand improves,” particularly after commissioning the Maceo cement plant. He said it remains to be seen what the company’s “next move” will be regarding the rest of the business in the country.
On Omega, Muguiro said the acquisition closed March 31. He described Omega as a leading stucco producer in the western U.S. with the No. 1 brand, acquired at a post-synergy multiple below 7x. He said direct synergies are expected to be close to 50% of Omega’s 2025 EBITDA of roughly $23 million, driven by vertical integration and raw-material sourcing. Muguiro also said Omega’s cement requirements are equivalent to those of approximately eight average-sized ready-mix plants.
Regional trends: Mexico recovery, U.S. weather impact, and pricing dynamics
Rodriguez said Mexico delivered strong results with year-over-year cement volumes turning positive for the first time in six quarters, supported by self-construction and government-backed social programs. She said Cemex is participating in construction of approximately 120,000 social housing units—double the fourth-quarter level—and is negotiating an additional 110,000 units.
Mexico EBITDA grew 47%, Rodriguez said, helped by a stronger peso and cost savings, with margin expanding to 36.1%. She cautioned that performance benefited from lower maintenance activity that is expected to normalize, and noted Mexico’s large exposure to petcoke could create the “largest headwind from energy inflation” this year.
In the U.S., Rodriguez said adverse weather in January and February weighed on volumes, especially in Texas and the Mid-South, but ready-mix volumes still grew 2% and aggregate volumes increased 9%, reflecting the consolidation of Couch Aggregates and other investments. Pricing remained competitive in cement and ready-mix, where prices declined 1% sequentially, and many April price increases were deferred to mid-year, she said, while fuel surcharges are already in place.
In EMEA, Rodriguez said EBITDA expanded at double-digit rates in both Europe and the Middle East and Africa, driven primarily by a leaner cost structure and pricing. In Europe, she cited weather as a headwind early in the quarter, with March volumes improving as conditions normalized. Cemex also pointed to mid-single-digit pricing gains supported by the Carbon Border Adjustment Mechanism and tightening free CO2 allowances under the EU ETS system.
Energy guidance lowered as inflation pressures are expected later in the year
Al-Haffar said Cemex has hedged approximately 60% of its total 2025 energy exposure of $1.65 billion for 2026. He also said about 75% of expected 2026 diesel consumption, including indirect consumption through third-party haulers, is hedged, and that around 70% of electricity needs are fixed or in regulated markets.
While energy costs per ton of cement in the quarter were stable—declining fuel costs offset by higher electricity costs—Al-Haffar said the company expects inflationary pressures later in the year. Cemex therefore downgraded its full-year guidance for energy costs per ton of cement produced, now expecting a mid- to high-single-digit increase, up from prior mid-single-digit guidance.
Capital allocation, shareholder returns, and credit profile
Management highlighted shareholder returns and balance-sheet actions. Muguiro said the company repurchased about $100 million in shares during the quarter, while Al-Haffar said shareholders approved a nearly 40% increase in the annual dividend to $180 million, up from $130 million last year. The company’s stated intent is to repurchase up to $500 million in shares over the next three years, Al-Haffar said.
On liability management, Al-Haffar said Cemex repaid a EUR 400 million bond and a MXN 6 billion peso loan, partially funded by issuing MXN 5.5 billion in five-year certificados bursátiles and cash on hand. Total debt plus subordinated notes declined by about $540 million sequentially, though net debt plus subordinated notes increased by $590 million due primarily to uses of cash including the Omega acquisition, growth CapEx, buybacks, and dividends.
Net financial leverage, including $2 billion of subordinated perpetual notes, stood at 2.3 times, unchanged sequentially, Al-Haffar said. He added that Fitch reaffirmed Cemex’s BBB- global rating and raised the outlook to positive, while also upgrading its long-term national scale ratings in Mexico to AAA. Al-Haffar told investors he expects rating agencies to consider a potential upgrade “sometime in the first half of 2027,” based on deleveraging and improved cash generation.
Looking ahead, Muguiro said the company kept full-year EBITDA guidance unchanged primarily due to limited visibility on the trajectory of the war and inflation. He said Cemex will reassess with more information after the second quarter, while remaining “confident” it can deliver its full-year EBITDA guidance.
About Cemex NYSE: CX
Cemex NYSE: CX is a global building materials company headquartered in Monterrey, Mexico. The company produces, distributes and sells cement, ready-mix concrete and aggregates, as well as related building materials, to construction markets in more than 50 countries. Cemex's product portfolio also includes asphalt and mortar mixes, waste-derived fuels and other complementary construction solutions, supported by a network of production facilities, distribution centers and logistics operations.
Founded in 1906 as Cementos Hidalgo, the company adopted the Cemex name in 1976 following a series of domestic mergers and expansions.
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