CEMEX SAB DE CV 6-K Analysis & Summary – 2/21/2025

⚠️This is not investment advice.

⚠️ This is an experimental project and this report is for informational purposes only and should not be considered investment advice. Conduct your own thorough research and consult with a qualified financial advisor before making any investment decisions. ⚠️

Cemex, S.A.B. de C.V. Sponsored

6-K

Asset Disposition, Earnings Release (Preliminary), Guidance Update

Filing date:

02/21/2025

TLDR:

Cemex, S.A.B. de C.V. reports its consolidated financial statements for the years ended December 31, 2024, 2023, and 2022, including revenues of $16.2 billion in 2024 and the sale of operations in the Philippines and Guatemala.

ELI5:

CEMEX, a building materials company, had a year where they made more profit even though they sold slightly less stuff. They’re also buying and selling different parts of their business.

Accession #:

0001193125-25-032080

Published on

March 16, 2025

Analyst Summary

Consolidated revenues decreased slightly from $16,554 million in 2023 to $16,200 million in 2024.
Consolidated Net Income increased significantly from $199 million in 2023 to $960 million in 2024.
Operating EBITDA decreased from $3,149 million in 2023 to $3,078 million in 2024.
Total debt decreased from $6,228 million in 2023 to $5,529 million in 2024.
Gross Profit Margin: 33.57%
Operating Profit Margin: 11.24%
Net Profit Margin: 5.93%
Return on Assets (ROA): 3.52%
Return on Equity (ROE): 7.53%
Basic EPS: $0.0217
Diluted EPS: $0.0213
Current Ratio: 0.82
Quick Ratio: 0.58
Cash Ratio: 0.14
Debt-to-Equity Ratio: 1.19
Debt-to-Assets Ratio: 0.54
Interest Coverage Ratio: 3.28
Inventory Turnover: 6.58
Days Sales Outstanding: 35.64 days
Days Payable Outstanding: 104.77 days
Asset Turnover: 0.59
Price-to-Earnings Ratio: 28.11
Price-to-Book Ratio: 2.13
Price-to-Sales Ratio: 1.64
Enterprise Value to EBITDA: 9.81
Revenue Growth: -2.14%
Net Income Growth: 382.41%
EPS Growth: 416.67%

Opportunities and Risks

The company is in compliance with all covenants contained in the 2023 Credit Agreement.
The report mentions legal proceedings and tax matters, which are potential risks.
Liquidity ratios remain a concern, suggesting potential challenges in meeting short-term obligations.

Potential Implications

Stock Price

The P/E ratio is slightly above the industry average, which could indicate the stock is overvalued.
The P/B ratio is within the industry average.
The P/S ratio is slightly above the industry average.

SEC Filing Report: CEMEX SAB DE CV – Form 6-K (February 21, 2025)

Executive Summary

This report analyzes CEMEX SAB DE CV’s Form 6-K filing, submitted on February 21, 2025. The filing primarily includes the consolidated and separate financial statements for the years ended December 31, 2024, 2023, and 2022. The financial statements are subject to shareholder approval on March 25, 2025. Key areas of focus include revenue trends, profitability, debt management, and significant business transactions (acquisitions and divestitures). A comprehensive analysis of the financial statements and management’s discussion is required to form a complete investment recommendation. This initial report highlights key observations and potential areas for further investigation.

Company Overview

CEMEX, S.A.B. de C.V. is a global building materials company headquartered in Mexico. It produces, markets, and distributes cement, ready-mix concrete, aggregates, and related construction products and services. The company’s shares are listed on the Mexican Stock Exchange (CemexCPO) and the New York Stock Exchange (CX). The industry is cyclical and sensitive to macroeconomic conditions, construction spending, and infrastructure development.

Detailed Analysis

Financial Statement Analysis

Revenue Trends

Consolidated revenues decreased slightly from $16,554 million in 2023 to $16,200 million in 2024. However, revenues increased significantly from $14,706 million in 2022 to $16,554 million in 2023. This suggests a potential slowdown in revenue growth in the most recent year. Further investigation into regional performance is warranted.

Year	Revenue (Millions USD)
2022	$14,706
2023	$16,554
2024	$16,200

Profitability

Consolidated Net Income increased significantly from $199 million in 2023 to $960 million in 2024. This is a positive sign, but the large swing warrants further investigation into the drivers of this increase, including discontinued operations and other expenses.

Year	Consolidated Net Income (Millions USD)
2022	$885
2023	$199
2024	$960

Operating EBITDA decreased from $3,149 million in 2023 to $3,078 million in 2024. This decrease, coupled with the increase in net income, suggests that factors other than core operations are driving the profitability improvement.

Key Ratios

A more detailed ratio analysis (gross margin, operating margin, net profit margin, debt-to-equity) is needed to assess the financial health and performance trends. This will require calculating these ratios from the provided financial statements.

Debt Management

Total debt decreased from $6,228 million in 2023 to $5,529 million in 2024. This indicates improved debt management. However, the mix of fixed and floating rate debt, as well as currency denomination, should be analyzed for potential risks.

Year	Total Debt (Millions USD)
2023	$6,228
2024	$5,529

The company is in compliance with all covenants contained in the 2023 Credit Agreement. The Consolidated Leverage Ratio is 1.81, well below the limit of 3.75. The Consolidated Coverage Ratio is 7.26, well above the minimum of 2.75.

Management’s Discussion and Analysis (MD&A) Insights

The filing highlights several business combinations and divestitures, indicating a strategic shift in CEMEX’s portfolio. The sale of operations in the Philippines and Guatemala, and the pending sale in the Dominican Republic, are significant events that require careful consideration. The acquisitions in Germany and Canada suggest a focus on developed markets and sustainable solutions.

Discontinued Operations

The significant impact of discontinued operations on net income, particularly in 2022, highlights the importance of understanding the company’s strategic restructuring. The gain on sale of Neoris in 2024 also significantly impacts the “Other expenses, net” line item.

Risk Factors

The report mentions legal proceedings and tax matters, which are potential risks. A deeper dive into these contingencies is necessary to assess their potential financial impact.

Uncommon Metrics

The report mentions “Operating EBITDA,” a non-IFRS measure used by management. While not a standard metric, its importance to management’s decision-making warrants attention. The report also mentions “stripping costs” related to mining operations, which should be analyzed for their impact on profitability.

Conclusion & Actionable Insights

The Form 6-K filing reveals a mixed picture. While net income has improved significantly, revenue growth has slowed, and operating EBITDA has decreased. The company is actively restructuring its portfolio through acquisitions and divestitures. Debt management appears to be improving, and the company is in compliance with its financial covenants. However, the impact of discontinued operations and legal contingencies requires further investigation.

Recommendations

Perform a detailed ratio analysis to assess profitability, liquidity, and solvency trends.
Analyze the impact of discontinued operations on future revenue and earnings.
Evaluate the risks associated with legal proceedings and tax matters.
Assess the sustainability of the company’s debt management strategy.
Monitor the progress of the company’s strategic restructuring initiatives.

A more in-depth analysis, including a review of the complete financial statements and a comparison with industry peers, is needed to form a well-supported investment recommendation.

table {
border-collapse: collapse;
width: 100%;
}

th, td {
border: 1px solid #ddd;
padding: 8px;
text-align: left;
}

th {
background-color: #f2f2f2;
}

Financial Ratio and Metric Analysis

Profitability

Gross Profit Margin

Ratio/Metric: Gross Profit / Revenues = $5,439 / $16,200 = 33.57%
Trend: (33.57% – 33.68%) / 33.68% = -0.33%
Industry: The average gross profit margin for the construction materials industry is around 30-40%. Cemex’s gross profit margin is within this range.

Operating Profit Margin

Ratio/Metric: Operating Earnings / Revenues = $1,821 / $16,200 = 11.24%
Trend: (11.24% – 10.56%) / 10.56% = 6.44%
Industry: The average operating profit margin for the construction materials industry is around 10-15%. Cemex’s operating profit margin is within this range.

Net Profit Margin

Ratio/Metric: Consolidated Net Income / Revenues = $960 / $16,200 = 5.93%
Trend: (5.93% – 1.20%) / 1.20% = 394.17%
Industry: The average net profit margin for the construction materials industry is around 5-10%. Cemex’s net profit margin is within this range.

Return on Assets (ROA)

Ratio/Metric: Consolidated Net Income / Total Assets = $960 / $27,299 = 3.52%
Trend: (3.52% – 0.70%) / 0.70% = 402.86%
Industry: The average ROA for the construction materials industry is around 3-6%. Cemex’s ROA is within this range.

Return on Equity (ROE)

Ratio/Metric: Controlling Interest Net Income / Total Stockholders’ Equity = $939 / $12,477 = 7.53%
Trend: (7.53% – 1.50%) / 1.50% = 402.00%
Industry: The average ROE for the construction materials industry is around 8-12%. Cemex’s ROE is slightly below this range.

Earnings Per Share (EPS) – Basic and Diluted

Ratio/Metric:
- Basic EPS: $0.0217
- Diluted EPS: $0.0213
Trend:
- Basic EPS: ($0.0217 – $0.0042) / $0.0042 = 416.67%
- Diluted EPS: ($0.0213 – $0.0041) / $0.0041 = 419.51%
Industry: EPS varies significantly based on company size, leverage, and profitability.

Liquidity

Current Ratio

Ratio/Metric: Total Current Assets / Total Current Liabilities = $5,016 / $6,092 = 0.82
Trend: (0.82 – 0.74) / 0.74 = 10.81%
Industry: A current ratio of 1.0 or greater is generally considered healthy. Cemex’s current ratio is below 1.0, indicating potential liquidity concerns.

Quick Ratio (Acid-Test Ratio)

Ratio/Metric: (Total Current Assets – Inventories) / Total Current Liabilities = ($5,016 – $1,485) / $6,092 = 0.58
Trend: (0.58 – 0.59) / 0.59 = -1.69%
Industry: A quick ratio of 1.0 or greater is generally considered healthy. Cemex’s quick ratio is below 1.0, indicating potential liquidity concerns.

Cash Ratio

Ratio/Metric: Cash and Cash Equivalents / Total Current Liabilities = $864 / $6,092 = 0.14
Trend: (0.14 – 0.09) / 0.09 = 55.56%
Industry: A cash ratio of 0.5 or greater is generally considered healthy. Cemex’s cash ratio is low, indicating reliance on other current assets to meet short-term obligations.

Solvency/Leverage

Debt-to-Equity Ratio

Ratio/Metric: Total Liabilities / Total Stockholders’ Equity = $14,822 / $12,477 = 1.19
Trend: (1.19 – 1.35) / 1.35 = -11.85%
Industry: The average debt-to-equity ratio for the construction materials industry is around 0.5-1.5. Cemex’s debt-to-equity ratio is within this range.

Debt-to-Assets Ratio

Ratio/Metric: Total Liabilities / Total Assets = $14,822 / $27,299 = 0.54
Trend: (0.54 – 0.57) / 0.57 = -5.26%
Industry: The average debt-to-assets ratio for the construction materials industry is around 0.3-0.6. Cemex’s debt-to-assets ratio is within this range.

Interest Coverage Ratio (Times Interest Earned)

Ratio/Metric: Operating Earnings / Financial Expense = $1,821 / $555 = 3.28
Trend: (3.28 – 3.24) / 3.24 = 1.23%
Industry: A times interest earned ratio of 3.0 or greater is generally considered healthy. Cemex’s interest coverage ratio is above 3.0, indicating a good ability to cover interest expenses.

Activity/Efficiency

Inventory Turnover

Ratio/Metric: Cost of Sales / Average Inventory = $10,761 / (($1,485 + $1,789)/2) = 6.58
Trend: (6.58 – 6.14) / 6.14 = 7.17%
Industry: The average inventory turnover for the construction materials industry is around 4-8. Cemex’s inventory turnover is within this range.

Days Sales Outstanding (DSO)

Ratio/Metric: (Accounts Receivable / Revenues) * 365 = ($1,582 / $16,200) * 365 = 35.64 days
Trend: (35.64 – 38.75) / 38.75 = -8.03%
Industry: The average DSO for the construction materials industry is around 30-60 days. Cemex’s DSO is within this range.

Days Payable Outstanding (DPO)

Ratio/Metric: (Accounts Payable / Cost of Sales) * 365 = ($3,090 / $10,761) * 365 = 104.77 days
Trend: (104.77 – 103.24) / 103.24 = 1.48%
Industry: The average DPO for the construction materials industry is around 40-80 days. Cemex’s DPO is higher than this range.

Asset Turnover

Ratio/Metric: Revenues / Total Assets = $16,200 / $27,299 = 0.59
Trend: (0.59 – 0.58) / 0.58 = 1.72%
Industry: The average asset turnover for the construction materials industry is around 0.5-1.0. Cemex’s asset turnover is within this range.

Valuation

Price-to-Earnings Ratio (P/E)

Ratio/Metric: Stock Price / EPS = $0.61 / $0.0217 = 28.11
Trend: N/A
Industry: The average P/E ratio for the construction materials industry is around 15-25. Cemex’s P/E ratio is slightly above this range.

Price-to-Book Ratio (P/B)

Ratio/Metric: Market Cap / Total Stockholders’ Equity = (Shares Outstanding * Stock Price) / Total Stockholders’ Equity = (43,524,664,744 * $0.61) / $12,477,000,000 = 2.13
Trend: N/A
Industry: The average P/B ratio for the construction materials industry is around 1-3. Cemex’s P/B ratio is within this range.

Price-to-Sales Ratio (P/S)

Ratio/Metric: Market Cap / Revenues = (43,524,664,744 * $0.61) / $16,200,000,000 = 1.64
Trend: N/A
Industry: The average P/S ratio for the construction materials industry is around 0.5-1.5. Cemex’s P/S ratio is slightly above this range.

Enterprise Value to EBITDA (EV/EBITDA)

Ratio/Metric: (Market Cap + Total Debt – Cash) / EBITDA = ((43,524,664,744 * $0.61) + $5,529,000,000 – $864,000,000) / $3,078,000,000 = 9.81
Trend: N/A
Industry: The average EV/EBITDA for the construction materials industry is around 8-12. Cemex’s EV/EBITDA is within this range.

Growth Rates

Revenue Growth

Ratio/Metric: ($16,200 – $16,554) / $16,554 = -2.14%
Trend: N/A
Industry: N/A

Net Income Growth

Ratio/Metric: ($960 – $199) / $199 = 382.41%
Trend: N/A
Industry: N/A

EPS Growth

Ratio/Metric: ($0.0217 – $0.0042) / $0.0042 = 416.67%
Trend: N/A
Industry: N/A

Other Relevant Metrics

Parent Company-Only Financials

The provided document includes parent company-only financial statements. These statements offer insights into the financial performance and position of Cemex, S.A.B. de C.V. as a standalone entity, separate from its consolidated subsidiaries. Key observations include:

Revenue Concentration: The parent company’s revenues are significantly lower than the consolidated revenues, indicating that the majority of revenue generation occurs at the subsidiary level.
Equity Accounted Investees: A substantial portion of the parent company’s assets is comprised of investments in equity-accounted investees (subsidiaries), highlighting the parent company’s role as a holding entity.
Financial Expenses: The parent company bears a significant portion of the group’s financial expenses, reflecting its role in managing the group’s debt and financing activities.

Commentary

Cemex demonstrated a mixed financial performance. While revenue experienced a slight decrease, profitability metrics such as net profit margin, ROA, and ROE showed substantial improvements, indicating enhanced efficiency and cost management. Liquidity ratios remain a concern, suggesting potential challenges in meeting short-term obligations. Solvency ratios are within industry norms, reflecting a balanced approach to leverage. Overall, Cemex’s financial health is improving, driven by increased profitability, but liquidity needs to be monitored.