CEMEX, S.A.B. de C.V.

Reported Q2 2026 consolidated EBITDA exceeded $1 billion and included a favorable one-off Europe claim settlement of $42 million. Excluding the one-off, sales grew 11%, EBITDA grew 19%, and EBIT grew 29%; consolidated EBITDA margin expanded 1.4 percentage points to 21.4%, while EBIT margin rose almost 2 percentage points. Free cash flow from operations reached a Q2 record of $651 million, and trailing 12-month free cash flow conversion reached 60% adjusted, versus 33% a year ago. Maher said first-half free cash flow from operations increased by more than $730 million to $666 million, working capital investment was $175 million lower year over year, net leverage was 2.08x, and interest paid plus subordinated note coupons are now expected to be about $455 million this year, around $40 million below last year. The company raised full-year EBITDA guidance to 16%–17% growth, assuming MXN 18.25 to MXN 18.50 for the second half.

Jaime Dominguez framed the quarter as evidence that CEMEX’s transformation is gaining traction, with margins and cash flow improving faster than sales. He emphasized Project Cutting Edge as a multi-year effort focused on operational excellence, asset pruning, free cash flow, and higher earnings quality, and said the company is finding new opportunities beyond the initial $400 million savings plan. His tone was confident but still cautious on the macro backdrop, repeatedly noting volatility, uneven demand recovery, and the need for patience as more benefits show up in 2027 and beyond.

Maher Al-Haffar highlighted that self-help actions are driving the financial improvement: EBITDA margin reached its highest level since 2008, cost of sales and operating expenses as a percentage of sales fell 106 basis points and 167 basis points year over year, and energy cost per ton of cement fell 6% in the quarter. He said working capital, CapEx, net interest, and other cash outflows all improved, and that the company now expects interest paid plus coupons to decline by about $40 million versus last year to roughly $455 million. He also detailed liability management steps, including repaying about $1.5 billion of bank term loans, redeeming $1 billion of subordinated notes, issuing $1.5 billion of 10-year senior notes, and replacing $2.3 billion of revolvers with a new $3 billion facility tied to CO2 targets. He said net debt plus subordinated notes rose about $270 million since December due to Omega, buybacks, and dividends, but expects it to end 2026 below year-end 2025 levels.

Analysts focused heavily on the expanded Project Cutting Edge target, asking how the new $75 million of savings, the $300 million free cash flow opportunity, and AI initiatives fit together. Management said the new $475 million savings target is split between roughly $230 million of overhead reduction and $245 million of operating efficiencies, with some benefits in 2026 and more in 2027, while AI and asset pruning should become more material later. Questions on Mexico centered on whether the strong volume and margin trends can last; management said margins should step down modestly in the second half because of competitor outages normalizing, less favorable mix, maintenance outages, and weaker energy tailwinds. In Europe, management said the $42 million claim benefit masked a softer underlying margin trend but argued the ETS proposal is supportive of pricing and decarbonization, while in the U.S. they pointed to weather disruptions, pricing carry-through, and better margins expected in the second half if hurricane impacts are limited.