Good morning. Welcome to the CEMEX First Quarter 2024 Conference Call and Webcast. My name is Elliot, and I'll be your operator today. All participants are currently in listen-only mode. A question-and-answer session will follow later. Now I will hand the conference over to Lucy Rodriguez, Chief Communications Officer. Please proceed.

Good morning. Thank you for joining us today for our first quarter 2024 conference call and webcast. We hope this call finds you in good health. I am joined today by Fernando Gonzalez, our CEO; and Maher Al-Haffar, our CFO. As always, we will spend a few minutes reviewing the business, and then we will be happy to take your questions. And now I will hand it over to Fernando.

Thanks, Lucy, and good day to everyone. I am pleased with our first quarter results, which outperformed our expectations underlying our 2024 guidance. In fact, EBITDA represents a first quarter record for the company. Despite fewer working days and difficult weather conditions in many markets, EBITDA grew 5%. Three of our four regions accounting for 90% of consolidated EBITDA experienced a combined growth rate of 15%. Mexico deserves special mention, setting a record in terms of quarterly EBITDA generation. EBITDA margin expanded year-over-year and sequentially, driven by a favorable price cost dynamic. Our prices rose in the mid-single digits, while input cost inflation slowed. Growth investments and urbanization solutions continue to materially support EBITDA growth. Net income grew 13%. Our return on capital at 2.4% was slightly higher relative to the same period last year despite the impact of the Spanish tax fine that we recognized in the fourth quarter of 2023. In other highlights, last month, we achieved an important milestone with the receipt of an investment-grade rating of BBB- from Standard & Poors. This rating action was recognition of our medium-term financial strategy as well as consistent financial performance. In late March, we hosted our 2024 CEMEX Day presenting additional insights into our regions, decarbonization progress and goals, capital allocation and strategy. I would encourage you to access the replay on our website. This month, we refinanced our Eurobank facility, further improving our maturity schedule and liquidity position. In March, we published our eighth integrated report as we continue to set the pace for our industry towards a profitable climate action transition. As part of our portfolio rebalancing efforts, we have announced an agreement to divest our interest assets and operations in the Philippines for a total enterprise value of $800 million. We currently expect to finalize this transaction before the end of year, aligned to our strategy. The majority of divestment proceeds would be repurposed to fund our growth strategy in the U.S. market. Net sales rose 3% with increases in Mexico and India partially offset by volume declines in the U.S. and EMEA. EBITDA rose in the mid-single digits, reflecting growth in Mexico, South America and the U.S. We estimate that the impact of fewer working days in the quarter amounted to an additional $20 million in EBITDA or 3% in year-over-year growth. EBITDA margin increased 0.5 percentage points as our pricing strategy effectively outpaced input cost inflation. Free cash flow after maintenance CapEx was negatively impacted by higher taxes, maintenance, as well as lower fixed asset sales. The decline in consolidated volumes results from difficult weather conditions in the U.S. and Europe, fewer working days and slowing economic growth in several EMEA countries. In the case of the U.S., we have seen volumes improve with better weather conditions in March and year-to-date April. In Europe, we have also seen volumes pick up over the last six weeks, and we expect volumes to continue to improve over the next few quarters with better economic conditions, the possibility of interest rate cuts and easier year-over-year comparisons. Mexico stood out in the quarter with strong volume performance, driven by improved bagged cement activity and continued strength in the infrastructure and industrial segments. Despite the challenging volume backdrop, our consolidated prices were up year-over-year and sequentially. Sequential pricing was up in all markets and for all products except for cement in the U.S. In the U.S., on a like-for-like basis, excluding a year-end adjustment, cement prices rose 1% sequentially. The sequential pricing achievement results from successful execution of first-quarter pricing increases, reflecting the ongoing but decelerating input cost inflation. We continue to execute on our commercial strategy designed to reflect input cost inflation in our prices, always recalibrating to current inflation levels with the goal of maintaining or improving margins. Our commercial strategy, along with our growth investments and urbanization solutions was instrumental in driving EBITDA growth in the quarter. The effectiveness of our pricing strategy is visible in the favorable price cost dynamics in the quarter, where the ratio of our pricing contribution to cost increased to 2x, about 0.3x higher than in 2023. Decelerating costs are also supported with cost of goods sold as a percentage of sales declining by 1.6 percentage points. Margin increased on a year-over-year and sequential basis in a quarter where the usual trend is for a decline in margins from fourth to first quarter. Our bolt-on investments continue to be an important component of growth, accounting for 10% of total EBITDA and 26% of incremental EBITDA. EBITDA was impacted by lower volumes as a result of bad weather, fewer working days and difficult demand conditions in EMEA. We expect better overall volume performance in the following quarters. In March, we published our eighth annual integrated report covering 2023, which details how our strategy, governance, sustainability, and financial performance intersect to create value for our stakeholders. Some of our main accomplishments presented in this report related to climate action are since the creation of our Future in Action program in 2020. We have reduced Scope 1 and 2 CO2 emissions by 13% and 12%, respectively, a pace that previously would have taken 15 years to accomplish. We repurposed close to 28 million tons of waste and byproducts through the Regenera business line. We increased alternative substitution rate to 37% and reduced clinker factor to 72%, both at record levels and contributing to the profitability of our business. In 2023, we increased the adoption of our low-carbon products, currently a more than $7 billion brand to 56% for cement and 48% for concrete. I encourage you to access our integrated report on our website. Urbanization Solutions, our fastest-growing business, continued its double-digit EBITDA growth rate with important margin expansion in the quarter, now accounting for 12% of consolidated EBITDA. This business is now reaching scale. Mexico, with its dominant waste management business, is currently the largest regional contributor. Main drivers of growth in the quarter were payment services related to the high level of formal construction activity in Mexico. Additionally, EMEA is leading the development of our construction demolition and excavation materials vertical. And now back to you, Lucy.

Thank you, Fernando. Our Mexican operations once again delivered strong results with EBITDA growing to record levels, supported by higher prices for our products, strong volumes and decelerating input cost inflation. Despite two fewer working days, volume performance was strong. Bulk cement and aggregate volumes grew double digits on an average daily sales basis, while ready-mix volumes rose mid-single digits, reflecting the dynamism of formal construction in the country. Infrastructure and nearshoring with particular strength in the North and Southeast remain the principal growth drivers. We continue to see improvement in bag cement volumes with mid-single-digit growth resulting from increased social spending, lower inflation and a favorable comparison base. Based on our first quarter performance, we are raising our cement and ready-mix volume guidance from low single digits to low to mid-single-digit growth for the full year. Sequential prices for our cement, ready-mix and aggregates rose in the low single digits, reflecting the traction of our January price increases implemented to offset the ongoing cost inflation of the business. On a year-over-year basis, our double-digit ready-mix and aggregate price increases and a mid-single-digit cement increase as well as decelerating energy costs led to an expansion in EBITDA margin of 0.5 percentage points. In the U.S., quarterly performance was significantly affected by bad weather in much of our portfolio. Despite these weather challenges, EBITDA rose 3%, while EBITDA margins expanded almost 1 percentage point, driven by higher prices and lower cost inflation, largely in the form of fuel, freight, and imports. In aggregates, where volumes are less impacted by weather conditions, volumes grew 9% on the back of increased base material sales for infrastructure work. Cement and ready-mix volumes declined high single digits and mid-teen percentages, respectively, due to heavy precipitation or deep freeze conditions in much of our portfolio. We estimate the impact of weather conditions on cement volumes explained approximately half of the volume decline. Over the last two months, with better weather, we have seen cement and ready-mix volumes recover sequentially. The difficult weather conditions, however, delayed cement and ready-mix pricing increases in several of our markets to April. We implemented pricing increases in Florida in the first quarter, and cement pricing in the state is up 2% sequentially, excluding freight to customers. In aggregate, sequential prices increased 6% due to price actions in Florida, Texas, and California, as well as a favorable geographic volume mix. We expect to implement our pricing strategy in the rest of our aggregate markets over the next few months. Going forward, we remain optimistic on the underlying demand for our products supported by strong contract awards for highways and streets, announced industrial projects related to onshore and clean energy, and the residential market recovery. In EMEA, EBITDA declined 41%, driven by a challenging demand backdrop in Europe and geopolitical events in Asia, the Middle East, and Africa. EBITDA in Europe experienced the largest decline of 44% due to a significant drop in volumes, while our prices for cement, ready-mix, and aggregates rose in low to mid-single digits sequentially. Volumes were down between high single and double digits for cement, ready-mix, and aggregates due to fewer working days, bad weather, and a strong prior year comparison base. Demand conditions were very much a mixed bag with volume declines in the U.K., Germany, and France, while the rest of our European portfolio showed positive volume performance. We recognize that the first quarter in Europe typically represents approximately 12% of full-year European EBITDA and can be significantly disrupted by weather. It should not be seen as an indicator of full-year performance. In fact, our European results actually outperformed our expectations for the quarter. As a result, given the easier comp base going forward as well as an expected improvement in demand outlook, driven by lower inflation and prospects for a more benign interest rate environment, we are upgrading our cement volume guidance slightly to a flat to low single-digit increase. On climate action, we continue our reduced carbon capture CO2 strategy in Europe, with sales of our lower carbon virtuous cement products increasing by 1 percentage point, reaching 93% of sales in the first quarter. Finally, EMEA also experienced a large decline in EBITDA of 35% due to ongoing tensions from the conflict in the Middle East. Our South America operations once again delivered solid results with its fourth consecutive year-over-year growth in EBITDA, led by strong pricing performance and decelerating input cost inflation. Pricing led top line growth with our cement prices increasing mid-single digits, more than compensating for input cost inflation. Regional cement volumes were pressured by two fewer working days in the quarter as well as continued weak bag cement demand. EBITDA margin increased 3.8 percentage points, largely explained by the strong pricing contribution, lower energy and raw material costs as well as the timing of kiln maintenance. In the Dominican Republic, while weak demand in the informal segment continues to weigh on demand, formal construction remains robust, fueled by projects in the tourism and infrastructure sectors. In Jamaica, volumes were supported by strong growth in the tourism sector, while in Panama, cement volumes increased high single digits, mainly driven by infrastructure projects, such as the metro, the fourth bridge over the canal, and highway expansions. And now I will pass the call to Maher to review our financial developments.

Thank you, Lucy, and good day to everyone. As Fernando mentioned, we are pleased with our first quarter performance, with growth in sales, EBITDA, and EBITDA margin. This was a record first quarter for CEMEX and a record for our operations in Mexico. As we noted earlier, this quarter had fewer working days than last year. Adjusting for this difference, our EBITDA would be higher by approximately $20 million or an additional 3 percentage points on both a reported and like-for-like basis. The 0.5 percentage point increase in EBITDA margin was driven primarily by pricing, easing inflation, and disciplined cost management. Our improved performance speaks to the success of our pricing strategy, cost containment efforts, and the result of our growth investment and urbanization solutions business. On the cost side, we saw a 20% decline in fuel cost per ton of cement, driven by a decline in the market price of fuels as well as our efforts to increase the proportion of lower cost and lower carbon fuels. On a sequential basis, consolidated fuel cost per ton declined by 11%. Free cash flow after maintenance CapEx was about $160 million lower than the prior year. This is due primarily to higher taxes paid in Mexico and currency tax gains from a strong Mexican peso. Due to the seasonality of our working capital cycle, first-quarter free cash flow is typically negative and turns around in subsequent quarters. Last year, we started implementing targeted actions to improve working capital, optimize our inventories, and turn trade throughout the company. While first-quarter working capital investment was substantially similar to the prior year, we expect to see a positive trend throughout the remainder of the year and remain on track to achieve our previously stated guidance of reducing more than $300 million in working capital this year. Net income increased 13% due primarily to better operational results and lower taxes. We are quite pleased with achieving our investment-grade rating from S&P. This should translate into significant value for all of our stakeholders and is a testament to the success of our financial strategy. As we have said before, we intend not only to reach investment grade but to maintain investment-grade ratings throughout our business cycle. During the quarter, we executed a series of transactions that further strengthened our financial position. First, we reopened our sustainability-linked long-term notes in Mexico in Mexican pesos for an equivalent amount of approximately $320 million and swapped them into U.S. dollars. We started tapping this source of funds last year for the first time in over 15 years at an attractive cost compared to our U.S. dollar curve. Second, we upsized and extended the maturity of our €500 million sustainability-linked loan facility. The new facility consists of a €450 million term loan maturing in 2029 and a new €300 million committed revolving credit facility. This brings our total committed revolving facilities to slightly over $2.3 billion, which puts us in the best liquidity position we've had in recent years. Our leverage ratio stood at 2.18x, up 0.12x compared to December. Typically, we see a sequential increase in leverage in the first quarter due to the seasonally negative free cash flow that reverses as we go through the year. As mentioned in our recent CEMEX Day, we are committed to reducing our leverage ratio by 0.5 turns in the next 24 to 36 months. And now back to you, Fernando.

I'm happy with our performance in the first quarter and believe it sets us up well for the rest of the year. Our full year guidance has always assumed more EBITDA growth in the second half of the year. As I said previously, the first quarter outperformed our expectations. In Europe, the biggest headwind in the quarter, we do expect better performance going forward. We continue to expect favorable price to cost dynamics for the rest of the year. We also are expecting and already seeing volumes recovering in the U.S. with better weather. In addition, we expect more pricing traction from second quarter pricing increases. Despite better performance to date, as this is only the first quarter, we are maintaining our full-year guidance for EBITDA of a low to mid-single-digit increase as well as maintaining guidance for all free cash flow items. This assumes FX rate as of March 31 levels for the remainder of the year. And now back to you, Lucy.

Before we go into our Q&A session, I would like to remind you that any forward-looking statements we make today are based on our current knowledge of the markets in which we operate and could change in the future due to a variety of factors beyond our control. In addition, unless the context indicates otherwise, all references to pricing initiatives, price increases, or decreases refer to the prices for our products. And now we will be happy to take your questions.

Hi, good morning, CEMEX team. Thank you for taking my questions. And congratulations on the record quarter. I guess my question is on the Philippines asset sale. That's very positive for your free cash flow. So I was just wondering if you can help us understand this transaction. Of course, you've approved means for you in terms of cash inflows. How much of your debt is on your balance sheet from this operation today? And maybe there are some details regarding what it means for working capital and CapEx. I mean anything that can help us assess the positive impact for free cash flow here? And anything on the timing you mentioned year-end, but would it be fair to assume fourth quarter? Or is that something potentially before that? Any color here would be very helpful. Thank you.

Thank you, Alejandra. Fernando, would you like me to take a stab at that?

Yes.

Yes, Alejandra, we're very pleased with announcing the transaction, and we're expecting closing by the end of the year. In terms of the impact, I mean, of course, you saw in the press release that we issued, the implied enterprise value is about $800 million. If we take a look based on last year's valuation, we're talking about a little bit over — in terms of multiples, a little bit over 20x — 21x, 22x. In terms of impact on us, I mean we have debt that will be assumed around $345 million, $350 million and then cash of about $360 million, $365 million. So you're talking about a total amount of about $708 million. Again, we don't know what the impact on leverage is going to be by the end of the year. But under Ceteris Paribus conditions by the end of the year, this should have about a 0.2 turn positive impact, assuming everything impacts leverage, of course, without taking into consideration what the use of proceeds would be in all of that. In terms of working capital from a trading perspective, it should be fairly limited because of the relatively low operational level that the business has at this point. And of course, closing is subject to customary regulatory approvals by the end of the year.

Perfect. Maher, just to make sure I got it right. What was the impact on potential impact on leverage? You mentioned 0.2 turns. How much for that, I'm sorry?

Again, under Ceteris Paribus conditions, meaning everything being applied to either cash or reduction in debt, the impact on leverage would be around 0.2 of a turn.

Got you. Perfect. That's very clear. Thank you very much, and congratulations again.

Thank you, Alejandra. Great to hear from you.

Hello, Lucy, Fernando, and Maher. Thanks for taking my questions. I don't know if you can provide more color on the U.S. volume performance we saw in the quarter. I know you explained there were fewer working days in the quarter, but maybe talk a little bit about market share or regional performance, that would be super useful.

Thanks, Pablo. We did experience a smaller decline in volumes for both cement and ready-mix, while aggregates saw an increase. The dip in cement and ready-mix is primarily due to our geographical footprint, which was more adversely affected by precipitation in those areas. On the other hand, aggregates are less impacted by weather because they can be stored and used in wet conditions without significant issues. The growth in aggregates is driven largely by infrastructure projects, particularly base materials. Regarding the volume decline, it's not precisely measurable, but we estimate that about half of it is due to weather-related issues. In the states where we generate 75% of our cement volumes, we encountered an average 35% rise in precipitation this quarter, notably in Texas, where the Houston area faced a 45% increase year-over-year. For example, in January, ready-mix in Houston was impacted by bad weather on eight days. Additionally, we attribute approximately 30% of the decline to market softening in commercial and residential sectors, especially in regions like San Francisco and Arizona. We also had some projects wrapping up, which accounted for around 20% of the volume drop, including two semiconductor chip manufacturing projects that have stalled in Arizona. Since February, there has been a recovery in volumes both sequentially and year-over-year, with March showing positive growth compared to the previous year. We are optimistic about future demand. Hopefully, that answers your question, Pablo.

Perfect. Lucy, thanks.

Great. And the next question then comes from the web. It's from Paul Roger from Exane. CEMEX has previously said carbon capture is a 2030 story. Is that still the view despite some big peers now suggesting it will come earlier this decade?

Well, Paul, thanks for your question. Let me clarify our position on carbon capture. Maybe the reason why you are saying it is a 2030 story is because of the way we have defined our road map to Net Zero and the emphasis that we are making in different steps in the process. Since we started our newer strategy, the Future in Action strategy launched in 2020, we have been focused on reducing our carbon emissions scopes at a much faster speed than we used to before. The reduction that we have done is about 13%. Every year, it continues reducing or we've been reducing close to four percentage points. We are highly focused on traditional levers to comply with our 2030 commitment, a commitment that is aligned with the scenario of the 1.5 degrees already certified by SBTI, meaning our target by 2030 for the time being is not assuming a contribution from carbon capture. At the same time, we've been developing carbon capture and storage or use projects, and we have publicly announced six projects, four in Europe and two in the U.S. At an industrial level, with proven technologies and with already most of the cases already with the consumptions needed to capture to transport and to start or use. If we can develop or put in place these projects before 2030, we are trying to do that; it will be much better. But again, regarding our commitments as of right now, we are not including this carbon capture contribution. The way we see it all over the world, the traditional levers can be applied in the cement industry. There might be some rules and regulations to improve in the Global South, but it can be done. What we see — and in your question, you are referring to big peers suggesting that it's coming earlier. That seems to be coming in Europe and the U.S., which accounts for about 10% of total cement capacity all over the world. We are all interested in reducing carbon capture, reducing even more and reducing it faster. But we are very pleased with the strategy of reducing almost 50% using 1990 as the base by 2030 without those contributions. So reduction is extremely important, as you can imagine, if you reduce up to 50%, the projects needed to capture the rest should be smaller and more convenient. We are one of the companies developing these projects as fast as possible. This is a European and U.S. proposition for the time being. We need to find a solution for our company in other geographies and for our industry in other geographies.

Thank you, Fernando. The next question comes from Adrian Huerta from JPMorgan. Adrian?

Hi, thank you, Lucy. And hi everyone. My question has to do with Mexico, both on volumes and on prices. In the case of prices, you tried to increase prices in January in Mexico, but it seems that prices were flat sequentially in local currency, but peers actually had a 4% increase in the quarter. So if you can make any comments on that and if we should expect, given that you did not have a price increase in the first quarter, any in the coming quarters? Regarding volumes, how much was in the first two months of the year started to be strong? We don't have data yet for March volumes. In the new guidance that you have, what type of deceleration are you assuming for the second half of the year especially from infrastructure?

Would you like me to explain it or...

Yes, go ahead.

Yes, Adrian. I think if we take a look at sequential pricing in local currency terms for Mexico, actually like up 3%. So we did announce in January a national pricing increase for bags, 12% for bulk, 15%. It was quite successful given the demand dynamics that we've had. As you saw, volumes in the first quarter for cement were up 7%, and that's before you start adjusting for the two fewer working days. If we take a look at average daily sales, volumes in cement are up 10%. This was, of course, what—between that and decelerating inflation is what drove the record performance. And definitely, volumes did get better towards March. We think the first part of April continued to do quite well as well. So we're happy about that. We believe that the success of our pricing strategy in Mexico should continue. If we take a look at margins, as you saw, we had a very positive expansion in margins because of the pricing and because of the cost deceleration. Bag cement grew by like 5% on an average daily sales basis on the back of lower inflation, easier comps, more remittances, the formal sector was really what was driving growth enormously. We saw the formal segment, bulk cement demand up 16%. If we take a look at ready-mix and aggregates, we were up 5%, which is almost more than double that on an average daily sales basis. So I think the demand dynamics are very positive. The cost dynamics are quite positive. We're expecting them frankly to continue to do that. As we see some possible conclusion of some of the large infrastructure projects by the middle of the year, we continue to see other projects that are actually starting and should continue to give us very good momentum into the back half of the year. So right now, we're not looking at any major deceleration during the rest of the year, and bag cement should continue to, with — in the rest of the year, we're expecting it to be actually a little bit better. Of course, coming from a much higher level because of the disproportionate growth in infrastructure and industrial and commercial. That's the other segment that also continues to do extremely well because of the onshoring and near-shoring. If we take a look at our implied volumes for the rest of the year, it's significantly higher than what we saw—the total guidance.

And significantly, I mean, our implied guidance for the rest of the year is 1% to 4%, right, versus the 7%, just to be clear. Okay. Adrian, does that answer your question?

Yes, that's fine. Yes, thank you.

Thanks, Adrian.

Okay. And the next question comes from Alberto Valerio from UBS. Alberto?

Thank you, Lucy and CEMEX team. My question is about the Philippines divestment. I would like to know if you have— you mentioned that you leverage the situation, if you have any other options for the use of proceeds from this transaction? And if you can see the similar movement for the Colombia assets where you made our offer for the shares, and we may be best following the strategy that you mentioned in the CEMEX Day of trending one, you cannot mistake when you say that we want to be more focused on developing world and the emerging markets.

I'm not sure I listened to the whole question, but let me try and let me know. I think as you mentioned in our CEMEX Day recently, we reaffirmed our strategy, a strategy that we started developing in 2020. We have been communicating it, meaning with the idea of making adjustments or changes to our portfolio, willing to grow, mainly our first priority in the U.S., we also mentioned Europe and to some extent in Mexico. That's what we've been doing. So this divestment in the Philippines, we see it pretty aligned with that strategy in the same way when we did other divestments from 2000 to 2003. Most of the proceeds from those divestments have been used in our bolt-on growth strategy. Little by little, but in these three and a half years, or two years and a quarter, we have divested already about $2.5 billion, and most of it has been repurposed to investments, again prioritizing U.S. sales, and also part of it to reduce our leverage ratio. This divestment is aligned with that strategy. This is the last piece that we usually have in Southeast Asia, so our Asian chapter will close once we execute the transaction by year-end. Again, maybe there is another part of the question that I didn't get. I don't know if Maher or Lucy have a comment on it.

I would just say that the other part of the question was about Colombia that we see the same way as we see the Philippines.

I think Alberto is asking about — it's about Colombia and because we've delisted the company there, wondering if something the same as Philippines would occur. Am I correct? Alberto, that was your question?

Exactly that, Maher. Thank you very much.

Okay. Sorry, I didn't understand it. Well, we — again, as I said, we have a clear strategy properly communicated, and we are executing. We do not comment on potential future either acquisitions or divestments. But what you can expect in the future is that we will continue with the same note. Even in our CEMEX Day, we shared a new piece of info on our strategy with the target of the U.S. to be up to 40% of CEMEX portfolio, currently being around 30%. As you can see, all pieces are moving forward according to that idea, and what you can expect in the future is that we will continue with the same process.

Fantastic. Makes sense. Thank you for the answers.

The next question comes from Yassine Touahri from On Field Research. Yassine.

Just a question on your volume outlook for Europe. You increased a little bit your volume forecast. But the cement demand was quite weak in Q1. Can you comment a little bit about the trends in March and maybe at the beginning of April? Do you start to see a recovery in volume in Europe? And then maybe a second question on the 9% volume growth that you delivered in aggregate in the U.S., it's exceptional compared to what many other companies have reported. Is it something specific to CEMEX? Is it some specific infrastructure project? Or is it something which is a one-off? Or do you see this strong growth continuing for the rest of the year?

I will take the second one. Regarding the volume growth in aggregates in the U.S., it is specific to CEMEX. There might be a similar effect in other players. But in our case, it’s a product mix effect. We are selling more base materials, meaning infrastructure is playing a role in that volume. It is not referred to all volumes, to all products but very specific on base materials, which we interpret as good news because it could suggest activity in infrastructure already in development. But it’s product-specific.

Great. And maybe just on Europe. Yes, Yassine. In Europe, obviously, there was a drop in EBITDA year-over-year in the first quarter. I think it's important just to remind everyone that the first quarter typically is the most seasonally impacted quarter, and Europe is the region where we see that the most. Typically, the first quarter accounts for about 11% to 12% of full-year EBITDA for Europe, so we shouldn't read too much into what we saw. The first quarter was impacted by two fewer working days in Europe, which explains about 10% of the EBITDA drop. We had bad weather in several geographies, particularly the U.K., which is our largest market in Europe, where we experienced a significant amount of precipitation. Germany was also impacted primarily from the economic slowdown. On the other hand, we saw great growth in places like Poland, where we're observing increased confidence coming out of the elections and the anticipation of EU funding going forward. France has also been an important source of decline; as you know, we're only ready-mix in France. But because of the Olympics, there has been a ban on large project activity extending into early summer. However, we expect improvements as construction resumes after the Olympics. In the quarter, despite the decline in volumes, we saw resilient pricing sequentially. Local currency prices increased between 1% and 5%, depending on the product. Another headwind we faced in the quarter was the impact of higher fixed costs due to lower volumes. We anticipate this will improve throughout the year. We've seen a seasonal pickup in volumes, and April has been looking quite good as we observed the normal seasonal uptick that occurs. As we consider Europe moving forward, we have better comp dynamics for the next three quarters since the declines we experienced really began in the second quarter. We expect improving fixed cost dynamics, and the Olympics will be behind us, along with a supportive economic environment and the promise of infrastructure picking up in Poland. So that is kind of it regarding Europe. Hopefully, that addresses your question.

It does. Thank you so much.

Okay. Thank you, Yassine. And the next question comes from Anne Milne from Bank of America. Anne?

Yes, good morning Fernando, Maher, Lucy. Thank you for the call.

Good morning.

Good morning. I know that we've discussed this in previous calls. By the next quarterly conference call, Mexico will be looking at presidential elections, and you will know who the new President is even though the polls provide some good suggestions. I know we've talked about business and volumes in Mexico potentially declining. Given some of the dynamics right now, both near-shoring and an increase in bag cement, could you just share your thoughts if this time might be different and what you might expect post-elections in the second half of '24?

Yes. Well, let me start, and then Maher or Lucy can complement. I think this year is an election year. What we see is, let's say, a good performance in different sectors in our industry. Perhaps the one impacted is the housing sector because of high interest rates, although at least in the case of Mexico, it seems the first adjustment was made; let's see how that continues moving forward. However, I think the informal economy is doing well. Mexico is growing. So on that side, growth in the market could be reasonable and stable for the rest of the year. On the other hand, both the industrial and commercial segments are positively impacted by the near-shoring effect, particularly in the north of the country. The other positive piece is public works infrastructure, everything that's ongoing in the central part of the country and in the Southeast, meaning projects like the rural roads and airports. Most of them—with some exceptions like the airport in Mexico City—are still under development and won't finish before elections. So they will continue to be executed throughout this year. We don't see any significant material factors or reasons for demand to materially suffer. We forecast stable volumes for Mexico during the whole year, despite the elections in mid-year.

If I can add maybe just some more granular color. I’m sure if you visited Monterrey or Mexico recently, you would see a lot of these projects that are just beginning. We think there's a very strong project pipeline for the second half of the year that is likely to substitute or ease the demand situation in that timeframe. You have the cross-border terminal in Dejana. There's an extensive metro expansion in Monterrey. I mean, on the way from the airport to downtown, you can see a considerable amount of concrete being poured, which is expected to continue for quite a bit of the year—major highway construction is on a plateau, and there are many others. On the housing side, we expect, as Fernando said, that as rates improve and inflation eases in the second half of the year, we do expect some improvement in demand there. Additionally, remittances continue to positively impact Mexico overall, benefiting from fiscal stimulus from the U.S. through those remittances and other means. Furthermore, the near-shoring process continues, especially in the northern part of the country, and it's starting to branch down south. Supply and demand dynamics also continue to be pretty favorable. So the second half of the year is looking reasonably good, I would say.

Okay. That's very good color. Thank you very much.

Thank you, Anne.

Okay. Thanks, Gordon. And the last question comes from Danielle Roha from Bank of America. Danielle?

Hi, Lucy, Fernando, Maher. Thanks for taking my call and question. I wanted to jump back to the U.S. and maybe discuss pricing. I understand that back in January, you were able to reprice around 20% of the market with the remaining 80% sometime in April. Could you give us some feedback on how you're seeing pricing evolving into April and May? Given price volumes going down in the first quarter, is a second potential increase still on the table?

Sure. Fernando, do you want to handle that? Do you want to take it or...?

Go ahead, Lucy.

Okay. Yes. Well, first of all, we did increase prices in Florida in January, and we saw good traction in terms of pricing on that increase. We do have a 70% portion of our portfolio that we expect to address for April pricing. In terms of pricing and the outlook for our achievements, I don't know, Maher, if you want to add anything to that?

No, that's fine, Lucy.

All right. Okay. Thank you very much, Daniel. Okay. So that's it then. We appreciate you joining us today for our first quarter results, and we hope you will be back with us again for second quarter results on July 25. Many thanks, and have a good end of the week.

Thank you for your participation in today's conference call. This concludes the presentation. You may now disconnect. Good day.