Good morning. Welcome to the CEMEX Third Quarter 2024 Conference Call and Webcast. My name is Adam, and I will be your operator for today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Now, I will turn the conference over to Lucy Rodriguez, Chief Communications Officer. Please proceed.

Good morning. Thank you for joining us today for our third 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. I would like to remind you that during third quarter, we announced the sale of our Dominican Republic and Guatemala operations as well as the remaining minority stake in Neoris. This is in addition to the anticipated sale of our Philippines operations, which we announced in April. All of these operations have been reclassified as discontinued operations and are now excluded from our 2024 and 2023 operating results. We are expecting to close these transactions by year-end, except for Guatemala, which has already closed in September. And now, I will hand it over to Fernando.

Thanks, Lucy, and good day to everyone. I'm pleased with the significant progress we have made this year with our portfolio optimization efforts. We advanced materially on our goal of streamlining our portfolio towards developed markets with the announcement of $1.4 billion in asset sales in the quarter, bringing year-to-date announced divestitures of noncore assets to $2.2 billion. With the closing of these transactions, approximately 90% of our EBITDA will be generated in the U.S., Europe, and Mexico. The proceeds from the divestments are expected to be recycled into our growth strategy launched in 2019 and primarily focused on the U.S. Our growth strategy continues to pay off in the quarter by contributing 13% of EBITDA, and we are excited by the new accretive growth opportunities we are finding. During the quarter, we formed a joint venture in the U.S. to strengthen and expand our aggregate reserves in the Southeast. Additionally, we acquired a majority stake in a construction demolition and excavation business in Germany to produce recycled aggregates. Our quarterly results were significantly impacted by temporary factors such as extraordinary weather conditions in all of our regions as well as a transportation strike in SCAC. In the U.S. alone, we faced three major hurricanes in the quarter versus one the prior year. Additionally, results have a difficult comparison base where EBITDA last year grew more than 30% and EBITDA margin expanded by 3.5 percentage points. Our pricing strategy continued to show resiliency as prices for our products rose low single digits. Net income showed exceptional strength growing over 200% year-over-year. In climate action, we continue delivering against our Future in Action roadmap, reducing our year-to-date Scope 1 and 2 CO2 emissions by 3% and 4%, respectively. While we are working hard to decarbonize using existing technologies, we are also developing breakthrough decarbonization solutions, such as the CEMEX-led consumption carbon capture project at our Rüdersdorf cement plant in Germany. This is CEMEX's largest CCUS project to date, and I'm happy to share that the EU Innovation Fund recently selected this project to receive funding. During the quarter, CEMEX through the activities of Regenera, our global waste management business, was honored by the inclusion in Fortune's 2024 Change the World list. Fortune highlighted our VeryNile initiative cleaning the Nile River, a landmark project exemplifying how companies can collaborate with NGOs and society to change the world for the better. Our financial results were impacted by extraordinary weather events in all of our main markets as well as a significant depreciation in the Mexican peso. We estimate a consolidated weather impact of approximately $33 million in EBITDA, a little less than half of the like-to-like EBITDA shortfall in the quarter. Hurricanes and precipitation impacted our U.S., Mexico, and SCAC businesses, while Europe was affected by significant flooding events in the East. Free cash flow after maintenance CapEx declined primarily due to a one-off $306 million tax payment related to the 2023 Spanish tax penalty. Maher will elaborate more on this. Adjusting for this extraordinary tax payment, free cash flow after maintenance CapEx would have been slightly lower than the prior year. Consolidated volumes declined between low- to mid-single digits. The U.S. experienced three major hurricanes and significantly higher precipitation flooding, impacting construction in several of our major markets. In Mexico, as we anticipated, we experienced a slowdown of construction activity post-elections, particularly in the informal residential and infrastructure segments. With hurricane Beryl impacting Jamaica, a transportation strike in Colombia, and overall softness in cement consumption in Panama and Colombia, SCAC volumes declined in the quarter. In Europe, cement volumes increased after nine quarters of consecutive declines. Consolidated prices rose low single digits, while sequential prices were largely stable with minor price variations explained by product and geographic mix. Importantly, price gains more than covered variable costs but were not sufficient to cover fixed costs due to the decline in volumes. With prices and the contribution from growth investments offsetting costs in the quarter, the decline in EBITDA was largely attributable to volumes. Weather impact accounted for a little less than half of the like-to-like EBITDA shortfall. While fixed costs increased due to higher maintenance and labor, we continue to experience energy tailwinds. Growth investments remain an important contributor, now accounting for 13% of total EBITDA. FX was a headwind to EBITDA primarily due to the devaluation of the Mexican peso. Our dynamic hedging strategy that we have followed since 2017 was designed specifically for these situations and worked as we expected. Booking again below the EBITDA line, protecting our leverage ratio and giving the Company time to adjust to a new FX level. Maher will explain in more detail. Despite lower volumes, EBITDA margin for our Organization Solutions business rose 1.6 percentage points, reflecting our favorable pricing cost dynamics. Admixtures and mortars continue to contribute strongly to EBITDA, with growth across all regions. Circularity, our fastest-growing business also saw important growth in the construction, demolition, and excavation materials business in the U.S. and Europe. The flat EBITDA variation was due primarily to Mexico, where some of the large government-related pavement projects of the prior administration came to an end. During the quarter, we announced the acquisition of a majority stake in a recycling company in Berlin that processes 400,000 tons of construction, demolition, and excavation materials which can be repurposed into aggregates for recycled concrete. Beyond its recycling capabilities, this facility operates the first plant to permanently store biogenic CO2 in recycled mineral waste in Germany. This investment will integrate with our Regenera business as we continue to scale the repurposing of construction demolition and excavation materials and advance our circularity focus. We remain optimistic about the outlook for this business and its contribution to our overall results. On climate action, through our Reduce before Capture strategy, we continue to make steady progress in decarbonization with a 3% decline in Scope 1 emissions year-to-date, driven by a 0.9 percentage point reduction in clinker factor. Since the launch of our Future in Action program in 2020, we have materially accelerated the pace of our decarbonization in a profitable way, reducing Scope 1 emissions by 15%, a reduction that previously would have taken us more than 15 years to achieve. And we continue to make strides on Scope 2 emissions with a 15% reduction since 2020. Additionally, we are working hard to innovate around carbon capture and other technologies to drive decarbonization from 2030 and beyond. One of those projects is included in Germany, where we have CEMEX's largest CCUS project to date. I'm pleased to announce that our CEMEX-led consumption project was elected to receive €157 million of EU innovation funding for carbon capture at Rüdersdorf. We will work with Linde, a leading global industrial gases and engineering company to capture 1.3 million metric tons of CO2 per year. This is a milestone project which aims to convert Rüdersdorf into the first Net Zero CO2 plant within the CEMEX system. We are very pleased with the rapid adoption of our lower carbon family of products, Vertua, which was introduced in 2018. Today, more than 60% of our total cement volumes have Vertua attributes, while ready-mix has a rate of 55% acceptance, an improvement of 8 percentage points versus the prior year. To qualify as Vertua cement or concrete, the material must have a minimum 25% reduction in CO2 compared to traditional cement or concrete. On average, the Vertua cement and ready mix that we are selling today has a 45% to 49% reduction of CO2 compared to a traditional product, which is quite significant. From the renovation of the Grand Palais in Paris ahead of the Olympics, to the longest tunnel in Latin America, to a 28-acre mixed-use facility in San Francisco, CEMEX is participating in key projects across the world, supplying sustainable building materials and leading the way in decarbonizing the built environment. I recognize we are at an important moment in our capital allocation strategy with the expected closing of $2.2 billion in announced divestments by the end of the year. I would like to take this opportunity to reaffirm what we have discussed a few months ago, during our CEMEX Day event related to our capital allocation framework. You should expect that we will continue to execute a balanced approach where we will prioritize recycling divestiture proceeds into growth investments while also focusing on deleveraging and accelerating shareholder return. The growth strategy is focused on investing in developed markets and Mexico with particular focus on the U.S., which we are expecting over the medium term to contribute to 40% of consolidated EBITDA. With the divestment proceeds, we will continue to pursue bolt-on margin enhancement investments aligned to what we have done over the last few years but complement these efforts with small to mid-sized M&A transactions. At the product level, investments are focused on aggregates, urbanization solutions, and addressing specific needs in cement and decarbonization. We also expect to continue allocating capital to reduce our net debt leverage ratio to 1.5x over the next two years. As a third element of our framework, we will gradually build on the recent initiation of a progressive dividend program and opportunistic share buyback program to return cash to shareholders. Our business, having grown nicely since 2020 with a CAGR of 14%, driven not only by organic growth but also by our growth strategy adopted in 2019. With $1.1 billion invested in 239 projects, our completed projects had an average IRR of 35%. The portfolio contribution is accelerating with growth projects now accounting for $325 million in 2023, roughly 10% of total EBITDA. The completed projects consist of accretive bolt-on and margin enhancement investments, typically within our existing footprint. They offer important synergies with our existing product portfolio and customers with significantly less acquisition risk. The growth strategy is proving to be a great complement to our organic growth. We expect that the contribution from our $3 billion pipeline of growth investments will continue to ramp up and contribute more than $700 million of EBITDA by 2028. Excluding cement legacy projects, half of the investments are expected to be allocated to the U.S. These are examples of some of the growth investments that we have executed over the last three years. Our initial portfolio consisting primarily of bolt-on investments offers IRRs in the 35% area. Going forward, as we pursue small- and medium-sized acquisitions, we expect overall return metrics to be somewhat tighter. And now back to you, Lucy.

Thank you, Fernando. Consistent with our expectations, volumes in our Mexican operations slowed as construction activity decelerated after the June election. The slowdown was further exacerbated by record precipitation and a prior year base effect in which EBITDA rose more than 30%. For the full quarter, precipitation levels were 50% higher than the prior year. We estimate the impact from bad weather on EBITDA to be approximately $8 million. As a forward-looking indicator, we continue to see healthy growth in our ready-mix order book for projects related to nearshoring and infrastructure. Importantly, our cement and ready-mix prices rose mid-single digits and helped to alleviate some of the cost pressure in the form of unfavorable currency movement, higher maintenance, and electricity costs. The margin variation related primarily to a 30% rise in electricity cost compared to a mid-single-digit decline observed in the first half. We are in the midst of transitioning our power supply sourcing in Mexico. In the interim, we are incurring incremental costs, which should reverse in the first quarter of 2025. In October, we announced a 5% price increase for bagged cement to offset recent cost inflation. Over the medium term, we are optimistic about Mexico's growth prospects. As the new government settles in, its agenda appears supportive of housing as well as infrastructure. In the past few days, the government announced its intention to build 1 million homes over the next six years as well as reaffirming the development of 10 economic corridors across the country, with the purpose of capitalizing on the nearshoring story. Recently announced investments of more than $20 billion in the energy, tourism, IT, and logistics sectors provide an encouraging outlook for the administration's receptivity to foreign direct investment. Demand for our products and solutions will continue to be supported by social programs, wage growth in real terms, high remittances, and circular construction opportunities. In the U.S., our operations were impacted by extreme weather conditions with three major hurricanes and above-average precipitation and flooding. Several of our key markets experienced 50% to 200% higher precipitation than the prior year. We expect some lost volumes to be recovered in future quarters. EBITDA declined slightly due to lower cement and ready-mix volumes. The resiliency of the business to the drop in volumes was impressive with EBITDA margin stable, driven by lower imports, energy cost deceleration, and our operational optimization efforts. Aggregate volumes, which are typically less sensitive to weather, declined 1%. We estimate the impact of adverse weather on EBITDA to be $17 million, which explains all of the EBITDA variation year-over-year. I would like to highlight our aggregates operations, which is now the largest contributor to U.S. profitability. Year-to-date, it accounts for 36% of EBITDA with margins in excess of 30%. Pricing for our three core products rose low single digits. We anticipate improved conditions in 2025, supported by underlying demand for infrastructure, improved activity in housing, and stabilization of the commercial sector. Only half of the IIJA funding has been allocated to date, and we expect affordability for the residential sector to gradually improve as rates adjust downwards. Finally, we are excited about our recent joint venture with couch aggregates, which will increase our distribution capabilities and eventually add to our aggregates reserves in the Mid-South market. We are pleased with EMEA's performance where we believe we are experiencing an important inflection point in our European business. EMEA EBITDA was stable year-over-year, and we believe we are seeing a recovery in the region. Europe is leading the turnaround with EBITDA growth on a reported basis and where, for the first time in nine quarters, we have seen volume growth. The improvement in volume is largely attributable to better economic activity, lower interest rates, the lifting of the construction ban related to the Paris Olympics, and an easier prior year comparison. The year-over-year variation in EBITDA improved significantly versus the prior three quarters. Prices for our three core products were stable across our European footprint, while most of our costs continued to decelerate, particularly in energy for cement production. On climate action, CEMEX Europe continues to test record levels of decarbonization with a 5% reduction year-to-date in CO2 per ton of cement, supported by clinker factor reduction of 1.7 percentage points. Finally, in the Middle East and Africa, EBITDA increased due to better pricing dynamics in Egypt and improved construction activity in Israel. As mentioned earlier, we have reclassified the Dominican Republic and Guatemalan operations as discontinued operations. Our SCAC operations experienced a challenging quarter in terms of volumes impacted by two hurricanes as well as the transportation strike in Colombia. These events impacted EBITDA by an estimated $7 million. EBITDA and EBITDA margin declined 27% and 5 percentage points, respectively, driven by lower volumes and higher maintenance. Despite the current demand environment, prices for our products rose between 3% and 10%. The formal sector continues driving demand with large infrastructure projects, such as the Bogota Metro, in which CEMEX was awarded approximately 80% of total volumes, and the fourth bridge over the canal in Panama. And now, I will pass the call to Maher to review our financial developments.

Thank you, Lucy, and good day to everyone. Sales and EBITDA for the first nine months of the year were down 1% and 2%, respectively versus last year. As mentioned earlier, we have faced volume headwinds due to adverse weather and weak demand dynamics in several of our markets. Despite this, our year-to-date EBITDA margin has shown remarkable resiliency and is virtually flat to last year at 19.4%. This performance is a consequence of our pricing strategy, which has outpaced inflation in our business, as well as cost containment and business optimization efforts. On the cost side, year-to-date, we saw a 23% decline in fuel cost on a per ton of cement basis. This was driven by lower fuel prices, the increased use of lower-cost and lower-carbon fuels, and our continued reduction in clinker factor. We have seen this cost trending down since the third quarter of 2023 and expect this to continue through year-end. Currently, close to 80% of our hedge-able energy and freight costs are either contractually fixed or hedged for 2024, while for 2025, we are close to a 60% level. Free cash flow after maintenance CapEx for the first nine months of the year was impacted by non-recurring items for $383 million, which includes a $306 million payment towards the $500 million Spanish tax line announced in the fourth quarter of 2023. Adjusting for these extraordinary payments, free cash flow year-to-date would be 23% lower than last year due primarily to lower EBITDA and fewer fixed asset sales. Working capital investment so far this year has been $415 million, and we remain on track to achieve our guidance of reducing working capital by about $300 million for the full year. Net income for the first nine months of the year was $891 million, 43% higher than last year, driven primarily by a lower effective tax rate and the gain from the sale of our operations in Guatemala in the third quarter. Given the volatility in the Mexican peso this year, I would like to highlight that we have an ongoing Mexican peso hedging strategy, fully covering our operating cash flow from our Mexican operations. That effectively lowers the volatility of the exchange rate at which we convert pesos into dollars for tenors of up to two years. The benefit of our peso hedging strategy and our consolidated net debt reached $185 million on a year-to-date basis and $95 million during the third quarter, including conversion gains on peso-denominated debt. This program helps smooth out our free cash flow in dollar terms. Our leverage ratio stood at 2.22x, about 1/10 of a return higher than the second quarter, driven primarily by lower EBITDA and the payment of the Spanish tax line. Our leverage ratio is expected to be substantially lower by the end of the year as we closed the sale of our $2 billion in remaining announced divestments. As we have stated before, these proceeds will be used mostly to fund our growth strategy going forward. And now back to you, Fernando.

We are adjusting our full year EBITDA guidance to a low single-digit percentage decrease. This primarily reflects the impact of weather in the third quarter as well as the current Mexican peso FX rate relative to our previous guidance. We remind you that our guidance is for like-to-like operations and assumes FX as of the end of the quarter for the remainder of the year. For total CapEx, we are reducing our guidance by $100 million to $1.5 billion. This guidance expects a significant ramp-up in spending in the fourth quarter, the pace of which is not completely in our control. For cash taxes, we are reducing our guidance by $100 million to $900 million to reflect the recent payment of the Spanish tax line. Please see the annex for our current volume guidance by region. It is a bit early for us to be talking about 2025, but I would like to share some of our thoughts on the upcoming year. We will, of course, give the usual guidance when we report fourth quarter results. We are seeing the evolution of some important macro trends and demand drivers for next year and beyond. Billions of dollars in fiscal stimulus remain to be deployed in the U.S. and Europe for infrastructure and climate action purposes. We also expect the nearshoring story to continue to unfold as global supply chains shift and consolidate. In 2024, we had a record year for global elections occurring in countries home to almost half of the world's population. As we enter 2025, with more visibility on the policy of the new administrations, we expect incremental spending from both the private and public sector. A decrease in interest rates across the globe should stimulate additional private sector investment in the residential and industrial space. All of this should be supportive of demand conditions for our products in the core markets in 2025. 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 prices for our products. And now, we will be happy to take your questions.

And the first question comes from Gordon Lee at BTG Pactual. Gordon?

I just wanted to drill down a little further on the volume shortfall for the quarter and particularly get a better understanding of how confident you are that the bulk of it or a significant portion of it at least was weather-driven, whether you see some normalization of that as the fourth quarter has now begun, and it looks like weather seems to have normalized in most places. And then maybe also explain to us how your backlog performed, particularly in Mexico and the U.S., in contrast to the volume performance that you saw during the quarter. Just to get a better sense of how confident you are in attributing a good part of that weakness to weather and not to something more structural or underlying on the demand front?

Great. Lucy, do you want to let me take Mexico and then follow with the U.S.?

Sure. Go right ahead here, Maher.

Gordon, just to remind everyone, Mexico experienced a 7% decline this quarter. We faced significant weather issues in both July and September, which played a crucial role. The impact extends beyond just the number of rainy days; it also includes preparations before and after the storms, affecting all our markets. For Mexico, we estimate that around 40% of the volume decrease contributing to that 7% drop was directly linked to weather conditions. The remainder is related to the slowdown following the elections. We've definitely seen a slowdown in infrastructure and particularly in the residential market, where the formal construction housing sector in Mexico is struggling due to the interest rate landscape. However, we anticipate improvements moving forward. Additionally, it's essential to note that when we compare to last year, the third quarter performance in all our markets was significantly better, which also influences our current figures due to base effect comparisons. Lucy, do you want to discuss the U.S. situation next?

Sure. It might be helpful to explain how we assess the weather impact, as our estimates tend to be quite conservative. Typically, we consider the days operations are halted and the resulting sales losses, along with any necessary repairs due to the hurricane and potential new imports to support supply afterward. However, we do not factor in the level of precipitation. When the ground is saturated, it delays contractors from starting work after a hurricane due to debris removal and other issues. Thus, our weather impact estimates are indeed quite conservative, which is important to keep in mind. Additionally, both in the U.S. and Mexico, when the weather was favorable, we actually saw average daily sales levels largely aligning with our expectations for the latter half of the year. Addressing your point regarding Mexico, we faced significant challenges in July and September, but August met our expectations, and this has also been true for October. In the U.S., the weather impact, based on our criteria, is somewhat greater than in Mexico, estimated at around 50%. We reported a 6% volume decline, with 3% attributed to hurricane-related factors. Unfortunately, we encountered three hurricanes during the quarter, and precipitation levels varied between 50% to 200% higher in different markets. Weather alone does not account for all volume changes, as we notice a year-over-year slowdown in residential activity and a gradual bottoming out in the commercial sector, although it has also been sluggish. We estimate about 50% of the volume changes are due to weather. Looking at October, it was challenging since a hurricane affected us in the second week, impacting our results. However, we have observed a recovery in average daily sales aligning with our expectations for the latter half of the year in the U.S. business.

That’s very helpful. Thank you very much.

Thanks, Gordon.

And the next question comes from Paco Chávez from BBVA. Paco?

Can you give additional color on Mexico's margin drop and the reason for higher electricity costs? And also, with demand decelerating in Mexico, how feasible it is for you to continue increasing cement prices in order to recover margins?

Thank you, Paco. The primary factor affecting our margin was the negative impact of electricity costs, which contributed about 1.8 percentage points to the decline this quarter. We also experienced a further impact of approximately one percentage point related to volume. Fortunately, this was somewhat offset by a significant increase in pricing, which positively contributed 3.2 percentage points to our margins due to our effective pricing strategy. The rise in electricity costs was mainly due to our shift to the wholesale market during the quarter for many of our plants. We reduced our reliance on electricity from TEG, our self-generating facility, and began purchasing from the spot market with CFE. This change resulted in a price differential of about 30% to 35% for the quarter, which is expected to continue into the fourth quarter. However, we anticipate this will diminish as we transition more plants to the wholesale market at the beginning of next year. We will also start buying electricity under a contract from TEG in the wholesale market at a significantly lower cost compared to CFE, likely around 30% lower. Throughout the year, we should be able to recover much of the increase in electricity costs that we experienced this quarter. I'm not sure if that fully addresses your question. Was there a follow-up that I missed?

On the pricing?

Yes. Regarding pricing, go ahead, Lucy.

No, I was just going to say that as Maher said, pricing was quite strong on a year-over-year basis. We were up about 3%, I think, year-over-year. That was covering our fixed and variable cost increases, and fixed costs are up because of the volume decline as well in margin terms. Importantly, we did announce a pricing increase. In fact, our competitors in Mexico actually first led with the pricing increase, and we did follow in early October on bag cement with a 5% increase.

Great. Thanks so much.

And the next question comes from Anne Milne from Bank of America.

My question has to do with the comment on the larger contribution of the aggregates business in the U.S. Is this something that you are expecting will continue going forward? Is it possible to see something similar in any of CEMEX's other countries or regions?

The aggregates business in the U.S. is very significant, making up over one-third of our EBITDA, approximately 36% to 37%. It is highly profitable, and we are prioritizing it for future capital allocation. Given regulatory constraints and growth prospects in the U.S. construction market, we find this sector quite appealing. The pricing environment has been favorable for an extended period. We are committed to focusing on this area and also see potential for capital allocation in Mexico in the long term. Additionally, we will explore opportunities in other developed markets where the supply-demand dynamics and pricing strategies for aggregates appear positive. Consequently, this sector is a high priority for our future capital investments, and we anticipate maintaining strong pricing capabilities in the market.

And the next question comes from Adrian Huerta from JPMorgan. Adrian?

My question has to do with the capital allocation. First, on the $3 billion that were mentioned on the pipeline that is expected to add $700 million on EBITDA by 2028. How much of this has been invested? And if this is part of the growth CapEx? And then on the proceeds from the asset sales, what percentage of that could end up being allocated towards reducing debt and why not being more active on buybacks?

Yes. I don't think I got the first part of the question, Adrian. Could you mention again, please?

Sure, Maher. You mentioned a $3 billion investment pipeline and that some of this has already been executed, which is expected to contribute $700 million to EBITDA by 2028.

Yes. So far, about one-third of that has been invested, around $1.1 billion. It's contributing over 11% to 12% of EBITDA. The multiples we have been investing in have been quite attractive, typically between 3x and 4x, as we are focusing on bolt-on acquisitions and margin enhancement investments. The remaining $2 billion is expected to be invested over the next couple of years, with an anticipated increase in the total contribution to around $700 million of EBITDA. We plan to maintain this investment strategy primarily in the U.S. market, focusing on aggregates and urbanization solutions, which have been significant contributors to our EBITDA. We are also targeting specific investments in cement and decarbonization efforts. These transactions are projected to have IRRs exceeding 30% and average payback periods of three to four years, and we have already achieved that to some extent. We remain committed to reducing leverage, aiming for around 1.5x over the next two years, with some capital allocated for this purpose. Additionally, we are focused on increasing shareholder returns through sustainable dividends and eventually share buybacks. Regarding share buybacks, we believe we are currently trading at a low multiple, presenting an attractive opportunity for repurchases. However, we think the current multiples are being adversely affected by political uncertainties in Mexico and the U.S. market, which is causing volatility in our stock price. We view this as a short-term issue. Strategically, we have numerous capital investment opportunities that could provide accretive returns over the next 24 months, though we will also consider buybacks if it makes sense. We believe these investments will drive long-term EBITDA growth and provide valuable market positions with first-mover advantages. Our focus is on medium-term impacts, rather than short-term tactics, given the current valuation of our stock.

And the next question comes from the webcast from Paul Roger from Exane BNP Paribas.

Guidance is still for high single-digit decline in energy costs despite Q3 issues in Mexico. Does this suggest energy is going down by more than expected elsewhere? How hedged is the group into 2025?

Yes, thank you for the question. The answer is yes. While we saw an increase in electricity costs due to the transition to the wholesale market in Mexico, we expect this to reverse in 2025. There has been a decline in energy prices in many of our markets, including fuels and electricity. This is one of the reasons we believe that for the full year, our guidance will reflect a decrease in energy costs. For example, in the U.S., we experienced a drop in electricity costs as well as in several European markets. The costs of fuels are also decreasing and we anticipate this trend to continue into the third quarter. The use of expensive alternative fuels is significantly reducing, leading to better overall performance for the year and enabling us to maintain our guidance regarding energy. Regarding our hedging strategy, we are protected against a potential 15% increase in diesel prices going into 2025. For pet coke, we are hedged by about 10%. In terms of electricity, 76% of our needs are fixed for next year, either through regulation or fixed contracts. We have been very proactive in managing our energy strategy to capitalize on the favorable levels we've observed this year as we move into next year.

And Maher, I believe that maybe diesel is almost 100% hedged actually for 2025, if I'm not mistaken.

Yes. Yes.

Okay, great. And the next question comes from Adam Thalhimer from Thompson Davis.

So, like you, I am surprised at the valuation, it's frustrating. I'm curious if you've looked at any other strategies to address that such as the primary U.S. listing?

Yes. I would hate to speculate, Adam, because obviously, we're always looking at ways to maximize shareholder value. Anything along the lines that you're suggesting is a major operation. It has its positives and negatives. It takes time to execute. We need to evaluate the ramifications on other things. At the end of the day, we are optimizing shareholder value at the CX level foremost, I would say. I think I would prefer not to speculate on this. What I can tell you is that we're constantly evaluating different strategies and seeing how we can deliver the most efficient way of shining the light on the valuation of the Company. But I really would prefer not to speculate on whether we're looking at a particular strategy versus another at this point in time.

The next question comes from Carlos Peyrelongue from Bank of America. Carlos?

Thank you, Lucy. My question has already been answered.

I think we have time for one more question, and the last question comes from Jorel Guilloty from Goldman Sachs. Jorel, sorry if I mispronounce your name.

I just wanted to touch upon something that was mentioned earlier, that the current Mexican president announced proposals for the 1 million homes in Mexico. I was wondering, considering that more than half of your residential demand is from the informal sector. I just wanted to understand how these proposals could impact your overall residential demand and how quickly do you think we can see this flow through? That will be my question.

Lucy I...

I'll start, but please feel free to jump in. You're absolutely right. Claudia Sheinbaum recently announced that she intends to build 1 million homes during her administration. Obviously, that's over a six-year period, but she did say that 167,000 of these homes were expected to be built during 2025. So, we certainly think that this should have a positive impact going into next year. If you look at formal construction, it's coming from the residential sector, it's roughly about 30% of our volumes. So, I think that for that 30%, that obviously is a plus and something we'll be considering as we look towards next year and beyond in terms of growth. In addition, she's had some important announcements as well in terms of onshoring investments, with over $20 million announced in onshoring as well in the last two weeks. Also, continued focus on her 10 development corridors, which would provide the infrastructure necessary for continued onshoring. So, all in all, I think we're very pleased with the announcements to date. We obviously have to see these come to fruition, and I think 2025 would be the starting point to see that impacting our volumes.

Thank you very much.

We appreciate you joining us today for our third quarter results call, and we hope you'll join us again for our fourth quarter 2024 webcast on February 6, 2025. If you have any additional questions, please feel free to reach out to the Investor Relations team. Many thanks.

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