Good morning. Welcome to the CEMEX Third Quarter 2025 Conference Call and Webcast. My name is Becky, and I will be your operator for today. Now, I will turn the conference over to Lucy Rodriguez, Chief Communications Officer. Please proceed.

Good morning and thank you for joining us for our third quarter 2025 conference call and webcast. We hope this call finds you well. I'm joined today by Jaime Dominguez, our CEO; and by Maher Al-Haffar, our CFO. We will start our call with an update on the progress made so far on our strategic plan, followed by a review of our business and the outlook for the remainder of the year. And then we will be happy to take your questions. Please note that although the sale of our business in Panama was successfully completed on October 6, these operations were reclassified as discontinued as of the end of the third quarter and have been excluded from our results for both 2025 and 2024. As communicated previously, we retained our admixtures business in Panama, which we will continue to operate. In the case of Couch Aggregates, after increasing our holdings to a majority stake, we are fully consolidating these assets and their results in our U.S. business effective September 1. And now I will hand the call over to Jaime.

Thanks, Lucy, and good day to everyone. Six months ago, I outlined our vision for CEMEX with two core objectives: attaining best-in-class operational excellence and delivering industry-leading shareholder returns. I also presented our strategic framework and the guiding principles to drive our company's transformation. These levers aim to enhance profitability, increase free cash flow conversion, improve asset efficiency and generate returns that comfortably exceed our cost of capital. Since then, we have worked relentlessly bringing together and aligning our entire organization with these principles. This has required sustained commitment and a willingness to embrace change at all levels. By engaging our teams and fostering a shared vision, we are ensuring that everyone at CEMEX is dedicated and empowered to deliver on our strategic plan. Today, I am pleased to share with you that while we still have much work to do, we are making important progress on our key priorities. As anticipated in our full year guidance, which assumed a significant year-over-year recovery in the second half, we're now seeing improved performance in the third quarter. Consolidated EBITDA rose sharply, increasing at a double-digit rate with solid growth across our portfolio. Substantive margin gains in every region were largely driven by cost savings under Project Cutting Edge and higher prices. In the quarter, we made significant headway in the implementation of Project Cutting Edge with the realization of approximately $90 million in EBITDA savings. This keeps us on track to reach our 2025 full year goal of $200 million in savings. We continued executing on our portfolio rebalancing and growth strategy by divesting our operations in Panama while investing in targeted businesses in the U.S. with the consolidation of Couch Aggregates, strengthening our position in the Southeast. Our operations in Europe remain at the forefront of our decarbonization agenda and point to our climate leadership with net CO2 emissions on a per ton of cement equivalent basis ahead of the European Cement Association's 2030 target. All of these achievements serve as important stepping stones, strengthening our resolve to continue working towards our long-term goals. Third quarter results surpassed our recovery expectations for the back half of the year. Consolidated net sales are growing for the first time since the first quarter 2024 on the back of a stable volume backdrop and higher prices. Demand conditions in Mexico, while still soft, are showing signs of improvement, and Europe continues with its volume growth trend. The increase in consolidated EBITDA was supported by all regions with EMEA, Mexico and South Central America and the Caribbean region recording double-digit growth. EBITDA margin expanded by 2.5 percentage points, reaching its highest level for a third quarter since 2020. The U.S. and Europe reached record third quarter margins, while Mexico and our South, Central America and the Caribbean region posted multiyear margin highs. Net income performance in the quarter was largely explained by the prior year one-off gain from asset divestments. Adjusting for discontinued operations, net income is growing by 8% in the quarter and by 3% year-to-date. Free cash flow from operations benefited from higher EBITDA, lower interest costs and cash taxes. Importantly, the free cash flow from operations conversion rate, a key operating metric for our strategic plan, reached 41% on a trailing 12-month basis despite severance payments of $135 million. I expect free cash flow generation and the conversion rate to continue improving as we make additional progress on our strategic priorities. Consolidated volumes in the quarter were stable with growth in EMEA compensating for dynamics in other markets. While demand conditions are still soft in Mexico, we saw the first signs of improvement in the quarter. In the U.S., while year-over-year volume performance improved versus the first half of the year, we attribute this change primarily to an easier prior year comparison base. We are pleased with the positive trend in our operations in Europe. Cement volume growth was driven by higher activity throughout Eastern Europe and Spain with relatively stable performance in Germany and the U.K. Overall, while we have faced challenging volume conditions in two key markets this year, we remain optimistic on fundamentals going forward. With our renewed focus on operational efficiency, we're well positioned to capitalize on the strong operating leverage in our business once volumes improve. Consolidated prices were stable on a sequential basis, reflecting the customary annual first half price increases that generally prevail in our industry. On a year-over-year basis, consolidated prices are up low single digits, in line with our pricing strategy for at least covering input cost inflation. In Mexico, despite the volume backdrop, prices remain resilient with cement, ready-mix and aggregates prices increasing by a mid-single-digit rate since December. In the U.S., adjusting for product mix, aggregate prices are up 5% since the beginning of the year. In EMEA, rising cement prices in the Middle East and Africa more than offset performance in Europe. EBITDA growth was largely driven by our self-help measures and higher prices. Costs across the various categories declined by close to $80 million, accounting for approximately two-thirds of the like-to-like increase in EBITDA. Consolidated margin expanded by 2.5 percentage points with all of our regions as well as our three core products recording relevant margin gains. After a year of FX headwinds, we're benefiting this quarter from stronger currencies versus the dollar. In our Urbanization Solutions portfolio, better results in admixtures are partially compensating for still challenging conditions in other businesses. Going forward, our Urbanization Solutions business will primarily focus on admixtures, mortars and concrete products, which we believe offer strong synergies with our traditional core business as well as high margins. Under Project Cutting Edge, we have committed to an annualized recurring EBITDA savings of $400 million by 2027, with half related to overhead reduction. Importantly, with most of the actions required to achieve the overhead savings already done, we anticipate this effort to deliver about $75 million in the second half of 2025 and $125 million in 2026. We achieved about 40% of the 2025 overhead savings in the third quarter. We're also making progress on the implementation of the operating initiatives, including fuel efficiency, optimization of fuel mix, improvements in logistics and supply chain, among others. As a result of these efforts, both cost of goods sold and operating expenses as a percentage of sales are declining throughout all regions, leading to an expansion in EBITDA margin. With total EBITDA savings captured in the third quarter of $90 million, we remain on track to reach our full year 2025 target of $200 million. As we go into 2026, we expect additional progress on Project Cutting Edge to further support margins. Complementing Project Cutting Edge, our ongoing business performance reviews should provide more visible improvements in EBITDA, profitability and free cash flow during 2026 and beyond. I am confident that by working with a clear focus on our key priorities of operational excellence, free cash flow conversion and return on capital, we will continue to identify opportunities to further optimize our operations. We're also advancing on our portfolio rebalancing efforts, creating shareholder value through disciplined capital allocation. As our growth strategy shifts towards prioritizing small to midsized acquisitions, we will reallocate capital to opportunities that are immediately accretive. We will continue seeking potential divestments in non-core markets to strengthen our position in the U.S. with a clear focus on aggregates and building solutions such as admixtures and mortars, which strongly complement our cement and ready-mix businesses. Allow me to emphasize that we will be disciplined when evaluating potential growth opportunities, following our return criteria and protecting our investment-grade capital structure. A clear example of this value creation approach is the recently announced transactions in Panama and Couch Aggregates in the U.S. We completed the divestment of our operations in Panama at an attractive multiple of about 12x. At the same time, we allocated part of the proceeds to acquire a majority stake in Couch Aggregates, a leading player in the aggregates materials industry across the Southeastern U.S. with an implied valuation of a high single-digit multiple after synergies. We expect that in the short term, this investment will offset the loss of EBITDA from the sale of our operations in Panama. This transaction is strengthening our aggregates footprint in the U.S., providing significant synergies and allowing us to better serve customers with a more complete offering. I am highly encouraged by our achievements in the quarter, which confirm that we're moving in the right direction, setting a strong foundation to position CEMEX as a more focused, agile and high-performing company. And now back to you, Lucy.

Thank you, Jaime. We are encouraged by our third quarter performance in Mexico. EBITDA grew 11%, marking the expected inflection point in quarterly performance underlying our annual guidance. A leaner cost base and higher prices drove this double-digit growth despite lower volumes. After a challenging first half, volume trends suggest an improvement in demand conditions. Average daily cement sales volume outperformed historical sequential seasonality patterns in the quarter despite heavy rains in August and September. In bagged cement, we benefited from a gradual rollout in rural road projects as well as other social programs. While demand in the formal sector remains soft, there are promising signs of recovery in the near term. In infrastructure, contracted volumes in our ready-mix backlog have increased in each of the last four months with several rail projects expected to commence construction soon. We are seeing incremental activity in projects related to the 2026 World Cup in Mexico City, Monterrey and Guadalajara with investments in roads, metro lines, airport terminals, stadium renovations and hotels. The social housing program, which was recently expanded to a goal of 1.8 million units during the administration's six-year term is accelerating. We are already participating in the construction phase of several projects, which represent about 26,000 units with a similar amount in the planning phase. Prices for cement continued their positive trajectory with a sequential increase of 1%. Over the first nine months of the year, cement, ready-mix and aggregate prices are up by mid-single digits, working to offset input cost inflation. We recently announced a mid-single-digit price increase in bagged cement. Project Cutting Edge initiatives are already delivering relevant operational improvements, reflected in the 5 percentage points of margin expansion in the quarter. We believe we have additional opportunities to further drive margins in 2026. Importantly, the 33.1% EBITDA margin achieved in the quarter was the highest level for our Mexican business since 2021. Going forward into 2026, as the government enters its second year in office, we expect to see the customary pickup in infrastructure spending as well as potential benefits from the upcoming renegotiation of the USMCA trade agreement. As demand conditions improve, operating leverage should continue supporting profitability in Mexico. Our operations in the U.S. reached a record third quarter EBITDA and EBITDA margin, driven by increased cost efficiencies and higher prices. While year-over-year volume performance improved in the third quarter, this was largely due to an easy comparison base resulting from adverse weather conditions in the prior year. Adjusting for ready-mix asset sales and the consolidation of Couch Aggregates volumes for our three core products declined by 1%. Demand continues to reflect strength in infrastructure, offset by persistent softness in the residential sector. With three consecutive years of volume declines, we have seen increased competitive pressure in select markets within our footprint, explaining the slight decline in sequential cement prices. In aggregates, we continue to experience robust pricing with prices adjusting for product mix, rising 5% since December. Our efforts to improve cement kiln efficiency continue to pay off in the U.S. with domestic production replacing lower-margin imports leading to relevant EBITDA gains. In our aggregates business, which is responsible for about 40% of EBITDA within the U.S., we continue to focus on initiatives to make our operations more efficient as well as expand our production. The recent upgrade of our Balcones quarry in Texas, one of the largest quarries in the United States, is optimizing our cost structure and contributing to higher margin. The recent consolidation of Couch Aggregates, along with other expansion projects in Florida and Arizona are expected to increase our aggregate production capacity by about 10% in 2026. Going forward, we expect infrastructure to continue driving demand as IIJA transportation projects continue to roll out. About 50% of funds under IIJA have been spent with peak spending levels expected during 2026. We remain optimistic about the outlook for the industrial and commercial sector, which continues gaining momentum with healthcare projects, data centers and chip manufacturing facilities being planned in our markets as well as relevant works in Cape Canaveral. While there is continued weakness in single-family residential, we see strong potential over the medium term as mortgage rates decline and market sentiment improves. It is important to highlight that as in the case of Mexico, operational leverage should result in additional benefits once volumes recover. Our EMEA region continued with its strong performance, reaching new records in EBITDA and margins in both Europe and the Middle East and Africa. In Europe, high single-digit growth in cement volumes was mostly driven by infrastructure throughout Eastern Europe, with housing activity also boosting demand in Spain. In the U.K. and Germany, volumes are stabilizing. Infrastructure activity driven by EU funding, along with a gradual recovery of residential, should continue supporting construction in the region. In the Middle East and Africa, ready-mix and aggregate volumes expanded by 13% and 1%, respectively. The slight decline in cement volumes is explained by a temporary regulatory impact in Egypt with demand already improving on strong market fundamentals. Higher cement prices in the Middle East and Africa more than offset dynamics in Europe. While price performance in Europe is largely explained by geographic mix, we have also faced some limited competitive pressure in specific markets. For the full EMEA region, cement, ready-mix and aggregate prices are up low single digits since year-end. Our European operations remain at the forefront of our decarbonization efforts, having already surpassed the European Cement Association's 2030 consolidated net CO2 emissions target, further reinforcing our position as an industry leader. The implementation of the carbon border adjustment mechanism in 2026, along with the gradual phaseout of the free EU ETS allowances should be supportive of cement prices next year and beyond. We remain optimistic on the outlook for the region with a continued positive trend in infrastructure and further recovery in residential. Our South Central America and the Caribbean region posted impressive results with EBITDA rising by 54% and margin expanding by 6.8 percentage points. This strong performance was driven by several factors: the completion of the debottlenecking project in Jamaica, allowing us to substitute low-margin imports with domestically produced cement, benefits from savings realized under Project Cutting Edge, improved demand conditions in both Colombia and Jamaica and a more favorable prior year comparison base. In Colombia, demand is being driven by the informal sector with a rebound in bagged cement volumes and the metro project in Bogota. In Jamaica, we are seeing tourism-related developments along with improved bagged cement sales supported by remittances. Sequential prices for cement and ready-mix in the region are broadly stable with variation explained by regional mix. We remain optimistic on the medium-term outlook for the region, where improved consumer sentiment and formal construction are expected to drive demand. And now I will pass the call to Maher to review our financial development.

Thank you, Lucy, and good day to everyone. We are very pleased with our performance in the quarter. On the back of single-digit growth in our top line, we delivered 19% growth in EBITDA. Free cash flow from operations was close to $540 million, an improvement of more than $350 million versus the third quarter of last year. The year-over-year growth was driven by the initial effects of our cost-cutting efforts, lower maintenance CapEx, interest expense and taxes. Adjusting for extraordinary items such as the payment of the Spanish tax fine in 2024, discontinued operations and severance payments, this year, free cash flow for the quarter grew 29% to approximately $600 million. In line with our normal seasonality, we saw a divestment of more than $130 million for working capital during the third quarter, and we expect this favorable trend to continue in the fourth quarter. Our year-to-date average working capital days stood at negative 10 days, an improvement of 5 days versus the same period last year. Our free cash flow conversion rate reached 41% for the trailing 12 months ending in September versus 35% for the full year 2024. As mentioned earlier, we are seeing the initial benefits from our efforts to optimize our cost base under Project Cutting Edge. During the third quarter, cost of goods sold as a percentage of sales was 71 basis points lower year-over-year, while operating expenses as a percentage of sales were 164 basis points lower. Energy cost on a per ton of cement basis declined by 14% in the first nine months, driven by lower fuel and power prices and a continued improvement in clinker factor and thermal efficiency. Record net income of $1.3 billion for the first nine months of the year was driven primarily by the sale of our operations in the Dominican Republic, a favorable FX effect and lower financial expenses. Our leverage ratio under our bank debt agreements stood at 1.88x in September, moderately higher than at the end of last year. We expect our leverage ratio to end 2025 below last year's level. We have fine-tuned our full year guidance for working capital and now expect a range of $0 to $50 million in incremental investment compared to the prior year. In the case of cash taxes, we now anticipate $350 million in 2025, which is $100 million lower compared to our previous guidance. And now back to you, Jaime.

Thank you, Maher. In light of our year-to-date results and reflecting the progress achieved in Project Cutting Edge, we are maintaining our full year EBITDA guidance unchanged, expecting a flat performance versus 2024 with potential upside. Based on more visibility, we have made some small adjustments to elements in our free cash flow spend guidance that should positively impact 2025 free cash flow generation. We remain focused on the implementation of our strategic plan, delivering EBITDA savings under Project Cutting Edge, higher free cash flow conversion rate and returns above cost of capital. We will keep you updated as we continue making progress towards these objectives. And now back to you, Lucy.

Before we begin our Q&A session, I want to remind you that any forward-looking statements made today are based on our current understanding of the markets we operate in and may change in the future due to various factors. Also, unless otherwise indicated, all mentions of pricing initiatives, price increases, or decreases pertain to our product prices. We are now ready to take your questions.

First question comes from Carlos Peyrelongue from Bank of America.

Congratulations, Jaime, Maher and Lucy, on the strong results. My question is related to cash conversion. It improved materially in the last 12 months. What should we expect for next year and 2027 besides the cost-cutting that you mentioned as part of Cutting Edge, what else could drive higher cash conversion in the next two years?

In 2026, I'm targeting around 45% free cash flow conversion from operations, and you do expect further improvement beyond 2026. We should be targeting around 50% free cash flow conversion from operations. What is driving and will drive this improved performance is basically a reduction in strategic CapEx and an optimization in platform CapEx. We will continue reducing interest expenses for the most part. So that's how we're going to do it, and I feel pretty comfortable about 2026 45% free cash flow conversion.

The next question comes from Adrian Huerta from JPMorgan.

Congratulations on the results. You briefly addressed my question about Mexico, particularly for 2026. You mentioned the increase in backlogs over the past four months regarding infrastructure. We've noticed various actions occurring that haven't been publicized on the infrastructure front. In previous presidential transitions, we observed recovery in volumes of 30% to 50% from the losses of the prior year. This year, it appears that volumes are expected to decline by a high single-digit percentage. Based on what you're currently observing, can we anticipate recovering at least half of the volumes lost this year? Additionally, could you provide more insights into what you're seeing that gives you confidence in this?

Thank you for your question, Adrian. I believe it’s reasonable to say that demand volumes in Mexico next year are expected to grow by at least 2.5% to 3%. When demand volumes increase, especially driven by infrastructure, CEMEX is well-positioned to benefit due to our strong technical and operational capabilities for complex infrastructure projects, including highways and rail. We anticipate potentially gaining about 1 percentage point in market share in the infrastructure sector as it improves, which is typically what we lose during downturns. We are optimistic about this development for next year, particularly due to infrastructure initiatives. Currently, we are working on various projects like Escolleras, Dos Bocas, the cargo terminal in Quintana Roo, Camino Real, and La Primavera in Sinaloa, among others. We view the outlook for Mexico positively for the coming year, predicting demand growth of at least 2.5%, close to 3%. Additionally, the social housing initiatives are gaining momentum, and our partners and customers are increasingly enthusiastic about these projects. I also believe that if interest rates in Mexico continue to decrease, it will support a robust formal housing market, which has performed surprisingly well this year. I hope that addresses your question, Adrian.

Thanks, Adrian. And if I could just complement, we, of course, will continue fine-tuning our thoughts on next year, and we'll give guidance on Mexican volumes in early February, but we are quite positive.

The next question comes from Francisco Suarez from Scotiabank.

Congrats on the wonderful execution, exciting times for sure. My question relates with the massive EBITDA margin expansion in Mexico in the quarter. Can you give us a little bit of color on the breakdown roughly of the 500 basis improvements between, say, Project Cutting Edge, how much of that was also driven by lower pet coke prices? How much was by thermal substitution, perhaps prices or any other thing that you can give us a little bit more color?

Francisco, thanks for your question. Well, yes, we had a solid 5-percentage-point expansion. It explains basically around the following: #1, prices close to 4-percentage points. Then very pleased with our SG&A and corporate reductions that contributed with around 0.8-percentage-point improvement. Variable cost, 0.9-percentage-point; fixed cost around 0.3-percentage-point. When you look at variable cost, energy continues to be a tailwind, both electricity, although there, I must acknowledge that last year, we had a one-off, but still, it's a tailwind as we take advantage of the wholesale electricity market, right? And then a positive contribution of fuels, around 1.1-percentage-point. So that was also encouraging with a minus 18% decrease in unitary fuel cost. So I hope that I answered your question.

So that creates a wonderful foundation for further improvements in 2026 on your operating year-end, isn't it?

Well, in Mexico, particularly, we're targeting to be the most efficient operator in the country. We've done extensive benchmark with others, although we have a different business model Francisco, mainly in retailing, but we are seeking to be best-in-class in margins in Mexico.

Thanks, Paco. And to your point, Mexico is the region that probably has contributed the most to date in terms of Project Cutting Edge, and we do believe that next year a lot of that will continue.

The next question comes from Anna Schumacher from BNP Paribas.

Is the industry deprioritizing CCUS? I appreciate CEMEX has always taken a pragmatic approach. Could your schemes like Rudersdorf be delayed? And how will you decide?

Thank you for your question. You are inquiring about whether the industry is deprioritizing CCUS, among other things. I can't speak on behalf of the entire industry, but I can provide some insight into our perspective at CEMEX. We have consistently prioritized traditional methods for decarbonization, and we are making good progress in that area. We see ample opportunity to continue utilizing traditional methods, especially with a significant reduction in clinker factor, improving energy efficiency, and increasing the use of alternative fuels with biomass outside of Europe. CCUS remains an important tool for us in the medium term, and we plan to implement CCS projects if they contribute positively to value creation. For this to occur, we require substantial subsidies for both capital and operational expenses, as well as a green premium. We are enthusiastic about potential bilateral agreements with some offtakers under the book-and-claim scheme that we are working on. While I acknowledge that CCUS is crucial for achieving net zero, we will not pursue CCS projects that compromise value. Further regulatory work is necessary, and we will refrain from implementing CCS in assets that we do not plan to operate in the long run. Currently, we are assessing our asset footprint, especially in Europe, as we see opportunities to optimize our assets. Some of our kilns may be converted to produce calcium clays, and we are employing micronization technologies to decrease the clinker factor and introduce new blends. Our primary focus for decarbonization remains in Europe, followed by California. In other regions where we are profitable and enhance shareholder returns, we will continue our decarbonization efforts, as it remains a top priority. Thank you, Anna, for your question.

The next question comes from Yassine Touahri from On Field.

Congratulations on the excellent results. I would like to ask about the pricing for next year. Have you sent a letter to your clients in the U.S. and Europe regarding the price increase for 2026? It would be helpful if you could provide an estimate of the expected price increase in those regions. Additionally, I noticed that prices in the U.S. and Europe were somewhat subdued in 2025. Can we anticipate a change in that trend next year?

Thank you for your question. We haven't sent our price increase letters to customers yet, but we're working on it. I want to share our perspective. Across all our markets, our pricing strategy should more than cover input cost inflation. We are particularly optimistic about Europe because next year, with the introduction of the CBAM, importers may face additional costs of EUR 5 to EUR 10 per ton. In CEMEX’s case, we have a significant advantage in Europe due to our lower CO2 footprint related to clinker and cement. We understand that local producers lack sufficient CO2 surpluses and will have to buy CO2 credits at prices around EUR 75 to EUR 77 per tonne. Moreover, we need to factor in CBAM costs for imports since competitors from Turkey, Algeria, and others have higher CO2 footprints compared to European standards. The European Union is expected to publish a new benchmark next year, which could be around 650 kilos per tonne of clinker. This means we will face the CBAM, and if producers calculate costs as I do regarding CO2, there could be favorable pricing conditions in Europe. I’m currently reviewing market conditions on a macro level and feel positive about it. In the U.S., unlike in 2025 and 2026, we will aim for price increases to compensate for input cost inflation and recover lost opportunities from 2025. Additionally, new tariffs and potential price increases for FOB cement and clinker from the Med Basin could benefit the Gulf Coast and Eastern coastal U.S. markets. I hope this addresses your question.

And the next question comes from Ben Theurer from Barclays.

Jaime, congrats on the great execution here once again. I wanted to follow up real quick on the performance in the U.S., particularly as it relates to volume. Clearly, you've highlighted it was still down across all segments. But I wanted to understand if you're seeing any regional differences in the performance. And if you could maybe dig a little bit deeper into the subcategories, residential versus industrial, commercial and infrastructure as it relates to the U.S. volume specifically.

Thank you for your question. Currently, focusing on the third quarter, we have observed weaker volumes in Florida, California, and Arizona, but this has been somewhat offset by growth in Texas, Colorado, and the Mid-South. The outlook suggests that we still see strong infrastructure, and nothing indicates that these dynamics will change next year. In fact, based on the information Lucy provided about the infrastructure bill and the peak in investment expected in 2026, we continue to see activity in data centers, chip factories, and some significant commercial projects. However, the single-family home sector remains weak, and I don't foresee a recovery there next year. Mortgage rates are currently around 6.3%, and I expect them to remain around 6% for a while. It's crucial for potential homebuyers to recognize that mortgage rates might not decrease significantly anytime soon, which could affect their decisions to purchase homes. I believe recovery in the residential market may not occur until 2027, while I anticipate U.S. demand to grow next year at a low single-digit rate.

The next question comes from Alejandra Obregon from Morgan Stanley. Can you elaborate on the evolution of your optimization plans and yield improvement initiatives at Balcones in Texas? And how can these translate into profitability improvements in Texas as you substitute imports with domestic production? Is there room for similar improvements in any other plant in the U.S.?

Thank you for your question, Alejandra. I would like to share what we are doing at Balcones. We are implementing artificial intelligence to assist operators in managing our raw mills, kilns, and cement mills automatically, allowing AI to make real-time decisions regarding operating parameters. We have observed yield increases in the high single digits to low teens. Essentially, the AI processes reliable data much quicker to adjust parameters that would typically take a human days to alter, especially in terms of chemistry adjustments for the quality of raw materials. This is quite encouraging. We also see significant opportunities to apply this technology across all our cement plants in the U.S., as each has potential for yield enhancements. This year, we have achieved a notable rise, resulting in an increase in cement production exceeding 500,000 short tons, which is enhancing our margins by replacing imports and operating in a more stable environment, thereby improving energy efficiency. We anticipate further developments. Our goal is to obtain an additional one million short tons from our existing asset base, and this technology is expected to facilitate that. You can foresee additional improvements in cement margins in the U.S. moving ahead, potentially increasing by 2 to 3 percentage points in the midterm. Thank you for your question, Alejandra.

The next question comes from Gordon Lee from BTG Pactual.

Congratulations on the results. Just a quick question, Jaime, and you addressed this a little bit in your opening remarks, but I was wondering if you could speak a little bit more about the Urbanization Solutions business and specifically, the decline that we've seen year-to-date in revenue and EBITDA, is that a function of the completion of projects? Or should we interpret that as a strategic deemphasizing of its relevance within CEMEX or maybe also as a product of the implementation of Cutting Edge?

Thank you for your question, Gordon. The decline in sales and EBITDA is not related to the completion of projects. The main reasons for the drop in sales and EBITDA are twofold: weakness in residential concrete block sales in Florida and lower infrastructure activity in Mexico related to our concrete paving solutions. These areas are central to our operations due to their synergy with raw materials, cement, admixtures, aggregates, and distribution, as well as sharing a similar customer base. Regarding the idea of deemphasizing certain aspects, we are currently reviewing the Urbanization Solutions umbrella. Some businesses may not remain under this category, especially those where most of our transactions are internal. For example, the New Line Transport business in Florida predominantly engages in internal transactions, and while we do sell to third-party shippers, we do not plan to expand that business. Therefore, any business we do not intend to grow will not be included in Urbanization Solutions. We are enthusiastic about the admixtures sector and will continue our efforts there, as it is a solid business. Next year, we will start to share more detailed information about each vertical. I'm particularly excited about mortars, stuccos, and renders due to their synergy and our familiarity with them. Additionally, we see potential in recycling concrete, aggregates, and construction demolition waste, focusing on micromarkets, along with concrete products like sleepers, blocks, and infrastructure, which I view as areas with significant growth opportunities. I hope this answers your question, Gordon.

The next question comes from Anne Milne from Bank of America.

My question is about the debt profile. You have large maturities coming up next year, primarily in the debt market. Can you share your thoughts on that? Your average debt life is 3.7 years, and the yields on your bonds are quite attractive. The spreads on your 31 bonds are around 20% to 25% over Mexico, and about 100 basis points over U.S. treasuries. Are you considering extending your debt from this point? Also, I see that your net debt is around $5 billion, and you have leverage at 1.88. I understand CEMEX may be looking into some potential acquisitions. Do you have a target range for leverage moving forward? This all relates to your debt profile.

So I will pass the word to Maher to answer the first part of the question. So Maher, you'll take that. I just want to tell you about the leverage. Look, I'm more comfortable using the fully loaded leverage. I don't think that bank leverage has any meaning going forward. And the range I want to set up is between 1.5x to 2x, fully loaded. Back to you, Maher, you may answer the question.

Thank you, Jaime. And thank you, Anne, for the question. We are completely aligned and believe that from the perspective of rating agencies and the debt markets, using the fully loaded leverage ratio is a more sensible approach. Regarding the balance between maintaining investment grade status and potentially accepting slightly higher leverage, we feel very confident in this strategy, especially as our EBITDA improves over the next 12 to 24 months and beyond. We believe this, in conjunction with our cash on hand from recent portfolio rebalancing, will provide us with sufficient M&A capacity without jeopardizing our ratings, and may even enhance our ratings towards strong BBB metrics. We have no concerns about conflicting forces in this area. As for maturities, we agree with you. We appreciate the current yields, and naturally, we prefer them to be lower, ideally aligning closer to our peers, who tend to have yields that are about 15% to 20% lower than ours. We are actively considering extending maturities. I want to emphasize that if we factor in the two subordinated notes we possess, which total $2 billion, and assume a hypothetical 10-year tenor from their issuance date, our average life would approach five years. That said, the long end of the market is quite appealing, which encourages us to think about extending maturities. Of course, we continuously weigh the cost of debt against the tenor, but the positive market conditions suggest that this is an option we should explore next year. As you are aware, some maturities are approaching, including the term loan facility and a EUR 400 million bond due next March. This provides us significant flexibility in managing our liabilities and the chance to capitalize on these opportunities. Additionally, one of the subordinated notes will reset next year, and the 5.125 note will reset by a considerable margin, which again presents us with further potential actions. Thank you, and I hope that answers your question.

Yes. I just have one clarification. When both you and Jaime mentioned fully loaded debt, are you talking about financial debt and leases or something in addition to that as well?

No, we're talking about adding the subordinated notes to the total debt outstanding.

Okay. So that would be in the 1.5 to 2 range figures.

Right.

And the next question comes from Jorel Guilloty from Goldman Sachs.

Mine is a more big picture question. So I was wondering if you could provide some color as to how you see the capacity of CEMEX after Project Cutting Edge is completed in 2027. In other words, given the leaner structure you're pursuing, what will be the capacity of the company that we see at the other end of this? Are you thinking that it's a lower yet more profitable volumes? Is it a larger company growing through acquisitions with a leaner base? Just to get a sense of this cost structure vis-a-vis your capacity going forward?

Jorel, thank you for your question. Looking ahead, we envision a company that excels in operations and delivers strong returns to our shareholders. As our volumes increase and markets improve, we anticipate considerable operational leverage. We aim for responsible capital allocation with strict criteria and will maintain a solid investment rating regardless of our actions. We plan to return cash to shareholders and focus on acquiring companies in the U.S., particularly in aggregates, mortars, and renders. Our objective is to have a portfolio that provides a return on invested capital above the cost of capital and to achieve a consolidated free cash flow conversion rate of at least 50%. Currently, we prioritize growth in the U.S., Mexico, and Europe. Additionally, we are committed to being socially responsible, adding value to our communities sustainably, ensuring safety, attracting top talent in the industry, and focusing on decarbonization, biodiversity, and water management. That's what I can share at this time, Jorel. Thank you for your question.

We have time for one last question, and it's coming from Adam Thalhimer from Thompson, Davis.

Congratulations on a strong Q3. I would like to know if you could provide an update on the outlook for U.S. M&A. What are your thoughts on the ideal scenarios and potential time frame?

Thank you for your question, Adam. First, we are enhancing our team with key additions who bring valuable expertise in bolt-on acquisition strategy and deployment, which is crucial. Second, we are improving our pipeline. Currently, we are evaluating 100 family-owned aggregate targets in the U.S. and are starting to engage with several of them using flexible approaches, similar to what we did with Couch, where we entered with a minority equity option to acquire a majority stake or pursue a full acquisition. We are also interested in mortars, stuccos, and renders because we understand how to manage those businesses. They are very synergistic since they consume our cement, cementitious materials, some of our sand, and admixture solutions. Additionally, they offer distribution and customer base synergies. We also want to explore niche opportunities in admixtures in the U.S. and Europe primarily. That summarizes our focus for now. I want to emphasize that we will base all decisions on preserving our investment grade rating and we have established clear metrics for acquisitions, such as ensuring free cash flow per share is accretive in the first year, achieving a return on invested capital over the weighted average cost of capital plus 100 basis points in the midterm, and targeting synergies around 3% of sales so we can drive the multiple to high single digits. Our main focus will continue to be on aggregates, mortars, renders, and stuccos. I hope that answers your question, Adam. We are actively cultivating these opportunities in the U.S. as they arise.

Thank you, Adam. We appreciate you joining us today for our third quarter results, and we hope that you will come back again for our fourth quarter 2025 webcast on February 5, 2026. If you have any additional questions, please feel free to contact the Investor Relations team. Many thanks.

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