UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 or 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

 

 

For the month of February 2024

Commission File Number: 001-14946

 

 

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

(Translation of Registrant’s name into English)

 

 

Avenida Ricardo Margáin Zozaya #325, Colonia Valle del Campestre,

San Pedro Garza García, Nuevo León 66265, México

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F ☒    Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

 

 

 


Contents

 

1.

Cemex, S.A.B. de C.V.’s (NYSE: CX) (“Cemex”) and its subsidiaries consolidated financial statements for the years ended December 31, 2023, 2022, and 2021.

 

2.

Cemex’s separate financial statements for the years ended December 31, 2023, 2022, and 2021.

Cemex’s consolidated and separate financial statements are subject to approval by Cemex’s shareholders at the Ordinary General Shareholders’ Meeting to be held on March 22, 2024.


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, Cemex, S.A.B. de C.V. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

       Cemex, S.A.B. de C.V.
       (Registrant)
Date: February 23, 2024     By:   /s/ Rafael Garza Lozano
      Name:   Rafael Garza Lozano
      Title:   Chief Comptroller

 

3


EXHIBIT INDEX

 

EXHIBIT
NO.
  

DESCRIPTION

1.    Cemex, S.A.B. de C.V.’s (NYSE: CX) (“Cemex”) and its subsidiaries consolidated financial statements for the years ended December 31, 2023, 2022, and 2021, subject to approval by Cemex’s shareholders at the Ordinary General Shareholders’ Meeting to be held on March 22, 2024.
2.    Cemex’s separate financial statements for the years ended December 31, 2023, 2022, and 2021, subject to approval by Cemex’s shareholders at the Ordinary General Shareholders’ Meeting to be held on March 22, 2024.

 

4

Exhibit 1

INDEX TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

Cemex, S.A.B. de C.V. and Subsidiaries:

  

Consolidated Statements of Income for the years ended December 31, 2023, 2022 and 2021

     1  

Consolidated Statements of Comprehensive Income for the years ended December 31, 2023, 2022 and 2021

     2  

Consolidated Statements of Financial Position as of December 31, 2023 and 2022

     3  

Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021

     4  

Statements of Changes in Stockholders’ Equity for the years ended December 31, 2023, 2022 and 2021

     5  

Notes to the Consolidated Financial Statements

     6  

Independent auditors’ report — KPMG Cárdenas Dosal, S.C.

     63  


Cemex, S.A.B. de C.V. and Subsidiaries

Consolidated Statements of Income

(Millions of U.S. Dollars, except for earnings per share)

 

          Years ended December 31,  
     Notes    2023     2022     2021  

Revenues

   3    $ 17,388       15,577       14,379  

Cost of sales

   5      (11,527     (10,755     (9,743
     

 

 

   

 

 

   

 

 

 

Gross profit

        5,861       4,822       4,636  

Operating expenses

   6      (3,747     (3,261     (2,917
     

 

 

   

 

 

   

 

 

 

Operating earnings before other expenses, net

   2      2,114       1,561       1,719  

Other expenses, net

   7      (265     (467     (82
     

 

 

   

 

 

   

 

 

 

Operating earnings

        1,849       1,094       1,637  

Financial expense

   8.1, 17      (531     (505     (576

Financial income and other items, net

   8.2      33       151       (161

Share of profit of equity accounted investees

   14.1      98       30       54  
     

 

 

   

 

 

   

 

 

 

Earnings before income tax

        1,449       770       954  

Income tax

   20      (1,250     (209     (137
     

 

 

   

 

 

   

 

 

 

Net income from continuing operations

        199       561       817  

Discontinued operations

   4.2      —        324       (39
     

 

 

   

 

 

   

 

 

 

CONSOLIDATED NET INCOME

        199       885       778  

Non-controlling interest net income

        17       27       25  
     

 

 

   

 

 

   

 

 

 

CONTROLLING INTEREST NET INCOME

      $ 182       858       753  
     

 

 

   

 

 

   

 

 

 

Basic earnings per share

   23    $ 0.0042       0.0197       0.0171  

Basic earnings per share from continuing operations

   23    $ 0.0042       0.0123       0.0180  

Diluted earnings per share

   23    $ 0.0041       0.0193       0.0168  

Diluted earnings per share from continuing operations

   23    $ 0.0041       0.0120       0.0177  
     

 

 

   

 

 

   

 

 

 

The accompanying notes are part of these consolidated financial statements.

 

1


Cemex, S.A.B. de C.V. and Subsidiaries

Consolidated Statements of Comprehensive Income

(Millions of U.S. Dollars)

 

            Years ended December 31,  
     Notes      2023     2022     2021  

CONSOLIDATED NET INCOME

      $ 199       885       778  

Items that will not be reclassified subsequently to the statement of income

         

Net actuarial (losses) gains from remeasurements of defined benefit pension plans

     19        (45     176       263  

Effects from strategic equity investments

     14.2        (2     (9     (9

Income tax benefit (expense) recognized directly in other comprehensive income

     20        5       (32     (26
     

 

 

   

 

 

   

 

 

 
        (42     135       228  
     

 

 

   

 

 

   

 

 

 

Items that are or may be reclassified subsequently to the statement of income

         

Results from derivative financial instruments designated as cash flow hedges

     17.4        (7     80       60  

Currency translation results of foreign subsidiaries

     21.2        255       (326     (400

Income tax benefit recognized directly in other comprehensive income

     20        1       18       70  
     

 

 

   

 

 

   

 

 

 
        249       (228     (270
     

 

 

   

 

 

   

 

 

 

Total items of other comprehensive income (loss), net

        207       (93     (42
     

 

 

   

 

 

   

 

 

 

CONSOLIDATED COMPREHENSIVE INCOME

        406       792       736  

Non-controlling interest comprehensive income (loss)

        31       (36     14  
     

 

 

   

 

 

   

 

 

 

CONTROLLING INTEREST COMPREHENSIVE INCOME

      $ 375       828       722  
     

 

 

   

 

 

   

 

 

 

The accompanying notes are part of these consolidated financial statements.

 

2


Cemex, S.A.B. de C.V. and Subsidiaries

Consolidated Statements of Financial Position

(Millions of U.S. Dollars)

 

          As of December 31,  
     Notes    2023     2022  
ASSETS        

CURRENT ASSETS

       

Cash and cash equivalents

   9    $ 624       495  

Trade accounts receivable

   10      1,751       1,644  

Other accounts receivable

   11      650       535  

Inventories

   12      1,789       1,669  

Other current assets

   13      191       183  
     

 

 

   

 

 

 

Total current assets

        5,005       4,526  
     

 

 

   

 

 

 

NON-CURRENT ASSETS

       

Investments in associates and joint ventures

   14.1      729       640  

Other investments and non-current accounts receivable

   14.2      340       293  

Property, machinery and equipment, net and assets for the right-of-use, net

   15      12,466       11,284  

Goodwill and intangible assets, net

   16      9,530       9,293  

Deferred income tax assets

   20.2      363       411  
     

 

 

   

 

 

 

Total non-current assets

        23,428       21,921  
     

 

 

   

 

 

 

TOTAL ASSETS

      $ 28,433       26,447  
     

 

 

   

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY        

CURRENT LIABILITIES

       

Current debt

   17.1    $ 25       51  

Other current financial obligations

   17.2      950       936  

Trade accounts payable

        3,109       2,966  

Income tax payable

        1,082       368  

Other current liabilities

   18.1      1,620       1,225  
     

 

 

   

 

 

 

Total current liabilities

        6,786       5,546  
     

 

 

   

 

 

 

NON-CURRENT LIABILITIES

       

Non-current debt

   17.1      6,203       6,920  

Other non-current financial obligations

   17.2      986       918  

Pensions and other post-employment benefits

   19      735       695  

Deferred income tax liabilities

   20.2      443       394  

Other non-current liabilities

   18.2      1,164       1,065  
     

 

 

   

 

 

 

Total non-current liabilities

        9,531       9,992  
     

 

 

   

 

 

 

TOTAL LIABILITIES

        16,317       15,538  
     

 

 

   

 

 

 

STOCKHOLDERS’ EQUITY

       

Controlling interest:

       

Common stock and additional paid-in capital

   21.1      7,699       7,810  

Other equity reserves and subordinated notes

   21.2      (363     (1,555

Retained earnings

   21.3      4,428       4,246  
     

 

 

   

 

 

 

Total controlling interest

        11,764       10,501  

Non-controlling interest

   21.4      352       408  
     

 

 

   

 

 

 

TOTAL STOCKHOLDERS’ EQUITY

        12,116       10,909  
     

 

 

   

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

      $ 28,433       26,447  
     

 

 

   

 

 

 

The accompanying notes are part of these consolidated financial statements.

 

3


Cemex, S.A.B. de C.V. and Subsidiaries

Consolidated Statements of Cash Flows

(Millions of U.S. Dollars)

 

            Years ended December 31,  
     Notes      2023     2022     2021  

OPERATING ACTIVITIES

         

Consolidated net income

      $ 199       885       778  

Discontinued operations

        —        324       (39
     

 

 

   

 

 

   

 

 

 

Net income from continuing operations

        199       561       817  

Adjustments for:

         

Sale of emission allowances

     2.15, 7        —        —        (600

Depreciation and amortization of assets

     5, 6        1,233       1,120       1,120  

Impairment losses of longed-lived assets

     7        43       442       509  

Share of profit of equity accounted investees

     14.1        (98     (30     (54

Results on sale of subsidiaries, other disposal groups and others

        (39     (116     (23

Financial expense, financial income and other items, net

        498       354       737  

Income taxes

     20        1,250       209       137  

Changes in working capital, excluding income taxes

        192       (390     (143
     

 

 

   

 

 

   

 

 

 

Cash flows provided by operating activities from continuing operations

        3,278       2,150       2,500  
     

 

 

   

 

 

   

 

 

 

Interest paid

        (581     (493     (524

Income taxes paid

        (538     (188     (170
     

 

 

   

 

 

   

 

 

 

Net cash flows provided by operating activities from continuing operations

        2,159       1,469       1,806  

Net cash flows provided by operating activities from discontinued operations

        —        6       37  
     

 

 

   

 

 

   

 

 

 

Net cash flows provided by operating activities after interest and income taxes

        2,159       1,475       1,843  
     

 

 

   

 

 

   

 

 

 

INVESTING ACTIVITIES

         

Purchase of property, machinery and equipment, net

     15        (968     (909     (776

Acquisition of intangible assets, net

     16.1        (207     (151     (192

Disposal (acquisition) of subsidiaries, net

     4, 14.1        (189     341       122  

Proceeds from the sale of emission allowances

     2.15, 7        —        —        600  

Non-current assets and others, net

        24       (12     (10
     

 

 

   

 

 

   

 

 

 

Cash flows used in investing activities from continuing operations

        (1,340     (731     (256

Net cash flows used in investing activities from discontinued operations

        —        (1     (17
     

 

 

   

 

 

   

 

 

 

Net cash flows used in investing activities

        (1,340     (732     (273
     

 

 

   

 

 

   

 

 

 

FINANCING ACTIVITIES

         

Proceeds from new debt instruments

     17.1        2,938       2,006       3,960  

Debt repayments

     17.1        (3,840     (2,420     (5,897

Issuance of subordinated notes

     21.2        992       —        994  

Other financial obligations, net

     17.2        (274     (197     (288

Own shares repurchase program

     21.1        —        (111     —   

Shares in trust for future deliveries under share-based compensation

     22        (45     (36     —   

Changes in non-controlling interests and repayment of perpetual debentures

     21.4        (62     (14     (447

Derivative financial instruments

     17.4        (189     34       (41

Coupons on subordinated notes and coupons on perpetual debentures

     21.2, 21.4        (120     (51     (24

Non-current liabilities, net

        (101     (172     (109
     

 

 

   

 

 

   

 

 

 

Net cash flows used in financing activities

        (701     (961     (1,852
     

 

 

   

 

 

   

 

 

 

Increase (decrease) in cash and cash equivalents from continuing operations

        118       (223     (302

Increase in cash and cash equivalents from discontinued operations

        —        5       20  

Foreign currency translation effect on cash

        11       100       (55

Cash and cash equivalents at beginning of period

        495       613       950  
     

 

 

   

 

 

   

 

 

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

     9      $ 624       495       613  
     

 

 

   

 

 

   

 

 

 

Changes in working capital, excluding income taxes:

         

Trade accounts receivable

      $ (27)       (208     (20

Other accounts receivable and other assets

        21       (23     94  

Inventories

        68       (464     (341

Trade accounts payable

        (45     290       290  

Other accounts payable and accrued expenses

        175       15       (166
     

 

 

   

 

 

   

 

 

 

Changes in working capital, excluding income taxes

      $ 192       (390     (143
     

 

 

   

 

 

   

 

 

 

The accompanying notes are part of these consolidated financial statements.

 

4


Cemex, S.A.B. de C.V. and Subsidiaries

Statements of Changes in Stockholders’ Equity

For the years ended December 31, 2023, 2022 and 2021

(Millions of U.S. Dollars)

 

                      Other equity                          
                Additional     reserves and           Total           Total  
          Common     paid-in     subordinated     Retained     controlling     Non-controlling     stockholders’  
    Notes     stock     capital     notes     earnings     interest     interest     equity  

Balance as of December 31, 2020

    $ 318       7,575       (2,453     2,635       8,075       877       8,952  

Net income for the period

      —        —        —        753       753       25       778  

Other comprehensive loss for the period

      —        —        (31     —        (31     (11     (42
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total of other comprehensive income (loss) for the period

    21.2       —        —        (31     753       722       14       736  

Cancellation of own shares by shareholders’ resolution

    21.1       —        (83     83       —        —        —        —   

Issuance of subordinated notes

    21.2       —        —        994       —        994       —        994  

Changes in non-controlling interest and repayment of perpetual debentures

    21.4       —        —        —        —        —        (447     (447

Share-based compensation

    22       —        —        77       —        77       —        77  

Coupons paid on subordinated notes and perpetual debentures

    21.2, 21.4       —        —        (41     —        (41     —        (41
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of December 31, 2021

      318       7,492       (1,371     3,388       9,827       444       10,271  

Net income for the period

      —        —        —        858       858       27       885  

Other comprehensive loss for the period

      —        —        (30     —        (30     (63     (93
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total of other comprehensive income (loss) for the period

    21.2       —        —        (30     858       828       (36     792  

Own shares purchased under shares repurchase program

    21.1       —        —        (111     —        (111     —        (111

Shares in trust for future deliveries under share-based compensation

    22       —        —        (36     —        (36     —        (36

Changes in non-controlling interest

    21.4       —        —        —        —        —        —        —   

Share-based compensation

    22       —        —        47       —        47       —        47  

Coupons paid on subordinated notes

    21.2       —        —        (54     —        (54     —        (54
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of December 31, 2022

      318       7,492       (1,555     4,246       10,501       408       10,909  

Net income for the period

      —        —        —        182       182       17       199  

Other comprehensive income for the period

      —        —        193       —        193       14       207  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total of other comprehensive income for the period

    21.2       —        —        193       182       375       31       406  

Cancellation of own shares by shareholders’ resolution

    21.1       —        (111     111       —        —        —        —   

Shares in trust for future deliveries under share-based compensation

    22       —        —        (45     —        (45     —        (45

Issuance of subordinated notes

    21.2       —        —        992       —        992       —        992  

Changes in non-controlling interest

    21.4       —        —        —        —        —        (87     (87

Share-based compensation

    22       —        —        61       —        61       —        61  

Coupons paid on subordinated notes

    21.2       —        —        (120     —        (120     —        (120
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of December 31, 2023

    $ 318       7,381       (363     4,428       11,764       352       12,116  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

The accompanying notes are part of these consolidated financial statements.

 

5


Cemex, S.A.B. de C.V. and Subsidiaries

Notes to the Consolidated Financial Statements

As of December 31, 2023, 2022 and 2021

(Millions of U.S. Dollars)

 

1)

DESCRIPTION OF BUSINESS

Cemex, S.A.B. de C.V., originated in 1906, is a publicly traded variable stock corporation (Sociedad Anónima Bursátil de Capital Variable) organized under the laws of the United Mexican States, or Mexico, and is the parent company of entities whose main activities are oriented to the construction industry, through the production, marketing, sale and distribution of cement, ready-mix concrete, aggregates, urbanization solutions and other construction materials and services. In addition, Cemex, S.A.B. de C.V. performs significant business and operational activities in Mexico.

The shares of Cemex, S.A.B. de C.V. are listed on the Mexican Stock Exchange (“MSE”) as Ordinary Participation Certificates (“CPOs”) (Certificados de Participación Ordinaria) under the symbol “CemexCPO.” Each CPO represents two series “A” shares and one series “B” share of common stock of Cemex, S.A.B. de C.V. In addition, Cemex, S.A.B. de C.V.’s shares are listed on the New York Stock Exchange (“NYSE”) as American Depositary Shares (“ADSs”) under the symbol “CX.” Each ADS represents ten CPOs.

The terms “Cemex, S.A.B. de C.V.” and/or the “Parent Company” used in these accompanying notes to the financial statements refer to Cemex, S.A.B. de C.V. without its consolidated subsidiaries. The terms “Company” or “Cemex” refer to Cemex, S.A.B. de C.V. together with its consolidated subsidiaries.

The issuance of these consolidated financial statements was authorized by the Board of Directors of Cemex, S.A.B. de C.V. on February 7, 2024 considering the favorable recommendation of its Audit Committee. These financial statements will be submitted for approval to the annual general ordinary shareholders’ meeting of the Parent Company on March 22, 2024.

 

2)

BASIS OF PRESENTATION AND DISCLOSURE

The consolidated financial statements as of December 31, 2023 and 2022 and for the years ended December 31, 2023, 2022 and 2021, were prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

Cemex adopted Disclosure of Accounting Policies (Amendments to IAS 1) starting January 1, 2023. The amendments require the disclosure of “material” rather than “significant” accounting policies. Accounting policy information is material if, when considered together with other information included in an entity’s financial statements, it can reasonably be expected to influence decisions that the primary users of general-purpose financial statements make on the basis of those financial statements. See note 28 for Cemex’s material accounting policies.

Presentation currency and definition of terms

The consolidated financial statements and the accompanying notes are presented in Dollars of the United States of America (the “United States”), except when specific reference is made to a different currency. When reference is made to “U.S. Dollar,” “Dollar,” “Dollars” or “$” it means Dollars of the United States. All amounts in the financial statements and the accompanying notes are stated in millions, except when references are made to earnings per share and/or prices per share. When reference is made to “Ps” or “Pesos,” it means Mexican Pesos. When reference is made to “€” or “Euros,” it means the currency in circulation in a significant number of European Union (“EU”) countries. When reference is made to “£” or “Pounds,” it means British Pounds sterling. Previously reported Dollar amounts of prior years are restated when the underlying transactions in other currencies remain unsettled using the closing exchange rates as of the reporting date. Amounts reported in Dollars should not be construed as representations that such amounts represented those Dollars or could be converted into Dollars at the rate indicated.

Amounts disclosed in the notes in connection with outstanding tax and/or legal proceedings (notes 20.4 and 25), which are originated in jurisdictions where currencies are different from the Dollar, are presented in Dollar equivalents as of the closing of the most recent year presented. Consequently, without any change in the original currency, such Dollar amounts will fluctuate over time due to changes in exchange rates.

Discontinued operations (note 4.2)

Cemex reports as discontinued operations the disposal of entire geographical reportable operating segments regardless of size, the sale of a considerable portion of a significant reportable operating segment, as well as the sale of a major line of business.

Statements of income

Cemex includes the line item titled “Operating earnings before other expenses, net” considering that it is a subtotal relevant for the determination of Cemex’s “Operating EBITDA” (Operating earnings before other expenses, net plus depreciation and amortization) as described below in this note. The line item of “Operating earnings before other expenses, net” allows for easy reconciliation of the amount in these financial statements under IFRS to the non-IFRS measure of Operating EBITDA by adding back depreciation and amortization. The line item “Other expenses, net” consists primarily of revenues and expenses not directly related to Cemex’s main activities or which are of a non-recurring nature, including impairment losses of long-lived assets, non-recurring sales of emission allowances (note 28.13), results on disposal of assets and restructuring costs, among others (note 7). Under current IFRS, the inclusion of certain subtotals such as “Operating earnings before other expenses, net” and the display of the statement of income vary significantly by industry and company according to specific needs.

 

6


Cemex, S.A.B. de C.V. and Subsidiaries

Notes to the Consolidated Financial Statements

As of December 31, 2023, 2022 and 2021

(Millions of U.S. Dollars)

 

Basis of presentation and disclosure – continued

 

 

Although Operating EBITDA is not a measure of operating performance, an alternative to cash flows or a measure of financial position under IFRS, Operating EBITDA is the financial measure used by Cemex’s chief executive officer to review operating performance and profitability, for decision-making purposes and to allocate resources. Moreover, Operating EBITDA is a measure used by Cemex’s creditors to review its ability to internally fund capital expenditures, to review its ability to service or incur debt and to comply with financial covenants under its financing agreements. Cemex presents “Operating EBITDA” in notes 4.3 (selected financial information by reportable segment and line of business) and 17.1 (Financial instruments—Financial covenants). Cemex’s Operating EBITDA may not be comparable to other similarly titled measures of other companies.

Statements of cash flows

The statements of cash flows exclude the following transactions that did not represent sources or uses of cash:

Financing activities:

 

   

In 2023, 2022 and 2021, the increases in other financing obligations in connection with lease contracts negotiated during the year for $341, $296 and $227, respectively (note 17.2); and

Investing activities:

 

   

In 2023, 2022 and 2021, in connection with the leases negotiated during the year, the increases in assets for the right-of-use related to lease contracts for $341, $296 and $227, respectively (note 15.2).

Other newly issued IFRS adopted in the reported periods

IFRS 17, Insurance contracts (“IFRS 17”)

Beginning January 1, 2023, IFRS 17 replaced IFRS 4, Insurance contracts, which sets forth accounting requirements for all contracts in which an entity (the “Issuer”) accepts significant insurance risks from another entity (the “Policyholder”) by agreeing to compensate the Policyholder if a specified uncertain future event (the insured event) adversely affects the Policyholder. IFRS 17 may apply to any contract in which an entity assumes a risk position similar to an Issuer, to the extent that is not being accounted for under other IFRS, such as warranties or residual value guarantees, covered by IFRS 15, Revenues from contracts with customers (“IFRS 15”) and IFRS 16, Leases (“IFRS 16”), respectively, among others. IFRS 17 does not apply to acquired insurance policies.

Concurrent with the adoption of IFRS 17, Cemex analyzed its several contracts and concluded that: a) it has not issued insurance policies to third-parties; and b) all obligations and contingent obligations arising from another type of contracts are accounted under the relevant IFRS, such as IFRS 15, IFRS 16, IFRS 9, Financial Instruments (“IFRS 9”) or IAS 19, Employee benefits (“IAS 19”), as applicable.

Others

In addition, beginning January 1, 2023, Cemex adopted prospectively IFRS amendments that did not result in any material impact on its results of operation or financial position, and which are explained as follows:

 

Standard

  

Main topic

Amendments to IAS 8, Definition of Accounting Estimates

  

The amendment makes a distinction between how an entity should present and disclose different types of accounting changes in its financial statements. Changes in accounting policies must be applied retrospectively, while changes in accounting estimates are accounted for prospectively.

Amendments to IAS 12, Income Taxes – Deferred Tax related to Assets and Liabilities arising from a Single Transaction

  

The amendment clarifies that companies should account for deferred tax assets and liabilities on transactions such as leases and decommissioning obligations. Cemex has always applied these criteria.

Amendments to IFRS 16, Leases – Lease Liability in a Sale and Leaseback

  

The amendments mentioned that on initial recognition, the seller-lessee would include variable payments when it measures a lease liability arising from a sale-and-leaseback transaction. In addition, the amendments established that the seller-lessee could not recognize gains or losses relating to the right of use it retains after initial recognition.

 

7


Cemex, S.A.B. de C.V. and Subsidiaries

Notes to the Consolidated Financial Statements

As of December 31, 2023, 2022 and 2021

(Millions of U.S. Dollars)

 

3)

REVENUES

Cemex’s revenues are mainly originated from the sale and distribution of cement, ready-mix concrete, aggregates and other construction materials and services, including urbanization solutions, and are recognized at a point in time or over time in the amount of the price, before tax on sales, expected to be received for goods and services supplied due to ordinary activities, as contractual performance obligations are fulfilled, and control of goods and services passes to the customer. Cemex grants credit for terms ranging from 15 to 90 days depending on the type and risk of each customer. For the years ended December 31, 2023, 2022 and 2021, revenues were as follows:

 

     2023      2022      2021  

From the sale of goods associated to Cemex’s main activities 1

   $ 16,904        15,137        14,009  

From the sale of other goods and services 2

     484        440        370  
  

 

 

    

 

 

    

 

 

 
   $ 17,388        15,577        14,379  
  

 

 

    

 

 

    

 

 

 

 

1

During the reported periods, revenues recognized over time under construction contracts were not significant.

2

Refers mainly to revenues generated by subsidiaries not individually significant operating in different lines of business.

Information on revenues by reportable segment and line of business for the years 2023, 2022 and 2021 is presented in note 4.3.

As of December 31, 2023 and 2022, amounts receivable for progress billings and advances received from customers of construction contracts were not significant. Moreover, for the years 2023, 2022 and 2021, revenues and costs related to construction contracts in progress were not significant.

Certain promotions and/or discounts and rebates offered as part of the sale transaction, result in a portion of the transaction price should be allocated to such commercial incentives as separate performance obligations, recognized as contract liabilities with customers, and deferred to the statement of income during the period in which the incentive is exercised by the customer or until it expires. For the years ended December 31, 2023, 2022 and 2021 changes in the balance of contract liabilities with customers are as follows:

 

     2023     2022     2021  

Opening balance of contract liabilities with customers

   $ 293       257       201  

Increase during the period for new transactions

     1,603       1,493       1,626  

Decrease during the period for exercise or expiration of incentives

     (1,519     (1,458     (1,574

Currency translation effects

     7       1       4  
  

 

 

   

 

 

   

 

 

 

Closing balance of contract liabilities with customers

   $ 384       293       257  
  

 

 

   

 

 

   

 

 

 

For the years 2023, 2022 and 2021, any costs capitalized as contract fulfillment assets and released over the contract life according to IFRS 15, Revenues from contracts with customers were not significant.

 

4)

BUSINESS COMBINATIONS, DIVESTITURES AND DISCONTINUED OPERATIONS AND SELECTED FINANCIAL INFORMATION BY REPORTABLE SEGMENT AND LINE OF BUSINESS

 

4.1)

BUSINESS COMBINATIONS

On November 1, 2023, through a subsidiary in Germany, Cemex completed the acquisition of Kiesel, a mortars and adhesives technological leader in the construction industry based in Germany that serves the German, French, Polish, and Czech markets, consisting of a production facility and five distribution locations for a total consideration of $13. As of December 31, 2023, based on the preliminary valuation of the fair values of the assets acquired and liabilities assumed, Cemex determined goodwill of $5.

On May 11, 2023, through a subsidiary, Cemex completed the purchase of Atlantic Minerals Limited in Newfoundland, Canada, consisting mainly of an aggregates quarry and maritime port operations for a price of $75. With this investment, Cemex secured a new long-term aggregates reserve for its operations in Florida and the east coast of the United States, as well as a source for chemical-grade stone serving a broader customers. As of December 31, 2023, based on the preliminary valuation of the fair values of the assets acquired and liabilities assumed, Cemex did not determine any goodwill.

On January 30, 2023, through a subsidiary, Cemex acquired a 51% stake in Israel-based SHTANG Recycle LTD (“SHTANG”), a construction demolition and excavation waste (CDEW) recycling company, for a price of $13. The acquisition aligns with Cemex’s strategy to strengthen its business in developed markets through bolt-on acquisitions in businesses with strong circular and sustainable attributes. SHTANG has been awarded a 13-year license to build and operate the CDEW recycling facility. The state-of-the-art facility will be capable of processing 600,000 tons of waste annually. The CDEW production will be used by Cemex as raw materials for aggregate production, reintegrating them into the construction value chain. As of December 31, 2023, based on the preliminary valuation of the fair values of the assets acquired and liabilities assumed, Cemex determined goodwill of $3.

 

8


Cemex, S.A.B. de C.V. and Subsidiaries

Notes to the Consolidated Financial Statements

As of December 31, 2023, 2022 and 2021

(Millions of U.S. Dollars)

 

Business combinations – continued

 

 

On July 11, 2022, through a subsidiary in Germany, Cemex completed the acquisition of a 53% stake in the German aggregates company ProStein for a total consideration of $21. The investment expands Cemex’s aggregates business in the region and Cemex estimates increased the life of aggregates reserves for Cemex’s operations in Central Europe for at least the next 25 years. The majority stake in ProStein’s assets adds a full range of fine and hardstone aggregates to Cemex’s aggregates portfolio. In addition to supplying the greater Berlin area, the additional capacity can supply several urban centers in Poland and the Czech Republic. ProStein’s assets include six active hardstone plants and six CDEW recovery sites. During 2023, based on the valuation of the fair values of the assets acquired and liabilities assumed, Cemex did not determine any goodwill.

On December 10, 2021, through a subsidiary in Mexico, Cemex acquired Broquers Ambiental, a sustainable waste management company for a total consideration of $13. Broquers Ambiental’s assets include a plant for solid waste treatment for its use as alternate fuel. During 2022, considering the valuation of the fair values of the assets acquired and liabilities assumed, Cemex determined goodwill of $4.

In January 2021, a subsidiary of Cemex in Israel acquired two ready-mix concrete plants from Kinneret and Beton-He’Emek for an amount in shekels equivalent to $6. During 2021, based on the valuation of the fair values of the assets acquired and liabilities assumed, Cemex determined goodwill of $5.

 

4.2)

DIVESTITURES AND DISCONTINUED OPERATIONS

On October 25, 2022, to accelerate the growth and development of Neoris N.V. (“Neoris”), its subsidiary in the digital solutions sector, Cemex closed a partnership with Advent International (“Advent”). As part of the partnership Cemex sold to Advent a 65% stake in Neoris for a total cash consideration of $119. While surrendering control to Advent, Cemex retained a 35% stake and remained a key strategic partner and customer of Neoris. Cemex’s retained stake in Neoris was remeasured at fair value at the date of loss of control and was subsequently accounted for under the equity method within the line item “Investments in associates and joint ventures.” Neoris’ results for the period from January 1 to October 25, 2022 and for the year ended December 31, 2021 are reported in the statements of income, net of income tax, in the single line item “Discontinued operations,” including in 2022 a gain on sale of $117, net of the reclassification of foreign currency translation effects accrued in equity until the date of loss of control.

On August 31, 2022, through subsidiaries in Colombia and Spain, Cemex concluded the sale with affiliates of Cementos Progreso Holdings, S.L. of its entire operations in Costa Rica and El Salvador for a total cash consideration of $325, related to Cemex’s aggregate controlling interest. The assets sold consisted of one cement plant, one grinding station, seven ready-mix plants, one aggregates quarry, one distribution center in Costa Rica and one distribution center in El Salvador. Cemex’s results of these operations for the period from January 1 to August 31, 2022 and for the year ended December 31, 2021 are reported in the statements of income, net of income tax, in the single line item “Discontinued operations,” including in 2022 a gain on sale of $240 which includes the reclassification of foreign currency translation effects accrued in equity until the disposal date.

On July 9, 2021, Cemex closed the sale to Çimsa Çimento Sanayi Ve Ticaret A.Ş., of its white cement business, except for Mexico and the United States, for a total cash consideration of $155, including its Buñol cement plant in Spain and its white cement customer list. Cemex’s operations of these assets in Spain for the period from January 1 to July 9, 2021 are reported in the statements of income, net of income tax, in the single line item “Discontinued operations,” including in 2021 a loss on sale of $67 net of the proportional allocation of goodwill of $41.

On March 31, 2021, Cemex closed the sale to LafargeHolcim of 24 concrete plants and one aggregates quarry located in the Rhone Alpes region in the Southeast of France for a total cash consideration of $44. Cemex’s operations of these assets in France for the three-month period ended on March 31, 2021 are reported in the statements of income, net of income tax, in the single line item “Discontinued operations.”

The following table presents condensed combined information of the statements of income of Cemex’s discontinued operations previously mentioned related to: a) Neoris operations for the period from January 1 to October 25, 2022 and for year ended December 31, 2021; b) Costa Rica and El Salvador for the period from January 1 to August 31, 2022 and for the year ended December 31, 2021; c) Spain related to the white cement business for the period from January 1 to July 9, 2021 and; d) France related to the Rhone Alpes region for the three-month period ended March 31, 2021.

 

     2022      2021  

Revenues

   $ 256        354  

Cost of sales and operating expenses

     (225      (304

Other expenses, net

     (8      (42

Financial expenses, net and others

     —         5  
  

 

 

    

 

 

 

Earnings before income tax

     23        13  

Income tax

     (3      (48
  

 

 

    

 

 

 

Result of discontinued operations

     20        (35

Net disposal result

     304        (4
  

 

 

    

 

 

 

Net result of discontinued operations

   $ 324        (39
  

 

 

    

 

 

 

 

9


Cemex, S.A.B. de C.V. and Subsidiaries

Notes to the Consolidated Financial Statements

As of December 31, 2023, 2022 and 2021

(Millions of U.S. Dollars)

 

4.3)

SELECTED FINANCIAL INFORMATION BY REPORTABLE SEGMENT AND LINE OF BUSINESS

Reportable segments

The Company’s main activities are oriented to the construction industry, mainly through the production, marketing, sale and distribution of cement, ready-mix concrete, aggregates, urbanization solutions and other construction materials and services. Under IFRS, the Company’s operating segments represent the components of Cemex that engage in business activities from which Cemex may earn revenues and incur expenses, whose operating results are reviewed by the entity’s top management to make decisions about resources to be allocated to the segments and assess their performance, and for which discrete financial information is available. A reportable segment represents an operating segment or an aggregation of operating segments considering certain thresholds, under which entities must report separately any operating segments which account for 10% or more of combined revenues, both internal and external, 10% or more of combined net profit or loss, depending on the individual result of the operating segment, and/or 10% or more of the combined assets of all operating segments. In addition, despite the described 10% threshold not being met individually, entities must report as many individual operating segments as needed to cover at least 75% of the entity’s revenue. Cemex operates by geography and line of business. Cemex discloses its segment information presenting 15 reportable segments. For the reported periods, Cemex’s operations were organized in four regions, each under the supervision of a regional president, as follows: 1) Mexico, comprised of one operating and reportable segment, 2) United States, comprised of one operating and reportable segment, 3) Europe, Middle East, Africa and Asia (“EMEAA”), comprised of 11 operating segments, of which four were aggregated into a single reportable operating segment as described below, and 4) South, Central America and the Caribbean (“SCA&C”), comprised of 12 operating segments, of which nine were aggregated into two reportable operating segments as described below. The Company’s regional presidents, who are part of Cemex’s Executive Committee, report to Cemex’s Chief Executive Officer or CEO. In addition, for those regions comprising several operating segments, such as EMEAA and SCA&C, each operating segment is supervised by a country manager whom in turn reports to the regional president.

The material accounting policies applied to determine the financial information by reportable segment are consistent with those described in note 28.

Aggregation criteria

Considering similar regional and/or economic characteristics and materiality, such as: (a) the nature of the products and services, all related to construction materials and the construction industry, (b) the nature of the production processes, which are the same for cement, ready-mix concrete, aggregates and urbanization solutions across geographies, (c) the type of customers for their products or services, in all cases construction materials distributors and wholesalers, governments and big construction firms, and (d) the methods used to distribute their products or provide their services, which are very similar among the Company’s geographies using both third-party transportation for cement and aggregates and our own mixers fleet for ready-mix, certain operating segments have been aggregated and presented as single reportable segments. These reportable segments are as follows: a) the “Rest of EMEAA” reportable segment refers to Cemex’s operating segments in the Czech Republic, Croatia, Egypt and the United Arab Emirates; b) the “Rest of SCA&C” reportable segment refers to Cemex’s operating segments in Puerto Rico, Nicaragua, Jamaica, the Caribbean and Guatemala, excluding the operations of Trinidad Cement Limited (“TCL”); and c) the “Caribbean TCL” reportable segment refers to the operating segments of TCL and subsidiaries in Trinidad and Tobago, Jamaica, Guyana and Barbados. The line item “Other activities,” included to reconcile the total of reportable segments with the consolidated amounts from continuing operations, refers to the following combined transactions: 1) cement trade maritime operations, 2) the Parent Company, other corporate entities and finance subsidiaries, and 3) other minor subsidiaries with different lines of business.

Selected information of the consolidated statements of income by reportable segment for the years 2023, 2022 and 2021, excluding the share of profits of equity accounted investees by reportable segment that is included in note 14.1, was as follows:

 

2023

  Sales
(including
intragroup
transactions)
    Less:
Intragroup
transactions
    External
revenues
    Operating
EBITDA
    Less:
Depreciation
and
amortization
    Operating
earnings (loss)
before other
expenses, net
    Other
expenses,
net
    Financial
expense
    Other
financing
items, net
 

Mexico

  $ 5,060       (205     4,855       1,488       221       1,267       (59     (39     105  

United States

    5,338       —        5,338       1,040       483       557       (31     (75     (30

EMEAA

                 

United Kingdom

    992       —        992       193       72       121       (6     (14     (17

France

    842       —        842       53       54       (1     (39     (15     (1

Germany

    497       (50     447       37       32       5       (3     (2     (5

Poland

    467       (1     466       72       24       48       1       (2     2  

Spain

    449       (38     411       71       31       40       3       (2     1  

Philippines 1

    312       —        312       34       32       2       (2     (3     1  

Israel

    794       —        794       90       33       57       5       (6     1  

Rest of EMEAA

    770       (4     766       147       48       99       (7     (6     (6

SCA&C

                 

Colombia 2

    458       —        458       62       25       37       (19     (6     (1

Panama 2

    158       (26     132       35       17       18       (2     —        —   

Caribbean TCL 3

    329       (12     317       78       20       58       (17     (2     (2

Dominican Republic

    378       (18     360       139       9       130       (2     (1     13  

Rest of SCA&C 2

    414       —        414       90       13       77       (10     (2     1  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Reportable segments

        16,904       3,629       1,114       2,515       (188     (175     62  

Other activities 4

        484       (282     119       (401     (77     (356     (29
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Consolidated

  $           17,388       3,347       1,233       2,114       (265     (531     33  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

10


Cemex, S.A.B. de C.V. and Subsidiaries

Notes to the Consolidated Financial Statements

As of December 31, 2023, 2022 and 2021

(Millions of U.S. Dollars)

 

Information of the consolidated statements of income by reportable segment – continued

 

 

2022

  Sales
(including
intragroup
transactions)
    Less:
Intragroup
transactions
    External
revenues
    Operating
EBITDA
    Less:
Depreciation
and
amortization
    Operating
earnings (loss)
before other
expenses, net
    Other
expenses,
net
    Financial
expense
    Other
financing
items, net
 

Mexico

  $ 3,842       (200     3,642       1,133       172       961       (69     (28     32  

United States

    5,038       (4     5,034       762       455       307       (205     (55     (21

EMEAA

                 

United Kingdom

    982       —        982       195       60       135       (8     (8     (8

France

    781       —        781       63       50       13       1       (10     2  

Germany

    485       (46     439       40       28       12       2       (2     (3

Poland

    419       (4     415       64       22       42       1       (2     4  

Spain

    382       (36     346       6       28       (22     (113     (2     2  

Philippines 1

    379       —        379       84       37       47       (2     18       (9

Israel

    840       —        840       112       46       66       5       (4     —   

Rest of EMEAA

    707       (1     706       116       55       61       (10     (4     2  

SCA&C

                 

Colombia 2

    429       —        429       61       24       37       12       (7     22  

Panama 2

    149       (34     115       28       16       12       (2     —        —   

Caribbean TCL 3

    302       (8     294       74       17       57       (19     (4     (1

Dominican Republic

    348       (6     342       133       8       125       (1     (1     (3

Rest of SCA&C 2

    394       (1     393       90       13       77       (2     (2     (3
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Reportable segments

        15,137       2,961       1,031       1,930       (410     (111     16  

Other activities 4

        440       (280     89       (369     (57     (394     135  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Consolidated

  $           15,577       2,681       1,120       1,561       (467     (505     151  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

2021

  Sales
(including
intragroup
transactions)
    Less:
Intragroup
transactions
    External
revenues
    Operating
EBITDA
    Less:
Depreciation
and
amortization
    Operating
earnings (loss)
before other
expenses, net
    Other
expenses,
net
    Financial
expense
    Other
financing
items, net
 

Mexico

  $ 3,466       (142     3,324       1,164       161       1,003       (43     (29     2  

United States

    4,359       (4     4,355       778       464       314       (127     (47     (19

EMEAA

                 

United Kingdom

    940       —        940       141       69       72       (3     (8     (17

France

    863       —        863       93       50       43       (6     (11     —   

Germany

    472       (43     429       69       28       41       —        (2     (2

Poland

    405       (6     399       73       25       48       (4     (2     1  

Spain

    359       (25     334       (6     33       (39     (331     (3     51  

Philippines 1

    424       —        424       114       40       74       (1     17       (2

Israel

    785       —        785       114       45       69       (1     (4     2  

Rest of EMEAA

    618       (5     613       87       56       31       (110     (3     1  

SCA&C

                 

Colombia 2

    437       —        437       87       26       61       (19     (7     (12

Panama 2

    121       (23     98       31       16       15       (2     —        —   

Caribbean TCL 3

    280       (7     273       65       19       46       (1     (6     (6

Dominican Republic

    299       (8     291       128       7       121       3       —        (1

Rest of SCA&C 2

    465       (21     444       110       13       97       (5     (2     (3
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Reportable segments

        14,009       3,048       1,052       1,996       (650     (107     (5

Other activities 4

        370       (209     68       (277     568       (469     (156
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Consolidated

  $           14,379       2,839       1,120       1,719       (82     (576     (161
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

1

Cemex’s operations in the Philippines are mainly conducted through Cemex Holdings Philippines, Inc. (“CHP”), a Philippine company whose shares trade on the Philippines Stock Exchange. As of December 31, 2023 and 2022, there is a non-controlling interest in CHP of 10.14% and 22.10%, respectively, of its ordinary shares (note 21.4).

2

Until June 2023, after the conclusion of a tender offer and delisting process, Cemex Latam Holdings, S.A. (“CLH”), a company incorporated in Spain, traded its ordinary shares on the Colombian Stock Exchange. CLH is the indirect holding company of Cemex’s operations in Colombia, Panama, Guatemala and Nicaragua, and until August 31, 2022, of the operations in Costa Rica and El Salvador. As of December 31, 2023 and 2022, there was a non-controlling interest in CLH of 0.50% and 4.70% of its ordinary shares, respectively, excluding shares held in CLH’s treasury (note 21.4).

3

The shares of TCL trade on the Trinidad and Tobago Stock Exchange. As of December 31, 2023 and 2022, there was a non-controlling interest in TCL of 30.17% of its ordinary shares in both years (note 21.4).

4

In the caption of external revenues, refers mainly to trade maritime transactions of cement and clinker carried by Cemex’s trading unit and, in the rest of the captions, refers to Cemex’s corporate activities.

 

11


Cemex, S.A.B. de C.V. and Subsidiaries

Notes to the Consolidated Financial Statements

As of December 31, 2023, 2022 and 2021

(Millions of U.S. Dollars)

 

Debt by reportable segment is disclosed in note 17.1. As of December 31, 2023 and 2022, the selected statement of financial position information by reportable segment was as follows:

 

2023

  Associates and
joint ventures
    Other
segment
assets
    Total
assets
    Total
liabilities
    Net assets
by segment
    Capital
expenditures 1
 

Mexico

  $ —        5,381       5,381       2,052       3,329       264  

United States

    216       12,782       12,998       2,770       10,228       521  

EMEAA

           

United Kingdom

    6       1,484       1,490       960       530       107  

France

    41       922       963       467       496       44  

Germany

    3       506       509       289       220       47  

Poland

    —        415       415       153       262       44  

Spain

    —        666       666       212       454       38  

Philippines

    —        795       795       135       660       85  

Israel

    —        808       808       507       301       41  

Rest of EMEAA

    11       852       863       329       534       75  

SCA&C

           

Colombia

    —        1,007       1,007       308       699       76  

Panama

    —        292       292       78       214       13  

Caribbean TCL

    —        478       478       207       271       18  

Dominican Republic

    —        233       233       95       138       16  

Rest of SCA&C

    —        280       280       111       169       25  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Reportable segments

    277       26,901       27,178       8,673       18,505       1,414  

Other activities

    452       754       1,206       7,644       (6,438     3  

Assets held for sale

    —        49       49       —        49       —   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total consolidated

  $ 729       27,704       28,433       16,317       12,116       1,417  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

2022

  Associates and
joint ventures
    Other
segment
assets
    Total
assets
    Total
liabilities
    Net assets
by segment
    Capital
expenditures 1
 

Mexico

  $ —        3,846       3,846       1,381       2,465       265  

United States

    198       12,425       12,623       2,642       9,981       551  

EMEAA

           

United Kingdom

    5       1,388       1,393       921       472       74  

France

    42       910       952       471       481       57  

Germany

    3       449       452       255       197       33  

Poland

    —        341       341       119       222       33  

Spain

    —        616       616       204       412       27  

Philippines

    —        792       792       155       637       72  

Israel

    —        771       771       495       276       37  

Rest of EMEAA

    10       773       783       303       480       55  

SCA&C

           

Colombia

    —        742       742       274       468       45  

Panama

    —        302       302       88       214       19  

Caribbean TCL

    —        499       499       218       281       16  

Dominican Republic

    —        232       232       81       151       18  

Rest of SCA&C

    —        268       268       104       164       20  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Reportable segments

    258       24,354       24,612       7,711       16,901       1,322  

Other activities

    382       1,385       1,767       7,827       (6,060     40  

Assets held for sale

    —        68       68       —        68       —   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total consolidated

  $ 640       25,807       26,447       15,538       10,909       1,362  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

1

Capital expenditures represent: a) the purchases of property, machinery and equipment, b) stripping costs, as well as c) assets for the right-of-use incurred during the respective period (notes 15.1 and 15.2) and exclude increases related to asset retirement obligations (note 18.2).

 

12


Cemex, S.A.B. de C.V. and Subsidiaries

Notes to the Consolidated Financial Statements

As of December 31, 2023, 2022 and 2021

(Millions of U.S. Dollars)

 

Revenues including intragroup transactions and external customers by line of business and reportable segment for the years ended December 31, 2023, 2022 and 2021, were as follows:

 

2023

  Cement     Concrete     Aggregates     Urbanization
solutions
    Others     Eliminations     External
revenues
 

Mexico

  $ 3,378       1,397       399       1,163       13       (1,495     4,855  

United States

    1,988       3,070       1,347       694       14       (1,775     5,338  

EMEAA

             

United Kingdom

    315       344       376       201       22       (266     992  

France

    —        656       356       17       —        (187     842  

Germany

    227       171       91       38       62       (142     447  

Poland

    331       169       44       6       —        (84     466  

Spain

    326       119       41       25       —        (100     411  

Philippines

    311       —        —        3       1       (3     312  

Israel

    —        662       200       116       2       (186     794  

Rest of EMEAA

    551       288       52       17       23       (165     766  

SCA&C

             

Colombia

    316       163       48       54       22       (145     458  

Panama

    128       30       9       12       4       (51     132  

Caribbean TCL

    316       5       8       1       4       (17     317  

Dominican Republic

    301       24       —        60       10       (35     360  

Rest of SCA&C

    373       18       5       28       1       (11     414  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Reportable segments

    8,861       7,116       2,976       2,435       178       (4,662     16,904  

Other activities

    —        —        —        —        484       —        484  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Consolidated

  $                   17,388  
             

 

 

 

 

2022

  Cement     Concrete     Aggregates     Urbanization
solutions
    Others     Eliminations     External
revenues
 

Mexico

  $ 2,663       925       261       843       14       (1,064     3,642  

United States

    2,017       2,871       1,202       697       12       (1,765     5,034  

EMEAA

             

United Kingdom

    312       329       371       206       27       (263     982  

France

    —        622       332       15       —        (188     781  

Germany

    220       186       81       32       71       (151     439  

Poland

    282       160       41       4       1       (73     415  

Spain

    281       99       34       25       —        (93     346  

Philippines

    378       —        —        4       —        (3     379  

Israel

    —        718       213       97       21       (209     840  

Rest of EMEAA

    504       260       48       18       26       (150     706  

SCA&C

             

Colombia

    296       137       40       62       19       (125     429  

Panama

    119       27       7       13       2       (53     115  

Caribbean TCL

    297       4       6       2       5       (20     294  

Dominican Republic

    285       20       —        46       10       (19     342  

Rest of SCA&C

    360       16       3       22       1       (9     393  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Reportable segments

    8,014       6,374       2,639       2,086       209       (4,185     15,137  

Other activities

    —        —        —        —        440       —        440  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Consolidated

  $                   15,577  
             

 

 

 

 

13


Cemex, S.A.B. de C.V. and Subsidiaries

Notes to the Consolidated Financial Statements

As of December 31, 2023, 2022 and 2021

(Millions of U.S. Dollars)

 

Information related to revenue by line of business and reportable segment – continued

 

 

2021

  Cement     Concrete     Aggregates     Urbanization
solutions
    Others     Eliminations     External
revenues
 

Mexico

  $ 2,412       733       208       810       14       (853     3,324  

United States

    1,731       2,479       1,005       558       13       (1,431     4,355  

EMEAA

             

United Kingdom

    270       311       377       200       53       (271     940  

France

    —        682       397       6       —        (222     863  

Germany

    210       204       65       30       69       (149     429  

Poland

    272       154       38       6       1       (72     399  

Spain

    256       93       31       23       —        (69     334  

Philippines

    423       —        —        4       1       (4     424  

Israel

    —        657       199       89       27       (187     785  

Rest of EMEAA

    423       232       47       14       21       (124     613  

SCA&C

             

Colombia

    309       130       36       58       21       (117     437  

Panama

    103       16       5       7       1       (34     98  

Caribbean TCL

    271       5       7       4       6       (20     273  

Dominican Republic

    240       16       —        44       8       (17     291  

Rest of SCA&C

    400       20       6       24       1       (7     444  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Reportable segments

    7,320       5,732       2,421       1,877       236       (3,577     14,009  

Other activities

    —        —        —        —        370       —        370  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Consolidated

  $                   14,379  
             

 

 

 

 

5)

COST OF SALES

Cost of sales represents the production cost of inventories at the moment of sale. Such cost of sales includes depreciation, amortization and depletion of assets involved in production, expenses related to storage in production plants and freight expenses of raw material in plants and delivery expenses of Cemex’s ready-mix concrete business.

The detail of the consolidated cost of sales by nature for the years 2023, 2022 and 2021 is as follows:

 

     2023      2022      2021  

Raw materials and goods for resale

   $ 5,353        4,916        4,875  

Payroll

     1,734        1,474        1,349  

Electricity, fuels and other services

     1,791        1,655        1,174  

Depreciation and amortization

     1,017        929        934  

Maintenance, repairs and supplies

     955        809        722  

Transportation costs

     466        671        573  

Other production costs and change in inventory

     211        301        116  
  

 

 

    

 

 

    

 

 

 
   $ 11,527        10,755        9,743  
  

 

 

    

 

 

    

 

 

 

 

6)

OPERATING EXPENSES

Administrative expenses represent the expenses associated with personnel, services and equipment, including depreciation and amortization, related to managerial activities and back office for the Company’s management. Sales expenses represent the expenses associated with personnel, services and equipment, including depreciation and amortization incurred in sales activities. Distribution and logistics expenses refer to expenses of storage at points of sales, including depreciation and amortization, as well as freight expenses of finished products between plants and points of sale and freight expenses between points of sales and the customers’ facilities.

Consolidated operating expenses by function during 2023, 2022 and 2021 are as follows:

 

     2023      2022      2021  

Administrative expenses 1, 2

   $ 1,385        1,074        958  

Selling expenses 2

     411        363        322  
  

 

 

    

 

 

    

 

 

 

Total administrative and selling expenses

     1,796        1,437        1,280  

Distribution and logistics expenses

     1,951        1,824        1,637  
  

 

 

    

 

 

    

 

 

 

Total operating expenses

   $ 3,747        3,261        2,917  
  

 

 

    

 

 

    

 

 

 

 

1

All significant research and development activities are executed by several internal areas of Cemex as part of their daily activities. In 2023, 2022 and 2021, the total combined expenses of these departments recognized within administrative expenses were $55, $42 and $44, respectively.

 

14


Cemex, S.A.B. de C.V. and Subsidiaries

Notes to the Consolidated Financial Statements

As of December 31, 2023, 2022 and 2021

(Millions of U.S. Dollars)

 

Operating expenses – continued

 

 

2

In 2023, 2022 and 2021, administrative expenses include depreciation and amortization of $162, $140 and $137, respectively, and selling expenses include depreciation and amortization of $54 in 2023, $51 in 2022 and $49 in 2021.

Consolidated operating expenses during 2023, 2022 and 2021 by nature are as follows:

 

     2023      2022      2021  

Transportation costs

   $ 1,793        1,676        1,502  

Payroll

     1,154        1,038        905  

Depreciation and amortization

     216        191        186  

Professional legal, accounting and advisory services

     236        145        144  

Maintenance, repairs and supplies

     99        84        76  

Other operating expenses

     249        127        104  
  

 

 

    

 

 

    

 

 

 
   $ 3,747        3,261        2,917  
  

 

 

    

 

 

    

 

 

 

 

7)

OTHER EXPENSES, NET

The detail of the caption “Other expenses, net” for the years 2023, 2022 and 2021 is as follows:

 

                             
     2023      2022      2021  

Results from the sale of assets and others 1

   $ (219      9        (126

Impairment losses (notes 15.1, 16.1 and 16.2)

     (43      (442      (513

Restructuring costs 2

     (2      (20      (17

Incremental expenses related to the COVID-19 Pandemic 3

     (1      (14      (26

Sale of CO2 allowances (note 28.13) 4

     —         —         600  
  

 

 

    

 

 

    

 

 

 
   $ (265      (467      (82
  

 

 

    

 

 

    

 

 

 

 

1

In 2023, 2022 and 2021, includes $13, $14 and $29, respectively, in connection with property damage related to natural disasters (note 25.1). In addition, in 2022 includes a gain of $48 as a result of the remeasurement at fair value of Cemex’s previous controlling interest in Neoris at the time of sale.

2

Restructuring costs mainly refer to severance payments and the definitive closing of operating sites.

3

Refers to certain incremental expenses that Cemex considers of non-recurring nature related to the maintenance of some hygiene measures related to the Coronavirus SARS-CoV-2 pandemic declared in March 2020 (the “COVID-19 Pandemic”). From the beginning of the COVID-19 Pandemic and to the present day, attending official dispositions of the authorities, Cemex has followed strict hygiene, sanitary and security protocols in all its operations and has modified its manufacturing, selling and distribution processes aiming to protect the health and safety of its employees and their families, customers and communities.

4

In connection with the EU’s Emissions Trading System (“EU ETS”), during March 2021, considering Cemex’s targets for the reduction of CO2 emissions (note 24.4), as well as the innovative technologies and considerable capital investments that have to be deployed to achieve such goals, Cemex sold 12.3 million CO2 emission allowances (“Allowances”) for an aggregate amount of $600.

 

8)

FINANCIAL ITEMS

 

8.1)

FINANCIAL EXPENSE

Consolidated financial expenses represent the interest on Cemex’s debt measured using the effective interest rate and, in 2023, 2022 and 2021, include $75, $67 and $67 of interest expense related to the Company’s lease contracts (notes 15.2 and 17.2). From the previously reported amounts for the years 2022 and 2021, Cemex reclassified from the caption of Financial expense to the line item of Financial income and other items, net, an income of $104 and an expense of $82, respectively, corresponding to results associated with the early redemption of debt during those years (note 17.1), considering it contributes to an improved analysis of the financial expense and to conform with the classification of these effects in 2023.

 

8.2)

FINANCIAL INCOME AND OTHER ITEMS, NET

The detail of financial income and other items, net in 2023, 2022 and 2021 was as follows:

 

     2023     2022     2021  

Foreign exchange results

   $ 144       73       (35

Financial income

     40       27       22  

Results from financial instruments, net (notes 14.2 and 17.4) 1

     (65     99       (88

Net interest cost of defined benefit liabilities (note 19)

     (44     (29     (31

Effects of amortized cost on assets and liabilities

     (42     (32     (28

Others

     —        13       (1
  

 

 

   

 

 

   

 

 

 
   $ 33       151       (161
  

 

 

   

 

 

   

 

 

 

 

1

For the years 2022 and 2021, includes the reclassification described in note 8.1.

 

15


Cemex, S.A.B. de C.V. and Subsidiaries

Notes to the Consolidated Financial Statements

As of December 31, 2023, 2022 and 2021

(Millions of U.S. Dollars)

 

9)

CASH AND CASH EQUIVALENTS

The balance in this caption is comprised of available amounts of cash and cash equivalents, represented by low-risk, highly liquid short-term investments readily convertible into known amounts of cash, including overnight investments, which yield fixed returns and have maturities of less than three months from the investment date. These fixed-income investments are recorded at cost plus accrued interest.

Accrued interest is included in the statement of income as part of “Financial income and other items, net.”

As of December 31, 2023 and 2022, consolidated cash and cash equivalents consisted of:

 

     2023      2022  

Cash and bank accounts

   $ 363        297  

Fixed-income securities and other cash equivalents

     261        198  
  

 

 

    

 

 

 
   $ 624        495  
  

 

 

    

 

 

 

 

10)

TRADE ACCOUNTS RECEIVABLE

As of December 31, 2023 and 2022, consolidated trade accounts receivable consisted of:

 

     2023     2022  

Trade accounts receivable

   $ 1,841       1,735  

Allowances for expected credit losses

     (90     (91
  

 

 

   

 

 

 
   $ 1,751       1,644  
  

 

 

   

 

 

 

As of December 31, 2023 and 2022, trade accounts receivable include receivables of $848 and $828, respectively, sold in several countries under outstanding trade accounts receivable securitization programs and/or factoring programs with recourse, in which, generally Cemex effectively surrenders control associated with the trade accounts receivable sold and there is no guarantee or obligation to reacquire the assets; nonetheless, in such programs, Cemex retains certain residual interest in the programs and/or maintains continuing involvement with the accounts receivable. Therefore, the trade accounts receivable sold were not derecognized from the statement of financial position and the funded amounts to Cemex as of December 31, 2023 and 2022 of $678 in both years, were recognized within the line item of Other financial obligations (note 17.2).

The discount granted to the acquirers of the trade accounts receivable is recorded as financial expense and amounted to $52 in 2023, $24 in 2022 and $11 in 2021. Cemex’s securitization programs are usually negotiated for periods of one to two years and are usually renewed at their maturity.

As of December 31, 2023, the balances of trade accounts receivable and the allowance for Expected Credit Losses (“ECL”) were as follows:

 

     Accounts
receivable
     ECL
allowance
     ECL average
rate
 

Mexico

   $ 457        31        6.8

United States

     536        8        1.5

EMEAA

     745        41        5.5

SCA&C

     96        10        10.4

Others

     7        —         —   
  

 

 

    

 

 

    
   $ 1,841        90     
  

 

 

    

 

 

    

Changes in the allowance for ECL in 2023, 2022 and 2021, were as follows:

 

     2023     2022     2021  

Allowances for expected credit losses at beginning of period

   $ 91       101       121  

Charged to selling expenses

     11       9       1  

Deductions

     (15     (21     (16

Reclassification to assets held for sale

     —        —        (2

Foreign currency translation effects

     3       2       (3
  

 

 

   

 

 

   

 

 

 

Allowances for expected credit losses at end of period

   $ 90       91       101  
  

 

 

   

 

 

   

 

 

 

 

16


Cemex, S.A.B. de C.V. and Subsidiaries

Notes to the Consolidated Financial Statements

As of December 31, 2023, 2022 and 2021

(Millions of U.S. Dollars)

 

11)

OTHER ACCOUNTS RECEIVABLE

As of December 31, 2023 and 2022, consolidated other accounts receivable consisted of:

 

     2023      2022  

Advances of income taxes and other refundable taxes

   $ 472        335  

Non-trade accounts receivable 1

     102        119  

Interest and notes receivable

     54        41  

Loans to employees and others

     16        15  

Current portion of assets from valuation of derivative financial instruments

     6        25  
  

 

 

    

 

 

 
   $ 650        535  
  

 

 

    

 

 

 

 

1

Non-trade accounts receivable are mainly attributable to the sale of assets.

 

12)

INVENTORIES

Inventories are valued using the lower of cost or net realizable value. The weighted average cost of inventories includes expenditures incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. Inventory balances are subject to impairment. When an impairment situation arises, the inventory balance is adjusted to its net realizable value against “Cost of sales.” Advances to suppliers of inventory are presented as part of other current assets.

As of December 31, 2023 and 2022, the consolidated balances of inventories were summarized as follows:

 

     2023      2022  

Materials and spare parts

   $ 537        563  

Finished goods

     461        406  

Raw materials

     370        329  

Work-in-process

     330        284  

Inventory in transit

     91        87  
  

 

 

    

 

 

 
   $ 1,789        1,669  
  

 

 

    

 

 

 

For the years ended December 31, 2023, 2022 and 2021, Cemex recognized within “Cost of sales” in the statements of income, inventory impairment losses of $7, $10 and $4, respectively.

 

13)

OTHER CURRENT ASSETS

As of December 31, 2023 and 2022, assets held for sale and other current assets were detailed as follows:

 

     2023      2022  

Other current assets

   $ 142        115  

Assets held for sale

     49        68  
  

 

 

    

 

 

 
   $ 191        183  
  

 

 

    

 

 

 

Assets held for sale are measured at the lower of their estimated realizable value, less costs to sell, and their carrying amounts.

Other current assets presented above are mainly comprised of advance payments to suppliers.

 

17


Cemex, S.A.B. de C.V. and Subsidiaries

Notes to the Consolidated Financial Statements

As of December 31, 2023, 2022 and 2021

(Millions of U.S. Dollars)

 

14)

INVESTMENTS IN ASSOCIATES AND JOINT VENTURES, OTHER INVESTMENTS AND NON-CURRENT ACCOUNTS RECEIVABLE

 

14.1)

INVESTMENTS IN ASSOCIATES AND JOINT VENTURES

As of December 31, 2023 and 2022, the investments in common shares of associates and joint ventures, which are accounted under the equity method, were as follows:

 

Associates    Activity      Country      %      2023      2022  

Camcem, S.A. de C.V.

     Cement        Mexico        40.1      $ 364        306  

Concrete Supply Co. LLC

     Concrete        United States        40.0        103        96  

Lehigh White Cement Company

     Cement        United States        36.8        83        76  

Neoris N.V. 1

     Technology        The Netherlands        34.8        69        62  

Joint ventures

              

Société d’Exploitation de Carrières

     Aggregates        France        50.0        24        23  

Société Méridionale de Carrières

     Aggregates        France        33.3        13        12  

Other companies

     —         —         —         73        65  
           

 

 

    

 

 

 
            $ 729        640  
           

 

 

    

 

 

 

Out of which:

              

Acquisition cost

            $ 330        302  

Equity method recognition

              399        338  
           

 

 

    

 

 

 

 

1

In connection with the sale of Cemex’s 65% stake in Neoris to Advent described in note 4.2, Cemex’s remaining equity interest in Neoris was remeasured at fair value at the date of loss of control, measured prospectively under the equity method and is presented in the line item of investments in associates and joint ventures.

Combined condensed statement of financial position information of associates and joint ventures as of December 31, 2023 and 2022 is set forth below:

 

     2023      2022  

Current assets

   $ 1,761        1,603  

Non-current assets

     1,877        1,699  
  

 

 

    

 

 

 

Total assets

     3,638        3,302  
  

 

 

    

 

 

 

Current liabilities

     468        468  

Non-current liabilities

     850        774  
  

 

 

    

 

 

 

Total liabilities

     1,318        1,242  
  

 

 

    

 

 

 

Total net assets

   $ 2,320        2,060  
  

 

 

    

 

 

 

Out of the total assets amounts in 2023 and 2022 presented in the table above, Camcem, S.A. de C.V. (“Camcem”), which is the holding company of Grupo Cementos de Chihuahua, S.A.B. de C.V. (“GCC”), represented 76% and 74%, respectively. In addition, out of total liabilities, Camcem represented 77% in 2023 and 78% in 2022.

Combined selected information of the statements of income of associates and joint ventures in 2023, 2022 and 2021 is set forth below:

 

     2023      2022      2021  

Revenues

   $ 2,410        2,319        1,801  

Operating earnings

     535        398        312  

Income before income tax

     394        268        219  

Net income

     268        186        153  
  

 

 

    

 

 

    

 

 

 

Out of net income in 2023, 2022 and 2021 from the table above, amounts that Cemex participates and which reflect the share in associates and joint ventures in the Company’s statement of income, Camcem represented 59%, 53% and 49%, respectively.

The share of associates and joint ventures by reportable segment in the statements of income for 2023, 2022 and 2021 are detailed as follows:

 

     2023      2022      2021  

Mexico

   $ 65        39        28  

United States

     21        17        18  

EMEAA

     10        8        8  

Corporate and others

     2        (34      —   
  

 

 

    

 

 

    

 

 

 
   $ 98        30        54  
  

 

 

    

 

 

    

 

 

 

As of December 31, 2023 and 2022, Cemex did not have written put options for the acquisition of non-controlling interests.

 

18


Cemex, S.A.B. de C.V. and Subsidiaries

Notes to the Consolidated Financial Statements

As of December 31, 2023, 2022 and 2021

(Millions of U.S. Dollars)

 

14.2)

OTHER INVESTMENTS AND NON-CURRENT ACCOUNTS RECEIVABLE

As of December 31, 2023 and 2022, consolidated other investments and non-current accounts receivable were summarized as follows:

 

     2023      2022  

Non-current accounts receivable 1

   $ 272        228  

Non-current portion of assets from valuation of derivative financial instruments (note 17.4)

     64        57  

Investments in strategic equity securities

     3        5  

Investments at fair value through the statements of income

     1        3  
  

 

 

    

 

 

 
   $ 340        293  
  

 

 

    

 

 

 

 

1

Includes, among other items: a) accounts receivable from investees and joint ventures of $78 in 2023 and $33 in 2022, b) advances to suppliers of fixed assets of $41 in 2023 and $58 in 2022, c) employee prepaid compensation of $8 in 2023 and $12 in 2022, and d) warranty deposits of $24 in 2023 and $21 in 2022.

 

15)

PROPERTY, MACHINERY AND EQUIPMENT, NET AND ASSETS FOR THE RIGHT-OF-USE, NET

As of December 31, 2023 and 2022, property, machinery and equipment, net and assets for the right-of-use, net were summarized as follows:

 

     2023      2022  

Property, machinery and equipment, net

   $ 11,272        10,156  

Assets for the right-of-use, net

     1,194        1,128  
  

 

 

    

 

 

 
   $ 12,466        11,284  
  

 

 

    

 

 

 

 

15.1)

PROPERTY, MACHINERY AND EQUIPMENT, NET

As of December 31, 2023, the average useful lives by category of fixed assets, which are reviewed at each reporting date, were as follows:

 

     Years  

Administrative buildings

     30  

Industrial buildings

     25  

Machinery and equipment in plant

     16  

Ready-mix trucks and motor vehicles

     11  

Office equipment and other assets

     7  
  

 

 

 

As of December 31, 2023, to the best of its knowledge, management considers that its commitments and actions in relation to climate change currently do not affect the estimated average useful lives of its property, machinery and equipment described above (note 24.4).

As of December 31, 2023 and 2022, consolidated property, machinery and equipment, net and the changes in this line item during 2023 and 2022, were as follows:

 

     2023  
     Land and
mineral
reserves
    Building     Machinery
and
equipment
    Construction
in progress 2
     Total  

Cost at beginning of period

   $ 4,843       2,342       11,663       1,668        20,516  

Accumulated depreciation and depletion

     (1,337     (1,513     (7,510     —         (10,360
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Net book value at beginning of period

     3,506       829       4,153       1,668        10,156  

Capital expenditures

     33       86       720       200        1,039  

Stripping costs 1

     37       —        —        —         37  
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Total capital expenditures

     70       86       720       200        1,076  

Disposals 3

     (31     (2     (75     —         (108

Business combinations (note 4.1)

     13       4       22       —         39  

Depreciation and depletion for the period

     (141     (80     (653     —         (874

Impairment losses (note 7)

     (16     (2     (18     —         (36

Asset retirement obligations (note 18.2)

     —        20       44       —         64  

Foreign currency translation effects

     399       124       369       63        955  
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Cost at end of period

     5,295       2,636       12,702       1,931        22,564  

Accumulated depreciation and depletion

     (1,495     (1,657     (8,140     —         (11,292
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Net book value at end of period

   $ 3,800       979       4,562       1,931        11,272  
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

 

19


Cemex, S.A.B. de C.V. and Subsidiaries

Notes to the Consolidated Financial Statements

As of December 31, 2023, 2022 and 2021

(Millions of U.S. Dollars)

 

Property, machinery and equipment, net – continued

 

 

     2022  
     Land and
mineral
reserves
    Building     Machinery
and
equipment
    Construction
in progress 2
    Total  

Cost at beginning of period

   $ 4,801       2,532       11,727       1,262       20,322  

Accumulated depreciation and depletion

     (1,226     (1,494     (7,400     —        (10,120
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net book value at beginning of period

     3,575       1,038       4,327       1,262       10,202  

Capital expenditures

     126       52       406       457       1,041  

Stripping costs 1

     25       —        —        —        25  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total capital expenditures

     151       52       406       457       1,066  

Disposals 3

     (4     (4     (22     —        (30

Business combinations (note 4.1)

     32       1       9       1       43  

Depreciation and depletion for the period

     (153     (78     (493     —        (724

Impairment losses (note 7)

     (12     (8     (55     (2     (77

Asset retirement obligations (note 18.2)

     —        5       17       —        22  

Foreign currency translation effects

     (83     (177     (36     (50     (346
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cost at end of period

     4,843       2,342       11,663       1,668       20,516  

Accumulated depreciation and depletion

     (1,337     (1,513     (7,510     —        (10,360
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net book value at end of period

   $ 3,506       829       4,153       1,668       10,156  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

1

All waste removal costs or stripping costs incurred in the operative phase of a surface mine to access the mineral reserves are recognized as part of its carrying amount. The capitalized amounts are further amortized over the expected useful life of exposed ore body based on the units-of-production method.

2

As of December 31, 2023, the Maceo plant in Colombia with an annual capacity of 1.3 million tons of cement, has not initiated commercial operations mainly as the access road has not been finalized. As of the reporting date, the works related to the access road to the plant reflect significant progress; nonetheless, the beginning of commercial operations is subject also to the successful conclusion of several ongoing processes for the proper operation of the assets and other legal proceedings (note 25.3). As of December 31, 2023, the carrying amount of the plant is for an amount in Colombian Pesos equivalent to $308.

3

In 2023 includes sales of non-strategic fixed assets in the United States and France for $23 and $16, respectively, among others. In 2022 includes sales of non-strategic fixed assets in the United States and the United Kingdom for $5 in each country, among others.

During the years ended December 31, 2023, 2022 and 2021 impairment losses of fixed assets by country are as follows:

 

     2023      2022      2021  

Colombia

   $ 8        —         10  

Caribbean TCL

     7        14        —   

France

     6        —         —   

United Kingdom

     5        10        5  

United States

     3        26        18  

Spain

     2        23        —   

Others

     5        4        10  
  

 

 

    

 

 

    

 

 

 
   $ 36        77        43  
  

 

 

    

 

 

    

 

 

 

In connection with the impairment losses presented in the table above, recognized within the line item of Other expenses, net (notes 2.9 and 7), Cemex adjusted the related fixed assets to their estimated value in use in those circumstances in which the assets remained in operation based on estimated cash flows during the remaining useful life, or to their realizable value, in the case of idle assets.

Cemex’s recognized impairment losses of fixed assets in 2023 relate mainly to: a) closing and/or reduction of operations resulting from adjusting the supply to current demand conditions; b) a change of operating model of certain assets; and c) some equipment that remained idle for several periods. In 2022 and 2021, those impairment losses were associated mainly with certain negative effects of the COVID-19 Pandemic in 2020, as a result of which, Cemex closed certain assets that will remain closed for the foreseeable future in relation to the estimated sales volumes and the Company’s ability to supply demand by achieving efficiencies in other operating assets. In addition, during 2023, 2022 and 2021 there were no reversal of impairment charges.

 

20


Cemex, S.A.B. de C.V. and Subsidiaries

Notes to the Consolidated Financial Statements

As of December 31, 2023, 2022 and 2021

(Millions of U.S. Dollars)

 

15.2)

ASSETS FOR THE RIGHT-OF-USE, NET

As of December 31, 2023 and 2022, consolidated assets for the right-of-use, net and the changes in this caption during 2023 and 2022, were as follows:

 

     2023  
     Land     Buildings     Machinery
and
equipment 
    Others     Total  

Assets for the right-of-use at beginning of period

   $ 439       335       1,570       55       2,399  

Accumulated depreciation

     (142     (203     (894     (32     (1,271
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net book value at beginning of period

     297       132       676       23       1,128  

Additions of new leases

     36       9       284       12       341  

Cancellations and remeasurements, net

     (10     (4     (14     (1     (29

Depreciation

     (15     (36     (141     (12     (204

Foreign currency translation effects

     13       21       (68     (8     (42
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Assets for the right-of-use at end of period

     476       356       1,722       58       2,612  

Accumulated depreciation

     (155     (234     (985     (44     (1,418
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net book value at end of period

   $ 321       122       737       14       1,194  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

     2022  
     Land     Buildings     Machinery
and
equipment 
    Others     Total  

Assets for the right-of-use at beginning of period

   $ 395       401       1,513       21       2,330  

Accumulated depreciation

     (147     (205     (845     (13     (1,210
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net book value at beginning of period

     248       196       668       8       1,120  

Additions of new leases

     45       21       207       23       296  

Cancellations and remeasurements, net

     (15     (27     (82     (1     (125

Depreciation

     (1     (77     (165     (15     (258

Foreign currency translation effects

     20       19       48       8       95  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Assets for the right-of-use at end of period

     439       335       1,570       55       2,399  

Accumulated depreciation

     (142     (203     (894     (32     (1,271
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net book value at end of period

   $ 297       132       676       23       1,128  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

For the years ended December 31, 2023, 2022 and 2021, the combined rental expense related with short-term leases, leases of low-value assets and variable lease payments were $137, $108 and $94, respectively, and were recognized in cost of sales and operating expenses, as applicable. During the reported periods, Cemex did not have any material revenue from sub-leasing activities.

 

16)

GOODWILL AND INTANGIBLE ASSETS, NET

 

16.1)

BALANCES AND CHANGES DURING THE PERIOD

As of December 31, 2023 and 2022, consolidated goodwill, intangible assets and deferred charges were summarized as follows:

 

     2023      2022  
Intangible assets of indefinite useful life:    Cost      Accumulated
amortization
    Carrying
amount
     Cost      Accumulated
amortization
    Carrying
amount
 

Goodwill

   $ 7,674        —        7,674      $ 7,538        —        7,538  

Intangible assets of definite useful life:

               

Extraction rights

     1,768        (479     1,289        1,729        (452     1,277  

Internally developed software

     973        (639     334        820        (534     286  

Customer relationships

     196        (196     —         196        (196     —   

Mining projects

     47        (7     40        39        (6     33  

Industrial property and trademarks

     32        (16     16        32        (15     17  

Other intangible assets

     357        (180     177        305        (163     142  
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 
   $ 11,047        (1,517     9,530      $ 10,659        (1,366     9,293  
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

 

21


Cemex, S.A.B. de C.V. and Subsidiaries

Notes to the Consolidated Financial Statements

As of December 31, 2023, 2022 and 2021

(Millions of U.S. Dollars)

 

Changes in consolidated goodwill for the years ended December 31, 2023 and 2022, were as follows:

 

     2023      2022  

Balance at beginning of period

   $ 7,538        7,984  

Impairment losses (notes 7 and 16.2)

     —         (365

Business combinations (note 4.1)

     8        4  

Foreign currency translation effects

     128        (85
  

 

 

    

 

 

 

Balance at end of period

   $ 7,674        7,538  
  

 

 

    

 

 

 

Changes in intangible assets of definite life in 2023 and 2022, were as follows:

 

     2023  
     Extraction
rights
    Internally
developed
software 1
    Mining
projects
    Industrial
property and
trademarks
    Others     Total  

Balance at beginning of period

   $ 1,277       286       33       17       142       1,755  

Amortization for the period

     (42     (91     (1     (1     (20     (155

Impairment losses (note 7)

     (7     —        —        —        —        (7

Additions (decreases), net 1

     2       148       7       2       48       207  

Business combinations

     26       —        —        —        —        26  

Foreign currency translation effects

     33       (9     1       (2     7       30  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at the end of period

   $ 1,289       334       40       16       177       1,856  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

                                                                             
     2022  
     Extraction
rights
    Internally
developed
software 1
    Mining
projects
    Industrial
property
and
trademarks
    Others     Total  

Balance at beginning of period

   $ 1,350       228       45       23       133       1,779  

Amortization for the period

     (44     (73     (1     (7     (13     (138

Additions (decreases), net 1

     (10     136       (10     —        35       151  

Foreign currency translation effects

     (19     (5     (1     1       (13     (37
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at the end of period

   $ 1,277       286       33       17       142       1,755  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

1

Includes the capitalized direct costs incurred in the development stage of internal-use software, such as professional fees, direct labor and related travel expenses. The capitalized amounts are amortized to the statement of income over a period ranging from 3 to 5 years.

In 2021, out of the impairment losses recognized in the caption of Other expenses, net (note 7), $53 related to intangible assets, of which, $49 referred to internally developed software capitalized in prior periods, considering certain obsolescence generated by the significant replacement of the applications platform during that year.

 

16.2)

ANALYSIS OF GOODWILL IMPAIRMENT

Based on IFRS, Cemex analyses the possible impairment of goodwill mandatorily at least once a year. This analysis is made during the last quarter, or additionally on any interim date when impairment indicators exist, by means of determining the value in use of its groups of Cash Generating Units (“CGUs”) to which goodwill balances have been allocated. The value in use represents the discounted cash flow projections of each CGU for the next five years plus a terminal value using risk adjusted discount rates.

In 2023, Cemex did not determine goodwill impairment losses considering the increase in the Company’s projected cash flows linked to the improved generation of Operating EBITDA in the majority of the countries in which Cemex operates to which goodwill balances have been allocated and the positive outlook for the following years, partly offset by the general increase in the applicable discount rates as compared to 2022, which on average increased 120 basis points or 1.2%.

In 2022, as part of the mandatory impairment tests during the fourth quarter, Cemex recognized within Other expenses, net (note 7), non-cash goodwill impairment losses for an aggregate amount of $365, of which, $273 correspond to the operating segment in the United States and $92 correspond to the operating segment in Spain. In both cases, the related book value of the operating segment exceeded the corresponding value in use. The impairment losses in 2022 are mainly related to the significant increase in the discount rates as compared to 2021 and the resulting significant decrease in the Company’s projected cash flows in these segments considering the global high inflationary environment, which increased the risk-free rates, and the material increase in the funding cost observed in the industry during the period. These negative effects more than offset the expected improvements in the estimated Operating EBITDA generation in both the United States and Spain.

 

22


Cemex, S.A.B. de C.V. and Subsidiaries

Notes to the Consolidated Financial Statements

As of December 31, 2023, 2022 and 2021

(Millions of U.S. Dollars)

 

Analysis of goodwill impairment – continued

 

 

In 2021, the Company recognized within Other expenses, net (note 7) in the statement of income, non-cash goodwill impairment losses for an aggregate amount of $440, related to the operating segments in Spain of $317, United Arab Emirates (“UAE”) of $96 as well as $27 related to Neoris due to reorganization. The impairment losses in Spain and UAE referred closely to disruptions in the supply chains that have generated increases in the estimated production and transportation costs that were considered to be sustained in the mid-term, which significantly reduced the projected Operating EBITDA as compared to the valuations determined as of December 31, 2020.

As of December 31, 2023 and 2022, goodwill balances allocated by Operating Segment after impairment adjustments were as follows:

 

     2023      2022  

Mexico

   $ 441        384  

United States

     6,176        6,176  

EMEAA

     

United Kingdom

     264        250  

France

     207        201  

Spain

     59        57  

Philippines

     82        82  

Rest of EMEAA 1

     50        38  

SCA&C

     

Colombia

     254        202  

Caribbean TCL

     83        83  

Rest of SCA&C 2

     58        65  
  

 

 

    

 

 

 
   $ 7,674        7,538  
  

 

 

    

 

 

 

 

1

This caption refers to the operating segments in Israel, the Czech Republic, Egypt and Germany.

2

This caption refers to the operating segments in the Dominican Republic, the Caribbean and Panama.

As of December 31, 2023, 2022 and 2021, Cemex’s pre-tax discount rates and long-term growth rates used to determine the discounted cash flows in the group of CGUs with the main goodwill balances were as follows:

 

     Discount rates   Long-term growth rates 1

Groups of CGUs

   2023   2022   2021   2023   2022   2021

United States

   10.1%   9.1%   7.2%   2.0%   2.0%   2.0%

United Kingdom

   10.4%   9.1%   7.3%   1.5%   1.5%   1.5%

France

   10.4%   9.2%   7.3%   1.5%   1.4%   1.4%

Spain

   10.7%   9.4%   7.6%   1.6%   1.7%   1.5%

Mexico

   11.6%   10.3%   8.4%   1.0%   1.1%   1.0%

Colombia

   12.7%   10.9%   8.5%   3.3%   3.3%   3.5%

Range of rates in other countries

   10.3% — 17.0%   9.3% — 13.9%   7.4% — 11.7%   1.5% — 6.4%   1.5% — 6.0%   1.7% — 6.0%
  

 

 

 

 

 

 

 

 

 

 

 

 

1

The long-term growth rates are generally based on projections issued by the International Monetary Fund (“IMF”).

As of December 31, 2023, the discount rates used by the Company in its cash flows projections to determine the value in use of its operating segments or CGUs in which goodwill has been allocated, increased by a weighted average of 1.2% with respect to the discount rates determined at December 31, 2022, mainly considering the increase in the risk-free rate associated to Cemex segments which changed from 3.58% in 2022 to 4.79% in 2023, as well as the reduction in the weight of debt which changed from 27% in 2022 to 22.5% in 2023. This was partially offset by the reduction in the public comparable companies’ stock volatility (beta) which changed from 1.08 in 2022 to 1.07 in 2023. In 2023, the funding cost observed in the industry remained unchanged at 6.7% as compared to 2022, as well as other assumptions that remained relatively flat in 2023 as compared to 2022. As new economic data is available, these financial assumptions will be revised upwards or downwards again in the future. Cemex maintained certain reductions to the long-term growth rates used as of December 31, 2023, as compared to the IMF projections, mainly in Israel in 2.1%, Mexico 1.0% and Egypt in 3.0%.

As of December 31, 2022, the discount rates used by Cemex in its cash flows projections to determine the value in use of its operating segments or CGUs in which goodwill has been allocated, increased by a weighted average of 2.0% with respect to the discount rates determined at December 31, 2021, mainly considering the increase in the risk-free rate associated to Cemex which changed from 1.82% in 2021 to 3.58% in 2022, the significant increase in the funding cost observed in the industry which changed from 4.1% in 2021 to 6.7% in 2022, as well as the average increase of 1.7% in the cost of equity in 2022. The other variables remained relatively flat. As new economic data is available, these financial assumptions will be revised upwards or downwards again in the future. Cemex maintained certain reductions to the long-term growth rates used as of December 31, 2022, as compared to the IMF projections, mainly in Mexico in 1.0% and Egypt in 2.85%.

 

23


Cemex, S.A.B. de C.V. and Subsidiaries

Notes to the Consolidated Financial Statements

As of December 31, 2023, 2022 and 2021

(Millions of U.S. Dollars)

 

Analysis of goodwill impairment – continued

 

 

Moreover, the discount rates used by Cemex as of December 31, 2021, changed slightly as compared to 2020 in a range of -0.1% up to 0.5%. The discount rates increased considering the weighing of debt in the calculation which decreased from 34.6% in 2020 to 26.9% in 2021 and the market risk premium which increased from 5.7% in 2020 to 5.8% in 2021. These increasing effects were offset by the decrease in the risk-free rate associated with Cemex which changed from 2.2% in 2020 to 1.8% in 2021 and the reduction in the public comparable companies’ stock volatility (beta) that changed from 1.19 in 2020 to 1.12 in 2021. As of December 31, 2021, the funding cost observed in the industry of 4.1% remained unchanged against 2020, while the specific risk rates of each country experienced mixed non-significant changes in 2021 compared to 2020 in most of the countries. In addition, as a preventive measure to continue considering the COVID-19 Pandemic’s negative effects, Cemex reduced in certain countries its long-term growth rates used in their cash flows projections as of December 31, 2021, as compared to the IMF projections such as in Mexico in 1.0% and Egypt in 2.8%.

In connection with the discount rates and long-term growth rates included in the table above, Cemex verified the reasonableness of its conclusions using sensitivity analyses to changes in assumptions, affecting the value in use of all groups of CGUs with an independent reasonably possible increase of 1% in the pre-tax discount rate, an independent possible decrease of 1% in the long-term growth rate, as well as using multiples of Operating EBITDA, by means of which, Cemex determined a weighted-average multiple of Operating EBITDA to enterprise value observed in recent mergers and acquisitions in the industry. The average multiple was then applied to a stabilized amount of Operating EBITDA and the result was compared to the corresponding carrying amount for each group of CGUs to which goodwill had been allocated. Cemex considered an industry average Operating EBITDA multiple of 10.9 times in 2023 and 11.3 times in 2022 and 11.5 times 2021.

In relation to the economic assumptions used by the Company described above, the additional impairment losses that would have resulted from the sensitivity analyses derived from independent changes in each of the relevant assumptions, as well as the average multiple of Operating EBITDA, in those operating segments that presented relative impairment risk as of December 31, 2023, are as follows:

 

            Impairment effects from the sensitivity analyses to
changes in assumptions as of December 31, 2023
 
Operating segment    Impairment
losses
recognized
     Discount rate
+1%
     Long-term
growth rate

–1%
     Multiples
Operating
EBITDA

10.9x
 

United States

   $ —         357        64        —   
  

 

 

    

 

 

    

 

 

    

 

 

 

As of December 31, 2023, except for the operating segment in the United States, which goodwill accounts for 80% of Cemex’s goodwill consolidated balance, none of the other sensitivity analyses indicated a potential impairment risk in Cemex’s operating segments. The factors considered by the Company’s management that could cause the hypothetical scenario of the previous sensitivity analysis in the United States are, in relation to the discount rate, an independent increase of 306 bps in the Company’s funding cost observed as of December 31, 2023 of 6.67% or, an independent increase in the risk-free rate of 89 bps over the rate of 4.79% in the United States. Nonetheless, such assumptions did not seem reasonable as of December 31, 2023. Cemex continually monitors the evolution of the group of CGUs to which goodwill has been allocated that have presented relative goodwill impairment risk in any of the reported periods and if the relevant economic variables and the related value in use would be negatively affected, it may result in a goodwill impairment loss in the future.

Impairment tests are significantly sensitive to the estimation of future prices of Cemex’s products, the development of operating expenses, local and international economic trends in the construction industry, the long-term growth expectations in the different markets, as well as the discount rates and the growth rates in perpetuity applied. For purposes of estimating future prices, Cemex uses, to the extent available, historical data; plus the expected increase or decrease according to information issued by trusted external sources, such as national construction or cement producer chambers and/or in governmental economic expectations. Operating expenses are normally measured as a constant proportion of revenues, following experience. However, such operating expenses are also reviewed considering external information sources in respect of inputs that behave according to international prices, such as oil and gas. Cemex uses specific pre-tax discount rates for each group of CGUs to which goodwill is allocated, which are applied to discount pre-tax cash flows. The amounts of estimated undiscounted cash flows are significantly sensitive to the growth rate in perpetuity applied. The higher the growth rate in perpetuity applied, the higher the amount of undiscounted future cash flows by group of CGUs obtained. Moreover, the amounts of discounted estimated future cash flows are significantly sensitive to the weighted average cost of capital (discount rate) applied. The higher the discount rate applied, the lower the amount of discounted estimated future cash flows by group of CGUs obtained.

 

24


Cemex, S.A.B. de C.V. and Subsidiaries

Notes to the Consolidated Financial Statements

As of December 31, 2023, 2022 and 2021

(Millions of U.S. Dollars)

 

17)

FINANCIAL INSTRUMENTS

 

17.1)

CURRENT AND NON-CURRENT DEBT

As of December 31, 2023 and 2022, Cemex’s consolidated debt summarized by interest rates and currencies, was as follows: