Safe.
2020
Integrated
Report
Essential.
Resilient.
Table of Contents
Company Overview
CEMEX at a Glance
Performance and Progress Highlights
Our Response to COVID-19
Letter to Stakeholders
How We Create Value
CEMEX Value Creation Model
Material Priorities
Engaging Our Stakeholders
Net Value We Create for Society
Contribution to the Sustainable
Development Goals
Our 2030 Sustainability Targets
Our Performance in 2020
Financial Performance
Our Health and Safety Commitment
Climate Action
Delivering a Superior Customer
Experience
Innovation in our Product and
Solutions Portfolio
Metropolises and Urbanization Solutions
Environmental Excellence
Building a Better Workforce Experience
Responsible Sourcing
Social Impact
3
3
4
5
7
10
11
12
13
16
17
18
19
20
25
30
40
44
49
52
58
64
67
Governance
Board of Directors
Board Committees
Executive Committee
Ethics and Compliance
Risks and Opportunities
Our Commitment to Respect
Human Rights
Results in Detail
Financial Information
Non-Financial Information
About This Report
Scope and Boundaries
External Advisory Panel Members and
Statement
Terms We Use
Investor, Media, and Sustainability
Information
76
78
81
82
84
87
93
97
98
181
188
189
191
194
196
ESG Performance and Disclosure
Ratings and Standards
Our Response
to COVID-19
5
21
Advancing
Towards our
Operation
Resilience Goals
26
Behaviors that
Save Lives:
Replicated and
Monitored Globally
32
Our 2030 CO2
Reduction Target
and Roadmap
41
Digital Innovation
to Deliver a
Superior Customer
Experience
49
Providing
Means for
Sustainable
Urbanization
67
Engaging our
Communities
During the
COVID-19
Pandemic
Company Overview
How We Create Value
Our Performance in 2020
Governance
Results in Detail
About This Report
3
CEMEX at
a Glance
CEMEX is a leading vertically
integrated heavy building materials
company focused on four core
businesses—Cement, Ready-Mix
Concrete, Aggregates, and
Urbanization Solutions.
Our high-quality products and innovative solutions
across the construction value chain aim to exceed
our customers’ expectations and sustainably meet
society’s growing needs.
We seek to provide a superior customer experience
as the foundation for long-lasting partnerships. To
this end, we continuously tailor our products and
solutions to suit our customers’ specific needs and
ensure their satisfaction. This is not only our best
competitive advantage, but also essential to our
global business strategy.
CEMEX started doing business in 1906 and has
grown from a local player to one of the top global
companies in the industry. With more than 41,000
employees worldwide, CEMEX is strategically posi-
tioned in the Americas, Europe, Middle East, Asia,
and Africa.
People
Cement
Ready-Mix Concrete
Aggregates
Terminals
+41
thousand
employees
64
cement and
grinding plants
92
1,348
plants
47
246
quarries
133
million tons installed
production capacity
million m3 annual
sales volume
million tons annual
sales volume
269
land distribution
centers
68
marine
terminals
Our Core Businesses
Our Global Presence
Cement
A binding agent, when mixed with aggregates and water,
produces either ready-mix concrete or mortar.
USA
8,489 employees
Europe, Middle East,
Asia & Africa
(EMEA&A)1
11,819 employees
Ready-Mix Concrete
A combination of cement, aggregates, admixtures, and water.
Mexico
12,189 employees
Aggregates
Obtained from land-based sources or by dredging
marine deposits.
Urbanization Solutions
Leverages our competitive advantages to capture new
urbanization business opportunities with a value
proposition based on sustainability.
South America,
Central America &
the Caribbean (SCA&C)2
5,300 employees
Other3
3,866 employees
As of December 31, 2020
1. Includes operations in Croatia, Czech Republic, France, Germany, Poland, Spain, the
United Kingdom, Egypt, Israel, the Philippines, and the United Arab Emirates.
2. Includes operations in Barbados, Colombia, Costa Rica, the Dominican Republic, El
Salvador, Guatemala, Guyana, Jamaica, Nicaragua, Panama, Peru, Puerto Rico,
Trinidad and Tobago, as well as other operations in the Caribbean region.
3. Includes Neoris and employees performing corporate functions in different locations.
CEMEX 2020 INTEGRATED REPORT
Company Overview
How We Create Value
Our Performance in 2020
Governance
Results in Detail
About This Report
4
Performance
and Progress
Highlights
US$13
Billion
Net Sales
+1% vs. 2019
US$2.5
Billion
EBITDA
+7% vs. 2019
19%
EBITDA
Margin
+0.9pp vs. 2019
US$1 Billion
Net Debt
Reduction
excluding FX impact
Lowest
Opex / Sales
in history reaching 9.4%
US$3.2 Billion
Entered into a
Sustainability-Linked
Loan, one of the largest
in the world
96%
of our operations
had zero fatalities
and injuries
-83%
fatalities and
-77%
LTIs in the last decade
+61%
global sales
processed through
CEMEX Go
68 Global Net
Promoter Score
highest ever achieved
Global launch
of our first net-zero CO2
concrete solution
-35% net CO2
2030 Target and
Roadmap validated
by Carbon Trust
29%
clean electricity
in cement
91%
of our cement
plants co-processed
alternative fuels
Significant
clinker factor
drop
~1 pp vs. 2019
97%
of clinker produced with
continuous monitoring
of major emissions
Waste consumption
from other industries
31 times larger
vs. waste sent to landfills
98%
targeted quarries
implemented
Biodiversity Action
Plans
2030 roadmap definition
for Water Action
Plans in priority sites
+20,000
employee hours
invested in
volunteering
programs
As of December 2020
* Net sales and EBITDA on a like to like basis
+23 million
people positively
impacted by social
initiatives since 1998
150%
annual improvement
on Employee Net
Promoter Score
63%
critical supplier
spend underwent
sustainability
assessment
Contractors’
H&S verification for
82%
procurement
spend
CEMEX 2020 INTEGRATED REPORT
Company Overview
How We Create Value
Our Performance in 2020
Governance
Results in Detail
About This Report
5
Our Response
to COVID-19
At CEMEX, we take pride in how we
responded to the unprecedented
challenges of COVID-19. In a year that
was extremely demanding, we
responded with discipline, agility and
resilience—all characteristic traits of
our company.
Going the Extra Mile During the
Pandemic
The true spirit of working as One CEMEX
emerges in challenging situations. Our
people navigated through the COVID-19
pandemic with intention, purpose,
resilience, and adherence to our compa-
ny's values. We thank them for their
efforts to keep our families, colleagues,
and themselves safe while protecting
the health and wellbeing of our custom-
ers and communities.
» We profoundly appreciate the efforts
of our frontline employees, as well as
all staff who continue to work
remotely to responsibly serve our
customers and operations.
» Our CEMEX healthcare professionals
have been providing valuable support
since the pandemic started. We rec-
ognize their constant efforts working
with our colleagues and their families,
looking after their well-being.
» We are grateful to our more than
2,000 CEMEX COVID Coordinators
around the world for their ongoing
work to monitor and help keep our
employees and contractors safe at our
worksites during this pandemic.
» The Global Rapid Response Teams
have done an amazing job in ensuring
we deploy a common strategy world-
wide focused on implementing our
protocols to provide a safe work envi-
ronment and ensuring our ability to
keep serving our customers in the
safest possible way. Mostly because of
this, the number of infections
recorded at CEMEX was barely a third
of the average number recorded in
the countries where we operate.
We are deeply saddened by the loss of
colleagues and family members to
COVID-19. We recognize each of them
and extend our heartfelt sentiments to
their loved ones.
Remaining Focused on Health & Safety
We acted swiftly and remained focused on protect-
ing the health of our employees and their families,
our contractors, customers, and suppliers, and the
communities in which we operate.
» 52 Hygiene and Safety Protocols to protect our
employees, families, contractors, suppliers, cus-
tomers, and communities
» Behaviors that Save Lives Campaign to create
awareness of protocols to help mitigate or avoid
virus contagion
» +2,000 COVID Coordinators
» Global Rapid Response Teams activated in all
regions
» CEMEX Unite volunteers donating time and skills
globally to support our communities
Learn more in Our Commitment to Health and
Safety, pages 25-29 and Social Impact, pages 67-75
of this report ▶
We are grateful to our
employees who have
risen to the challenge
of COVID-19.
CEMEX 2020 INTEGRATED REPORT Company Overview
How We Create Value
Our Performance in 2020
Governance
Results in Detail
About This Report
6
Helping Our Communities Remain Resilient
We acted swiftly and remained focused on protecting the health
of our employees and their families, our contractors, customers,
and suppliers, and the communities in which we operate.
» +3.6 million m2 of public health spaces sanitized —the area of
500 soccer fields
» +1.75 million Personal Protection Equipment and 1.75 million
medical supplies donated
» 52 hygiene and safety protocols shared and replicated exter-
nally through more than 80 partners
» The Keep Rolling campaign had the highest organic engage-
ment rate for all campaigns ever featured in our social media
channels.
» CEMEX trucks branded to create awareness
Learn more: Social Impact, pages 67-75 ▶
CEMEX mixers in key markets were
specially branded to reinforce and
amplify the COVID-19 preventive
messaging, reminding people to
continue taking precautions with a
positive forward-looking attitude.
Continuing to Serve Our Customers Safely
and Reliably
The investment we made in our digital platforms
over the last three years paid off during the pan-
demic. CEMEX Go was instrumental in allowing
our customers and employees to work remotely
with seamless efficiency.
Our product technologies proved particularly use-
ful to help reactivate construction sites, and we
maintained continuous, effective communication
with our suppliers to closely monitor our critical
supply chain.
Learn more: Delivering a Superior Customer
Experience, pages 40-43 ▶
Innovation in our Product and Solutions Portfolio,
pages 44-48 ▶
Responsible Sourcing, pages 64-66 ▶
Restarting Together
CEMEX, together with 11 companies including
Telefónica, BCG, and Microsoft, launched Restart-
ing Together, a global challenge to encourage
startups and small and medium-sized businesses
to find innovative projects that will expedite
economic recovery and a return to normality
after the COVID-19 pandemic.
To learn more about the initiative, go to
www.restartingtogether.com.
CEMEX 2020 INTEGRATED REPORT Company Overview
How We Create Value
Our Performance in 2020
Governance
Results in Detail
About This Report
7
Dear fellow
stakeholders:
Left:
Rogelio Zambrano
Chairman of the Board of Directors
Right:
Fernando A. González
Chief Executive Officer
We will continue to focus on staying safe
and providing essential products and
services to the markets we serve.
We reacted to the
immediate challenges
of the COVID-19
pandemic by focusing
on three priorities.
2020 was undoubtedly a very challenging year, with COVID-19 abruptly
upending every aspect of our lives and disrupting every industry world-
wide. At CEMEX, that uncertainty and the challenges it posed brought out
the best in our people. It also revealed the essential nature of our products
and services, the value we bring to our customers, and the strength and
resiliency of our business.
contagion throughout our worldwide sites and operations. As many gov-
ernments designated construction to be an essential service, our proac-
tive approach to health and safety enabled us to contribute substantially
to the important role that the construction industry has in building and
maintaining the critical infrastructure required to face the challenges of
the pandemic, and to lead economic recovery going forward. This was
also instrumental to the success and continuity of our operations.
As soon as the COVID-19 threat emerged, we activated Rapid Response
Teams to swiftly adapt to the new conditions and introduce preventive
measures within CEMEX. We focused on three priorities: (1) protecting the
health and safety of our employees and their families, our contractors,
customers, and suppliers, and the communities in which we operate; (2)
continuing to serve our customers both safely and reliably by leveraging
our digital technologies; and (3) strengthening our liquidity position
through various bold actions.
Regarding our first priority, in accordance with global, national, and local
health authority recommendations, CEMEX developed and implemented
more than 50 strict hygiene and safety protocols to mitigate the risk of
We also provided wide support to our communities during the pandemic,
including providing humanitarian aid, organizing voluntary donations,
sanitizing outdoor public health areas, and widely distributing the anti-
bacterial disinfectant we produced in some of our plants.
We are grateful to our employees who have risen to the challenge of
COVID-19 and adjusted their work habits to act safely and effectively while
still delivering results. Regretfully, we have lost treasured colleagues
during this unprecedented pandemic. We recognize these individuals
and their significant contributions to the company and extend our deep-
est sympathies to their families and friends.
CEMEX 2020 INTEGRATED REPORT Company Overview
How We Create Value
Our Performance in 2020
Governance
Results in Detail
About This Report
8
Given the growth potential we
foresee in this line of business
for the coming years, we will
continue to invest in
Urbanization Solutions.
In 2020, we significantly increased activity
on our ZERO4Life objective. We attained a
low level of employee lost-time injuries (LTIs)
for the sector and made progress across
most of our countries, resulting in 96% of our
operations reaching zero fatalities and LTIs.
In this year of disruption, we also focused on
ensuring that our customers continued to
have the best experience doing business
with us. The investment we made in our
digital platforms over the last three years
paid off during the pandemic. CEMEX Go
was instrumental in allowing our customers
and employees to work remotely with
seamless efficiency and consistently, safely,
and reliably deliver our products despite the
challenging circumstances. By year-end, we
processed over 61% of our total global sales
digitally through CEMEX Go, with a 90%
overall usage rate among recurring custom-
ers and high levels of customer satisfaction.
Our customers awarded us with a Net Pro-
moter Score of 68 points, an increase of 18
points compared to the prior year, meeting
and surpassing our 2030 goal.
To respond to important market changes in
outlook resulting from the pandemic, we
launched Operation Resilience. This is our
medium-term strategy designed to achieve
greater sustained growth and, in turn, to
create more value for our stakeholders.
Despite the volatility of 2020, we made
progress against these medium-term goals,
significantly increasing our operating results
and margins as well as free cash flow. Our
net sales increased 1%, to US$13 billion, and
our Operating EBITDA increased by 7%, to
US$2.5 billion, both on a like-to-like basis.
EBITDA margin expanded 0.9 percentage
points to 19%, supported by improved oper-
ating performance, cost reduction efforts,
and our lowest operating expenses as a
percentage of sales in our history.
We increased our financial flexibility with
the successful amendment of our bank
debt under our Facilities Agreement. This
transaction underscored our commitment
to a carbon-neutral economy by incorporat-
ing green metrics and is one of the largest
sustainability-linked loans in the world and
the largest in emerging markets. During the
year, we continued accessing the capital
markets with the issuance of US$2 billion in
7 to 10-year bonds, which, together with the
bank debt refinancing, allowed us to
improve our debt maturity profile. We also
reduced our net debt by US$771 million,
which contributed to a decline of 0.30 of a
turn in our leverage ratio.
One of the goals in our Operation Resilience
program is to optimize our portfolio by
increasing EBITDA through strategic divest-
ments and bolt-on investments while pro-
moting our new key business of
Urbanization Solutions, which continued to
grow. In 2020, EBITDA from this business
grew around 15% and accounted for close to
6% of consolidated EBITDA. Given the
growth potential we foresee in this line of
business for the coming years, we will con-
tinue to invest in Urbanization Solutions.
CEMEX 2020 INTEGRATED REPORT Company Overview
How We Create Value
Our Performance in 2020
Governance
Results in Detail
About This Report
9
We have confidence in our ability to
achieve our 2030 CO2 reduction target
where we rely on proven technologies
and a detailed roadmap.
By launching our new product line called Vertua,
the first Net-Zero CO2 Concrete solution in our
industry, we made important progress towards
our 2050 CO2 neutrality goal. This product offering
mitigates its carbon footprint by applying new
concrete technologies, thereby allowing custom-
ers to fulfill their construction needs using more
sustainable products. Vertua has already been
used for large infrastructure projects in Europe
and has had great acceptance in Mexico, the
United States, and South America.
During 2020 we strengthened the Social Impact
strategy that allows us to reinforce our initiatives
to contribute to the well-being of our communi-
ties. We have positively impacted more than 23
million people on an accumulated basis, contrib-
uting to the achievement of the United Nations
Sustainable Development Goals (SDGs), particu-
larly the five in which CEMEX can have the most
impact. By focusing on CEMEX's five priority SDGs,
we are making large strides in addressing the
most pressing global challenges and building a
better future.
We could not have attained this success in our
2020 results and future goals without our out-
standing people. We are proud of our workforce
and recognize each individual's contribution on a
day-to-day basis, especially during this year's
challenging and demanding circumstances. We
are firmly committed to prioritizing their health
and safety and maintaining high levels of
employee satisfaction. Efforts such as maintaining
a continuous dialogue with employees, imple-
menting key diversity and inclusion initiatives, and
supporting our strong culture of ethics and integ-
rity will help us continue attracting and retaining
the talent and skillset that we need to grow.
We also thank all our partners and suppliers who
have worked with us to maintain our supply
chain without interruption during these chal-
lenging times.
This year is testimony to the resilience of CEMEX
and that we are a company dedicated to building
a better future for all our stakeholders. As COVID-
19 will continue to be a challenge in 2021, we will
remain steadfastly focused on the health and
safety in all our relationships--our employees and
their families, contractors, customers, suppliers,
and communities—all the while continuing to
provide essential products and services in the
markets that we serve.
On behalf of CEMEX's Board of Directors, our
management team, and our employees, we thank
you for your continued confidence in CEMEX.
Sincerely,
Rogelio Zambrano
Chairman of the
Board of Directors
Fernando A. González
Chief Executive Officer
Under Operation Resilience, we reaffirm that
sustainability is one of our top priorities. In Febru-
ary 2020, we rolled out a proactive Climate Action
strategy and announced a 2030 target of reduc-
ing our net specific CO2 emissions by 35% com-
pared to our 1990 baseline and a 2050 goal to
deliver net-zero CO2 concrete across all our opera-
tions. We have confidence in our ability to achieve
this, particularly the 2030 objective, where we rely
on proven technologies and a detailed plant-by-
plant roadmap.
As part of our CO2 emissions reduction strategy,
we are accelerating our alternative fuels and
clinker factor initiatives while also advancing new
carbon mitigation levers such as hydrogen injec-
tion. In 2020, we retrofitted all our plants in
Europe to utilize this technology, allowing us to
achieve higher alternative fuel rate and reduce
heat consumption in a significant way. We are
moving quickly to extend hydrogen injection to
the rest of our operations.
We are proud of our
workforce and recognize
each individual's
contribution on a day-to-
day basis, especially during
this year's challenging and
demanding circumstances.
CEMEX 2020 INTEGRATED REPORT
Company Overview
How We Create Value
Our Performance in 2020
Governance
Results in Detail
About This Report
10
How We
Create Value
Our mission is to create sustainable value by providing
innovative products and solutions to satisfy the
construction needs of our customers around the world.
CEMEX 2020 INTEGRATED REPORT Company Overview
How We Create Value
Our Performance in 2020
Governance
Results in Detail
About This Report
11
CEMEX
Value
Creation
Model
At CEMEX, our shared
purpose is to build a
better future for our
employees, customers,
shareholders, investors,
suppliers, and the
communities in which
we live and work.
Aligned with our commitment to
the United Nations Sustainable
Development Goals (SDGs), we
prioritized five SDGs that are
directly related to our company’s
business strategy. These SDGs
represent our greatest opportuni-
ties for shared value creation and
concentrate our largest potential
for building a better future.
WHAT
we do
Mission
Our mission is to create sustainable
value by providing industry-leading
products and solutions to satisfy the
construction needs of our customers
around the world.
WHY
our reason for being
Purpose
Building a better future
Values
» Ensure safety
» Focus on customers
» Pursue excellence
» Work as One CEMEX
» Act with integrity
HOW
WHO
VALUE
SDGs
we do business
we share our value with
how we create value
Our strategic priorities
Stakeholders
our 5 priority
Sustainable
Development
Goals
Health and Safety
Employees
Customer Centricity
Customers
Innovation
Shareholders and Investors
Sustainability
Communities
EBITDA Growth
Suppliers
» Provide a great workplace that
helps employees grow
» Build skills and expertise
» Enable a strong sense of purpose
» Tailor our offerings to solve our
clients’ construction needs
» Make it easy to work with us
» Provide enhanced performance
and reliability
» Grow revenue
» Reduce costs
» Optimize assets
» Keep a tight rein on risks
» Be a relevant engine of economic growth
» Build more capable, inclusive and
resilient communities
» Reduce impact on local air, water and
waste and conserve biodiversity
» Encourage creation of innovative
solutions to reduce costs while promoting
sustainable goods and services
» Be a reliable client throughout the value
chain, adding a trustworthy reputation to
the negotiation
GRI 102-42, GRI 102-46, GRI 102-47
CEMEX 2020 INTEGRATED REPORT Company Overview
How We Create Value
Our Performance in 2020
Governance
Results in Detail
About This Report
12
Material Priorities
n
r
e
c
n
o
C
r
e
d
o
h
e
k
a
t
S
l
CEMEX's materiality assessment
brings together financial and
non-financial topics that matter
most to our business and our
stakeholders. Aligned with the
GRI's framework and materiality
principles, this analysis helps
identify topics to be addressed in
our strategic planning and inte-
grated reporting.
To select the assessment topics,
we considered internal and exter-
nal stakeholder views, carried out
an industry-level evaluation, and
researched economic, environ-
mental, and major social trends
and challenges.
The identified topics were later
prioritized and ranked based on
their potential to impact our
organization and our stakehold-
ers according to their level of
concern reflected on the assess-
ment and the execution of
CEMEX management risks and
opportunities analysis.
Our Four-Step Materiality Process
To map the significance these
material topics have for our stake-
holders, we launched a worldwide
materiality survey with the partici-
pation of employees, customers,
suppliers, analysts, investors,
shareholders as well as non-mar-
ket stakeholders, including com-
munity members, NGOs, and
industry associations. Together,
the 2410 responses received
across all regions where CEMEX
operates make up the "stake-
holder concern" axis of our
updated matrix.
CEMEX’s strategic business func-
tions worked together to carry
out a deep-dive exercise that
graphed the "impact on CEMEX"
axis of the matrix. These functions
include Sustainability, Health and
Safety, Human Resources, Social
Impact, Corporate Communica-
tions and Public Affairs, Enter-
prise Risk Management,
Planning, Procurement, Supply
Chain, Logistics, Legal, Investor
Relations, Customer Experience,
Commercial and Urbanization
Solutions.
1
2
3
4
Identification
of relevant topics to
include in the survey
Definition
of the stakeholder
groups to be included
Prioritization
of the topics through
gathering our
stakeholder groups’
opinions and concerns
Results
reviewed internally to
ensure consistency with
our business risks and
strategy
4
5
1
2
3
24
21
16
12
13
17
7
8
6
9
10
23
20
18
27
25
26
28
31
30
29
22
19
15
14
11
Highest
Materiality
Higher
Materiality
High
Materiality
Impact on CEMEX
● Governance ● Economic ● Social ● Environmental
Highest Materiality
1. Health and safety
2. Business ethics and compliance
3. Climate change and greenhouse
gas emissions
4. Customer experience
5. Product quality, innovation and
sustainability
6. Business continuity
7. Employee well-being
8. Pricing integrity and anti-trust
compliance
9. Risk management
10. Energy costs, efficiency, and
sourcing
Higher Materiality
11. Return on capital employed
12. Employee engagement and
development
13. Alternative fuels and raw materials
14. Industry and market growth/
disruption
15. Circular economy and waste
16. Research and development
17. Air quality
18. Employee diversity and inclusion
19. Labor practices and decent work
20. Cyber threat and data protection
21. Supplier relations
22. Digital connectivity
23. Transport and logistics
24. Water
High Materiality
25. Human Rights
26. Environmental standards
27. Biodiversity conservation
28. Stakeholder engagement
29. Community infrastructure pro-
grams and housing
30. Community employability skills
and wellbeing
31. Poverty and social injustice
GRI 102-40, GRI 102-44, GRI 102-46, GRI 102-47
CEMEX 2020 INTEGRATED REPORT
Company Overview
How We Create Value
Our Performance in 2020
Governance
Results in Detail
About This Report
13
Engaging Our
Stakeholders
Listening to our stakeholders is
vital to maximizing our positive
impact on the communities in
which we operate.
GRI 102-40, GRI 102-43
We analyze stakeholder inputs, company
insights, sector initiatives, peer reviews,
and global trends to set our business
initiatives. By listening to what our stake-
holders consider important, we are able to
engage with their key interests proac-
tively, manage risks and opportunities,
and set a clear direction to deliver long-
term shared value for our company and
communities. To identify those issues that
are most important for our company and
our stakeholders, we periodically conduct
Materiality Assessments, which help us to
continually attune our efforts.
to interact with each of our stakeholders,
depending on our line of business in a
given location, so as to share best prac-
tices, accelerate change, and seek to
ensure we are contributing our utmost to
a sustainable future.
We are committed to conducting our
business relations with honesty, respect,
and integrity. Through our Code of Ethics
and Business Conduct and Stakeholder
Engagement Policy, we define the frame-
work we use when deploying our proac-
tive stakeholder engagement strategy.
Across the countries where we operate, we
encourage and invest in developing stra-
tegic relations through open dialogue
with our key stakeholders. To this end, we
customize unique engagement activities
Our stakeholders include our people,
customers, shareholders, investors, com-
munities, suppliers, NGOs, academia,
governments, policymakers, and other
businesses through trade associations.
Our Stakeholders
Our People
Our employees are our competitive advantage and the
reason for our success. We continuously communicate and
listen to our employees to provide them with opportunities
for growth and development, as well as a safe, healthy, and
inclusive work environment.
For more on Our People, please see pages 58-63 of this
report. ▶
Customers
A core strategic goal is to become the most customer-cen-
tric company in our industry. By listening to our custom-
ers’ needs and understanding their challenges, we aim to
place them at the center of everything we do, surpass
their expectations, and become their partner of choice.
For more on our Customers, please see pages 40-43 of
this report. ▶
Shareholders, Investors, and Analysts
Our commitment to delivering value to our investors rests
on a clear recognition that, as a public company, we are
stewards of other people’s money. Consequently, we
embark on a robust investor engagement strategy to
foster a clear understanding not only of our company’s
financial position, performance, business perspectives,
and risks, but also of our management and environmental,
social, and governance practices.
For more on our Financial Performance, please see pages
20-24 of this report. ▶
Communities
The regular, formal dialogues we conduct with our neigh-
boring communities have proven key to building mutual
trust between our company and the communities we
serve. By understanding the expectations of neighboring
communities, we can review progress and take action
together towards achieving agreed plans.
For more on Communities, please see pages 67-75 of this
report. ▶
CEMEX 2020 INTEGRATED REPORT Company Overview
How We Create Value
Our Performance in 2020
Governance
Results in Detail
About This Report
14
Suppliers
As we continually work to build strong relationships across
our network of suppliers, we engage them with our core
values, aiming to ensure that our suppliers comply with
our Code of Ethics and Suppliers Code of Conduct. When
selecting our business partners, we offer equal opportuni-
ties to bid on and win contracts, following strict competi-
tive pricing, quality, experience, and service criteria while
adhering to sustainable practices.
For more on Our Suppliers, please see pages 64-66 of this
report. ▶
NGOs and Academic Institutions
We build innovative collaboration platforms through
which we find common ground with entities who share
our vision of building a better future. To this end, in collab-
oration with NGOs, we foster global partnerships that are
fundamental to the way we deliver value and improve the
quality of people’s lives. Furthermore, we engage with
leading academic institutions and invest in scientific
research that enhances our understanding of how our
products can benefit and enhance their environmental,
societal, and economic impacts.
Governments and Policy Makers
We cooperate and engage with governments, regulators,
and legislators—both directly and through business asso-
ciations—responsible for regulating and defining relevant
policies for our industry. We actively participate in global
and national industry policy discussions covering issues
related to climate change, sustainable infrastructure,
innovation, digital transformation, operational efficiency,
health & safety, circular economy, alternative fuels, and
waste management frameworks, among others. We
conduct our business and relations with government
entities in a manner consistent with our values, our Code
of Ethics, and the law.
Business Associations
We actively participate in various business associations at
global, regional, and national levels to develop partner-
ships and promote our core cement, ready-mix concrete,
aggregates, and urbanization solutions businesses within
the sector. Our active involvement in these associations
gives us a crucial perspective to support, along with other
companies, fundamental topics for our sector.
As a founding member of the GCCA, and together with 39
other member companies, we speak with a single voice
on behalf of the cement and concrete industry and
actively promote the use of concrete as an essential mate-
rial for sustainable construction.
Using Social Media to Remain
Close
Taking advantage of its immediate
nature, we used social media to
share health and safety best prac-
tices and protocols, covered import-
ant events, shared relevant news
regarding the reopening of the
construction industry while
strengthening our relationships
with customers, partners, NGOs and
local governments and helped
promote new ways to keep building
community together even at a
distance.
Main Cement and Concrete Associations in which CEMEX Participates
Global
» Global Cement and Concrete Association (GCCA)
Regional
» European Cement Association (CEMBUREAU) – Europe
» European Ready Mixed Concrete Organization (ERMCO)
– Europe
» European Aggregates Association (UEPG) – Europe
» Inter-American Cement Federation (FICEM) – LATAM
National
» National Chamber of Cement (CANACEM) – Mexico
» Portland Cement Association (PCA) – USA
» National Ready Mixed Concrete Association (NRMCA)
– USA
» American Concrete Pavement Association (ACPA) – USA
» Cement Manufacturers’ Association of the Philippines
(CEMAP) – Philippines
» OFICEMEN (Agrupación de Fabricantes de Cemento de
España) – Spain
» Mineral Products Association (MPA) - UK
We are active participants in global initiatives led by
the World Economic Forum and the United Nations,
among other internationally recognized institutions.
CEMEX participates in various associations and chambers not listed in
this page.
GRI 102-40, GRI 102-43
CEMEX 2020 INTEGRATED REPORT
Company Overview
How We Create Value
Our Performance in 2020
Governance
Results in Detail
About This Report
15
Communication
Mechanisms with
Our Stakeholders
Topics presented in this table
are those of top interest
brought up by our stakehold-
ers in our materiality assess-
ment and the different
communication channels we
use to engage with them. Key
outcomes from our dialogues
and collaboration are also
summarized.
During the COVID-19 pan-
demic, we innovated and
adjusted our mechanisms to
continue our active engage-
ment while following strict
hygiene and safety protocols,
in many cases using digital
technology.
Stakeholders
Collaboration Topics
Engagement Channels and Frequency
Outcomes
Our People
• Health and safety
• Company priorities and challenges
• Business ethics
• Employee wellbeing, experience, and engagement
• Diversity and inclusion
• Training, development, and career path
Customers
• Customer experience and engagement
• Construction needs and challenges
• Quality products, services, and solutions
• Sustainability management practices
Shareholders,
Investors, and
Analysts
• Company's financial performance
• Return on capital employed
• Pricing integrity and anti-trust compliance
• Environmental, Social, and Governance (ESG) disclosure and
Suppliers
Communities
NGOs and
Academic
Institutions
performance
• Risks and opportunities
• Business ethics and legal compliance
• Quality of products and services
• Supply chain reliability and efficiency
• Health and safety
• Sustainability management practices
• Health and safety
• Education and capability development
• Community infrastructure programs and housing
• Community employability skills and wellbeing
• Respect for human rights
• Local employment opportunities
• ESG performance and disclosure
• Sustainable cities and communities
• Energy and climate change solutions
• Natural resources conservation
• Circular economy
• Innovation and business development
• Public policy and advocacy
Governments and
Policy Makers
• Health and safety
• Business ethics and compliance
• Climate change and emissions
• Energy costs, efficiency, and sourcing
• Circular economy and waste
• Community infrastructure programs and housing
Business
Associations
• Health and safety
• Business ethics and compliance
• Environmental standards
• Sustainability principles and challenges
• Increased awareness of our products’ sustainable attributes
• Industry best-practice sharing
• ETHOSLine 24/7 reporting line
• Ethics and compliance campaigns
• Employee experience survey
• Global and local newsletters
• Leader email messages and videos
• HR teams and HR process platforms
• Open dialogues and meetings with leaders including townhalls
with CEO
• Sales representatives ongoing relationship management
• CEMEX Go digital platform 24/7
• Regular commercial events
• Customer satisfaction surveys
• Customer service centers and helplines
• Social media and eMarketing
• Regular meetings, webcasts, and conference calls
• Quarterly financial updates and guidance
• Annual integrated and 20-F reports, and mandatory filings
• Ongoing website updates and press releases
• Annual CEMEX Day investor event
• Understanding of our employees’ needs
• Talent management strategy
• Ethics case reports for investigation
• Learning strategy
• Safety workplace environment
• Diversity and Inclusion Policy, committees and initiatives
• Customer centricity strategy
• Clear understanding of our customers' needs and concerns
• Net Promoter Score (NPS)
• Digitalized solutions
• Understanding of financial position, performance, business
perspectives, and risks
• Strengthening of CEMEX’s ESG practices and metrics
• Enhancement of reporting quality and transparency
• Daily procurement interactions
• Ongoing training and capacity building programs
• Health and safety and sustainability verification platforms
• Annual Smart Innovation process
• Supplier Sustainability Program
• Promotion of local suppliers
• Contractor Health and safety verifications
• Ongoing dialogues with communities
• Annual open house days at operating sites
• Ongoing educational programs and training
• Community infrastructure, volunteering, and social investment
initiatives
• Co-creation of inclusive business programs
• Annual call for CEMEX-TEC Award entries
• Advisory Panel for integrated reporting
• Permanent collaborative research portfolio
• Subject matter expert participation in internal CEMEX lectures
(Lighthouse talks)
• Collaboration on research papers and advisory services
• Yearly best practices and methodologies playbooks
• Hackathons co-organized with universities
• Annual reports and conservation books
• Company position papers
• Ongoing public policy discussions
• Long-term partnerships
• Working groups
• Periodic plant visits
• Events and conferences
• Periodic meetings
• Annual conferences
• Ongoing working groups and research studies
• Improvement to community infrastructure and wellbeing
• Increased participation of women in the local economy
• Reduced figures of not-in-employment-or-education youth
• Economic growth in the community
• CEMEX Unite Volunteering program
• Incremental quality and transparency of CEMEX reporting
• Develop solutions through collaborative projects
• Build strategic partnerships with NGOs and top universities
• Awareness of global trends
• Attract new talent for CEMEX
• Risk and opportunities assessment
• Successful adaptations to new local, national, and regional
regulations
• Creation of joint initiatives that require a multidisciplinary
approach, such as ARISE
• Coordinated initiatives, statements, whitepapers, and
communication campaigns
• Industry best practices sharing
• Strengthened positioning of cement and concrete as sustainable
building materials
GRI 102-40, GRI 102-42, GRI 102-43, GRI 102-44
CEMEX 2020 INTEGRATED REPORT
Company Overview
How We Create Value
Our Performance in 2020
Governance
Results in Detail
About This Report
16
Net Value We
Create for Society
CEMEX 2020 Net Value to Society Statement
(in millions of US dollars)
5
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As a company, we are aware that our financial statements
only partly reflect how our activities affect society; there
are both positive and negative impacts that are not val-
ued in the capital markets and, therefore, do not appear
in our traditional profit and loss calculation. We quantify
these so-called externalities in monetary terms and vali-
date our methodology to estimate the Net Value to Soci-
ety with the corresponding True Value methodology
from KPMG.
Through this exercise, we enhance our understanding of
the materiality, relevance, and interdependency of our
company's positive and negative impacts. We believe
that it is an essential step to informed management and
decision-making in order to improve the value that
CEMEX contributes to our company, our society, and our
planet. Furthermore, it allows us to manage risks, be more
transparent, and achieve our sustainability ambitions.
Economic Impact
» Salaries and Benefits - Value that our company creates
for our employees.
» Taxes - Value through our contribution to government
funding. This item only contains income tax as shown
in our profit and loss statement.
» Interest and Dividends - Value for shareholders and
creditors.
Social Impact
» Talent Development - Value through our training
programs and other educational initiatives. This only
includes the value created outside our company
(employee turnover).
» Social Initiatives - Value for our stakeholders through
our social initiatives and inclusive businesses.
» Health and Safety - Impact on employees and their
CEMEX Net Value to Society Methodology
families from accidents (injuries and fatalities).
The starting point for our analysis is the retained benefit
(EBITDA minus taxes, interests, and dividends; i.e., the
part of our value creation that remains within our com-
pany). It attributes a monetary value based on available
studies to our most material positive and negative eco-
nomic, social, and environmental impacts and then adds
and subtracts these figure to determine the total value
that our company creates.
In 2020, the net value we created for society
resulted in US$3.7 billion, 2.3 times the
benefit we retained in the same period.
Environmental Impact
» GHG Emissions - Impact from the emission of green-
house gases (scopes 1, 2, and 3).
» Air Emissions - Impact from the emission of other
potentially noxious substances (SOx, NOx, particles).
» Water Consumption - Impact from the use of a scarce
resource.
» Biodiversity - Impact from the disturbance of land by
our mining operations. This item also includes the value
created by our conservation project in El Carmen on
the US-Mexican border.
» Net Waste Balance - Value derived from co-processing
waste, minus the impact of waste generated in our
operations.
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Starting point:
Retained Benefits = EBITDA minus
taxes, interest and dividends
● Net Value
● Economic
● Social
● Environmental
CEMEX 2020 INTEGRATED REPORT
Company Overview
How We Create Value
Our Performance in 2020
Governance
Results in Detail
About This Report
17
Contribution to
the Sustainable
Development Goals
Our Five Priority SDGs
We have set five priority Sustainable Development
Goals upon which we can further contribute to
achieving the United Nations 2030 Agenda.
As a leading building materials company, we recog-
nize and embrace our responsibility in the develop-
ment of sustainable cities and resilient communities.
Aligned with our commitment to the United Nations
Sustainable Development Goals (SDGs), we priori-
tized five that are directly related to our company’s
business strategy. SDGs 8, 9, 11, 13, and 15 represent
our greatest opportunities for shared value creation
and concentrate our largest potential for building a
better future.
We collaborate within and outside our company and
have joined forces with sector peers, field experts,
authorities, customers, suppliers, NGOs, and other
stakeholders to collectively work towards achieving
the SDGs. To this end, we devised internal output
indicators designed to enhance CEMEX's economic,
environmental, and social performance, as well as to
track our contributions to our five priority SDGs.
In partnership with the Global Cement and Concrete
Association (GCCA), a joint statement is now avail-
able to fully comprehend our sector's contribution to
all 17 SDGs. We acknowledge that a decade of action
is needed to achieve the UN SDGs, and that the
concrete industry will play an important role in
contributing to achieving these targets.
View the GCCA joint statement
Widening Collaboration to Achieve the UN
2030 Agenda
Greater international, regional, and local collabora-
tion and public-private partnerships will be essential
to preventing future global health and environmen-
tal crises and ensuring business continuity in the
long run.
In the midst of the COVID-19 crisis, during 2020, in
Mexico, the private sector led around 17 multi-stake-
holder working groups to support and accelerate the
SDG targets in the country. This was done in alliance
with the federal government and Mexico's Coordi-
nating Business Council (CCE).
One of the main lessons learned during the pan-
demic crisis is that we need to increase the knowl-
edge on resilience both within business and society.
We acknowledge that through our collaboration and
partnerships, we can continue sharing expertise,
best practices, creating synergies, and scaling efforts.
CEMEX will continue working collectively with multi-
ple stakeholder groups towards achieving the 2030
UN goals.
Our priority SDGs represent
our greatest opportunities
for shared value creation and
concentrate our largest
potential for building a
better future.
» CEMEX is a member of the United
Nations Office for Disaster Risk
Reduction (UNDRR)
» We continue to lead the UN Global
Compact (UNGC) in Mexico for the
2020-2022 period
Learn more about our collaborations
with UNDRR and UNGC on pages 67-75
of the Social Impact section of this
report ▶
CEMEX 2020 INTEGRATED REPORT Company Overview
How We Create Value
Our Performance in 2020
Governance
Results in Detail
About This Report
18
Our 2030 Sustainability Targets
Progress Toward Our 2030 Sustainability Targets
We recognize our responsibility to join
the collective action to positively
impact the world. At CEMEX, we
believe sustainability is the most
meaningful way of doing business.
Sustainability is embedded in our
strategy, and thus, it is linked to all
decision-making processes across our
business lines. Our 2030 Sustainability
Targets are designed to further
enhance CEMEX's economic, environ-
mental, and social performance, and
to strengthen our commitment to
building a better and more sustain-
able future for all.
Focus Area
Key Performance Indicator
2020
2020
2030
Target
Link to
Priority SDGs
Health and Safety
• Employee fatalities (Nº)
• Employee Lost Time Injuries (Nº)
Customer Centricity
• Net Promoter Score (NPS)
Climate Action
• Reduction of net CO2 emissions per ton of cementitious product vs. 1990 (%)
• Power consumption from clean energy sources in cement (%)
Sustainable Construction
• Annual sales from cement and ready-mix concrete products with outstanding sustainable attributes (%)
Circular Economy
• Total consumption of waste-derived sources from other industries (million tons)
• Reduction of dust emissions per ton of clinker vs. 2005 (%)
Air Emissions
• Reduction of NOx emissions per ton of clinker vs. 2005 (%)
• Reduction of SOx emissions per ton of clinker vs. 2005 (%)
Biodiversity
• Quarry rehabilitation plans, Biodiversity Action Plans (BAPs), and third-party certification (% from target
quarries)
Water
• Implementation of Water Action Plans in sites located in water-scarce areas (%)
Employee Experience
• Employee Net Promoter Score (eNPS)
• Implementation of key diversity and inclusion initiatives in our business units (%)
Suppliers
• Sustainability assessment of critical suppliers implemented by an independent third-party (% spend)
Communities
• Community engagement plans with formal stakeholder dialogues and committees in all priority sites (%)
• Community partners (i.e., individuals positively impacted from our social initiatives) (million people)
Ethics and Compliance
• Implementation of Ethics and Compliance Continuous Improvement Program (%)
3
49
68
22.6
29
53
12.4
87
39
66
77
N/A3
48
64
63
90
23.3
76
0
0
70 1
35 2
40
≥50
19
95
47
67
100
100
≥32
100
80
100
30
100
8, 9, 11
8, 9, 11
8, 9, 11
9, 11, 13, 15
9, 11, 13, 15
9, 11, 13, 15
8, 9, 11, 13, 15
11, 15
11, 15
11, 15
11, 13, 15
8, 9, 11, 15
8, 9
8, 9
8, 9, 11, 13, 15
8, 9, 11
8, 9, 11, 13, 15
8, 9
GRI 102-46, GRI 102-47
1. Our target for NPS was updated from 60 to 70, given our extraordinary performance in 2020.
2. Our target is aligned with the International Energy Agency’s roadmap to reducing CO2 emissions.
3. During 2020 we developed the methodology for our Water Action Plans and will begin roll-out in 2021.
CEMEX 2020 INTEGRATED REPORT Company Overview
How We Create Value
Our Performance in 2020
Governance
Results in Detail
About This Report
19
Our Performance
in 2020
We have a clear strategy for our company in the years
ahead and we know well what we have to do in order to
be an increasingly resilient organization and to become
an even more successful company.
CEMEX 2020 INTEGRATED REPORT Company Overview
How We Create Value
Our Performance in 2020
Governance
Results in Detail
About This Report
20
Financial
Performance
Despite the challenges the
pandemic posed to our business,
due to a timely management
response, our customer-centric
approach, as well as recent
strategic initiatives such as our
digital efforts, we were able to
deliver growth versus the prior year.
We increased sales on a like-to-like
basis and registered significant
growth in operating EBITDA as well
as free cash flow.
2020 was one of the most challenging
periods we have faced, but it was also a
remarkable year that tested the
strengths of CEMEX and several of our
recent strategic initiatives.
Financial Highlights
In millions of US dollars 1, except per-ADS data
2020
2019(i)
%VAR.
Net sales
12,970
13,130
(1.2)
Operating earnings before other expenses, net
1,343
1,333
Operating EBITDA
2,460
2,378
0.8
3.4
Controlling interest net income
(1,467)
143
(1,127.8)
Controlling interest basic earnings per ADS 2
(0.98)
0.10
(1,039.5)
Controlling interest basic earnings per ADS 2
from continuing operations
(0.90)
0.04
Controlling interest basic earnings per ADS 2
from discontinued operations
(0.08)
Free cash flow after maintenance capital expenditures
959
0.06
695
Total assets
27,425
29,363
Total debt and perpetual debentures
11,048
11,634
38.0
(6.6)
(5.0)
Net sales and
operating EBITDA
(millions of US dollars)
13,531
13,355
12,926
13,130
12,970
Free cash flow after
maintenance capital
expenditures
(millions of US dollars)
1,685
1,290
959
2,761
2,698
2,685
2,378
2,460
793
695
16
17
18
19
20
Total controlling stockholders’ equity
8,075
9,321
(13.4)
16
17
18
19
20
Notes:
1. Under IFRS, CEMEX translates the financial statements of foreign subsidiaries using exchange rates at the reporting date for the balance sheet and the exchange rates at the end of each
month for the income statement.
2. Based on an average of 1,498 and 1,527 million American Depositary Shares (ADSs) for 2020 and 2019, respectively.
CEMEX 2020 INTEGRATED REPORT
Company Overview
How We Create Value
Our Performance in 2020
Governance
Results in Detail
About This Report
21
Advancing Towards Our Operation Resilience Goals
In September 2020, we announced Operation Resilience, the company's medium-term strategy that
responds to the changes in our outlook for our business due to the COVID-19 pandemic and lays out a plan to
enhance EBITDA growth over the next three years. It allows CEMEX to optimize its portfolio for profitable
growth while securing our position as a vertically integrated, leading heavy building materials company with
a focus on four core businesses: cement, ready-mix, aggregates, and urbanization solutions.
Despite a volatile 2020, we made progress on our medium-term goals:
Taking the Lead in Green Financing
In 2020, we continued to improve our financial flexibility with the
successful amendment of our bank debt under our Facilities
Agreement. The amended agreement incorporates rigorous
sustainability-linked key performance indicators, including the
reduction of net CO2 emissions in about US$3.2 billion of com-
mitments. This transaction underscored our commitment to a
carbon-neutral economy.
Operation Resilience lays
the foundation for our
Our Approach
future. With our strategy
EBITDA margin of ≥20% by 2023
of optimization for
growth, we will build a
portfolio of bolt-on
investments in our four
businesses: cement,
ready-mix, aggregates,
and our recently
announced business line
of urbanization solutions.
Optimize our portfolio for
growth
≤3.0x net leverage by 2023
Enhance EBITDA margin through
operational performance and
disciplined cost containment.
Undertake strategic divestments
to streamline our portfolio and
de-lever while seeking attractive,
bolt-on investment opportunities
in the company’s footprint;
construct a portfolio with more
weight towards the USA and
Europe; focus on vertically
integrated positions in attractive
metropolises and develop
Urbanization Solutions as a core
business.
Utilize EBITDA growth, free cash
flow, and divestiture proceeds to
improve capital structure.
Proactive Climate Action
Strategy
35% reduction in net CO2
emissions vs. 1990 baseline by
2030
Recognizing sustainability as a
competitive advantage, advance
towards our 2030 carbon reduction
goal and the company’s ultimate
vision of a carbon-neutral
economy.
Our Approach in 2020
EBITDA margin of 19.0%
Achieved US$280 million
savings target
Asset divestment in France
Urbanization Solutions
EBITDA grew ~15% in 2020,
representing ~6% of
consolidated EBITDA
4.07x net leverage, a decrease
of 0.10x
~23% reduction vs. 1990
baseline
Our Facilities Agreement
became one of the largest
sustainability-linked loans in
the world and the largest in
emerging markets at the
time of signing.
CEMEX 2020 INTEGRATED REPORT Company Overview
How We Create Value
Our Performance in 2020
Governance
Results in Detail
About This Report
22
Consolidated Results
Global Review of Operations
Following is a review of 2020 operational results and the financial con-
dition of the company.
Consolidated net sales increased by 1% to US$13 billion in 2020 versus
the comparable periods in 2019 on a like-to- like basis for our ongoing
operations and adjusting for foreign exchange fluctuations. Despite
the disruptions of COVID-19 in our operations, higher local-currency
prices for all our products along with the growth in cement volumes,
more than offset the decline in our ready-mix and aggregates volumes.
Global Operations
In millions of US dollars
Mexico
United States
Cost of sales as a percentage of net sales remained flat for the whole
year. Higher costs of purchased cement was offset by lower energy
prices.
Europe, Middle East, Africa
and Asia 1
Net Sales
Operating
Earnings
Before Other
Expenses, Net
2,812
3,994
4,453
783
307
300
Operating
EBITDA
Total
Assets 4
931
747
3,837
12,442
638
6,848
Operating expenses as a percentage of net sales during the year
decreased, from 22.6% in 2019 to a record 21.9% due to our cost contain-
ment measures during the COVID-19 pandemic.
Operating EBITDA increased 3% to US$2.5 billion in 2020. On a like-to-
like basis, operating EBITDA increased 7% for the year. EBITDA growth
was largely driven by higher prices and savings from our Operation
Resilience program.
Operating EBITDA margin increased 0.9 percentage points, from 18.1%
in 2019 to 19.0% in 2020.
We reported a loss on financial instruments of US$16.1 million in 2020,
resulting mainly from our USD interest rate swap.
Other expenses, net, for the year were US$1.8 billion in 2020, which
includes US$1.5 billion impairment of goodwill and assets taken in the
third quarter and severance payments.
We reported controlling interest net income (loss) of US$1.5 billion in
2020 versus a net income of US$143 million in 2019. The lower net income
is the result of the US$1.5 billion impairment of goodwill and assets.
Total debt plus perpetual notes decreased 5%, or US$609 million, to
US$11.1 billion at the end of 2020.
South, Central America and the
Caribbean 2
1,472
281
371
2,384
Others 3
Total
239
(328)
(227)
1,914
12,970
1,343
2,460
27,425
Includes operations in the United Kingdom, France, Germany, Spain, Philippines, Israel, Poland, Czech Republic, Croatia, Egypt and the United Arab Emirates.
Includes operations in Colombia, Panama, Caribbean TCL, the Dominican Republic, Costa Rica, Puerto Rico, Nicaragua, Jamaica, the Caribbean, Guatemala and El Salvador.
Includes minor subsidiaries with different lines of business.
Includes assets in associated participation.
1.
2.
3.
4.
(*) See note 5.3 to the 2020 Annual Report’s Financial Statements.
Sales Distribution by Product
(percentage)
Sales Distribution by Region
(percentage)
● Cement
42%
● Ready-Mix 41%
● Aggregates 17%
● Mexico
22%
● USA
31%
● EMEA&A 34%
● SCA&C
11%
● Others
2%
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tons of granulated blast furnace slag, a
non-clinker cementitious material, and
0.6 million tons of other products.
Freight rates, which account for a large
share of the total import supply cost, have
been subject to significant volatility in
recent years. Our trading operations,
however, have obtained significant sav-
ings by contracting maritime transporta-
tion in due time and by using our own
and chartered fleet, which transported
approximately 50% of our cement and
clinker traded volume during 2020. Fur-
thermore, based on our spare fleet capac-
ity, we provide freight service to third
parties, generating additional revenues.
Mexico
South, Central America and the
Caribbean
deal with the virus in the UK, Spain, and
France, however, impacted demand.
In 2020, on a like-to-like basis, our Mexi-
can operations' net sales increased 7% to
US$2.8 billion, and operating EBITDA
increased 7% to US$931 million versus
2019. During the year, our domestic gray
cement volumes increased by 6% while
our ready-mix concrete and aggregates
volumes decreased by 16%, and 10%,
respectively.
The increase in cement volumes was
supported by the self-construction sector,
evidenced by the double-digit growth in
bagged cement as a result of government
social programs, high level of remittances,
and home improvements. Activity in the
formal sectors experienced a slight recov-
ery in the second half of the year as gov-
ernment restrictions eased and flagship
infrastructure projects accelerated.
United States
Our US operations' net sales increased 6%
year over year, to US$4.0 billion, while
operating EBITDA increased 19% to
US$747 million during the year. This repre-
sented our highest reported operating
EBITDA since 2007. Our US operations'
domestic gray cement, ready-mix con-
crete, and aggregates volumes increased
by 8%, 1% and 4%, respectively, for 2020.
Our cement volumes during the year
were relatively unaffected by COVID-19.
The residential sector was the main driver
of demand as single family starts reached
their highest levels since 2016. The infra-
structure sector also remained dynamic
driven by state/local funding. For the full
year, we achieved highest reported
EBITDA since 2007 and highest cement
volumes since 2016.
In 2020, our net sales for the region
declined 8% on a like-to-like basis, to US$1.5
billion. Our operating EBITDA increased 2%
on a like-to-like basis to US$372 million.
Regional domestic gray cement, ready-mix
concrete, and aggregates volumes
decreased by 8%, 34%, and 33%, respec-
tively, for the year. The volume decline is a
result of the severe lockdowns experienced
in several of our countries, which nega-
tively impacted our performance.
In Colombia, activity continued supported
by the self-construction sector and the
execution of 4G highways projects. The
decline in our cement volumes reflects
our focus on pricing and new capacity in
the country. In the Dominican Republic,
activity recovered in the second half of
the year driven by high level of remit-
tances which contributed to the strong
performance of our bagged cement
volumes.
Europe, Middle East, Africa, and Asia
During 2020, net sales decreased 1% on a
like-to-like basis, to US$4.4 billion, while
operating EBITDA decreased 1%, to
US$630 million. For the full year, our
regional domestic gray cement, ready-
mix concrete and aggregates volumes
declined 1%, 4% and 3%, respectively.
In Europe, our domestic gray cement
volumes remained flat, while our ready-
mix concrete and aggregates volumes
decreased by 8% and 6%, respectively.
Countries like Germany, Poland and
Czech Republic were relatively unaffected
from the pandemic. Social restrictions to
In the Philippines, our domestic gray
cement volumes decreased by 11% for
2020. Our decline in cement volumes
during the year was due to lower con-
struction activity, mainly in the public
infrastructure sector, as a result of strict
lockdown measures implemented by the
government.
In Israel, our ready-mix concrete and
aggregates volumes increased by 8% and
12%, respectively, for the year. Volume
growth was driven by continued construc-
tion activity in all sectors.
Trading
Our global trading network is one of the
largest in the industry. Our trading opera-
tions help us to optimize our worldwide
production capacity, deliver excess
cement to areas where it is most needed,
and explore new markets without the
necessity of making immediate capital
investments. Our worldwide network of
strategically located marine terminals and
broad third-party customer base also
provide us with the added flexibility to
place contracted supplies optimally.
In 2020, we enjoyed trading relationships
in 95 countries. Our traded volume
totaled more than 12 million tons of
cementitious and non-cementitious
materials, including approximately 10
million tons of cement and clinker.
Approximately 4.5 million tons of our
traded cement and clinker consisted of
exports from our operations, while the
remaining 5 million tons were purchased
from third parties. We also maintained a
sizeable trading position of 0.9 million
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carbon alternatives, becoming more efficient in
the use of energy, sourcing alternative raw mate-
rials that contribute to reducing overall emis-
sions or clinker factor, developing and actively
promoting lower carbon products, and the
recent deployment of groundbreaking hydrogen
technology in all CEMEX’s European kilns. CEMEX
is also working closely with alliances to develop
industrial-scale technologies towards its goal of a
net-zero carbon future. Strong and clear regula-
tions such as EU ETS give companies like CEMEX
the confidence and certainty to enable these
investments, which is exactly what the EU ETS is
designed to deliver. For these reasons, as of the
date of this report, CEMEX is selling, in one or
more transactions, an amount of carbon allow-
ances that is equivalent to approximately 2% of
CEMEX’s consolidated assets, to contribute to
further accelerate CEMEX’s climate action strat-
egy and for other general corporate purposes.
We believe that after closing these sales, we
would retain sufficient allowances to cover the
requirements of our operations in Europe until at
least 2025.
Other Information
During the years-ended December 31, 2020 and
2019, in the countries in which we operate, we
paid in cash a total amount of taxes of US$160
million and US$179 million, respectively. Out of
the US$160 million of corporate income taxes in
2020 (US$179 million in 2019), US$35 were paid by
our operations in Europe (US$34 million in 2019)
and US$125 million by our operations in the
Americas and other countries (US$145 million in
2019). For purposes of this paragraph, our opera-
tions in Europe are mainly comprised of Poland,
France, the Czech Republic and Switzerland; our
operations in the Americas are mainly comprised
of Mexico, the US, Colombia, the Dominican
Republic and Guatemala.
In addition, for the years-ended December 31,
2020 and 2019, we had an aggregate tax profit of
US$368 million and US$262 million, respectively,
from our operations in Mexico, Costa Rica, the
Dominican Republic, Israel, the Czech Republic,
Colombia, Nicaragua, Guatemala, Jamaica, the
Netherlands, Switzerland, and Poland.
As of December 31, 2020 and 2019, we were allo-
cated free CO2 emission allowances in the coun-
tries in which we operate in the European Union
(EU) and that are part of the EU Emissions Trad-
ing System. For purposes of this paragraph, our
operations in Europe are mainly comprised of
Croatia, the Czech Republic, Germany, Spain,
Poland, and the UK. For years 2020 and 2019, we
received total European Union Allowances (EUAs)
of 8,949,684 and 9,504,497, respectively. The
EUAs allocated by country during 2020 and 2019,
respectively, were 1,079,391 and 1,102,118 for Croa-
tia; 391,862 and 400,112 for the Czech Republic;
1,205,421 and 1,230,801 for Germany; 3,854,132 and
4,301,659 for Spain; 1,240,879 and 1,267,006 for
Poland; and 1,177,999 and 1,202,801 for the UK.
The EUAs received were worth US$265 million
and US$272 million in 2020 and 2019, respec-
tively. Breakdown by country of the EUAs for
2020 and 2019, respectively: US$32 million and
US$32 million for Croatia; US$12 million and US$11
million for the Czech Republic; US$36 million and
US$35 million for Germany; US$114 million and
US$123 million for Spain; US$37 million and
US$36 million for Poland; and US$35 million and
US$34 million for the UK.
As of December 31, 2020, CEMEX has already
achieved a close to 35% reduction in CO2 emis-
sions vs. its 1990 baseline across all of CEMEX’s
cement plants in Europe. CEMEX is the first
company in its sector to set industry-leading
climate targets for its operations in Europe which
align directly to the EU’s aspiration of 55% CO2
reduction by 2030. CEMEX has also committed to
moving to net-zero CO2 concrete globally by
2050. Since the inception of the European Union
Emissions Trading System (EU ETS) in 2005,
CEMEX has taken measures that have resulted in
avoiding around 32 million tons of CO2 compared
to CEMEX’s 1990 baseline level in that region. In
order to achieve our 2030 and 2050 CO2 reduc-
tion goals, innovative technologies and consider-
able capital investments have to be deployed.
Since EU ETS began in 2005, over US$300 million
of investments in Europe are either already
executed or planned in the next years to support
our CO2 reduction objectives. Additional invest-
ments are still required to meet CEMEX’s 55%
CO2 reduction target by 2030 in Europe. These
investments include, but are not limited to, the
general process switch from fossil fuels to lower
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Our Health
and Safety
Commitment
Our goal is that anyone who interacts with our
operations returns home safely to their family.
We consider this a moral imperative, and it is the
reason health and safety is our company’s
foremost value and priority.
Our efforts to offer our
employees and contractors
a safe and healthy work
environment and to
provide for our
communities’ wellbeing
directly contribute to our
priority SDGs 8, 9 and 11 as
well as to SDG 3.
Keeping Our People Safe
and Healthy During the
COVID-19 Pandemic
At CEMEX, Health and Safety has
long been our top priority. The
unprecedented challenges of
2020 underscored the impor-
tance and relevance of keeping it
so. As soon as the COVID-19
threat emerged, we activated our
local, regional, and global Rapid
Response Teams to implement
preventive measures in response
to this worldwide health crisis.
Throughout the pandemic,
CEMEX maintained constant
communication with govern-
ment authorities and maintained
the strictest requirements as we
worked to safeguard our people
and safely deliver to our custom-
ers the products and services
needed to ensure the continuity
of essential activities.
Our production sites as well as
construction operations are rig-
idly controlled environments well-
suited to protect workers and for
continuing to carry out essential
activities paramount to address-
ing society’s needs during the
COVID-19 pandemic. In addition
to operating under the strictest
health and safety protocols, con-
struction sites are normally
low-density personnel operations
that are closed to the general
public and are situated in open
outdoor spaces with abundant
natural ventilation. Despite these
inherent traits that make the
building industry low risk for virus
transmission, in 2020 we
launched special protocols
designed to further protect our
employees, customers, suppliers,
and communities from the risks
COVID-19 presents.
Over 50 COVID-19 Hygiene
and Safety Protocols
In 2020, we developed 52 hygiene
and safety protocols designed to
protect our employees and the
people that we interact with
during our day-to-day business
activities from potential risks
presented by COVID-19. These
detailed guidelines represent new
ways for all of us to conduct our-
selves at work and in our lives in
general.
Released in April 2020 and trans-
lated into all required languages,
these documents are based on
the best available information
from the World Health Organiza-
tion, health specialists, and our
own company health and safety
experience. Furthermore, we are
constantly updating and rein-
forcing our protocols to address
new developments and to follow
applicable health regulations
and guidelines.
Among the protocols imple-
mented and shared with our
customers, commercial partners,
and other companies are: Per-
sonal Hygiene, Physical Distanc-
ing, Screening at the Workplace,
CEMEX Truck Drivers, Workplace
Cleaning, and Commuting To and
From Work, among many others.
Extending our COVID-19
Protocols to the CEMEX Family
Our 52 COVID-19 protocols also
address situations away from our
worksite, focusing on critical
moments when our employees or
their family members could be
exposed to the virus, and how to
prevent contagion. Throughout
the year, we made special efforts
to reach employees’ families with
this information by utilizing digi-
tal technologies such as video-
conferences and social media.
Learn more about the publicly
available COVID-19 Protocols
implemented in all of our
operations
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Behaviors that Save Lives: Replicated
and Monitored Globally
The COVID Coordinator Role: Critical to our
Efforts
Upon release in April 2020 of our 52 hygiene
and safety protocols to cope with COVID-19
challenges, we sought to communicate and
implement them throughout our operations
in a quick and efficient way.
To facilitate the adoption of the developed
guidelines, we identified the daily journey
followed by each employee group: plant,
office, call centers, drivers, and field sales,
among others. By analyzing the unique
requirements of each role, we discerned that
across all employees we needed to prioritize
four essential behaviors to mitigate the risk of
COVID-19 transmission: identifying and report-
ing symptoms, personal hygiene, physical
distancing, and protecting yourself and others.
We branded these four behaviors as the
“Behaviors that Save Lives” and created and
deployed a global awareness and adoption
campaign to advance them quickly through-
out our operations. The full deployment of the
global campaign to share the COVID-19 proto-
cols and to embed the Behaviors that Save
Lives into daily activities was coordinated in
record time, with guidelines, playbooks, as
well as other communication and training
materials translated and distributed through-
out our operations.
Close to 2,000 of our employees around the
world assumed a new COVID Coordinator
function, which has been critical to our efforts
to continue safeguarding our people and
seeking the continuity of our business during
the ongoing COVID-19 pandemic. The role of
the coordinator is to help keep our employees
and contractors safe and healthy, and also to
monitor and support the adaptation of neces-
sary measures at each facility so as to reduce
the risk of contagion.
Strengthening Communication with our
Employees During the Pandemic
During the pandemic, we strengthened our
communication with our employees to under-
stand more about how COVID-19 is impacting
their lives and to keep them continuously
informed of the actions and protocols we were
undertaking. Feedback from close to 13,000
employees revealed that 84% have a positive
perception of the measures CEMEX has
adopted across its operations to confront the
pandemic. CEMEX rated above average in
comparison to other companies measured in
the same survey.
Harnessing the Power of Digital Innovation
During the COVID-19 pandemic, we have leveraged our existing digital
capabilities to limit direct contact, increase physical distancing in our
operations, and provide real-time worker density monitoring.
Some of the digital innovations we adopted to address the challenges
presented by COVID-19 included using a proprietary Health Check app in
several regions to closely follow up on the health of our employees
through their mobile devices, testing virtual reality glasses in our cement
plant in Panama to remotely monitor and inspect safety protocols in the
facility, and utilizing our industry-leading CEMEX Go platform to conduct
sales, payments, and customer service in a virtual and safe digital environ-
ment that eliminates the risk of virus transmission, protecting both our
workers and our customers.
Learn more about our CEMEX Go platform on page 41 of this report. ▶
Supporting Our Communities During the
COVID-19 Pandemic
We have continued working closely with our
communities and most vulnerable groups to
understand their needs during the pandemic.
Maintaining close communication with our
neighbors allowed us to develop a comprehen-
sive action plan to provide relief for the chal-
lenges faced, including implementing social
actions to strengthen health and hygiene
behaviors, providing medical supplies and
humanitarian aid, launching sanitization initia-
tives, and developing immediate response
actions to boost local economic recovery in
record time.
Learn more about our Social Impact initiatives
during COVID-19 on page 67 and how our
Urbanization Solutions contributed to building
new health infrastructure on page 49. ▶
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Employee Lost-Time
Frequency Rate
(per million hours worked)
2.6
0.6
0.5
2010
2015
2020
In 2020, we reaffirmed our
public goal to reach zero
employee LTIs by 2030.
Our Path to Becoming an Injury-free
Company
Contractor Safety
We are constantly working towards our
ultimate goal of zero injuries worldwide at
every location—our Zero4Life commit-
ment. We believe that zero injuries and
fatalities are possible, and, to that end, we
continually renew our determination to
protect our people.
We continued to make progress in most of
our countries in 2020, with 96% of our oper-
ations achieving zero employee and con-
tractor fatalities and Lost Time Injuries
(LTIs). These results provide both motivation
and clear evidence that our Zero4Life com-
mitment is producing positive outcomes
and becoming a reality across the vast
majority of our sites.
Our 0.5 employee LTI frequency rate has
remained a positive benchmark for a global
company in our industry for several years.
Sadly, there were 3 employee and 4 con-
tractor fatalities, 5 of which occurred away
from our premises. We are committed to
maintaining our positive momentum on
this important health and safety journey.
» We have continued to reduce the num-
ber of fatalities year-over-year but
acknowledge zero is the only acceptable
number.
» We reduced the total number of injuries
involving employees and contractors.
Progress in the past decade has derived
in 77% LTIs reduction.
» 85% of our operations achieved zero
employee and contractor Total Record-
able Injuries (TRI’s).
Consistent with our Zero4Life commitment,
we are not only dedicated to the safety of all
of our employees, but also to that of our
contractors. Accordingly, we continue to
focus on contractor management and
driving safety in our various global cam-
paigns and initiatives. Each injury and each
fatality are analyzed carefully to identify root
causes and required actions to prevent
future incidents.
Our Contractor Health and Safety Verifica-
tion Program is designed to confirm the
practices and credentials of contractors
who work on our behalf. Working with our
Global Procurement team, we evaluate
contractors’ health and safety practices
through a specialized third-party organiza-
tion that utilizes a data-driven system. The
verification checks for regulation compli-
ance, liability policies, risk premiums, manu-
als and procedures, and applicable training
and accreditations, among other require-
ments. This evaluation helps us to verify
that contractors know and comply with
health and safety processes and keep safe
while working with us.
As part of our Contractor Health and Safety
Verification Program, in 2020, we reached
our goal of evaluating at least 82% of our
company’s procurement contractors spend.
To achieve this goal, we engaged our oper-
ating countries and worked closely with our
Health and Safety Functional Network.
Protecting Vulnerable Road Users
From innovative awareness campaigns and safety features
for our trucks, to defensive driving training and workshops,
we aim to enhance road safety for drivers, motorcyclists,
cyclists, pedestrians, and other vulnerable road users. In
2020, our operations relied on digital platforms to reinforce
road safety with key stakeholders, allowing us to bolster
strong communication while complying with social distanc-
ing measures.
We also continued with the campaign, introduced in 2019
and launched in 63 cities around the world, that has seen
more than 200 CEMEX trucks branded with high-visibility
graphics and safety tips to raise road safety awareness aimed
at helping protect pedestrians.
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Building a Strong Health and Safety Culture
H&S Management System
Across our operations, we continue investing in initiatives to strengthen
our culture of health and safety. Through standardized global programs
and sharing of best practices, we instill consistency across all of our
operations.
Our interconnected global organizational structure fosters a coordi-
nated, consistent, and collaborative approach to reach our compa-
ny-wide goal of zero injuries, including our:
» H&S Functional Network: National health and safety specialists and
their teams.
» Global H&S Council: Corporate and regional representatives that
support our H&S Functional Network.
» Global Health Forum of Experts: Group of experts that lead initiatives
to help employees and contractors adopt healthier lifestyles.
H&S Policies and Procedures: Reinforcing Our Top Priority
As our number one value and priority, we have strong policies in place
to uphold our commitment to health and safety throughout our orga-
nization. Relying on standardized controls and procedures in the coun-
tries where we operate helps us build safer operations and consistently
monitor the progress of our initiatives.
Our Global Health and Safety Policy is the cornerstone of our CEMEX
Health and Safety Management System (HSMS) and sets out clear
expectations, for leaders and workforce, to carry out their activities in a
safe manner and to care for the well-being of our employees, contrac-
tors, and other people with whom we interact. Updated in 2020, the
policy now reinforces topics such as communication with suppliers,
reporting and incident investigation, as well as taking care of the health
and safety of others.
The HSMS, based on the OHSAS 18001 standards, empowers our leaders
to implement a successful health and safety strategy for the company
and guides us on how to adequately allocate resources to training pro-
grams for our employees. In addition to defining operations in accor-
dance with local regulations, the HSMS also lays the groundwork for
assessing potential risks and planning the measures needed to mitigate
them in a coordinated manner. Our line managers utilize our HSMS on
an ongoing basis and make a formal and deep review each year to help
them formulate their annual Health and Safety Improvement Plan.
In 2020, we acted swiftly to add a new dedicated element to our HSMS
to effectively manage and mitigate risks and impacts from pandemics
and epidemics. This 15th element in CEMEX HSMS is designed to help us
to remain effective in our management of risks associated with the
current virus and to institutionalize our approach in the future if further
situations of a similar nature occur.
Management
of Pand-
emics
and Epi-
demics
Leadership
& Account-
ability
Risk
Management
Audits,
Inspecions
& Continuous
Improve-
ment
Incident
Reporting,
Investigation
and Prevention
Regulation
Policies
Driving
Safety
Contractor
Safety
Management
Occupational
Health &
Wellbeing
CEMEX
H&S
Policy
Emergency
Management
Operational
Control
Standard
Operating
Procedures
Document
Control
People,
Training &
Behaviours
Communi-
cation &
Consulta-
tion
H&S Training: Achieving Our Goals
At CEMEX, training is a key part of our strategy to achieve our Zero4Life
commitment. We continuously revise and seek to improve our training
programs and strive for all of our employees to possess the correct
knowledge, skills, and experience to perform their jobs safely.
As part of our training program, executives, line managers, and supervi-
sors must complete our Health and Safety Academy, designed to
enhance the leadership skills and to reinforce our number one value
and priority across our organization—from our production plants to our
corporate offices. The Academy was launched in 2016 with our Founda-
tion Module, which prepares our line managers to lead by example and
play a fundamental role in ensuring safety throughout our operations.
Launched in 2017, Module 2 enables our line managers to utilize our
HSMS tool to help achieve our Zero4Life commitment in their opera-
tions. Module 3, deployed in 2018, is designed to enhance the profi-
ciency of our line managers in key topics.
In 2020 we strengthened our Health and Safety Academy training to
address the new Pandemics and Epidemics Element included in our
HSMS. We delivered the newly designed training using CEMEX Univer-
sity’s self-learning platform to reach over 10,800 line-managers, in nine
languages, across all regions worldwide, which represented more than
16,200 hours of training during 2020 on this topic.
Learn more about CEMEX University on page 63 of this report. ▶
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Reinforcing Our Health and Safety Culture with Innovation
From self-assessment systems to mobile apps, GPS tracking, and
the creative branding of our trucks, we are continuously develop-
ing and deploying innovative initiatives to proactively advance
our goals.
We continued to install specific safety features for our company’s
trucks in an ongoing program to help improve road safety. These
features include vehicle sensors, camera systems that alert our
drivers to potential dangers, and many other types of safety
equipment. Our countries are utilizing truck GPS and telematics
data to not only identify risky driving behaviors that require addi-
tional training, but also to highlight good driving performance
that merits recognition. Data that we track include speed, harsh
braking, and driving hours; several appropriate systems have been
developed to monitor potential issues and to bring them to the
attention of operations and their drivers.
Within our operations, we also deploy such measures as driving
simulators, workshops, and video sessions to improve our drivers’
knowledge base on rigorous topics for our organization, such as
logistics and transportation. Our Mobile Intelex App gives our
people the capability to report near misses, hazards, inspections,
and leadership health and safety visits—anytime, anywhere—on
their cell phones, tablets, and computers, enabling quicker reac-
tions to prevent injuries.
Global Health and Wellness Activities
We continue to increase our local wellness
initiatives throughout our global operations,
supported by medical professionals from
our Global Health Forum of experts. We also
remain focused on our employees’ occupa-
tional health and well-being by providing
ongoing health checks and promoting our
CEMEX Health Essentials.
In 2020 we introduced three new CEMEX
University learning pathways to help
address new challenges emerging from
COVID-19, including: working and collabo-
rating effectively while remote from home;
building emotional and physical well-being
to manage stress and anxiety; and building
individual, team, and organizational resil-
ience and leadership.
Visible and Quantifiable Leadership
As we continue to improve our health and
safety culture, we must make all types of
injuries to our employees and contractors a
thing of the past, especially fatalities and
other high severity incidents. To this end,
our key proactive efforts include Visible Felt
Leadership (VFL) and Near Miss/Hazard
Alert Reporting.
The VFL Program includes a process
whereby our leaders regularly engage with
frontline workers on health and safety mat-
ters to influence non-risk-taking behaviors
and to reinforce the importance of keeping
themselves and others safe. In 2020, we
continued implementing some in-person
VFL site visits in adherence with physical
distancing measures, and we also transi-
tioned to virtual engagement exercises to
reinforce our health and safety culture and
maintain high levels of awareness. This
approach was designed to convey organiza-
tion-wide the genuine commitment of
every manager to health and safety and to
inspire positive behaviors by others during
the pandemic.
For more than 10 years, CEMEX has consis-
tently implemented the Near Miss/Hazard
Alert System across all of our geographies
and business lines. Employees, contractors,
or anyone visiting a CEMEX site can use
this tool to report identified risks, thus
contributing greatly to the elimination of
potential hazards.
Health and Safety Awards: Recognizing
Those Who Excel
Our Global Health and Safety Awards provide us
with the opportunity to recognize those opera-
tions and employees that excel at providing a
safe workplace and promoting a healthy life-
style among our employees and everyone
involved with our company. In 2020 we
acknowledged our outstanding performance in
four categories: Zero4life Contribution, Contrac-
tor Management, Health Contribution, and
Sector Awards.
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30
Climate Action
At CEMEX, we pride ourselves on building a
better future, and climate action is essential
for the achievement of that future.
Concrete is the most consumed
man-made material on earth and a
key enabler of cities and
communities’ growth. We are
committed to enhancing the
sustainable attributes of our
building solutions in order to
contribute to modern life while
addressing climate change and
other global challenges. Our 2030
CO2 reduction target and 2050
carbon neutrality ambition reflect
this aspiration and the implied
efforts are linked to priority SDGs 9,
11, 13, and 15.
In 2020 we announced:
» Our 2030 goal of 35% reduction in specific
net CO2 emissions
» Our 2030 commitment of 55% reduction in
specific net CO2 emissions in our European
operations
» Our ambition to deliver globally net-zero
CO2 concrete by 2050
» Additionally, we aim to reach 40% clean
electricity for cement by 2030.
Climate action has been for decades
a priority for CEMEX, and our efforts
to date have resulted in significant
progress. Our resolve is to go further,
which is why we’ve made the con-
sideration of carbon emissions
reduction an integral part of every-
thing we do.
We support the urgency of collective
action to achieve compliance with
the Paris Agreement commitments
and the fulfillment of the United
Nations Sustainable Development
Goals on climate action.
Taking the Lead in Green Financing
In 2020, CEMEX successfully closed an amend-
ment to the Facilities Agreement that incorpo-
rated sustainability-linked metrics, including
reduction of net CO2 emissions, clean electric-
ity consumption, quarry biodiversity conserva-
tion, water management, and clinker factor.
This Facilities Agreement became the largest
Sustainability-Linked Loan to date in Latin
America and the emerging markets and one
of the largest in the world, incorporating rigor-
ous key performance indicators in about
US$3.2 billion of commitments.
CEMEX is the first company
in the sector to target a
specific net CO2 reduction
in its European operations
of at least 55% by 2030.
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CO2 Emissions and Reduction Levers in Our Value Chain
Power
Supply
Production
Process ▶
1
2
Raw Material
Extraction
Clinker
Production
3
Cement
Production
4
Aggregates
Production
5
Concrete
Production
CO2
Reduction
Levers ▶
Reforestation
Offsets
Clinker
» Alternative Fuels
» Hydrogen Injection
» Decarbonated Raw
Materials
Carbon Capture,
Use and Storage
» CO2 Capture
» CO2 Storage
» CO2 to Produce
» Low Temperature
Fuels
Clinker
» Low CO2 Clinker
» CO2 Mineralization
» Other CO2 uses
» Solar Calcination
Cement
» Additions
» Integral Cement
» Grinding Admixtures
and Technologies
» Calcined Clays
Ready Mix and Aggregates
» Additions
» Binders
» Recycled Aggregates
5
Construction: Buildings
and Infrastructure
Construction and Demolition
» Fast Recarbonation of
Recycled Concrete
» Natural Carbonation of
Concrete during Lifetime of
Structure
Power Supply
» Clean Power
» Energy Storage
» Waste Heat Recovery
» Energy efficiency
» Waste to Energy
Transport & Supplies
» Low CO2 Transport
» Routes Optimization
» Barges and Railroad
» Low CO2 Fuels
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A Clear CO2 Reduction Roadmap in Line with Climate
Science
The CO2 Reduction Roadmap to meet our 2030 goal
assesses the carbon mitigation potential that can be
seized across each of our cement manufacturing sites,
taking into consideration local challenges, regulations,
materials supply, technical limitations, and market
dynamics, among other decisive factors.
Building on this roadmap, we intend to invest approxi-
mately US$130 million over five years to reinforce our
efforts in reducing emissions in our production pro-
cesses. To this end, we aim to accelerate and replicate
in new geographies the use of proven technologies that
our operations have been employing successfully for
the last 20 years and adding recent technologies that
have great innovative potential as CO2 reduction levers.
To additionally contribute to our carbon mitigation
goals, we intend to reduce our indirect emissions by
reaching 40% of electricity consumption in cement
from clean energy sources.
CO2 Reduction Levers for Our
2030 Target Reduction Roadmap
● Alternative Fuels
● Clinker Factor
● Decarbonated
Raw Materials
● Novel Clinkers
● Hydrogen
Injection
32%
31%
16%
16%
5%
CEMEX’s 2030 CO2 reduction target
and roadmap including Scope 1 and
2 emissions, have been validated by
Carbon Trust, an internationally
recognized consulting company
that provides a rigorous third-party
assessment of carbon reduction plans. In their verifica-
tion process, Carbon Trust assessed for each cement
operation the technological feasibility and the expected
benefit of each lever on carbon reduction as well as the
viability cost to implement the plan. Finally, they also
ensured that we have appropriate governance in place
to implement the roadmap.
View the Carbon Trust verification letter
Our 2030 CO2 Reduction Target and Roadmap
CEMEX’s 2030 CO2 reduction goal is focused on our
cement business, where the majority of the carbon
emissions reside. To fulfill this target, we developed a
detailed CO2 roadmap for each of our manufacturing
plants to accelerate the worldwide rollout of proven
technologies.
Our roadmap is aligned with the Sectoral Decarboniza-
tion Approach (SDA) 2°C scenario developed by the
International Energy Agency (IEA) for the cement sector
in line with climate science.
Our 2030 Target
(kg CO2 / ton of cementitious product)
801
-22.6% -35%
620
520
We aim to
reduce our net
CO2 emissions
per ton of
cementitious
product by 35%
compared to
our 1990 levels
1990
2020
2030
As of 2020, we have reduced our net CO2 emissions per
ton of cementitious products by close to 23% compared
with the 1990 baseline. In 2020 alone, this reduction
together with the clean energy and electricity efficiency
improvements, allowed us to avoid emitting 8.6 million
tons of CO2, equivalent to the annual emissions of 1.9
million passenger vehicles. With our 2030 goal, we aim
to avoid up to 16 million tons of CO2 per year, equivalent
to the annual emissions of 3 million passenger vehicles.
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Alternative Fuels Rate
Key Levers to Reach Our CO2 Reduction Target
(percentage)
Accelerating the Use of Alternative Fuels
25.3%
20.4%
5.1%
0.6%
1990
2005
2010
2020
With close to 11%
share in total fuel
mix, CEMEX is the
industry leader in
biomass content
from alternative
fuels consumption.
Given the high-energy intensity of our cement opera-
tions, the use of alternative fuels as a substitute for
fossil fuels is an important lever to reduce direct CO2
emissions from our clinker production process across
all of our cement sites. Alternative fuels are predomi-
nantly non-recyclable materials and waste from
industrial, domestic, agricultural, and forestry pro-
cesses—including used tires, processed municipal
solid waste, and biomass residues such as rice and
coffee husks, animal meal, and sewage sludge—
which contain recoverable energy and material.
Our Alternative Fuels Strategy helps us confront
climate change by enabling us to rely less on fossil
fuels and thereby reduce the CO2 intensity of clinker
manufacturing. Concurrently, by co-processing waste
as an alternative fuel in our cement operations, we
can help decrease the amount of waste society sends
to landfill, reduce public investment in new dedi-
cated waste management facilities, and foster local
business creation and employment by developing
alternative fuel supply chains.
Our 2020 milestones:
» 25.3% global alternative fuels rate
» 91% of our cement plants co-processed a cumula-
tive 2.7 million tons of waste as alternative fuels
» ~1.6 million tons of coal replaced
» +US135 million avoided in fossil fuel costs
» +US$43 million in additional savings in carbon-reg-
ulated regions where we operate.
In 2020, our Chelm plant in Poland reached
over 93% alternative fuels rate, one of the
highest substitution rates in the cement
sector
With 60% substitution of fossil fuels in the
region, our cement operations in Europe have
the highest share of alternative fuels. This is
directly linked to waste directives, and market
dynamics that have allowed us to take our
largest production cost, fuel, and convert it to an
income stream.
Our installations with the highest alternative
fuels rate include Chelm and Rudniki in Poland,
Prachovice in the Czech Republic, Rüdersdorf in
Germany, Morata in Spain, and Rugby in the UK.
CEMEX has the proven experience, technology, and
know-how needed to process, store, and leverage the
special conditions offered by the rotary kilns in the
production of clinker as well as to process waste and
recover energy from alternative sources in a respon-
sible manner. Some of the main challenges we face
in increasing our global alternative fuel substitution
rate are the lack of stable quality fuel supply; limited
policy incentives to develop the waste to fuel value
chain; and a lack of a regulatory framework that
recognizes co-processing as the optimal waste man-
agement solution for unrecyclable materials.
Going forward, we will continue working to reach our
targets and seeking investment opportunities to
identify and transform new sources of waste to
replace fossil fuels, while remaining a prominent
industry advocate and leading user of alternative
fuels for cement production.
To learn more about the circular economy benefits
of using alternative fuels in clinker production, visit
page 54 of this report. ▶
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Development of Novel Clinkers with Lower
Energy Demand and Higher Reactivity
In recent years, we have paid increased
attention to the development of clinker
produced with lower energy demand and
clinker with higher reactivity that allows for a
smaller CO2 footprint in cement. We have
successfully developed new types of clinker
with a 10% to 20% lower CO2 footprint by
changing our raw meal composition to
reduce the energy intensity of clinker pro-
duction and leverage a higher clinker reac-
tivity, thereby allowing for a higher content
of clinker substitutes in our cement.
These new types of clinker have been intro-
duced in several markets, mainly in Mexico
and Europe, reaching 50% share in our clinker
production in the latter region. We will also
continue our work to develop and extend
across regions novel cements with signifi-
cantly larger carbon footprint reductions.
Harnessing the Power of Hydrogen
Injection
We have successfully integrated an innova-
tive hydrogen-based technology into all of
our cement plants in Europe. This technol-
ogy enables our kilns to increase their use of
alternative fuels by optimizing the combus-
tion process. Hydrogen burns faster and
assists the ignition of biomass. To this end, a
mixture of both hydrogen and biomass can
be used to address some of the alternative
fuel’s calorific limitations, leading to a reduc-
tion of all fossil fuel CO2.
Guided by our 2030 CO2 Reduction Road-
map, we will continue making the invest-
ments needed to extend this technology to
other regions, starting with deployment
throughout Mexico, the U.S., and SCA&C
during 2021.
Increasing the Use of Clinker Substitutes
We continue our global push to bring tech-
nological, operational, and commercial
elements to bear on further reducing the
clinker-to-cement ratio in cement produc-
tion or clinker factor. Using supplementary
cementitious materials as a substitute for
clinker reduces CO2 process emissions and
CO2 emissions from energy use related to
clinker production. Substitutes include active
minerals derived from industrial waste, such
as slag from blast furnaces for steel produc-
tion and fly ash, a by-product of power plant
coal combustion, as well as natural materials
such as limestone and pozzolan.
In our Assiut cement plant in Egypt, we
successfully activated clays in our kilns
through calcination, which aims to solve the
challenge of locally available active supple-
mentary cementitious materials for the
cement production process. We are also
working to develop tailor-made quality
enhancer admixtures to improve the reactiv-
ity of cement and, thus, increase the rate of
supplementary cementitious materials.
As of 2020, the average clinker factor in our
cement products is 77.0%, down from 85.4%
in our baseline year 1990. We aim to achieve
further reductions in our clinker factor as a
key contributor to reach our 2030 goal.
Increasing the Use of Decarbonated Raw
Materials
We are also investing in the research and
development of other decarbonated raw
materials to replace limestone in clinker
production. These decarbonated raw materi-
als are normally waste from other industries,
such as lignite ash, carbide sludge, or lime
residues from the beet sugar industry. These
already decarbonized raw materials have a
great potential to simultaneously reduce
both process emissions and fuel emissions,
as less heat is demanded to decarbonize the
raw meal.
As of 2020, we achieved an increase in our
decarbonated raw materials of close to 15% in
the European cement operations, which
contributes to position Europe at the fore-
front of emissions reduction worldwide.
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Maximizing the Use of Clean Energy Sources
Improving Energy Efficiency
Energy efficiency in production processes is also a major contributor to
reducing the demand for energy and lowering energy-related emis-
sions. At CEMEX, we are focused on promoting a mindset of continuous
improvement and constant innovation that enables us to leverage
opportunities to capture savings and reduce energy consumption
across our operations by replacing outdated equipment and moderniz-
ing our plants with the latest available energy-efficient technologies.
Leading Energy Efficiency in the U.S.
Our U.S. operations earned the 2020 EPA ENERGY STAR® Partner
of the Year, Sustained Excellence Award—the highest honor
among ENERGY STAR® awards—marking the second consecutive
year the company has received ENERGY STAR® Partner of the
Year in recognition of our leadership in energy management and
longstanding commitment to sustainability. Being honored with
this award reflects our commitment to company-wide energy
management and affirms our efforts and activities reflect the
highest industry standards.
This award is among a list of honors by the U.S. Environmental
Protection Agency and the U.S. Department of Energy that rec-
ognizes CEMEX USA’s ongoing and active participation in the
ENERGY STAR® program. Since 2007, CEMEX USA cement plants
have earned more than 50 ENERGY STAR® Certifications. In addi-
tion, dozens of CEMEX USA cement terminals and ready-mix
concrete operations have achieved the ENERGY STAR® Challenge
for Industry.
Maximizing our operations’ use of clean energy not only complements
our existing efforts towards reducing our indirect carbon emissions, but
also makes good business sense. Our definition of clean energy includes
renewable energy sources such as solar, wind, hydro, and biomass,
together with power generated from waste heat recovery systems.
CEMEX’s global energy strategy includes the development of clean
energy projects within our operations and the advancement of our
procurement practices to foster adoption of such electricity generation
sources. As a result of our focus, in 2020, around 29% of our cement
operations’ power consumption came from clean energy sources.
In 2020, we achieved 100% renewable energy supply for our operations
in Poland, thanks to an agreement with PGE Obrót. Additionally, we
extended for three more years our agreement with Engie to supply
100% renewable energy for our operations in the United Kingdom.
We currently lead our industry in the use of clean electricity and we have
established an ambitious target of sourcing 40% of our power consump-
tion in our cement operations from clean energy by 2030.
Clean Power Sources Developed or Contracted
as of December 31, 2020
Mexico
250 MW Eurus wind farm
150 MWac Tuli solar farm
150 MWac Helios solar farm
126 MW Ventika I wind farm
126 MW Ventika II wind farm
Germany
30 MW waste-to-energy facility
United Kingdom
100% renewable contract
Poland
Colombia
Panama
California
Philippines
100% renewable contract
30 MW sugarcane bagasse contract
11 MW hydropower portfolio
100% hydroelectric contract
7 MW wind portfolio
6 MW waste heat recovery facility in Solid
5 MW waste heat recovery facility in APO
Dominican Republic
1.5 MWac solar project
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2050 Ambition: Deliver Net-Zero CO2 Concrete for
All Products and Geographies
Our 2050 Ambition is delivering net-zero CO2 concrete to all
customers and geographies. Concrete will continue to have
a critical role to play in a low-carbon economy as there are
no substitutes for the key attributes it offers—cost-effective
strength and resilience, among others.
The technology for some of these levers is still in the early
stages of development, setting an open path for innovation
that requires continuous work in our Research and Devel-
opment Center, new investments by CEMEX Ventures, the
formation of strategic partnerships, and cross-industry
collaboration.
Vertua®: The Industry-First Net-Zero CO2
Concrete Solution
In 2020, we launched Vertua, our industry-first
Net-Zero CO2 Concrete Solution. This product
is an important step in our ambition of achiev-
ing carbon neutrality in all our concrete prod-
ucts and geographies.
70%. For the remaining 30%, we provide a
carbon neutral certificate through the com-
plementary use of carbon offsets supplied by
Natural Capital Partners from reforestation
projects in Africa and Mexico. We only pur-
chase carbon credits that are globally recog-
nized and respected for their high levels of
environmental integrity.
The Vertua product line allows customers to
customize the carbon content of concrete to
meet their construction needs. We achieve
this by applying two of our key CO2 reduction
levers: new concrete technologies and refor-
estation initiatives.
The Vertua Net-Zero CO2 concrete is made
possible due to an innovative solution created
by our Research and Development Center. The
offering is already being successfully used in
prestigious projects, like the HS2 high-speed
railway in the U.K., currently the largest infra-
structure project in Europe.
With Vertua Ultra Zero we are offering a Net-
Zero CO2 concrete product for the first time to
our customers. We achieve this through a
cutting-edge technology with geopolymers
that reduces the carbon footprint by up to
To learn more about Vertua and how
much CO2 you can save in your
construction project visit our website.
CO2 Reduction Levers for Our 2050 Ambition
A range of products under Vertua® umbrella
offering zero to low carbon concrete solutions
● 2030 Cement Levers
● Carbon Capture,
Utilization, & Storage
● Concrete Technologies
● Clean Power Supply
● Transport Emissions
● Reforestation & Other
Carbon Removal
● Recarbonation
● Circular Economy
32%
34%
12%
6%
6%
4%
3%
3%
Reduction in kg CO2/m3 (%)
Ultra Zero
≈70%
less CO2
Plus
40-50%
less CO2
Classic
20-30%
less CO2
Baseline
Concrete
≈340 kg
CO2/m3
In Ultra Zero,
geopolymers provide 70%
reduction in CO2
emissions and carbon-
offsets provide the
remaining, while not
compromising strength
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New CCUS feasibility studies in Texas and California
Our U.S. operations were awarded grants from the U.S. Depart-
ment of Energy to research and develop innovative carbon cap-
ture technology.
In Texas, CEMEX is partnering with Membrane Technology and
Research, Inc. to conduct an 18-month study at CEMEX’s Bal-
cones cement plant in Texas, and explore the potential CO2 emis-
sion reduction from installing new membrane technology in the
plant’s production process. The membrane will act as a semi-per-
meable barrier through which CO2 can pass, facilitating carbon
capture at a minimal adoption cost.
In California, CEMEX was awarded a grant to research, engineer
and develop a pilot for a breakthrough carbon capture unit. The
project, anchored to CEMEX’s Victorville, California cement plant,
will also contemplate cost-competitive solutions to completely
close the loop on current carbon emissions.
These projects are expected to be an important advancement
towards CEMEX’s ambition to deliver net-zero CO2 concrete
globally by 2050.
Harnessing the Sun for Cement Production
CEMEX and Synhelion SA announced the joint development of a
groundbreaking technology designed to harness solar energy to
fully decarbonize the clinker manufacturing process. The radi-
cally new approach replaces fossil fuels with solar heat. To
achieve the high temperature needed in the kilns, this pioneer-
ing process captures 100% of the carbon emissions from the
limestone decarbonization and reincorporates them back as
feedstock for fuel production. CEMEX and Synhelion plan a pilot
installation into an existing CEMEX cement plant by 2022.
Advancing High Impact Technologies
CEMEX is participating in the Low Emissions Intensity Lime and
Cement 2 (LEILAC 2) project, an initiative funded by the Euro-
pean Union's Horizon 2020 research program. CEMEX also has
active participation in LEILAC 1, working to develop the direct
separation and concentration of process carbon emissions from
the clinker manufacture, and will continue its contributions to
the project by bringing expertise, experience, and key resources.
Researching Cost-effective Carbon Capture Solutions
CEMEX Ventures signed an agreement with Carbon Clean, a
leader in low-cost modular carbon dioxide capture and separa-
tion technology. Carbon Clean solutions for the cement industry
could provide a significant reduction in both capital cost and
equipment size, enabling the wider-scale commercial deploy-
ment of carbon capture systems.
Investing and Exploring Carbon Capture, Use,
and Storage Technologies
The Carbon Capture, Utilization, and Storage (CCUS)
technology is a key lever to deliver on our 2050
Ambition.
Since 2002, CEMEX has been studying CCUS in collab-
oration with other companies, international organiza-
tions, and academic institutions. Currently, CEMEX is
actively participating in close to 30 research projects
aimed at contributing to carbon reduction and miti-
gation including accelerating CCUS implementation
on an industrial scale.
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Strengthening the Circular Economy of Concrete
Concrete has two outstanding characteristics that are particularly
valuable in the construction of a circular economy: it can be 100%
recycled as an alternative aggregate or raw material for cement
production and, like trees, it absorbs CO2 over its lifetime (recarbon-
ation)—up to 25% of its embodied CO2 process emissions.
Our work combines advancing our technologies while also seeking
complementary innovation outside of CEMEX through investments
in startups and high-value collaboration agreements.
New Concrete Technologies
We continue working to further develop concrete technologies, admix-
tures, and novel binding materials that help lower the CO2 footprint
compared to conventional cement.
Improving Other Cementitious Materials
CEMEX signed an agreement with Carbon Upcycling Technolo-
gies that aims to produce nanomaterials with greater reactivity
and a lower carbon footprint. We expect this venture to result in a
doubling of the industrial residues we use to 6 million tons annu-
ally by 2030, an increase that will enable a lower carbon footprint
in cement and concrete.
Rapid Carbonation of Concrete Aggregates
Reforestation and Other Carbon Sink Initiatives
CEMEX is participating in the FastCarb Project, a multi-stake-
holder initiative that aims to accelerate the carbonation pro-
cess of aggregates made from recycled concrete. The National
Technical Center of CEMEX France will evaluate in its labora-
tory facilities the physical and mechanical properties of the
carbonated recycled concrete aggregates when used in
ready-mix concrete.
We strongly support the role that natural carbon sinks can play in reduc-
ing the total CO2 concentration in the atmosphere. Our quarries rehabili-
tation and biodiversity conservation efforts enable CO2 removal and
enhance these natural carbon sinks. Similarly, El Carmen, CEMEX’s
140,000-hectare biodiversity reserve located on the U.S.-Mexican border,
stores around 11 million tons of biologically sequestered CO2, equivalent
to 30% of our annual worldwide CO2 emissions. Going forward, we aim to
continue the expansion and protection of these natural carbon reser-
voirs, helping reduce the total CO2 concentration in the atmosphere.
Leveraging New Aggregates from Plastic
Learn more about El Carmen on page 57 of this report. ▶
CEMEX Ventures announced an investment in Arqlite SPC, a
company focused on producing artificial gravel from unrecy-
clable plastic waste. By giving plastic a second life, we avoid
the use of natural quarry aggregates, thereby saving resources
and reducing the carbon footprint of concrete designed for
applications such as drainage, precast, and lightweight con-
crete systems for non-structural use.
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Task Force on Climate-Related Financial Disclosures (TCFD) Alignment
Leading the Industry in Climate Disclosure
CEMEX has been a driver of reporting and transparency within
our sector. We recognize the relevance of monitoring and dis-
closing our impacts and contributions and are committed to
providing our stakeholders with key information that generates
a better understanding of our challenges and action plans,
including those related to climate.
Creating a common understanding of climate-related risks and
opportunities across the cement and concrete industry is key in
the delivery of the Paris Agreement goals. Disclosures of infor-
mation on climate-related governance, strategy, risk, and met-
rics is essential for successful long-term investors.
We are proud to be actively engaged in the main carbon disclo-
sure platforms and adhere our reporting to their guidelines and
recommendations including:
» CDP: CEMEX achieved recognition for transparency and is part
of the CDP Climate Change Leaders of the Industry.
» Transition Pathway Initiative (TPI): CEMEX’s carbon strategy
and the management of its risks and opportunities related to
the low-carbon transition reached the top level according to its
criteria.
» Task Force on Climate-Related Financial Disclosures (TCFD):
CEMEX is a supporter of TCFD and has adopted its recommen-
dations for climate related reporting since 2020.
Indicated CDP disclosures refer to our 2020 Climate Change
Response. Details and additional information can be found
across our annual submissions to CDP
https://www.cdp.net/en
Governance
Strategy
Risk Management
Metrics and Targets
Disclose the organization’s
governance around climate-
related risks and opportunities
Disclose the actual and
potential impacts on climate-
related risks and opportunities
on the organization’s
businesses, strategy, and
financial planning where such
information is material
Disclose how the organization
identifies, assesses, and
manages climate-related risks
Disclose the metrics and
targets used to assess and
manage relevant climate-
related risks and opportunities
where such information is
material
Recommended Disclosures
Recommended Disclosures
Recommended Disclosures
Recommended Disclosures
a) Board’s oversight of
climate-related risks and
opportunities.
CDP: C1.1, C1.1a, C1.1b
Integrated Report: P.81
a) Risks and opportunities for
short, medium and long
term.
CDP: C2.1, C2.1a, C2.2, C2.2a
Integrated Report: P. 87-92
b) Management’s role.
b) Impact on business strategy
CDP: C1.2, C1.2a, C1.3, C1.3a,
C2.2, C2.2a
Integrated Report: P.81, 89
and financial planning.
CDP: C2.1b, C2.2, C2.2a, C2.3,
C2.3a, C2.4, C2.4a, C3.1, C3.1a,
C3.1b, C3.1d, C3.1e, C3.1f, C4.3c,
C4.5, C4.5a, C-CE9.6,
C-CE9.6a, C12.3a, C12.3f
Integrated Report: P.8-9, 12,
16, 21, 24, 30-38, 46-51, 54
c) Resilient strategy and
scenarios planning.
CDP: CC2.2a, C2.3a, C2.4a,
C3.1a, C3.1b, C11.3a
Integrated Report: P. 30-38,
46-51, 54, 89
a) Climate-related risks
a) Climate-related metrics.
CDP: C4.1, C4.1b, C4.2, C4.2a,
C4.2b, C4.5a, C9.1, C11.3, C11.3a
Integrated Report: P. 4, 16, 18,
21, 30-38, 46, 54-57, 182-184
b) Disclose Scope 1, 2 and 3.
CDP: C6, C7, C8
Integrated Report: P. 16, 18,
21, 31-32, 183
c) Climate-related targets.
CDP: C1.3, C1.3a, C4.1, C4.1b,
C4.2, C4.2a, C4.2b
Integrated Report: P. 4, 9, 18,
21, 30-38, 46, 54-57, 183
identification.
CDP: C1.1a, C1.1b, C1.2, C1.2a,
C2.1, C2.1a, C2.1b, C2.2, C2.2a,
C2.3, C2.3a
Integrated Report: P. 12,
30-38, 46-51, 54, 81, 87-92
b) Climate-related risks
management.
CDP: C1.1a, C1.1b, C1.2, C1.2a,
C2.1, C2.2, C2.3, C2.3a, C3.1,
C3.1b, C3.1d, C3.1e, C3.1f,
C-CE9.6, C-CE9.6a, C11.1d,
C12.1a, C12.1b, C12.3, C12.3a,
C12.3c, C12.3e, C12.3f
Integrated Report: P. 12, 16,
30-38, 46-51, 54, 81, 87-92
c) Integration into overall risks.
CDP: C1.1a, C1.1b, C1.2, C1.2a,
C2.1, C2.1a, C2.1b, C2.2, C2.2a,
C2.3, C2.3a
Integrated Report: P. 12, 16,
30-38, 46-51, 54, 81, 87-92
CEMEX 2020 INTEGRATED REPORT Company Overview
How We Create Value
Our Performance in 2020
Governance
Results in Detail
About This Report
40
Delivering a Superior
Customer Experience
We place our customers at the center of every
action we take and every decision we make,
underscoring our determination to be the most
customer-centric company in the building
materials industry.
Our strong commitment to help
our customers succeed and our
focus of seeking to ensure the
best experience for them directly
contribute to our priority SDG 8,
while our constant innovation in
digital technologies to serve our
customers better and help them
build sustainable cities and
communities directly contribute
to our priority SDGs 9 and 11.
In 2020 we achieved
an outstanding NPS
result with an
average of 68 points,
an 18-point increase
compared to 2019.
Fostering Customer Centricity
As a customer-centric company, we begin by listening and identifying
our customers' pain points. Knowing and focusing on what success
means to them, enables us to innovate around their needs and fuels
our drive to surpass their expectations in every interaction.
Our One CEMEX Commercial model is steering our internal practices
to offer a more desirable experience for our customers and shape a
competitive advantage for CEMEX through differentiation. The
multi-faceted model encompasses the elements to act on our cus-
tomers’ needs, personalizing value propositions and developing digital
solutions and strategies that enable us to capture the value we deliver,
among others.
Our Service Delivery Model is a key component of the One CEMEX
Commercial Model, where we have created the future customer expe-
rience vision through the eyes of the customer and how to make it a
reality. During 2020, we started implementing our new model by
executing initiatives in every region to bring tangible improvements
for our customers in the short term. The alliance between our global
areas helped us streamline our processes and make important
improvements in systems and technology that bring us closer to pro-
viding superior experiences to our customers.
Capturing Our Customer’s Voice through Our Net Promoter
Score (NPS)
Understanding our customers’ perceptions of the service experience we
offer is the path to continuous improvement. The Net Promoter Score
(NPS) is a key performance indicator that helps us systematically mea-
sure customer satisfaction and monitor their purchasing experiences in
every market segment, in all the countries where we operate. Enhanced
analytics enable us to better understand our customers and give us
new insights we can use to design more targeted, data-based value
propositions, and an overall superior customer experience.
In 2020 we achieved outstanding NPS result with an average of 68
points, an 18-point increase compared to 2019, placing us ahead of
schedule of reaching our global 2030 NPS customer satisfaction target
of 60 points.
We are proud of this year's efforts to deliver a Superior Customer Experi-
ence across all of our geographies. We listened to our customers and
learned how to translate their voice into actionable improvements.
Our customers witnessed the dedication we put into serving them
better and the incredible resilience to overcome the challenges we all
currently face. We are proud of the consistent increase in our NPS result.
We aim to maintain excellence in everything we do to continue being
our customers' preferred partner.
GRI 102-42, GRI 102-43, GRI 102-44
CEMEX 2020 INTEGRATED REPORT Company Overview
How We Create Value
Our Performance in 2020
Governance
Results in Detail
About This Report
41
During the COVID-19
pandemic, we have
been able to support
business continuity at a
global scale for our
customers due to the
comprehensive digital
strategy we began
implementing in 2017.
At the Forefront of Digital Innovation to
Deliver a Superior Customer Experience
We view the creation of a customer-centric
digital organization as not only our best com-
petitive advantage but as essential to our global
business strategy. For that reason, our applica-
tion of digital technology in our processes
enables us to offer our industry’s preeminent
customer experience.
Every technological application we develop is
designed to boost our customers’ productivity,
positively impact their bottom line, and improve
their experience when interacting with CEMEX.
Continual enhancements to our technological
infrastructure also make us more agile, enabling
new capabilities that provide added value to our
customers and strengthen the relationships we
form with them.
Continuing to Lead the industry’s digital
evolution through CEMEX Go
We are accelerating innovation with CEMEX Go,
a state-of-the-art digital platform and a win-win
value proposition for our customers and our
company. Using CEMEX Go enables our custom-
ers to build more efficient operations and attain
self-reliance through control of all aspects of
their business relationship with CEMEX, includ-
ing the control of their orders, 24/7.
This state-of-the-art digital solution automates
order-to-cash workflows, which streamlines
customers’ ability to achieve efficient real-time
management, from orders to tracking to fulfill-
ment. Additionally, CEMEX Go enhances deci-
sion-making capabilities by offering quick access
to detailed information and in-depth analytics
and business insights, empowering our custom-
ers to make more informed decisions and save
time and money. CEMEX Go also contributes to
the ongoing transformation of our company’s
sales force, enabling them to dedicate more of
their time to understanding and serving cus-
tomer needs. The platform is strategically
important to our customer-centricity; it enables
us to strengthen our relationships with custom-
ers and improve their value propositions.
CEMEX Go: An Instrumental Platform during
COVID-19 pandemic
In executing our crisis response to the COVID-19
pandemic, we leveraged our existing technologi-
cal infrastructure and focused on consolidating
our CEMEX Go platforms, accelerating the pace
of adoption and improving the value proposition
for our customers. The new normal for business
entails increased digitization of customer and
supply-chain interactions as well as internal
operations. CEMEX is at the forefront of our
industry in these developments and we will
continue working to develop innovative solutions
that allow us to increase remote capabilities and
ensure safety measures remain strong.
In 2020, CEMEX Go was instrumental in enabling
us to safely and reliably provide our products and
services —sales, payments, and customer ser-
vice— in a remote digital environment that
eliminated the risk of virus transmission and
allowed our customers to seamlessly continue
carrying out their work without interruptions.
The substantial growth we have seen in
the use of our CEMEX Go platform in 2020
is a testament to our company’s
commitment to continuous improvement
as we work to deliver on our promise of
customer-centricity.
3 years
serving our
customers
Available in
all our
operations
with over
42,000
customers
21 countries
with access
90%
usage
rate among
recurring
customers
61% of
our total
global sales
processed
through
CEMEX Go
Allows our customers
to work seamlessly in
a contactless digital
environment during
COVID-19
CEMEX Go Developer Center offers
direct connectivity to our customers to
place and track orders, as well as access
financial documents for all products
and services
CEMEX 2020 INTEGRATED REPORT Company Overview
How We Create Value
Our Performance in 2020
Governance
Results in Detail
About This Report
42
Welcome, Olivia!
Our Service Centers in Mexico,
the U.S., Colombia, Spain, and
the Philippines welcomed
Olivia to our service team, an
artificial intelligence bot that
contributes to providing even
faster responses to our custom-
ers’ most common questions.
The introduction of Olivia is the
first in a series of steps we will
take to further integrate Artifi-
cial Intelligence tools into our
service attention processes.
Olivia speaks English and Span-
ish and will eventually incorpo-
rate Polish, German, French,
and Hebrew.
CEMEX Go Adds New Functionalities
Expanding Our Digital Offer
Relying on customer feedback, and with a focus on
providing a superior customer experience despite
challenges from the COVID-19 pandemic, we acceler-
ated the CEMEX Go adoption rate and evolved the
platform by enabling new functionalities:
CEMEX continues to take bold digital actions that
differentiate us as a pioneer and first-mover of accessi-
ble, scalable solutions unique in our industry.
New Ways of Connecting with Our Customers
Digital Confirmation: Allows for automatic
purchase orders’ confirmation, with no fol-
low-up requirements from service center
agents. Phase one rollout has been com-
pleted, covering our ready-mix business line in
Mexico.
Ready-mix Go app: An enhanced capability
that allows users to place, view, schedule, and
manage orders, as well as to track deliveries,
configure notifications, and view order history
from their mobile devices.
Pick-up Experience: Integrating the pick-up
solution into the current track web platform
providing a superior digital experience for our
customers, including both pick-up and deliv-
ery methods for our cement and aggregates
business lines. Deployed in Florida, it is cur-
rently expanding to other U.S. regions.
Paperless Experience: Allows customers to sign
delivery tickets online and receive invoices and
delivery tickets digitally via their mobile devices.
COVID-19 enhancements: New functionalities
that improve the experience and safety fea-
tures for our customers related to delivery
tickets, handling of financial documents, and
payment options.
Our CEMEX Go Developer Center uses digital tools and a
growing selection of Application Programming Inter-
faces (APIs) that facilitate connectivity of our company
processes with our customers. It also enables the direct
management of orders and the use of public informa-
tion from CEMEX that will allow other companies to
integrate their digital offers. As of 2020, CEMEX Go Devel-
oper Center has already helped nine customers from the
U.S., Mexico, the U.K., Germany, and France enable real-
time access to status of their products and services.
Better Value-Added Customer Service
CEMEX Go CRM enables our front-line sales represen-
tatives and support teams to manage our customer
relationships more efficiently and systematically, dedi-
cating more quality time to serve our customers. Cur-
rently, we have deployed CEMEX Go CRM in 10
countries, including Colombia, Egypt, Mexico, the U.K.,
and the U.S. In 2020, we leveraged CEMEX Go CRM to
help us safely maintain a high level of customer service
during the pandemic by remotely managing our sales
representatives.
Introducing our Construrama Partners to the
Digital Age
Continuing to grow in 2020, our Construrama Online
Store enables registered buyers to speed up order
placement, gain access to exclusive promotions, and
receive an enhanced supply management experience.
More buyers now enjoy easy access to a wider catalog
of products—with the ability to select, purchase, and
follow up online on their orders—generating significant
savings in productivity for our Construrama distribution
network of retail stores, builders, and final customers.
Our B2B platform ConstruramaSupply.com grew
during 2020 in 3 strategic fronts:
US$11.9 million annual sales (+48%)
1,680 users (+45%)
1,090 retail stores using the platform (+90%)
+14,000 orders (+21%)
Construsync is the Enterprise Resource Planning (ERP)
system designed by CEMEX for our Construrama dis-
tributors; it plays a critical role in establishing an inte-
grated network between CEMEX, our associates, and
suppliers. In 2020 this solution was defined and imple-
mented and is being integrated with our e-commerce
platform Construrama.com. At the end of 2020, the first
pilot projects for this solution had been launched with
three different customers in 27 stores. The objective for
2021 is to reach 400 stores using Construsync.
CEMEX 2020 INTEGRATED REPORT Company Overview
How We Create Value
Our Performance in 2020
Governance
Results in Detail
About This Report
43
Cultivating Better, Closer Personal Relationships With Our
Customers
We invest considerable time and effort into building strong, personal
partnerships with our stakeholders. Consistent with this commitment,
we strive to build transparent and trusting relationships with our cus-
tomers across every business in which we engage.
Architects constitute an influential group of customers who inspire and
constantly challenge the possibilities of our cutting-edge building
materials. Accordingly, we continually foster collaborative relationships
with this important constituency, from academic outreach to our
annual CEMEX Building Award. To communicate the advantages of
concrete pavement, we convey information to engineers, architects,
and the community in general about its attributes, including the results
obtained by research institutions around the world.
Throughout 2020, we collaborated with universities and architecture
firms to identify and explore new ways in which we can use concrete to
continue building better societies while creating a symbiotic relation-
ship with nature. Our collaborative relationships included the Massa-
chusetts Institute of Technology, University of Pennsylvania, Syracuse
University, the Politecnico di Torino, the International University of
Catalonia, Tec de Monterrey, Universidad de las Américas, Universidad
Rosario, Universidad de Monterrey, University of Edinburgh, McGill
University, University of Nantes, Kaunas Technical University, Universi-
dad Comillas, Lodz University of Technology, and Ecole Polytec’Nantes.
Increased Efficiency Through Artificial Intelligence
Informed by the needs and challenges of our customers, at
CEMEX we constantly evaluate emerging technologies for incor-
poration into our ecosystem of digital solutions. As an example, we
have already begun to employ Artificial Intelligence and Robotic
Process Automation (RPA) within our commercial platforms. In
Spain and Germany, the nine RPA processes using artificial intelli-
gence we implemented in 2020 enable us to provide a better
service for our customers by speeding-up transactions, offering
24/7 business hours, and eliminating the incidence of errors.
RPA technology without human intervention processed 95% of the
bulk cement orders of CEMEX Go in Spain and over 40% of the
orders in Germany.
eCommerce Leverages on Procurement Negotiations
CEMEX Industrial Supply, an online store launched in Mexico in
2017, offers materials and goods we also consume in our opera-
tion, at a very competitive price, leveraging the strong negotia-
tions the Procurement function executes with our national and
international suppliers. Mainly addressing our industrial, builders,
and distribution segments, although also open to the general
public, the most successful categories of this online store are
Tires; Industrial Lubricants, Oils, and Greases; Vehicles and Mobile
Equipment; Personal Protective Equipment (PPE); Concrete
Testing Lab Equipment; Concrete Admixtures and Fibers.
We are currently evaluat-
ing its extension to our
SCA&C and Europe regions.
Visit CEMEX Industrial Supply
Superior Customer Centricity Award: Recognizing Those
Business Units That Excel
To strengthen our customer-centric culture, at CEMEX we recog-
nize teams that excel in the pursuit of customer satisfaction by
conferring our Superior Customer Experience Award. Each busi-
ness unit participates, with champions selected regionally and
awards determined on a global basis in three categories: Net
Promoter Score (NPS) Performance & Improvement, Best Initia-
tives Implemented, and CEMEX Go Adoption.
CEMEX Building Award: Honoring the Best of the Best in
the Construction Field
Through our annual CEMEX Building Award, one of the most
renowned competitions in the construction field, we not only
honor engineers, architects, and other building professionals, but
also encourage creativity in the application of new concrete tech-
nologies to improve our communities. For the first time in its 30
-year history and as part of our measures to mitigate the impact
of the COVID-19 pandemic, the company decided to suspend the
2020 edition. We look forward to recognizing the most acclaimed
architectural and construction projects in Mexico and the world,
completed during 2019 and 2020, in the 2021 event.
For a full list of projects honored in our past CEMEX Building
Award editions visit www.cemex.com.
CEMEX 2020 INTEGRATED REPORT Company Overview
How We Create Value
Our Performance in 2020
Governance
Results in Detail
About This Report
44
Innovation in Our
Product and
Solutions Portfolio
Innovation is key for reaching our strategic
goal of being the most customer-centric
company in our industry.
Through our innovative
products and solutions, we
enable resilient, efficient and
sustainable infrastructure to
support growing urban
populations. With these efforts
we contribute to our priority
SDGs 9, 11, 13, and 15.
Additionally, our construction
focus is also aligned to SDG 12.
Portfolio Innovation: A Key Driver of Our Customer-
Centricity Strategy
CEMEX's global Research & Development (R&D) efforts are led by the
CEMEX Research Center in Switzerland. Our unique, dynamic By
DesignTM approach to product and solutions development sets us apart
as leaders in the industry. Our approach to R&D is grounded in the
understanding that innovating around our customers’ changing needs
requires us to constantly evolve; and in the recognition that our world’s
ever-changing economic, social, and political environments require us
to continually adapt—now and in the future.
An element that makes us unique in the markets where we participate
is that CEMEX is the only construction materials company that devel-
ops and manufactures its own chemical admixtures for cement, ready-
mix concrete, and aggregates. Admixtures are added to our different
core products to enhance their material properties, such as increasing
cement’s strength. They can also make concrete harden rapidly, flow
Innovation at every step: from
design strategies and building
products, to fabrication
methods, novel use of
technology, installations,
software, and materials.
better, have self-curing properties, or develop water repellency and can
help recyle concrete into aggregates. Chemical admixtures, now part of
our Urbanization Solutions core business, play a crucial role in our
innovation model as they allow tailoring our products’ performance,
grant value-added properties to materials, and develop completely
novel applications, while at the same time maintaining superior quality
standards. This enables a co-creation process among CEMEX, engi-
neers, architects, and our customers.
Technologies developed by our Global R&D team are protected by
more than 45 international patent families, covering new types of
cement, cementitious materials, concrete mix designs, admixtures
formulations, construction systems, and advanced manufacturing
processes—offering unique, exclusive solutions to our customers.
Connecting R&D to Solve Our Customers’ Needs
Our Global R&D team of experts makes it a priority to engage with our
customers. Increasingly, innovations in our products and solutions
portfolio emerge from a co-creation process that involves direct collab-
oration with our customers. We go together into the laboratory to
explore new possibilities with cement-based materials and aggregates.
Our R&D team considers this a fundamental stage in the innovation
process; it allows them to sharpen their techno-commercial skills while
also delivering innovation at the right time for our customers.
CEMEX 2020 INTEGRATED REPORT Company Overview
How We Create Value
Our Performance in 2020
Governance
Results in Detail
About This Report
45
Cultivating Positive Results through Collaborative Projects
Our R&D group’s customer relationships have been recognized in
forums worldwide, earning acclaim for the positive results produced
through long-term collaborative projects.
Walking Assembly, a collaboration project between CEMEX’s R&D
Group and the architectural firm Matter Design, received the R+D 2020
Award as part of the 14th Annual R+D Awards organized by Architect
Magazine. The Award noted Walking Assembly as scalable,
thought-provoking, and promising in achieving a more equitable and
healthier built environment.
Walking Assembly is a construction solution that explores the possibil-
ity of developing concrete elements that require minimal use of
machinery during installation and a testament to the positive results of
productive collaboration with our customers; results that advance new
types of intelligent construction systems through innovation.
Learn more about this recognition
Offering an Essential Portfolio of Sustainable
Construction Solutions
We understand the complexity and interconnectivity
of the decision process towards building more sus-
tainably. To this end, we recognize the important
and unique role of architects, engineers, construc-
tion companies, investors, promoters, government
officials, and final users. At CEMEX we are enablers
for the decision-makers on sustainable construction
and we are determined to provide the best products,
services, solutions, technologies, and support to all
players in the construction value chain.
The building materials industry plays an essential role
in addressing some of society’s most pressing chal-
lenges and concrete is uniquely placed to help the
world towards a more sustainable future. Our con-
crete building solutions are locally sourced and
adapted to each region in consideration of commu-
nity needs. They sustainably provide the means to
build social infrastructure that contributes to improv-
ing quality of life and increasing societal well-being—
including affordable housing, schools, hospitals,
parks, dams, water treatment plants, and public
service facilities—as well as to build economic infra-
structure that opens access to new markets, makes
investments more productive, and encourages job
creation—such as roads, bridges, and airports.
Beyond providing cement, concrete, and aggregates
for construction, at CEMEX we have a strategic role
in providing solutions to rapid urbanization chal-
lenges and satisfying our customers’ needs more
sustainably.
Learn more about our Urbanization Solutions on
pages 49-51 of this report. ▶
Our metropolises strategy
focuses on addressing the
growing needs of our large
urban metropolitan areas and
their citizens. We are uniquely
positioned to provide our
portfolio of cement, ready-mix
concrete, aggregates, and
Urbanization Solutions for the
construction and maintenance
of more sustainable and
resilient cities.
Combining Capabilities to Achieve Net-Zero Energy
Buildings
Pich Architects is using our global concrete brand Resilia in
the construction of the OUM Wellness building in Monterrey,
Mexico, a structure designed to achieve net-zero energy
consumption.
The building combines the sustainability attributes of our
construction materials with an active bioclimatic facade to
reduce exterior air temperature by 6 °C to 8 °C, improving
comfort in the intermediate spaces of the building and reduc-
ing the surface temperature of the outer face of the enclo-
sures in direct contact with the air-conditioned interior
spaces. The project has the maximum environment ambition
aiming to be NZEB, LEED®, and WELLTM certified.
Learn more about the OUM Wellness
project by PichArchitects
CEMEX 2020 INTEGRATED REPORT Company Overview
How We Create Value
Our Performance in 2020
Governance
Results in Detail
About This Report
46
Our Cement and Ready-Mix Concrete Technologies
In 2020, 53% of our cement and ready-mix concrete
sales were linked to products with outstanding
sustainability attributes including resource and energy
efficiency, resilience, low CO2 footprint, H&S benefits,
among others.
Concrete and cement are natural choices to build essential housing and
infrastructure sustainably. An important share of our portfolio offers
performance characteristics beyond traditional options. This year we
surpassed our 2030 target to reach at least half of our cement and ready-
mix concrete sales to come from solutions with outstanding sustainabil-
ity attributes.
Helping Reactivate Construction Sites
Our technologies proved particularly useful to help reactivate
construction sites during the COVID-19 pandemic. Evolution®’s
self-compacting and self-leveling features helped reduce the num-
ber of people on-site, aiding the ability to comply with social dis-
tancing restrictions. Promptis®’ rapid hardening features helped
sites recover time lost during lockdowns and catch up with con-
struction schedules.
Learn more about our COVID-19 efforts on pages 5-6 of this report. ▶
Vertua®: an industry-first net-zero CO2
concrete solution
In 2020 CEMEX announced the global launch-
ing of Vertua®, our industry-first net-zero CO2
concrete solution. Customers in several Euro-
pean countries are using Vertua® in flagship
infrastructure projects and many cli-
mate-friendly building projects, reducing their
construction CO2 footprint significantly.
Learn more about Vertua and our Climate
Action strategy on pages 30-39 of this report. ▶
Our global brands of value-added ready-mix concrete and aggregates
technologies are helping meet the challenges of the cities of the future
2
1
6
3
4
5
8
9
7
1
2
3
Porofoam®
Ultra-light weight foamed
concrete.
Hidratium®
Tolerates extreme conditions and
has self-curing properties that
eliminate concrete cracking.
Evolution®
Saves time and costs because it is
self-compacting and self-leveling
characteristics. It encompasses a
range of strengths ranging from
conventional to high strength.
4
5
6
neogem®
A range of value-added
aggregates that offer unique
construction solutions.
Pervia®
A solution for draining pavement
that makes it easier for water to
permeate and be conducted to a
water management system.
Vertua®
Industry-first net-zero CO2
concrete.
7
8
9
Promptis®
Rapid-hardening concrete that
develops compressive strength to
demold and move elements in
four hours.
Resilia®
A substitute for steel with fibers
that provide hyper strength
and ductility.
Insularis®
Improves energy efficiency due
to enhanced thermal insulation
and elimination of thermal
bridges.
SASB EM-CM-130a.1, EM-CM-410a.1, EM-CM-410a.2
CEMEX 2020 INTEGRATED REPORT
Company Overview
How We Create Value
Our Performance in 2020
Governance
Results in Detail
About This Report
47
The Top 50 ConTech Startup List
CEMEX Ventures positioned itself as one of the leaders in the
industry on investment efforts in the Construction and Technol-
ogy ecosystem. Furthermore, CEMEX Ventures unveiled its
TOP 50 ConTech Startups list, which includes the 50 most prom-
ising new solutions from the 2020 construction ecosystem.
Learn more about these startups
Igniting Innovation through CEMEX
Ventures
CEMEX Ventures, our open innovation and corpo-
rate venture capital unit, leads the construction
industry’s revolution, engaging startups, entrepre-
neurs, universities, and other stakeholders to
tackle current industry challenges and shape
tomorrow’s value ecosystem. We focus on helping
overcome the main challenges and capitalizing
on areas of opportunity within the construction
ecosystem through sustainable business models.
To bring new, innovative, and engaging solutions
to the construction industry, CEMEX Ventures has
identified six market-driven areas of opportunity:
1. Innovative building materials & construction
methods
2. Supply chain management
3. Smart cities and buildings
4. Project design & engineering
5. Project & jobsite management
6. Investment & financing
Furthermore, CEMEX Ventures supports CEMEX’s
ambition to deliver net-zero CO2 concrete to all of
its customers globally by 2050. CEMEX Ventures
partners with startups and new business models
such as Arqlite, Carbon Clean and Carbon Upcy-
cling Technologies to give plastic a second life
creating light concrete from it, improving CO2
capture technology, and developing a low carbon
footprint concrete that captures CO2 residues
from industrial by-products.
In 2020, CEMEX Ventures invested in two new
startups and followed-up investment with two
startups of its investment portfolio. First, GoFor
Industries, a last-mile logistics marketplace for
on-demand delivery of building materials and
equipment for the home improvement and con-
struction industries. The other follow-up invest-
ment was with StructionSite a software that uses
cameras to capture images and video of construc-
tion jobsites, which can be stitched together for
remote project tours as well as for tracking con-
struction progress and quality control.
Smart Innovation – CEMEX Innovation Model
CEMEX Ventures leads an innovation model to
empower innovation with clear priorities and
agile, transparent, and disciplined execution. For
a second year in a row, employees from all levels
of the organization participate in this internal
challenge, where more than one thousand ideas
are gathered. This standardized process across
CEMEX helps to identify the most valuable ideas
to be quickly experimented, leveraging internal
and external resources for their quick develop-
ment. CEMEX Ventures, in collaboration with
other areas manages closely the overall portfolio,
making sure the resources are optimized, allow-
ing us to constantly launch new value proposi-
tions or business models.
CEMEX 2020 INTEGRATED REPORT Company Overview
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Investment in Soil Connect to Reduce Waste in
Landfills
This US-based digital marketplace provides a
better, faster, and cheaper way for construction
professionals to transport and acquire soil, aggre-
gates, and other building materials. Soil Connect
limits waste, as users can mitigate the need to
dump excess materials in landfills, and it helps
reduce carbon emissions by enabling users to
transact at shorter distances.
This investment by CEMEX Ventures is part of
CEMEX's ambition to deliver net-zero CO2 concrete
globally by 2050.
Learn more about this investment.
Accelerating the Arrival of New Construction Methods: Wallex
Grupo Avintia and CEMEX Ventures created Wallex,
a freestanding, off-site panelized construction sys-
tem that simplifies traditional construction pro-
cesses. The new Wallex plant is the first
industrialized construction factory in Spain; it began
operations in December 2020 with a production
capacity of approximately 1,000 homes per year.
This investment addresses several of the sector's
main challenges, including reducing delivery times,
solving the lack of professionalized workforce, and
proposing sustainable and quality construction
systems without limits to innovation and architec-
tural design.
Learn more about this CEMEX Venture
investment
Recycling Plastic To Produce
Concrete and Aggregates through
Investment in Arqlite
Arqlite SPC, a US company based in
California, processes unrecyclable
plastic waste into artificial gravel,
avoiding the use of natural quarry
aggregates and boulders in the pro-
duction of light concrete with a low
CO2 footprint and for installing drain-
age beds for construction and land-
scaping.
CEMEX Ventures’ new alliance with Arqlite SPC offers an innovative solution around the
construction industry’s circular economy: it gives a second life to plastic and reduces the
carbon footprint and operating costs of handling and producing construction materials
such as aggregates and concrete.
Learn more about this investment.
Fourth Annual Global Construction Startup
Competition
After the tremendous growth of its previous three
editions, CEMEX Ventures was joined by Ferrovial,
Hilti, VINCI Group’s Leonard, and NOVA by Saint-
Gobain to launch the 2020 Construction Startup
Competition, seeking entrepreneurs and startups to
drive innovation in the construction industry. Almost
700 startups participated, closing the event with 10
winners.
Visit the CEMEX Ventures website for more
information on the startup competitions
Leveraging CEMEX Ventures to Achieve Our Net-Zero
CO2 Concrete Ambitions
CEMEX Ventures develops partnerships that support
CEMEX’s ambition to deliver net-zero CO2 for all concrete
products in all geographies. The alliances with Arqlite,
Carbon Clean, and Carbon Upcycling Technologies, cre-
ate light concrete from recycled plastic, improve CO2
capture technology, and develop a low carbon footprint
concrete, respectively.
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Metropolises and
Urbanization Solutions
We are taking a step forward to complement
our portfolio of products and
services for sustainable urbanization across
the construction value chain.
Through our initiatives and
projects that deliver resilient and
energy-efficient infrastructure to
support growing urban
populations, we contribute to
our priority SDGs 9, 11, 13, and 15.
Additionally, by delivering our
urbanization solutions we
contribute to SDG 12.
55%
of the world’s population lives in cities
68%
of the world’s population will live in
cities by 2050*
* Source: United Nations (2018)
Prepared to Meet the Opportunities of
Sustainable Urbanization
As of 2020, 4.2 billion people, or 55% of the world’s
population lives in cities. The World Bank estimates
this number will grow by 1.6 million people every
week for the next 30 years. In the next decades,
cities will face unprecedented demands for housing,
transportation, energy, infrastructure, jobs, and
basic services like education and healthcare. Recent
events have also shown the crucial importance of
resilience against extreme weather events and
health crises like the COVID-19 pandemic.
Accelerated urbanization demands smarter
construction that contributes to mitigating climate
change and resource scarcity while improving social
wellbeing. CEMEX is uniquely positioned to provide
integrated solutions for the construction and
maintenance of more sustainable and resilient cities.
Through our business of cement, ready-mix
concrete, and aggregates, CEMEX has a successful
track record of providing the construction industry
with innovative solutions and high-quality
materials. Now, in order to better serve the needs of
our customers, we are integrating and
complementing our portfolio to provide a
comprehensive offering directly aimed at the
needs of growing urban centers.
This is an evolutionary
step forward for CEMEX
that will uniquely
position the company
as a partner for the key
players in building the
cities of tomorrow.
Urbanization Solutions is collaborating with architects,
developers, suppliers and local governments to find
solutions for affordable housing, efficient buildings and
resilient infrastructure powered by technology innovation
and a constant evolution of the regulatory landscape.
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An Integrated Portfolio of Urbanization
Solutions
Through Urbanization Solutions we are capitalizing
on our critical mass and expertise in building materi-
als to offer complementary solutions to solve the
most pressing needs for cities: net-zero and sustain-
ability, circular solutions, and resilient buildings and
infrastructure.
Product Innovation to Improve Air Quality
Admixtures are an efficient way of enhancing our portfolio of
high-performance materials
ISODUST® and ISOFINES® are reducing the need for quicklime and
mitigating the amount of dust generated (up to 10 microns) at
construction sites, including ground excavation of complex tunnel-
ling projects.
Treated material is transported and disposed of safely, improving the
air quality in urban areas and contributing to depolluting cities.
Resiliency for Cities will be Driven by Adaptable and
Innovative Companies
24 COVID Hospital sections in Mexico were built and commis-
sioned in less than 21 days each
By leveraging an industrialized construction solution, the delivery
and commissioning time was significantly reduced. This is a clear
demonstration that the use of technology provides effective solu-
tions to cities´ needs, especially in uncertain times, such as with the
COVID pandemic.
Net-Zero & Sustainable Cities
Resilient Buildings and
Infrastructure
Circular Solutions
Construction materials, tech-
niques, and technologies to build
net zero buildings, electric mobility
infrastructure to support sustain-
ability goals in cities. Solutions to
improve energy efficiency insula-
tion, embodied carbon, and safety
play a key role in achieving more
sustainable construction. From
mitigating carbon emissions and
energy use to improving safety
and transportation, our portfolio
can support sustainability goals in
many different ways.
Solutions for safer, more resistant,
and more adaptable buildings and
infrastructure are key for resilient
cities. Through our integrated offer
we can enable cities prepared to
face the challenges of today and
tomorrow, with the well-being of
its residents as our top priority.
We are leading the industry in new
technologies and solutions for the
more efficient use of resources and
the revalorization of waste flows,
converting expended resources
into value-added materials like
recycled aggregates and
alternative fuels. Waste
management, recycling, and
reusing are key elements in our
portfolio that directly contribute to
a circular economy.
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Building 12 Mobile Hospitals in Record Time
In 2020, the hospital infrastructure was challenged
by a spiking number of COVID-19 cases in cities
around the world. To treat patients infected by
COVID-19 in Mexico, CEMEX concurrently built 12
mobile hospitals, adding more than 280 beds in just
two weeks. Our contribution to this priority cause
actually led to CEMEX inclusion for the third time in
FORTUNE’s Change the World List.
Furthermore, the smart modules were built and
equipped as totally autonomous medical units, not
dependent on existing hospital infrastructure by
featuring intelligent access controls in critical areas,
independent air conditioning systems with special
filters, ultraviolet light to help eliminate viruses and
bacteria, heated septic for bio-infectious hazardous
waste, and fire extinguishing systems.
Working with the Mexican Institute of Social Secu-
rity (Instituto Mexicano del Seguro Social) and in
coordination with more than 20 multisectoral part-
ners, CEMEX applied its experience in prefabricated
solutions to build the hospitals in record time from
the ground up. The innovative structures were
formed using highly durable antibacterial concrete
precast modules equipped with hospital-grade
vinyl flooring, access ramps, and antibacterial fin-
ishes and paint.
In addition to providing a fast response in six differ-
ent states throughout Mexico during a peak
moment in the COVID-19 pandemic, CEMEX’s solu-
tion achieved a significantly lower cost per bed
compared to traditional facilities by maximizing the
company’s industrialized construction expertise.
Our offsite precast process also helped minimize
health and safety risks during construction, in addi-
tion to following onsite protocols recommended by
the health authority.
Industrialized Construction - an
Urbanization Solution to face
the Pandemic
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Environmental
Excellence
We are fully committed to carrying out our business
activities responsibly and sustainably, minimizing
the environmental impacts and maximizing the
value generated to society.
We contribute to our priority SDGs
8, 11, 13, and 15 through our
environmental excellence
initiatives, Biodiversity and Water
Action Plans, and our commitment
to advancing a circular economy
across our operations.
CEMEX Environmental Management
System
We are devoted to conducting business
minimizing the impacts and protecting the
environment of sites and communities in
which we operate. This commitment is
documented in the CEMEX Environmental
Policy and is systematically implemented
across the world through a risk-based
framework known as the CEMEX Environ-
mental Management System (EMS).
Our EMS integrates key mechanisms for
environmental performance enhancement
and impact assessment, stakeholder
engagement, and response to events with
input from a range of subject matter
experts and specialists. We have manage-
ment teams responsible for the EMS across
all locations who annually carry out internal
audits across all sites. The CEMEX EMS is
aligned with global environmental stan-
dards such as the ISO 14001 and the EU
Eco-Management and Audit Scheme.
During 2020, we made progress in our
global EMS implementation and reached
97% of our company’s facilities across all
businesses, compliant with our internal
environmental management standards.
Also, we have 97% of our cement sites certi-
fied with ISO 14001.
Robust Environmental and Social
Performance Management
Our Global Environmental and Social Inci-
dent Reporting process enables all of our
sites to maintain a proactive approach to
respond to emergencies that could poten-
tially impact our communities or our opera-
tions. The thorough application of this
reporting procedure requires a timely regis-
tration of environmental and social impact
events, identification and analysis of the
root causes, and the implementation of
corrective and preventive action plans as a
first step towards avoiding their occurrence
and reducing their severity.
This standardized framework across all of
our operations recognizes and classifies
incidents in three categories according to
their severity. Moreover, it also serves as a
grievance mechanism to register com-
plaints from external stakeholders.
CEMEX's Global Environmental and Social
Incident Reporting Framework
» Continuous Improvement: consistently
record and report events at every level of
our business to identify recurring root
causes and implement and share correc-
tive actions.
» Dialogue and Engagement: maintain an
open communication with our neighbors,
law enforcement officials, public agencies,
and other stakeholders and develop con-
tingency plans at each of our sites.
» Rapid Response: global, regional, and local
Rapid Response Teams trained to address
environmental and social impact events
and hold annual emergency drills.
Environmental and Social Incidents
and Complaints Reporting
(percentage)
● Dust
● Fuels & Chemicals
● Water
● Noise, Odour &
Light
● Logistics
● Waste & Materials
● Air Emissions (excl. dust)
● Others
35%
23%
14%
8%
4%
3%
3%
10%
In 2020 our total reported incidents increased by
12%, which is consistent with our permanent efforts
for risks monitoring and transparency. However,
there were no category 1 environmental events
(major) registered in the year.
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Enhancing Air Quality
Air emissions inherent to the cement manufacturing process
are limited in countries by legal thresholds to ensure environ-
mental quality. In some cases, applicable regulations also
imply continuous online monitoring of these emissions.
Given CEMEX's Environmental Excellence purpose, we decided
several decades ago to go beyond local air regulations and
invest to effectively implement Continuous Emissions Monitor-
ing Systems (CEMS) across all of our operations, even when
this is not mandatory in all geographies. CEMS for clinker
production, together with our internal EMS, provide effective
resources for air quality optimization where we operate.
In addition to our continuous monitoring, in 2020, we invested
more than US$5 million in the best available emissions abate-
ment techniques and equipment, including a system imple-
mented in Croatia that substitutes urea with ammonia to
reduce NOx emissions.
Due to COVID-19 disruptions during the year, we postponed
other purchases and the installation of previously acquired
CEMS; consequently it was not feasible to reach our goal of
100% of our clinker produced with CEMS by year-end 2020.
Our new goal is to achieve this target by 2021.
CEMEX Air Emissions Management
Air Emissions: Major emissions —dust, nitrogen
oxides (NOx), and sulfur compounds (SOx)— are
released as part of the cement production pro-
cess. Minor emissions —including dioxins, furans,
volatile organic compounds, and heavy metals—
are released in very small or negligible quantities.
Continuous Emissions Monitoring System
(CEMS): Allow our operations to control and
ensure compliance with air quality regulations.
Online Visualization Tool: In 2020, we launched a
new industry-benchmark online tool that allows
operators and management teams to closely
analyze major emissions, improve monitoring
abilities from kilns with CEMS installed, and
strengthen emissions performance.
+US$285 million
in CAPEX investments since 2013 in the best
available abatement techniques, including projects
to monitor and reduce our air emissions
97%
of our cement kilns have a CEMS to measure major
air emissions
2021 target: 100%
100%
of our cement kilns with CEMS have a new
industry-benchmark online data analyzing tool
-87%
Dust
We reduced our Dust emissions by 87% compared
to our 2005 baseline
2030 target: 95%
SOx
-66%
We reduced our SOx emissions by 66% compared to
our 2005 baseline
2030 target: 67%
NOx
-39%
We reduced our NOx emissions by 39% compared
to our 2005 baseline
2030 target: 47%
SASB EM-CM-120a.1
CEMEX 2020 INTEGRATED REPORT100%of our cement kilns with Continuous Monitoring System have a new industry-benchmark online data analyzing tool97%of our cement kilns have a Continuous Monitoring System to measure major air emissions2021 target: 100%2030 target: 95%2030 target: 67%2030 target: 47%100%of our cement kilns with Continuous Monitoring System have a new industry-benchmark online data analyzing tool97%of our cement kilns have a Continuous Monitoring System to measure major air emissions2021 target: 100%2030 target: 95%2030 target: 67%2030 target: 47%100%of our cement kilns with Continuous Monitoring System have a new industry-benchmark online data analyzing tool97%of our cement kilns have a Continuous Monitoring System to measure major air emissions2021 target: 100%2030 target: 95%2030 target: 67%2030 target: 47%100%of our cement kilns with Continuous Monitoring System have a new industry-benchmark online data analyzing tool97%of our cement kilns have a Continuous Monitoring System to measure major air emissions2021 target: 100%2030 target: 95%2030 target: 67%2030 target: 47%100%of our cement kilns with Continuous Monitoring System have a new industry-benchmark online data analyzing tool97%of our cement kilns have a Continuous Monitoring System to measure major air emissions2021 target: 100%2030 target: 95%2030 target: 67%2030 target: 47%100%of our cement kilns with Continuous Monitoring System have a new industry-benchmark online data analyzing tool97%of our cement kilns have a Continuous Monitoring System to measure major air emissions2021 target: 100%2030 target: 95%2030 target: 67%2030 target: 47% Company Overview
How We Create Value
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54
Waste and Circular Economy
We consume over 30 times more waste
than we send to landfills.
Our main waste management objective is
to maximize the use of society's and other
industries' waste and non-recyclable
by-products in our plants. In 2020, we con-
sumed more than 12 million tons of waste
and non-recyclable by-products, which is
over 30 times more waste than we sent to
landfill. Moreover, by 2030 we aim to
increase by 50% the amount of waste and
by-products we capture as alternative fuels
and alternative raw materials.
At CEMEX, we have the know-how to source,
process, store, and recover energy from
waste responsibly. Cement kilns are ideal for
the sustainable and safe disposal of many
types of waste and residues that cannot be
recycled but can be used as a substitute for
fossil-based fuels. Co-processing waste as an
alternative fuel in cement kilns is a more
efficient waste management solution for
society than landfills or incineration.
We are also seizing the mineral content of
waste from other industries as alternative
raw materials. In the cement production
process, we replace part of the clinker with
by-products from other industries, includ-
ing fly ash and slag. In the ready-mix con-
crete production process, we recycle
materials to use as cement substitutes and
consume waste from construction and
demolition sites as alternative aggregates.
Through these processes, we achieve one of
the most important virtuous cycles for our
operations: we have become consumers of
waste and non-recyclable by-products from
several industries, including power, iron,
steel, agriculture, and municipal waste
management.
Recycling Waste From Our Operations
We aim to maximize reusing clinker kiln
dust and bypass dust in the production
loop, mainly avoiding the need for its dis-
posal in a landfill. When this process is not
possible, we make every effort to recover
these by-products for other uses. For exam-
ple, cement kiln bypass dust can be used for
soil or road stabilization, fertilizer, or as a
de-icing agent for roads in the winter, con-
tributing to a circular economy.
In 2020, we recovered 94% of our
total generated waste and
further reused or recycled it
within our operations, with only
6% going to landfills.
While applying circular
economy principles, we
contribute to alleviating
the waste management
challenges that cities,
governments, and
communities face
worldwide.
Increasing Our Waste Management and Co-processing
Capabilities
This year our Huichapan cement installation in Mexico increased
its co-processing capacity by 9% through a US$1.4 million invest-
ment that widens waste processing and provides a safe and
sustainable solution to industrial waste, mostly consisting of
residues impregnated with hydrocarbons that require specialized
handling and disposal. The plant is now capable of co-processing
up to 2,000 tons of this kind of waste a month.
In the UK, our Climafuel® system project seeks to increase our
Rugby Plant's Refuse-Derived Fuel (RDF) consumption by 16%,
leading the plant to reach a total of 75% in alternative fuels sub-
stitution. The project involves a complete system to safely receive,
handle, and feed RDF to the cement kiln. The US$21 million proj-
ect is currently in execution, with an expected completion date in
June 2021.
94%
of our waste,
is reused, recycled
or recovered
Waste
Generation
Only
6%
is sent to landfills - 0.4M tons.
12.4 M tons of non-recyclabe
waste from other industries.
This is 31 times
what we send
to landfills.
9.7 M
2.7 M
Alternative raw
materials
Waste
Consumption
Alternative fuels
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Optimizing Water Management
Developing Water Action Plans
Although cement production is not a water-intensive process, we seek
its efficient and mindful use across all our activities to avoid altering the
ecosystems we rely on.
Understanding how we use water in our operations is a key step in
prioritizing water-related risks and opportunities for our operational use
and for ecosystems and communities.
To this end, we guide our operations through a comprehensive water
optimization process that prioritizes sites where water-related risks are
highest, and the business impact could be most significant. Further-
more, we work continuously to optimize water consumption, imple-
ment maintenance routines that ensure leak-free systems, install water
recycling systems, and follow-up on discharge quality. These actions
make us global leaders in high efficiency and low water consumption.
Our water stress map updated in 2019 identifies the more than 1,500
cement, ready-mix concrete, and aggregates sites located in water-
stressed zones. Our goal is to develop by 2030 a specific Water Action
Plan (WAP) for each of the mapped locations. As a first step, in 2021, we
aim to implement WAPs in 1% of sites located in extremely high water-
stressed zones.
Water consumption by product
Total water
withdrawals
Total water
consumption
53.7
million m3
37.8
million m3
The research was completed in collaboration with the University of
Alcalá Foundation using Aqueduct, an online tool run by the World
Resources Institute that provided valuable information to understand
and respond to water quantity, quality, regulatory, and reputational
risks worldwide. The executed assessment identifies current water
stress in our operations as well as projected 2030 and 2040 scenarios.
Geographical mapping of more than 1,500 CEMEX sites for
comparison with areas identified as water-stressed zones
>1,235
Ready-mix
Concrete
>235
Aggregates
64
Cement
Our WAPs will offer a customized set of response actions to maximize
water use efficiency and mitigate specific water risks for each commu-
nity by adopting recommendations based on the Water Risk Filter tool
from the World Wildlife Foundation.
Our WAP recommendations are based on the World Wildlife Fund’s
Water Risk Filter that offers a customized set of response actions to
mitigate specific water risks.
2021
Implementation Roadmap
2030
During 2021, CEMEX
commits to implement
the water optimization
plan in Extremely High
Water Stress Zones (1%)
High Water Stress
Zones (15%)
distributed in order of
priority until 2030
Module 1
Water
Awareness &
Internal Capacity
CEMEX’s Water
Optimization
Plan
Module 5
Stakeholder
Engagement
Module 2
Operations,
Performance
Measurement
& Mgmt.
Module 3
Internal
Efficiency &
CEMEX’s
Solutions
Module 4
Value Chain
Engagement
Sites operated within
water-stressed areas by business
(percentage)
Cement
Ready-Mix
16
Aggregates
12
23
Water Stress Areas Future Scenarios
2012
9%
of our sites
operate in high
and extremely
high water stress
2020
2030
2040
16%
of our sites
43%
of our sites
44%
of our sites
SASB EM-CM-140a.1
CEMEX 2020 INTEGRATED REPORTCement 233 l/tonReady-mix concrete 219 l/m3Aggregates 123 l/ton Company Overview
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Preserving Land, Biodiversity, and Ecosystem Services
Responsible Site Operation: Rehabilitation Plans in Our Active Quarries
In 2020 we continued taking action to enhance the biodiversity in and
around our quarries through the implementation of rehabilitation
plans and conservation initiatives and the development of local Biodi-
versity Action Plans (BAPs) for quarries located in or close to high biodi-
versity value areas.
Protecting biodiversity and the environment is fundamental to our com-
mitment to carrying out our activities sustainably. The Global Cement
and Concrete Association (GCCA) Sustainability Guidelines for Quarry
Rehabilitation and Biodiversity Management—to which our company is
fully committed—underscore the importance of these actions.
Our Corporate Biodiversity Policy enables us to responsibly handle
natural resources by integrating practices with best standards and
aligning our biodiversity initiatives with our decision-making process,
management system, and business model. The policy is aligned with
the Convention on Biological Diversity and its Aichi Biodiversity Targets.
Active Quarries 2030 Targets Progress
(247 total active quarries in 2020)
All active quarries
99%
Rehabilitation Plans
Quarries not overlapped
with high-value
biodiversity areas
58%
3rd Party Certification
Quarries overlapped
with high-value
biodiversity areas
98%
Biodiversity
Action Plans
Impact Assessment
Avoidance and
Minimization of Impact
Restoration / Rehabilitation
Compensation
Before starting any earthwork,
we carry out an environmental
impact analysis to map potential
risks and extraction possibilities.
We carry out activities with the
least potential risks to avoid or
minimize impact, for example,
stopping extraction where
biodiversity is especially high.
During and after extraction
activities in the quarries, we
implement a rehabilitation plan.
The goal is to help restore the
ecosystem services to where they
were before extraction.
Lastly, for any part of the impact
area that could not be restored or
rehabilitated, compensation is
sought with a Biodiversity Action
Plan.
Third-party Certified Conservation Projects
In 2020, we continued and strengthened our conserva-
tion efforts. In addition to implementing BAPs in tar-
geted quarries, we have extended our strategy to other
sites that do not overlap high value biodi versity areas.
For this purpose, we are working to achieve and multi-
ply third-party certifications from different environ-
mental organizations such as the Wildlife Habitat
Council (WHC), ECOCERT, Texan by Nature, Croatia's
Ministry of Environment and Energy, among others.
In 2020, the WHC awarded CEMEX the Corporate
Conservation Leadership Award, the most prestigious
recognition presented annually by WHC to honor the
corporate commitment to biodiversity, conservation
education, and meaningful alignments with global
conservation objectives.
Our conservation activities provide a valuable oppor-
tunity to engage employees and local communities in
wildlife enhancement initiatives and foster awareness
of how industry and natural habitats can coexist.
USA
● 15
■ 1
◆ 2
Mexico
● 8
■ 2
United Kingdom
■ 12
Germany
■ 3
Dominican
Republic
● 1
■ 1
Spain
■ 4
France
▲ 31
■ 11
Czech Republic
■ 4
Croatia
▶ 2
Panama
● 4
Colombia
100 sites have earned a third-
● 1
■ 1
party certification as
conservation projects.
Learn more about our WHC
certified programs
● WHC ▲ ECOCERT ◆ Texan by Nature ▶ Croatia Ministry of Environment ■ BAPs
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We are advancing toward our
goal of implementing local BAPs
in every quarry that overlaps with
high-value biodiversity areas.
CEMEX-BirdLife New Proximity Study
The CEMEX-BirdLife International Scoping Study has enabled us to
adopt a productive strategy for managing biodiversity issues, including
the development of a Biodiversity Action Plan (BAP) Standard and a
Corporate Guideline on Biodiversity Management.
The convergence of several factors during the last decade led us to
launch a new Scoping Study in partnership with BirdLife to account for
changes in CEMEX's portfolio, evolving regulations, and CEMEX's com-
mitment to Net Positive Impact on Biodiversity. As a result, in 2020
CEMEX and BirdLife defined a new Biodiversity Proximity Study to
identify CEMEX's biodiversity-related priorities for the coming years.
The study will be carried out during the first quarter of 2021 and calcu-
lates proximity to high conservation value areas using the Integrated
Biodiversity Assessment Tool. This tool results from a partnership
between BirdLife International, Conservation International, the Interna-
tional Union for the Conservation of Nature, and the UNEP World Con-
servation Monitoring Centre.
The study will analyze over 400 of our cement and aggregates sites
worldwide. The findings of this assessment provide a scientific basis by
which to identify CEMEX's biodiversity-related priorities for the coming
years for developing a sound biodiversity risk management program
and to design activities to support the company's sustainability strat-
egy for 2030.
10 years
+60
of partnership
with BirdLife
International
BAPs in areas of
high conservation
value
+25,000
hectares of area
positively
impacted by
conservation
projects
~100
conservation
groups and
stakeholders
identified and
engaged
+100
priority species
have benefited
from biodiversity
action plans
+4,000
students engaged
in environmental
education
El Carmen: Preserving Nature and Sharing its Wonder
Over the past 20 years, CEMEX has been preserving nature and sharing its wonder
through El Carmen, a private trans-boundary conservation area in Mexico and the
U.S. that comprises five different ecosystems and is home to a myriad species of
plants, birds, mammals, reptiles, and amphibians.
In 2020 we continued our most recent conservation effort: the reintroduction of the
American bison into El Carmen Nature Reserve. The American bison is currently on
Mexico's list of endangered species and faces several threats to its recovery; most
notably the loss of habitat. Over three years, this joint initiative is intended to relocate
60 specimens of genetically pure bison from Rancho El Uno in Chihuahua, Mexico, to
El Carmen. This effort is a joint initiative between CEMEX, AES Mexico, the Mexican
Fund for the Conservation of Nature (FMCN), and the National Commission of Pro-
tected Natural Areas of Mexico (CONANP).
Learn more about El Carmen Nature Reserve
El Carmen has
140,000 hectares for
biodiversity
conservation—the
size of Houston or
Mexico City.
SASB EM-CM-160a.1
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Building a Better
Workforce Experience
At CEMEX, our more than 41,000 employees are part
of a world-class workforce environment in which
they are enabled to work to the best of their
abilities and to unleash their full potential for the
benefit of customers, shareholders, investors, and
the communities where we live and work.
Our efforts to provide our
employees with competitive
compensation, while offering a
safe, healthy, and respectful
work environment, directly
contribute to our priority SDGs
8 and 9, as well as SDG 5.
Bringing Out the Best in Our
Employees
As a global company, we contin-
uously research and tailor new
initiatives that enhance the
workforce experience for
employees in different geogra-
phies and with different levels of
responsibility. Ultimately, our
goal is to fully unlock our peo-
ples’ potential and enable them
to achieve their full value in light
of their experience, interests, and
training. Engaging their curiosity,
desire, and passion leads to
better performance and fuels
higher levels of accomplishment
under all kinds of circumstances.
We have set three objectives,
which guide our efforts:
1. Empowerment: Equip our
people with the right tools,
connectivity, and training while
offering them a supportive
workspace where they can
safely collaborate and freely
express their ideas, proposals,
and questions.
2. Culture: Provide our people
with the organizational culture,
structure, and processes that
foster success and allow them
to unlock their full potential,
performance, and productivity.
3. Purpose: Our people are moti-
vated by purpose, and we seek
to create the conditions that
enable them to achieve their
goals and make a positive
impact within and beyond our
company.
Our Global Workforce
By position
By gender
● Operational
54%
● Non-executive 35%
● Executive
11%
● Male
84%
● Female 16%
By employment type
By contract
● Full time
● Part time
99%
1%
● Permanent 92%
● Temporary
8%
By generation
By seniority
● Traditionalists 0.1%
● Baby Boomers 13%
● Generation X
39%
● Millennials
45%
● Generation Z
3%
● Less than 1 year
11%
● 1-5 years
35%
● 5-10 years
22%
● More than 10 years 32%
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Measuring Our Progress in Delivering an
Outstanding Workforce Experience
We build on the Employee Net Promoter Score
(eNPS) methodology, a straightforward statistic, to
comprehensively measure the positive net bal-
ance of our employee experience. When asked
whether they would recommend CEMEX as a
good place to work, our employees’ responses
generated an eNPS score of 48 in 2020, higher
than the global benchmark score measured by
our survey provider and above our 2030 goal of 32
points. We are using this indicator to identify areas
for improvement and for structuring regional,
local, and team-specific action plans to address
employee concerns.
Listening to Our Employees
Our organizational growth has entailed adopting new ways of thinking and working,
spurring the development of a high-performance, people-driven culture where open
dialogue is encouraged and rewarded.
WE’x Survey: Gaining Insights and Implementing Action Plans
We hear our people’s needs and expectations, work to keep them engaged, and enable
them to meet their career goals through our aligned organizational structures and
processes. Our first step is to listen to our people, constantly and intently, and then to
take action together. Our Workforce Experience (WE’x) Survey helps us better under-
stand from the perspective of our people what organizational, digital, physical, and
interpersonal elements of our company require strengthening or developing so we can
provide a consistently positive work experience for
our people worldwide.
In 2020, the views of 95% of our employees world-
wide were heard via this anonymous engagement
survey, which yielded many important findings. The
survey was 100% digital to promote hygiene proto-
cols. To allow for a faster and consistent follow-up to
the insights, we not only digitized much of the
survey process but also empowered our “X Force”
teams, a select group of employees who will lead
our coordinated follow-up and implementation of
action plans that have been derived from our sur-
vey results.
77%
of WE’x Survey
respondents
feel optimistic about the
future of CEMEX,
+8 p.p. vs. 2019
Strengthening Communication and Supporting Our Employees
We’ve strengthened our communication with our employees to keep them contin-
uously informed about the actions and protocols we were undertaking. We lis-
tened to our people to understand more about how COVID-19 is impacting their
lives. Approximately 13,000 employees provided feedback regarding the measures
CEMEX has adopted across its operations to face the pandemic; 84% perceive them
positively. This evaluation placed us above average relative to other companies
measured with the same survey.
Digital Solutions for Continuous Communication and Collaboration
with Our Workforce
The COVID-19 pandemic has significantly increased our digital transfor-
mation and adoption of new technologies. During the COVID-19 pan-
demic in 2020, we relied on enhanced digital and mobile solutions that
facilitated our ability to: provide strong continuous communication
with our workforce and an enhanced experience for our employees;
support remote collaboration; and help maintain health and safety as
well as business continuity.
Enabled additional
accounts for cloud
telephony services and
help desks globally
Launches a
communication
strategy to reach
offline employees via
mobile channels
Enabled video and
audio-conferencing
capabilities for all
online employees
worldwide
Launched video-con-
ferencing capabilities
to reach employees
and their families
Launched a propri-
etary Healthcheck App
in several regions to
closely follow up on
the health or our
employees through
their mobile devices
Increased VPN
installed capacity to
ensure remote access
to systems and appli-
cations
Enabled virtual
desktops
Provided laptops that
allows employees to
continue working
from the safety of their
homes
For more information regarding our efforts to help maintain health
and safety as well as business continuity during the COVID-19
pandemic, please refer to Our Health & Safety Commitment on pages
25-29 of this report. ▶
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Fostering Workplace Diversity and Inclusion
Our company is diverse across multiple dimensions, including
ethnicity, nationality, race, culture, religion, gender, sexual orien-
tation, socioeconomic background, physical abilities, learning
styles, values, and viewpoints. We embrace the benefits of our
differences and our similarities; with more than 41,000 employ-
ees from over 100 nationalities working as One CEMEX across
our operations, our success is rooted in leveraging our diversity
to deliver on our vision of building a better future.
Our Global Diversity and Inclusion Program guides relevant
decision-making processes and sustainable initiatives to sup-
port our company’s long-term commitment to these ideals. The
program helps build an inclusive atmosphere that progresses
equality in our organization through advanced guidelines and
policies, awareness campaigns, career development initiatives,
digital platforms, and structured follow-up tools.
Our company is respectful of applicable regulations and poli-
cies, including non-discriminatory recruitment processes, facili-
ties, and services adapted to meet accessibility requirements, as
well as other specific programs in our business units. Our Diver-
sity and Inclusion Policy supports our continuous journey to
create a more diverse, inclusive workplace, as well as our com-
pany’s commitment to cultivating an environment that fosters
possibilities for everyone.
View our Position Paper on Diversity and Inclusion.
Providing Equal Opportunities
In our recruitment and promotion processes, we apply princi-
ples of equality and respect for diversity and focus on finding
candidates who in our determination best meet the require-
ments for a given position. Launched in 2020, our Global
Recruitment Policy emphasizes providing equal employment
opportunities in our company. For instance, in our global head-
quarters office, we now present candidates without any associ-
ated demographics, promoting a more reflective assessment of
talents, capabilities, and experiences; in the U.S., our company
began participating in local job networks to increase the visibil-
ity of our job postings through entities focused on minority
communities; and in Poland, our operation communicates the
principles of equality through their job posting process.
In 2020, we launched a Global Job site that aims to give visibil-
ity to internal and external talent of open positions at any of
our locations.
Learn more at https://jobs.cemex.com.
We Want Our People to Perform their Best
At CEMEX, we actively promote inclusivity across our opera-
tions. When our team members draw from different experi-
ences and a unique set of competencies to bring a different
perspective forward, they increase the chances of developing
truly transformative solutions. Moreover, proactive listening,
while enabling a space where individuals with different mind-
sets and backgrounds can exchange ideas, is a way for us to
foster the imaginations and creativity of our people.
In 2020 we launched our Non-harassment and Non-discrimi-
nation Policy, which promotes an atmosphere of openness,
generosity, and respect. Also, we continued the rollout of our
Unconscious Bias course, designed to build awareness and
provide tools to ultimately eliminate potential discriminatory
behaviors. Additionally, to emphasize the importance of diver-
sity in our organization, we strengthened our Diversity Talks
Series with compelling speakers who raised awareness about
the advantages and successes of diverse, multicultural teams.
Recognizing that our journey towards greater diversity and
inclusion is a shared responsibility, in 2020 we strengthened
our Diversity Committees and expanded their scope to every
business unit and central office. Their charge is to pursue the
co-creation of diversity initiatives in all of our operations that
reflect consideration of local challenges and existing practices.
The new committee created to
oversee company-wide initiatives
relating to diversity and inclusion
is chaired quarterly by our CEO.
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Empowering Women in Our Distribution
Network
Aligned with our commitment to promote
women’s participation across the whole
supply chain, we leveraged our distribution
network to launch the Construrama
Women program in Mexico, an annual
event aimed at supporting women’s devel-
opment in Construrama, a network of over
2,000 retail stores in more than 600 cities.
This event aims to inspire women to thrive
as individuals and business owners, posi-
tively extending their impact throughout
their communities. In 2020, close to 350
women participated in the event.
More Women in our Company and in
Executive Positions
To hire, retain, and encourage the participa-
tion of more women at all levels in our com-
pany, including in executive positions, we are
creating greater awareness of the gender gap
and encouraging careers for women by
unleashing their potential and growth
through leadership development, mentor-
ships with senior management, and partici-
pation in executive forums. The intent is not
only to support women during life and career
transitions, but also to open a space for con-
versation, guidance, and exploration during
“moments that matter” to foster work-life
integration, career planning, and well-being.
As part of our commitment to gender equal-
ity, in 2020 we became a signatory to the UN
Global Compact Women’s Empowerment
Principles; a new guidepost to promote wom-
en’s empowerment in the workplace, market-
place, and community. The results of our
participation will provide direction on the
gaps we need to address to continue advanc-
ing our Global Diversity and Inclusion Pro-
gram and build upon our commitment to
promote equality in our company.
Furthermore, in 2020 we launched the CEMEX
Global Women Network, a group of women in
senior leadership positions at CEMEX that
fosters opportunities for exposure, learning,
and career advancement, and that helps
create strong, visible role models for emerging
talent within CEMEX and the industry.
2020 Milestones for Gender Equality
» 50/50 representation of men and women in our entry-level Talent Devel-
opment Professionals program in our Mexico and U.S. operations.
» +50% women participation in our 2019-2020 class of Professionals in
Development in Mexico and the U.S.
» New staffing and hiring guidelines require at least two women in the
final shortlist of candidates for GA positions, as well as a 50% target for
entry-level positions.
» Our Coaching for Life Events mentoring program, designed to enable
women with high-potential in our company to continue their growth at
CEMEX, continues to expand.
Encouraging a Healthy Work-Life Balance
In 2020, we continued expanding our existing
base of flexible work schedules and leave
options throughout our worldwide operations.
In recognition of the different needs of
employees across our countries of operation,
we allow them to select from flexible work
hours and provide them with extended
maternity leave. We also have put in place a
Dynamic Work Schemes Global Guideline and
Leaves Global Guideline.
We know the importance of complying with
all applicable local practices, regulations, and
policies regarding overtime and work sched-
ules. Consequently, we are determined that
compulsory labor shall never be a practice in
any CEMEX site, and for that purpose, we have
implemented robust systems to control shifts
in each of our operations and closely monitor
work hours according to local laws.
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Leadership Development Programs:
Inspiring A Cultural Evolution
Instilling a cultural evolution requires
sound, strong direction throughout our
company. That’s why we invest in leader-
ship development programs at different
levels of our organization—always
designed with the guiding imperative of
diverse representation.
Our three Leadership Development Pro-
grams—Ignite, Leader-To-Leader, and
Connect—allow us to provide new manag-
ers, newly appointed directors, and top-tier
executives the foundational knowledge
and all the necessary tools to support a
successful transition and development in
their roles. We underscore the importance
of connecting our current leaders as men-
tors for future leaders; and of creating
opportunities to practice their skills while
engaged in actual work projects. In 2020
we launched Thrive, a program focused on
developing new leadership skills and
methodologies for our teams to solve
specific business challenges in line with
the organization priorities.
In 2020, more than 340 leaders from
across all of our regions and business
units participated in these programs.
performance, talent review, and succes-
sion planning processes, we enable career
decisions and professional growth. Our
digital performance management system
allows our employees to seamlessly set,
evaluate, and discuss their individual
goals with their supervisors while also
allowing them to receive feedback on
their achievements.
As our company constantly transforms
and expands, our succession manage-
ment process enables us to build a tal-
ented pool of leaders with the skills and
deep understanding of our business
fundamentals to continue our pursuit of
excellence and the successful implemen-
tation of our strategy. One of our main
objectives is to develop people with the
potential to fill key leadership positions;
we offer opportunities for them to build
experience and capabilities appropriate
for success in ever more challenging roles
while strengthening our talent pipelines.
Through this process, we make every
effort to help our employees meet their
career development expectations and
prepare them for key roles as they chal-
lenge themselves with professional devel-
opment opportunities.
We know that our employees, when they
have the resources they need to live
healthy, fulfilling lives, bring their best to
the workplace. Our competitive compen-
sation and employee benefit packages are
key contributors to delivering a superior
workforce experience for all of our people.
We continually seek to improve the way
we communicate these benefits to our
employees—across all organizational
levels—so they understand the value and
opportunities available to them.
Creating a High Performance,
People-Driven Culture
As we learn and grow as an organization,
adopting new ways of thinking and work-
ing, we are developing a high-perfor-
mance, people-driven culture—where
open dialogue is encouraged and
rewarded. We hear our people’s needs
and expectations, work to keep them
engaged, and enable them to meet their
career goals through our aligned organi-
zational structures and processes.
Talent Management and Development
To build an enriching experience that
attracts, retains, and develops the best
talent within and outside of our industry,
we seek to offer our employees acceler-
ated opportunities for growth; a transpar-
ent, inclusive, and rewarding
environment; and experiences that mani-
fest identity and purpose.
We know firsthand that employees who
are supported by their company are
inspired to excel. Through our integrated
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Our Sustainability Learning Pathway at
CEMEX University
Considering the relevance of spreading the
knowledge of the company’s strategic priorities
among our employees, in 2020 we launched the
Sustainability Learning Pathway. Integrated by a
series of videos, articles, and resources, this
program allows our workforce to grasp funda-
mental environmental, economic, social, and
governance aspects and get a clear idea on how
to contribute to CEMEX sustainability targets.
More than 6,000 employees across all regions
have enrolled in this dedicated training and we
are working to further expand it and keep it
dynamic based on new sustainability trends,
developments, and ambitions.
CEMEX University: Capabilities for the
Pursuit of Excellence
Our work is challenging, invigorating, and rewarding.
Accordingly, we want our people to stay connected
and to never stop learning. Through ongoing training
and development opportunities, we teach our
employees new skills and deepen their expertise in
several critical areas for the company.
CEMEX University is our company’s trusted educa-
tional advisor with a vision of developing a continu-
ous learning ecosystem for our employees and
acting as a high-impact catalyst for our transforma-
tion. It works in consort with our functional and
regional leaders, who act as executive sponsors, to
respond to the multi-region, multi-business learning
needs of our employees by providing the concepts,
practices, tools, and capabilities required to imple-
ment our strategy. CEMEX University integrates our
institutional academies and our leadership develop-
ment programs under one comprehensive learning
model that favors a blended approach to learning
that leverages traditional in-person training and new
best-in-class digital learning platforms.
During the COVID-19 pandemic, CEMEX University
was an essential tool that helped to quickly adapt
our learning offer to the new normal and ensured
our employees with continuous, rich learning online
experiences during the year.
Institutional Academies: Building Strategic
Capabilities
Our institutional academies are the vehicles through
which we develop our company’s strategic capabili-
ties. They are designed to work together to advance
CEMEX priorities and help shape our people-driven
culture. 2020 marked an impressive year for CEMEX
University, with more than 24,000 participants
undergoing about 50 different programs across all
business units.
» Health and Safety Academy: Designed to help
assure the well-being of our employees by
enabling leaders to understand their responsibility
and duties to transmit health and safety practices
to their teams.
» Commercial Academy: Teaches sales managers
and sales executives how to deliver against
CEMEX’s commitment to customer centricity and
reinforces the key aspects of our Commercial
Model, leading to more successful interactions
with our customers.
» Culture and Values Academy: Promotes a culture
of ethics and compliance into our daily activities by
addressing topics such as confidentiality, uncon-
scious bias, workplace harassment, conflict of
interest, and fraud prevention.
» Supply Chain Academy: Participants understand
how to work together across the functional
domains of our supply chain to deliver a superior
customer experience.
» Digital Academy: Comprises valuable learning
experiences in the realm of emerging technologies
that are driving the digital economy, design think-
ing, and CEMEX’s Digital Vision so as to accelerate
our growth and deliver value to our customers.
» Cement Operations Academy: Supports our com-
mitment to operational excellence by reinforcing
in all plant managers the aspects involved in suc-
cessfully managing plants and their teams.
» Responsible Business Academy: Teaches our
employees the company’s shared value strategy
for them to be able to propose initiatives that will
further increase our positive social impact.
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Responsible
Sourcing
At CEMEX, we build strong and responsible
relationships with our suppliers that are based
on trust, respect, and mutual value creation.
Our work with our suppliers
towards fostering continuous
innovation and sustainable
practices supports our priority
SDGs 8, 11, 13, and 15.
We further extend our
commitment to health
and safety to our
contractors with access to
our facilities—reinforcing
our number one priority.
commitment to sustainability across our value chain by communicat-
ing, promoting, and evaluating our suppliers’ adoption of responsible
business practices. Additionally, we extend our commitment to health
and safety to contractors with access to our sites—reinforcing our
number one priority.
Our Suppliers during the COVID-19 Pandemic
During the COVID-19 pandemic, we have maintained continuous, effec-
tive communication with our suppliers to closely monitor our critical
supply chain. Our collaborative efforts helped us successfully optimize
inventory levels and quickly respond to fluctuating demand and mar-
ket restrictions—avoiding overstock or stockouts. They also have
enabled more competitive negotiations for some materials and con-
tinue implementing our low-cost sourcing initiative.
Following global, national, and local health authority recommenda-
tions, we developed and implemented strict hygiene safety protocols
throughout our operations. These protocols are designed to protect not
only our employees, but also extend to our contractors, suppliers, com-
munities, and customers to limit the spread of COVID-19 in our value
chain. For instance, our Loading, Dispatch and Reception, Including
Warehouses Protocol establishes new requirements for reception and
dispatch activities in warehouses to protect our workers and suppliers.
Learn more about our health and safety practices with our contractors
and suppliers in the Our Commitment to Health and Safety section on
pages 25-29 of this report. ▶
Building Strong and Responsible Relationships With Our
Suppliers
Our relationship with our suppliers is an integral part of our goal of
achieving a superior customer experience and creating value for all of
our stakeholders. We recognize suppliers for the contributions they
make to our business by delivering profitable and innovative solutions
and services.
The overarching goal of our Global Procurement Model is to guarantee
the continuity of our operations by achieving the optimal total cost
while assuring high quality and terms for products and services. The
flexibility and agility of our worldwide model enables us to support our
operations’ evolving needs and provide economies of scale at country,
regional, and global levels by using a strategic sourcing process that
leverages the expert management and knowledge of our people
throughout our organization.
Our procurement and operations teams continuously challenge our
suppliers to further develop their products, services, and businesses
for mutual value creation. We closely cooperate with our suppliers to
foster continuous innovation and implement the most sustainable
practices in our day-to-day operations. We also make an extensive
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Extending Our Sustainability Commitment
Our sustainability commitment goes beyond our operations. We con-
tinually work to engage our suppliers with our core values, including
our emphasis on health and safety, excellence, innovation, and integrity.
For more than a decade, CEMEX Supplier Sustainability Program has
contributed to strengthening our value chain’s consistency and respect
to our sustainability principles, policies, and practices. To this end, we
also collaborate in global efforts advancing sustainability in our indus-
try’s supply chain, including, since 2010, the UN Global Compact Advi-
sory Group on Supply Chain Sustainability and, more recently, through
the Global Cement and Concrete Association (GCCA).
As part of our Supplier Sustainability Program, our 2030 goal is to assess
the sustainability practices of at least 80% of the critical suppliers spend
under our company’s procurement scope. By critical suppliers, we refer
to those business partners who could have a significant impact on our
core businesses; in particular, those suppliers who have the highest
spend or those that could affect the continuity of our operations,
including health, safety, and environmental risks. In 2020, we continued
adding new suppliers to the assessment, reaching 63% of the critical
group and keeping us on track to achieve our 2030 goal of 80%.
Contractor Health and Safety Verification
Globally executed in alliance with specialized
firms, CEMEX Contractor Health and Safety Verifi-
cation Program is designed to certify our contrac-
tor’s compliance with stringent health and safety
standards, proper training and applicable accred-
itations. We have engaged all countries to suc-
cessfully accomplish our target of 80%
certification of our procurement spend, overpass-
ing this goal in 2020 with an 82% contractors
verification rate.
As one step further on this effort, CEMEX in Mex-
ico recently partnered with Clever, an interna-
tional firm specialized in Contractor Control, to
deploy and implement a document manage-
ment system to guarantee the compliance of our
contractors' employees, machinery and vehicles
with applicable health and safety regulations and
requirements. As of December 2020, more than
1,300 contractor companies, around 8,000 of their
employees and more than 1,400 of their vehicles
used for the services provided within a CEMEX
installation in Mexico have been successfully
enrolled in the health and safety verification by
Clever. This represents more than 80% of the total
amount of suppliers in the target and the remain-
ing share will be covered during 2021.
Supplier Sustainability Assessment
(% of critical suppliers spend under our company’s procurement scope)
2030
Goal
2020
2019
80%
63%
44%
To assess our suppliers’ sustainability practices, we developed a three-
phase effort:
1. Assessment: In collaboration with a third-party firm, we invite our
suppliers to perform a sustainability assessment based on ISO 26000
guidelines, which cover social, environmental, health and safety,
business ethics, stakeholder relationships, and financial performance
standards.
2. Continuous Improvement: The specialized company we work with
analyzes the information provided and prepares a comprehensive
report with findings, conclusions, and a proposed action plan to close
gaps, if any.
3. Scorecard: The evaluation is periodically updated. The grade is inte-
grated into each supplier’s scorecard to track and reward suppliers
that demonstrate progress and advanced sustainability practices.
Suppliers’ Code of Ethics and Conduct
Our aim is to always manage our supplier relationships with honesty,
respect, and integrity, creating a culture of communication that
strengthens our relationship while working to fulfill our company’s
objectives. Aligned with our principles, policies, and values, we are
committed to having our suppliers understand and comply with the
CEMEX Code of Ethics and Business Conduct and with the 12 principles
of our Code of Conduct When Doing Business with Us—which are
rooted in our membership in, and commitment to, the Global Cement
and Concrete Association (GCCA).
Learn more about our CEMEX Code of Conduct When Doing
Business with Us
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Fostering Innovation with Our Supply Chain
Driving innovation alongside our suppliers is a win-
win approach that enables us to continuously
improve our supply chain and our company.
Since 2006, we have worked together with our sup-
pliers to collect and implement their proposals to
improve our products, processes, and services. We
look for a strong collaborative partnership that pro-
motes innovation, generates new thinking processes,
improves supply chain practices, and contributes to
cost reduction strategies. We further replicate win-
ning ideas and promote the suppliers’ products and
services throughout our operations. In this period, we
have received ideas from more than 80 global suppli-
ers and more than 400 local suppliers.
2020 Smart Innovation Program for Suppliers
In 2019, we merged our Supplier Innovation Program with our
company’s global Smart Innovation Model to expand its reach to
all geographies where CEMEX operates. As part of this program, in
2020 we recognized Dispersible Paper Packaging from Klabin and
Green Energy for Mixer Trucks from Sinotruk. We received 30
ideas, from which two proposals will undergo a business case
process that may lead to a pilot project in our operations.
Efficiency and Savings Through Digital
Procurement
Aligned with our company’s digital transformation,
we are implementing digital procurement initiatives
throughout our operations that help us increase the
portfolio of cost-effective, high-quality suppliers.
» CEMEX Marketplace is a digital platform that
enables our company’s end-users to purchase the
right product at the best available price. By year-
end 2020, we implemented this initiative in 13
countries.
» E-Auctions and e-Requests make it easier to for us
to quickly investigate, evaluate, and select new
suppliers to drive our business forward.
» Scanmarket eAuctions is digital platform for man-
aging challenging negotiations in a dynamic,
real-time manner. In 2020, this platform was imple-
mented in eight countries, bringing the total num-
ber of countries in which it operates to 21.
» CEMEX Service Suite supports our low-cost sourc-
ing initiative by streamlining efficiency and coordi-
nation between our Global Procurement Office
and our country purchasing specialists.
» Robotic Processing Automation (RPA). Imple-
mented in Mexico in 2020, we use RPA technology
to automate tasks at our warehouses and speed-up
ordering and stock replenishment of spare parts.
» Artificial Intelligence platforms are under assess-
ment to reinforce our worldwide item codification
and standardization, spend analysis, and inventory
optimization strategies.
» CEMEX Industrial Supply is an e-commerce plat-
form designed to leverage CEMEX Mexico’s negoti-
ation capabilities with our suppliers to offer
industrial supplies, maintenance parts, and per-
sonal protective equipment to our customers and
third-party companies, individuals, and suppliers.
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Social Impact
Our Social Impact strategy, which enables us to
foster transformational change within and outside
CEMEX, contributes to building a better future.
Our social efforts to deliver
sustainable and inclusive
outcomes contribute to our
priority SDGs 8, 9, 11, 13, and 15.
Our collaborations with ARISE
UNDRR and U.N. Global Compact
allow us to build synergies with
multiple ecosystem actors to go
faster and further to achieve the
Sustainable Development Goals.
To date, CEMEX has
collaborated with more than
23 million people in more
than 5,000 communities,
contributing to achieving the
goal of 30 million community
partners by 2030.
Our Social Impact strategy contributes to CEMEX's
ability to minimize negative impacts, anticipate risks,
and help solve social issues, including some that
offer potential business opportunities. It embodies
and transmits our culture and helps create a better
future by:
Visit our website to learn more about how we
implement our strategy throughout our
operations.
Engaging Our Communities During the
COVID-19 Pandemic
» Contributing to our operational continuity
» Creating positive stakeholder experiences
» Creating shared value
» Strengthening our brand
Maintaining close communication with our neighbors
allowed us to develop a comprehensive action plan to
provide relief for COVID-19 challenges, with phases
extending from immediate response to economic
recovery actions in record time.
We put our Social Impact strategy into action through
Community Engagement Plans (CEPs), in which we
co-create with our neighbors to align our business pri-
orities with community needs. We create initiatives,
projects, and programs through a participatory pro-
cess focused on developing people and communities.
During 2020, our Social Impact Committees con-
ducted over 60 stakeholder dialogues globally, in
many instances leveraging technology to keep close
communication while complying with safety proto-
cols. We also established communication channels
with vulnerable families to respond effectively to their
essential needs.
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Social Actions During the COVID-19 Pandemic
To support our stakeholders worldwide in enduring lockdowns and loss of
income, we developed swift action plans across our operations in coordi-
nation with local partners and authorities, as well as through strategic
philanthropy.
330,000
food kits for
basic needs
delivered
1.75 million
medical
supplies
donated
180
public health
spaces
sanitized
UK
France
Spain
Croatia
Jamaica
Dom. Rep.
Puerto
Rico
Trinidad &
Tobago
USA
Mexico
Guatemala
Nicaragua
Costa Rica
Panama
Colombia
Germany
Poland
Czech R.
Egypt
Philippines
We worked with more than 2.9 million
community partners who were positively
impacted, and we engaged in social
actions with 73 allied organizations
during the COVID-19 pandemic.
196
MSMEs
supported
179
jobs
created
+2.9
million
beneficiaries
+11,400
hours of digital
volunteering
+400
educational
institutions
supported
12,000
people
supported with
workshops or
training
Learn more about our social actions during the COVID-19 pandemic
in our COVID Social Impact Booklet
Collaborating to Scale Positive Impact
Prior to and during the COVID-19 crisis, we have
developed solutions through our partnerships,
replicated our programs in multiple countries in
record time, and scaled efforts to reach out to the
most vulnerable people in society. During 2020,
we strengthened many long-standing partner-
ships.
During 2020, we focused our efforts with partners
to communicate and implement actions to sup-
port rapid response and strategic recovery
actions:
» Business Fights poverty—generated COVID-19
toolkits with replicable practices.
» REDAMERICA—created six thematic groups to
share practices, develop content, and promote
agendas on education, early childhood, envi-
ronmental understanding, and strengthening
local governments and regional areas across
Latin America.
» ARISE Mexico—created a resilience protocol for
SMEs and integrated more than 54 organiza-
tions.
» NGOs—Exchanged best practices to help stop
gender violence due to social isolation, cooper-
ated to work on the emergency, and helped
MSMEs navigate the crisis.
Additionally, through our leadership U.N. Global
Compact Mexico, 17 working groups were created
to manage actions to make concrete progress in
the 2030 Agenda. CEMEX was re-elected to the
presidency for the 2020-2022 period.
The role of partnerships to deliver sustainable and
inclusive development has proven essential to
building a sustainable and fair future for all our
stakeholders, as evidenced by the fact that
105,000 families have been positively impacted
through our alliances.
We collaborate with over
500 social impact partners
and lead more than 30
councils, such as ARISE
UNDRR and UNGC in Mexico.
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Developing Capabilities and a Social Impact Mindset
Improving Quality of Life and Well-being
During 2020, CEMEX's social strategy evolved to focus on making visible
the impacts of social actions on our supply value chain as a way to
become more resilient and have a more competitive business culture.
We continue to live our purpose of building a better future through our
employees' day-to-day actions, having a systemic view, and collaborat-
ing in partnerships. The long-term goal is to accomplish well-being,
social welfare, and benefits that contribute to CEMEX's competitive and
sustainable landscape. As a result, we expect a positive outcome in
generating shared social transformation for our different stakeholders.
Through our Community Engagement Plans (CEPs), we foster regular,
operations-wide dialogue via multi-disciplinary Social Impact Commit-
tees. These engagements help us manage key issues, provide expert
opinions on topics of concern to stakeholders, and ensure follow-up on
matters related to their areas. The committees also contribute to the
design, implementation, and evaluation of our stakeholder engage-
ment efforts.
CEMEX seeks to embed a social impact mindset into its everyday
actions and fully integrate the footprint from its actions across all of our
business units.
Our CEPs guide collaboration and investment in the
communities in which we operate and center on four
pillars:
For the company to be better equipped to create a positive impact and
to be able to conduct the process cross-functionally, we have updated
our policy and launched our Academy so that all employees may
develop capabilities on how to address social challenges and stake-
holder relationships.
Our focus is to keep on track to scale our social footprint and work to be
stewards of the planet. We will continue to engage with our partners to
reach our 2030 goals, and have a strong commitment to building a
better future through sustainable business solutions, causing, directly
or indirectly, a positive net change on stakeholders.
1. Education and Capability Development for Employability
2. Sustainable and Resilient Infrastructure and Mobility
3. Social and Environmental Innovation and Entrepreneurship
4. Culture of Environmental Protection, Health, and Safety
IMPROVING QUALITY OF LIFE AND WELL-BEING
EDUCATION AND
CAPABILITY
DEVELOPMENT FOR
EMPLOYABILITY
SUSTAINABLE
AND RESILIENT
INFRASTRUCTURE
AND MOBILITY
SOCIAL AND
ENVIRONMENTAL
INNOVATION AND
ENTREPRENEURSHIP
CULTURE OF
ENVIRONMENTAL
PROTECTION,
HEALTH & SAFETY
Learn more about our four pillars
To date, 98% of
cement plants have
put Community
Engagement Plans
into action.
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During 2020, we adapted our
institutional programs to
continue working with local
partners to strengthen their
educational services, but we
also leveraged our capabilities
to launch new initiatives.
1.
Education and Capability Development
for Employability
Enabling Education During COVID-19
CEMEX Community Centers Leverage
Technology
During the crisis, we leveraged technology to
maintain communication with the communi-
ties where we operate. We shifted from tradi-
tional activities to digital platforms in
community centers to provide remote activi-
ties to avoid physical contact. We also main-
tained contact with local authorities and, in
some cases, with state authorities.
Our community centers diversified scheduling
for courses in Mexico, leading to an increased
reach to nearby towns. Also, we diversified
content to support capacity building for
employment, to cultivate entrepreneurial
interests and jobs creation in the context of
the pandemic.
CEMEX believes education and capability
development are needed for resilient, self-suf-
ficient, and empowered communities. Schol-
arships, courses, workshops, and programs
that foster experience, knowledge, and the
development of technical and life skills are
among the initiatives CEMEX has worked with
local partners to implement in communities
worldwide. Such efforts improve employability,
income-earning potential, and quality of life
and help ensure an adequate future workforce
for our company and industry.
In 2019, CEMEX made a public commitment as
part of the Global Alliance for Youth to foster
the employability of 65,000 youth by 2022 by
partnering with local organizations to support
education, employment, and entrepreneur-
ship. By developing youth employability capa-
bilities, we bridge the gap between current
skills and our future industrial ecosystem's
needs while improving income opportunities
for young workers.
During 2020, we not only adapted our institu-
tional programs to continue working with
local partners to strengthen their educational
services, but we also leveraged our capabilities
to launch new initiatives designed to support
our local communities during the COVID-19
global pandemic.
As COVID-19 quarantine measures forced
educational institutions worldwide to adapt
their instruction methods quickly, the work of
our volunteers helped students of our neigh-
boring communities meet the challenge of
rapidly adopting new ways to continue their
education successfully.
» Spain—Adapted a Language and Sustain-
ability summer camp we have held since
2016 to comply with new global hygiene and
safety protocols.
» Poland—Provided information technology
assistance to eight local schools and training
for close to 300 teachers to help facilitate
virtual classrooms for around 2,000 stu-
dents.
» Egypt—Set up special facilities with laptops
and internet access to support our custom-
ers' children's education.
» Mexico—Supported 3,000 youth with a
tablet and mentorship support to avoid
school desertion through EDUCANL.
» U.S.—Partnered with local organizations in
Florida and California to help alleviate the
shortage of childcare facilities and services
for emergency workers.
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+29,000 people trained,
51% female
+5,600 young people
and adults participated
in our technical and
vocational skills programs
+53,000 youth
trained to date
NEO - Opportunities for All
Women's Economic Empowerment in the Communities
In partnership with local stakeholders, CEMEX runs New
Employment Opportunities (NEO) in Mexico, a program that
helps close the skills gap for non-educated -employed -and-
trained (NEET) young people providing market-relevant training
counseling and employment services. Among its initiatives, NEO
reinforces the quality of upper secondary technical education
programs, including comprehensive courses and workshops in
soft skills such as resilience, teamwork, and communication.
NEO graduates report considerably less job-hopping and
above-average earnings.
Virtual Education and Soft Skills for Youth
To continue our promotion of education and soft skills for youth,
during 2020, CEMEX collaborated with diverse organizations,
reaching over 53,000 youth through training.
» Mexico. Granted scholarships for 39 teachers and awarded
more than 6,000 students. With the Lab4U Scholarship, par-
ticipants have access to Lab4Physics, an app that integrates
the power of four sensors in more than 25 rigorous laboratory
experiences that allow students to learn through their smart-
phones with research-based experimentation.
» USA. Over 1,600 educators and students across the nation
were able to get an inside look into the manufacturing of
cement, aggregates, and ready-mix concrete, as well as to
learn directly from CEMEX's employees about the company's
sustainability efforts and future employment possibilities.
» Spain. CEMEX hosted an online seminar in collaboration with
the Valencian Institute of Youth (IVAJ) to address the use of
social media to build a good online reputation and search for
job opportunities. Over 600 youth participated.
» Mexico, Colombia, Costa Rica, Panama, and the Dominican
Republic. In collaboration with Junior Achievement Mexico, we
ran a virtual workshop series to improve soft skills in young
people, including leadership, team collaboration, communica-
tion, and innovation. More than 100 young people between 16
and 29 years old were trained.
CEMEX and CEMEX TEC Center provided 1,000 scholarships for
women to Victoria Online Academy147 to have access to learn-
ing about innovation, finance, and sales, enabling them to
acquire knowledge to help them run their own business. Victo-
ria147 is the first organization in Mexico and Latin America spe-
cializing in supporting women working through education and
training in business, both in entrepreneurship and in the corpo-
rate sector.
Women Producing Sanitizer and Face Masks during the
Pandemic
As essential personal protection equipment (PPE) for healthcare
workers and families became scarce during 2020, women from
CEMEX Community Centers in Latin America worked with raw
materials from home to produce hand sanitizer and face masks:
» Mexico. More than 100 large-scale
projects benefited from local crafts-
women's face masks produced in
partnership with the Mexican Cham-
ber of Construction Industry.
» Colombia. Local craft women sup-
ported in the elaboration of 6,000 face
masks and sports clothes.
» Panama. Women manufactured reus-
able face masks for neighbors, which
has reached 15,000 facemasks in part-
nership with local governments.
Learn more about our Education and
Capability Development for
Employability practices in our COVID
Social Impact Booklet
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2. Sustainable and Resilient Infrastructure and Mobility
Investing in Marginalized Communities
Leveraging our expertise in the building materials industry is an effec-
tive way to create a sustainable infrastructure through our products
and services. We can help build resilient, accessible, and inclusive com-
munities and cities, including mobility strategies.
Resiliency and Urban Transformation Model
Disaster management and resilience are fundamental to fostering
economic development and well-being and are essential to our core
business and inclusive business models. Through our Resiliency and
Urban Transformation Model, we leverage our programs' different
solutions to promote a culture of prevention and provide rapid
response to disasters.
Disaster Preparedness and Prevention with ARISE
Our participation as co-chair on the ARISE Global Board and
presiding ARISE Mexico allows us to contribute to building resil-
ient cities through disaster risk reduction.
ARISE is a voluntary private-sector group of more than 300 mem-
bers worldwide that works in conjunction with the U.N. Office for
Disaster Risk Reduction (UNDRR), the public sector, academia,
and NGOs with four priority areas of engagement: (1) Enhancing
long-term resilience of Small and Medium Enterprises; (2)
Encouraging and facilitating the integration of disaster and
climate risk into private and financial sector investment deci-
sions; (3) Promoting and implementing pilot projects with the
insurance industry to incentivize the integration of disaster risk
reduction considerations; (4) Promoting and engaging in the
implementation of resilient infrastructure.
To learn more about our Resiliency and Urban Transformation
Model, visit our website.
For over five years, we have helped transform highly marginalized
urban areas into sustainable and resilient communities. As part of
our efforts, we have worked to form an intersectoral governance
system that develops policies for new investments, creates
multi-stakeholder projects, empowers communities through capac-
ity building, and fosters ethics and leadership through community
committees. To date, we have invested over US$6.8 million in more
than 312 projects with different partners to provide 10,000 families
with access to clean water, reduce theft by 50% in these communi-
ties, and build over 2,000 meters of roads and pedestrian overpasses.
Growing Platform
Our Growing Platform addresses the main challenges inherent to
poverty and inequality in vulnerable communities, such as inade-
quate housing, limited land ownership, lack of access to essential
services, unemployment, and financial inclusion.
To learn more about our Growing Platform, visit our website.
» Construyo Contigo: +7,000 families have taken part in this pro-
gram since 2006
» Centers for Self-employment: +76,000 families have participated
since 2006
» Construapoyo: ~190,000 individuals have benefited from this
program
» Yo Construyo: During 2020, we developed a facilitation manual for
the Mexican government to be used in 50,000 remodeling or new
construction actions, leading to the creation of 125,000 direct jobs
and 187,500 indirect jobs.
» Patrimonio Hoy: +3 million participants in Costa Rica, Colombia,
the Dominican Republic, Nicaragua, and Mexico
» Clean Cookstoves: +28,000 households reached since 2014 by
partnering with microfinance institutions, governments, and local
women's groups.
Learn more about our Sustainable and Resilient Infrastructure
and Mobility practices in our COVID Social Impact Booklet
+3.6 million
people have accessed
affordable housing
solutions to date
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3. Social and Environmental Innovation and Entrepreneurship
CEMEX SDG Innovators
We provide sustainable solutions to social and environmental chal-
lenges by supporting, promoting, or otherwise contributing to organi-
zations that create disruptive ideas and support local entrepreneurship
that boosts local economies.
Supporting Entrepreneurs in Their Journey
During 2020, we exchanged best practices and cooperated with NGOs
to work on pandemic-related emergencies, and supported close to 200
MSMEs in navigating the pandemic.
» Colombia—Collaborated in the first job fair to increase the sale of
local products and boost contracting opportunities in San Luis
Payandé, with 320 participants and 18 local SMEs.
» Along with different partners, we designed more than 50 webinars to
offer information to our supply chain regarding health and safety and
provide an update of governments' measures to support the supply
chain during the pandemic.
» Through ARISE Network, we designed a series of webinars for private
and public entities focused digital risks, preparation for natural disas-
ters, and how to interact safely during the pandemic.
In 2020, for the second consecutive year, young intra-entrepreneurs
from CEMEX were selected to participate in the UN Global Compact’s
Young SDG Innovators Program. This 10-month accelerated training
enables future change-makers to join peers from across the globe to
develop innovative solutions that help deliver on the global 2030
Agenda, as well as our company’s sustainability objectives.
“In order to achieve the SDGs, businesses need to collaborate in devel-
oping and innovating on their business models. The Young SDG Inno-
vator Program is giving me the opportunity to reach out to various
fronts within CEMEX and collaborate with the extended network of UN
Global Compact to try to contribute with an idea that will add value to
the company and have an impact on the SDGs.” - Gonzalo Daniel
García, CEMEX
CEMEX-Tec Social Impact Award
CEMEX-Tec Award annually recognizes entrepreneurs, students, and
new MSMEs worldwide who develop high-impact projects that foster
sustainable development and social innovation in four different catego-
ries: Transforming Communities, Social Entrepreneurs, Community
Entrepreneurship, and Collaborative Action.
To achieve global participation, the CEMEX-Tec Award partners with
leading institutions, including Ashoka, MassChallenge, Impact Hub,
Makesense, and the Sirolli Institute, and 600 universities and more than
100 academic partners.
In 2020, the CEMEX-Tec Award received a record 1,678 applications from
61 countries and achieved 50% participation by women for the first
time. The 33 awardees received grants and participated in a two-week
virtual boot camp that provided specialized training, one-on-one men-
toring with international experts, and networking opportunities to
further develop their projects.
In 10 years, the CEMEX-Tec Award
has built a unique ecosystem of
more than 8,600 students, social
innovators, community
entrepreneurs, and leaders of
multi-sectoral initiatives from 90
countries.
Learn more about our Social and Environmental Innovation and
Entrepreneurship practices in our COVID Social Impact Booklet.
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4. Culture of Environmental Protection, Health, and Safety
Community Environmental Restoration Program
We reinforce a culture of health and safety in communities and
cities and partner with governments and localities to develop
productive and educational projects that contribute to regener-
ating ecosystems, restoring biodiversity, promoting the sustain-
able use of resources, and fostering a culture of caring for and
protecting the environment.
This initiative designed by the CEMEX-TEC Center continued the
remote work with ten groups of environmental promoters.
These groups operate in communities near our cement opera-
tions in Mexico, where around 500 young people took training
on environmental issues and carried out restoration activities
from their homes.
The Integral Program
for Rural Development
generates employment
opportunities for
marginalized
populations.
Supporting Sanitization of Essential Public Spaces
Fostering Rural Development
+ 3.6 Million m²
—the area of 500 soccer fields—sanitized
in Colombia, the Czech Republic, the
Dominican Republic, Egypt, Guatemala,
Jamaica, México, Nicaragua, Panama,
Puerto Rico, Philippines, Spain, and
Trinidad and Tobago.
During 2020, we leveraged our logistics capacity and our ability
to partner with local governments to accomplish massive saniti-
zation of essential facilities and public spaces in close coordina-
tion with local authorities.
CEMEX drivers volunteered to take our ready-mix trucks filled
with a special soap to help sanitize the areas around 450 hospi-
tals, schools, shelters, markets, schools, transportation hubs, and
other key public places.
Personal Protection Equipment and Hygiene Aids
With more than 40 partners from the private sector, academia,
and government, the Integral Program for Rural Development
generates employment opportunities for marginalized popula-
tions through entrepreneurial projects that create environmen-
tally-conscious artisanal products. During the pandemic, we
worked on finding alternative commercialization channels for
communities to sell their products and reduce emigration.
14,800 environmental promoters have been trained in our Com-
munity Environmental Restoration Program to help diagnose
and solve local sustainability challenges
+1.75 Million
Personal Protection Equipment (PPE)
donated in Colombia, the Czech
Republic, the Dominican Republic,
Egypt, France, Germany, Guatemala,
Jamaica, México, Nicaragua, Panama,
Poland, Philippines, Spain, the UK, the
United States, and Trinidad and Tobago.
We used CEMEX procurement channels to support hospitals and
vulnerable communities during the pandemic.
In Colombia and the Dominican Republic, parts of the popula-
tion were made extremely vulnerable by lack of water to perform
hygiene practices. We worked with municipal governments to
deliver water for 4,000 families who gained improved hygiene
from 560 m3 of water delivered to address this need.
Learn more about our
culture of Environmental,
Protection, and Health
and Safety practices in
our COVID Social Impact
Booklet.
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While we know that there is still much
to do, it is inspiring to see how our
employees are committed to contribut-
ing and collaborating to build the
sustainable world we want and deserve
today and for future generations.
Learn more about CEMEX's position
on volunteering
CEMEX UNITE Volunteers Donating
Skills and Time Globally
As part of our commitment to support
sustainable development in the coun-
tries in which we operate, we encour-
age our employees to actively engage
in activities that help improve the
quality of life and well-being in their
communities. Through CEMEX UNITE,
our global volunteering program and
strategy, employees engage in skilled
and hands-on activities to enable
rapid identification of opportunities to
tackle the world's most significant
challenges of the communities where
we operate.
CEMEX UNITE seeks to connect our
employees' interests with relevant
initiatives that provide a meaningful
experience. Additionally, following the
CEMEX Global Volunteering Guide-
lines, our volunteers can participate in
initiatives during work hours, as well as
on weekends, which allows them to
share experiences with their families.
During 2020, amidst the pandemic,
CEMEX employees worldwide per-
formed diverse volunteering activities,
innovating in digital actions and
directly contributing to the company's
five priority SDGs and to the four
pillars of the company's social impact
strategy:
» Colombia—Participated in cleaning
and disinfection activities in vulnera-
ble communities.
» Croatia—Donated funds to support
hospitals and charities.
» Egypt—Set-up installations with
portable laptops and internet for
children to learn.
» Mexico—Donated food kits and face
masks; donated time to reinforce
behaviors that may save lives during
the pandemic with employees’
families
» Philippines—Participated in clean-
ing activities and assembling sanitiz-
ing structures.
» Poland—Implemented the CEMEX
Virtual School to support remote
learning for schools near our cement
plants - 291 trained teachers and
close to 2,000 students benefited.
» U.S. —A family produced 300 masks
to give away in the community.
Around the globe, CEMEX employees
made extraordinary efforts: digital
mentoring to young people for their
professional development; sharing
skills with our value chain through
webinars; supporting stem movement
for girls’ education; sharing time with
elders to have daily conversations;
reaching out to employees' families
and communities to reinforce behav-
iors that may save lives during the
pandemic; volunteering time to sani-
tize public spaces and hospitals; digi-
tally mapping areas so humanitarian
support could reach remote or exclu-
sion areas.
During 2020, we celebrated 95 volun-
teers from 20 countries for their exem-
plary volunteer efforts and donating
their valuable time to create impactful
collaboration with the communities.
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Governance
We are committed to achieving high performance with a high
degree of integrity involving adherence to laws and
regulations and the adoption of high ethical standards and
best practices in corporate governance.
CEMEX 2020 INTEGRATED REPORT Company Overview
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Beyond compliance,
our commitment—to
ourselves, our
investors, and to all of
our stakeholders—is
to manage CEMEX
with integrity.
As a public company, we are not only committed to achiev-
ing a high performance reflected in strong and sustained
economic growth, but also to achieving such high perfor-
mance with a high degree of integrity involving adherence to
laws and regulations, and the adoption of the high ethical
standards and best practices in corporate governance.
The shares of CEMEX, S.A.B. de C.V. are listed on the Mexican
Stock Exchange as Ordinary Participation Certificates (Cer-
tificados de Participación Ordinarios) (CPOs) 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 as American Deposi-
tary Shares (ADSs) under the symbol “CX.” Each ADS rep-
resents ten CPOs. As such, we adhere to applicable Mexican
regulations and United States, NYSE and U.S. Securities and
Exchange Commission requirements for foreign private
issuers, including the Sarbanes-Oxley Act of 2002 (SOX).
We are committed to abiding by the laws and regulations of
every jurisdiction in which we operate. Nonetheless, we
recognize that our adherence to the law is not enough to
run a growing, global organization. Beyond compliance, our
commitment—to ourselves, our investors, and to all of our
stakeholders—is to manage CEMEX with integrity.
Our financial culture and management style are open and
transparent. Through our regular meetings, reports, guid-
ance, conference calls, and personal interactions, we vigor-
ously work to keep our investors fully and fairly informed of
our activities, and we expect our disclosures to meet high
ethical standards.
We know that to succeed we must not only do the right
things, but do them the right way. Hence, our Code of Ethics
and Business Conduct aims for all of our employees to abide
by the same high standards of conduct in their daily interac-
tions and prevent issues related to non-compliance with our
Code. The code—which reflects the requirements of SOX—
governs our relationships with all of our stakeholders, includ-
ing such important areas as workplace safety, environmental
responsibility, confidentiality, conflicts of interest, financial
controls, and preservation of assets. We have also issued a
number of corporate policies addressing matters that are
critical to meet our commitment with high integrity, such as
our Global Anti-Corruption Policy, Global Anti-Money Launder-
ing Policy, Global Antitrust Compliance Policy, among others.
While our Board of Directors is ultimately responsible for
supervising the overall operation of our company, all of our
employees play a critical role in enforcing good governance
and financial reporting practices. We, therefore, encourage
them to comment on our reporting methods and processes
and to voice any concerns. To this end, we have created a col-
laborative environment that includes: 1) A system for relevant
information to reach senior management in a timely man-
ner; 2) A system for anonymously and confidentially commu-
nicating to the Audit Committee complaints and concerns
regarding accounting and audit issues; 3) A process for
anonymously and confidentially submitting complaints
related to potential unethical conduct and misuse of assets;
and 4) A global task force to follow legal requirements and
best corporate governance practices and, when appropriate,
propose further improvements.
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Board of
Directors
Our Board of Directors is ultimately responsible
for supervising the overall operation of our
company. Our Board of Directors is composed
of qualified directors who provide appropriate
oversight and includes directors that meet the
independence criteria under the laws of Mexico.
In addition, one member of our audit commit-
tee meets the requirements of a “financial
expert” as defined by SOX.
Chaired by Rogelio Zambrano, our Board of
Directors consists of 15 directors, ten of whom
qualify as independent directors according to
criteria specified under Mexican Securities Law.
During the year, our board met five times to
report on a wide range of relevant issues,
including sustainability-related concerns and
financial strategy, with average board meeting
attendance of approximately 93%.
*As of December 31, 2020
Non-Independent Directors
Rogelio Zambrano Lozano – Male (64)
Chairman of the Board
History in CEMEX’s Board of Directors:
Member of the Board of Directors since
1987 and Chairman since May 15, 2014.
Areas of Expertise: Mr. Zambrano Lozano
has focused on strengthening corporate
governance practices and guiding the
business strategy to enhance the
operational and financial performance of
CEMEX at a global level, based on the
commitment to create long-term value for
all CEMEX’s stakeholders.
Mr. Zambrano Lozano brings experience to
the Board of Directors in the following
fields: Business strategy, environmental
and climate change, construction and
building materials, energy, finance,
manufacturing, real estate, risk
management, information technology and
cybersecurity, ethics, corporate
governance, health and safety, sales,
investor relations, public affairs, mergers
and acquisitions, marketing, economics,
and entrepreneurship.
Fernando A. González Olivieri –
Male (66)
Non-Independent Director - CEO
History in CEMEX’s Board of Directors:
Member of the Board of Directors since
March 26, 2015 and CEO since May 15, 2014.
Areas of Expertise: Mr. González Olivieri
brings to CEMEX, S.A.B de C.V.’s Board of
Directors a global vision and leadership
that directly contributes to the
formulation and the integral
implementation of CEMEX’s global
business strategy.
Mr. González Olivieri also brings experience
to the Board of Directors in the following
fields: Business strategy, environmental
and climate change, construction and
building materials, finance, manufacturing,
real estate, risk management, information
technology and cybersecurity, ethics,
corporate governance, human rights,
health and safety, sales, logistics, investor
relations, public affairs, mergers and
acquisitions, human resources, marketing,
economics, and experience in other boards
of directors.
Ian Christian Armstrong Zambrano –
Male (40)
Non-Independent Director
History in CEMEX’s Board of Directors:
Member of the Board of Directors since
March 26, 2015 and member of the
Sustainability Committee since it was
established in September 25, 2014.
Areas of Expertise: In addition to
contributing his knowledge to the
Sustainability Committee to evaluate
energy projects, Mr. Armstrong Zambrano
provides strategic guidance for the
development and global expansion of
CEMEX.
Mr. Armstrong Zambrano also brings
experience to the Board of Directors in the
following fields: Business strategy,
environmental and climate change,
finance, ethics, health and safety, investor
relations, and economics.
Marcelo Zambrano Lozano – Male (65)
Non-Independent Director
History in CEMEX’s Board of Directors:
Member of the Board of Directors since
March 31, 2017 and member of the
Sustainability Committee since July 27,
2017.
Areas of Expertise: Mr. Zambrano Lozano
provides an extensive view of the main
trends in the sector, thus helping CEMEX
to anticipate and satisfy the needs of
customers in each of the market segments
CEMEX participates in.
Mr. Zambrano Lozano also brings
experience to the Board of Directors in the
following fields: Business strategy,
construction and building materials,
finance, telecommunications, real estate,
marketing, and experience in other boards
of directors.
Tomás Milmo Santos – Male (56)
Non-Independent Director
History in CEMEX’s Board of Directors:
Member of CEMEX, S.A.B. de C.V.’s Board of
Directors since 2006.
Areas of Expertise: Mr. Milmo Santos
provides to CEMEX, S.A.B. de C.V.’s Board of
Directors insight into the various markets
where CEMEX operates around the world.
Mr. Milmo Santos also brings experience to
the Board of Directors in the following
fields: Business strategy, environmental
and climate change, energy,
telecommunications, economics, and
experience in other boards of directors.
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Independent Directors
Armando J. García Segovia –
Male (68)
Independent Director
History in CEMEX’s Board of Directors:
Member of the Board of Directors
since 1983 and member of the
Sustainability Committee since it was
established in September 25, 2014.
Areas of Expertise: Mr. García Segovia
brings to CEMEX his considerable level
of detailed knowledge of CEMEX, as
well as a commitment to care and
conservation of nature, which allows
him to make significant contributions
to the constant strengthening of
CEMEX’s sustainability policy.
Mr. García Segovia also brings
experience to the Board of Directors in
the following fields: Business strategy,
environmental and climate change,
construction and building materials,
energy, manufacturing, information
technology and cybersecurity, ethics,
corporate governance, human rights,
health and safety, logistics, human
resources, and experience in other
boards of directors.
Rodolfo García Muriel – Male (75)
Independent Director
History in CEMEX’s Board of Directors:
Member of the Board of Directors
since 1985, member of the Corporate
Practices and Finance Committee
since March 26, 2015 and member of
the Audit Committee since March 31,
2016.
Areas of Expertise: With his vast
experience and long history as
founder, director and president of
many different companies, Mr. García
Muriel provides CEMEX with a wide
vision of the global business
environment.
Mr. García Muriel also brings
experience to the Board of Directors in
the following fields: Business strategy,
construction and building materials,
finance, regulatory and legal matters,
manufacturing, real estate, transport
and communication, risk
management, ethics, corporate
governance, human rights, health and
safety, sales, logistics, investor relations,
public affairs, mergers and
acquisitions, accounting, human
resources, marketing, branding,
auditing, law enforcement, economics,
and experience in other boards of
directors.
Dionisio Garza Medina – Male (66)
Independent Director
History in CEMEX’s Board of Directors:
Member of the Board of Directors
since 1995, and member of the
Corporate Practices and Finance
Committee since March 26, 2015. He
was President of the Corporate
Practices and Finance Committee
from March 26, 2015 until March 28,
2019.
Areas of Expertise: With his extensive
business experience and in-depth
knowledge of the energy, oil and
education sectors, the economy and
global markets in general, Mr. Garza
Medina brings to CEMEX a strategic
vision that contributes to the
achievement of CEMEX’s business
objectives, including the constant
strengthening and improvement of
CEMEX’s corporate governance
practices.
Mr. Garza Medina also brings
experience to the Board of Directors
in the following fields: Finance, real
estate, corporate governance, and
experience in other boards of
directors.
Francisco Javier Fernández Carbajal
– Male (65)
Independent Director
History in CEMEX’s Board of Directors:
Member of the Board of Directors
since February 2012. On March 26, 2015,
he was appointed as a member of the
Audit Committee and Corporate
Practices and Finance Committee. On
April 28, 2016, he was elected as a
member of the Sustainability
Committee and on March 28, 2019 he
was appointed President of the
Corporate Practices and Finance
Committee.
Areas of Expertise: Mr. Fernández
Carbajal’s background and career
related to the payments and financial
services industry enables him to bring
a global perspective to CEMEX. He also
provides relevant insights in relation to
strategic planning, operations and
management, as well as an enhanced
understanding of risk management of
large, complex organizations. He has
accumulated extensive experience in
corporate finance and accounting,
financial reporting and internal
controls, and human resources and
compensation, which contributes to
his service at CEMEX.
Mr. Fernández Carbajal also brings
experience to the Board of Directors in
the following fields: Finance, risk
management, information technology
and cybersecurity, corporate
governance, and experience in other
boards of directors.
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Everardo Elizondo Almaguer – Male (77)
Independent Director
History in CEMEX’s Board of Directors:
Member of the Board of Directors since
March 31, 2016 and member of the Audit
Committee since April 5, 2018. On March
28, 2019 he was appointed President of the
Audit Committee.
Areas of Expertise: With his renowned
career as a financial analyst, exemplary
public official and university scholar, Mr.
Elizondo Almaguer brings to CEMEX an
extensive knowledge of the financial
system and the macroeconomic
environment at the international level,
contributing to the strategy design and
business initiatives to enhance CEMEX’s
growth.
Mr. Elizondo Almaguer also brings
experience to the Board of Directors in the
following fields: Business strategy,
corporate governance, public affairs,
human resources, auditing, public office/
public servant, and experience in other
boards of directors.
Armando Garza Sada – Male (63)
Independent Director
History in CEMEX’s Board of Directors:
Member of the Board of Directors and
Corporate Practices and Finance
Committee since March 26, 2015.
Areas of Expertise: Mr. Garza Sada
provides CEMEX with a unique insight on
the global economic and commercial
landscape, thus allowing the constant
improvement of CEMEX’s business
strategy.
Mr. Garza Sada also brings experience to
the Board of Directors in the following
fields: Energy, finance,
telecommunications, public affairs,
mergers and acquisitions, and experience
in other boards of directors.
David Martínez Guzmán – Male (63)
Independent Director
History in CEMEX’s Board of Directors:
Member of the Board of Directors since
March 26, 2015.
Areas of Expertise: Mr. Martínez Guzmán
brings extensive knowledge and expertise
in the financial sector and global markets,
thus providing a significant guidance
regarding CEMEX’s financial strategy and
contributes directly to CEMEX’s business
strategy focused on regaining CEMEX’s
investment grade credit metrics.
Mr. Martínez Guzmán also brings
experience to the Board of Directors in the
following fields: Telecommunications, risk
management, economics, and experience
in other boards of directors.
Ramiro Gerardo Villarreal Morales –
Male (73)
Independent Director
History in CEMEX’s Board of Directors:
Member of the Board of Directors since
2017.
Isabel María Aguilera Navarro –
Female (60)
Independent Director
History in CEMEX’s Board of Directors:
Member of the Board of Directors since
March 2019.
Areas of Expertise: With his vast
knowledge and experience within CEMEX,
Mr. Villarreal Morales offers CEMEX key
guidance in regulatory and legal matters,
as well as extensive knowledge related to
corporate governance and financial
transactions issues.
Mr. Villarreal Morales also brings
experience to the Board of Directors in the
following fields: Energy, risk management,
public affairs, accounting, and law
enforcement.
Gabriel Jaramillo Sanint – Male (71)
Independent Director
History in CEMEX’s Board of Directors:
Member of the Board of Directors since
2018.
Areas of Expertise: Mr. Jaramillo Sanint
brings to CEMEX, S.A.B. de C.V.’s Board of
Directors his extensive experience in
financial matters, and also in corporate
social responsibility, one of the pillars of
CEMEX’s global business strategy to
achieve sustainable growth and create
long-term value.
Mr. Jaramillo Sanint also brings experience
to the Board of Directors in the following
fields: Business strategy, risk
management, corporate governance,
health and safety, mergers and
acquisitions, human resources, and
experience in other boards of directors.
Areas of Expertise: With her vast
experience and extensive knowledge in
multinational corporations, Mrs. Aguilera
Navarro brings to CEMEX guidance and
strategic vision which contributes to the
business strategy to enhance CEMEX’s
objectives at a global level, including the
constant strengthening of information
technology and digitalization efforts.
Mrs. Aguilera Navarro brings experience to
the Board of Directors in the following
fields: Environmental and climate change,
energy, finance, ethics, health and safety,
investor relations, and economics.
Secretary
Roger Saldaña Madero – Male (52)
Secretary (Not a member of the Board of
Directors)
History in CEMEX: On March 30, 2017, Mr.
Saldaña Madero was appointed Secretary
of the Board of Directors of CEMEX and
the committees to such Board.
René Delgadillo Galván – Male (60)
Alternate Secretary (Not a member of the
Board of Directors)
History in CEMEX: On March 31, 2017, Mr.
Delgadillo Galván was appointed Alternate
Secretary of the Board of Directors of
CEMEX.
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Board
Committees
Our established governance and
management practices are consis-
tent with our relentless commitment
to creating sustainable, long-term
stakeholder value.
Audit Committee
Corporate Practices and
Finance Committee
Sustainability Committee
The Audit Committee is responsible for
evaluating our internal controls and
procedures and identifying deficien-
cies; following up with corrective and
preventive measures in response to any
non-compliance with our operation
and accounting guidelines and policies;
evaluating the performance of our
external auditors; describing and valu-
ing non-audit services performed by
our external auditors; reviewing our
financial statements; assessing the
effects of any modifications to the
accounting policies approved during
any fiscal year; overseeing measures
adopted as a result of any observations
made by our shareholders, directors,
executive officers, employees or any
third parties with respect to account-
ing, internal controls, and internal and
external audits, as well as any com-
plaints regarding management irregu-
larities, including anonymous and
confidential methods for addressing
concerns raised by employees; and
analyzing any risks identified by our
company’s independent auditors,
accounting, internal control, and pro-
cess assessment areas.
In accordance with Mexican law and
our company’s bylaws, all members of
the Audit Committee, including its
President, must be independent direc-
tors. During 2020, the Audit Commit-
tee met four times with meeting
attendance of 100%.
Everardo Elizondo Almaguer
President
Rodolfo García Muriel
Francisco Javier Fernández Carbajal
The Corporate Practices and Finance
Committee is responsible for evaluating
the hiring, firing, and compensation of
our Chief Executive Officer; reviewing
the hiring and compensation policies
for our executive officers; reviewing
related party transactions; reviewing
policies regarding the use of corporate
assets; reviewing unusual or material
transactions; evaluating waivers
granted to our directors or executive
officers regarding seizure of corporate
opportunities; identifying, evaluating,
and following up on the operating risks
affecting our company and its subsid-
iaries; evaluating our company’s finan-
cial plans; reviewing our company’s
financial strategy and its implementa-
tion; and reviewing mergers, acquisi-
tions, market information, and financial
plans, including financing and related
party transactions.
In accordance with Mexican law and
our company’s bylaws, all members of
the Corporate Practices and Finance
Committee, including its President,
must be independent directors. During
2020, the Corporate Practices and
Finance Committee met four times
with meeting attendance of 75%.
Francisco Javier Fernández Carbajal
President
Dionisio Garza Medina
Rodolfo García Muriel
Armando Garza Sada
The members of our Sustainability Com-
mittee are appointed by our shareholders.
» Business Ethics and Compliance
» Analysis of water stress assessment
The Sustainability Committee is respon-
sible for ensuring sustainable develop-
ment is embedded in our strategy;
supporting our Board of Directors in
fulfilling its responsibility to sharehold-
ers regarding our company’s sustain-
able growth; evaluating the ambition of
our sustainability targets and the prog-
ress towards them; providing guidance
to our Chief Executive Officer and senior
management team regarding our
strategic direction on sustainability; and
endorsing our model of sustainability,
priorities, and key indicators. The Com-
mittee particularly provides board-level
oversight on Climate Action and CO2
Management Strategy. During 2020, the
Sustainability Committee met four
times with meeting attendance of 100%.
Some of the most relevant topics on
the 2020 Agenda included:
» CEMEX’s 2020 Integrated Report
Structure and Content
» Sustainability KPIs Annual Perfor-
mance and Improvement Plan
» Health & Safety Overview and Action
Plan for ZERO4Life Goal and evalua-
tion of health and safety risks
» Global and Regional Sustainability
Risks Agenda Update
» Workforce Experience and Diversity
and Inclusion efforts
» Employee training and recruitment
strategy
» Climate Action Strategy
» Environmental Management Plan
» Respect for Human Rights
and action plan
The Sustainability Committee’s
enriching discussions led to valuable
outcomes such as:
» CO2 2030 Target and Roadmap Vali-
dation by Carbon Trust
» Organization of CEMEX Climate
Action Panel with financial analysts
and other external audiences
» Open dialogue between CEMEX
collaborators and independent Sus-
tainability Advisory Panel
» Deeper analysis of ESG risks and
opportunities, and specially cli-
mate-related
» Water Action Plans (WAPs) definition
in all priority sites
» Biodiversity conservation efforts
strengthening
» Construction of major air emissions
online visualization tool
» CEMEX Sustainability Learning Path-
way as dedicated employee training
Armando J. García Segovia
President
Ian Christian Armstrong Zambrano
Francisco Javier Fernández Carbajal
Marcelo Zambrano Lozano
*As of December 31, 2020
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Executive
Committee
Our commitment to deliver value
to our stockholders rests on a clear
recognition that, as a public
company, we are stewards of other
people’s money.
They invest with us to achieve superior long-term
returns at acceptable risk. We have never—and will
never—lose sight of that fact.
At the executive level, our CEO and members of
our Executive Committee oversee the day-to-day
operation of our company. They develop, refine,
and direct the implementation of our business
strategy.
Fernando A. González (66)
Chief Executive Officer
Maher Al-Haffar (62)
Executive Vice President of
Finance and Administration
(CFO)
Since joining CEMEX in 1989, Fernando A. González
has held several senior management positions,
including Corporate Vice President of Strategic
Planning, head of operations in Venezuela, President
of CEMEX Asia, President of the CEMEX South
America and the Caribbean region, President of the
CEMEX Europe, Middle East, Africa, Asia and Australia
region, and Executive Vice President of Strategic
Planning, Finance and Administration (CFO).
Fernando was appointed Chief Executive Officer in
2014. He also serves in the Board of Directors of Grupo
Cementos de Chihuahua, Axtel, and TecMilenio
University. He earned his BA in Administration and an
MBA, both from Tecnológico de Monterrey.
Maher Al-Haffar joined CEMEX in 2000, and has held
several executive positions, including Managing
Director of Finance, Head of Investor Relations, and
most recently, Executive Vice President of Investor
Relations, Corporate Communications and Public
Affairs. He is also a member of the NYSE Advisory
Board. Before joining CEMEX, Maher spent nineteen
years with Citicorp Securities Inc. and with Santander
Investment Securities, as an investment banker and
capital markets professional. Maher holds a BS in
Economics from the University of Texas, and a
master’s degree in International Relations and
Finance from Georgetown University.
Mauricio Doehner (46)
Executive Vice President of
Corporate Affairs, Enterprise
Risk Management and Social
Impact
Jesús González (55)
President CEMEX South,
Central America and the
Caribbean
Mauricio Doehner joined CEMEX in 1996 and has held
several executive positions in Strategic Planning and
Enterprise Risk Management at CEMEX Europe, Asia,
the Middle East, South America, and Mexico, and
most recently, Executive Vice President of Corporate
Communications, Public Affairs, and Social Impact.
He has also worked in the public sector at the
Mexican Presidency. Mauricio holds a BA in
Economics from Tecnológico de Monterrey, an MBA
from IESE/IPADE, and a Master in Public
Administration from Harvard University.
Jesús González joined CEMEX in 1998, and has
held several senior positions, including Corporate
Director of Strategic Planning, Vice President of
Strategic Planning in CEMEX USA, President of
CEMEX Central America, President of CEMEX UK,
and more recently Executive Vice President of
Sustainability and Operations Development. He
holds a MSc in Naval Engineering from the
Polytechnic University of Madrid and an MBA
from IESE - University of Navarra, Barcelona.
*As of December 31, 2020
As of March, 2021
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José Antonio González (50)
Executive Vice President of
Strategic Planning and
Business Development
Luis Hernández (57)
Executive Vice President of
Digital and Organization
Development
Sergio Menéndez (50)
President of CEMEX Europe,
Middle East, Africa, and Asia
Jaime Muguiro (52)
President of CEMEX USA
José Antonio González joined CEMEX in 1998,
and has held several executive positions in the
Finance, Strategic Planning, and Corporate
Communications and Public Affairs areas,
including most recently, Executive Vice President
of Finance and Administration (CFO). José
Antonio holds a BS in Industrial Engineering
from Tecnológico de Monterrey, and an MBA
from Stanford University.
Luis Hernández joined CEMEX in 1996 and has
held senior management positions in Strategic
Planning and Human Resources. In his current
position, he heads the areas of Organization and
Human Resources, Information Technology,
Digital Innovation, as well as CEMEX Ventures
and Neoris. Luis holds a BS in Civil Engineering
from Tecnológico de Monterrey, and a Master's
degree in Civil Engineering and an MBA, both
from the University of Texas at Austin.
Sergio Menéndez joined CEMEX in 1993. He has
held several executive positions, including
Director of Planning and Logistics in Asia,
Corporate Director of Commercial Development,
President of CEMEX Philippines, Vice President of
Strategic Planning for Europe, Middle East, Africa
and Asia region, President of CEMEX Egypt, Vice
President of Infrastructure Segment and
Government Sales in Mexico, and more recently,
as Vice President of Distribution Segment Sales
in Mexico. Sergio holds a BS in Industrial
Engineering from Tecnológico de Monterrey, and
an MBA from Stanford University.
Jaime Muguiro joined CEMEX in 1996, and has
held several executive positions in the Strategic
Planning, Business Development, Ready-Mix
Concrete, Aggregates, and Human Resources
areas, and also headed CEMEX operations in
Egypt, our operations in the Mediterranean
region, and more recently, our operations in the
South, Central America, and the Caribbean
region. He holds a BA in Management from San
Pablo CEU University, Spain, a Law degree from
the Universidad Complutense of Madrid, and an
MBA from the Massachusetts Institute of
Technology.
Ricardo Naya (48)
President CEMEX Mexico
Louisa (Lucy) P. Rodriguez (61)
Executive Vice President of
Investor Relations, Corporate
Communications and Public
Affairs
Juan Romero (63)
Executive Vice President of
Sustainability, Commercial
and Operations Development
Ricardo Naya joined CEMEX in 1996. He has held
several executive positions, including Vice President
of Strategic Planning for South, Central America and
the Caribbean region, Vice President of Strategic
Planning for Europe, Middle East, Africa and Asia
region, President of CEMEX Poland and Czech
Republic, Vice President of Commercial and
Marketing in Mexico, Vice President of Distribution
Segment Sales in Mexico, and more recently, as
President of CEMEX Colombia. Ricardo holds a BA in
Economics from Tecnológico de Monterrey, and an
MBA from the Massachusetts Institute of
Technology.
Lucy Rodríguez has over 25 years of experience in
international finance and capital markets. She joined
CEMEX in 2006 in the Investor Relations Department
where she has been involved in more than US$15
billion of equity and fixed income fundraising efforts.
She also represents the company in the international
financial community. Prior to CEMEX, Lucy spent 15
years at Citibank where she worked in capital markets
origination, debt syndicate and securitization financing
for Emerging Market issuers. In her early career, she
worked for KPMG in their Audit Department. Lucy
holds a B.A. in Economics from Trinity College
(Hartford Ct.), an MBA from New York University and a
Masters from Columbia University School of
International and Public Affairs. She has been a
Certified Public Accountant.
As of March, 2021
Juan Romero joined CEMEX in 1989, and has held
several senior positions, including head of operations
in Colombia and Mexico, President of the CEMEX
South America and the Caribbean region, President
of the CEMEX Europe, Middle East, Africa and Asia
region, and most recently, President of CEMEX
Mexico. Currently, as part of his role, he also leads the
Digital Marketing function. Juan Romero holds a Law
degree and a B.S. in Economics and Business
Administration, both from the University of Comillas
in Spain.
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Ethics and
Compliance
Strengthening Business Ethics and Transparency
CEMEX’s Code of Ethics and Business Conduct
At CEMEX, we are strongly committed to conducting our
business in compliance with applicable laws, rules, and regula-
tions and in accordance with high ethical standards. As our
industry evolves, our values continue to serve as the pillars
upon which we base our actions. They express who we are,
how we behave, and what we believe in.
A culture of integrity is critical to achieving our sustainable
growth. High levels of trust, together with a strong business
reputation, make it easier to operate; help attract and retain
our people, customers, and suppliers; contribute to good rela-
tionships in our local communities; and pave the way to confi-
dently enter new markets. Compliance is an essential element
of our company’s culture of integrity—requiring responsible
conduct from all of our employees, directors, and third-party
business partners in accordance with all applicable laws, inter-
nal codes, and policies.
Our enhanced, robust Code of Ethics and Business Conduct
aims for all of our employees to abide by the same high stan-
dards of conduct. The Code governs our relationships with all
of our stakeholders and addresses anti-bribery, antitrust com-
pliance, prevention of money laundering, related-person trans-
actions, workplace health and safety, environmental
responsibility, confidentiality terms, conflicts of interest, finan-
cial controls and records, and preservation of assets. Through
our local ethics committees, training programs, global integ-
rity campaigns, and secure internal communication channels,
we enforce and create awareness of the Code.
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To strengthen our culture of ethics and compliance, we periodically launch new
and updated policies. We have worked on updating and enhancing the following
policies:
» Anti-Corruption – This enhanced policy not only features robust new controls,
but also a section governing interaction with government officials. Before
interacting with a government official, employees must enter our online Gov-
ernment Interaction platform, evaluate the details of their planned interaction,
and undergo a thorough authorization process. This policy came into effect in
2020.
» Corporate Hospitalities to Government Officials – This policy is complemen-
tary to the Anti-Corruption Policy and specifically regulates the entertaining,
gifts, travel expenses and other courtesies provided to government officials.
This policy contains the management procedures, the authorization routes and
specific accounting guidelines. This policy came into effect in 2020.
» Global Policy for Third Parties – This policy features a robust due diligence,
screening, and control procedures for potential new suppliers and customers.
Notably, this policy screens companies for cases of corruption, money launder-
ing, organized crime, and other relevant issues. We launched this policy in 2020.
» Anti-Money Laundering – This policy features robust controls to help detect,
report, and prevent suspicious activity that could give rise to the smuggling of
illegally obtained funds and money laundering. We launched this policy in
2020.
» Donations, Sponsorships, and Operational Contributions – These related new
and updated policies feature rigorous legal, budgetary, and accounting pro-
cesses governing donations, sponsorships, and operational contributions.
Furthermore, in Mexico, Colombia, Peru, Dominican Republic, Jamaica, Haiti,
Trinidad & Tobago, Barbados, and Guyana, we conduct thorough screening, mon-
itoring, and due diligence of third parties through an external service provider
before onboarding our third parties in our enterprise resource platform (ERP)
system. Additionally, we conduct global monitoring activities of all our third par-
ties registered in our ERP system on a periodic basis with information available on
public lists to verify if our third parties have been involved in bribery, antitrust,
corruption or money laundering violations and to verify if there are any politically
exposed persons (PEPs) involved with our third parties. If we find that a third
party failed to meet our internal protocols and procedures, CEMEX shall seek to
end the relationship with said third party.
Our Reporting Mechanism – ETHOSline
If there are concerns or suspected ethics, governance or compliance violations,
it’s important that our employees, our stakeholders, and the general public have
a trusted, secure place to which they can turn. Managed by an autonomous third
party, our ETHOSline provides an online portal and phone line for sending com-
ments, requesting advice, and submitting complaints on these topics. Accessible
through our company website, this secure, confidential, and independent portal
is available 24 hours a day, seven days a week. Open and free for all to use, our
ETHOSline reporting statistics demonstrate the confidence that people have in
this tool.
Ultimately, our main goal is to get to the bottom of every report; all cases are
looked at. We carry out a review; then if needed, an investigation to handle it
according to our ETHOS Manual; and if applicable, apply consequences if our
Code of Ethics is violated.
Overall, from a total of 620 cases reported through our official reporting channels
in 2020, 514 were closed, of which 174 were found to be true and 269 disciplinary
actions were taken. From the true cases reported, 66 employees were dismissed
as a result of investigations.
Business Ethics Training and Communication
Our employees are continually informed of CEMEX business ethics principles in
multiple ways, including our Code of Ethics and Business Conduct, employee
onboarding activities, internal communication channels, face-to-face and online
courses, legal and accounting audits, relevant global policies, as well as our robust
intranet Policy Center. In 2020, we designed and rolled out 412 global communi-
cation campaigns in relation to ETHOSline awareness and our ethics framework,
enabling us to reach all our employees. These campaigns and actions help to
promote our company values, policies, and procedures and to inform our employ-
ees about unacceptable behavior such as discrimination, improper treatment,
mobbing, theft, rules for gifts and courtesies, and workplace harassment, as well
as to reinforce our institutional reporting mechanisms.
During 2020, approximately 25,000 employees and 1,400 outside participants
received training related to business ethics, human rights, and legal compliance,
dedicating more than 37,000 total hours for this purpose.
The COVID-19 pandemic also impacted our global compliance training program.
As a result, we prioritized health and safety trainings. Through CEMEX University,
10,834 employees and third parties from our global operations completed the
training course on HSMS Element 15: Management of Pandemics and Epidemics.
Cases Reported Through
ETHOSline
(number of cases)
●
Environment, Health &
Safety
Misuse, misappropriation
of corporate assets
● Business integrity
●
●
Human Resources, diver-
sity and workplace respect
14%
8%
26%
52%
Cases Reported
Through ETHOSline
(number of cases)
745
630
620
568
359
2015
2017
2018
2019
2020
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2020 Ethics and Compliance Related Training
CEMEX ETHOS Global Program
Topic
Anti-Money Laundering
Anti-Corruption and Anti-Bribery
Antitrust
Conflicts of Interest, Data Protection,
and Related Party Transactions
Code of Ethics and Business Conduct
ETHOS Do the Right Thing
Sanctions
Health & Safety, and HSMS Element 15:
Management of Pandemics &
Epidemics
Other (Contracts)
Total
ETHOS Do the Right Thing
Number of
employees
trained
Total hours
of employee
training
1,938
3,841
554
118
2,249
6,388
137
3,296
7,357
821
146
2,177
6,388
327
10,855
16,283
316
624
26,396
37,419
During 2020, more than 6,000 employees took part in the ETHOS
Do The Right Thing online training. This course included videos
with hypothetical scenarios where employees could learn about
how to proceed with potential day-to-day interactions in a range
of topics that included conflicts of interest, employee relations
and harassment, and fraud.
This online training helped us expand our training efforts during
the COVID-19 pandemic, and as such, helped further our culture
of ethics and compliance in our organization during the year.
Our Global Anti-Corruption Policy, Global Antitrust
Policy, Global Anti-Money Laundering Policy, Global
Policy for Third Parties, Global Conflict of Interest
Policy, Related Person Transactions Policy, and Insider
Trading Policy outline our procedures and commit-
ment to global expectations and standards.
To further encourage our employees to act in a
manner consistent with our values, CEMEX Global
Compliance Program evolved into a more integrated
approach: CEMEX ETHOS Global Program. With a
worldwide focus, led by our ETHOS Group and local
ETHOS Committees, the program consists of a set of
principles, rules, controls, procedures, guidelines,
and bodies designed to comply with the laws and
standards of conduct applicable to our company.
CEMEX ETHOS Global Program works as an internal
network coordinating six core corporate functions
with ethics and compliance-related responsibilities:
1. Legal – responsible for developing and updating
relevant policies; carrying out trainings and legal
audits; setting and carrying out proper oversight
of third-party management; and managing com-
pliance-related complaints.
2. Organization and Human Resources (OHR)
– responsible for defining and enhancing CEMEX
Code of Ethics and Business Conduct; deploying
the ethics training program; administering ETHO-
Sline; coordinating and administering local
ETHOS Committees; investigating cases within
their responsibilities; assuming co-responsibility
for CEMEX ETHOS Global Program; promoting a
culture of ethics and reporting; and providing
end-to-end case management.
3. Internal Control – responsible for implementing
controls and compliance with policies; and deploy-
ing an internal control model in order to reduce
risk exposure and the likelihood of significant and/
or severe deficiencies in the processes and proce-
dures governing our company’s operations.
4. Global Service Organization (GSO) – responsible
for delivering business services to CEMEX opera-
tions, while complying with both our internal and
external control requirements and corporate
governance model; and performing internal
control responsibilities, such as performing SOX
testing, following up on remediation plans, advis-
ing process owners on items related to internal
control, performing change management tests,
and promoting compliance with policies.
5. Process Assessment – responsible for overseeing
internal audits of controls and compliance with
policies; conducting worldwide internal audits;
conducting special fraud investigations; perform-
ing SOX audit compliance; conducting CAPEX
audits; and monitoring risk.
6. Enterprise Risk Management (ERM) – responsi-
ble for analyzing local and global compliance
risks; performing risk oversight, including risk
identification, monitoring, assessment, reporting,
and mitigation; and following up on risk mitiga-
tion measures.
As part of the Legal function’s program responsibili-
ties, special attention is given to the most sensitive
countries concerning corruption risks to our busi-
ness system process. During 2020, our main opera-
tions in terms of revenues were: the USA (medium
risk), Mexico (high risk), France (medium risk), UK
(low risk), Israel (medium risk), Germany (low risk),
Philippines (high risk), Colombia (high risk), Spain
(medium risk), Dominican Republic (high risk), and
Panama (high risk). We also operate in other coun-
tries of which some are low risk, medium risk, and
high risk. This risk classification is based on Transpar-
ency International’s 2020 Corruption Perception
Index. Our Code of Ethics reflects the requirements
of the Sarbanes-Oxley Act of 2002 (SOX).
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Risks and
Opportunities
Risk agendas are developed at a
global, regional, country, and
business unit level at least twice
a year. Risk agendas include all
types of risks, trends, emerging
concerns, and opportunities that
could impact CEMEX in the short
(zero to two years), medium (two
to five years), and long term (five
to ten years).
Other risk management areas
and processes within our com-
pany complement the surveil-
lance and risk management
function: Process Assessment,
Internal Control, Legal, Financial
Risk Management, ETHOS Com-
pliance, and Sustainability.
CEMEX operates in a constantly
evolving business landscape
which exposes us to several
types of risks that could impact
the achievement of our strategic
and operational objectives.
Aiming to maximize our share-
holders' sustainable value,
CEMEX has established an
Enterprise Risk Management
(ERM) framework that sets a
proactive and structured
approach to manage risks and
capitalize on opportunities.
The risk management process,
deployed throughout our opera-
tions, helps identify, assess,
mitigate, and monitor CEMEX's
main risks. This process empha-
sizes risk discussions by deci-
sion-makers and risk oversight
by the Board of Directors.
Risk Management Process
Our risk management process is an ongoing sys-
tematic approach present in corporate, regions,
countries, and operational business units.
Our risk management process is based on interna-
tional best practices from the Risk Management
Society (RIMS) and Business Continuity Institute
(BCI). It is compliant with ISO 31000:2018-Risk man-
agement standards and ISO 22300:2018-Business
continuity management systems. Furthermore, this
process is conducted in compliance with our com-
pany’s values, laws of the countries where we oper-
ate, and our Code of Ethics and Business Conduct.
Risk Monitoring
Risk and opportunity developments are continuously
monitored through several channels and a broad variety of
report. Changes in risks and opportunities status are promptly
communicated to decision makers.
Risk Identification
Risk Assessment
CEMEX identifies main risks
and opportunities using a
combination of a
bottom-up and a top-down
approach and employing
several techniques that
include, but are not limited
to, risk interviews, online risk
surveys, and risk workshops.
Focus is on both strategic
and operational issues.
We assess risks and
opportunities employing
qualitative and quantitative
methods to determine their
potential impact and
likelihood of materialization
in a specific timeframe. We
prioritize risks and
opportunities based on
their impact or relevance to
CEMEX’s strategic
objectives.
Discussion on risk and
mitigation strategy at
the Executive Committee
Risk Oversight
at Board Level
Risk Mitigation
A mitigation strategy with a
specific action plan is
defined for each risk, and a
risk owner—mainly
responsible for the risk
treatment—is assigned.
ERM representatives follow
up on the risk treatment
strategy and in some cases,
acts as coordinators of
ad-hoc task forces focused
to mitigate specific risks.
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Main Risks and Mitigation Strategies
Uncertain Economic Conditions
Political Uncertainty and Social Instability
Our business, financial condition, and results of operations are
highly dependent on the economic conditions of the countries
where we operate. We face risks particular to each country and
region, as well as global economic risks. Some potential
sources of economic risk include: slow global growth or eco-
nomic contraction; changes in the economy that affect
demand for our products and services; the cyclical activity of
the construction sector; trade barriers, changes in existing
trade policies or changes to, or withdrawals from, free trade
agreements; protectionist trade policies and escalation of the
U.S.-China trade conflict or its spread to other parts of the
world; changes in financial conditions and its impact on for-
eign exchange rates, interest rates, access to financing, and
financial markets; volatility of oil prices; economic vulnerability
of emerging market economies; China’s economic perfor-
mance; political uncertainty and geopolitical risks; and impact
of COVID-19 pandemic, epidemics or outbreaks of infectious
diseases.
CEMEX Mitigation Actions
We are subject to the political and social environment of the
countries where we operate. Any political, geopolitical, or social
event that affects a country’s economic development, its busi-
ness environment, or that makes significant changes in laws,
public policy, or regulations has the potential to materially and
adversely affect our business, financial conditions, and results
of operations.
New governments and elections that take place in the coun-
tries where we operate, such as the 2020 U.S. presidential and
senate elections, in addition to other political and geopolitical
events such as Brexit, trade conflicts, social unrest, and politi-
cal instability in Latin American countries have had and may
continue to have a negative impact on the economy, financial
markets, social stability, and business environment, which
could materially and adversely affect our results and prospects
for our business.
CEMEX Mitigation Actions
» Implementation of Operation Resilience
munities, governments)
» EBITDA growth through margin enhancement
» Optimize our portfolio for growth
» Reduce net leverage
» Delivery of superior customer experience enabled by digital
» Tailor-made strategy per country
» Business continuity plans to minimize operational disruption
» Security protocols to protect our employees
» Monitoring and scenario planning to anticipate potential
» Building long-term relationships with key stakeholders (com-
technologies
risks and opportunities
» Enhancement of revenue streams (Core Businesses, CEMEX
Ventures)
» Drive operational excellence
» Implementation of financial strategy
The following is a brief description of some of the main short-
term, medium-term, and long-term risks faced by CEMEX and
their corresponding mitigation strategies:
The COVID-19 Pandemic and / or any Other Outbreak of
Disease or Similar Public Threat
The COVID-19 pandemic and the measures implemented by
some governmental authorities to contain and mitigate the
effects of the virus have resulted or may result in a number of
consequences, including: temporary restrictions on our produc-
tion facilities, staffing shortages, production slowdowns or stop-
pages, and disruptions in our delivery systems; disruptions or
delays in our supply chains; reduced availability of land and sea
transport; increased cost of materials, products, and services on
which our businesses depend; general slowdown in economic
activity; and financial markets volatility, among others. As a result
of the COVID-19 pandemic, the construction activity and demand
for our products have been and may continue to be affected,
which, in turn, could have a material adverse impact on our
business, financial condition, liquidity, and results of operations.
The degree to which COVID-19, or any other outbreak of disease
or similar public threat, could affect our results and operations
will depend on the duration and spread of the outbreak, its
severity, the actions to contain the virus or treat its impact, and
how quickly and to what extent normal economic conditions can
resume, among other uncertain events.
CEMEX Mitigation Actions
» Adherence to over 52 protocols to safeguard the health and
safety of our employees, their families, our customers, suppli-
ers, and communities
» Business continuity under government guidelines of Safe
and Essential industry
» Enhanced customer experience through proven e-com-
merce platforms and distribution network
» Activation of Rapid Response Teams and implementation of
Business Continuity Plans to minimize operational disrup-
tions
» Implementation of Social Impact Strategy: ~1.7 million of
beneficiaries as of November 2020.
» Execution of financial strategy to ensure liquidity and finan-
cial flexibility
» Implementation of cost savings initiatives and delay of capi-
tal expenditures
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Complex Competitive Dynamics
The markets in which we operate are highly
competitive and are served by numerous indus-
try players. Additionally, new entrants, capacity
expansions, and imports have caused and may
continue to cause supply-demand imbalances,
affecting our prices and sales. Some of these
industry players could compete based on a
variety of factors, often employing aggressive
pricing strategies to gain market share; if we are
not able to compete effectively, we may lose
substantial market share, and our sales could
decline or grow at a slower rate, which could
materially and adversely impact our business,
financial condition, and results of operations.
CEMEX Mitigation Actions
» Delivery of superior customer experience
enabled by digital technologies
» Enhancement of revenue streams (core busi-
nesses, CEMEX Ventures)
» EBITDA growth through margin enhance-
ment
» Optimization of our portfolio for growth
» Drive operational excellence
Climate-Related Risks
Carbon Regulation Transition Risk
CEMEX is subject to a strict carbon pricing
approach in the form of cap-and-trade systems
in those geographies with a carbon regulation
in place, particularly in Europe and parts of the
USA, as well as to the risk of transition to stricter
carbon pricing in other geographies to be regu-
lated in the short and medium-term, both of
which may have a potential financial impact on
its businesses. Even though CEMEX has taken
steps which make it likely that it will achieve
compliance with the limits of such cap-and-
trade systems, any transition to a stricter carbon
pricing in the countries where we have opera-
tions may cause CEMEX’s non-compliance with
the relevant cap-and-trade systems, which may
lead to substantial penalties and in turn have a
material adverse effect on our business, finan-
cial condition, and results of operations.
Technology
Development of technologies is key to reduce
our emissions in the long-run to meet our Net-
Zero CO2 concrete goal and the limits of any
cap-and-trade systems to which CEMEX is sub-
ject. Failure to, effectively develop and roll-out
any necessary technologies, as well as the lack or
late implementation of these new technologies
could lead CEMEX to fail in achieving its Net-Zero
CO2 concrete goal and the limits of any cap-and-
trade systems to which CEMEX is subject, which
may lead to substantial penalties and in turn
have a material adverse effect on our business,
financial condition, and results of operations.
Markets
CEMEX has identified that market development
is a key topic in the long term. More stringent
building and energy efficiency standards are
likely to foster the development of new low
carbon products and effective constructive
solutions. Therefore, not meeting the future
market expectations in the form of new low-car-
bon products and effective constructive solu-
tions could lead to reduced demand for our
products and solutions, which may in turn have a
material adverse effect on our business, financial
condition, and results of operations.
Reputation
Cement could be perceived as a relevant con-
tributor to CO2 global emissions, which could
affect our future sales and in turn have a mate-
rial adverse effect on our business, financial
condition, and results of operations.
group with the participation of Sustainability,
Operations and Technology, R&D, Energy,
Supply Chain and CEMEX Ventures
Physical risks (acute and chronic)
Climate change patterns and acute physical
climate risks, mainly extreme weather events
such as tropical cyclones and blizzards, and
chronic physical risks like rising sea levels or
water stress mapping could cause damage in
the most exposed of our operations, as well as
the disruption of our business continuity. This
could have a material adverse effect on our
business, financial condition, and results of
operations.
CEMEX Mitigation Actions:
» CEMEX has set and publicly announced its
2030 reduction target for which it developed
a CO2 Roadmap including specific reduction
initiatives for each cement site and identify-
ing the resources (CAPEX) and calendar for
their implementation. Both the target and
roadmap have been verified by Carbon Trust,
ensuring technical feasibility of the consid-
ered technologies as well as adequate gover-
nance and a robust strategy to reduce
emissions. Each region monitors on a
monthly basis its site-by-site plan to ensure its
implementation and resources allocation
» CEMEX R&D is continuously enhancing our
solutions portfolio based on the increasing
demand of more sustainable products. A
recent example is Vertua®, a family of prod-
ucts that started with a range of concrete
with low or neutral CO2 footprint launched in
several markets in 2020 and to be extended to
other geographies in 2021
» As the development of emerging technolo-
gies is key to meet our 2050 carbon neutrality
ambition for concrete, the role that CEMEX
plays on different research consortiums and
partnerships, together with the outcomes of
new-technologies mapping, are being moni-
tored in a monthly basis by the CEMEX CO2
Taskforce. This taskforce is a multidisciplinary
» CEMEX’s fourth core business, Urbanization
Solutions, also plays a key role in climate-re-
lated risks mitigation, by generating sustain-
able alternatives for metropolises growth,
providing the market with high-efficient
building solutions, and promoting circular
economy through enhanced waste manage-
ment schemes for cities
» To mitigate reputational risk, CEMEX is actively
involved in industry associations including the
Global Cement and Concrete Association
(GCCA) from which concrete is promoted as a
suitable building material to cope with climate
change. Concrete plays a critical role in making
cities sustainable and resilient, as it is the most
durable and disaster-resistant among all con-
struction materials
» To mitigate acute physical risks, CEMEX
implemented a Business Continuity Program
(BCP) for each of its sites in order to minimize
the potential impact of a disruptive event in
our operations. This program integrates
guidelines for emergency support, crisis
management, and business recovery. The
definition of the CEMEX BCPs ensures busi-
ness resilience and operation recovery in the
case of force-majeure events, ensuring the
fulfillment of our commitments with our
clients and a quick return to business as usual
» To mitigate impact of the water stress risk we
executed a detailed assessment in all our sites
to identify potential water scarcity using the
World Resources Institute Aqueduct tools.
Based on the resulting map we have set a
2030 target to implement a Water Action Plan
(WAP) in all those priority sites where high-
risk water stress was identified. Additionally,
we developed water stress scenarios mapping
for 2030 and 2040.
For further information on climate-related
risks and opportunities, please refer to CDP
report, section C2.
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Financial Risks
Regulatory and Compliance Risks
Energy Price Volatility Including Alternative Fuels
We are exposed to several financial risks, including
our debt level, potentially limited access to favorable
financing, financial covenants and restrictions,
potentially unfavorable foreign currency and interest
rates, among others.
We have debt and other financial obligations matur-
ing in the next several years. If we are unable to
generate enough cash to service our indebtedness
or to secure refinancing on favorable terms—or at
all—we may not be able to comply with our upcom-
ing payment obligations. Additionally, our main
financial agreements require us to comply with
several restrictions and covenants. Any failure to
comply with such obligations could materially and
adversely affect our business, financial condition,
and results of operations.
Devaluation or depreciation of any of the currencies
of the countries in which we operate and from which
we obtain our revenues, compared to the U.S. Dollar
could materially and adversely affect our ability to
service our debt and other financial obligations. In
addition, our consolidated reported results and out-
standing indebtedness are significantly affected by
fluctuations in exchange rates between the Mexican
Peso and other currencies.
CEMEX Mitigation Actions
» Amendment and refinancing of debt commit-
We are subject to the laws and regulations of the
countries where we operate. Any non-compliance
with or changes in such laws and regulations and/or
their interpretation by the relevant authorities and/or
any significant delay in assessing the impact and/or
adapting to such changes may result in potential
costs, fines, and penalties which could have a material
adverse effect on our business, financial condition,
and results of operations. Some of these laws and
regulations include, but are not limited to areas such
as anti-corruption, anti-bribery, anti-money launder-
ing, information security, mining, environmental,
transportation, taxes, and labor, among others.
CEMEX Mitigation Actions
» Compliance with laws and regulations
» Continuous enhancement of CEMEX’s Compliance
program: New and updated policies and continued
training
» Enhancement of our Code of Ethics and Business
Conduct, which addresses anti-bribery, related-per-
son transactions, health and safety, environmental
responsibility, confidentiality, conflicts of interest,
financial controls, and preservation of assets
» Acknowledgment and understanding of our Code
of Ethics and Business Conduct by employees
» Increased internal controls through continuous
internal audits and internal controls in place to
prevent misconduct by our employees and third
parties
Electric energy and fuel costs represent an important
part of our overall cost structure. The price and avail-
ability of electric power and fuels are generally sub-
ject to market volatility and, therefore, may impact
our costs and operating results. Furthermore, if third-
party suppliers fail to provide us the required
amounts of energy or fuel under existing agree-
ments, we may need to acquire energy or fuel at an
increased cost from other suppliers. In addition,
governments in several of the countries in which we
operate are working to reduce energy subsidies,
introduce clean energy obligations, or impose new
excise taxes, which could increase energy costs and
materially and adversely affect our business, financial
condition, liquidity, and results of operations. Addi-
tionally, if our efforts to increase our use of alternative
fuels are unsuccessful, due to their limited availability,
price volatility or otherwise, we would be required to
use traditional fuels, which may increase our energy
and fuel costs.
CEMEX Mitigation Actions
» Increase use of alternative fuels
» Secure long-term renewable contracts for energy
and fuel supply that not only provide clean energy,
but also certainty in future energy costs
» Develop processes and products to reduce heat
consumption in our kilns
» Execute hedging for coal and diesel in the financial
markets to reduce volatility
ments to ensure financial flexibility
» Incorporate compliance-related initiatives in the
» Monitor new regulations, subsidies, obligations,
» Reinforcement of liquidity
» Issue of debt and raising of capital
» Liability management
» Foreign exchange and interest rate hedging strategy
management of third parties
» Monitoring of new potential regulations
and taxes
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Lower Availability or Increased Cost of Raw
Materials
We increasingly use in most of our business certain
by-products of industrial processes produced by third
parties, such as pet coke, fly ash, slag, and synthetic
gypsum, among others, as well as natural resources
such as aggregates and water. While we are not
dependent on any particular supplier and we seek to
secure the supply of the required materials, products,
or resources through long-term renewable contracts
and framework agreements, short-term contracts
are entered into in certain countries where we oper-
ate. Should existing suppliers cease operations or
reduce or eliminate the production of these by-prod-
ucts, or should any suppliers for any reason not be
able to deliver to us the contractual quantities, or
should laws and/or regulations in any region or coun-
try limit access to these materials, sourcing costs for
these could increase significantly or require us to
find alternative sources, which could have a material
adverse effect on our business, financial condition,
and results of operations. In particular, scarcity and
quality of natural resources (such as water and
aggregates reserves) in some countries could also
have a material adverse effect.
Cyberthreats and Information Technology Risks
Health and Safety Risks
We increasingly rely on a variety of information tech-
nology and cloud services, on a fully digital customer
integration platform, such as CEMEX Go, and on auto-
mated operating systems to manage and support our
operations, as well as to offer our products to our cus-
tomers. Our systems and technologies, as well as those
provided by our third-party service providers, may be
vulnerable to damage, disruption, or intrusion caused
by circumstances beyond our control, such as physical
or electronic break-ins, catastrophic events, power
outages, natural disasters, computer system or net-
work failures, security breaches, computer viruses, and
cyber-attacks. Any significant disruption to our sys-
tems, information leakages or theft of information, or
any unlawful processing of personal data, could affect
our compliance with data privacy laws and make us
subject to regulatory action and could damage our
relationships with employees, customers, and suppli-
ers, which could have a material adverse impact on our
business, financial condition, and results of operations.
CEMEX Mitigation Actions
Activities in our business can be hazardous and can
cause injury, illness, or fatality to our people, or else
damage to property. Accidents that occur at our
facilities could result in adverse outcomes to employ-
ees, disruptions to our business, and may have
health, legal, and regulatory consequences. We also
may be required to assume costs and liabilities to
compensate affected personnel or repair or replace
damaged property. This could materially and
adversely affect our reputation, business, and results
of operations.
In addition, employees are subject to contracting
existing or new viruses that could affect their health
and the health of others, which could cause disrup-
tions in our operations and impact our results.
CEMEX Mitigation Actions
» Ensure nothing comes before the health and safety
of our employees, contractors, and the community
where we operate
» Implementation of Health and Safety Protocols in
» Enforce Information Security Policy and risk pre-
all our operations
CEMEX Mitigation Actions
» Have cybersecurity controls and monitoring ser-
vention culture
vices in place
» Full adherence to high health and safety standards
» Continued monitoring, preparedness, and compli-
ance to health and safety recommendations
» Secure the supply of the required materials
» Have recovery plans and rapid response teams in
through long-term renewable contracts and
framework agreements
» Monitor global aggregates, limestone, and natural
resources reserves, identify critical levels, and
secure reserves in attractive markets
» Monitor permit processes and regulations
place
» Enhanced insurance coverage
» ISO 27001 certification on production plants for
information security management to preserve
confidentiality, integrity, and availability of data
» Renewal, modifications, or upgrades of required
systems and technologies
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Adverse Weather and Natural Disasters
Construction activity, and thus the demand for our
products, decreases substantially during periods of
cold weather, when it snows, when heavy or sus-
tained rainfalls occur, or generally, during winter or
rainy and snowy seasons. Any of these events can
adversely affect our operations, as well as our access
to products and materials. Additionally, some of our
operations are particularly exposed to hurricanes,
blizzards and similar weather events. The decrease in
sales volumes is usually counterbalanced by the
increase in the demand for our products during the
reconstruction phase, unless any of our operating
units or facilities are impacted by the natural disas-
ter. Such adverse weather conditions and natural
disasters can have a material adverse effect on our
business, financial condition, and results of opera-
tions if they occur with unusual intensity, or last
longer than usual.
CEMEX Mitigation Actions
» Have business continuity plans to avoid major
disruptions to our business
» Insure assets – Some of our main operations and
assets are insured against such events. However, in
most cases, the insurance policy does not cover
the total impact that an adverse event could have,
which limits its effect
Potential Disruption by Emerging Technologies or
Innovations
In recent years, technology has started to transform
the construction industry. Emerging disruptions,
including but not limited to digitalization, automati-
zation, new materials, new construction methods, or
any other innovation in the construction industry
value chain, are likely to accelerate in the coming
years to tackle the construction industry’s main
challenges. These trends have the capacity to disrupt
the construction ecosystem value chain and poten-
tially affect our capacity to compete.
Construction industry transformation will create both
risks and opportunities. Digitalization is improving
industry productivity and data analytics, and it is
transforming our interaction with customers, provid-
ers, and other stakeholders in the ecosystem. The
introduction of new digital technologies opens access
to new industry participants to our markets, which
could impact our sales. The use of new materials or
construction methods and technologies could reduce
the demand for our products and services. All of these
could have a material adverse effect on our business,
financial condition, liquidity and results of operations.
CEMEX Mitigation Actions
» Deliver a superior customer experience enabled by
» Provide construction solutions for reconstruction
digital technologies (e.g., CEMEX Go)
» Early detection, development, and commercializa-
tion of disruptive and revolutionary construction
projects through CEMEX Ventures
» Identification of high growth and sustainable
business opportunities through Urbanization
Solutions strategy
» Enforced promotion of innovation
» Continued partnership with innovative and sus-
tainable companies
» Continuous Research and Development efforts on
products, materials, and technologies
» Enhancement of CEMEX’s Digital strategy
Talent Retention and Attraction
Operational Disruption Due to Different
Interests from Stakeholders
Retaining and attracting the right talent is key to
assure we meet our growth objectives. Talent
attraction could be impacted as the technical
skills needed for the job are highly sought in the
market and as the construction industry could be
perceived as less attractive than other industries,
especially for new generations. Labor activism
and unrest, or failure to maintain satisfactory
labor relations, are also a concern. This has the
potential to impact our ability to execute our
business plan and strategy efficiently.
In addition, labor shortages in the construction
industry have the potential to impact the overall
construction activity which could materially and
adversely affect our business and the results of
our operations.
Although we make significant efforts to maintain
good long-term relationships with the communi-
ties and governments in the geographies where
we operate, there can be no assurance that the
mentioned stakeholders could have different, or
at times conflicting, interests or objectives from
ours. This could result in delays in legal or admin-
istrative proceedings, unrest, negative media
coverage, as well as in requests for the govern-
ment to revoke or deny our concessions, licenses,
or other permits. Any such occurrences could
materially and adversely affect our business,
reputation, liquidity, and results of operations.
» Compliance with local, state, and federal laws
CEMEX Mitigation Actions
and regulations
» Evolution of CEMEX’s culture, policies, and
social responsibility standards
procedures to adjust to the new work environ-
ment
» Engagement and development programs to
» Implementation of sustainable community
engagement plans to build mutually beneficial
long-term relations with key stakeholders
improve talent retention and attraction
» Business continuity plans to minimize business
» Efforts to increase the talent pools for key posi-
disruption
» Social impact strategy and adherence to high
tions
» Engagement survey
CEMEX Mitigation Actions
phases
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Governance
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93
Our Commitment to
Respect Human Rights
Human rights are the
fundamental rights,
freedoms, and standards
of treatment to which all
people are entitled.
Respecting human rights
is reinforced in our core
value of “Acting with
Integrity,” which is
embedded in the way we
do business.
Progress Toward Our Commitment to Human Rights
Although fundamental human rights do not change,
society and its context do. Therefore, at CEMEX we must
be vigilant and address this new context effectively in
order to align our strategy and operations with universal
principles of human rights. We understand that these
principles constitute a global standard of expected cor-
porate conduct applicable to all of our operations.
Accordingly, we are determined to meet our responsibil-
ity to respect all human rights and to foster respect for
them among our business partners.
As a signatory and active participant in the UN Global
Compact, we reaffirm our support of its 10 principles on
Human Rights, Labor, Environment, and Anti-Corruption.
To demonstrate our strong commitment to these princi-
ples, we annually submit an Advanced Communication
of Progress to the UN Global Compact.
As part of the mitigation actions proposed as follow-up
to our Human Rights Compliance Assessment, we
recently updated our employee and supplier Codes of
Conduct, and, through them, we continue to build
awareness on human rights. We aim to always ensure
humane treatment in our installations and together with
CEMEX's Global Workplace Diversity and Inclusion Policy,
we strive to prevent discrimination due to sensitive med-
ical conditions, social background, family status , or
membership in trade unions.
As part of the campaigns around the enhancement of
our Code of Ethics we encourage employees to speak up
- without fear of retribution - about any concerns they
may have concerning ethics and human rights. We aim
to strengthen the credibility of our grievance channels
and continually evaluate and review how best to improve
our approach to address human rights. We also continue
communications on our Human Rights Policy.
Our Human Rights Policy reflects our support and
respect for the protection of internationally proclaimed
human rights principles, as expressed in the Interna-
tional Bill of Human Rights and the International Labor
Organization’s Declaration on Fundamental Principles
and Rights at Work. In addition, it recognizes employees,
communities, contractors, and suppliers as main areas of
impact and reaffirms our commitment to the promotion
of and respect for human rights throughout our world-
wide operations, local communities, and supply chain.
As part of CEMEX’s shared responsibility to climate
change mitigation and adaptation as well as our contin-
ued determination to respect and support internation-
ally recognized human rights standards, we are fully
committed to carrying out our business activities in an
environmentally responsible and sustainable manner
and to minimizing the environmental implications of our
activities. This commitment is embodied in our Environ-
mental, Water, and Biodiversity policies.
Human Rights Commitment Timeline
2004
CEMEX becomes a signatory to the UN
Global Compact.
2014
CEMEX approaches Shift for expert
advice on the UN Guiding Principles on
Business and Human Rights.
2014
CEMEX releases its first Human Rights
Policy Statement.
2017
CEMEX executes a Human Rights
Compliance Assessment in 30
countries to identify risks to people.
2018
CEO signs enhanced Human Rights
Policy.
2018
CEMEX releases global Workplace
Diversity and Inclusion Policy.
2018
CEMEX Code of Ethics and Business
Conduct is enhanced.
2018
CEMEX enrollment in the UN Global
Compact changes to participant.
2019
CEMEX Supplier Code of Conduct
When Doing Business with Us is
released.
2019
Flexible Work Schedule Policy is
implemented.
CEMEX releases:
2020
» Dynamic Work Schemes Global
Guideline
» Digital Citizenship Global Guideline
» Diversity and Inclusion Position
Paper
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Human Rights Policy Implementation
Existing CEMEX Global Policy
Human Rights Components
The implementation of our Human Rights Policy is
focused on establishing the right controls through-
out our existing governance processes and tools.
Human Rights continue to be included in both our
Code of Ethics and Business Conduct and our Suppli-
ers Code of Conduct.
Policies that govern our day-to-day operations enable
us to implement and safeguard our Human Rights
commitments, including our Health and Safety Policy,
Stakeholder Engagement Policy, Environmental Policy,
Water Policy, and Biodiversity Policy, among others.
We expect our employees, suppliers, contractors, and
other business partners to consistently apply all of
our policies and procedures wherever we operate.
Consistent with our commitment to build a truly
diverse CEMEX team, and in conjunction with existing
and future programs and initiatives, our global Work-
place Diversity and Inclusion Policy supports our con-
tinuous, constantly evolving journey to create a more
inclusive, diverse workplace.
This policy is accompanied by a number of global
guidelines that acknowledge and encourage diversity
and inclusion in all of CEMEX’s operating business
units and corporate offices. For example, the
Dynamic Work Schemes Global Guideline is designed
to be an agile, attitudinal approach to meeting
employees’ wide-ranging needs while having a posi-
tive impact on productivity, engagement, and reten-
tion. As well as the Digital Citizenship Guideline,
especially important during the pandemic, since it
promotes the effective and efficient use of working
and collaboration hours and recognizes employees’
right to disconnect by promoting behaviors that
allow being off-the-grid outside working hours.
Health and Safety Policy
» Provide a safe and healthy workplace for our employees and contractors.
» Comply with company policies, Health and Safety Management System, procedures, and all applicable local laws.
» Develop a positive health and safety culture whereby individuals look after the health and safety of each other and share our belief that the achievement
of ZERO injuries is possible.
Human Rights Policy
» We seek to align our strategy and operations with universal principles on human rights. It is a global standard of expected conduct applicable to all our
operations.
» We support and respect the protection of internationally proclaimed human rights principles, as expressed in the International Bill of Human Rights and
the International Labor Organization’s Declaration on Fundamental Principles and Rights at Work.
Stakeholder Engagement
Policy
» We strive to build mutually beneficial relationships with our stakeholders and communities.
» CEMEX is committed to engage its stakeholders in an ongoing and transparent way.
» We seek to create value for society through our core business activities.
Environmental Policy
» Actively pursue a policy of pollution prevention, applying best available techniques to minimize the impact of our operations.
» Comply with company policies and procedures and all applicable local laws and regulations.
» Make strategic efforts to maximize our energy and resource efficiency, lower our carbon intensity, and reduce emissions by managing our energy use,
water consumption, and waste generation.
» Responsibly manage the land within our operations to protect ecosystems and biodiversity and to maximize our contribution to nature conservation.
Water Policy
» CEMEX is fully committed to carrying out our business activities in a sustainable manner, minimizing pressure on water resources and covering three
essential aspects of resource availability, resource quality, and ecosystem integrity.
Biodiversity Policy
» Align our biodiversity initiatives with our business model so that the identification, assessment, and management of biodiversity values is considered in
our decision-making process and management systems throughout the life cycle of our sites.
Workplace Diversity and
Inclusion Policy
» Our people represent a wide range of different countries and cultures, as well as a broad range of backgrounds and experiences, making CEMEX a
stronger and more inclusive environment.
» CEMEX aims to be a great place to work for all of our employees.
» Decisions are made without regard to gender, race, color, age, religion, mental or physical disability, pregnancy and maternity/paternity, marriage or civil
partnership, sexual orientation or preference, political affiliation or national origin.
Data Protection and Privacy
Policy
» CEMEX is fully committed to international compliance with data protection laws for protecting personal data of customers, suppliers, business partners,
and employees.
» Collection, processing, and sharing of personal data should always be based on lawful purposes.
» Data can be processed following consent of the data subject. Before giving consent, the data subject must be informed how his/her data is being used
and for what purpose.
» Only people who have a need to know and are authorized to use the personal data can access it. Data subjects are entitled to a reasonable expectation of
privacy in the processing of their personal data.
Anti-Bribery/Anti-Corruption
Policy
Code of Conduct
» This global policy applies to all of CEMEX directors, officers, and employees, regardless of where they reside or conduct business, CEMEX subsidiaries,
affiliates, and third-party relationships over which CEMEX has control, including joint ventures, as well as all agents, consultants, business partners, and
other third-party representatives when they act on CEMEX’s behalf.
» Seek compliance with anti-bribery/anti-corruption laws.
» Encourage Board members, CEMEX personnel and third parties to act with integrity and adhere to the highest ethical standards and practices.
Code of Conduct When Doing
Business With Us – Supplier
Sustainability
» Encourage suppliers to adhere to the highest ethical standards and practices.
» Comply with all anti-bribery laws.
» Seek equality and fairness in supplier relations.
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Human Rights Due Diligence
CEMEX Human Rights due diligence process is embedded in our existing
approach to risk management with a special focus on potential human rights
risks to people. It is integrated into our company’s regularly running formal pro-
cesses, including:
» Enterprise Risk Management (ERM): This dedicated corporate function perma-
nently executes a process of risk detection and analysis at global, regional, and
local levels by enabling the deployment of corresponding monitoring, mitiga-
tion, and reporting measures in a timely manner. As part of this process, a
Global Risk Agenda is biannually presented to the Risk Management Commit-
tee, comprised of CEMEX Executive Committee. Additionally, key material risks
are evaluated and tracked by the Board-level Corporate Practices and Finance
Committee. Other risk management processes within CEMEX, including inter-
nal controls and audits, complement the ERM function.
» Global Compliance Program (GCP): Legal compliance audits focused mostly on
antitrust, anti-bribery, and insider trading issues are conducted throughout the
year in all of the geographies where we operate, especially in the most sensitive
countries relative to transparency and risks.
» Suppliers Assessment: We partner with specialized independent firms to per-
form sustainability assessments of our suppliers across the globe. As part of
their scope, these assessments include respect and promotion of human rights
in their workforce and supply chain.
» Grievance Mechanism: In addition to the above processes, our global grievance
mechanisms enable us to maintain permanent communication with our key
stakeholder groups, especially those that might be vulnerable under certain
circumstances. Moreover, these open communication channels enable us to
obtain valuable feedback to evaluate the effectiveness of implemented mitiga-
tion actions based on identified risks to people. Our main grievance mecha-
nisms include:
a. ETHOSline: We look to live our values and to properly manage our Code of
Ethics. Therefore, we encourage our employees, stakeholders, and the gen-
eral public to submit suggestions, inquiries, and possible violations through
our ETHOSline communication channel available 24/7. This reporting mecha-
nism helps us to identify human rights related risks not only in our opera-
tions, but also in the communities where we work.
b. Global and Local Ethics Committees: Composed of representatives from
different functions in each of the countries in which we operate, these dedi-
cated taskforces encourage awareness and enforcement of our Code of Eth-
ics. All of them receive, investigate, and collaborate to resolve reported ethics
breaches, including those related to human rights.
c. Stakeholder Dialogues: Aimed at getting to know and understand our stake-
holders’ needs and concerns, these dialogues enable us to identify potential
impacts on people and properly address these risks.
» Contractors Assessment: This program is designed to certify that those con-
tractors with which we engage are equally committed to respect human rights
aligned with the health and safety of their employees, clients, and the commu-
nities in which they operate. To support CEMEX in this important program, we
rely on leading global technology and applications development firms.
d. Local Corporate Social Responsibility Committees: Composed of our plant’s
director and local environmental officials, trade union representatives, local
mayors of nearby towns, neighborhood representatives, and other local insti-
tutions, these groups aim to build positive, sustainable relationships with our
neighboring communities.
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Our Performance in 2020
Governance
Results in Detail
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96
Moving Forward to Close the Gap
During 2020, we made significant progress
in identifying and implementing preventive
measures to avoid any negative human
rights impacts in our operations. Through
our operations’ identification of their top five
human rights impacts, we are developing a
culture of awareness and accountability with
the implementation of the UN Guiding
Principles on Business and Human Rights.
CEMEX Human Rights Compliance Assess-
ment enabled us to discuss and define
action plans by country in order to proac-
tively anticipate any potential human rights
impacts. Nonetheless, we continue to work
very closely with our operations to build their
capabilities and maintain a robust mitiga-
tion and remediation model that enables us
to prioritize and address human rights
issues, while working to maximize our posi-
tive impacts.
Salient Human
Rights
Potentially Impacted
Stakeholders
Health and
Safety
Environmental
Footprint
Community
Impacts
Diversity and
Discrimination
Main Functions
Leading Mitigation
Actions
» Health & Safety
» Operations
» Procurement
» Human Resources
» Sustainability
» Sustainability
» Operations
» Social Impact
» Procurement
» Legal
» Public Affairs
» Legal
» Operations
» Social Impact
» Sustainability
» Human Resources
» Social Impact
» Legal
» Sustainability
Related Activities
» Employee and contractors’ awareness for alignment with safe and healthy behavior. During
2020, we dedicated about 90,000 hours to health and safety training.
» Open-door policy for our employees, contractors, and community members to share related
complaints or suggestions.
» We enhanced our existing protocols by adopting 52 new special protocols to address the risks
posed by COVID-19 to reduce any probability of virus transmission.
» Continuous assessment of our environmental impacts and risks to manage them proactively.
» Our global environmental policies seek to avoid, prevent, mitigate, and remediate impacts
related to our activities.
» A Monthly Environmental and Social Incidents Report details all events in the period. It results in
a direct message from our CEO requesting our operations to address and remediate identified
situations.
» Multi-stakeholder committees across all geographies foster empathy with our neighboring
communities and enable us to incorporate insights into our human rights promotion and
respect strategy.
» Implementation of our Social and Environmental Model strengthens our responsible business
strategy by deeply understanding and addressing our stakeholders’ conditions, needs, and
concerns.
» Our inclusive business models tackle the many side effects of poverty, providing families with the
space and privacy all humans need to live in harmony and children with healthy living and
learning conditions.
» Implementation of CEMEX Diversity and Inclusion Policy and its global guidelines.
» Creation of Diversity Committees in our different business units help to shape and implement
CEMEX inclusion strategy.
» New personnel are trained on our non-discrimination policies. Furthermore, our employees
receive training on how to identify and report discrimination issues.
» In 2020, 86% of our business units implement initiatives to promote diversity and inclusion, 69%
to foster gender equality, and 48% to create opportunities for those with disabilities. A total of 194
collaborators with some type of disability were integrated into our workforce by year end.
Work-life
Balance
» Human Resources
» Legal
» Sustainability
» Respect employees’ use of time by promoting the effective and efficient use of working and
collaboration hours during the pandemic, through our Digital Citizenship Global Guidelines.
» All of our business units have formal channels for employees to communicate needs and
concerns regarding work-life balance, in order to define actions for implementation based on
this feedback.
» In 2020, over 500 initiatives to improve work-life balance were implemented across our business
units. Examples include programs that support child and elderly care, allow sabbaticals, parental
leave, and other benefits such as flexible work schedules and working from home.
Employees
Suppliers And Contractors
Customers
Local Communities
CEMEX 2020 INTEGRATED REPORT
Company Overview
How We Create Value
Our Performance in 2020
Governance
Results in Detail
About This Report
97
Results
in Detail
We share an integral approach to the results of
our financial and non-financial key performance
indicators for the year.
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Our Performance in 2020
Governance
Results in Detail
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98
Selected
Consolidated
Financial
Information
CEMEX, S.A.B. de C.V. and Subsidiaries
In millions of US dollars, except ADSs
and per-ADS amounts
Operating results (1)
Net sales
Cost of sales (2)
Gross profit
Operating expenses
Operating earnings before other expenses, net
Other expenses, net
Financial expense
Financial income (expense) and other items, net (3)
Earnings before income taxes
Discontinued operations, net of tax (1)
Non-controlling interest net income (4)
Controlling interest net income
Millions of average ADSs outstanding (5,6)
Controlling interest basic earnings per ADS (5,7)
Controlling interest basic earnings per ADS from continuing operations (5,7)
Controlling interest basic earnings per ADS from discontinued operations (5,7)
Dividends per ADS (5,6,7,8)
Statement of Financial Position Information
Cash and cash equivalents
Assets from operations held for sale
2016 (i)
2017 (i)
2018 (i)
2019 (i)
2020
13,355
12,926
13,531
13,130
12,970
(8,568)
(8,365)
(8,849)
(8,825)
(8,791)
4,787
4,561
4,682
4,305
4,179
(2,882)
(2,826)
(2,979)
(2,972)
(2,836)
1,905
(91)
1,735
(205)
(1,156)
(1,086)
225
920
38
64
726
1,431
0.53
0.49
0.04
n.a
184
661
222
75
792
1,517
0.53
0.41
0.12
n.a
1,703
(296)
(722)
(2)
717
77
42
528
1,543
0.37
0.32
0.05
0.10
1,333
(347)
(711)
(71)
253
88
36
1,343
(1,779)
(777)
(110)
(1,274)
(120)
21
143
(1,467)
1,527
0.10
0.04
0.06
n.a
1,498
(0.98)
(0.90)
(0.08)
n.a
561
1,015
699
70
309
107
788
839
950
187
Property, plant, and equipment, net and assets for the right-of-use, net (10)
11,107
12,782
12,454
11,850
11,413
Total assets
Liabilities from operations held for sale
Short-term debt & other financial obligations (11)
Long-term debt & other financial obligations (11)
Total liabilities
Non-controlling interest and perpetual debentures (4)
Total controlling interest
Total stockholders’ equity
Book value per ADS (5,6)
Other Financial Data (1)
Operating margin
Operating EBITDA margin (9)
Operating EBITDA (9)
Free cash flow after maintenance capital expenditures (9)
28,944
29,884
29,181
29,363
27,425
39
622
-
2,040
16
900
37
6
1,443
1,058
12,596
10,586
10,858
10,347
10,127
19,450
19,286
18,128
18,539
18,473
1,397
8,097
9,494
5.66
14.3%
20.7%
2,761
1,685
1,571
9,027
1,572
9,481
1,503
9,321
10,598
11,053
10,824
6.02
6.15
6.11
13.4%
20.9%
2,698
1,290
12.6%
19.8%
2,685
793
10.2%
18.1%
2,378
695
877
8,075
8,952
5.39
10.4%
19.0%
2,460
959
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Notes to
Selected
Consolidated
Financial
Information
1. Considering the disposal of entire reportable
4. From 2016 through 2020, the line-item Non-con-
operating segments as well as the sale of signifi-
cant businesses, CEMEX’s statements of opera-
tions present in the single line item of
“Discontinued operations,” the results of: a) the
assets sold in the United Kingdom for the years
2017, 2018, 2019 and for the period from January 1
to August 3, 2020; b) Kosmos’ assets sold in the
United States for the years 2017, 2018, 2019 and for
the period from January 1 to March 3, 2020; c) the
white cement business held for sale in Spain for
the years 2017, 2018, 2019 and 2020; d) the French
assets sold for the years 2017 and 2018 and for the
period from January 1 to June 28, 2019; e) the
German assets sold for the years 2017, 2018 and for
the period from January 1 to May 31, 2019; f) the
Baltic and Nordic businesses sold for the years
2017, 2018 and for the period from January 1 to
March 29, 2019; g) the operating segment in Brazil
sold for the years 2016, 2017 and for the period
from January 1 to September 27, 2018; h) CEMEX’s
Pacific Northwest Materials Business operations
in the United States sold for the year 2016 and for
the six months ended June 30, 2017; i) CEMEX’s
Concrete Pipe Business operations sold in the
United States for the year 2016 and for the one-
month ended January 31, 2017; and j) CEMEX´s
operations in Bangladesh and Thailand sold for
the period from January 1 to May 26, 2016. See
note 5.2 in our consolidated financial statements
included elsewhere in this annual report.
2. Cost of sales includes depreciation, amortization
and depletion of assets involved in the produc-
tion, expenses related to storage in producing
plants, freight expenses of raw material in plants
and delivery expenses of CEMEX’s ready-mix
concrete business.
3. Financial income (expense) and other items, net,
includes financial income, results from financial
instruments, foreign exchange results, the effects
of amortized cost on assets and liabilities and
others, in 2017 the results in sale of associates in
connection with GCC shares and in 2017 and 2018
the remeasurement of previously held non-con-
trolling interest before change in control in
connection with TCL.
trolling interest and perpetual debentures includes
$438 million, $448 million, $444 million, $443
million and $449 million, respectively; of aggregate
notional amounts of perpetual debentures issued
by consolidated entities. For accounting purposes,
these perpetual debentures are included within
stockholders’ equity (See note 21.4 to the 2020
Annual Report’s Financial Statements).
5. CEMEX, S.A.B. de C.V.’s CPOs are listed on the
Mexican Stock Exchange. CEMEX, S.A.B. de C.V.’s
ADSs, each of which currently represents ten
CPOs, are listed on the New York Stock Exchange
(“NYSE”). In the Consolidated Financial State-
ments, earnings per share are presented on a
per-share basis (See note 23 to the 2020 Annual
Report’s Financial Statements).
6. In 2020, the number of ADSs outstanding, stated
in millions of ADSs, represents: (i) the total average
amount of ADS equivalent units outstanding of
each year and (ii) excludes the total number of
ADS equivalents issued by CEMEX and owned by
its subsidiaries. From 2016 through 2019 the
number of ADSs outstanding also include the
total number of ADS equivalents issued in under-
lying derivative transactions.
7. For purposes of the selected financial information
for the periods ended December 31, 2016 through
2020, the controlling interest basic earnings per
ADS amounts were determined by considering
the average number of ADS equivalent units
outstanding during each year. These numbers of
ADSs outstanding were not restated retrospec-
tively neither to give effect to stock dividends
occurring during the period nor to present the
controlling earnings -per-ADS of continuing and
discontinuing operations.
8. Dividends declared at each year’s annual stock-
holders’ meeting for each period are reflected as
dividends for the preceding year. We did not
declare dividends for fiscal years 2016, 2017 and
2019, a cash dividend of $150 million was declared
for fiscal year 2018. At our annual 2016 sharehold-
ers’ meeting held on 2017, CEMEX’s stockholders
approved a capitalization of retained earnings.
New CPOs issued pursuant to the capitalization
were allocated to shareholders on a pro rata basis.
As a result, shares equivalent to approximately 562
million CPOs were issued and paid in 2017. CPO
holders received one new CPO for each 25 CPOs
held, and ADS holders received one new ADS for
each 25 ADSs held. There was no cash distribution
and no entitlement to fractional shares. In our
annual shareholders’ meetings held on 2018
through 2020 there was no capitalization of
retained earnings. (See note 21.1 to the 2020
Annual Report’s Financial Statements).
9. Please refer to page 194 for the definition of terms.
10. In 2020 excludes the white cement assets held for
sale in Spain and certain assets in France. In 2019
excludes assets held for sale in the United King-
dom, Kosmos’ assets in the United States and the
white cement assets in Spain. In 2018 excludes the
assets held for sale in the central region of France
and the white cement assets in Spain. In 2017
excludes the assets held for sale of Andorra plant
in Spain and the white cement assets in Spain. In
2016 excludes the assets held for sale of Fairborn
cement plant and the Concrete Pipe Division in
the United States, the ready-mix pumping equip-
ment in Mexico and the assets of Andorra plant in
Spain. (See note 13.1 to the 2020 Annual Report’s
Financial Statements).
11. From 2017 through 2020, other financial obliga-
tions include: a) lease contracts as per IFRS 16; b)
liabilities secured with accounts receivable; c) the
liability components associated with CEMEX’s
financial instruments convertible into CEMEX’s
CPOs. In 2016, other financial obligations included
capital leases according to former IAS 17. (See
notes 3.6, 15.2 and 17.2 to the 2020 Annual Report’s
Financial Statements).
(i) Beginning in 2019, CEMEX changed its presenta-
tion currency from the Mexican peso to the U.S.
dollar and adopted IFRS 16, both with retrospec-
tive effects for 2017 and 2018. (See note 3.1 to the
2020 Annual Report’s Financial Statements). The
amounts for 2016 were translated into U.S. dollars
using the exchange rates at the reporting date for
the balance sheet and the exchange rates at the
end of each month for the income statement and
do not include IFRS 16 effects.
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Consolidated
Statements of
Operations
CEMEX, S.A.B. de C.V. and Subsidiaries
(Millions of U.S. dollars, except for earnings
per share)
Revenues
Cost of sales
Gross profit
Operating expenses
Operating earnings before other expenses, net
Other expenses, net
Operating earnings (loss)
Financial expense
Financial income and other items, net
Share of profit of equity accounted investees
Earnings (loss) before income tax
Income tax
Net income (loss) from continuing operations
Discontinued operations
CONSOLIDATED NET INCOME (LOSS)
Non-controlling interest net income
CONTROLLING INTEREST NET INCOME (LOSS)
Basic earnings (loss) per share
Basic earnings (loss) per share from continuing operations
Diluted earnings (loss) per share
Diluted earnings (loss) per share from continuing operations
Years ended December 31,
Notes
4
3.16
$
2020
12,970
(8,791)
2019
13,130
(8,825)
2018
13,531
(8,849)
4,179
4,305
4,682
3.16, 6
(2,836)
(2,972)
(2,979)
3.1
7
8.1, 17
8.2
14.1
20
5.2
23
23
23
23
1,343
1,333
1,703
(1,779)
(436)
(777)
(110)
49
(1,274)
(52)
(1,326)
(120)
(1,446)
21
(1,467)
(0.0332)
(0.0305)
(0.0332)
(0.0305)
$
$
$
$
$
(347)
986
(711)
(71)
49
253
(162)
91
88
179
36
143
0.0031
0.0012
0.0031
0.0012
(296)
1,407
(722)
(2)
34
717
(224)
493
77
570
42
528
0.0114
0.0098
0.0114
0.0098
The accompanying notes are part of these
consolidated financial statements.
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Consolidated
Statements of
Comprehensive
Income (Loss)
CEMEX, S.A.B. de C.V. and Subsidiaries
(Millions of U.S. dollars)
CONSOLIDATED NET INCOME (LOSS)
$
(1,446)
179
570
Notes
2020
2019
2018
Years ended December 31,
Items that will not be reclassified subsequently to the statement
of operations
Net actuarial gains (losses) from remeasurements of defined benefit
pension plans
Effects from strategic equity investments
Income tax recognized directly in other comprehensive income
Items that are or may be reclassified subsequently to the statement
of operations
Derivative financial instruments designated as cash flow hedges
Currency translation results of foreign subsidiaries
Income tax recognized directly in other comprehensive income
Total items of other comprehensive income, net
TOTAL COMPREHENSIVE INCOME (LOSS)
Non-controlling interest comprehensive income (loss)
19
14.2
20
17.4
21.2
20
(199)
–
41
(158)
(5)
(204)
19
(190)
(348)
(1,794)
(181)
CONTROLLING INTEREST COMPREHENSIVE INCOME (LOSS)
$
(1,613)
(210)
(8)
29
(189)
(137)
60
49
(28)
(217)
(38)
(69)
31
176
(3)
(31)
142
(119)
(91)
43
(167)
(25)
545
1
544
The accompanying notes are part of these
consolidated financial statements.
CEMEX 2020 INTEGRATED REPORT
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102
Consolidated
Statements
of Financial
Position
CEMEX, S.A.B. de C.V. and Subsidiaries
(Millions of U.S. dollars)
The accompanying notes are part of these
consolidated financial statements.
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade accounts receivable
Other accounts receivable
Inventories
Assets held for sale
Other current assets
Total current assets
NON-CURRENT ASSETS
Equity accounted investees
Other investments and non-current accounts receivable
Property, machinery and equipment, net and assets for the right-of-use, net
Goodwill and intangible assets, net
Deferred income tax assets
Total non-current assets
TOTAL ASSETS
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Current debt
Other financial obligations
Trade payables
Income tax payable
Other current liabilities
Liabilities directly related to assets held for sale
Total current liabilities
NON-CURRENT LIABILITIES
Non-current debt
Other financial obligations
Employee benefits
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities
TOTAL LIABILITIES
STOCKHOLDERS’ EQUITY
Controlling interest:
Common stock and additional paid-in capital
Other equity reserves
Retained earnings
Total controlling interest
Non-controlling interest and perpetual debentures
TOTAL STOCKHOLDERS’ EQUITY
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
Notes
2020
2019
December 31,
9
10
11
12
13.1
13.2
14.1
14.2
15
16
20.2
17.1
17.2
18.1
13.1
17.1
17.2
19
20.2
18.2
21.1
21.2
21.3
21.4
$
$
$
$
950
1,533
477
971
187
117
4,235
510
275
11,413
10,252
740
23,190
27,425
179
879
2,571
445
1,272
6
5,352
9,160
967
1,339
658
997
13,121
18,473
7,893
(2,453)
2,635
8,075
877
8,952
27,425
788
1,521
325
989
839
117
4,579
481
236
11,850
11,590
627
24,784
29,363
62
1,381
2,526
219
1,184
37
5,409
9,303
1,044
1,138
720
925
13,130
18,539
10,424
(2,724)
1,621
9,321
1,503
10,824
29,363
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103
Consolidated
Statements of
Cash Flows
CEMEX, S.A.B. de C.V. and Subsidiaries
(Millions of U.S. dollars)
The accompanying notes are part of these
consolidated financial statements.
Notes
2020
2019
2018
Years ended December 31,
OPERATING ACTIVITIES
Consolidated net income (loss)
Discontinued operations
Net income (loss) from continuing operations
Non-cash items:
Depreciation and amortization of assets
Impairment losses of longed-lived assets
Share of profit of equity accounted investees
Results on sale of subsidiaries, other disposal groups and others
Financial expense, financial income and other items, net
Income taxes
Changes in working capital, excluding income taxes
Cash flow provided by operating activities from continuing operations
Interest and coupons on perpetual debentures paid
Income taxes paid
Net cash flow provided by operating activities from continuing operations
Net cash flow provided by operating activities from discontinued operations
Net cash flows provided by operating activities
INVESTING ACTIVITIES
Purchase of property, machinery and equipment, net
Disposal (acquisition) of subsidiaries and other disposal groups, net
Intangible assets
Non-current assets and others, net
Net cash flows used in investing activities
FINANCING ACTIVITIES
Proceeds from new debt instruments
Debt repayments
Other financial obligations, net
Shares repurchase program
Decrease in non-controlling interests
Derivative financial instruments
Securitization of trade receivables
Dividends paid
Non-current liabilities, net
Net cash flows used in financing activities
Increase (decrease) in cash and cash equivalents from continuing operations
Increase in cash and cash equivalents from discontinued operations
Foreign currency translation effect on cash
Cash and cash equivalents at beginning of period
CASH AND CASH EQUIVALENTS AT END OF PERIOD
Changes in working capital, excluding income taxes:
Trade receivables
Other accounts receivable and other assets
Inventories
Trade payables
Other accounts payable and accrued expenses
Changes in working capital, excluding income taxes
6
7
14.1
20
21.4
15
5, 14.1
16
17.1
17.1
17.2
21.1
21.4
9
$
(1,446)
(120)
(1,326)
1,117
1,520
(49)
(4)
887
52
197
2,394
(703)
(128)
1,563
15
1,578
(538)
628
(53)
51
88
4,210
(4,572)
(794)
(83)
(105)
12
(26)
–
(138)
(1,496)
155
15
(8)
788
950
25
(22)
24
20
150
197
$
$
$
179
88
91
1,045
64
(49)
(49)
782
162
98
2,144
(694)
(168)
1,282
71
1,353
(651)
500
(116)
5
(262)
3,331
(3,284)
(233)
(50)
(31)
(56)
(6)
(150)
(96)
(575)
445
71
(37)
309
788
(8)
33
96
(41)
18
98
570
77
493
982
62
(34)
(13)
724
224
(55)
2,383
(741)
(207)
1,435
132
1,567
(601)
(26)
(187)
(1)
(815)
2,325
(2,745)
(578)
(75)
–
20
32
–
(142)
(1,163)
(543)
132
21
699
309
15
(82)
(148)
231
(71)
(55)
CEMEX 2020 INTEGRATED REPORT
Company Overview
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Governance
Results in Detail
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104
Note
Common
stock
Additional
paid-in
capital
Other
equity
Retained
reserves earnings
Total
controlling Non-controlling
interest
interest
Total
stockholders’
equity
Balance as of January 1, 2018
Net income for the period
Other comprehensive income (loss) for the period
21.2
Total other comprehensive income (loss) for the period
Own shares purchased under share repurchase program
21.1
Share-based compensation
22
Coupons paid on perpetual debentures
Balance as of December 31, 2018
Effects from adoption of IFRIC 23
Balance as of January 1, 2019
Net income for the period
Other comprehensive income (loss) for the period
Total other comprehensive income (loss) for the period
Dividends
Effects of mandatorily convertible securities
21.2
21.1
Own shares purchased under share repurchase program
21.1
Share-based compensation
22
Coupons paid on perpetual debentures
Balance as of December 31, 2019
Net loss for the period
Other comprehensive income (loss) for the period
Total of other comprehensive income (loss) for the period 21.2
Own shares purchased under share repurchase program
Restitution of retained earnings
Changes in non-controlling interest
Share-based compensation
Coupons paid on perpetual debentures
21.1
21.3
21.4
22
$
318
9,979
(2,385)
1,094
9,006
1,571
10,577
–
–
–
–
–
–
–
–
–
–
34
–
–
16
16
(75)
1
(29)
528
–
528
–
–
–
528
16
544
(75)
35
(29)
42
(41)
1
–
–
–
570
25
545
(75)
35
(29)
318
10,013
(2,472)
1,622
9,481
1,572
11,053
–
–
–
6
6
–
6
318
10,013
(2,472)
1,628
9,487
1,572
11,059
–
–
–
–
–
–
–
–
–
–
–
–
151
(75)
17
–
–
(112)
(112)
–
(151)
25
15
(29)
143
–
143
(150)
–
–
–
–
143
(112)
31
(150)
–
(50)
32
(29)
36
(105)
(69)
–
–
–
–
–
318
10,106
(2,724)
1,621
9,321
1,503
–
–
–
–
–
–
–
–
–
–
–
–
(1,467)
(1,467)
(146)
–
(146)
(146)
(1,467)
(1,613)
(50)
(33)
–
(2,481)
–
2,481
–
–
–
445
29
(24)
–
–
–
(83)
–
445
29
(24)
21
(202)
(181)
–
–
(445)
–
–
179
(217)
(38)
(150)
–
(50)
32
(29)
10,824
(1,446)
(348)
(1,794)
(83)
–
–
29
(24)
Balance as of December 31, 2020
$
318
7,575
(2,453)
2,635
8,075
877
8,952
Statements
of Changes in
Stockholders’
Equity
CEMEX, S.A.B. de C.V. and Subsidiaries
(Millions of U.S. dollars)
The accompanying notes are part of these
consolidated financial statements.
CEMEX 2020 INTEGRATED REPORT
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105
Notes to the
Consolidated
Financial
Statements
CEMEX, S.A.B. de C.V. and Subsidiaries
As of December 31, 2020, 2019 and 2018
(Millions of U.S. dollars)
1) DESCRIPTION OF BUSINESS
Bursátil de Capital Variable) organized under the
CEMEX, S.A.B. de C.V., founded in 1906, is a publicly traded variable stock corporation (Sociedad Anónima Bursátil
laws of the United Mexican States, or Mexico, and is a holding company (parent) of entities whose main activities are oriented to the construction industry,
through the production, marketing, sale and distribution of cement, ready-mix concrete, aggregates and other construction materials and services. In
addition, CEMEX, S.A.B. de C.V. performs substantially all 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”) 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 the “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 3, 2021 considering
the favorable recommendation of its Audit Committee. These financial statements will be submitted for authorization to the Annual General Ordinary
Shareholders’ Meeting of the Parent Company on March 25, 2021.
2) RELEVANT EVENT DURING THE PERIOD AND AS OF THE ISSUANCE DATE OF THE FINANCIAL STATEMENTS
COVID-19 Pandemic
On March 11, 2020, the World Health Organization declared the outbreak of the novel spread of the Coronavirus SARS-CoV-2 that produces the disease called
COVID-19 as a pandemic (the “COVID-19 Pandemic”). At different points in time since the outbreak of the COVID-19 Pandemic, according to and in compliance
with the containment measures enacted and implemented by local governments, certain of CEMEX’s cement, ready-mix concrete and aggregates operating
facilities in different parts of the world have operated with reduced volumes and, in some cases, have temporarily halted operations considering the effects
of the COVID-19 Pandemic. This situation has had the following implications for the Company’s business units: (i) temporary restrictions on, or suspended
access to, or shutdown, or suspension or the halt of, its manufacturing facilities, personnel shortages, production slowdowns or stoppages and disruptions
in the delivery systems; (ii) disruptions or delays in the supply chains, including shortages of materials, products and services on which the Company and
its businesses depend; (iii) reduced availability of land and sea transport, including labor shortages, logistics constraints and increased border controls or
closures; (iv) increased cost of materials, products and services on which the Company and its businesses depend; (v) reduced investor confidence and
consumer spending in the countries where the Company operates; as well as (vi) a general slowdown in economic activity, including construction, and a
decrease in demand for the Company’s products and services and industry demand generally.
From the beginning of the COVID-19 Pandemic and attending official dispositions, CEMEX has implemented strict hygiene, sanitary and security measures
guidelines in all its operations and modified its manufacturing, selling and distributions processes to implement physical distancing, aiming to protect
the health and safety of its employees and their families, customers and communities. CEMEX’s operations have been affected to different degrees. In this
respect, for the year 2020, since the start of the COVID-19 Pandemic, CEMEX has identified incremental costs and expenses associated with implementing
and maintaining the measures of $48 (note 7).
CEMEX’s most important segments are, or have been, affected as follows:
•
•
In Mexico, in accordance with technical guidelines set by the government, CEMEX had initially announced on April 6, 2020, that the Company would
temporarily halt all production and certain related activities in Mexico until April 30, 2020. Moreover, on April 7, 2020, CEMEX announced that the Company
was permitted to resume production and related activities in Mexico to support the development of sectors designated as essential by the government
during the COVID-19 Pandemic. In addition, beginning on May 14, 2020 the reopening of social, educational and economic activities were allowed, therefore,
companies dedicated to construction and mining industry activities were able to resume full operations as long they complied with the applicable health
and safety protocols and guidelines established by the government, as these were considered, and continued to be considered, essential activities during
the current COVID-19 Pandemic health emergency in Mexico. No additional official decrees have been issued requiring the construction industry in
Mexico to halt all or part of its operations.
In the United States, except for a few ready-mix concrete plants in the San Francisco area that were temporarily shut down, all sites that were operational
before the COVID-19 Pandemic are active. During November and December of 2020, certain States in the United States continued to implement certain
degrees of lockdowns, which may have an impact on our operations and demand for our products and services.
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•
•
In CEMEX’s Europe, Middle East, Africa and Asia (“EMEAA”) region, the main effects have been experienced in Spain, the Philippines and the United Arab
Emirates, where operations either operated on a limited basis or were temporarily halted. However, CEMEX’s operations in the EMEAA region in general
have not been halted. Other countries have experienced negative effects on the market side, with drops in demand resulting in some temporary site
closures. During November and December of 2020, certain countries like France, Germany and the United Kingdom continued to implement certain
degrees of lockdowns, which may have an impact on our operations and demand for our products and services.
In most of CEMEX’s South America, Central America and Caribbean region, considering governmental requirements, the Company’s operations were
temporarily affected. In Colombia, CEMEX temporarily halted production and related activities beginning on March 25, 2020, partially resuming from April
13 to April 27, 2020 to attend certain allowed needs. Beginning on April 27, 2020 the supply of material and supplies for infrastructure works, public works
and general construction was permitted. In Panama, the closing of the Company’s operations was initially effective from March 25, 2020 through May
24, 2020, partially resuming for certain approved activities and finally, on September 4, 2020, the supply for construction works in general was allowed. In
Trinidad and Tobago and Barbados operations were temporarily halted from the last week of March until May 14, 2020.
The implications negatively affected CEMEX’s financial situation and results of operations, mostly during the second quarter. During the year ended December
31, 2020, consolidated revenues decreased by 1.2% against the previous year, caused by several factors such as the decrease in sales volumes from reduced
operations, as well as by the devaluation of several currencies during the period against the U.S. dollar and the intensification of competitive dynamics in some
countries, among others. This decrease in revenues was partially offset by a reduction in cost of sales and operating costs and expenses, which decreased
0.4% and 4.6%, respectively, during the same period, because of reduced operations but also considering the strict control of expenditures. During 2020, the
Company’s Operating EBITDA (operating earnings before other expenses, net, plus depreciation and amortization expenses) increased by 0.3% compared to
the previous year (note 3.1). In addition, considering the negative effects of the COVID-19 Pandemic and its impact on the valuation of the Company’s assets
as well as the future operating plans for certain assets, in the year ended December 31, 2020, CEMEX recognized non-cash impairment losses of certain fixed
assets, related operating permits and goodwill for an aggregate amount of $1,520 (notes 7, 15.1 and 16.2).
A recent World Economic Outlook report published by the International Monetary Fund, states that the COVID-19 Pandemic and its effects on supply chains,
global trade, mobility of persons, business continuity, lower demand for goods and services and oil prices, have significantly increased the risk of a deep
global recession and projects the global economy to contract sharply. Even though some governments and central banks have implemented monetary
and fiscal policies to curb the potential adverse effects on economies and financial markets, these measures may vary by country and may not be enough
to deter material adverse economic and financial effects. Even if the most severe restrictive measures have been lifted, the Company considers nonetheless
that the construction activity across most of the markets in which it operates will continue to be adversely affected during some time, before returning to
pre-COVID-19 Pandemic levels. The degree to which the COVID-19 Pandemic continues to affect the Company’s liquidity, financial condition and results of
operations will depend on future developments, some of which are highly uncertain and cannot be predicted, including, but not limited to, the duration
and continued spread of the outbreak, its severity, the actions to contain the virus or treat its impact, and to how fast and to which extent the economic
and operational conditions can return, within a new normality with limited activities, until medicines, vaccines and other treatments against the virus are
authorized, produced, distributed and accessible to the general public in the countries in which the Company operates, and also to a degree, how much of
the world’s population is willing to receive the vaccines.
The Company considers that, if the duration of the COVID-19 Pandemic is extended and/or its negative impacts return or are extended, as applicable, there
could be significant negative effects or significant negative effects could be repeated in the future, mainly in connection with: (i) increases in estimated
credit losses on trade accounts receivable (note 10); (ii) impairment of long-lived assets including goodwill (notes 16.2); (iii) foreign exchange losses related
to CEMEX’s obligations denominated in foreign currency; (iv) new disruptions in the supply chains; and (v) liquidity risks to meet the Company’s short-term
operational and financial obligations. The most relevant aspects regarding the potential negative effects mentioned above as of the date of approval of these
consolidated financial statements as of December 31, 2020 are disclosed in the explanatory notes.
CEMEX dealt with liquidity risks during the deepest phase of suspension of activities within the COVID-19 Pandemic, maintaining sufficient cash, to the
extent possible, by means of obtaining financing in the bonds market and with commercial banks. From March through September 2020, CEMEX issued
notes, negotiated new loans and borrowed from its committed lines of credit a total of $3,478, of which, as of December 31, 2020 an aggregate of $2,785 had
been repaid. In addition, CEMEX, S.A.B. de C.V. suspended its share repurchase program and did not pay dividends during 2020. The Company projects it will
continue to generate sufficient cash flows from operations, which would enable the Company to meet its current obligations. Moreover, as of December 31,
2020, CEMEX has $1,121 available on its committed revolving line of credit (note 17.1).
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In other measures, beginning on April 8, 2020 and for the rest of 2020: a) all capital expenditures not associated with the management of the COVID-19
Pandemic were suspended; b) operating expenses were incurred strictly according to the Company’s markets evolution and demand; c) the Company
produced, to the extent permitted by quarantine measures, only the volume of products that markets demanded; and d) all corporate and global network
activities not related to managing the COVID-19 crisis and basic operations were suspended. Moreover, to support the Company’s liquidity, CEMEX took
the following temporary measures; starting May 1st, 2020 and for a 90-day period and subject to all applicable laws and regulations, CEMEX, S.A.B. de C.V.’s
Chairman of the Board of Directors, Chief Executive Officer and the members of our Executive Committee agreed to forgo 25% of their salaries; the members
of the Board of Directors of CEMEX, S.A.B. de C.V. agreed to forgo 25% of their remuneration (including with respect to the meetings that took place in April
2020); certain senior executives accepted to voluntarily forgo 15% of their monthly salaries during May, June and July 2020; and CEMEX asked other salaried
employees to voluntarily defer 10% of their monthly salary during the same three-month period, with the deferred amount scheduled to be paid in full during
December 2020. For hourly employees, where applicable, CEMEX worked to mitigate the effects on jobs derived from any operational shutdowns due to
demand contraction or government measures derived from the COVID-19 Pandemic and economic crisis. During November 2020, all amounts forgone and/
or deferred were fully reimbursed to all employees, executives and members of the Board of Directors of the Parent Company.
3) SIGNIFICANT ACCOUNTING POLICIES
3.1) BASIS OF PRESENTATION AND DISCLOSURE
The consolidated financial statements as of December 31, 2020 and 2019 and for the years ended December 31, 2020, 2019 and 2018, were prepared in
accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).
Presentation currency and definition of terms
The consolidated financial statements and the accompanying notes are presented in dollars of the United States of America (“United States”), except when
specific reference is made to a different currency. When reference is made to U.S. 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. When it is deemed
relevant, certain amounts in foreign currency presented in the notes to the financial statements include between parentheses a convenience translation into
dollars and/or into pesos, as applicable. Previously reported convenience translations of prior years are not restated unless the transaction is still outstanding,
in which case those are restated using the closing exchange rates as of the reporting date. These translations should not be construed as representations
that the amounts in dollars or pesos, as applicable, represent those dollar or peso amounts or could be converted into dollar or peso 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 5.2)
Considering the disposal of entire reportable operating segments as well as the sale of significant businesses, CEMEX’s Statements of Operations present in
the single line item of “Discontinued operations,” the results of: a) the assets sold in the United Kingdom for the period from January 1 to August 3, 2020 and
for the years 2019 and 2018; b) the assets sold in the United States for the period from January 1 to March 3, 2020 and for the years 2019 and 2018; c) the white
cement business held for sale in Spain for the years 2020, 2019 and 2018; d) the French assets sold for the period from January 1 to June 28, 2019 and for the
year 2018; e) the German assets sold for the period from January 1 to May 31, 2019 and for the year 2018; f) the Baltic and Nordic businesses sold for the period
from January 1 to March 29, 2019 and for the year 2018; and g) the operating segment in Brazil sold for the period from January 1 to September 27, 2018.
Statements of operations
CEMEX includes the line item titled “Operating earnings before other expenses, net” considering that it is a relevant operating measure for CEMEX’s
management. The line item “Other expenses, net” consists primarily of revenues and expenses not directly related to CEMEX’s main activities, including
impairment losses of long-lived assets, results on disposal of assets and restructuring costs, among others (note 7). Under IFRS, the inclusion of certain
subtotals such as “Operating earnings before other expenses, net” and the display of the statement of operations vary significantly by industry and company
according to specific needs.
Considering that it is an indicator of CEMEX’s ability to internally fund capital expenditures and to measure its ability to service or incur debt under its financing
agreements, for purposes of notes 5.3 and 17, CEMEX presents “Operating EBITDA” (operating earnings before other expenses, net, plus depreciation and
amortization). This is not an indicator of CEMEX’s financial performance, an alternative to cash flows, a measure of liquidity or comparable to other similarly
titled measures of other companies. In addition, this indicator is used by CEMEX’s management for decision-making purposes.
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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 2020, 2019 and 2018, the increases in other financing obligations in connection with lease contracts negotiated during the year for $213, $274 and
$296, respectively (note 17.2); and
•
In 2020, 2019 and 2018, in connection with the CPOs issued as part of the executive share-based compensation programs (note 22), the total increases
in equity for $29 in 2020, $17 in 2019 and $34 in 2018.
Investing activities:
•
In 2020, 2019 and 2018, in connection with the leases negotiated during the year, the increases in assets for the right-of-use related to lease contracts
for $213, $274 and $296, respectively (note 15.2).
Newly issued IFRS adopted in the reported periods
There were new standards, interpretations and standard amendments adopted as of January 1, 2020 and 2019 prospectively, that did not result in any material
impact on CEMEX´s results or financial position, and which are explained as follows:
Standard
IFRIC 23, Uncertainty over income tax
treatments (note 20.4)
Main topic
Based on IFRIC 23, the income tax effects from an uncertain tax position are recognized when it is
probable that the position will be sustained based on its technical merits and assuming that the
tax authorities will examine each position and have full knowledge of all relevant information.
For each position is considered individually its probability, regardless of its relation to any other
broader tax settlement. The probability threshold represents a positive assertion by management
that CEMEX is entitled to the economic benefits of a tax position. If a tax position is considered
not probable of being sustained, no benefits of the position are recognized. Interest and penalties
related to unrecognized tax benefits are recorded as part of the income tax in the consolidated
statements of operations. The adoption effect of IFRIC 23 credited to retained earnings as of
January 1, 2019 was $6.
Amendments to IFRS 16, Leases,
COVID-19-related rent concessions
Beginning on or after June 1, 2020, the amendment provides lessees with an exemption from
assessing whether a COVID-19-related rent concession is a lease modification.
Amendments to IFRS 3,
Business combinations
Amendments to IAS 1, Presentation of
Financial Statements and IAS 8
Accounting Policies, Changes in
Accounting Estimates and Errors
The amendments definition of a business requires that an acquisition include an input and a
substantive process that together contribute significantly to the ability to create outputs. The
definition of the term “outlets” is modified to focus on goods and services provided to customers,
generating investment income and other income, and excludes returns in the form of lower costs
and other economic benefits. The modifications are likely to result in more acquisitions being
accounted for as asset acquisitions.
The amendments use a coherent definition of materiality throughout the International Financial
Reporting Standards and the Conceptual Framework for Financial Reporting, clarify when
information is material and incorporate some of the guidance in IAS 1 on non-material information.
Amendments to IFRS 9, IAS 39 and
IFRS 7 - The Reform of the Reference
Interest Rates
The amendments refer to the replacement of the Interbank Reference Rates (IBOR) and provide
temporary relief to continue applying hedge accounting during the period of uncertainty before
its replacement by an alternate quasi risk-free rate.
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3.2) PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include those of CEMEX, S.A.B. de C.V. and those of the entities in which the Parent Company exercises control,
including structured entities (special purpose entities), by means of which the Parent Company, directly or indirectly, is exposed, or has rights, to variable
returns from its involvement with the investee, and has the ability to affect those returns through its power over the investee’s relevant activities. Balances
and operations between related parties are eliminated in consolidation.
Investments are accounted for by the equity method when CEMEX has significant influence which is generally presumed with a minimum equity interest
of 20%. The equity method reflects in the financial statements, the investee’s original cost and CEMEX’s share of the investee’s equity and earnings after
acquisition. The financial statements of joint ventures, which relate to those arrangements in which CEMEX and other third-party investors have joint control
and have rights to the net assets of the arrangements, are recognized under the equity method. During the reported periods, CEMEX did not have joint
operations, referring to those cases in which the parties that have joint control of the arrangement have rights over specific assets and obligations for specific
liabilities relating to the arrangements. The equity method is discontinued when the carrying amount of the investment, including any long-term interest in
the investee or joint venture, is reduced to zero, unless CEMEX has incurred or guaranteed additional obligations of the investee or joint venture.
3.3) USE OF ESTIMATES AND CRITICAL ASSUMPTIONS
The preparation of financial statements in accordance with IFRS requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of
revenues and expenses during the period. These assumptions are reviewed on an ongoing basis using available information. Actual results could differ from
these estimates. The items subject to significant estimates and assumptions by management include impairment tests of long-lived assets, recognition
of deferred income tax assets, as well as the measurement of financial instruments at fair value, and the assets and liabilities related to employee benefits.
Significant judgment is required by management to appropriately assess the amounts of these concepts.
3.4) FOREIGN CURRENCY TRANSACTIONS AND TRANSLATION OF FOREIGN CURRENCY FINANCIAL STATEMENTS
Transactions denominated in foreign currencies are recorded in the functional currency at the exchange rates prevailing on the dates of their execution.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the statement
of financial position date, and the resulting foreign exchange fluctuations are recognized in earnings, except for exchange fluctuations arising from: 1) foreign
currency indebtedness associated with the acquisition of foreign entities; and 2) fluctuations associated with related parties’ balances denominated in foreign
currency, whose settlement is neither planned nor likely to occur in the foreseeable future and as a result, such balances are of a permanent investment
nature. These fluctuations are recorded against “Other equity reserves”, as part of the foreign currency translation adjustment (note 21.2) until the disposal of
the foreign net investment, at which time, the accumulated amount is recognized through the statement of operations as part of the gain or loss on disposal.
The financial statements of foreign subsidiaries, as determined using their respective functional currency, are translated to U.S. dollars at the closing exchange
rate for statement of financial position accounts and at the closing exchange rates of each month within the period for statements of operations accounts.
The functional currency is that in which each consolidated entity primarily generates and expends cash. The corresponding translation effect is included
within “Other equity reserves” and is presented in the statement of other comprehensive income for the period as part of the foreign currency translation
adjustment (note 21.2) until the disposal of the net investment in the foreign subsidiary.
Considering its integrated activities, for purposes of functional currency, the Parent Company is considered to have two divisions, one related with its financial
and holding company activities, in which the functional currency is the dollar for all assets, liabilities and transactions associated with these activities, and
another division related with the Parent Company’s operating activities in Mexico, in which the functional currency is the peso for all assets, liabilities and
transactions associated with these activities.
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The most significant closing exchange rates for statement of financial position accounts and the approximate average exchange rates (as determined
using the closing exchange rates of each month within the period) for income statement accounts for the main functional currencies to the U.S. dollar as of
December 31, 2020, 2019 and 2018, were as follows:
Currency
Closing
Average
Closing
Average
Closing
Average
2020
2019
2018
Mexican peso
Euro
British Pound Sterling
Colombian Peso
Philippine Peso
19.8900
0.8183
0.7313
3,433
48.0230
21.5766
0.8736
0.7758
3,730
49.4944
18.9200
0.8917
0.7550
3,277
50.6350
19.3500
0.8941
0.7831
3,300
51.5650
19.6500
0.8727
0.7843
3,250
52.5800
19.2583
0.8483
0.7521
2,972
52.6925
3.5) CASH AND CASH EQUIVALENTS (note 9)
The balance in this caption is comprised of available amounts of cash and cash equivalents, mainly represented by highly liquid short-term investments, which
are readily convertible into known amounts of cash, and which are not subject to significant risks of changes in their values, 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 income statement as part of “Financial income and other items, net.”
To the extent that any restriction will be lifted in less than three months from the statement of financial position reporting date, the amount of cash and
cash equivalents in the statement of financial position includes restricted cash and investments, when applicable, comprised of deposits in margin accounts
that guarantee certain of CEMEX’s obligations, except when contracts contain provisions for net settlement, in which case, these restricted amounts of cash
and cash equivalents are offset against the liabilities that CEMEX has with its counterparties. When the restriction period is greater than three months, any
restricted balance of cash and investments is not considered cash equivalents and is included within short-term or long-term “Other accounts receivable,”
as appropriate.
3.6) FINANCIAL INSTRUMENTS
Classification and measurement of financial instruments
Financial assets are classified as “Held to collect” and measured at amortized cost when they meet both of the following conditions and are not designated as
at fair value through profit or loss: a) are held within a business model whose objective is to hold assets to collect contractual cash flows; and b) its contractual
terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Amortized cost
represents the net present value (“NPV”) of the consideration receivable or payable as of the transaction date. This classification of financial assets comprises
the following captions:
• Cash and cash equivalents (notes 3.5 and 9).
•
•
•
Trade receivables, other current accounts receivable and other current assets (notes 10 and 11). Due to their short-term nature, CEMEX initially recognizes
these assets at the original invoiced or transaction amount less expected credit losses, as explained below.
Trade receivables sold under securitization programs, in which certain residual interest in the trade receivables sold in case of recovery failure and
continued involvement in such assets is maintained, do not qualify for derecognition and are maintained in the statement of financial position (notes 10
and 17.2).
Investments and non-current accounts receivable (note 14.2). Subsequent changes in effects from amortized cost are recognized in the income statement
as part of “Financial income and other items, net”.
Certain strategic investments are measured at fair value through other comprehensive income within “Other equity reserves” (note 14.2). CEMEX does
not maintain financial assets “Held to collect and sell” whose business model has the objective of collecting contractual cash flows and then selling those
financial assets.
The financial assets that are not classified as “Held to collect” or that do not have strategic characteristics fall into the residual category of held at fair value
through the income statement as part of “Financial income and other items, net” (note 14.2).
Debt instruments and other financial obligations are classified as “Loans” and measured at amortized cost (notes 17.1 and 17.2). Interest accrued on financial
instruments is recognized within “Other accounts payable and accrued expenses” against financial expense. During the reported periods, CEMEX did not
have financial liabilities voluntarily recognized at fair value or associated with fair value hedge strategies with derivative financial instruments.
Derivative financial instruments are recognized as assets or liabilities in the statement of financial position at their estimated fair values, and the changes in
such fair values are recognized in the income statement within “Financial income and other items, net” for the period in which they occur, except in the case
of hedging instruments as described below (note 17.4).
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Impairment of financial assets
Impairment losses of financial assets, including trade accounts receivable, are recognized using the Expected Credit Loss model (“ECL”) for the entire lifetime
of such financial assets on initial recognition, and at each subsequent reporting period, even in the absence of a credit event or if a loss has not yet been
incurred, considering for their measurement past events and current conditions, as well as reasonable and supportable forecasts affecting collectability. For
purposes of the ECL model of trade accounts receivable, CEMEX segments its accounts receivable in a matrix by country, type of client or homogeneous
credit risk and days past due and determines for each segment an average rate of ECL, considering actual credit loss experience over the last 24 months and
analyses of future delinquency, that is applied to the balance of the accounts receivable. The average ECL rate increases in each segment of days past due
until the rate is 100% for the segment of 365 days or more past due.
Costs incurred in the issuance of debt or borrowings
Direct costs incurred in debt issuances or borrowings, as well as debt refinancing or non-substantial modifications to debt agreements that did not represent
an extinguishment of debt by considering that the holders and the relevant economic terms of the new instrument are not substantially different to the
replaced instrument, adjust the carrying amount of the related debt and are amortized as interest expense as part of the effective interest rate of each
instrument over its maturity. These costs include commissions and professional fees. Costs incurred in the extinguishment of debt, as well as debt refinancing
or modifications to debt agreements, when the new instrument is substantially different from the old instrument according to a qualitative and quantitative
analysis, are recognized in the income statement as incurred.
Leases (notes 3.8, 15 and 17.2)
At the inception of a lease contract, CEMEX assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the
right to control the use of an identified asset for a period in exchange for consideration. CEMEX uses the definition of a lease in IFRS 16, Leases (“IFRS 16”) to
assess whether a contract conveys the right to control the use of an identified asset.
Based on IFRS 16, leases are recognized as financial liabilities against assets for the right-of-use, measured at their commencement date as the net present
value (“NPV”) of the future contractual fixed payments, using the interest rate implicit in the lease or, if that rate cannot be readily determined, CEMEX´s
incremental borrowing rate. CEMEX determines its incremental borrowing rate by obtaining interest rates from its external financing sources and makes
certain adjustments to reflect the term of the lease, the type of the asset leased and the economic environment in which the asset is leased.
CEMEX does not separate the non-lease component from the lease component included in the same contract. Lease payments included in the measurement
of the lease liability comprise contractual rental fixed payments, less incentives, fixed payments of non-lease components and the value of a purchase option,
to the extent that option is highly probable to be exercised or is considered a bargain purchase option. Interest incurred under the financial obligations
related to lease contracts is recognized as part of the “Interest expense” line item in the income statement.
At commencement date or on modification of a contract that contains a lease component, CEMEX allocates the consideration in the contract to each lease
component based on their relative stand-alone prices. CEMEX applies the recognition exception for lease terms of 12 months or less and contracts of low-
value assets and recognizes the lease payment of these leases as rental expense in the income statement over the lease term. CEMEX defined the lease
contracts related to office and computer equipment as low-value assets.
The lease liability is measured at amortized cost using the effective interest method as payments are incurred and is remeasured when: a) there is a change
in future lease payments arising from a change in an index or rate, b) if there is a change in the amount expected to be payable under a residual guarantee,
c) if the Company changes its assessment of whether it will exercise a purchase, extension or termination option, or d) if there is a revised in-substance fixed
lease payment. When the lease liability is remeasured, an adjustment is made to the carrying amount of the asset for the right-of-use or is recognized within
“Financial income and other items, net” if such asset has been reduced to zero.
Financial instruments with components of both liabilities and equity (note 17.2)
Financial instruments that contain components of both liability and equity, such as notes convertible into a fixed number of the issuer’s shares and denominated
its same functional currency, are accounted for by each component being recognized separately in the statement of financial position according to the
specific characteristics of each transaction. In the case of instruments mandatorily convertible into shares of the issuer, the liability component represents the
NPV of interest payments on the principal amount using a market interest rate, without assuming early conversion, and is recognized within “Other financial
obligations,” whereas the equity component represents the difference between the principal amount and the liability component, and is recognized within
“Other equity reserves,” net of commissions. In the case of instruments that are optionally convertible into a fixed number of shares, the equity component
represents the difference between the total proceeds received for issuing the financial instruments and the fair value of the financial liability component
(note 3.14). When the transaction is denominated in a currency different than the functional currency of the issuer, the conversion option is accounted for as
a derivative financial instrument at fair value in the income statement.
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Hedging instruments (note 17.4)
A hedging relationship is established to the extent the entity considers, based on the analysis of the overall characteristics of the hedging and hedged items,
that the hedge will be highly effective in the future and the hedge relationship at inception is aligned with the entity’s reported risk management strategy
(note 17.5). The accounting categories of hedging instruments are: a) cash flow hedge; b) fair value hedge of an asset or forecasted transaction; and c) hedge
of a net investment in a subsidiary.
In cash flow hedges, the effective portion of changes in fair value of derivative instruments are recognized in stockholders’ equity within other equity reserves
and are reclassified to earnings as the interest expense of the related debt is accrued, in the case of interest rate swaps, or when the underlying products
are consumed in the case of contracts on the price of raw materials and commodities. In hedges of the net investment in foreign subsidiaries, changes in
fair value are recognized in stockholders’ equity as part of the foreign currency translation result within “Other equity reserves” (note 3.4), whose reversal to
earnings would take place upon disposal of the foreign investment. During the reported periods, CEMEX did not have derivatives designated as fair value
hedges. Derivative instruments are negotiated with institutions with significant financial capacity; therefore, CEMEX believes the risk of non-performance of
the obligations agreed to by such counterparties to be minimal.
Embedded derivative financial instruments
CEMEX reviews its contracts to identify the existence of embedded derivatives. Identified embedded derivatives are analyzed to determine if they need to
be separated from the host contract and recognized in the statement of financial position as assets or liabilities, applying the same valuation rules used for
other derivative instruments.
Put options granted for the purchase of non-controlling interests
Under IFRS 9, represent agreements by means of which a non-controlling interest has the right to sell, at a future date using a predefined price formula or at
fair market value, its shares in a consolidated subsidiary. When the obligation should be settled in cash or through the delivery of another financial asset, an
entity should recognize a liability for the NPV of the redemption amount as of the reporting date against the controlling interest within stockholders’ equity.
A liability is not recognized under these agreements when the redemption amount is determined at fair market value at the exercise date and the entity has
the election to settle using its own shares. As of December 31, 2020 and 2019, CEMEX did not have written put options.
Fair value measurements (note 17.3)
Under IFRS, fair value represents an “Exit Value” which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date, considering the counterparty’s credit risk in the valuation. The concept of Exit Value is premised on
the existence of a market and market participants for the specific asset or liability. When there are no market and/or market participants willing to make a
market, IFRS establishes a fair value hierarchy that gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities
(Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements).
The three levels of the fair value hierarchy are as follows:
• Level 1.- represent quoted prices (unadjusted) in active markets for identical assets or liabilities that CEMEX can access at the measurement date. A quoted
price in an active market provides the most reliable evidence of fair value and is used without adjustment to measure fair value whenever available.
• Level 2.- are inputs other than quoted prices in active markets that are observable for the asset or liability, either directly or indirectly, and are used mainly
to determine the fair value of securities, investments or loans that are not actively traded. Level 2 inputs included equity prices, certain interest rates and
yield curves, implied volatility and credit spreads, among others, as well as inputs extrapolated from other observable inputs. In the absence of Level 1
inputs, CEMEX determined fair values by iteration of the applicable Level 2 inputs, the number of securities and/or the other relevant terms of the contract,
as applicable.
• Level 3.- inputs are unobservable inputs for the asset or liability. CEMEX used unobservable inputs to determine fair values, to the extent there are no
Level 1 or Level 2 inputs, in valuation models such as Black-Scholes, binomial, discounted cash flows or multiples of Operative EBITDA, including risk
assumptions consistent with what market participants would use to arrive at fair value.
3.7) INVENTORIES (note 12)
Inventories are valued using the lower of cost or net realizable value. The cost of inventories is based on weighted average cost formula and includes
expenditures incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location
and condition. CEMEX analyzes its inventory balances to determine if, because of internal events, such as physical damage, or external events, such as
technological changes or market conditions, certain portions of such balances have become obsolete or impaired. When an impairment situation arises,
the inventory balance is adjusted to its net realizable value. In such cases, these adjustments are recognized against the results of the period. Advances to
suppliers of inventory are presented as part of other current assets.
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3.8) PROPERTY, MACHINERY AND EQUIPMENT AND ASSETS FOR THE RIGHT-OF-USE (note 15)
Property, machinery and equipment are recognized at their acquisition or construction cost, as applicable, less accumulated depreciation and accumulated
impairment losses. Depreciation of fixed assets is recognized as part of cost and operating expenses (note 6) and is calculated using the straight-line method
over the estimated useful lives of the assets, except for mineral reserves, which are depleted using the units-of-production method. As of December 31, 2020,
the average useful lives by category of fixed assets, which are reviewed at each reporting date and adjusted if appropriate, were as follows:
Administrative buildings
Industrial buildings
Machinery and equipment in plant
Ready-mix trucks and motor vehicles
Office equipment and other assets
Years
31
26
15
9
6
Assets for the right-of-use related to leases are initially measured at cost, which comprises the initial amount of the lease liability adjusted by any lease
payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle, remove or restore the
underlaying asset, less any lease incentives received. The asset for the right-of-use is subsequently depreciated using the straight-line method from the
commencement date to the end of the lease term, unless the lease transfers ownership of the underlaying asset to CEMEX by the end of the lease term or if
the cost of the asset for the right-of-use reflects that CEMEX will exercise a purchase option. In that case the asset for the right-of-use would be depreciated
over the useful life of the underlying asset, on the same basis as those of property, plant and equipment. In addition, assets for the right-of-use may be
reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
CEMEX capitalizes, as part of the related cost of fixed assets, interest expense from existing debt during the construction or installation period of significant
fixed assets, considering CEMEX’s corporate average interest rate and the average balance of investments in process for the period.
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 the
carrying amount of the related quarries. The capitalized amounts are further amortized over the expected useful life of exposed ore body based on the units-
of-production method.
Costs incurred in respect of operating fixed assets that result in future economic benefits, such as an extension in their useful lives, an increase in their
production capacity or in safety, as well as those costs incurred to mitigate or prevent environmental damage, are capitalized as part of the carrying amount
of the related assets. The capitalized costs are depreciated over the remaining useful lives of such fixed assets. Periodic maintenance of fixed assets is
expensed as incurred. Advances to suppliers of fixed assets are presented as part of other long-term accounts receivable.
3.9) BUSINESS COMBINATIONS, GOODWILL AND OTHER INTANGIBLE ASSETS (notes 5.1 and 16)
Business combinations are recognized using the acquisition method, by allocating the consideration transferred to assume control of the entity to all assets
acquired and liabilities assumed, based on their estimated fair values as of the acquisition date. Intangible assets acquired are identified and recognized at
fair value. Any unallocated portion of the purchase price represents goodwill, which is not amortized and is subject to periodic impairment tests (note 3.10).
Goodwill may be adjusted for any change to the preliminary assessment given to the assets acquired and/or liabilities assumed within the twelve-month
period after purchase. Costs associated with the acquisition are expensed in the income statement as incurred.
CEMEX capitalizes intangible assets acquired, as well as costs incurred in the development of intangible assets, when probable future economic benefits
associated are identified and there is evidence of control over such benefits. Intangible assets are recognized at their acquisition or development cost, as
applicable. Indefinite life intangible assets are not amortized since the period in which the benefits associated with such intangibles will terminate cannot
be accurately established. Definite life intangible assets are amortized on a straight-line basis as part of operating costs and expenses (note 6).
Startup costs are recognized in the income statement as they are incurred. Costs associated with research and development activities (“R&D activities”),
performed by CEMEX to create products and services, as well as to develop processes, equipment and methods to optimize operational efficiency and
reduce costs are recognized in the operating results as incurred. Direct costs incurred in the development stage of computer software for internal use are
capitalized and amortized through the operating results over the useful life of the software, which on average is approximately 5 years.
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Costs incurred in exploration activities such as payments for rights to explore, topographical and geological studies, as well as trenching, among other
items incurred to assess the technical and commercial feasibility of extracting a mineral resource, which are not significant to CEMEX, are capitalized when
probable future economic benefits associated with such activities are identified. When extraction begins, these costs are amortized during the useful life
of the quarry based on the estimated tons of material to be extracted. When future economic benefits are not achieved, any capitalized costs are subject
to impairment.
CEMEX’s extraction rights have weighted-average useful lives of 83 years, depending on the sector and the expected life of the related reserves. As of
December 31, 2020, except for extraction rights and/or as otherwise indicated, CEMEX’s intangible assets are amortized on a straight-line basis over their
useful lives that range on average from 3 to 20 years.
3.10) IMPAIRMENT OF LONG-LIVED ASSETS (notes 15 and 16)
Property, machinery and equipment, assets for the right-of-use, intangible assets of definite life and other investments
These assets are tested for impairment upon the occurrence of internal or external indicators of impairment, such as changes in CEMEX’s operating business
model or in technology that affect the asset, or expectations of lower operating results, to determine whether their carrying amounts may not be recovered.
An impairment loss is recorded in the income statement for the period within “Other expenses, net,” for the excess of the asset’s carrying amount over its
recoverable amount, corresponding to the higher of the fair value less costs to sell the asset, as generally determined by an external appraiser, and the asset’s
value in use, the latter represented by the NPV of estimated cash flows related to the use and eventual disposal of the asset. The main assumptions utilized
to develop estimates of NPV are a discount rate that reflects the risk of the cash flows associated with the assets and the estimations of generation of future
income. Those assumptions are evaluated for reasonableness by comparing such discount rates to available market information and by comparing to third-
party expectations of industry growth, such as governmental agencies or industry chambers.
When impairment indicators exist, for each intangible asset, CEMEX determines its projected revenue streams over the estimated useful life of the asset. To
obtain discounted cash flows attributable to each intangible asset, such revenue is adjusted for operating expenses, changes in working capital and other
expenditures, as applicable, and discounted to NPV using the risk adjusted discount rate of return. The most significant economic assumptions are: a) the
useful life of the asset; b) the risk adjusted discount rate of return; c) royalty rates; and d) growth rates. Assumptions used for these cash flows are consistent
with internal forecasts and industry practices. The fair values of these assets are significantly sensitive to changes in such relevant assumptions. Certain
key assumptions are more subjective than others. In respect of trademarks, CEMEX considers that the most subjective key assumption is the royalty rate.
In respect of extraction rights and customer relationships, the most subjective assumptions are revenue growth rates and estimated useful lives. CEMEX
validates its assumptions through benchmarking with industry practices and the corroboration of third-party valuation advisors. Significant judgment by
management is required to appropriately assess the fair values and values in use of the related assets, as well as to determine the appropriate valuation
method and select the significant economic assumptions.
Goodwill is tested for impairment when required upon the occurrence of internal or external indicators of impairment or at least once a year, during the last
quarter of such year. CEMEX determines the recoverable amount of the group of cash-generating units (“CGUs”) to which goodwill balances were allocated,
which consists of the higher of such group of CGUs fair value less cost to sell and its value in use, the latter represented by the NPV of estimated future cash
flows to be generated by such CGUs to which goodwill was allocated, which are generally determined over periods of 5 years. If the value in use of a group of
CGUs to which goodwill has been allocated is lower than its corresponding carrying amount, CEMEX determines the fair value of such group of CGUs using
methodologies generally accepted in the market to determine the value of entities, such as multiples of Operating EBITDA and by reference to other market
transactions. An impairment loss is recognized within “Other expenses, net”, if the recoverable amount is lower than the net book value of the group of CGUs
to which goodwill has been allocated. Impairment charges recognized on goodwill are not reversed in subsequent periods.
Impairment of long-lived assets – Goodwill
The reportable segments reported by CEMEX (note 5.3), represent CEMEX’s groups of CGUs to which goodwill has been allocated for purposes of testing
goodwill for impairment, considering: a) that after the acquisition, goodwill was allocated at the level of the reportable segment; b) that the operating
components that comprise the reported segment have similar economic characteristics; c) that the reported segments are used by CEMEX to organize and
evaluate its activities in its internal information system; d) the homogeneous nature of the items produced and traded in each operative component, which
are all used by the construction industry; e) the vertical integration in the value chain of the products comprising each component; f) the type of clients, which
are substantially similar in all components; g) the operative integration among components; and h) that the compensation system of a specific country is
based on the consolidated results of the geographic segment and not on the particular results of the components. In addition, the country level represents
the lowest level within CEMEX at which goodwill is monitored for internal management purposes.
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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.
3.11) PROVISIONS
CEMEX recognizes provisions when it has a legal or constructive obligation resulting from past events, whose resolution would require cash outflows, or the
delivery of other resources owned by the Company. As of December 31, 2020 and 2019, some significant proceedings that gave rise to a portion of the carrying
amount of CEMEX’s other current and non-current liabilities and provisions are detailed in note 25.1.
Considering guidance under IFRS, CEMEX recognizes provisions for levies imposed by governments when the obligating event or the activity that triggers
the payment of the levy has occurred, as defined in the legislation.
Restructuring
CEMEX recognizes provisions for restructuring when the restructuring detailed plans have been properly finalized and authorized by management and have
been communicated to the third parties involved and/or affected by the restructuring prior to the statement of financial position’s date. These provisions
may include costs not associated with CEMEX’s ongoing activities.
Asset retirement obligations (note 18)
Unavoidable obligations, legal or constructive, to restore operating sites upon retirement of long-lived assets at the end of their useful lives are measured
at the NPV of estimated future cash flows to be incurred in the restoration process and are initially recognized against the related assets’ book value. The
increase to the assets’ book value is depreciated during its remaining useful life. The increase in the liability related to adjustments to NPV by the passage
of time is charged to the line item “Financial income and other items, net.” Adjustments to the liability for changes in estimations are recognized against
fixed assets, and depreciation is modified prospectively. These obligations are related mainly to future costs of demolition, cleaning and reforestation, so that
quarries, maritime terminals and other production sites are left in acceptable condition at the end of their operation.
Costs related to remediation of the environment (notes 18 and 25)
Provisions associated with environmental damage represent the estimated future cost of remediation, which are recognized at their nominal value when
the time schedule for the disbursement is not clear, or when the economic effect for the passage of time is not significant; otherwise, such provisions are
recognized at their discounted values. Reimbursements from insurance companies are recognized as assets only when their recovery is practically certain.
In that case, such reimbursement assets are not offset against the provision for remediation costs.
Contingencies and commitments (notes 24 and 25)
Obligations or losses related to contingencies are recognized as liabilities in the statement of financial position only when present obligations exist resulting
from past events that are probable to result in an outflow of resources and the amount can be measured reliably. Otherwise, a qualitative disclosure is included
in the notes to the financial statements. The effects of long-term commitments established with third parties, such as supply contracts with suppliers or
customers, are recognized in the financial statements on an incurred or accrued basis, after taking into consideration the substance of the agreements.
Relevant commitments are disclosed in the notes to the financial statements. The Company recognizes contingent revenues, income or assets only when
their realization is virtually certain.
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3.12) PENSIONS AND OTHER POST-EMPLOYMENT BENEFITS (note 19)
Defined contribution pension plans
The costs of defined contribution pension plans are recognized in the operating results as they are incurred. Liabilities arising from such plans are settled
through cash transfers to the employees’ retirement accounts, without generating future obligations.
Defined benefit pension plans and other post-employment benefits
The costs associated with employees’ benefits for defined benefit pension plans and other post-employment benefits, generally comprised of health care
benefits, life insurance and seniority premiums, granted by CEMEX and/or pursuant to applicable law, are recognized as services are rendered by the employees
based on actuarial estimations of the benefits’ present value considering the advice of external actuaries. For certain pension plans, CEMEX has created
irrevocable trust funds to cover future benefit payments (“plan assets”). These plan assets are valued at their estimated fair value at the statement of financial
position date. The actuarial assumptions and accounting policy consider: a) the use of nominal rates; b) a single rate is used for the determination of the
expected return on plan assets and the discount of the benefits obligation to present value; c) a net interest is recognized on the net defined benefit liability
(liability minus plan assets); and d) all actuarial gains and losses for the period, related to differences between the projected and real actuarial assumptions at
the end of the period, as well as the difference between the expected and real return on plan assets, are recognized as part of “Other items of comprehensive
income, net” within stockholders’ equity.
The service cost, corresponding to the increase in the obligation for additional benefits earned by employees during the period, is recognized within operating
costs and expenses. The net interest cost, resulting from the increase in obligations for changes in NPV and the change during the period in the estimated
fair value of plan assets, is recognized within “Financial income and other items, net.”
The effects from modifications to the pension plans that affect the cost of past services are recognized within operating costs and expenses over the period
in which such modifications become effective to the employees or without delay if changes are effective immediately. Likewise, the effects from curtailments
and/or settlements of obligations occurring during the period, associated with events that significantly reduce the cost of future services and/or significantly
reduce the population subject to pension benefits, respectively, are recognized within operating costs and expenses.
Termination benefits
Termination benefits, not associated with a restructuring event, which mainly represent severance payments by law, are recognized in the operating results
for the period in which they are incurred.
3.13) INCOME TAXES (note 20)
The effects reflected in the income statement for income taxes include the amounts incurred during the period and the amounts of deferred income taxes,
determined according to the income tax law applicable to each subsidiary, reflecting uncertainty in income tax treatments, if any. Consolidated deferred
income taxes represent the addition of the amounts determined in each subsidiary by applying the enacted statutory income tax rate or substantively
enacted by the end of the reporting period to the total temporary differences resulting from comparing the book and taxable values of assets and liabilities,
considering tax assets such as loss carryforwards and other recoverable taxes, to the extent that it is probable that future taxable profits will be available
against which they can be utilized. The measurement of deferred income taxes at the reporting period reflects the tax consequences that follow the way
in which CEMEX expects to recover or settle the carrying amount of its assets and liabilities. Deferred income taxes for the period represent the difference
between balances of deferred income taxes at the beginning and the end of the period. Deferred income tax assets and liabilities relating to different tax
jurisdictions are not offset. According to IFRS, all items charged or credited directly in stockholders’ equity or as part of other comprehensive income or loss
for the period are recognized net of their current and deferred income tax effects. The effect of a change in enacted statutory tax rates is recognized in the
period in which the change is officially enacted.
Deferred tax assets are reviewed at each reporting date and are reduced when it is not deemed probable that the related tax benefit will be realized,
considering the aggregate amount of self-determined tax loss carryforwards that CEMEX believes will not be rejected by the tax authorities based on
available evidence and the likelihood of recovering them prior to their expiration through an analysis of estimated future taxable income. If it is probable that
the tax authorities would reject a self-determined deferred tax asset, CEMEX would decrease such asset. When it is considered that a deferred tax asset will
not be recovered before its expiration, CEMEX would not recognize such deferred tax asset. Both situations would result in additional income tax expense for
the period in which such determination is made. To determine whether it is probable that deferred tax assets will ultimately be recovered, CEMEX takes into
consideration all available positive and negative evidence, including factors such as market conditions, industry analysis, expansion plans, projected taxable
income, carryforward periods, current tax structure, potential changes or adjustments in tax structure, tax planning strategies, future reversals of existing
temporary differences. Likewise, CEMEX analyzes its actual results versus the Company’s estimates, and adjusts, as necessary, its tax asset valuations. If actual
results vary from CEMEX’s estimates, the deferred tax asset and/or valuations may be affected, and necessary adjustments will be made based on relevant
information in CEMEX’s income statement for such period.
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Based on IFRIC 23, Uncertainty over income tax treatments (“IFRIC 23”), the income tax effects from an uncertain tax position are recognized when it is
probable that the position will be sustained based on its technical merits and assuming that the tax authorities will examine each position and have full
knowledge of all relevant information. For each position is considered individually its probability, regardless of its relation to any other broader tax settlement.
The probability threshold represents a positive assertion by management that CEMEX is entitled to the economic benefits of a tax position. If a tax position
is considered not probable of being sustained, no benefits of the position are recognized. Interest and penalties related to unrecognized tax benefits are
recorded as part of the income tax in the consolidated statements of operations.
The effective income tax rate is determined dividing the line item “Income tax” by the line item “Earnings before income tax.” This effective tax rate is
further reconciled to CEMEX’s statutory tax rate applicable in Mexico (note 20.3). A significant effect in CEMEX’s effective tax rate and consequently in the
reconciliation of CEMEX’s effective tax rate, relates to the difference between the statutory income tax rate in Mexico of 30% against the applicable income
tax rates of each country where CEMEX operates.
For the years ended December 31, 2020, 2019 and 2018, the statutory tax rates in CEMEX’s main operations were as follows:
Country
Mexico
United States
United Kingdom
France
Germany
Spain
Philippines
Colombia
Others
2020
30.0%
21.0%
19.0%
32.0%
28.2%
25.0%
30.0%
32.0%
9.0% – 30.0%
2019
30.0%
21.0%
19.3%
34.4%
28.2%
25.0%
30.0%
33.0%
7.8% – 35.0%
2018
30.0%
21.0%
19.3%
34.4%
28.2%
25.0%
30.0%
37.0%
7.8% – 39.0%
CEMEX’s current and deferred income tax amounts included in the income statement for the period are highly variable, and are subject, among other factors,
to taxable income determined in each jurisdiction in which CEMEX operates. Such amounts of taxable income depend on factors such as sale volumes and
prices, costs and expenses, exchange rate fluctuations and interest on debt, among others, as well as to the estimated tax assets at the end of the period due
to the expected future generation of taxable gains in each jurisdiction.
3.14) STOCKHOLDERS’ EQUITY
Common stock and additional paid-in capital (note 21.1)
These items represent the value of stockholders’ contributions, and include increases related to the capitalization of retained earnings and the recognition
of executive compensation programs in CEMEX, S.A.B. de C.V.’s CPOs as well as decreases associated with the restitution of retained earnings.
Other equity reserves (note 21.2)
Groups the cumulative effects of items and transactions that are, temporarily or permanently, recognized directly to stockholders’ equity, and includes the
comprehensive income, which reflects certain changes in stockholders’ equity that do not result from investments by owners and distributions to owners.
The most significant items within “Other equity reserves” during the reported periods are as follows:
Items of “Other equity reserves” included within other comprehensive income:
• Currency translation effects from the translation of foreign subsidiaries, net of: a) exchange results from foreign currency debt directly related to the
acquisition of foreign subsidiaries; and b) exchange results from foreign currency related parties’ balances that are of a non-current investment class
(note 3.4);
•
The effective portion of the valuation and liquidation effects from derivative financial instruments under cash flow hedging relationships, which are
recorded temporarily in stockholders’ equity (note 3.6);
• Changes in fair value of other investments in strategic securities (note 3.6); and
• Current and deferred income taxes during the period arising from items whose effects are directly recognized in stockholders’ equity.
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Items of “Other equity reserves” not included in comprehensive income:
• Effects related to controlling stockholders’ equity for changes or transactions affecting non-controlling interest stockholders in CEMEX’s consolidated
subsidiaries;
• Effects attributable to controlling stockholders’ equity for financial instruments issued by consolidated subsidiaries that qualify for accounting purposes
as equity instruments, such as the interest expense paid on perpetual debentures;
•
•
The equity component of securities which are mandatorily or optionally convertible into shares of the Parent Company (notes 3.6 and 17.2). Upon conversion,
this amount will be reclassified to common stock and additional paid-in capital; and
The cancellation of the Parent Company’s shares held by consolidated entities.
Retained earnings (note 21.3)
Retained earnings represent the cumulative net results of prior years, net of: a) dividends declared; b) capitalization of retained earnings; c) restitution of
retained earnings when applicable; and d) cumulative effects from adoption of new IFRS.
Non-controlling interest and perpetual debentures (note 21.4)
This caption includes the share of non-controlling stockholders in the results and equity of consolidated subsidiaries. This caption also includes the nominal
amounts of financial instruments (perpetual notes) issued by consolidated entities that qualify as equity instruments considering that there is: a) no
contractual obligation to deliver cash or another financial asset; b) no predefined maturity date; and c) a unilateral option to defer interest payments or
preferred dividends for indeterminate periods.
3.15) REVENUE RECOGNITION (note 4)
Revenue is 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
because of ordinary activities, as contractual performance obligations are fulfilled, and control of goods and services passes to the customer. Revenues are
decreased by any trade discounts or volume rebates granted to customers. Transactions between related parties are eliminated in consolidation. Variable
consideration is recognized when it is highly probable that a significant reversal in the amount of cumulative revenue recognized for the contract will not
occur and is measured using the expected value or the most likely amount method, whichever is expected to better predict the amount based on the terms
and conditions of the contract.
Revenue and costs from trading activities, in which CEMEX acquires finished goods from a third party and subsequently sells the goods to another third-
party, are recognized on a gross basis, considering that CEMEX assumes ownership risks on the goods purchased, not acting as agent or broker.
When revenue is earned over time as contractual performance obligations are satisfied, which is the case of construction contracts, CEMEX applies the
stage of completion method to measure revenue, which represents: a) the proportion that contract costs incurred for work performed to date bear to the
estimated total contract costs; b) the surveys of work performed; or c) the physical proportion of the contract work completed; whichever better reflects the
percentage of completion under the specific circumstances. Revenue related to such construction contracts is recognized in the period in which the work
is performed by reference to the contract’s stage of completion at the end of the period, considering that the following have been defined: a) each party’s
enforceable rights regarding the asset under construction; b) the consideration to be exchanged; c) the manner and terms of settlement; d) actual costs
incurred and contract costs required to complete the asset are effectively controlled; and e) it is probable that the economic benefits associated with the
contract will flow to the entity.
Progress payments and advances received from customers do not reflect the work performed and are recognized as short-term or long-term advanced
payments, as appropriate.
3.16) COST OF SALES AND OPERATING EXPENSES (note 6)
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.
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, involved specifically 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.
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3.17) EXECUTIVE SHARE-BASED COMPENSATION (note 22)
Share-based payments to executives are defined as equity instruments when services received from employees are settled by delivering shares of the Parent
Company and/or a subsidiary; or as liability instruments when CEMEX commits to make cash payments to the executives on the exercise date of the awards
based on changes in the Parent Company and/or subsidiary’s own stock (intrinsic value). The cost of equity instruments represents their estimated fair value
at the date of grant and is recognized in the income statement during the period in which the exercise rights of the employees become vested. In respect
of liability instruments, these instruments are valued at their estimated fair value at each reporting date, recognizing the changes in fair value through the
operating results.
3.18) EMISSIONS OF CARBON DIOXIDE (“CO2”)
The cement industry releases CO2 as part of the production process. In certain countries where CEMEX operates, such as EU countries, mechanisms aimed
at reducing carbon dioxide emissions have been established by means of which, the relevant environmental authorities grant annually certain number of
emission rights (“certificates”) so far free of cost to the different industries releasing CO2. Industries in turn must submit to such environmental authorities
at the end of a compliance period, certificates for a volume equivalent to the tons of CO2 released. Companies must obtain additional certificates to meet
deficits between actual CO2 emissions during the compliance period and certificates received, or they can dispose of any surplus of certificates in the
market. In addition, the United Nations Framework Convention on Climate Change (“UNFCCC”) granted Certified Emission Reductions (“CERs”) to qualified
CO2 emission reduction projects. Until the compliance phase that finalized in 2020, CERs could be used in specified proportions to settle emission rights
obligations in the EU. In the current phase from 2021 to 2030, CERs are no longer valid to settle emission rights obligations in the EU. Nonetheless, CEMEX
actively participates in the development of projects aimed to reduce CO2 emissions, some of which have been awarded with CERs. In general, failure to meet
the emissions caps is subject to significant monetary penalties. The cap is reduced over time so that the total volume of emissions will decrease.
Further to the strategy to address climate change that CEMEX announced in February 2020, on December 3, 2020, CEMEX hosted a Climate Action panel to
present the progress on climate action and the roadmap to achieve the Company’s 2030 and 2050 goals, which are mainly a 35% reduction in CO2 emissions
and delivery of net-zero CO2 concrete for all products and geographies, respectively (unaudited). The 35% CO2 emissions reductions target by 2030 is aligned
with the Science-Based Targets initiative (“SBTi”) methodology. SBTi drives ambitious climate action in the private sector by enabling companies to set
science-based emissions reductions targets. To meet this target, this objective has been included in the variable compensation of senior management and
CEMEX has detailed CO2 roadmaps developed for each cement plant which include a roll-out of proven CO2 reduction technologies and the investments
required for their implementation. Furthermore, CEMEX works towards delivering net-zero CO2 concrete globally by 2050, which should contribute to the
development of smart urban projects, sustainable buildings and climate-resilient infrastructure. These reduction targets were included in 2020 in a portion
of CEMEX’s debt, and their grade of accomplishment, will represent increases or decreases to the interest rate (note 17.1).
CEMEX does not maintain emission rights, CERs and/or enters in forward transactions with trading purposes. CEMEX accounts for the effects associated with
CO2 emission reduction mechanisms as follows:
• Certificates received for free are not recognized in the statement of financial position. Revenues from the sale of any surplus of certificates are recognized
by decreasing cost of sales. In forward sale transactions, revenues are recognized upon physical delivery of the emission certificates.
• Certificates and/or CERs acquired to hedge current CO2 emissions are recognized as intangible assets at cost and are further amortized to cost of sales
during the compliance period. In the case of forward purchases, assets are recognized upon physical reception of the certificates.
• CEMEX accrues a provision against cost of sales when the estimated annual emissions of CO2 are expected to exceed the number of emission rights, net
of any benefit obtained through swap transactions of emission rights for CERs.
• CERs received from the UNFCCC were recognized as intangible assets at their development cost, which are attributable mainly to legal expenses incurred
in the process of obtaining such CERs.
During 2020, 2019 and 2018, there were no sales of emission rights to third parties. In addition, in certain countries, the environmental authorities impose
levies per ton of CO2 or other greenhouse gases released. Such expenses are recognized as part of cost of sales as incurred.
3.19) CONCENTRATION OF CREDIT
CEMEX sells its products primarily to distributors in the construction industry, with no specific geographic concentration within the countries in which
CEMEX operates. As of and for the years ended December 31, 2020, 2019 and 2018, no single customer individually accounted for a significant amount of
the reported amounts of sales or in the balances of trade receivables. In addition, there is no significant concentration of a specific supplier relating to the
purchase of raw materials.
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3.20) NEWLY ISSUED IFRS NOT YET ADOPTED
There are several amendments or new IFRS issued but not yet effective which are under analysis and the Company’s management expects to adopt in
their specific effective dates considering preliminarily without any significant effect in the Company’s financial position or operating results, and which are
summarized as follows:
Standard
Main topic
Amendments to IFRS 10, Consolidated
financial statements and IAS 28
Clarify the recognition of gains or losses in the Parent’s financial statements
for the sale or contribution of assets between an investor and its associate
or joint venture
Amendments to IAS 37, Provisions,
Contingent Liabilities and Contingent
Assets – Onerous Contracts—Cost of
Fulfilling a Contract
Amendments to IAS 16, Property, Plant
and Equipment – Proceeds before
Intended Use
Clarifies that the ‘cost of fulfilling’ a contract comprises the ‘costs that relate
directly to the contract’. Costs that relate directly to a contract can either
be incremental costs of fulfilling that contract or an allocation of other costs
that relate directly to fulfilling contracts.
Clarifies the prohibition of deducting from the cost of an item of property,
plant and equipment any proceeds from selling items produced while
bringing that asset to the location and condition necessary for it to be
capable of operating in the manner intended by management.
Annual improvements to IFRS (2018-2020
cycle): IFRS 9, Financial Instruments –
Fees in the ‘10 per cent’ Test for
Derecognition of Financial Liabilities
The amendment clarifies which fees an entity includes when it applies the ‘10
per cent’ test in assessing whether to derecognize a financial liability. An entity
includes only fees paid or received between the entity (the borrower) and the
lender, including fees paid or received by either the entity or the lender on the
other’s behalf.
Effective date
Has yet to be set
January 1, 2022
January 1, 2022
January 1, 2022
Amendments to IAS 1, Presentation of
Financial Statements
Clarifies the requirements to be applied in classifying liabilities as current
and non-current.
January 1, 2023
IFRS 17, Insurance contracts
The new Standard establishes the principles for the recognition, measurement,
presentation and disclosure of insurance contracts and supersedes IFRS 4,
Insurance contracts. The Standard outlines a General Model, which is modified
for insurance contracts with direct participation features, described as the
Variable Fee Approach. The General Model is simplified if certain criteria are
met by measuring the liability for remaining coverage using the Premium
Allocation Approach.
January 1, 2023
4) REVENUE AND CONSTRUCTION CONTRACTS
CEMEX’s revenues are mainly originated from the sale and distribution of cement, ready-mix concrete, aggregates and other construction materials and
services. 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, 2020,
2019 and 2018, revenue is as follows:
From the sale of goods associated to CEMEX’s main activities 1
From the sale of services 2
From the sale of other goods and services 3
2020
12,485
145
340
12,970
2019
12,605
147
378
13,130
$
$
2018
13,018
159
354
13,531
1
Includes in each period revenue generated under construction contracts that are presented in the table below.
2 Refers mainly to revenue generated by Neoris N.V. and its subsidiaries, involved in providing information technology solutions and services.
3 Refers mainly to revenues generated by subsidiaries not individually significant operating in different lines of business.
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Information of revenues by reportable segment and line of business for the years 2020, 2019 and 2018 is presented in note 5.3
As of December 31, 2020 and 2019, amounts receivable for progress billings to and advances received from customers of construction contracts were not
significant. For 2020, 2019 and 2018, revenues and costs related to construction contracts in progress were as follows:
Revenue from construction contracts included in consolidated revenues 2
Costs incurred in construction contracts included in consolidated cost of sales 3
Construction contracts gross operating profit
Accrued 1
2020
2019
2018
$
$
112
(111)
1
101
(101)
–
79
(79)
–
72
(68)
4
1 Revenues and costs recognized from inception of the contracts until December 31, 2020 in connection with those projects still in progress.
2 Revenues from construction contracts during 2020, 2019 and 2018, were mainly obtained in Mexico and Colombia.
3 Refers to actual costs incurred during the periods.
Under IFRS 15, 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 income
statement during the period in which the incentive is exercised by the customer or until it expires. For the years ended December 31, 2020, 2019 and 2018
changes in the balance of contract liabilities with customers are as follows:
Opening balance of contract liabilities with customers
Increase during the period for new transactions
Decrease during the period for exercise or expiration of incentives
Currency translation effects
Closing balance of contract liabilities with customers
2020
225
1,536
(1,561)
1
201
2019
234
1,931
(1,946)
6
225
$
$
2018
237
1,763
(1,762)
(4)
234
For the years 2020, 2019 and 2018, CEMEX did not identify any costs required to be capitalized as contract fulfilment assets and released over the contract life
according to IFRS 15, Revenues from contracts with customers.
5) BUSINESS COMBINATIONS, DISCONTINUED OPERATIONS, SALE OF OTHER DISPOSAL GROUPS AND SELECTED
FINANCIAL INFORMATION BY REPORTABLE SEGMENT AND LINE OF BUSINESS
5.1) BUSINESS COMBINATIONS
In January 2020 and April 2020 a subsidiary of CEMEX in Israel acquired a ready-mix business from Netivei Noy for an amount in shekels equivalent to $33.
As of December 31, 2020, based on the preliminary valuation of the fair values of the assets acquired and liabilities assumed, the net assets of Netivei Noy
amounted to $33 and goodwill was determined in the amount of $2.
In August 2018, a subsidiary of CEMEX in the United Kingdom acquired all the shares of the ready-mix producer Procon Readymix Ltd for an amount in
pounds sterling equivalent to $22. The net assets of Procon amounted to $10 and goodwill was determined in the amount of $12.
5.2) DISCONTINUED OPERATIONS
On August 3, 2020, through a subsidiary in the United Kingdom, CEMEX concluded the sale to Breedon Group plc of certain assets for an amount in
Pounds equivalent to $230, including $30 of debt. The assets sold consisted of 49 ready-mix plants, 28 aggregate quarries, four depots, one cement terminal,
14 asphalt plants, four concrete products operations, as well as a portion of CEMEX’s paving solutions business in the United Kingdom. CEMEX retained
significant operations in the United Kingdom related with the production and sale of cement, ready-mix concrete, aggregates, asphalt and paving solutions.
As of December 31, 2019, the assets and liabilities associated with this segment under negotiation in the United Kingdom were presented in the statement of
financial position within the line items of “Assets held for sale,” including a proportional allocation of goodwill of $47, and “Liabilities directly related to assets
held for sale,” respectively. Moreover, for purposes of the statements of operations for the period from January 1 to August 3, 2020, including in 2020 a loss on
sale of $57 net of the proportional allocation of goodwill mentioned above, and the years ended December 31, 2019 and 2018 the operations related to this
segment are presented net of tax in the single line item “Discontinued operations.”
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On March 6, 2020, CEMEX concluded the sale to Eagle Materials Inc. of its U.S. subsidiary Kosmos Cement Company (“Kosmos”), a partnership with a subsidiary
of Buzzi Unicem S.p.A. in which CEMEX held a 75% interest, for a total consideration of $665, of which the proceeds to CEMEX were $499. The assets sold
consisted of Kosmos’ cement plant in Louisville, Kentucky, as well as related assets which include seven distribution terminals and raw material reserves. As
of December 31, 2019, the assets and liabilities associated with this sale in the United States were presented in the statement of financial position within the
line items of “Assets held for sale,” including a proportional allocation of goodwill of $291, and “Liabilities directly related to assets held for sale,” respectively.
Moreover, CEMEX’s statements of operations present the operations related to this segment from January 1 to March 6, 2020, including in 2020 a gain on sale
of $14 net of the proportional allocation of goodwill mentioned above, and for the years ended December 31, 2019 and 2018, respectively, net of income tax in
the single line item “Discontinued operations.”
On June 28, 2019, after obtaining customary authorizations, CEMEX concluded with several counterparties the sale of its ready-mix and aggregates business
in the central region of France for an aggregate price in euro equivalent to $36. CEMEX’s operations of these disposed assets in France for the period from
January 1 to June 28, 2019 and for the year ended December 31, 2018 are reported in the statements of operations, net of income tax, in the single line item
“Discontinued operations,” including in 2019 a gain on sale of $17 net of a proportional allocation of goodwill related to this reporting segment of $8.
On May 31, 2019, CEMEX concluded the sale of its aggregates and ready-mix assets in the North and North-West regions of Germany to GP Günter Papenburg
AG for a price in euro equivalent to $97. The assets divested in Germany consisted of four aggregates quarries and four ready-mix facilities in North Germany,
and nine aggregates quarries and 14 ready-mix facilities in North-West Germany. CEMEX’s operations of these disposed assets for the period from January 1
to May 31, 2019 and for the year ended December 31, 2018 are reported in the statements of operations, net of income tax, in the single line item “Discontinued
operations,” including in 2019 a gain on sale of $59.
On March 29, 2019, CEMEX closed the sale of assets in the Baltics and Nordics to the German building materials group Schwenk for a price in euro equivalent
to $387. The Baltic assets divested consisted of one cement production plant in Broceni with a production capacity of approximately 1.7 million tons, four
aggregates quarries, two cement quarries, six ready-mix plants, one marine terminal and one land distribution terminal in Latvia. The assets divested also
included CEMEX’s 37.8% non-controlling interest in Akmenes Cementas AB owner of a cement production plant in Akmene in Lithuania with a production
capacity of approximately 1.8 million tons, as well as the exports business to Estonia. The Nordic assets divested consisted of three import terminals in Finland,
four import terminals in Norway and four import terminals in Sweden. CEMEX’s operations of these disposed assets for the period from January 1 to March
29, 2019 and for the year ended December 31, 2018 are reported in the statements of operations, net of income tax, in the single line item “Discontinued
operations,” including in 2019 a gain on sale of $66.
On March 29, 2019, CEMEX signed a binding agreement with Çimsa Çimento Sanayi Ve Ticaret A.Ş. to divest CEMEX’s white cement business, except for Mexico
and the U.S., for an initial price of $180 subject to adjustments, including its Buñol cement plant in Spain and its white cement customer list. The transaction
is pending for approval from regulators. CEMEX currently expects it could close this divestment during the first quarter of 2021. As of December 31, 2020,
and 2019 the assets and liabilities associated with the white cement business were presented in the Statement of Financial Position within the line items of
“Assets and liabilities directly related to assets held for sale”, as correspond. CEMEX’s operations of these assets in Spain for the years ended December 31,
2020, 2019 and 2018 are reported in the statements of operations, net of income tax, in the single line item “Discontinued operations.”
On September 27, 2018, CEMEX concluded the sale of its construction materials operations in Brazil (the “Brazilian Operations”) through the sale to Votorantim
Cimentos N/NE S.A. of all the shares of CEMEX’s Brazilian subsidiary Cimento Vencemos Do Amazonas Ltda, consisting of a fluvial cement distribution
terminal located in Manaus, Amazonas province, as well as the operation license for a price of $31. CEMEX’s Brazilian Operations for the period from January
1 to September 27, 2018 are reported in the statements of operations, net of income tax, in the single line item “Discontinued operations” net of a gain on
sale of $12.
As of December 31, 2020, the following table presents condensed combined information of the statement of financial position for the assets held for sale in
Spain, as mentioned above:
Current assets
Non-current assets
Total assets of the disposal group
Current liabilities
Non-current liabilities
Total liabilities directly related to disposal group
Total net assets of disposal group
2020
4
103
107
–
–
–
107
$
$
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In addition, the following table presents condensed combined information of the statements of operations of CEMEX’s discontinued operations previously
mentioned in: a) the United Kingdom for the period from January 1 to August 3, 2020 and for the years ended December 31, 2019 and 2018; b) the United States
related to Kosmos for the period from January 1 to March 6, 2020 and for the years ended December 31, 2019 and 2018; c) France for the period from January 1
to June 28, 2019 and for the year ended December 31, 2018; d) Germany for the period from January 1 to May 31, 2019 and for the year ended December 31, 2018;
e) the Baltics and Nordics for the period from January 1 to March 29, 2019 and for the year ended December 31, 2018; f) Spain for the years ended December
31, 2020, 2019 2018; and g) Brazil for the period from January 1 to September 27, 2018:
Revenues
Cost of sales and operating expenses
Other income (expenses), net
Financial expenses, net and others
Earnings before income tax
Income tax
Result of discontinued operations
Net disposal result
Net result of discontinued operations
2020
2019
2018
$
$
189
(184)
(5)
–
–
(75)
(75)
(45)
(120)
572
(534)
1
–
39
(6)
33
55
88
868
(792)
(1)
(2)
73
(7)
66
11
77
5.3) SELECTED FINANCIAL INFORMATION BY REPORTABLE SEGMENT AND LINE OF BUSINESS
Reportable segments represent the components of CEMEX that engage in business activities from which CEMEX may earn revenues and incur expenses,
whose operating results are regularly 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. CEMEX operates geographically and by business on a regional basis.
Beginning April 1, 2020 and for subsequent periods, the geographical regions Europe and Asia, Middle East and Africa (“AMEA”) were merged and reorganized
under a single regional president and was denominated Europe, Middle East, Africa and Asia (“EMEAA”). For the reported periods, the Company’s operations
were organized in four geographical regions, each under the supervision of a regional president, as follows: 1) Mexico, 2) United States, 3) EMEAA and 4) South,
Central America and the Caribbean (“SCA&C”). The accounting policies applied to determine the financial information by reportable segment are consistent
with those described in note 3.
Considering similar regional and economic characteristics and/or materiality, certain countries have been aggregated and presented as single line items as
follows: a) “Rest of EMEAA” refers mainly to CEMEX’s operations and activities in Poland, the Czech Republic, Croatia, Egypt and the United Arab Emirates; b)
“Rest of SCA&C” refers mainly to CEMEX’s operations and activities in Costa Rica, Puerto Rico, Nicaragua, Jamaica, the Caribbean, Guatemala and El Salvador,
excluding the operations of Trinidad Cement Limited (“TCL”); and c) “Caribbean TCL” refers to TCL’s operations mainly in Trinidad and Tobago, Jamaica,
Guyana and Barbados. The segment “Others” refers to: 1) cement trade maritime operations, 2) Neoris N.V., CEMEX’s subsidiary involved in the business of
information technology solutions, 3) the Parent Company, other corporate entities and finance subsidiaries, and 4) other minor subsidiaries with different
lines of business.
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Selected information of the consolidated statements of operations by reportable segment for the years 2020, 2019 and 2018, excluding the share of profits of
equity accounted investees by reportable segment that is included in the note 14.1, was as follows:
Revenues
(including
intragroup
Less:
Intragroup
2020
transactions) transactions Revenues
Less:
Depreciation
and
Operating
earnings
Other
before other expenses,
amortization expenses, net
net
Operating
EBITDA
Financial
expense
Other
financing
items, net
Mexico
United States
EMEAA
United Kingdom
France
Germany
Spain
Philippines 1
Israel
Rest of EMEAA
SCA&C
Colombia 2
Panama 2
Caribbean TCL 3
Dominican Republic
Rest of SCA&C 2
Others
Continuing operations
Discontinued operations
Total
$
2,812
3,994
(134)
(1)
2,678
3,993
739
795
489
319
398
754
959
404
80
251
229
508
957
13,688
189
13,877
$
–
–
(37)
(16)
–
–
(16)
–
(7)
(7)
(11)
(17)
(472)
(718)
–
(718)
739
795
452
303
398
754
943
404
73
244
218
491
485
12,970
189
13,159
931
747
88
76
67
25
118
115
149
86
12
65
84
124
(227)
2,460
14
2,474
148
440
67
49
28
39
46
28
81
25
16
22
8
19
101
1,117
9
1,126
783
307
21
27
39
(14)
72
87
68
61
(4)
43
76
105
(328)
1,343
5
1,348
(46)
(1,350)
(73)
(1)
(3)
(195)
(1)
–
(27)
(14)
(19)
(9)
(5)
(41)
5
(1,779)
(5)
(1,784)
(31)
(53)
(9)
(12)
(2)
(3)
2
(4)
(5)
(5)
(1)
(6)
(1)
(2)
(645)
(777)
–
(777)
(4)
(20)
(77)
3
(3)
(9)
2
1
(22)
(13)
1
(8)
4
15
20
(110)
–
(110)
Revenues
(including
intragroup
Less:
Intragroup
2019
transactions) transactions Revenues
Less:
Depreciation
and
Operating
earnings
Other
before other expenses,
amortization expenses, net
net
Operating
EBITDA
Financial
expense
Other
financing
items, net
Mexico
United States
EMEAA
United Kingdom
France
Germany
Spain
Philippines 1
Israel
Rest of EMEAA
SCA&C
Colombia 2
Panama 2
Caribbean TCL 3
Dominican Republic
Rest of SCA&C 2
Others
Continuing operations
Discontinued operations
Total
$
2,897
3,780
(105)
–
2,792
3,780
749
869
439
319
458
660
958
504
181
248
245
511
1,104
13,922
572
14,494
$
–
–
(25)
(25)
–
–
(14)
–
(2)
(8)
(17)
(17)
(579)
(792)
–
(792)
749
869
414
294
458
660
944
504
179
240
228
494
525
13,130
572
13,702
969
629
119
94
65
16
117
89
132
90
48
56
84
107
(237)
2,378
89
2,467
159
392
69
48
28
34
38
23
71
29
17
23
9
20
85
1,045
51
1,096
810
237
50
46
37
(18)
79
66
61
61
31
33
75
87
(322)
1,333
38
1,371
(48)
(22)
(2)
(4)
3
(8)
1
–
(7)
(21)
(9)
(2)
(1)
(60)
(167)
(347)
1
(346)
(36)
(64)
(11)
(11)
(3)
(2)
6
(2)
(7)
(4)
(1)
(6)
–
(3)
(567)
(711)
–
(711)
(1)
(13)
(17)
–
(4)
2
4
1
26
(3)
–
(4)
–
(6)
(56)
(71)
–
(71)
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Revenues
(including
intragroup
Less:
Intragroup
2018
transactions) transactions Revenues
Mexico
United States
EMEAA
United Kingdom
France
Germany
Spain
Philippines 1
Israel
Rest of EMEAA
SCA&C
Colombia 2
Panama 2
Caribbean TCL 3
Dominican Republic
Rest of SCA&C 2
Others
Continuing operations
Discontinued operations
Total
$
$
3,302
3,614
773
895
429
334
448
630
1,090
524
222
254
218
590
1,247
14,570
868
15,438
(91)
–
–
–
(75)
(47)
–
–
(51)
–
–
(5)
(16)
(20)
(734)
(1,039)
–
(1,039)
3,211
3,614
773
895
354
287
448
630
1,039
524
222
249
202
570
531
13,531
868
14,399
Operating
EBITDA
1,217
686
117
91
37
13
93
87
157
97
66
58
61
133
(228)
2,685
147
2,832
Less:
Depreciation
and
Operating
earnings
Other
before other expenses,
amortization expenses, net
net
Financial
expense
Other
financing
items, net
148
369
67
50
28
33
36
21
72
29
17
19
10
21
62
982
71
1,053
1,069
317
50
41
9
(20)
57
66
85
68
49
39
51
112
(290)
1,703
76
1,779
(33)
(18)
(7)
(47)
(8)
(16)
(3)
–
(12)
6
(3)
(15)
(1)
(7)
(132)
(296)
(1)
(297)
(32)
(53)
(12)
(13)
(3)
(3)
(2)
(3)
(6)
(7)
(1)
(3)
(1)
(3)
(580)
(722)
(2)
(724)
(3)
(11)
(22)
–
(4)
3
(4)
(1)
(5)
(22)
–
(2)
2
14
53
(2)
–
(2)
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, 2020 and 2019, there is a non-controlling interest in CHP of 22.16% and 33.22% of its ordinary shares (note 21.4).
2 CEMEX Latam Holdings, S.A. (“CLH”), a company incorporated in Spain, trades its ordinary shares on the Colombian Stock Exchange. CLH is the indirect holding company of CEMEX’s
operations in Colombia, Panama, Costa Rica, Guatemala, Nicaragua and El Salvador. At year end 2020 and 2019, there is a non-controlling interest in CLH of 7.63% and 26.83%,
respectively, of its ordinary shares, 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, 2020 and 2019, there is a non-controlling interest in TCL of 30.17% of its ordinary shares in
both years (note 21.4).
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Debt by reportable segment is disclosed in note 17.1. As of December 31, 2020 and 2019, selected statement of financial position information by reportable
segment was as follows:
2020
Mexico
United States
EMEAA
United Kingdom
France
Germany
Spain
Philippines
Israel
Rest of EMEAA
SCA&C
Colombia
Panama
Caribbean TCL
Dominican Republic
Rest of SCA&C
Others
Total
Assets held for sale and related liabilities (note 13.1)
Total consolidated
2019
Mexico
United States
EMEAA
United Kingdom
France
Germany
Spain
Philippines
Israel
Rest of EMEAA
SCA&C
Colombia
Panama
Caribbean TCL
Dominican Republic
Rest of SCA&C
Others
Total
Assets held for sale and related liabilities (note 13.1)
Total consolidated
Equity
accounted
investees
–
146
6
53
4
–
–
–
9
–
–
–
–
–
292
510
–
510
Equity
accounted
investees
–
143
6
50
4
–
–
–
11
–
–
–
–
–
267
481
–
481
$
$
$
$
Other
segment
assets
3,837
12,296
1,507
999
412
1,023
761
769
1,172
1,105
295
493
158
333
1,568
26,728
187
26,915
Other
segment
assets
3,910
13,755
1,556
928
397
1,190
689
611
1,168
1,187
337
542
193
381
1,199
28,043
839
28,882
Total
assets
3,837
12,442
1,513
1,052
416
1,023
761
769
1,181
1,105
295
493
158
333
1,860
27,238
187
27,425
Total
assets
3,910
13,898
1,562
978
401
1,190
689
611
1,179
1,187
337
542
193
381
1,466
28,524
839
29,363
Total
liabilities
Net assets
Additions to
by segment fixed assets 1
1,523
2,490
1,368
585
357
230
158
507
417
514
78
258
66
162
9,754
18,467
6
18,473
2,314
9,952
145
467
59
793
603
262
764
591
217
235
92
171
(7,894)
8,771
181
8,952
144
284
55
62
24
22
82
28
51
14
3
16
2
7
1
795
–
795
Total
liabilities
Net assets
Additions to
by segment fixed assets 1
1,443
2,440
1,225
460
353
185
141
429
435
428
105
236
66
164
10,392
18,502
37
18,539
2,467
11,458
337
518
48
1,005
548
182
744
759
232
306
127
217
(8,926)
10,022
802
10,824
199
398
67
38
25
34
84
33
65
25
10
21
8
18
8
1,033
–
1,033
1
In 2020 and 2019, the column “Additions to fixed assets” includes capital expenditures, which comprises acquisitions of property, machinery and equipment as well as additions of
assets for the right-of-use, for combined amounts of $795 and $1,033, respectively (note 15).
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Revenues by line of business and reportable segment for the years ended December 31, 2020, 2019 and 2018 were as follows:
2020
Cement
Concrete
Aggregates
Others
Eliminations
Revenues
Mexico
United States
EMEAA
United Kingdom
France
Germany
Spain
Philippines
Israel
Rest of EMEAA
SCA&C
Colombia
Panama
Caribbean TCL
Dominican Republic
Rest of SCA&C
Others
Continuing operations
Discontinued operations
Total
Mexico
United States
EMEAA
United Kingdom
France
Germany
Spain
Philippines
Israel
Rest of EMEAA
SCA&C
Colombia
Panama
Caribbean TCL
Dominican Republic
Rest of SCA&C
Others
Continuing operations
Discontinued operations
Total
2019
$
2,001
1,599
628
2,255
201
–
210
233
398
–
643
294
67
245
185
458
–
6,534
68
6,602
274
647
202
83
–
623
363
119
14
5
15
32
–
5,260
28
5,288
172
954
314
340
69
24
–
195
80
34
4
7
5
9
–
2,207
55
2,262
587
481
229
8
116
25
3
113
34
64
4
15
38
24
959
2,700
53
2,753
(710)
(1,296)
2,678
3,993
(279)
(200)
(145)
(62)
(3)
(177)
(177)
(107)
(16)
(28)
(25)
(32)
(474)
(3,731)
(15)
(3,746)
739
795
452
303
398
754
943
404
73
244
218
491
485
12,970
189
13,159
Cement
Concrete
Aggregates
Others
Eliminations
Revenues
2,009
1,608
798
2,189
227
–
192
228
457
–
609
363
141
241
194
448
–
6,717
229
6,946
310
720
184
86
–
554
378
176
49
9
27
48
–
5,528
110
5,638
196
917
290
355
62
23
–
166
89
53
15
5
8
11
–
2,190
154
2,344
445
332
246
4
43
18
2
78
28
51
12
9
25
18
1,107
2,418
85
2,503
(656)
(1,266)
2,792
3,780
(324)
(210)
(67)
(61)
(1)
(138)
(160)
(139)
(38)
(24)
(26)
(31)
(582)
(3,723)
(6)
(3,729)
749
869
414
294
458
660
944
504
179
240
228
494
525
13,130
572
13,702
$
$
$
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Mexico
United States
EMEAA
United Kingdom
France
Germany
Spain
Philippines
Israel
Rest of EMEAA
SCA&C
Colombia
Panama
Caribbean TCL
Dominican Republic
Rest of SCA&C
Others
Continuing operations
Discontinued operations
Total
2018
Cement
Concrete
Aggregates
Others
Eliminations
Revenues
$
2,302
1,584
898
2,088
237
–
186
250
444
–
656
353
171
245
178
510
–
7,116
420
7,536
$
325
735
197
70
–
521
416
189
71
10
27
63
–
5,610
219
5,829
210
850
300
353
56
19
3
159
94
55
23
5
9
14
–
2,150
236
2,386
642
393
281
9
136
17
2
110
205
92
14
13
24
24
1,285
3,247
144
3,391
(841)
(1,301)
(370)
(202)
(221)
(69)
(1)
(160)
(332)
(165)
(57)
(24)
(36)
(41)
(772)
(4,592)
(151)
(4,743)
3,211
3,614
773
895
354
287
448
630
1,039
524
222
249
202
570
513
13,531
868
14,399
6) OPERATING EXPENSES, DEPRECIATION AND AMORTIZATION
Consolidated operating expenses during 2020, 2019 and 2018 by function are as follows:
Administrative expenses 1
Selling expenses
Distribution and logistics expenses
2020
2019
2018
$
$
1,076
337
1,423
2,836
1,112
371
1,489
2,972
1,130
312
1,537
2,979
1 All significant R&D activities are executed by several internal areas as part of their daily activities. In 2020, 2019 and 2018, total combined expenses of these departments recognized
within administrative expenses were $31, $38 and $39, respectively.
Depreciation and amortization recognized during 2020, 2019 and 2018 are detailed as follows:
Included in cost of sales
Included in administrative, selling and distribution and logistics expenses
2020
2019
2018
$
$
921
196
1,117
865
180
1,045
853
129
982
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7) OTHER EXPENSES, NET
The detail of the line item “Other expenses, net” in 2020, 2019 and 2018 was as follows:
Impairment losses 1
Results from the sale of assets and others, net 2
Restructuring costs 3
Incremental costs and expenses related to the COVID-19 Pandemic (note 2)
Remeasurement of pension liabilities 4
Charitable contributions
2020
2019
2018
$
$
(1,520)
(127)
(81)
(48)
–
(3)
(1,779)
(64)
(230)
(48)
–
–
(5)
(347)
(62)
(149)
(72)
–
(8)
(5)
(296)
1
2
In 2020, include impairment losses of goodwill and other intangible assets of $1,020 and $194, respectively, related to CEMEX’s assets and its Reporting Segment in the United States
(notes 16.1 and 16.2), as well as impairment losses of fixed assets of $306, mainly related to assets in the United States, Spain and the United Kingdom (note 15.1). In 2019 and 2018,
among others, includes impairment losses of fixed assets of $64 and $23, respectively, as well as in 2018 losses in the valuation of assets held for sale of $22 (notes 14.2, 15 and 16).
In 2020, 2019 and 2018, includes $11, $55 and $56, respectively, in connection with property damages and natural disasters (note 25.1).
3 Restructuring costs mainly refer to severance payments and the definite closing of operating sites.
4 Refers to past services remeasurement of CEMEX’s defined benefit plan in the United Kingdom determined in 2018 considering the issuance of a gender parity law.
8) FINANCIAL ITEMS
8.1) FINANCIAL EXPENSE
Consolidated financial expense in 2020, 2019 and 2018 includes $74, $77 and $74 of interest expense from financial obligations related to lease contracts
(notes 15.2 and 17.2).
8.2) FINANCIAL INCOME AND OTHER ITEMS, NET
The detail of financial income and other items, net in 2020, 2019 and 2018 was as follows:
Effects of amortized cost on assets and liabilities and others, net 1
Results from financial instruments, net (notes 14.2 and 17.4)
Foreign exchange results
Financial income
Others
2020
2019
2018
$
$
(122)
(17)
6
20
3
(110)
(59)
(1)
(32)
21
–
(71)
(59)
39
10
18
(10)
(2)
1 The increase in 2020 is mainly a result of the decrease in the discount rates in the United Kingdom utilized by the Company to determine its environmental remediation liabilities.
9) CASH AND CASH EQUIVALENTS
As of December 31, 2020 and 2019, consolidated cash and cash equivalents consisted of:
Cash and bank accounts
Fixed-income securities and other cash equivalents
2020
2019
$
$
501
449
950
547
241
788
Based on net settlement agreements, the balance of cash and cash equivalents excludes deposits in margin accounts that guarantee several obligations of
CEMEX of $32 in 2020 and $27 in 2019, which were offset against the corresponding obligations of CEMEX with the counterparties, considering CEMEX’s right,
ability and intention to settle the amounts on a net basis.
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10) TRADE ACCOUNTS RECEIVABLE
As of December 31, 2020 and 2019, consolidated trade accounts receivable consisted of:
Trade accounts receivable
Allowances for expected credit losses
2020
2019
1,654
(121)
1,533
1,637
(116)
1,521
$
$
As of December 31, 2020 and 2019, trade accounts receivable include receivables of $677 and $682, respectively, sold under outstanding trade receivables
securitization programs and/or factoring programs with recourse, established in Mexico, the United States, France and the United Kingdom, in which 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 removed from the statement of financial position and the funded amounts to CEMEX of $586 in 2020 and $599
in 2019, were recognized within the line item of “Other financial obligations.” Trade accounts receivable qualifying for sale exclude amounts over certain days
past due or concentrations over certain limits to any one customer, according to the terms of the programs. The discount granted to the acquirers of the
trade accounts receivable is recorded as financial expense and amounted to $13 in 2020, $25 in 2019 and $23 in 2018. 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, 2020, the balances of trade accounts receivable and the allowance for Expected Credit Losses (“ECL”) were as follows:
Mexico
United States
Europe, Middle East, Africa and Asia
South, Central America and the Caribbean
Others
Changes in the allowance for expected credit losses in 2020, 2019 and 2018, were as follows:
Allowances for expected credit losses at beginning of period
Adoption effects of ECL model as of January 1, 2018
Charged to selling expenses
Deductions
Foreign currency translation effects
Allowances for expected credit losses at end of period
Accounts
receivable
ECL
allowance
ECL
average rate
284
477
766
94
33
1,654
38
8
51
20
4
121
13.7%
1.7%
6.7%
21.3%
12.1%
2020
2019
2018
116
–
23
(19)
1
121
119
–
12
(16)
1
116
109
29
8
(20)
(7)
119
$
$
$
$
As of December 31, 2020, in relation to the COVID-19 Pandemic (note 2) and the potential increase in expected credit losses on trade accounts receivable
because of the negative economic effects associated with the COVID-19 Pandemic, CEMEX maintains continuous communication with its customers as part
of its collection management, in order to anticipate situations that could represent an extension in the portfolio’s recovery period or in some cases the risk
of non-recovery. As of this same date, the Company considers that these negative effects do not yet have a significant impact on the estimates of expected
credit losses and will continue to monitor the development of relevant events that may eventually have effect because of a deepening or extension of the
COVID-19 Pandemic.
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11) OTHER ACCOUNTS RECEIVABLE
As of December 31, 2020 and 2019, consolidated other accounts receivable consisted of:
Advances of income taxes and other refundable taxes
Non-trade accounts receivable 1
Interest and notes receivable
Current portion of valuation of derivative financial instruments
Loans to employees and others
1 Non-trade accounts receivable are mainly attributable to the sale of assets.
12) INVENTORIES
As of December 31, 2020 and 2019, the consolidated balance of inventories was summarized as follows:
Finished goods
Materials and spare parts
Raw materials
Work-in-process
Inventory in transit
2020
2019
304
117
39
7
10
477
147
113
50
1
14
325
2020
2019
309
271
192
164
35
971
320
263
194
195
17
989
$
$
$
$
For the years ended December 31, 2020, 2019 and 2018, CEMEX recognized within “Cost of sales” in the income statement, inventory impairment losses of $9,
$6 and $6, respectively.
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13) ASSETS HELD FOR SALE AND OTHER CURRENT ASSETS
13.1) ASSETS HELD FOR SALE (note 5.2)
As of December 31, 2020 and 2019, assets held for sale, which are measured at the lower of their estimated realizable value, less costs to sell, and their carrying
amounts, as well as liabilities directly related with such assets are detailed as follows:
White cement assets in Spain
Kosmos’ assets in the United States
Assets in the United Kingdom
Other assets held for sale 1
2020
2019
Assets
Liabilities
Net assets
Assets
Liabilities
Net assets
$
$
107
–
–
80
187
–
–
–
6
6
107
–
–
74
181
$
$
106
457
229
47
839
–
14
23
–
37
106
443
206
47
802
1
In 2020, includes assets and liabilities of $26 and $6, respectively, associated with a committed sale of certain assets in France negotiated in December 2020.
CEMEX recognized within the line item “Other expenses, net” adjustments in the fair value of its assets held for sale representing losses of $23 in 2020 and
$30 in 2018.
13.2) OTHER CURRENT ASSETS
As of December 31, 2020 and 2019, other current assets are mainly comprised of advance payments to vendors.
14) EQUITY ACCOUNTED INVESTEES, OTHER INVESTMENTS AND NON-CURRENT ACCOUNTS RECEIVABLE
14.1) EQUITY ACCOUNTED INVESTEES
As of December 31, 2020 and 2019, the investments in common shares of associates were as follows:
Camcem, S.A. de C.V.
Concrete Supply Co. LLC
Lehigh White Cement Company
Société d’Exploitation de Carrières
Société Méridionale de Carrières
Other companies
Out of which:
Book value at acquisition date
Changes in stockholders’ equity
Activity
Cement
Concrete
Cement
Aggregates
Aggregates
—
Country
Mexico
United States
United States
France
France
—
%
40.1
40.0
36.8
50.0
33.3
—
2020
2019
$
$
$
$
244
81
62
21
14
88
510
311
199
229
75
64
17
15
81
481
331
150
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Combined condensed statement of financial position information of CEMEX’s associates as of December 31, 2020 and 2019 is set forth below:
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Total net assets
2020
2019
$
$
1,240
1,662
2,902
496
766
1,262
1,640
982
1,757
2,739
326
898
1,224
1,515
Combined selected information of the statements of operations of CEMEX’s associates in 2020, 2019 and 2018 is set forth below:
Sales
Operating earnings
Income before income tax
Net income
$
2020
2019
2018
1,759
296
175
128
1,600
237
158
118
1,449
224
110
86
The share of equity accounted investees by reportable segment in the statements of operations for 2020, 2019 and 2018 is detailed as follows:
Mexico
United States
EMEAA
Corporate and others
2020
2019
2018
$
$
30
15
6
(2)
49
23
18
10
(2)
49
13
15
7
(1)
34
14.2) OTHER INVESTMENTS AND NON-CURRENT ACCOUNTS RECEIVABLE
As of December 31, 2020 and 2019, consolidated other investments and non-current accounts receivable were summarized as follows:
Non-current accounts receivable 1
Investments at fair value through the income statement 2
Non-current portion of valuation of derivative financial instruments (note 17.4)
Investments in strategic equity securities 3
2020
2019
$
$
246
23
3
3
275
197
34
2
3
236
1
Includes, among other items: a) accounts receivable from investees and joint ventures of $36 in 2020 and $32 in 2019, b) advances to suppliers of fixed assets of $47 in 2020 and $32
in 2019, c) employee prepaid compensation of $6 in 2020 and $7 in 2019, d) refundable taxes of $10 in 2019; and e) warranty deposits of $29 in 2020 and $33 in 2019.
2 Refers to investments in private funds and investments related to employee’ savings funds. In 2020 and 2019, no contributions were made to such private funds.
3 This line item refers mainly to a strategic investment in CPOs of Axtel, S.A.B. de C.V. (“Axtel”). This investment is recognized at fair value through other comprehensive income.
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15) PROPERTY, MACHINERY AND EQUIPMENT, NET AND ASSETS FOR THE RIGHT-OF-USE, NET
As of December 31, 2020 and 2019, property, machinery and equipment, net and assets for the right-of-use, net were summarized as follows:
Property, machinery and equipment, net
Assets for the right-of-use, net
2020
10,170
1,243
11,413
2019
10,565
1,285
11,850
$
$
15.1) PROPERTY, MACHINERY AND EQUIPMENT, NET
As of December 31, 2020 and 2019, consolidated property, machinery and equipment, net and the changes in this line item during 2020, 2019 and 2018, were
as follows:
Cost at beginning of period
Accumulated depreciation and depletion
Net book value at beginning of period
Capital expenditures
Stripping costs
Total capital expenditures
Disposals 2
Reclassifications
Business combinations (note 5.1)
Depreciation and depletion for the period
Impairment losses
Foreign currency translation effects
Cost at end of period
Accumulated depreciation and depletion
Net book value at end of period
Land and
mineral
reserves
Building
2020
Machinery
and
equipment
Construction
in progress 1
$
$
4,606
(968)
3,638
47
18
65
(26)
(31)
–
(134)
(87)
139
4,741
(1,177)
3,564
2,374
(1,326)
1,048
35
–
35
(7)
(1)
–
(99)
(54)
42
2,438
(1,474)
964
11,519
(6,849)
4,670
482
–
482
(30)
(56)
11
(515)
(165)
57
11,929
(7,475)
4,454
1,209
–
1,209
–
–
–
–
–
–
–
–
(21)
1,188
–
1,188
Total
19,708
(9,143)
10,565
564
18
582
(63)
(88)
11
(748)
(306)
217
20,296
(10,126)
10,170
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Cost at beginning of period
Accumulated depreciation and depletion
Net book value at beginning of period
Capital expenditures
Stripping costs
Total capital expenditures
Disposals 2
Reclassifications 3
Business combinations (note 5.1)
Depreciation and depletion for the period
Impairment losses
Foreign currency translation effects
Cost at end of period
Accumulated depreciation and depletion
Net book value at end of period
Land and
mineral
reserves
4,789
(958)
3,831
46
22
68
(38)
(163)
–
(121)
(18)
79
4,606
(968)
3,638
$
$
2019
Machinery
and
equipment
12,185
(7,081)
5,104
663
–
663
(50)
(203)
–
(451)
(29)
(364)
11,519
(6,849)
4,670
Building
2,633
(1,371)
1,262
28
–
28
(8)
(23)
–
(61)
(17)
(133)
2,374
(1,326)
1,048
Construction
in progress 1
Total
2018 1, 2
1,035
–
1,035
–
–
–
–
(13)
–
–
–
187
1,209
–
1,209
20,642
(9,410)
11,232
737
22
759
(96)
(402)
–
(633)
(64)
(231)
19,708
(9,143)
10,565
20,653
(9,065)
11,588
630
38
668
(49)
6
6
(657)
(23)
(307)
20,642
(9,410)
11,232
1 As of December 31, 2020, the Maceo plant in Colombia, finalized significantly in 2017, with an annual capacity of approximately 1.1 million tons, has not initiated commercial
operations. As of the reporting date, the works related to the access road to the plant remain suspended and the beginning of commercial operations is subject 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, 2020, the carrying amount of the plant,
net of impairment adjustments of certain advance payments recognized in 2016 of $23, is for an amount in Colombian pesos equivalent to $270.
2
3
In 2020, includes sales of non-strategic fixed assets in the United Kingdom and the United States for $28 and $18, respectively, among others. In 2019, includes sales of non-strategic
fixed assets in Germany, France and the United Kingdom for $32, $12 and $6, respectively, among others. In 2018, includes sales of non-strategic fixed assets in the United States,
Spain and Mexico for $19, $8 and $6, respectively, among others.
In 2019, refers to the reclassification of the assets in the United States, United Kingdom and Spain for $134, $182 and $86, respectively. In 2018, refers mainly to the reclassification of
the assets in Spain (note 13.1) for $30.
Considering mainly the negative effects of the COVID-19 Pandemic on certain idle 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, during 2020, CEMEX recognized
non-cash impairment losses for these assets for an aggregate amount of $306, of which $76 relate to assets in the United States mainly the North Brooksville
plant, $189 to assets in EMEAA mainly referring to the Lloseta and Gador plants in Spain and the South Ferriby plant in the United Kingdom, among minor
adjustments in other countries and $39 to assets in SCA&C mainly in connection with land in Puerto Rico and the kiln 1 in Panama. In 2019 due to the continued
adverse outlook and the overall uncertain economic conditions in Puerto Rico after hurricane “Maria” in 2017, CEMEX recognized an impairment loss of $52.
These losses result from the excess of the net book value of the related assets against their respective use value or estimated realizable value, whichever is
greater. For the years ended December 31, 2020, 2019 and 2018, CEMEX adjusted the related fixed assets to their estimated value in use in those circumstances
in which the assets would continue in operation based on estimated cash flows during the remaining useful life, or to their realizable value, in case of
permanent shut down, and recognized impairment losses within the line item of “Other expenses, net” (notes 3.10 and 7).
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During the years ended December 31, 2020, 2019 and 2018 impairment losses of fixed assets by country are as follows:
Spain
United States
United Kingdom
Puerto Rico
Croatia
Panama
Dominican Republic
Colombia
France
Poland
Mexico
Others
2020
2019
2018
$
$
135
76
39
20
13
12
5
2
2
–
–
2
306
–
6
–
52
–
–
–
3
1
–
–
2
64
2
13
–
–
–
–
–
2
–
5
1
–
23
15.2) ASSETS FOR THE RIGHT-OF-USE, NET
As of December 31, 2020 and 2019, consolidated assets for the right-of-use, net and the changes in this caption during 2020, 2019 and 2018, were as follows:
Assets for the right-of-use at beginning of period
Accumulated depreciation
Net book value at beginning of period
Additions of new leases
Cancellations and remeasurements
Business combinations (note 5.1)
Depreciation
Foreign currency translation effects
Assets for the right-of-use at end of period
Accumulated depreciation
Net book value at end of period
Land
Building
$
$
366
(117)
249
42
(7)
13
(28)
1
409
(139)
270
471
(233)
238
38
(17)
–
(35)
(20)
457
(253)
204
2020
Machinery
and
equipment
1,417
(625)
792
127
(51)
–
(173)
63
1,502
(744)
758
Others
Total
11
(5)
6
6
(1)
–
(3)
3
21
(10)
11
2,265
(980)
1,285
213
(76)
13
(239)
47
2,389
(1,146)
1,243
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Assets for the right-of-use at beginning of period
Accumulated depreciation
Net book value at beginning of period
Additions of new leases
Cancellations and remeasurements
Reclassifications
Depreciation
Foreign currency translation effects
Assets for the right-of-use at end of period
Accumulated depreciation
Net book value at end of period
Land
Building
$
$
384
(83)
301
25
(6)
(5)
(29)
(37)
366
(117)
249
393
(265)
128
52
(6)
65
(39)
38
471
(233)
238
2019
Machinery
and
equipment
1,289
(499)
790
193
(40)
(25)
(219)
93
1,417
(625)
792
Others
Total
2018
7
(4)
3
4
–
–
(1)
–
11
(5)
6
2,073
(851)
1,222
274
(52)
35
(288)
94
2,265
(980)
1,285
1,881
(688)
1,193
296
(9)
–
(219)
(39)
2,073
(851)
1,222
For the years ended December 31, 2020, 2019 and 2018, the combined rental expense related with short-term leases, leases of low-value assets and variable
lease payments were $97, $104 and $89, respectively, and were recognized in cost of sales and operating expenses, as correspond. 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, 2020 and 2019, consolidated goodwill, intangible assets and deferred charges were summarized as follows:
2020
2019
Cost
Accumulated
amortization
Carrying
amount
Cost
Accumulated
amortization
Carrying
amount
$
8,506
–
8,506
$
9,562
–
9,562
Intangible assets of indefinite useful life:
Goodwill
Intangible assets of definite useful life:
Extraction rights
Industrial property and trademarks
Customer relationships
Mining projects
Others intangible assets
1,774
44
196
49
1,034
11,603
$
(416)
(20)
(196)
(6)
(713)
(1,351)
1,358
24
–
43
321
10,252
Changes in consolidated goodwill for the years ended December 31, 2020, 2019 and 2018, were as follows:
Balance at beginning of period
Business combinations (note 5.1)
Reclassification to assets held for sale (notes 5.2, 5.3 and 13.1)
Impairment losses
Foreign currency translation effects
Balance at end of period
1,985
42
196
48
1,014
12,847
(395)
(18)
(196)
(5)
(643)
(1,257)
1,590
24
–
43
371
11,590
2020
2019
2018
9,562
2
(9)
(1,020)
(29)
8,506
9,912
–
(371)
–
21
9,562
9,948
16
(22)
–
(30)
9,912
$
$
$
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Changes in intangible assets of definite life in 2020, 2019 and 2018, were as follows:
Balance at beginning of period
Additions (disposals), net 1
Impairment losses (note 2)
Business combinations (note 5.1)
Amortization for the period
Foreign currency translation effects
Balance at the end of period
Balance at beginning of period
Additions (disposals), net 1
Reclassifications (notes 5.2 and 13.1)
Amortization for the period
Impairment losses
Foreign currency translation effects
Balance at the end of period
Extraction
rights
Industrial
property and
trademarks
$
$
1,590
(33)
(181)
–
(21)
3
1,358
Extraction
rights
Industrial
property and
trademarks
$
$
1,622
(26)
–
(8)
–
2
1,590
24
(6)
–
(1)
–
7
24
24
–
–
2
(2)
–
24
2019
Mining
projects
37
5
–
(1)
–
2
43
2020
Mining
projects
43
–
–
–
(1)
1
43
Others 1
Total
371
37
(13)
5
(106)
27
321
2,028
4
(194)
7
(130)
31
1,746
Others 1
Total
2018
341
108
(2)
(114)
–
38
371
2,024
81
(2)
(124)
–
49
2,028
2,006
157
(11)
(106)
(9)
(13)
2,024
1
In 2020 and 2019, “Others” includes the carrying amount of internal-use software of $213 and $253, respectively. Capitalized direct costs incurred in the development stage of internal-
use software, such as professional fees, direct labor and related travel expenses amounted to $40 in 2020, $102 in 2019 and $133 in 2018.
In connection with the idle status of North Brooksville plant in the United States (notes 2 and 15.1), CEMEX also recognized a non-cash impairment charge of
$181 associated with the operating permits related to such plant considering that the book value of such permits will not be recovered through normal use
before their expiration and $13 of other intangible assets.
16.2) ANALYSIS OF GOODWILL IMPAIRMENT
At least once a year during the last quarter or when impairment indicators exist, CEMEX analyses the possible impairment of goodwill by means of determining
the value in use of its Cash Generating Units (“CGUs”) to which goodwill balances have been allocated. The value in use is represented by the discounted
cash flows projections related to such CGUs using risk adjusted discount rates. In addition to the periodic goodwill impairment tests performed at year end
2020, considering the negative effects on its operating results caused by the COVID-19 Pandemic (note 2), as well as the high uncertainty and lack of visibility
in relation to the duration and consequences in the different markets where the Company operates, management considered that impairment indicators
occurred during the third quarter of 2020 in its operating segments in the United States, Spain, Egypt and the United Arab Emirates, and consequently
carried out impairment analyses of goodwill as of September 30, 2020.
As a result of these impairment analyses, in the third quarter of 2020, the Company recognized within “Other expenses, net” (note 7) in the statement of
operations, a non-cash goodwill impairment loss for an amount of $1,020 in connection with its operating segment in the United States. No other impairment
test of goodwill as of September 30, 2020 resulted in additional goodwill impairment losses. Moreover, CEMEX did not determine additional impairment
losses in its goodwill impairment test as of December 31, 2020 in any of the groups of CGUs to which goodwill balances have been allocated. In 2019 and 2018,
CEMEX did not determine goodwill impairment losses.
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The impairment loss in the United States resulted from the high volatility, lack of visibility and reduced outlook associated with the effects of the COVID-19
Pandemic (note 2) which made CEMEX reduce its cash-flows projections in such country from 7 to 5 years as well as reduce its long-term growth rate from
2.5% to 2%. Such changes significantly reduced the value in use as of September 30, 2020, which decreased by 25.7% as compared to December 31, 2019. Of
this reduction, 51.5 percentage points (“p.p.”) were related to the decrease of two years in the cash flows projections, 27.3 p.p. resulted from the reduction in
the long-term growth rate used to determine the terminal value which changed from 2.5% in 2019 to 2.0% as of September 30, 2020, and 28.3 p.p. resulted
from the slowdown of sales growth over the projected years, partially compensated by a positive effect of 7.1 p.p. associated with the reduction in the discount
rate which decrease from 7.8% in 2019 to 7.7% as of September 30, 2020.
As of December 31, 2020 and 2019, goodwill balances allocated by operating segment were as follows:
Mexico
United States
EMEAA
Spain
United Kingdom
France
Philippines
United Arab Emirates
Rest of EMEAA 1
SCA&C
Caribbean TCL
Caribe TCL
Rest of SCA&C 2
Others
Other reporting segments 3
2020
2019
$
372
6,449
384
7,469
463
292
229
95
96
44
283
92
64
494
279
221
92
96
42
296
100
62
$
27
8,506
27
9,562
1 This caption refers to the operating segments in the Czech Republic and Egypt.
2 This caption refers to the operating segments in the Dominican Republic, the Caribbean, Costa Rica and Panama.
3 This caption is primarily associated with Neoris N.V., CEMEX’s subsidiary involved in the sale of information technology and services.
As of December 31, 2020, 2019 and 2018, 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:
Groups of CGUs
2020
2019
2018
2020
2019
2018
Discount rates
Long-term growth rates
United States
Spain
United Kingdom
France
Mexico
Colombia
United Arab Emirates
Egypt
Range of rates in other countries
7.3%
7.7%
7.4%
7.4%
8.3%
8.4%
8.3%
10.2%
7.8%
8.3%
8.0%
8.0%
9.0%
8.9%
8.8%
10.3%
7.2% - 15.5% 8.1% - 11.5%
8.5%
8.8%
8.4%
8.4%
9.4%
9.5%
11.0%
10.8%
8.5% - 13.3%
2.0%
1.5%
1.6%
1.7%
1.1%
2.5%
2.6%
5.6%
(0.3%) - 6.5%
2.5%
1.6%
1.5%
1.4%
2.4%
3.7%
2.5%
6.0%
1.6% - 6.5%
2.5%
1.7%
1.6%
1.6%
3.0%
3.6%
2.9%
6.0%
2.3% - 6.9%
The discount rates used by CEMEX in its cash flows projections as of September 30, 2020 in the applicable countries remained relatively flat as compared to
the rates determined as of December 31, 2019.
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Moreover, the discount rates used by CEMEX in its cash flows projections to determine the value in use of its operating segments as of December 31, 2020
generally decreased as compared to 2019 in a range of 0.1% up to 1.5%, mainly as a result of a decrease in 2020 in the funding cost observed in the industry
that changed from 5.4% in 2019 to 4.1% in 2020 as well as the weighing of debt in the calculation of the discount rates that increased from 31.7% in 2019 to
34.6% in 2020. The risk-free rate associated to CEMEX changed from 2.9% in 2019 to 2.2% in 2020, nonetheless, increases in the specific risk rates of each
country and in the market risk premium which changed from 5.6% in 2019 to 5.7% in 2020, resulted in that total cost of equity remained significantly flat in
2020 as compared to 2019 in the majority of the countries. These reductions were partially offset by a slight increase in the public comparable companies’
stock volatility (beta) that changed from 1.08 in 2019 to 1.19 in 2020. In addition, as preventive measure to consider the high uncertainty, volatility and reduced
visibility related to the negative effects of the COVID-19 Pandemic (note 2), CEMEX significantly reduced in certain countries its long-term growth rates used
in their cash flows projections as of December 31, 2020 as compared to 2019 such as in the United States in 0.5%, Mexico in 1.3% and Colombia in 1.2%. These
long-term growth rates will be revised upwards or downwards again in the future as new economic data is available.
The discount rates used by CEMEX in its cash flows projections to determine the value in use of its operating segments as of December 31, 2019 generally
decreased as compared to 2018 in a range of 0.6% up to 2.6%, mainly because of a decrease in 2019 in the funding cost observed in the industry that changed
from 7.3% in 2018 to 5.4% in 2019. The risk-free rate associated to CEMEX remained significantly flat in the level of 2.9%, while the country risk-specific rates
decreased slightly in 2019 in most cases. These reductions were partially offset by a slight increase in the public comparable companies’ stock volatility (beta)
that changed from 1.06 in 2018 to 1.08 in 2019 and the decrease in the weighing of debt in the calculation of the discount rates that changed from 33.5% in
2018 to 31.7% in 2019.
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 has been allocated. CEMEX considered an industry average Operating EBITDA multiple of 11.5 times in
2020, 11.5 times in 2019 and 11.1 times in 2018.
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 multiples of Operating EBITDA, in those operating
segments that presented impairment charges or relative impairment risk during 2020, are as follows:
Operating segment
Additional effects of the sensitivity analyses
to the charges recognized from the changes
in assumptions as of December 31, 2020
Impairment
losses
recognized
Long-term
Discount rate growth rate
+1%
–1%
Multiples
Operating
EBITDA
11.5x
United States
$
1,020
188
–
–
The factors considered by the Company’s management that could cause the hypothetical scenarios of the previous sensitivity analysis in the United States are,
in relation to the discount rate, an independent increase of 300 bps in the industry funding cost observed as of December 31, 2020 of 4.1% or, an independent
increase in the risk-free rate of 190 bps over the rate of 2.3% in such country. Nonetheless, such assumptions do not seem probable as of December 31, 2020.
As of December 31, 2020, except for the operating segment in the United States presented in the table above, none of the other sensitivity analyses indicated
a potential impairment risk in CEMEX’s operating segments. 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.
As of December 31, 2020 and 2019, goodwill allocated to its operating segment in the United States accounted for 76% and 78%, of CEMEX’s total amount
of consolidated goodwill, respectively. In connection with CEMEX’s determination of value in use relative to its groups of CGUs in the United States in the
reported periods, CEMEX has considered several factors, such as the historical performance of such operating segment, including the operating results in
recent years, the long-term nature of CEMEX’s investment, the signs of recovery in the construction industry over the last years, the significant economic
barriers for new potential competitors considering the high investment required, and the lack of susceptibility of the industry to technology improvements
or alternate construction products, among other factors. To improve its assurance, as mentioned above, CEMEX verified its conclusions using sensitivity
analyses over Operating EBITDA multiples of recent sale transaction within the industry occurred in such country, as well as macroeconomic information
regarding gross domestic product and cement consumption over the projected periods issued by the International Monetary Fund and the U.S. Portland
Cement Association, respectively.
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17) FINANCIAL INSTRUMENTS
17.1) CURRENT AND NON-CURRENT DEBT
As of December 31, 2020 and 2019, CEMEX´s consolidated debt summarized by interest rates and currencies, was as follows:
Floating rate debt
Fixed rate debt
Effective rate 3
Floating rate
Fixed rate
Dollars
Euros
Pounds
Philippine pesos
Mexican pesos
Other currencies
2020
2019
Current
Non-current
Total 1, 2
Current
Non-current
Total 1, 2
$
$
172
7
179
3.1%
4.7%
2,538
6,622
9,160
4.0%
5.6%
2020
2,710
6,629
9,339
$
$
3,056
6,309
9,365
59
3
62
4.3%
5.2%
2,997
6,306
9,303
4.1%
5.5%
2019
Currency
Current Non-current
Total
$
$
6
73
55
3
–
42
179
6,089
2,078
329
220
334
110
9,160
6,095
2,151
384
223
334
152
9,339
Effective
rate 3
5.8%
2.7%
2.5%
4.1%
6.8%
4.9%
Current
Non-current
Total
25
3
23
3
–
8
62
6,144
2,438
433
221
–
67
9,303
6,169
2,441
456
224
–
75
9,365
$
$
Effective
rate 3
5.2%
3.1%
3.2%
5.2%
–
5.6%
1 As of December 31, 2020 and 2019, from total debt of $9,339 and $9,365, respectively, 93% in 2020 and 84% in 2019 was held in the Parent Company, 11% in 2019 was in finance
subsidiaries in the Netherlands and the United States, and 7% in 2020 and 5% in 2019 was in other countries.
2 As of December 31, 2020 and 2019, cumulative discounts, fees and other direct costs incurred in CEMEX’s outstanding debt borrowings and the issuance of notes payable (jointly
“Issuance Costs”) for $66 and $71, respectively, are presented reducing debt balances and are amortized to financial expense over the maturity of the related debt instruments under
the amortized cost method.
3
In 2020 and 2019, represents the weighted-average nominal interest rate of the related debt agreements determined at the end of each period.
As of December 31, 2020 and 2019, CEMEX´s consolidated debt summarized by type of instrument, was as follows:
2020
Current Non-current
2019
Current
Non-current
Bank loans
Loans in foreign countries, 2021 to 2024
Syndicated loans, 2021 to 2025
Notes payable
Medium-term notes, 2024 to 2030
Other notes payable, 2021 to 2027
Total bank loans and notes payable
Current maturities
$
$
67
–
67
–
7
7
74
105
179
371
2,383
2,754
6,327
184
6,511
9,265
(105)
9,160
Bank loans
Loans in foreign countries, 2020 to 2024
Syndicated loans, 2021 to 2022
$
Notes payable
Medium-term notes, 2023 to 2026
Other notes payable, 2020 to 2025
Total bank loans and notes payable
Current maturities
$
1
–
1
–
6
6
7
55
62
290
2,865
3,155
6,044
159
6,203
9,358
(55)
9,303
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As of December 31, 2020 and 2019, CEMEX’s bank loans included the balances under CEMEX’s facilities agreement entered on July 19, 2017, as amended and
restated several times in 2020 and 2019 as described below (the “2017 Facilities Agreement”) for $2,420 and $2,897, respectively. The 2017 Facilities Agreement
is multi-currency and includes a committed revolving credit facility of $1,121 in 2020 and $1,135 in 2019.
Changes in consolidated debt for the years ended December 31, 2020, 2019 and 2018 were as follows:
Debt at beginning of year
Proceeds from new debt instruments
Debt repayments
Foreign currency translation and accretion effects
Debt at end of year
2020
9,365
4,210
(4,572)
336
9,339
2019
9,311
3,331
(3,284)
7
9,365
$
$
2018
9,873
2,325
(2,745)
(142)
9,311
As of December 31, 2020 and 2019, non-current notes payable for $6,511 and $6,203, respectively, were detailed as follows:
Description
September 2030 Notes 3
November 2029 Notes 4
June 2027 Notes
April 2026 Notes
March 2026 Notes
July 2025 Notes
March 2025 Notes 3
January 2025 Notes
December 2024 Notes
June 2024 Notes 3
April 2024 Notes 4
Other notes payable
Date of
issuance
17/Sep/20
19/Nov/19
05/Jun/20
16/Mar/16
19/Mar/19
02/Apr/03
03/Mar/15
11/Sep/14
05/Dec/17
14/Jun/16
01/Apr/14
Issuer 1
Principal
Currency amount
Rate
Maturity
date
Redeemed Outstanding
amount 2
$
amount 2
$
2020
2019
Dollar
CEMEX, S.A.B. de C.V.
Dollar
CEMEX, S.A.B. de C.V.
Dollar
CEMEX, S.A.B. de C.V.
Dollar
CEMEX, S.A.B. de C.V.
Euro
CEMEX, S.A.B. de C.V.
CEMEX Materials LLC Dollar
Dollar
CEMEX, S.A.B. de C.V.
Dollar
CEMEX, S.A.B. de C.V.
Euro
CEMEX, S.A.B. de C.V.
Euro
CEMEX Finance LLC
Dollar
CEMEX Finance LLC
5.2%
1,000
5.45%
1,000
1,000 7.375%
7.75%
1,000
400 3.125%
150
7.70%
750 6.125%
5.70%
1,100
650
2.75%
400 4.625%
6.00%
1,000
17/Sep/30
19/Nov/29
05/Jun/27
16/Apr/26
19/Mar/26
21/Jul/25
05/May/25
11/Jan/25
05/Dec/24
15/Jun/24
01/Apr/24
–
–
–
–
–
–
(750)
(29)
–
(400)
(1,000)
1,000
1,000
1,000
1,000
449
150
–
1,071
729
–
–
$
$
995
993
994
997
487
153
–
1,069
792
–
–
31
6,511
–
992
–
996
446
154
748
1,069
726
447
621
4
6,203
1 As of December 31, 2020, except for the July 2025 Notes which are guaranteed exclusively by CEMEX Corp. and unless otherwise indicated, all issuances are fully and unconditionally
guaranteed by CEMEX, S.A.B. de C.V., CEMEX Concretos, S.A. de C.V., CEMEX España, S.A. (“CEMEX España”), CEMEX Asia B.V., CEMEX Corp., CEMEX Africa & Middle East Investments
B.V., CEMEX Finance LLC, CEMEX France Gestion, (S.A.S.), CEMEX Research Group AG and CEMEX UK.
2 Presented net of all outstanding notes repurchased and held by CEMEX’s subsidiaries.
3 CEMEX used a significant portion of the proceeds from the September 2030 Notes to redeem in full the March 2025 Notes and the June 2024 Notes.
4 In December 2019, CEMEX used a portion of the proceeds of the November 2029 Notes and increased to $360 the redeemed amount of the April 2024 Notes and further redeemed
the entire amount in 2020.
The maturities of consolidated long-term debt as of December 31, 2020, were as follows:
2022
2023
2024
2025
2026 and thereafter
Bank loans
Notes payable
Total
$
$
180
766
603
1,100
–
2,649
6
6
796
1,226
4,477
6,511
186
772
1,399
2,326
4,477
9,160
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As of December 31, 2020, CEMEX had the following lines of credit, of which, the only committed portion refers to the revolving credit facility under the 2017
Facilities Agreement, at annual interest rates ranging between 1.65% and 3.94%, depending on the negotiated currency:
Other lines of credit in foreign subsidiaries
Other lines of credit from banks
Revolving credit facility 2017 Facilities Agreement
Lines of credit
Available
$
$
248
310
1,121
1,679
87
310
1,121
1,518
As a result of debt issuances, exchange offers and tender offers incurred to refinance, replace and/or repurchase existing debt instruments, as applicable,
CEMEX paid Issuance Costs for a combined amount of $98 in 2020, $63 in 2019 and $51 in 2018. Of these incurred Issuance Costs, $38 in 2020 and $24 in 2019,
corresponding to new debt instruments or the refinancing of old debt, adjusted the carrying amount of the related debt instruments and are amortized over
the remaining term of each instrument, while $60 in 2020, $39 in 2019 and $51 in 2018 of such Issuance Costs, associated with the extinguished portion of the
related debt, were recognized in the statement of operations in each year within “Financial expense”. In addition, Issuance Costs pending for amortization
related to extinguished debt instruments for $19 in 2020, $1 in 2019 and $4 in 2018 were also recognized in the statement of operations of each year within
“Financial expense.”
2017 Facilities Agreement
On July 19, 2017, the Parent Company and certain subsidiaries entered into the 2017 Facilities Agreement for an amount in different currencies equivalent
to $4,050 at the origination date. The proceeds were used to refinance in full the $3,680 then outstanding under the former facilities agreements and other
debt repayments. All tranches under the 2017 Facilities Agreement have substantially the same terms and share the same guarantors and collateral package
as other secured debt obligations of CEMEX. After the amendments to the 2017 Facilities Agreement mentioned below that became effective on October 13,
2020, all tranches under the 2017 Facilities Agreement amortize in five equal payments beginning in July 2021 and ending in July 2025, except for: (i) a tranche
for the Mexican Peso equivalent of $313 amortizing in four equal payments beginning in July 2023 and ending in July 2025; and (ii) the commitments under
the revolving credit which mature in July 2023.
All tranches under the 2017 Facilities Agreement have substantially the same terms, including a margin over LIBOR or EURIBOR and TIIE, as applicable,
depending on the consolidated leverage ratio (as defined below in the Financial Covenants section) of CEMEX, as follows:
Consolidated leverage ratio
LIBOR / EURIBOR Applicable margin 1
TIIE Applicable margin 1
> = 6.00x
< 6.00x > = 5.50x
< 5.50x > = 5.00x
< 5.00x > = 4.50x
< 4.50x > = 4.00x
< 4.00x > = 3.50x
< 3.50x > = 3.00x
< 3.00x > = 2.50x
< 2.50x
475 bps
425 bps
375 bps
300 bps
250 bps
212.5 bps
175 bps
150 bps
125 bps
425 bps
375 bps
325 bps
250 bps
210 bps
180 bps
150 bps
125 bps
100 bps
1 LIBOR and EURIBOR refer to the London Inter-Bank Offered Rate and the Euro Inter-Bank Offered Rate, respectively, variable rates used in international markets for debt denominated
in U.S. dollars and Euros, respectively. TIIE refers to the Tasa de Interés Interbancaria de Equilibrio, variable rate used for debt denominated in Mexican Pesos. As of December 31,
2020 and 2019, 3-Month LIBOR rate was 0.23838% and 1.9084%, respectively, meanwhile 3-Month EURIBOR rate was -0.545% and -0.3839%, respectively. As of December 31, 2020,
28-day TIIE rate was 4.4805%. The contraction “bps” means basis points. One hundred basis points equal 1%.
As part of the amendment process to the 2017 Facilities Agreement that became effective on October 13, 2020, among other aspects, CEMEX negotiated: a)
the extension of $1.1 billion of maturities by three years, from 2022 to 2025 and $1.1 billion (including the extension of December 17, 2020 mentioned below)
of commitments under the revolving credit facility by one year from 2022 to 2023; b) the inclusion of five sustainability-linked metrics, including reduction
of net CO2 emissions per cementitious product, power consumption from green energy in cement and improvements in quarry rehabilitation and water
management, among other metrics; c) redenominating $313 of previous Dollar debt under the term loans that are part of the 2017 Facilities Agreement to
Mexican Pesos, and $82 to Euros; d) amending the consolidated leverage ratio, as described below in the financial covenants section; and e) amendments
to incorporate Loan Market Association replacement screen rate provisions in anticipation of the discontinuation of LIBOR and potentially EURIBOR, as well
as Mexican benchmark interbank rate provisions. On December 17, 2020, $136 of debt under the 2017 Facilities Agreement were further extended, of which,
$43 mature in 2023 and $93 mature in 2025 in line with the October 13, 2020 amendment process.
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As part of amendment process to the 2017 Facilities Agreement that became effective on May 22, 2020, among other aspects, CEMEX negotiated the
modification of the financial covenants contained therein, including the leverage and coverage ratios, to levels that would ideally enable CEMEX to remain
in compliance with such financial covenants notwithstanding the adverse effects arising during the COVID-19 Pandemic (note 2) and the period of gradual
return to normal operations. As a result of the modifications to its financial covenants, the Company agreed to a one-time fee of $14 (35 basis points (“bps”))
and adjusted the applicable margin over LIBOR, or EURIBOR, as applicable, to accommodate for the changes to the leverage limits covenant. Moreover,
CEMEX agreed to certain temporary restrictions which are no longer applicable with respect to permitted capital expenditures, the extension of loans to
third parties, acquisitions and/or the use of proceeds from asset sales and fundraising activities, as well as an increase from zero to 125 bps in the financial
expense, depending on the corresponding applicable margin, CEMEX would be required to pay under the 2017 Facilities Agreement. CEMEX also agreed to
cease share repurchases whenever and for as long as the Company fails to report a consolidated leverage ratio of 4.50x or less.
As part of the amendments to the 2017 Facilities Agreement that became effective on November 4, 2019, among other aspects, CEMEX negotiated: a) an
exclusive amount of up to $500 permitted for share buy-back; b) a new allowance for disposals of non-controlling interests in subsidiaries that are no obligors
under the 2017 Facilities Agreement of up to $100 per calendar year; c) amendments related to the implementation of corporate reorganizations in Mexico,
Europe and TCL; and d) modifications to the calculation and limits of the consolidated coverage ratio and the consolidated leverage ratio, as described in the
Financial Covenants section below.
As part of the amendment process to the 2017 Facilities Agreement that became effective on April 2, 2019, among other aspects, CEMEX extended $1,060 of
maturities by three years and made certain adjustments to its consolidated financial leverage ratio, as described below in the financial covenants section, in
connection with the implementation of IFRS 16 and the neutralization of any potential effect from such adoption. In addition, CEMEX delayed the scheduled
tightening of the consolidated financial leverage ratio limit by one year.
The balance of debt under the 2017 Facilities Agreement, which debtor is CEMEX, S.A.B. de C.V., was originally guaranteed by CEMEX México, S.A. de C.V.
(“CEMEX México”), CEMEX Concretos, S.A. de C.V., Empresas Tolteca de México, S.A. de C.V. (“ETM”), New Sunward Holding B.V., CEMEX España, CEMEX Asia
B.V., CEMEX Corp., CEMEX Africa & Middle East Investments B.V., CEMEX Finance LLC, CEMEX France Gestion (S.A.S.), CEMEX Research Group AG and CEMEX
UK. In addition, the debt under these agreements (together with all other senior capital markets debt issued or guaranteed by CEMEX, and certain other
preceding facilities) is also secured by a first-priority security interest in: (a) substantially all the shares of CEMEX Operaciones México, S.A. de C.V, CEMEX
Innovation Holding Ltd. and CEMEX España (the “Collateral”); and (b) all proceeds of such Collateral. In 2019, the Parent Company merged and absorbed ETM
and CEMEX México, effective against third parties on February 26, 2020 and March 9, 2020, respectively. In addition, CEMEX España merged and absorbed
New Sunward Holding B.V. with effects as of December 1, 2020. As a result, the merged and absorbed entities ceased to guarantee CEMEX, S.A.B. de C.V.’s
indebtedness and the shares of CEMEX México and New Sunward Holding B.V., which used to be part of the Collateral, are no longer part of it.
During the years 2020 and 2019, under the 2017 Facilities Agreement, CEMEX was required to: a) not exceed an aggregate amount for capital expenditures of
$1,500 per year, excluding certain capital expenditures, joint venture investments and acquisitions by CHP and its subsidiaries and CLH and its subsidiaries,
which had a separate limit of $500 (or its equivalent) each; and b) not exceed the amount for permitted acquisitions and investments in joint ventures of
$400 per year. Nonetheless, such limitations did not apply if capital expenditures or acquisitions did not exceed free cash flow generation or were funded
with proceeds from equity issuances or asset disposals.
In addition to the restrictions mentioned above, and subject in each case to the permitted negotiated amounts and other exceptions, CEMEX is also subject
to several negative covenants that, among other things, restrict or limit its ability to incur additional obligations, change its line of business, enter into
mergers and enter into speculative derivatives transactions. Certain covenants and restrictions, such as the capital expenditure restrictions and several
negative covenants, including restrictions on CEMEX’s ability to declare or pay cash dividends and distributions to shareholders, among others, shall cease
to apply or become less restrictive if CEMEX so elects upon CEMEX’s Leverage Ratio (as defined hereinafter) for the two most recently completed quarterly
testing periods being less than or equal to 3.75 times and no default under the 2017 Facilities Agreement is continuing. CEMEX cannot assure that it will
be able to meet the conditions for these restrictions to cease to apply prior to the final maturity date under the 2017 Facilities Agreement. In addition, the
2017 Facilities Agreement contains events of default, some of which may occur and are outside of CEMEX’s control such as expropriation, sequestration and
availability of foreign exchange.
As of December 31, 2020 and 2019, CEMEX was in compliance with such limitations and restrictions contained in the 2017 Facilities Agreement. CEMEX
cannot assure that in the future it will be able to comply with such restrictive covenants and limitations. CEMEX’s failure to comply with such covenants and
limitations could result in an event of default, which could materially and adversely affect CEMEX’s business and financial condition.
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Financial Covenants
The 2017 Facilities Agreement requires CEMEX to comply with financial ratios, which mainly include: a) the consolidated ratio of debt to Operating EBITDA
(the “Leverage Ratio”); and b) the consolidated ratio of Operating EBITDA to interest expense (the “Coverage Ratio”). These financial ratios are calculated
using the consolidated amounts under IFRS.
CEMEX must comply with a Coverage Ratio and a Leverage Ratio for each period of four consecutive quarters. After the October 13, 2020 amendments, the
Coverage Ratio should be equal or greater than 1.75 times for each reference period ending on December 31, 2020 through March 31, 2021; equal or greater
than 2.25 times for each reference period ending on June 30, 2021 through September 30, 2021; equal or greater than 2.50 times for each reference period
ending on December 31, 2021 through September 30, 2022; and equal or greater than 2.75 times for each subsequent reference period. The limits for the
Leverage Ratio are as follows:
Period
For the period ending on December 31, 2020 up to and including the period ending on March 31, 2021
For the period ending on June 30, 2021
For the period ending on September 30, 2021 up to and including the period ending on March 31, 2022
For the period ending on June 30, 2022 up to and including the period ending on September 30, 2022
For the period ending on December 31, 2022 up to and including the period ending on March 31, 2023
For the period ending on June 30, 2023 and each subsequent reference period
Leverage Ratio
< = 6.25
< = 6.00
< = 5.75
< = 5.25
< = 4.75
< = 4.50
Leverage Ratio: is calculated dividing “Funded Debt” by pro forma Operating EBITDA for the last twelve months as of the calculation date including a
permanent fixed adjustment from the adoption of IFRS 16. Funded Debt equals debt, as reported in the statement of financial position, net of cash and
cash equivalents, excluding components of liability of convertible subordinated notes, plus lease liabilities, perpetual debentures and guarantees, plus or
minus the fair value of derivative financial instruments, as applicable, among other adjustments for business acquisitions or disposals. Before the April 2, 2019
amendments, the calculation of Funded Debt did not include cash and cash equivalents and obligations under lease contracts.
Pro forma Operating EBITDA represents, Operating EBITDA for the last twelve months as of the calculation date, after IFRS 16 effects, plus the portion
of Operating EBITDA referring to such twelve-month period of any significant acquisition made in the period before its consolidation in CEMEX, minus
Operating EBITDA referring to such twelve-month period of any significant disposal that had already been liquidated.
Coverage Ratio: is calculated by dividing pro forma Operating EBITDA by the financial expense for the last twelve months as of the calculation date, both
including IFRS 16 effects. Financial expense includes coupons accrued on the perpetual debentures.
As of December 31, 2020, 2019 and 2018, under the 2017 Facilities Agreement, the main consolidated financial ratios were as follows:
Leverage ratio
Coverage ratio
Consolidated financial ratios 1
Limit
Calculation
Limit
Calculation
2020
<=6.25
4.07
>=1.75
3.82
2019
<=5.25
4.17
>=2.50
3.86
2018
<=4.75
3.84
>=2.50
4.41
1 Refers to the compliance limits and calculations that were effective on such dates. For 2019, before the October 13, 2020 amendments and the May 22, 2020 amendments. For 2018,
before the April 2, 2019 amendments, the November 4, 2019 amendments and the adoption of IFRS 16 in the financial statements.
CEMEX’s ability to comply with these ratios may be affected by economic conditions and volatility in foreign exchange rates, as well as by overall conditions
in the financial and capital markets.
CEMEX will classify all of its non-current debt as current debt if: 1) as of any measurement date CEMEX fails to comply with the aforementioned financial
ratios; or 2) the cross default clause that is part of the 2017 Facilities Agreement is triggered by the provisions contained therein; 3) as of any date prior to a
subsequent measurement date CEMEX expects not to be in compliance with such financial ratios in the absence of: a) amendments and/or waivers covering
the next succeeding 12 months; b) high probability that the violation will be cured during any agreed upon remediation period and be sustained for the
next succeeding 12 months; and/or c) an agreement to refinance the relevant debt on a long-term basis. As a result of such classification of debt as current
for noncompliance with the agreed upon financial ratios or, in such event, the absence of a waiver of compliance or a negotiation thereof, after certain
procedures upon CEMEX’s lenders’ request, they would call for the acceleration of payments due under the 2017 Facilities Agreement. That scenario would
have a material adverse effect on CEMEX’s operating results, liquidity or financial position.
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17.2) OTHER FINANCIAL OBLIGATIONS
As of December 31, 2020 and 2019, other financial obligations in the consolidated statement of financial position were detailed as follows:
2020
2019
Current
Non-current
Total
Current
Non-current
Total
I. Leases
II. Liabilities secured with accounts receivable
III. Convertible subordinated notes due 2020
$
$
293
586
–
879
967
–
–
967
1,260
586
–
1,846
$
$
262
599
520
1,381
1,044
–
–
1,044
1,306
599
520
2,425
I. Leases (notes 3.6, 8.1, 15.2 and 24.1)
CEMEX has several operating and administrative assets under lease contracts (note 15.2). CEMEX applies the recognition exemption for short-term leases and
leases of low-value assets. Changes in the balance of lease financial liabilities during 2020, 2019 and 2018 were as follows:
2020
2019
2018
Lease financial liability at beginning of year
Additions from new leases
Reductions from payments
Cancellations and liability remeasurements
Foreign currency translation and accretion effects
Lease financial liability at end of year
As of December 31, 2020, the maturities of non-current lease financial liabilities are as follows:
2022
2023
2024
2025
2026 and thereafter
$
$
1,306
213
(276)
(9)
26
1,260
1,315
274
(239)
(54)
10
1,306
1,309
296
(192)
(67)
(31)
1,315
Total
199
162
127
95
384
967
$
$
Total cash outflows for leases in 2020, 2019 and 2018, including the interest expense portion as disclosed at note 8.1, were $350, $316 and $266, respectively.
Future payments associated with these contracts are presented in note 24.1.
II. Liabilities secured with accounts receivable
As mentioned in note 10, the funded amounts of sale of trade accounts receivable under securitization programs and/or factoring programs with recourse,
are recognized in “Other financial obligations” in the statement of financial position.
III. Optional convertible subordinated notes due 2020
During 2015, the Parent Company issued $521 aggregate principal amount of 3.72% optional convertible subordinated notes due in March 2020 (the “2020
Convertible Notes”) because of exchanges or settlements of other convertible notes. The 2020 Convertible Notes, were subordinated to most of CEMEX’s
liabilities and commitments and were convertible into a fixed number of the Parent Company’s ADSs at any time at the holder’s election and were subject to
antidilution adjustments. As of December 31, 2019, the conversion price per ADS for the 2020 Convertible Notes was $10.73 dollars. On March 13, 2020, CEMEX
paid $521 as full settlement of the aggregate outstanding amount of the 2020 Convertible Notes which matured on March 15, 2020 with a minimal conversion
of ADS.
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17.3) FAIR VALUE OF FINANCIAL INSTRUMENTS
Financial assets and liabilities
The book values of cash, trade receivables, other accounts receivable, trade payables, other accounts payable and accrued expenses, as well as short-term
debt, approximate their corresponding estimated fair values due to the revolving nature of these financial assets and liabilities in the short-term.
The estimated fair value of CEMEX´s non-current debt is level 1 and level 2 and is either based on estimated market prices for such or similar instruments,
considering interest rates currently available for CEMEX to negotiate debt with the same maturities, or determined by discounting future cash flows using
market-based interest rates currently available to CEMEX.
The fair values determined by CEMEX for its derivative financial instruments are level 2. There is no direct measure for the risk of CEMEX or its counterparties
in connection with such instruments. Therefore, the risk factors applied for CEMEX’s assets and liabilities originated by the valuation of such derivatives were
extrapolated from publicly available risk discounts for other public debt instruments of CEMEX or of its counterparties.
The estimated fair value of derivative instruments fluctuates over time and is determined by measuring the effect of future relevant economic variables
according to the yield curves shown in the market as of the reporting date. These values should be analyzed in relation to the fair values of the underlying
transactions and as part of CEMEX’s overall exposure to fluctuations in interest rates and foreign exchange rates. The notional amounts of derivative instruments
do not represent amounts of cash exchanged by the parties, and consequently, there is no direct measure of CEMEX’s exposure to the use of these derivatives.
The amounts exchanged are determined based on the notional amounts and other terms included in the derivative instruments.
As of December 31, 2020 and 2019, the carrying amounts of financial assets and liabilities and their respective fair values were as follows:
Financial assets
Derivative financial instruments (notes 14.2 and 17.4)
Other investments and non-current accounts receivable (note 14.2)
Financial liabilities
Long-term debt (note 17.1)
Other financial obligations (note 17.2)
Derivative financial instruments (notes 17.4 and 18.2)
2020
Carrying
amount
Fair value
2019
Carrying
amount
Fair value
$
$
$
$
3
272
275
9,160
967
53
10,180
3
272
275
9,687
1,012
53
10,752
$
$
$
$
2
234
236
9,303
1,044
46
10,393
2
234
236
9,711
1,071
46
10,828
As of December 31, 2020 and 2019, assets and liabilities carried at fair value in the consolidated statements of financial position are included in the following
fair value hierarchy categories (note 3.6):
2020
Level 1
Level 2
Level 3
Total
Assets measured at fair value
Derivative financial instruments (notes 14.2 and 17.4)
Investments in strategic equity securities (note 14.2)
Other investments at fair value through earnings (note 14.2)
Liabilities measured at fair value
Derivative financial instruments (notes 17.4 and 18.2)
$
$
$
–
3
–
3
–
3
–
23
26
53
–
–
–
–
–
3
3
23
29
53
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2019
Level 1
Level 2
Level 3
Total
Assets measured at fair value
Derivative financial instruments (notes 14.2 and 17.4)
Investments in strategic equity securities (note 14.2)
Other investments at fair value through earnings (note 14.2)
Liabilities measured at fair value
Derivative financial instruments (notes 17.4 and 18.2)
$
$
$
–
3
–
3
–
2
–
34
36
46
–
–
–
–
–
2
3
34
39
46
17.4) DERIVATIVE FINANCIAL INSTRUMENTS
During the reported periods, in compliance with the guidelines established by its Risk Management Committee, the restrictions set forth by its debt
agreements and its hedging strategy (note 17.5), CEMEX held derivative instruments, with the objectives, as the case may be of: a) changing the risk profile
or fixed the price of fuels; b) foreign exchange hedging; c) hedge of forecasted transactions; and d) other corporate purposes.
As of December 31, 2020 and 2019, the notional amounts and fair values of CEMEX’s derivative instruments were as follows:
I. Net investment hedge
II. Interest rate swaps
III. Equity forwards on third party shares
IV. Fuel price hedging
2020
2019
Notional
amount
Fair value
Notional
amount
Fair value
$
$
741
1,334
27
128
2,230
(42)
(47)
3
5
(81)
1,154
1,000
74
96
2,324
(67)
(35)
1
1
(100)
The caption “Financial income and other items, net” in the income statement includes gains and losses related to the recognition of changes in fair values
of the derivative financial instruments during the applicable period, which represented net losses of $17 in 2020, net losses of $1 in 2019 and net gains of $39
in 2018.
I. Net investment hedge
As of December 31, 2020 and 2019, there are Dollar/Mexican peso foreign exchange forward contracts under a program that started in 2017 with a notional of
up to $1,250, which can be adjusted in relation to hedged risks. During 2020, this program was adjusted and reached a notional amount of $741 with forward
contracts with tenors from 1 to 18 months. For accounting purposes under IFRS, CEMEX has designated this program as a hedge of CEMEX’s net investment
in Mexican pesos, pursuant to which changes in fair market value of these instruments are recognized as part of other comprehensive income in equity.
For the years 2020, 2019 and 2018, these contracts generated gains of $53 and losses of $126 and $59, respectively, which partially offset currency translation
results in each year recognized in equity generated from CEMEX’s net assets denominated in Mexican pesos due to the depreciation of the peso in 2020 and
the appreciation of the peso in 2019 and 2018.
II. Interest rate swap contracts
As of December 31, 2020 and 2019, CEMEX held interest rate swaps for a notional amount of $1,000 the fair value of which represented a liability of $44 and
$35, respectively, negotiated in June 2018 to fix interest payments of existing bank loans bearing floating rates. The contracts mature in June 2023. During
September 2020, CEMEX amended one of the interest rate swap contracts to reduce the weighted strike from 3.05% to 2.56% paying $14 recognized within
“Financial income and other items, net” in the statement of operations. For accounting purposes under IFRS, CEMEX designated these contracts as cash flow
hedges, pursuant to which, changes in fair value are initially recognized as part of other comprehensive income in equity and are subsequently allocated
through financial expense as interest expense on the related bank loans is accrued. For the years ended in 2020 and 2019, changes in fair value of these
contracts generated losses of $9 and losses of $26, respectively, recognized in other comprehensive income.
During October 2020, CEMEX negotiated interest rate swaps to fix interest payments of existing bank loans referenced to Mexican Peso floating rates and
will mature in November 2023. As of December 31, 2020, CEMEX held a notional amount of $334 the fair value of which represented a liability of $3. CEMEX
designated these contracts as cash flow hedges, pursuant to which, changes in fair value are initially recognized as part of other comprehensive income
in equity and are subsequently allocated through financial expense as interest expense on the related bank loans is accrued. For the year ended in 2020
changes in fair value of these contracts generated losses of $3 recognized in other comprehensive income.
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As of December 31, 2018, CEMEX had an interest rate swap maturing in September 2022 associated with an agreement entered by CEMEX for the acquisition
of electric energy in Mexico, the fair value of which represented assets of $11. Pursuant to this instrument, during the tenure of the swap and based on
its notional amount, CEMEX receives fixed rate of 5.4% and pays LIBOR. Changes in the fair value of this interest rate swap generated losses of $6 in 2018,
recognized in the income statement for each period. During 2019, CEMEX unwound and settled its interest rate swap.
III. Equity forwards on third party shares
As of December 31, 2020 and 2019, CEMEX maintained equity forward contracts with cash settlement in March 2021 and March 2020, respectively, over the
price of 4.7 million shares of Grupo Cementos de Chihuahua, S.A.B. de C.V. in 2020 and 13.9 million in 2019. During 2020 and 2019, CEMEX early settled a
portion of these contracts for 9.2 and 6.9 million shares, respectively. Changes in the fair value of these instruments and early settlement effects generated
gains of $1 in 2020, gains of $2 in 2019 and gains of $26 in 2018 recognized within “Financial income and other items, net” in the income statement.
IV. Fuel price hedging
As of December 31, 2020 and 2019, CEMEX maintained forward and option contracts negotiated to hedge the price of certain fuels, primarily diesel and gas,
in several operations for aggregate notional amounts of $128 and $96, respectively, with an estimated aggregate fair value representing assets of $5 in 2020
and assets of $1 in 2019. By means of these contracts, for its own consumption only, CEMEX fixed the price of these fuels over certain volumes representing
a portion of the estimated consumption of such fuels in several operations. These contracts have been designated as cash flow hedges of diesel or gas
consumption, and as such, changes in fair value are recognized temporarily through other comprehensive income and are recycled to operating expenses
as the related fuel volumes are consumed. For the years 2020, 2019 and 2018, changes in fair value of these contracts recognized in other comprehensive
income represented gains of $7, gains of $15 and losses of $35, respectively.
Other derivative financial instruments negotiated during the periods
During 2020, CEMEX negotiated Dollar/Peso, Dollar/Euro and Dollar/British Pound foreign exchange forward contracts to sell Dollars and Pesos and buy
Euro and British Pounds, negotiated in connection with the voluntary prepayment and currency exchanges under the 2017 Facilities Agreement, for a
combined notional amount of $397. For the year 2020, the aggregate results from positions entered and settled, generated losses of $15 recognized within
“Financial income and other items, net” in the statements of operation. Additionally, during 2020, CEMEX negotiated Dollar/Euro foreign exchange forward
contracts to sell Dollars and buy Euro, negotiated in connection with the redemption of the 4.625% April 2024 Notes. For the year 2020, the aggregate
results of these instruments from positions entered and settled, generated gains of $3, recognized within “Financial income and other items, net” in the
statement of operations.
Moreover, in connection with the proceeds from the sale of certain assets in the United Kingdom (note 5.2), the Company negotiated British Pound/Euro
foreign exchange forward contracts to sell British Pounds and buy Euro for a notional amount of $186. CEMEX settled such derivatives on August 5, 2020.
During the year 2020, changes in the fair value of these instruments and their settlement generated gains of $9 recognized within “Financial income and
other items, net” in the statement of operations.
17.5) RISK MANAGEMENT
Enterprise risks may arise from any of the following situations: i) the potential change in the value of assets owned or reasonably anticipated to be owned, ii)
the potential change in value of liabilities incurred or reasonably anticipated to be incurred, iii) the potential change in value of services provided, purchase or
reasonably anticipated to be provided or purchased in the ordinary course of business, iv) the potential change in the value of assets, services, inputs, products
or commodities owned, produced, manufactured, processed, merchandised, leased or sell or reasonably anticipated to be owned, produced, manufactured,
processed, merchandised, leased or sold in the ordinary course of business, or v) any potential change in the value arising from interest rate or foreign
exchange rate exposures arising from current or anticipated assets or liabilities.
In the ordinary course of business, CEMEX is exposed to commodities risk, including the exposure from inputs such as fuel, coal, petcoke, fly-ash, gypsum
and other industrial materials which are commonly used by CEMEX in the production process, and expose CEMEX to variations in prices of the underlying
commodities. To manage this and other risks, such as credit risk, interest rate risk, foreign exchange risk, equity risk and liquidity risk, considering the
guidelines set forth by the Parent Company’s Board of Directors, which represent CEMEX’s risk management framework and that are supervised by several
Committees, CEMEX’s management establishes specific policies that determine strategies oriented to obtain natural hedges to the extent possible, such as
avoiding customer concentration on a determined market or aligning the currencies portfolio in which CEMEX incurred its debt, with those in which CEMEX
generates its cash flows.
As of December 31, 2020 and 2019, these strategies are sometimes complemented with the use of derivative financial instruments as mentioned in note 17.4,
such as the commodity forward contracts on fuels negotiated to fix the price of these underlying commodities.
The main risk categories are mentioned below:
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Credit risk
Credit risk is the risk of financial loss faced by CEMEX if a customer or counterparty to a financial instrument does not meet its contractual obligations and
originates mainly from trade accounts receivable. As of December 31, 2020 and 2019, the maximum exposure to credit risk is represented by the balance of
financial assets. Management has developed policies for the authorization of credit to customers. Exposure to credit risk is monitored constantly according to
the payment behavior of debtors. Credit is assigned on a customer-by-customer basis and is subject to assessments which consider the customers’ payment
capacity, as well as past behavior regarding due dates, balances past due and delinquent accounts. In cases deemed necessary, CEMEX’s management
requires guarantees from its customers and financial counterparties regarding financial assets.
The Company’s management has established a policy of low risk tolerance which analyzes the creditworthiness of each new client individually before
offering the general conditions of payment terms and delivery. The review includes external ratings, when references are available, and in some cases bank
references. Thresholds of purchase limits are established for each client, which represent the maximum purchase amounts that require different levels of
approval. Customers that do not meet the levels of solvency requirements imposed by CEMEX can only carry out transactions by paying cash in advance. As
of December 31, 2020, considering CEMEX’s best estimate of potential expected losses based on the ECL model developed by CEMEX (note 10), the allowance
for expected credit losses was $121.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates, which
only affects CEMEX’s results if the fixed-rate long-term debt is measured at fair value. All of CEMEX’s fixed-rate long-term debt is carried at amortized cost
and therefore is not subject to interest rate risk. CEMEX’s accounting exposure to the risk of changes in market interest rates relates primarily to its long-term
debt obligations with floating interest rates, which, if such rates were to increase, may adversely affect its financing cost and the results for the period.
Nonetheless, it is not economically efficient to concentrate on fixed rates at a high point when the interest rates market expects a downward trend. That
is, there is an opportunity cost for continuing to pay a determined fixed interest rate when the market rates have decreased, and the entity may obtain
improved interest rate conditions in a new loan or debt issuance. CEMEX manages its interest rate risk by balancing its exposure to fixed and variable rates
while attempting to reduce its interest costs. CEMEX could renegotiate the conditions or repurchase the debt, particularly when the net present value of the
estimated future benefits from the interest rate reduction are expected to exceed the cost and commissions that would have to be paid in such renegotiation
or repurchase of debt.
As of December 31, 2020 and 2019, 17% and 22%, respectively, of CEMEX’s long-term debt was denominated in floating rates at a weighted-average interest
rate of LIBOR plus 294 basis points in 2020 and 285 basis points in 2019. These figures reflect the effect of interest rate swaps held by CEMEX during 2020
and 2019. As of December 31, 2020 and 2019, if interest rates at that date had been 0.5% higher, with all other variables held constant, CEMEX’s net income
for 2020 and 2019 would have reduced by $17 and $19, respectively, because of higher interest expense on variable rate denominated debt. This analysis does
not include the effect of interest rate swaps held by CEMEX during 2020 and 2019.
A fundamental reform of major interest rate benchmarks is being undertaken globally, including the replacement of some interbank offered rates (IBORs)
with alternative nearly risk-free rates (referred to as the “IBOR reform”). CEMEX has exposures to IBORs on its financial instruments that will be replaced or
reformed as part of these market-wide initiatives. There is uncertainty over the timing and the methods of transition in some jurisdictions in which CEMEX
operates. The Company anticipates that the IBOR reform will imply adjustments to its risk management and hedge accounting practices. Nonetheless, as
mentioned in note 17.1 as part of the October 13 amendments to the 2017 Facilities Agreements, to ease this transition, CEMEX included amendments to
incorporate Loan Market Association replacement screen rate provisions in anticipation of the discontinuation of LIBOR and potentially EURIBOR.
CEMEX’s respective risk management committee monitors and manages the Company’s transition to alternative rates. The committee evaluates the extent to
which contracts reference IBOR cash flows, whether such contracts will need to be amended as a result of IBOR reform and how to manage communication
about IBOR reform with counterparties. The committee reports to the Parent Company’s Board of Directors quarterly and collaborates with other business
functions as needed. It provides periodic reports to management of interest rate risk and risks arising from IBOR reform.
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Foreign currency risk
Foreign currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.
CEMEX’s exposure to the risk of changes in foreign exchange rates relates primarily to its operating activities. Due to its geographic diversification, CEMEX’s
revenues and costs are generated and settled in various countries and in different currencies. For the year ended December 31, 2020, 21% of CEMEX’s net
sales, before eliminations resulting from consolidation, were generated in Mexico, 29% in the United States, 5% in the United Kingdom, 6% in France, 4% in
Germany, 2% in Spain, 15% in the Rest of EMEAA region, 3% in Colombia, 1% in Panama, 2% in Dominican Republic, 2% in Caribbean TCL, 4% in the Rest of
South, Central America and the Caribbean region, and 6% in CEMEX’s other operations.
Foreign exchange results incurred through monetary assets or liabilities in a currency different from its functional currency are recorded in the consolidated
statements of operations. Exchange fluctuations associated with foreign currency indebtedness directly related to the acquisition of foreign entities and
exchange fluctuations in related parties’ long-term balances denominated in foreign currency that are not expected to be settled in the foreseeable future,
are recognized in the statement of other comprehensive income. As of December 31, 2020 and 2019, excluding from the sensitivity analysis the impact of
translating the net assets denominated in currencies different from CEMEX’s presentation currency, considering a hypothetic 10% strengthening of the dollar
against the Mexican peso, with all other variables held constant, CEMEX’s net income for 2020 and 2019 would have decreased by $87 and $76, respectively,
as a result of higher foreign exchange losses on CEMEX’s dollar-denominated net monetary liabilities held in consolidated entities with other functional
currencies. Conversely, a hypothetic 10% weakening of the U.S. dollar against the Mexican peso would have the opposite effect.
As of December 31, 2020, 65% of CEMEX’s financial debt was Dollar-denominated, 23% was Euro-denominated, 4% was Pound-denominated, 4% was Mexican
peso-denominated, 2% was Philippine peso-denominated and 2% was in other currencies. Therefore, CEMEX had a foreign currency exposure arising mainly
from the Dollar-denominated and Euro-denominated financial debt versus the several currencies in which CEMEX’s revenues are settled in most countries
in which it operates. The amounts of Pound-denominated financial debt and Philippine peso-denominated financial debt outstanding as of December 31,
2020, are closely related to the amount of revenues generated in such currencies and/or, in the case of the Euro-denominated financial debt, the amount
of CEMEX’s net assets denominated in such currencies; therefore, CEMEX considers that the foreign currency risk related to these amounts of debt is low.
Nonetheless, CEMEX cannot guarantee that it will generate sufficient revenues in dollars, euros, pounds and Philippine pesos from its operations to service
these obligations. As of December 31, 2020 and 2019, CEMEX had not implemented any derivative financing hedging strategy to address this foreign currency
risk. Nonetheless, CEMEX may negotiate derivative financing hedging strategies in the future if either of its debt portfolio currency mix, interest rate mix,
market conditions and/or expectations changes.
As of December 31, 2020 and 2019, CEMEX’s consolidated net monetary assets (liabilities) by currency are as follows:
Monetary assets
Monetary liabilities
Net monetary assets (liabilities)
Out of which:
Dollars
Pesos
Euros
Pounds
Other currencies
Mexico
United States
EMEAA
SCA&C
Others 1
Total
2020
$
$
$
$
856
1,420
(564)
(161)
(403)
–
–
–
(564)
550
2,480
(1,930)
(1,930)
–
–
–
–
(1,930)
1,452
3,534
(2,082)
17
–
(743)
(1,174)
(182)
(2,082)
240
680
(440)
(37)
–
–
–
(403)
(440)
419
9,625
(9,206)
(6,065)
(87)
(2,451)
26
(629)
(9,206)
3,517
17,739
(14,222)
(8,176)
(490)
(3,194)
(1,148)
(1,214)
(14,222)
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Monetary assets
Monetary liabilities
Net monetary assets (liabilities)
Out of which:
Dollars
Pesos
Euros
Pounds
Other currencies
Mexico
United States
EMEAA
SCA&C
Others 1
Total
2019
$
$
$
$
721
1,311
(590)
(23)
(567)
–
–
–
(590)
1,017
2,444
(1,427)
(1,427)
–
–
–
–
(1,427)
1,593
3,162
(1,569)
–
–
(519)
(807)
(243)
(1,569)
280
589
(309)
(72)
–
1
–
(238)
(309)
190
10,220
(10,030)
(6,715)
(144)
(2,505)
20
(686)
(10,030)
3,801
17,726
(13,925)
(8,237)
(711)
(3,023)
(787)
(1,167)
(13,925)
1
Includes the Parent Company, CEMEX’s financing subsidiaries, as well as Neoris N.V., among other entities.
Considering that the Parent Company’s functional currency for all assets, liabilities and transactions associated with its financial and holding company
activities is the dollar (note 3.4), there is foreign currency risk associated with the translation into dollars of subsidiaries’ net assets denominated in different
currencies. When the dollar appreciates, the value of these net assets denominated in other currencies decreases in terms of Dollars, generating negative
foreign currency translation and reducing stockholders’ equity. Conversely, when the dollar depreciates, the value of such net assets denominated in other
currencies would increase in terms of dollars generating the opposite effect. CEMEX has implemented a Dollar/Mexican peso foreign exchange forward
contracts program to hedge foreign currency translation in connection with its net assets denominated in pesos (note 17.4).
Equity risk
Equity risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in the market price of CEMEX, S.A.B.
de C.V.’s and/or third party’s shares. As described in note 17.4, considering specific objectives, CEMEX has negotiated equity forward contracts on third-party
shares. Under these equity derivative instruments, there is a direct relationship from the change in the fair value of the derivative with the change in price of
the underlying share. All changes in fair value of such derivative instruments are recognized in the income statement as part of “Financial income and other
items, net.” During the reported periods effects were not significant.
As of December 31, 2020 and 2019, the potential change in the fair value of CEMEX’s forward contracts in GCC shares that would result from a hypothetical,
instantaneous decrease of 10% in the market price of GCC shares in dollars, with all other variables held constant, CEMEX’s net income would have reduced
by $3 in 2020 and $7 in 2019, because of additional negative changes in fair value associated with these forward contracts. A 10% hypothetical increase in the
price of GCC shares would have generated approximately the opposite effect.
Liquidity risk
Liquidity risk is the risk that CEMEX will not have sufficient funds available to meet its obligations. In addition to cash flows provided by its operating activities,
to meet CEMEX’s overall liquidity needs for operations, servicing debt and funding capital expenditures and acquisitions, CEMEX relies on cost-cutting and
operating improvements to optimize capacity utilization and maximize profitability, as well as borrowing under credit facilities, proceeds of debt and equity
offerings, and proceeds from asset sales. CEMEX is exposed to risks from changes in foreign currency exchange rates, prices and currency controls, interest
rates, inflation, governmental spending, social instability and other political, economic and/or social developments in the countries in which it operates,
any one of which may materially affect CEMEX’s results and reduce cash from operations. The maturities of CEMEX’s contractual obligations are included
in note 24.1.
As of December 31, 2020, current liabilities, which included $1,063 of current debt and other financial obligations, exceed current assets by $1,117. It is noted
that as part of its operating strategy implemented by management, the Company operates with a negative working capital balance. For the year ended
December 31, 2020, CEMEX generated net cash flows provided by operating activities of $1,578. The Company’s management considers that CEMEX will
generate sufficient cash flows from operations in the following twelve months to meet its current obligations and trusts in its proven capacity to continually
refinance and replace its current obligations, which will enable CEMEX to meet any liquidity risk in the short-term. In addition, as of December 31, 2020,
CEMEX has committed lines of credit under the revolving credit facility in its 2017 Facilities Agreement for a total amount of $1,121.
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18) OTHER CURRENT AND NON-CURRENT LIABILITIES
18.1) OTHER CURRENT LIABILITIES
As of December 31, 2020 and 2019, consolidated other current liabilities were as follows:
Provisions 1
Interest payable
Other accounts payable and accrued expenses 2
Contract liabilities with customers (note 4) 3
2020
2019
$
$
718
86
267
201
1,272
558
88
313
225
1,184
1 Current provisions primarily consist of accrued employee benefits, insurance payments, accruals for legal assessments and others. These amounts are revolving in nature and are
expected to be settled and replaced by similar amounts within the next 12 months.
2 As of December 31, 2020 and 2019, includes $19 and $22, respectively, of the current portion of other taxes payable in Mexico.
3 As of December 31, 2020 and 2019, contract liabilities with customers included $161 and $184, respectively, of advances received from customers, as well as in 2020 and 2019 the
current portion of deferred revenues in connection with advances under long-term clinker supply agreements of $4 and $4, respectively.
18.2) OTHER NON-CURRENT LIABILITIES
As of December 31, 2020 and 2019, consolidated other non-current liabilities were as follows:
Asset retirement obligations 1
Accruals for legal assessments and other responsibilities 2
Non-current liabilities for valuation of derivative instruments
Environmental liabilities 3
Other non-current liabilities and provisions 4, 5
2020
2019
$
$
369
27
53
275
273
997
327
30
46
214
308
925
1 Provisions for asset retirement include future estimated costs for demolition, cleaning and reforestation of production sites at the end of their operation, which are initially recognized
against the related assets and are depreciated over their estimated useful life.
2 Provisions for legal claims and other responsibilities include items related to tax contingencies.
3 Environmental liabilities include future estimated costs arising from legal or constructive obligations, related to cleaning, reforestation and other remedial actions to remediate
damage caused to the environment. The expected average period to settle these obligations is greater than 15 years.
4 As of December 31, 2020 and 2019, includes $12 and $31, respectively, of the non-current portion of taxes payable in Mexico.
5 As of December 31, 2020 and 2019, the balance includes deferred revenues of $42 and $50, respectively, that are amortized to the income statement as deliverables are fulfilled over
the maturity of long-term clinker supply agreements.
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Changes in consolidated other current and non-current liabilities for the years ended December 31, 2020 and 2019, were as follows:
Balance at beginning of period
Additions or increase in estimates
Releases or decrease in estimates
Reclassifications
Accretion expense
Foreign currency translation
Balance at end of period
Out of which:
Current provisions
$
$
$
Asset
retirement Environmental
obligations
liabilities
Accruals
for legal
proceedings
Valuation of
derivative
instruments
Other liabilities
and provisions
Total
2019
2020
327
80
(28)
54
(17)
(47)
369
214
1
–
–
62
(2)
275
30
3
(8)
–
–
2
27
102
7
–
–
–
(18)
91
851
2,306
(2,132)
59
(167)
77
994
1,524
2,397
(2,168)
113
(122)
12
1,756
1,335
1,641
(1,527)
62
(59)
72
1,524
–
–
–
38
721
759
599
19) PENSIONS AND POST-EMPLOYMENT BENEFITS
Defined contribution pension plans
The consolidated costs of defined contribution plans for the years ended December 31, 2020, 2019 and 2018 were $48, $50 and $45, respectively. CEMEX
contributes periodically the amounts offered by the pension plan to the employee’s individual accounts, not retaining any remaining liability as of the
financial statements’ date.
Defined benefit pension plans
Most of CEMEX’s defined benefit plans have been closed to new participants for several years. Actuarial results related to pension and other post-employment
benefits are recognized in earnings and/or in “Other comprehensive income” for the period in which they are generated, as appropriate. For the years ended
December 31, 2020, 2019 and 2018, the effects of pension plans and other post-employment benefits are summarized as follows:
Net period cost (income):
2020
2019
2018
2020
2019
2018
2020
Pensions
Other benefits
Total
2019
2018
Recorded in operating costs and expenses
Service cost
Past service cost
Settlements and curtailments
Recorded in other financial expenses
Net interest cost
Recorded in other comprehensive income
Actuarial (gains) losses for the period
$
10
(2)
–
8
10
1
(3)
8
10
9
–
19
2
1
(1)
2
28
34
35
5
2
–
–
2
5
$
181
217
203
245
(176)
(122)
18
25
7
14
3
–
–
3
5
–
8
12
(1)
(1)
10
12
1
(3)
10
13
9
–
22
33
39
40
199
242
210
259
(176)
(114)
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As of December 31, 2020 and 2019, the reconciliation of the actuarial benefits’ obligations and pension plan assets, are presented as follows:
Change in benefits obligation:
Projected benefit obligation at beginning of the period
Service cost
Interest cost
Actuarial losses
Additions through business combinations
Settlements and curtailments
Reduction from disposal of assets
Plan amendments
Benefits paid
Foreign currency translation
Projected benefit obligation at end of the period
Change in plan assets:
Fair value of plan assets at beginning of the period
Return on plan assets
Actuarial gains
Employer contributions
Reduction for disposal of assets
Benefits paid
Foreign currency translation
Fair value of plan assets at end of the period
Pensions
Other benefits
Total
2020
2019
2020
2019
2020
2019
$
2,651
10
70
258
1
–
–
(2)
(140)
80
2,928
1,599
42
77
75
–
(140)
40
1,693
2,375
10
78
268
–
(3)
(2)
1
(141)
65
2,651
1,486
44
65
103
(1)
(141)
43
1,599
87
2
5
18
–
(1)
–
1
(6)
(1)
105
1
–
–
6
–
(6)
–
1
79
2
5
7
–
–
–
–
(7)
1
87
1
–
–
7
–
(7)
–
1
2,738
12
75
276
1
(1)
–
(1)
(146)
79
3,033
1,600
42
77
81
–
(146)
40
1,694
2,454
12
83
275
–
(3)
(2)
1
(148)
66
2,738
1,487
44
65
110
(1)
(148)
43
1,600
Net projected liability in the statement of financial position
$
1,235
1,052
104
86
1,339
1,138
For the years 2020, 2019 and 2018, actuarial (gains) losses for the period were generated by the following main factors as follows:
Actuarial (gains) losses due to experience
Actuarial (gains) losses due to demographic assumptions
Actuarial (gains) losses due financial assumptions
2020
2019
2018
$
$
1
18
180
199
5
(11)
216
210
(58)
(57)
(61)
(176)
In 2020, net actuarial losses due to financial assumptions were mainly driven by a general decrease in the discount rates applicable to the calculation of
the benefits’ obligations mainly in the United Kingdom, the United States, and Mexico, as market interest rates decrease globally in 2020 as compared to
2019, partially offset by actual returns in plan assets higher than estimated in the United Kingdom and the United States. In addition, the United Kingdom
Government confirmed on November 25, 2020, with effect from February 2030 onwards, Retail Prices Index (“RPI”) will be aligned with Consumer Prices
Index (“CPI”). The RPI is used to set pension increase assumptions for the United Kingdom pension plans. As a result of this change, in 2020, CEMEX had an
increase in its United Kingdom pension liabilities of $54. In 2019, such net actuarial losses were also mainly driven by a general decrease in the discount rates
applicable to the calculation of the benefits’ obligations mainly in the United Kingdom, the United States, Germany and Mexico, as market interest rates
decrease globally in 2019 as compared to 2018, partially offset by actual returns in plan assets higher than estimated in the United Kingdom and the United
States. In 2018, net actuarial gains due to financial assumptions were mainly generated by a general increase in the discounts rates applied for the calculation
of the pension benefit obligations in the United Kingdom, Germany, United States and Mexico, among others, resulting from the increase in market interest
rates after several years in which such rates reached historically low levels.
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As of December 31, 2020 and 2019, based on the hierarchy of fair values, plan assets are detailed as follows:
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
2020
2019
Cash
Investments in corporate bonds
Investments in government bonds
$
Total fixed-income securities
Investment in marketable securities
Other investments and private funds
Total variable-income securities
Total plan assets
$
44
1
86
131
341
146
487
618
–
474
371
845
89
55
144
989
–
–
–
–
–
90
90
90
44
475
457
976
430
291
721
1,697
$
$
45
4
90
139
223
46
269
408
16
396
450
862
157
85
242
1,104
–
–
–
–
–
88
88
88
61
400
540
1,001
380
219
599
1,600
The most significant assumptions used in the determination of the benefit obligation were as follows:
Discount rates
Rate of return on plan assets
Rate of salary increases
2020
2019
Mexico
7.8%
7.8%
4.5%
United
States
United
Kingdom
Range of rates in
other countries
2.6%
2.6%
–
1.5%
1.5%
3.0%
0.2% – 9.0%
0.2% – 9.0%
2.3% – 6.8%
Mexico
8.75%
8.75%
4.0%
United
States
United
Kingdom
Rates ranges in
other countries
3.6%
3.6%
–
2.1%
2.1%
3.0%
0.4% – 8.8%
0.4% – 8.8%
2.3% – 6.8%
As of December 31, 2020, estimated payments for pensions and other post-employment benefits over the next 10 years were as follows:
2021
2022
2023
2024
2025 – 2030
$
Estimated
payments
157
144
144
144
868
As of December 31, 2020 and 2019, the aggregate projected benefit obligation (“PBO”) for pension plans and other post-employment benefits and the plan
assets by country were as follows:
Mexico
United States
United Kingdom 1
Germany
Other countries
2020
PBO
Assets
Deficit
$
$
216
305
1,925
219
368
3,033
29
222
1,214
8
221
1,694
187
83
711
211
147
1,339
PBO
203
297
1,681
204
353
2,738
$
$
2019
Assets
24
219
1,128
9
220
1,600
Deficit
179
78
553
195
133
1,138
1 Applicable regulation in the United Kingdom requires to maintain plan assets at a level similar to that of the obligations. Beginning in 2012, the pension fund started to receive annual
dividends from a limited partnership (the “Partnership”), whose assets transferred by CEMEX UK of an approximate value of $553, are leased back to CEMEX UK. The Partnership is
owned, controlled and consolidated by CEMEX UK. The annual dividends received by the pension funds in 2020, 2019 and 2018, which increase at a 5% rate per year, were £21.3 ($29),
£20.3 ($27) and £19.3 ($25), respectively. In 2037, on expiry of the arrangement, the Partnership will be terminated and under the terms of the agreement, the remaining assets will
be distributed to CEMEX UK. Distributions from the Partnership to the pension fund are considered as employer contributions to plan assets in the period in which they occur.
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In some countries, CEMEX has established health care benefits for retired personnel limited to a certain number of years after retirement. As of December 31,
2020 and 2019, the projected benefits obligation related to these benefits was $78 and $62, respectively, included within other benefits liability. The medical
inflation rates used to determine the projected benefits obligation of these benefits in 2020 and 2019 for Mexico were 8% in both years, for Puerto Rico 6.4%
and 6.3%, respectively, for the United Kingdom were 6.5% in both years and for TCL were 5.0% and 8.0%, respectively.
Significant events of settlements or curtailments related to employees’ pension benefits and other post-employment benefits during the reported periods
During 2020, in connection with the divestiture of Kosmos’ assets in the United States (note 5.1), CEMEX recognized a curtailment gain of $1 related to its
medical plan. Moreover, in France, CEMEX changed certain formulas of the pension benefits resulting in a past service gain of $2. In addition, in Mexico,
CEMEX changed some postretirement benefits which resulted in an expense for past services of $1 in 2020. These effects were recognized in the income
statement for the year.
During 2019, CEMEX in France closed two legal entities resulting in a curtailment gain of $3, which were recognized in the income statement for the period.
There were no significant events during 2018.
Sensitivity analysis of pension and other post-employment benefits
For the year ended December 31, 2020, CEMEX performed sensitivity analyses on the most significant assumptions that affect the PBO, considering reasonable
independent changes of plus or minus 50 basis points in each of these assumptions. The increase (decrease) that would have resulted in the PBO of pensions
and other post-employment benefits as of December 31, 2020 are shown below:
Assumptions:
Discount Rate Sensitivity
Salary Increase Rate Sensitivity
Pension Increase Rate Sensitivity
Pensions
Other benefits
Total
+50 bps
-50 bps
+50 bps
-50 bps
+50 bps
-50 bps
$
(202)
7
146
228
(7)
(128)
(5)
1
–
6
–
–
(207)
8
146
234
(7)
(128)
Multiemployer defined benefit pension plans
In addition to the Company’s sponsored plans, certain union employees in the United States and the United Kingdom are covered under multiemployer
defined benefit plans administered by their unions. The Company’s funding arrangements, rate of contributions and funding requirements were made in
accordance with the contractual multiemployer agreements. The combined amounts contributed to the multiemployer plans were $56 in 2020, $64 in 2019
and $65 in 2018. The Company expects to contribute approximately $58 to the multiemployer plans in 2021.
In addition to the funding described in the preceding paragraph, CEMEX negotiated with a union managing a multiemployer plan in the United States the
change of the plan from defined benefit to defined contribution beginning on September 29, 2019. This change generated a one-time settlement obligation
of $24 recognized in the income statement in 2019 as part of “Other expenses, net”, against an accrued liability. Payments are expected to be made over the
next 20 years though lump sum payment is allowable.
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20) INCOME TAXES
20.1) INCOME TAXES FOR THE PERIOD
The amounts of income tax expense in the statements of operations for 2020, 2019 and 2018 are summarized as follows:
Current income tax expense
Deferred income tax expense (revenue)
2020
2019
2018
$
$
174
(122)
52
143
19
162
99
125
224
20.2) DEFERRED INCOME TAXES
As of December 31, 2020 and 2019, the main temporary differences that generated the consolidated deferred income tax assets and liabilities are presented below:
Deferred tax assets:
Tax loss carryforwards and other tax credits
Accounts payable and accrued expenses
Intangible assets, net
Total deferred tax assets, gross
Presentation offset regarding same legal entity
Deferred tax liabilities:
Property, machinery and equipment and right-of-use asset, net
Investments and other assets
Total deferred tax liabilities, gross
Presentation offset regarding same legal entity
Total deferred tax liabilities, net in the statement of financial position
Net deferred tax assets (liabilities)
Out of which:
Net deferred tax liability in Mexican entities 1
Net deferred tax asset in Foreign entities 2
Net deferred tax asset (liability)
2020
2019
777
558
49
1,384
(644)
740
(1,273)
(29)
(1,302)
644
(658)
82
(77)
159
82
757
458
57
1,272
(645)
627
(1,323)
(42)
(1,365)
645
(720)
(93)
(157)
64
(93)
$
$
$
$
1 Net deferred tax liabilities in Mexico mainly refer to a temporary difference resulting when comparing at the reporting date the carrying amount of property, machinery and
equipment, as per IFRS, and their corresponding tax values (remaining tax-deductible amount), partially offset by certain deferred tax assets from tax loss carryforwards that are
expected to be recovered in the future against taxable income. When the book value is greater than the related tax value results in a deferred tax liability. In 2011, upon transition to
IFRS, CEMEX elected to measure its fixed assets at fair value, which resulted in a significant increase in book value, mainly associated with the revaluation of mineral reserves. Such
restated amounts are depleted to the income statement in a period over 35 years, generating accounting expense that is not tax-deductible; hence the temporary difference will
gradually reverse over time but does not represent a payment obligation to the tax authority at the reporting date.
2 Net deferred tax assets in foreign entities in 2020 and 2019 are mainly related to tax loss carryforwards recognized in prior years, mainly in the United States, that are expected to be
recovered in the future against taxable income.
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As of December 31, 2020 and 2019, balances of the deferred tax assets and liabilities included in the statement of financial position are located in the
following entities:
Mexican entities
Foreign entities
2020
2019
Assets
Liabilities
Net
Assets
Liabilities
Net
$
$
152
588
740
(229)
(429)
(658)
(77)
159
82
$
$
189
438
627
(346)
(374)
(720)
(157)
64
(93)
The breakdown of changes in consolidated deferred income taxes during 2020, 2019 and 2018 was as follows:
Deferred income tax expense (revenue) in the income statement
Deferred income tax revenue in stockholders’ equity 1
Reclassifications 2
Change in deferred income tax during the period
2020
2019
2018
$
$
(122)
(41)
(12)
(175)
19
(59)
3
(37)
125
(10)
3
118
1
2
In 2018, includes a deferred income tax revenue of $8 in connection with the adoption of IFRS 9 on January 1, 2018.
In 2020, 2019 and 2018, refers to the effects of the reclassification of balances to assets held for sale and related liabilities (note 5.2).
Current and/or deferred income tax relative to items of other comprehensive income during 2020, 2019 and 2018 were as follows:
Revenue related to foreign exchange fluctuations from intercompany balances (note 21.2)
Expense (revenue) associated to actuarial results (note 21.2)
Revenue related to derivative financial instruments (note 17.4)
Expense (revenue) from foreign currency translation and other effects
As of December 31, 2020, consolidated tax loss and tax credits carryforwards expire as follows:
2021
2022
2023
2024
2025 and thereafter
2020
2019
2018
(19)
(41)
14
(14)
(60)
(19)
(29)
(34)
4
(78)
(2)
31
(3)
(38)
(12)
Amount of
Amount of
recognized
unrecognized
carryforwards carryforwards carryforwards
Amount of
93
312
475
524
14,897
16,301
81
289
454
234
12,078
13,136
12
23
21
290
2,819
3,165
$
$
$
$
As of December 31, 2020, in connection with CEMEX’s deferred tax loss carryforwards presented in the table above, to realize the benefits associated with such
deferred tax assets that have been recognized, before their expiration, CEMEX would need to generate $3,165 in consolidated pre-tax income in future periods.
Based on the same forecasts of future cash flows and operating results used by CEMEX’s management to allocate resources and evaluate performance in the
countries in which CEMEX operates, along with the implementation of feasible tax strategies, CEMEX believes that it will recover the balance of its tax loss
carryforwards that have been recognized before their expiration. In addition, CEMEX concluded that, the deferred tax liabilities that were considered in the
analysis of recoverability of its deferred tax assets will reverse in the same period and tax jurisdiction of the related recognized deferred tax assets. Moreover, a
certain amount of CEMEX’s deferred tax assets refers to operating segments and tax jurisdictions in which CEMEX is currently generating taxable income or
in which, according to CEMEX’s management cash flow projections, will generate taxable income in the relevant periods before the expiration of the deferred
tax assets.
The Parent Company does not recognize a deferred income tax liability related to its investments in subsidiaries considering that CEMEX controls the
reversal of the temporary differences arising from these investments and management is satisfied that such temporary differences will not reverse in the
foreseeable future.
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20.3) RECONCILIATION OF EFFECTIVE INCOME TAX RATE
For the years ended December 31, 2020, 2019 and 2018, the effective consolidated income tax rates were as follows:
Earnings before income tax
Income tax expense
Effective consolidated income tax expense rate 1
2020
2019
2018
$
(1,274)
(52)
(4.1)%
253
(162)
64.0 %
717
(224)
31.2 %
1 The average effective tax rate equals the net amount of income tax revenue or expense divided by income or loss before income taxes, as these line items are reported in the
income statement.
Differences between the financial reporting and the corresponding tax basis of assets and liabilities and the different income tax rates and laws applicable
to CEMEX, among other factors, give rise to permanent differences between the statutory tax rate applicable in Mexico, and the effective tax rate presented
in the consolidated statements of operations, which in 2020, 2019 and 2018 were as follows:
Mexican statutory tax rate
Difference between accounting and tax expenses, net 1
Non-taxable sale of equity securities and fixed assets
Difference between book and tax inflation
Differences in the income tax rates in the countries where
CEMEX operates 2
Changes in deferred tax assets 3
Changes in provisions for uncertain tax positions
Others
Effective consolidated income tax expense rate
2020
2019
2018
%
30.0
(19.0)
1.3
(7.1)
(0.9)
(9.6)
0.2
1.0
(4.1)
$
(382)
242
(17)
90
12
122
(2)
(13)
52
%
30.0
109.2
(13.4)
38.1
(31.9)
(59.8)
(5.2)
(3.0)
64.0
$
%
$
76
277
(34)
96
(81)
(151)
(13)
(8)
162
30.0
18.7
(4.6)
19.5
(16.0)
(15.6)
(1.8)
1.0
31.2
215
134
(33)
140
(115)
(112)
(13)
8
224
1
In 2020, includes $312 related to the effects of the impairment charges which are basically non-deductible (note 6). In 2019, includes $117 of difference between book and tax foreign
exchange fluctuations of the Parent Company.
2 Refers mainly to the effects of the differences between the statutory income tax rate in Mexico of 30% against the applicable income tax rates of each country where CEMEX
operates. In 2018, includes the effect related to the change in statutory tax rate in Colombia and the United States, respectively (note 20.4).
3 Refers to the effects in the effective income tax rate associated with changes during the period in the amount of deferred income tax assets related to CEMEX’s tax loss carryforwards.
The following table compares variations between the line item “Changes in deferred tax assets” as presented in the table above against the changes in
deferred tax assets in the statement of financial position for the years ended December 31, 2020 and 2019:
Tax loss carryforwards generated and not recognized during the year
Derecognition related to tax loss carryforwards recognized in prior years
Recognition related to unrecognized tax loss carryforwards
Foreign currency translation and other effects
Changes in deferred tax assets
2020
2019
Changes in the
statement of
financial
position
Changes in the
statement of
financial
position
Amounts in
reconciliation
Amounts in
reconciliation
$
$
–
(70)
82
8
20
178
12
(84)
16
122
–
(43)
92
6
55
84
(43)
92
18
151
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20.4) UNCERTAIN TAX POSITIONS AND SIGNIFICANT TAX PROCEEDINGS
Uncertain tax positions
As of December 31, 2020 and 2019, as part of current provisions and non-current other liabilities (note 18), CEMEX has recognized provisions related to
unrecognized tax benefits in connection with uncertain tax positions taken, in which it is deemed probable that the tax authority would differ from the
position adopted by CEMEX. As of December 31, 2020, the tax returns submitted by some subsidiaries of CEMEX located in several countries are under review
by the respective tax authorities in the ordinary course of business. CEMEX cannot anticipate if such reviews will result in new tax assessments, which would,
should any arise, be appropriately disclosed and/or recognized in the financial statements. A summary of the beginning and ending amount of unrecognized
tax benefits for the years ended December 31, 2020, 2019 and 2018, excluding interest and penalties, is as follows:
Balance of tax positions at beginning of the period
Adoption effects of IFRIC 23 credited to retained earnings (note 3.1)
Additions for tax positions of prior periods
Additions for tax positions of current period
Reductions for tax positions related to prior periods and other items
Settlements and reclassifications
Expiration of the statute of limitations
Foreign currency translation effects
Balance of tax positions at end of the period
2020
2019
2018
$
$
28
–
–
3
(1)
(3)
(2)
2
27
44
(6)
–
4
(13)
–
(2)
1
28
80
–
1
6
(2)
(7)
(32)
(2)
44
Tax examinations can involve complex issues, and the resolution of issues may span multiple years, particularly if subject to negotiation or litigation. Although
CEMEX believes its estimates of the total unrecognized tax benefits are reasonable, uncertainties regarding the final determination of income tax audit
settlements and any related litigation could affect the amount of total unrecognized tax benefits in future periods. It is difficult to estimate the timing and
range of possible changes related to uncertain tax positions, as finalizing audits with the income tax authorities may involve formal administrative and legal
proceedings. Accordingly, it is not possible to reasonably estimate the expected changes to the total unrecognized tax benefits over the next 12 months,
although any settlements or statute of limitations expirations may result in a significant increase or decrease in the total unrecognized tax benefits, including
those positions related to tax examinations being currently conducted.
Significant tax proceedings
As of December 31, 2020, the Company’s most significant tax proceedings are as follows:
•
The tax authorities in Spain have challenged part of the tax loss carryforwards reported by CEMEX España covering the tax years from and including
2006 to 2009. During 2014, the tax authorities in Spain notified CEMEX España of fines in the aggregate amount of $557. CEMEX España filed appeals
against such resolution. On September 20, 2017, CEMEX España was notified about an adverse resolution to such appeals. CEMEX España challenged this
decision and applied for the suspension of the payment before the National Court (Audiencia Nacional) until the case is finally resolved. On November 6,
2018 CEMEX España obtained a favorable resolution to this request from the National Court through the pledge of certain fixed assets. As of December
31, 2020, CEMEX believes an adverse resolution in this proceeding is not probable and no accruals have been created in connection with this proceeding.
Nonetheless, it is difficult to assess with certainty the likelihood of an adverse result, and the appeals that CEMEX España has filed could take an extended
amount of time to be resolved, but if adversely resolved, this proceeding could have a material adverse impact on CEMEX’s results of operations, liquidity
or financial position.
• On April 6, 2018, CEMEX Colombia received a special proceeding from the Colombian Tax Authority (the “Tax Authority”), where certain deductions
included in the 2012 income tax return were rejected. The Tax Authority assessed an increase in the income tax payable by CEMEX Colombia and imposed
an inaccuracy penalty for amounts in Colombian pesos equivalent to $36 of income tax and $36 of penalty. On June 22, 2018, CEMEX Colombia filed a
response to the special proceeding within the legal term. On December 28, 2018, CEMEX Colombia received an official review settlement ratifying the
rejected deductible items and amounts. CEMEX Colombia filed a reconsideration request on February 21, 2019. On January 8, 2020, CEMEX Colombia
was notified that, in response to the appeal filed by it, the Tax Authority had confirmed its assessment that CEMEX Colombia is required to pay increased
taxes and corresponding penalties, as previously notified on April 6, 2018. On July 1, 2020, CEMEX Colombia filed an appeal against the aforementioned
resolution in the Administrative Court of Cundinamarca. If the proceeding is adversely resolved in the final stage, CEMEX Colombia must pay the amounts
determined in the official settlement plus interest accrued on the amount of the income tax adjustment until the payment date. As of December 31, 2020,
in this stage of the proceeding, CEMEX considers that an adverse resolution in this proceeding after conclusion of all available defense procedures is not
probable, however, it is difficult to assess with certainty the likelihood of an adverse result in the proceeding; but if adversely resolved, CEMEX believes
this proceeding could have a material adverse impact on the operating results, liquidity or financial position of CEMEX.
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•
•
In September 2012, the Tax Authority requested CEMEX Colombia to amend its income tax return for the year 2011 in connection with several deductible
expenses including the amortization of goodwill. CEMEX Colombia rejected the arguments of the ordinary request and filed a motion requesting the
case to be closed. The 2011 income tax return was under audit of the Tax Authority from August 2013 until September 5, 2018, when CEMEX Colombia was
notified of a special requirement in which the Tax Authority rejects certain deductions included in such income tax return of the year 2011 and determined
an increase in the income tax payable and imposed a penalty for amounts in Colombian pesos equivalent to $25 of income tax and $25 of penalty. CEMEX
Colombia filed a response to the special requirement on November 30, 2018 and the Tax Authority notified the official review liquidation on May 15, 2019,
maintaining the claims of the special requirement; therefore, CEMEX Colombia filed an appeal within the legal term on July 11, 2019. On July 6, 2020,
CEMEX Colombia was notified about a resolution confirming the official liquidation. On October 22, 2020, CEMEX Colombia filed an appeal against such
resolution in the Administrative Court of Cundinamarca. If the proceeding is adversely resolved in its final stage, CEMEX Colombia would have to pay
the amounts determined in the official settlement plus interest accrued on the amount of the income tax adjustment until the date of payment. As of
December 31, 2020, in this stage of the proceeding, CEMEX considers that an adverse resolution in this proceeding after conclusion of all available defense
procedures is not probable, however, it is difficult to assess with certainty the likelihood of an adverse result in the proceeding; but if adversely resolved,
CEMEX believes this proceeding could have a material adverse impact on the operating results, liquidity or financial position of CEMEX.
In April 2011, the Tax Authority notified CEMEX Colombia of a special proceeding rejecting certain deductions taken by CEMEX Colombia in its 2009
tax return considering they are not linked to direct revenues recorded in the same fiscal year and assessed an increase in taxes to be paid by CEMEX
Colombia and imposed a penalty for amounts in Colombian pesos equivalent to $27 of income tax and $27 of penalty, considering changes in law that
reduced the original penalty. After several appeals of CEMEX Colombia to the Colombian Tax Authority’s special proceeding in the applicable courts in
which CEMEX Colombia obtained negative resolutions in each case over the years, in July 2014, CEMEX Colombia filed an appeal against this resolution
before the Colombian State Council (Consejo de Estado). On December 4, 2020, CEMEX Colombia received a last instance favorable resolution from the
Colombian State Council on November 26, 2020. Appeals or other resources against this resolution are not applicable. Accordingly, CEMEX Colombia will
not have to pay any additional taxes, penalties or interest in connection with the 2009 tax year.
21) STOCKHOLDERS’ EQUITY
The consolidated financial statements are presented in dollars based on IAS 21, The Effects of Changes in Foreign Exchange Rates (“IAS 21”), while the
reporting currency of the Parent Company is the Mexican Peso. As a result, for the consolidated entity, transactions of common stock, additional paid-in
capital and retained earnings are translated and accrued using historical exchange rates of the dates in which the transactions occurred. As a result, although
the amounts of total non-controlling interest in the consolidated financial statements and total stockholders’ equity of the Parent Company are the same,
IAS 21 methodology results in differences between line-by-line items within CEMEX’s controlling interest and the Parent Company’s stockholders’ equity. The
official stockholders’ equity for statutory purposes is that of the Parent Company as expressed in Mexican pesos. As of December 31, 2020, the line-by-line
reconciliation between CEMEX’s controlling interest, as reported using the dollar as presentation currency, and the Parent Company’s stockholders’ equity,
using a convenience translation of the balances in pesos translated using the exchange rate of 19.89 pesos per dollar as of December 31, 2020, is as follows:
Common stock and additional paid-in capital 1
Other equity reserves 1, 2
Retained earnings 2
Total controlling interest
As of December 31, 2020
Consolidated
Parent
Company
$
$
7,893
(2,453)
2,635
8,075
5,403
974
1,698
8,075
1 The difference relates to the method of accruing dollars using the historical exchange rates to translate each common stock and additional paid-in capital transaction denominated
in Mexican pesos to dollars. The cumulative effect from these changes in exchange rates is recognized against other equity reserves.
2 The difference relates with the method of accruing dollars using the exchange rates of each month during the period for income statement purposes. The cumulative effect from
these changes in exchange rates is recognized against “Other equity reserves”.
As of December 31, 2020 and 2019, stockholders’ equity excludes investments in CPOs of the Parent Company held by subsidiaries of $11 (20,541,277 CPOs)
and $8 (20,541,277 CPOs), respectively, which were eliminated within “Other equity reserves.”
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21.1) COMMON STOCK AND ADDITIONAL PAID-IN CAPITAL
As of December 31, 2020 and 2019, the breakdown of consolidated common stock and additional paid-in capital was as follows:
Common stock
Additional paid-in capital
2020
318
7,575
7,893
2019
318
10,106
10,424
$
$
Effective as of December 31, 2020, the Company’s management approved a restitution to the consolidated line item of “Retained earnings” for $2,481, by
means of transfer with charge to the line item of “Additional paid-in capital.” This transfer represents a reclassification between line items within CEMEX’s
consolidated stockholders’ equity that does not affect its consolidated amount.
As of December 31, 2020 and 2019 the common stock of CEMEX, S.A.B. de C.V. was presented as follows:
Shares 1
Series A 2
Series B 2
Series A 2
Series B 2
2020
2019
Subscribed and paid shares
Unissued shares authorized for executives’ stock compensation programs
Repurchased shares 3
Shares that guarantee/guaranteed the issuance of convertible securities 4
Shares authorized for the issuance of stock or convertible securities 5
29,457,941,452
881,442,830
756,323,120
1,970,862,596
302,144,720
33,368,714,718
14,728,970,726
440,721,415
378,161,560
985,431,298
151,072,360
16,684,357,359
30,214,262,692
881,442,830
315,400,000
2,842,339,760
302,144,720
34,555,590,002
15,107,131,346
440,721,415
157,700,000
1,421,169,880
151,072,360
17,277,795,001
1 As of December 31, 2020 and 2019, 13,068,000,000 shares correspond to the fixed portion, and 36,985,072,077 shares as of December 31, 2020 and 38,765,385,003 shares as of
December 31, 2019, correspond to the variable portion.
2 Series “A” or Mexican shares must represent at least 64% of CEMEX’s capital stock; Series “B” or free subscription shares must represent at most 36% of CEMEX’s capital stock.
3 Shares repurchased under the share repurchase program authorized by the Company’s shareholders (note 21.2).
4 Refers to those shares that guarantee the conversion of outstanding convertible securities and new securities issues (note 17.2).
5 Shares authorized for issuance in a public offering or private placement and/or by issuance of new convertible securities.
On March 26, 2020, stockholders at the annual ordinary shareholders’ meeting approved: (i) setting the amount of $500 or its equivalent in Mexican Pesos as
the maximum amount of resources that through fiscal year 2020, and until the next ordinary general shareholders’ meeting of CEMEX, S.A.B. de C.V. is held,
CEMEX, S.A.B. de C.V. may use for the acquisition of its own shares or securities that represent such shares; and (ii) the cancellation of shares of repurchased
during the 2019 fiscal year and the remained in CEMEX, S.A.B. de C.V.’s treasury after the maturities of the November 2019 Mandatory Convertible Notes and
the 3.72% Convertible Notes, except for the minimal conversion. Under the 2020 share repurchase program, CEMEX repurchased 378.2 million CEMEX CPOs,
at a weighted-average price in pesos equivalent to 0.22 dollars per CPO. The total amount of these CPO repurchases, excluding value-added tax, was $83. On
April 8, 2020, CEMEX, S.A.B. de C.V. announced that, to enhance its liquidity, it suspended the share repurchase program for the remainder of 2020 (note 2).
On March 28, 2019, stockholders at the annual ordinary shareholders’ meeting approved: (i) a cash dividend of $150. The dividend was paid in two installments,
the first installment, for half of the dividend was paid on June 17, 2019 at the rate of US$0.001663 per share and the second installment for the remainder of
the dividend was paid on December 17, 2019 at the rate of US$0.001654 per share; (ii) the acquisition of own shares of up to $500 or its equivalent in Mexican
pesos, as the maximum amount of resources that through fiscal year 2019, and until the next ordinary annual shareholder’s meeting is held, CEMEX may be
used for the acquisition of its own shares or securities that represent such shares; (iii) a decrease of CEMEX’s share capital, in its variable part for the amount in
pesos equivalent to $0.2826, through the cancellation of approximately 2 billion ordinary, registered and without par-value, treasury shares; (iv) a decrease of
CEMEX’s share capital, in its variable part for the amount in pesos equivalent to $0.0670 by the cancellation of approximately 461 million ordinary, registered
and without par-value, treasury shares; (v) the increase of CEMEX’s share capital in its variable part for the amount $22 thousands, through the issuance of
150 million ordinary shares. The subscription of shares representing the capital increase was made at a theoretical value of $0.000143 dollars per share, and
if applicable plus a premium defined by the Board of Directors. Until December 31, 2019, under the 2019 repurchase program, CEMEX has repurchased 157.7
million CEMEX CPOs, at a weighted-average price in pesos equivalent to $0.3164 dollars per CPO. The total amount of these CPO repurchases, excluding
value-added tax, was $50.
In connection with the long-term executive share-based compensation programs (note 22) in 2019 and 2018, CEMEX issued 27.4 million CPOs and 49.3
million CPOs, respectively, generating an additional paid-in capital of $32 in 2019 and $34 in 2018 associated with the fair value of the compensation received
by executives.
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21.2) OTHER EQUITY RESERVES
As of December 31, 2020 and 2019 other equity reserves are summarized as follows:
Cumulative translation effect, net of effects from perpetual debentures and deferred income taxes
recognized directly in equity (notes 20.2 and 21.4)
Cumulative actuarial losses
Treasury shares repurchased under share repurchase program (note 21.1)
Effects associated with the Parent Company´s convertible securities 1
Treasury shares held by subsidiaries
2020
2019
(1,567)
(792)
(83)
–
(11)
(2,453)
(2,098)
(593)
(50)
25
(8)
(2,724)
$
$
1 Represents the equity component upon the issuance of CEMEX, S.A.B. de C.V.’s convertible securities described in note 17.2, as well as the effects associated with such securities in
connection with the change in the Parent Company’s functional currency (note 3.4). Upon conversion of these securities, the balances have been correspondingly reclassified to
common stock and/or additional paid-in capital (note 17.1).
For the years ended December 31, 2020, 2019 and 2018, the translation effects of foreign subsidiaries included in the statements of comprehensive income
were as follows:
Foreign currency translation result 1
Foreign exchange fluctuations from debt 2
Foreign exchange fluctuations from intercompany balances 3
2020
2019
2018
$
$
341
(126)
(419)
(204)
88
19
(47)
60
(191)
120
(20)
(91)
1 These effects refer to the result from the translation of the financial statements of foreign subsidiaries and include the changes in fair value of foreign exchange forward contracts
designated as hedge of a net investment (note 17.4).
2 Generated by foreign exchange fluctuations over a notional amount of debt in CEMEX, S.A.B. de C.V., associated with the acquisition of foreign subsidiaries and designated as a
hedge of the net investment in foreign subsidiaries (note 3.4).
3 Refers to foreign exchange fluctuations arising from balances with related parties in foreign currencies that are of a long-term investment nature considering that their liquidation
is not anticipated in the foreseeable future and foreign exchange fluctuations over a notional amount of debt of a subsidiary of CEMEX España identified and designated as a hedge
of the net investment in foreign subsidiaries.
21.3) RETAINED EARNINGS
The Parent Company’s net income for the year is subject to a 5% allocation toward a legal reserve until such reserve equals one fifth of the common stock.
As of December 31, 2020, the legal reserve amounted to $95. As mentioned in note 21.1, effective as of December 31, 2020, CEMEX incurred a restitution of
retained earnings from additional paid-in capital for $2,481.
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21.4) NON-CONTROLLING INTEREST AND PERPETUAL DEBENTURES
Non-controlling interest
Non-controlling interest represents the share of non-controlling stockholders in the equity and results of consolidated subsidiaries. As of December 31,
2020 and 2019, non-controlling interest in equity amounted to $428 and $1,060, respectively. In addition, in 2020, 2019 and 2018, non-controlling interests in
consolidated net income were $21, $36 and $42, respectively. These non-controlling interests arise mainly from the following CEMEX’s subsidiaries:
•
•
•
In February 2017, CEMEX acquired a controlling interest in TCL, whose shares trade in the Trinidad and Tobago Stock Exchange. As of December 31, 2020
and 2019, there is a non-controlling interest in TCL of 30.17% of its common shares (see note 5.3 for certain relevant condensed financial information).
In July 2016, CHP, a then indirect wholly owned subsidiary of CEMEX España, closed its initial offering of 2,337,927,954 common shares, or 45% of CHP’s
common shares. Pursuant to the repurchase of CHP’s shares in the market during 2019, CEMEX’s reduced the non-controlling interest in CHP from 45%
in 2018 to 33.22% of CHP’s outstanding common shares as of December 31, 2019. Furthermore, CEMEX’s reduced the non-controlling interest in CHP from
33.22% in 2019 to 22.16% as of December 31, 2020 of CHP’s outstanding common shares due to the results of a public stock rights offering. CHP’s assets
consist primarily of CEMEX’s cement manufacturing assets in the Philippines (see note 5.3 for certain relevant condensed financial information).
In November 2012, pursuant to a public offering in Colombia and an international private placement, CLH, a direct subsidiary of CEMEX España, concluded
its initial offering of common shares. CLH’s assets include substantially all of CEMEX’s assets in Colombia, Panama, Costa Rica, Guatemala, El Salvador
and until September 27, 2018 the operations in Brazil (note 5.2). On November 9, 2020, initiated the acceptance period of a public Share Tender Offer by
CEMEX España for any and all outstanding ordinary shares of CLH. On December 18, 2020, CEMEX España settled $103 and increased its ownership in
CLH by acquiring 108,337,613 shares of CLH. As of December 31, 2020 and 2019, there is a non-controlling interest in CLH of 7.63% and 26.83%, respectively,
of CLH’s outstanding common shares, excluding shares held in treasury (see note 5.3 for certain relevant condensed financial information of CLH’s main
subsidiaries).
Perpetual debentures
As of December 31, 2020 and 2019, the line item “Non-controlling interest and perpetual debentures” included $449 and $443, respectively, representing the
notional amounts of perpetual debentures, which exclude any perpetual debentures held by subsidiaries.
Coupon payments on the perpetual debentures were included within “Other equity reserves” and amounted to $24 in 2020, $29 in 2019 and $29 in 2018,
excluding in all the periods the coupons accrued by perpetual debentures held by subsidiaries.
CEMEX’s perpetual debentures have no fixed maturity date and there are no contractual obligations for CEMEX to exchange any series of its outstanding
perpetual debentures for financial assets or financial liabilities. As a result, these debentures, issued entirely by Special Purpose Vehicles (“SPVs”), qualify as
equity instruments and are classified within non-controlling interest, as they were issued by consolidated entities. In addition, subject to certain conditions,
CEMEX has the unilateral right to defer indefinitely the payment of interest due on the debentures. The classification of the debentures as equity instruments
was made under applicable IFRS. The different SPVs were established solely for purposes of issuing the perpetual debentures and were included in CEMEX’s
consolidated financial statements.
As of December 31, 2020 and 2019, the detail of CEMEX’s perpetual debentures, excluding the perpetual debentures held by subsidiaries, was as follows:
Issuer
C10-EUR Capital (SPV) Ltd
C8 Capital (SPV) Ltd
C5 Capital (SPV) Ltd
C10 Capital (SPV) Ltd
Issuance date
May 2007
February 2007
December 2006
December 2006
2020
Nominal amount
2019
Nominal amount
Repurchase
option
€ 64
$135
$61
$175
€ 64
$135
$61
$175
Tenth anniversary
Eighth anniversary
Fifth anniversary
Tenth anniversary
Interest rate
EURIBOR +4.79%
LIBOR +4.40%
LIBOR +4.277%
LIBOR +4.71%
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22) EXECUTIVE SHARE-BASED COMPENSATION
CEMEX has long-term restricted share-based compensation programs providing for the grant of the CEMEX’s CPOs to a group of eligible executives, pursuant
to which, according to CEMEX’s election, either new CPOs are issued, or CEMEX provides funds to the administration trust owned by the executives for the
purchase of a portion or all of the required CPOs in the market for delivery to such executives under each annual program over a service period of four years
(the “Ordinary Program”). The Parent Company’s CPOs of the annual grant (25% of each annual Ordinary Program) are placed at the beginning of the service
period in the executives’ accounts to comply with a one-year restriction on sale. Under the Ordinary Programs, the Parent Company provided funds to a
broker for the purchase of 83.8 million CPOs in 2020 on behalf and for delivery to the eligible executives and issued new shares for 27.4 million CPOs in 2019
and 49.3 million CPOs in 2018, that were subscribed and pending for payment in the Parent Company’s treasury and in addition, 21.2 million CPOs in 2019,
net of taxes settled in cash, required for delivery were acquired by the executives’ trust in the market on behalf of such executives. As of December 31, 2020,
there are 248.4 million CPOs associated with these annual programs that are required for delivery in the following years as the executives render services.
Beginning in 2017, with the approval of the Parent Company’s Board of Directors, for a group of key executives, the conditions of the program were modified
for new awards by reducing the service period from four to three years and implementing tri-annual internal and external performance metrics, which
depending on their weighted achievement, may result in a final payment of the Parent Company’s CPOs at the end of the third year between 0% and 200%
of the target for each annual program (the “key executives program”). During 2020 and 2019, no CPOs of the Parent Company were issued or delivered under
the key executives’ program.
Beginning January 1, 2013, most of those eligible executives belonging to the operations of CLH and subsidiaries ceased to receive Parent Company’s CPOs
and instead started receiving shares of CLH, significantly sharing the same conditions of CEMEX’s plan also over a service period of four years. During 2020,
2019 and 2018, CLH physically delivered 1,383,518 shares, 393,855 shares and 258,511 shares, respectively, corresponding to the vested portion of prior years’
grants, which were subscribed and held in CLH’s treasury. As of December 31, 2020, there are 2,895,944 shares of CLH associated with these annual programs
that are expected to be delivered in the following years as the executives render services.
In addition, beginning in 2018, those eligible executives belonging to the operations of CHP and subsidiaries ceased to receive Parent Company’s CPOs and
instead started receiving shares of CHP, significantly sharing the same conditions of CEMEX’s plan. During 2020 and 2019, CHP provided funds to a broker for
the purchase of 11,546,350 and 4,961,130 CHP’s shares in the market, respectively, on behalf and for delivery to the eligible executives.
The combined compensation expense related to the programs described above as determined considering the fair value of the awards at the date of grant in
2020, 2019 and 2018, was recognized in the operating results against other equity reserves or a cash outflow, as applicable, and amounted to $29, $32 and $34,
respectively, including in 2019 and 2018 the cost of CEMEX’s CPOs and the CHP’s shares, as correspond, acquired in the market on behalf of the executives.
The weighted-average price per CEMEX CPO granted during the period was determined in pesos and was equivalent to $0.3379 dollars in 2020, $0.6263
dollars in 2019 and $0.7067 dollars in 2018. Moreover, the weighted-average price per CLH share granted during the period as determined in Colombian pesos
was equivalent to $0.72 dollars in 2020, $1.31 dollars in 2019 and $2.14 dollars in 2018. As of December 31, 2020 and 2019, there were no options or commitments
to make payments in cash to the executives based on changes in the market price of the Parent Company’s CPO, CLH’s shares and/or CHP’s shares.
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23) EARNINGS PER SHARE
Basic earnings per share is calculated by dividing net income attributable to ordinary equity holders of the Parent Company (the numerator) by the weighted-
average number of shares outstanding (the denominator) during the period. Shares that would be issued depending only on the passage of time should be
included in the determination of the basic weighted-average number of shares outstanding. Diluted earnings per share should reflect in both the numerator
and denominator the assumption that convertible instruments are converted, that options or warrants are exercised, or that ordinary shares are issued upon
the satisfaction of specified conditions, to the extent that such assumption would lead to a reduction in basic earnings per share or an increase in basic loss
per share. Otherwise, the effects of potential shares are not considered because they generate antidilution.
The amounts considered for calculations of earnings per share in 2020, 2019 and 2018 were as follows:
Weighted-average number of shares outstanding 1
Capitalization of retained earnings 1
Effect of dilutive instruments – mandatorily convertible securities (note 17.2) 2
Weighted-average number of shares – basic
Denominator (thousands of shares)
Effect of dilutive instruments – share-based compensation (note 22) 2
Effect of potentially dilutive instruments – optionally convertible securities (note 17.2) 2
Weighted-average number of shares – diluted
Net income (loss) from continuing operations
Less: non-controlling interest net income (loss)
Controlling interest net income (loss) from continuing operations
Plus: after tax interest expense on mandatorily convertible securities
Numerator
Controlling interest net income (loss) from continuing operations – for basic earnings
per share calculations
Plus: after tax interest expense on optionally convertible securities
Controlling interest net income (loss) from continuing operations – for diluted earnings
per share calculations
Net income (loss) from discontinued operations
Controlling interest basic earnings (loss) per share
Controlling interest basic earnings (loss) per share from continuing operations
Controlling interest basic earnings (loss) per share from discontinued operations
Basic earnings per share
Controlling interest diluted earnings (loss) per share
Controlling interest diluted earnings (loss) per share from continuing operations
Controlling interest diluted earnings (loss) per share from discontinued operations
Controlling interest diluted earnings per share 3
2020
2019
2018
44,125,288
–
–
44,125,288
745,163
–
44,870,451
45,393,602
–
–
45,393,602
470,985
1,457,554
47,322,141
45,569,180
–
708,153
46,277,333
316,970
1,420,437
48,014,740
$
$
$
$
$
(1,326)
21
(1,347)
–
(1,347)
4
(1,343)
(120)
(0.0332)
(0.0305)
(0.0027)
(0.0332)
(0.0305)
(0.0027)
91
36
55
1
56
18
74
88
0.0031
0.0012
0.0019
0.0031
0.0012
0.0019
493
42
451
3
454
23
477
77
0.0114
0.0098
0.0016
0.0114
0.0098
0.0016
1
In 2019, shareholders approved the delivery of a cash dividend, meanwhile, in 2018, the Assembly did not determine any cash dividend or capitalization of retained earnings (note 21.1).
2 The number of Parent Company CPOs to be issued under the executive share-based compensation programs, as well as the total amount of Parent Company CPOs committed for
issuance in the future under the mandatorily and optionally convertible securities, are computed from the beginning of the reporting period. The number of shares resulting from
the executives’ stock-based compensation programs is determined under the inverse treasury method.
3 For 2020, 2019 and 2018, the effects on the denominator and numerator of potential dilutive shares generate antidilution; therefore, there is no change between the reported basic
earnings per share and diluted earnings per share.
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24) COMMITMENTS
24.1) CONTRACTUAL OBLIGATIONS
As of December 31, 2020, CEMEX had the following contractual obligations:
Obligations
Long-term debt
Leases 1
Total debt and other financial obligations 2
Interest payments on debt 3
Pension plans and other benefits 4
Acquisition of property, plant and equipment 5
Purchases of raw materials, fuel and energy 6
Total contractual obligations
Less than 1
year
1-3
years
$
$
104
311
415
452
157
109
549
1,682
957
459
1,416
890
144
–
531
2,981
2020
3-5
years
3,768
275
4,043
750
144
–
347
5,284
More than
5 years
4,499
545
5,044
663
1,012
–
1,060
7,779
Total
9,328
1,590
10,918
2,755
1,457
109
2,487
17,726
1 Represent nominal cash flows. As of December 31, 2020, the NPV of future payments under such leases was $1,323, of which, $436 refers to payments from 1 to 3 years and $242 refers
to payments from 3 to 5 years.
2 The schedule of debt payments, which includes current maturities, does not consider the effect of any refinancing of debt that may occur during the following years. In the past,
CEMEX has replaced its long-term obligations for others of a similar nature.
3 Estimated cash flows on floating rate denominated debt were determined using the floating interest rates in effect as of December 31, 2020.
4 Represents estimated annual payments under these benefits for the next 10 years (note 19), including the estimate of new retirees during such future years.
5 Refers mainly to the expansion of a cement-production line in the Philippines.
6 Future payments for the purchase of raw materials are presented based on contractual nominal cash flows. Future nominal payments for energy were estimated for all contractual
commitments based on an aggregate average expected consumption per year using the future prices of energy established in the contracts for each period. Future payments also
include CEMEX’s commitments for the purchase of fuel.
24.2) OTHER COMMITMENTS
As of December 31, 2020 and 2019, CEMEX was party to other commitments for several purposes, including the purchase of fuel and energy, the estimated
future cash flows over maturity of which are presented in note 24.1. A description of the most significant contracts is as follows:
• Beginning in April 2016, in connection with the Ventika S.A.P.I. de C.V. and the Ventika II S.A.P.I. de C.V. wind farms (jointly “Ventikas”) located in the
Mexican state of Nuevo Leon with a combined generation capacity of 252 Megawatts (“MW”), CEMEX agreed to acquire a portion of the energy generated
by Ventikas for its overall electricity needs in Mexico for a period of 20 years. The estimated annual cost of this agreement is $24 (unaudited) if CEMEX
receives all its energy allocation. Nonetheless, energy supply from wind is variable in nature and final amounts are determined considering the final MW
per hour (“MWh”) effectively received at the agreed prices per unit.
• On July 27, 2012, CEMEX signed a 10-year strategic agreement with International Business Machines Corporation (“IBM”) pursuant to which IBM provides,
among others, data processing services (back office) in finance, accounting and human resources; as well as Information Technology (“IT”) infrastructure
services, support and maintenance of IT applications in the countries in which CEMEX operates.
• Beginning in February 2010, for its overall electricity needs in Mexico CEMEX agreed with EURUS the purchase a portion of the electric energy generated
for a period of no less than 20 years. EURUS is a wind farm with an installed capacity of 250 MW operated by ACCIONA in the Mexican state of Oaxaca.
The estimated annual cost of this agreement is $67 (unaudited) if CEMEX receives all its energy allocation. Nonetheless, energy supply from wind source
is variable in nature and final amounts will be determined considering the final MWh effectively received at the agreed prices per unit.
• CEMEX maintains a commitment initiated in April 2004 to purchase the energy generated by Termoeléctrica del Golfo (“TEG”) until 2027 for its overall
electricity needs in Mexico. The estimated annual cost of this agreement is $124 (unaudited) if CEMEX receives all its energy allocation. Nonetheless, final
amounts will be determined considering the final MWh effectively received at the agreed prices per unit.
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•
In regards with the above, CEMEX also committed to supply TEG and another third-party electrical energy generating plant adjacent to TEG all fuel
necessary for their operations until the year 2027, equivalent to approximately 1.2 million tons of petroleum coke per year. CEMEX covers its commitments
under this agreement acquiring the volume of fuel from sources in the international markets and Mexico.
• CEMEX Zement GmbH (“CZ”), CEMEX’s subsidiary in Germany, held a long-term energy supply contract until 2022 with STEAG - Industriekraftwerk
Rüdersdorf GmbH (“SIKW”) in connection with the overall electricity needs of CEMEX’s Rüdersdorf plant. Based on the contract, each year CZ has the
option to fix in advance the volume of energy in terms of MW that it will acquire from SIKW, with the option to adjust the purchase amount one time on
a monthly and quarterly basis. The estimated annual cost of this agreement is $17 (unaudited) if CEMEX receives all its energy allocation.
• On October 24, 2018, CEMEX, S.A.B. de C.V. entered into an energy financial hedge agreement in Mexico, commencing October 1, 2019 and for a period of
20 years. Through the contract, the Company fixed the megawatt hour cost over an electric energy volume of 400 thousand megawatts hour per year,
through the payment of 25.375 dollars per megawatt hour of electric power in exchange for a market price. The committed price to pay will increase 1.5%
annually. The differential between the agreed price and the market price is settled monthly. CEMEX considers this agreement as a hedge for a portion of
its aggregate consumption of electric energy in Mexico and recognizes the result of the exchange of price differentials described previously in the Income
Statement as a part of the costs of energy. During 2020, the Company paid $0.4. CEMEX, S.A.B. de C.V. does not record this agreement at fair value since
there is not a deep market for electric power in Mexico that would effectively allow for its valuation.
24.3) COMMITMENTS FROM EMPLOYEE BENEFITS
In some countries, CEMEX has self-insured health care benefits plans for its active employees, which are managed on cost plus fee arrangements with
major insurance companies or provided through health maintenance organizations. As of December 31, 2020, in certain plans, CEMEX has established stop-
loss limits for continued medical assistance derived from a specific cause (e.g., an automobile accident, illness, etc.) ranging from 23 thousand dollars to
550 thousand dollars. In other plans, CEMEX has established stop-loss limits per employee regardless of the number of events ranging from 100 thousand
dollars to 2.5 million dollars. The contingency for CEMEX if all employees qualifying for health care benefits required medical services simultaneously is
significantly. However, CEMEX believes this scenario is remote. The amount expensed through self-insured health care benefits was $61 in 2020, $62 in 2019
and $62 in 2018.
25) LEGAL PROCEEDINGS
25.1) PROVISIONS RESULTING FROM LEGAL PROCEEDINGS
CEMEX is involved in various significant legal proceedings, the adverse resolutions of which are deemed probable and imply the incurrence of losses and/
or cash outflows or the delivery of other resources owned by CEMEX. As a result, certain provisions and/or losses have been recognized in the financial
statements, representing the best estimate of cash outflows. CEMEX believes that it will not make significant expenditure in excess of the amounts recorded.
As of December 31, 2020, the details of the most significant events giving effect to provisions or losses are as follows:
• As of December 31, 2020, CEMEX had accrued environmental remediation liabilities through its subsidiaries in the United Kingdom pertaining to closed
and current landfill sites for the confinement of waste, representing the NPV of such obligations for an amount in pounds sterling equivalent to $178.
Expenditure was assessed and quantified over the period in which the sites have the potential to cause environmental harm, which is generally consistent
with the views taken by the regulator as being up to 60 years from the date of closure. The assessed expenditure included the costs of monitoring the
sites and the installation, repair and renewal of environmental infrastructure.
• As of December 31, 2020, CEMEX had accrued environmental remediation liabilities through its subsidiaries in the United States for $66, related to: a) the
disposal of various materials in accordance with past industry practice, which might currently be categorized as hazardous substances or wastes; and
b) the cleanup of sites used or operated by CEMEX, including discontinued operations, regarding the disposal of hazardous substances or waste, either
individually or jointly with other parties. Most of the proceedings are in the preliminary stages and a final resolution might take several years. CEMEX does
not believe that it will be required to spend significant sums on these matters in excess of the amounts previously recorded. The ultimate cost that may
be incurred to resolve these environmental issues cannot be assured until all environmental studies, investigations, remediation work and negotiations
with, or litigation against, potential sources of recovery have been completed.
•
In 2012, in connection with a contract entered into in 1990 (the “Quarry Contract”) by CEMEX Granulats Rhône Méditerranée (“CEMEX GRM”), one of CEMEX’s
subsidiaries in France, with SCI La Quinoniere (“SCI”) pursuant to which CEMEX GRM had drilling rights to extract reserves and do quarry remediation at a
quarry in the Rhône region of France, SCI filed a claim against CEMEX GRM for breach of the Quarry Contract, requesting the rescission of such contract
and damages plus interest for a revised amount in euros equivalent to $82, arguing that CEMEX GRM partially filled the quarry allegedly in breach of
the terms of the Quarry Contract. After many hearings, resolutions and appeals over the years, on November 25, 2020, the expert appointed by the court
of appeals determined an amount of loss of profits of $0.79 and a cost of backfilling the quarry in $15. As of December 31, 2020, CEMEX had accrued a
provision through its subsidiaries in France for $8 in connection with the best estimate of the remediation costs resulting from this claim. Although the
final amount may differ, CEMEX considers that any such amount should not have a material adverse impact on CEMEX’s results of operations, liquidity
and financial condition.
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25.2) CONTINGENCIES FROM LEGAL PROCEEDINGS
CEMEX is involved in various legal proceedings, which have not required the recognition of accruals, considering that the probability of loss is less than
probable. Nonetheless, until all stages in the procedures are exhausted in each proceeding, CEMEX cannot assure the achievement of a final favorable
resolution. As of December 31, 2020, the most significant events with a quantification of the potential loss, when it is determinable and would not impair the
outcome of the relevant proceeding, were as follows:
• On September 20, 2018, triggered by heavy rainfall, a landslide causing damages and fatalities (the “Landslide”) occurred in a site located within an area
covered by mining rights of APO Land & Quarry Corporation (“ALQC”) in Naga City, Cebu, Philippines. ALQC is a principal raw material supplier of APO
Cement Corporation (“APO”), a wholly owned subsidiary of CHP. CEMEX indirectly owns a minority 40% stake in ALQC. On November 19, 2018, 40 individuals
and one legal entity (on behalf of 8,000 individuals allegedly affected by the Landslide) filed an environmental class action lawsuit at the Regional Trial
Court (the “Court”) of Talisay, Cebu, against CHP, ALQC, APO, the Mines and Geosciences Bureau of the Department of Environment and Natural Resources,
the City Government of Naga, and the Province of Cebu. Plaintiffs claim that the Landslide occurred because of the defendants’ gross negligence and
seek, among other relief, (a) damages for an amount in Philippine Pesos equivalent to $90, (b) a rehabilitation fund for an amount in Philippine Pesos
equivalent to $10, and (c) the issuance of a Temporary Environment Protection Order against ALQC aiming to prevent ALQC from performing further
quarrying activities while the case is still pending. This last request was rejected by the Court on August 16, 2019 and after reconsideration, the resolution
became final on December 5, 2020. Moreover, on September 30, 2019 the Court dismissed the case against CHP and APO, order that is not yet final and
that was appealed by the plaintiffs on November 26, 2019. As of December 31, 2020, because of the status and preliminary stage of the lawsuit, CEMEX is
not able to assess with certainty the likelihood of an adverse result in this lawsuit; and CEMEX is neither able to assess if a final adverse result in this lawsuit
would have a material adverse impact on its results of operations, liquidity and financial position.
• On June 12, 2018, the Authority for Consumer Protection and Competition Defense of Panama (the “Panama Authority”) carried out an investigation against
Cemento Bayano and other competitors for the alleged commission of monopolistic practices in relation to the gray cement and the ready-mix concrete
markets. From this investigation, the Panama Authority considered the possible existence of monopolistic or anticompetitive practices consisting of: (i)
price fixing and/or production restriction of gray cement sold to ready-mix concrete producers in Panama; and (ii) unilateral and/or joint predatory acts
and/or cross subsidies in the ready-mix concrete market. On October 8, 2020, the Panama Authority issued a resolution that closed the investigation. The
resolution concluded that Cemento Bayano, among other competitors, did not engage in an absolute monopolistic practice, consisting of an agreement
and/or coordination of the sale price of cement or a restriction of production. The resolution also specifies that the analysis carried out and the evidence
collected does not allow to conclude that the parties under investigation carried out a predatory practice in their production and commercialization of
ready-mixed concrete, which is considered a relative monopolistic practice.
• Certain of CEMEX’s subsidiaries in the United States were notified of a grand jury subpoena dated March 29, 2018 issued by the United States Department
of Justice (“DOJ”) related to an investigation of possible antitrust law violations in connection with CEMEX’s sales (and related sales practices) of gray
Portland cement and slag in the United States and its territories. The objective of this subpoena is to gather facts necessary to make an informed decision
about whether violations of U.S. law have occurred. CEMEX has been cooperating with the DOJ and is complying with the subpoena. As of December
31, 2020, given the status of the investigation, CEMEX is not able to assess if this investigation will lead to any fines, penalties or remedies, or if such fines,
penalties or remedies, if any, would have a material adverse effect on the Company’s results of operations, liquidity or financial position.
•
•
In December 2016, the Parent Company received subpoenas from the SEC seeking information to determine whether there have been any violations of
the U.S. Foreign Corrupt Practices Act stemming from the Maceo Project. These subpoenas do not mean that the SEC has concluded that the Parent
Company or any of its affiliates violated the law. The Parent Company has been cooperating with the SEC and intends to continue cooperating fully with
the SEC. The DOJ also opened an investigation into this matter. In this regard, on March 12, 2018, the DOJ issued a grand jury subpoena to the Parent
Company relating to its operations in Colombia and other jurisdictions. The Parent Company intends to cooperate fully with the SEC, the DOJ and any
other investigatory entity. As of December 31, 2020, the Parent Company is unable to predict the duration, scope, or outcome of either the SEC investigation
or the DOJ investigation, or any other investigation that may arise, or, because of the current status of the SEC investigation and the preliminary nature
of the DOJ investigation, the potential sanctions which could be borne by the Parent Company, or if such sanctions, if any, would have a material adverse
impact on CEMEX results of operations, liquidity or financial position.
In February 2014, the Egyptian Tax Authority requested Assiut Cement Company (“ACC”), a subsidiary of CEMEX in Egypt, the payment of a development
levy on clay used in the Egyptian cement industry for an amount equivalent as of December 31, 2020 to $20 for the period from May 5, 2008 to November
30, 2011. In March 2014, ACC appealed the levy and on September 2014 it was notified that it obtained a favorable resolution from the Ministerial Committee
for Resolution of Investment Disputes, which instructed the Egyptian Tax Authority to cease claiming from ACC the payment of the levy on clay. It was
further decided that the levy on clay should not be imposed on imported clinker. Nonetheless, in May 2016, the Egyptian Tax Authority challenged ACC´s
right to cancel the levy on clay before the North Cairo Court, which referred the cases to Cairo’s Administrative Judiciary Court. These cases have been
adjourned by the Commissioners of the Cairo Administrative Judiciary Court, which on November 2, 2020 referred the cases to the Court and established
a first hearing session for February 15, 2021. CEMEX does not expect that such referral will prejudice ACC’s favorable legal position in this dispute. As of
December 31, 2020, CEMEX does not expect a material adverse impact due to this matter in its results of operations, liquidity or financial position.
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•
In September 2012, in connection with a lawsuit submitted to a first instance court in Assiut, Egypt in 2011, the first instance court of Assiut issued a
resolution to nullify the Share Purchase Agreement (the “SPA”) pursuant to which CEMEX acquired in 1999 a controlling interest in Assiut Cement
Company. In addition, during 2011 and 2012, lawsuits seeking, among other things, the annulment of the SPA were filed by different plaintiffs, including
25 former employees of ACC, before Cairo’s State Council. After several appeals, hearings and resolutions over the years, the cases are held in Cairo’s
7th Circuit State Council Administrative Judiciary Court awaiting the High Constitutional Court to pronounce regarding the challenges against the
constitutionality of Law 32/2014 filed by the plaintiffs, which protects CEMEX’s investments in Egypt. These matters are complex and take several years
to be resolved. As of December 31, 2020, CEMEX is not able to assess the likelihood of an adverse resolution regarding these lawsuits nor is able to assess
if the Constitutional Court will dismiss Law 32/2014, but, regarding the lawsuits, if adversely resolved, CEMEX does not believe the resolutions in the first
instance would have an immediate material adverse impact on CEMEX’s operations, liquidity and financial condition. However, if CEMEX exhausts all
legal recourses available, a final adverse resolution of these lawsuits, or if the Constitutional Court dismisses Law 32/2014, this could adversely impact the
ongoing matters regarding the SPA, which could have a material adverse impact on CEMEX’s operations, liquidity and financial condition.
In connection with the legal proceedings presented in notes 25.1 and 25.2, the exchange rates as of December 31, 2020 used by CEMEX to convert the amounts
in local currency to their equivalents in dollars were the official closing exchange rates of 0.8183 Euro per dollar, 0.7313 British pounds sterling per dollar and
15.7964 Egyptian pounds per dollar.
In addition to the legal proceedings described above in notes 25.1 and 25.2, as of December 31, 2020, CEMEX is involved in various legal proceedings of minor
impact that have arisen in the ordinary course of business. These proceedings involve: 1) product warranty claims; 2) claims for environmental damages;
3) indemnification claims relating to acquisitions or divestitures; 4) claims to revoke permits and/or concessions; and 5) other diverse civil, administrative,
commercial and lawless actions. CEMEX considers that in those instances in which obligations have been incurred, CEMEX has accrued adequate provisions
to cover the related risks. CEMEX believes these matters will be resolved without any significant effect on its business, financial position or results of operations.
In addition, in relation to certain ongoing legal proceedings, CEMEX is sometimes able to make and disclose reasonable estimates of the expected loss or
range of possible loss, as well as disclose any provision accrued for such loss, but for a limited number of ongoing legal proceedings, CEMEX may not be
able to make a reasonable estimate of the expected loss or range of possible loss or may be able to do so but believes that disclosure of such information
on a case-by-case basis would seriously prejudice CEMEX’s position in the ongoing legal proceedings or in any related settlement discussions. Accordingly,
in these cases, CEMEX has disclosed qualitative information with respect to the nature and characteristics of the contingency but has not disclosed the
estimate of the range of potential loss.
25.3) OTHER SIGNIFICANT PROCESSES
In connection with the cement plant located in the municipality of Maceo in Colombia (the “Maceo Plant”), as described in note 15.1, as of December 31, 2020,
the plant has not initiated commercial operations considering several significant processes for the profitability of the investment. The evolution and status
of the main issues related to such plant are described as follows:
Maceo Plant – Memorandums of understanding
•
In August 2012, CEMEX Colombia signed a memorandum of understanding (the “MOU”) with the representative of the entity CI Calizas y Minerales S.A.
(“CI Calizas”), for the acquisition and transfer of assets mainly comprising land, the mining concession and the shares of Zona Franca Especial Cementera
del Magdalena Medio S.A.S. (“Zomam”) (holder of the free trade zone concession). In addition, in December 2013, CEMEX Colombia engaged the same
representative of CI Calizas to also represent in the name and on behalf of CEMEX Colombia in the acquisition of certain land adjacent to the plant,
signing a new memorandum of understanding (the “Land MOU”). Under the MOU and the Land MOU, CEMEX Colombia made cash advances to this
representative for amounts in Colombian Pesos equivalent to approximately $13.4 of a total of approximately $22.5, and paid interest accrued over the
unpaid committed amount for approximately $1.2. These amounts considering the exchange rate as of December 31, 2016 of 3,000.75 Colombian Pesos
per U.S. Dollar. In September 2016, after confirming irregularities in the acquisition processes by means of investigations and internal audits initiated
in response to complaints received, which were reported to Colombia’s Attorney General (the “Attorney General”), providing the findings obtained, and
considering that such payments were made in breach of the Parent Company’s and CLH’s policies, the Company decided to terminate the employment
relationship with then those responsible for the Planning and Legal areas and accepted the resignation of the then Chief Executive Officer. Moreover,
because of the findings and considering the available legal opinions as well as the low likelihood of recovering those advances, in December 2016, CEMEX
Colombia write off such advances from its investments in progress (note 15.1) and cancelled the remaining advance payable.
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Maceo Plant – Expiration of property process and other related matters
• After the signing of the MOU, in December 2012, a former shareholder of CI Calizas, who presumptively transferred its shares of CI Calizas two years before
the signing of the MOU, was linked to a process of expiration of property initiated by the Attorney General. Amongst other measures, the Attorney General
ordered the seizure and consequent suspension of the right to dispose the assets subject to the MOU, including the shares of Zomam acquired by CEMEX
Colombia before the beginning of such process. As a third party acting in good faith and free of guilt, CEMEX Colombia joined the expiration of property
process fully cooperating with the Attorney General. As of December 31, 2020, it is estimated that a final resolution in the ongoing expiration of property
process, the evidentiary phase of which is about to begin, may take between 10 and 15 years from its beginning. As of December 31, 2020, pursuant to the
expiration of property process of the assets subject to the MOU and the failures to legally formalize the purchases under the Land MOU, CEMEX Colombia
does not have the legal representation of Zomam, is not the rightful owner of the land and is not the assigned entity of the mining concession.
In addition, there is an ongoing criminal investigation that resulted in a legal resolution by means of which an indictment was issued to two of the Company’s
former officers and to CI Calizas’ representative. CEMEX is not able to anticipate the actions that criminal judges may impose against these people.
Maceo Plant – Lease contract, mandate agreement and operation contract
•
In July 2013, CEMEX Colombia signed with the provisional depository designated by the former Drugs National Department (then depository of the assets
subject to the expiration of property process), which functions after its liquidation were assumed by the Administrator of Special Assets (Sociedad de
Activos Especiales S.A.S. or the “SAE”), a lease contract for a period of five years by means of which CEMEX Colombia was duly authorized to build and
operate the plant (the “Lease Contract”). Moreover, in 2014, the provisional depository granted a mandate (the “Mandate”) to CEMEX Colombia for an
indefinite period for the same purpose of continuing the construction and operation of the plant. On July 15, 2018, the Lease Contract expired.
• On April 12, 2019, CEMEX Colombia, CCL and another of its subsidiaries reached a conciliatory agreement with the SAE and CI Calizas before the Attorney
General’s Office and signed a contract of Mining Operation, Manufacturing and Delivery Services and Leasing of Properties for Cement Production (the
“Operation Contract”), which will allow CEMEX Colombia to continue using the assets subject to the aforementioned expiration of property process for
an initial term of 21 years that can be renewed for 10 additional years, provided that the extension of the mining concession is obtained. The Operation
Contract was signed by CI Calizas and Zomam with the authorization of the SAE as delegate of these last two companies. In addition to certain one-time
initial payments in Colombian pesos equivalent to $1.5 settled in 2019 and 2020, the Operation Contract includes the following payments:
• An annual payment equivalent to 15 thousand dollars to CI Calizas for the use of land that will be adjusted annually for changes in the Consumer Price
Index.
• Once the Maceo Plant begins commercial operations, CEMEX Colombia and/or a subsidiary will pay on a quarterly basis: a) 0.9% of the net sales
resulting from the cement produced in the plant as compensation to CI Calizas for the right of CEMEX Colombia to extract and use the mineral
reserves; and b) 0.8% of the net sales resulting from the cement produced in the plant as payment to Zomam for cement manufacturing and delivery
services, as long as Zomam maintains the Free Zone benefit, or, 0.3% of the aforementioned net sales exclusively for the use of equipment, in case
that Zomam losses the benefits as Free Trade Zone.
•
The Operation Contract will continue in force regardless of the result in the expiration of property process, except that the applicable criminal judge
would recognize ownership rights of the assets under expiration of property to CEMEX Colombia and its subsidiary, in which case the Operation
Contract would no longer be needed and would be early terminated.
• Under the presumption that CEMEX Colombia conducted itself in good faith, CEMEX considers that it will be able to keep ownership of the plant, and that
the rest of its investments are protected by Colombian law, under which, if a person builds on the property of a third party, with full knowledge of such
third party, this third party may: a) take ownership of the plant, provided a corresponding indemnity to CEMEX Colombia, or otherwise, b) oblige CEMEX
Colombia to purchase the land. Nonetheless, had this not be the case, CEMEX Colombia would take all necessary actions to safeguard its rights. If the
expiration of property over the assets subject to the MOU is ordered in favor of the State, if the assets were adjudicated to a third party in a public tender
offer, considering the signing of the Operation Contract, such third party would have to subrogate to the Operation Contract. As of December 31, 2020,
CEMEX is not able to estimate whether the expiration of property over the assets subject to the MOU will be ordered in favor of the State, or, if applicable,
if the assets would be adjudicated to a third party in a public tender offer.
Maceo Plant – Resource against the capitalization of Zomam
• On December 7, 2020, the Parent Company, acting as shareholder of CEMEX Colombia, filed a lawsuit before the Business Superintendency of Colombia
(Superintendencia de Sociedades de Colombia or the “Business Superintendency”), requesting a declaration of inefficiency and subsequent declaration
of invalidity and inexistence of the equity contribution in-kind carried out by CEMEX Colombia to Zomam on December 11, 2015. In the event of a favorable
resolution, all the effects of the equity contribution would roll back. As a consequence, the assets contributed to Zomam, which had a value of $43, would
revert to CEMEX Colombia in exchange for the shares in Zomam it received as a result of the capitalization. As a result of the current consolidation of
Zomam, such favorable resolution would not have any effect in CEMEX’s consolidated financial statements. As of December 31, 2020, the legal claim has
not yet been admitted by the Business Superintendency.
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Maceo Plant – Status in connection with the commissioning of the plant
• On September 3, 2019, CEMEX Colombia was notified of the resolution issued by Corantioquia’s Directive Council, the regional environmental authority
(“Corantioquia”), regarding the approval for the subtraction of a portion of the plant from the Integrated Management District of the Canyon of the
Alicante River (“IMD”). As of December 31, 2020, the commissioning of the Maceo plant and the conclusion of the access road remain suspended until the
successful modification of the environmental license for up to 990 thousand tons per year, which request was filed before Corantioquia on June 17, 2020
and was entered into review on July 2, 2020; remaining pending a resolution from this entity. In connection with the obtention of the permits required
for the conclusion of several sections of the access road, on November 10, 2020, Maceo’s municipality issued the approval of the Road Infrastructure
Intervention project and, on December 11, 2020, issued a decree establishing the public utility of the access road, required authorizations for both, building
the road and acquire the required land. In respect to the modification of the permitted land use where the project is located, CEMEX Colombia received
favorable criteria from Corantioquia regarding the change of land use because of the approval for the subtraction from the IMD, which was endorsed by
the municipality of Maceo on August 29, 2020, which allows for an industrial and mining use compatible with the project. As of December 31, 2020, CEMEX
continues working to resolve these matters as soon as possible and limits its activities to those for which it has the relevant authorizations.
26) RELATED PARTIES
All significant balances and transactions between the entities that constitute the CEMEX group have been eliminated in the preparation of the consolidated
financial statements. These balances with related parties resulted primarily from: (i) the sale and purchase of goods between group entities; (ii) the sale and/
or acquisition of subsidiaries’ shares within the CEMEX group; (iii) the invoicing of administrative services, rentals, trademarks and commercial name rights,
royalties and other services rendered between group entities; and (iv) loans between related parties. Transactions between group entities are conducted on
arm’s length terms based on market prices and conditions. When market prices and/or market conditions are not readily available, CEMEX conducts transfer
pricing studies in the countries in which it operates to assure compliance with regulations applicable to transactions between related parties.
The definition of related parties includes entities or individuals outside the CEMEX group, which, due to their relationship with CEMEX, may take advantage
of being in a privileged situation. Likewise, this applies to cases in which CEMEX may take advantage of such relationships and obtain benefits in its financial
position or operating results. CEMEX’s transactions with related parties are executed under market conditions.
For the years ended December 31, 2020, 2019 and 2018, in ordinary course of business, CEMEX has entered into transactions with related parties for the sale
and/or purchase of products, sale and/or purchase of services or the lease of assets, all of which are not significant for CEMEX and to the best of CEMEX’s
knowledge are not significant to the related party, are incurred for non-significant amounts for CEMEX and are executed under market terms and conditions
following the same commercial principles and authorizations applied to other third parties. These identified transactions, as applicable, are approved or
ratified at least annually by the Parent Company’s Board of Directors. For CEMEX, none of these transactions are material to be disclosed separately.
In addition, for the years ended December 31, 2020, 2019 and 2018, the aggregate amount of compensation of CEMEX, S.A.B. de C.V. Board of Directors,
including alternate directors, and CEMEX’s top management executives was $35, $40 and $38, respectively. Of these amounts, $29 in 2020, $34 in 2019,
$29 in 2018, were paid as base compensation plus performance bonuses, including pension and post-employment benefits. In addition, $6 in 2020, $6 in
2019 and $9 in 2018 of the aggregate amounts in each year, corresponded to allocations of Parent Company CPOs under CEMEX’s executive share-based
compensation programs.
27) SUBSEQUENT EVENTS
On January 12, 2021, CEMEX, S.A.B. de C.V. issued $1,750 of its 3.875% Senior Secured Notes due on July 11, 2031 denominated in U.S. Dollars (the “July 2031
Notes”), which bear interest semi-annually at an annual rate of 3.875% and mature on July 11, 2031. The July 2031 Notes were issued at a price of 100% of face
value and will be callable commencing on July 11, 2026. CEMEX intends to use the net proceeds from the offering of the July 2031 Notes for general corporate
purposes, including to repay other indebtedness, all in accordance with CEMEX’s 2017 Facilities Agreement (note 17.1). The July 2031 Notes share in the
Collateral pledged for the benefit of the lenders under the 2017 Facilities Agreement and other secured obligations having the benefit of such Collateral and
are guaranteed by the same group of guarantors (note 17.1).
On January 13, 2021, CEMEX, S.A.B. de C.V. announced that it has issued a notice of full redemption for $1,000 worth of its April 2026 Notes, which bear interest
semi-annually at an annual rate of 7.75% (note 17.1). Moreover, the Company has also issued a notice of partial redemption of $750 of its January 2025 Notes,
which bear interest semi-annually at an annual rate of 5.70%, out of the $1,071 that is in circulation (note 17.1). The full redemption of the April 2026 Notes and
partial redemption of the January 2025 Notes is expected to be concluded on February 16, 2021.
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28) MAIN SUBSIDIARIES
As mentioned in notes 5.3 and 21.4, as of December 31, 2020 and 2019, there are non-controlling interests on certain consolidated entities that are in turn
holding companies of relevant operations. The main subsidiaries as of December 31, 2020 and 2019, which ownership interest is presented according to the
interest maintained by CEMEX, were as follows:
Subsidiary
Country
2020
2019
% Interest
CEMEX España, S.A. 1
CEMEX, Inc.
CEMEX Latam Holdings, S.A. 2
CEMEX (Costa Rica), S.A. 3
CEMEX Nicaragua, S.A. 3
Assiut Cement Company
CEMEX Colombia, S.A. 4
Cemento Bayano, S.A. 5
CEMEX Dominicana, S.A.
Trinidad Cement Limited
Caribbean Cement Company Limited 6
CEMEX de Puerto Rico Inc.
CEMEX France Gestion (S.A.S.)
CEMEX Holdings Philippines, Inc. 7
Solid Cement Corporation 8
APO Cement Corporation 8
CEMEX U.K.
CEMEX Deutschland, AG.
CEMEX Czech Republic, s.r.o.
CEMEX Polska sp. Z.o.o.
CEMEX Holdings (Israel) Ltd.
CEMEX Topmix LLC, CEMEX Supermix LLC and CEMEX Falcon LLC 9
Neoris N.V. 10
CEMEX International Trading LLC 11
Transenergy, Inc. 12
Spain
United States of America
Spain
Costa Rica
Nicaragua
Egypt
Colombia
Panama
Dominican Republic
Trinidad and Tobago
Jamaica
Puerto Rico
France
Philippines
Philippines
Philippines
United Kingdom
Germany
Czech Republic
Poland
Israel
United Arab Emirates
The Netherlands
United States of America
United States of America
99.9
100.0
92.4
99.2
100.0
95.8
99.7
100.0
100.0
69.8
79.0
100.0
100.0
77.8
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
99.8
100.0
100.0
99.9
100.0
73.2
99.2
100.0
95.8
99.7
100.0
100.0
69.8
79.0
100.0
100.0
66.8
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
99.8
100.0
100.0
1 CEMEX España is the indirect holding company of most of CEMEX’s international operations.
2 The interest reported excludes own shares held in CLH’s treasury. CLH, incorporated in Spain, trades its ordinary shares in the Colombian Stock Exchange under the symbol CLH,
and is the indirect holding company of CEMEX’s operations in Colombia, Panama, Costa Rica, Guatemala, Nicaragua and El Salvador (note 21.4).
3 Represents CEMEX Colombia, S.A.’s direct or indirect interest.
4 Represents CEMEX’s direct and indirect interest in ordinary and preferred shares, including own shares held in CEMEX Colombia, S.A.’s treasury.
5 Represents CLH’s direct and indirect interest. The interest reported excludes a 0.515% interest held in Cemento Bayano’s treasury.
6 Represents the aggregate ownership interest of CEMEX in this entity of 79.04%, which includes TCL’s direct and indirect 74.08% interest and CEMEX’s 4.96% indirect interest held
through other subsidiaries.
7 CEMEX’s operations in the Philippines are conducted through CHP, a subsidiary incorporated in the Philippines which since July 2016 trades its ordinary shares on the Philippines
Stock Exchange under the symbol CHP (note 21.4).
8 Represents CHP direct and indirect interest.
9 CEMEX indirectly owns a 49% equity interest in each of these entities and holds the remaining 51% of the economic benefits, through agreements with other shareholders.
10 Neoris N.V. is the holding company of the entities involved in the sale of information technology solutions and services.
11 CEMEX International Trading LLC is involved in the international trading of CEMEX’s products.
12 Formerly named Gulf Coast Portland Cement Co., it is engaged in the procurement and trading of fuels, such as coal and petroleum coke, used in certain operations of CEMEX.
GRI 102-45
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Independent
auditors’ report
To the Board of Directors and Stockholders
CEMEX, S.A.B. de C.V.
Opinion
Millions of dollars
We have audited the consolidated financial statements of CEMEX, S.A.B. de C.V. and subsidiaries (“the Group”), which comprise the consolidated statements
of financial position as at December 31, 2020 and 2019, the consolidated statements of operations, comprehensive income, changes in stockholders’ equity
and cash flows for the years ended December 31, 2020, 2019 and 2018, and notes comprising significant accounting policies and other explanatory information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group
as at December 31, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the years ended December 31, 2020, 2019
and 2018 in accordance with International Financial Reporting Standards (IFRS).
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in
the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance
with the ethical requirements that are relevant to our audit of the consolidated financial statements in Mexico, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of
the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
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Evaluation of the goodwill impairment analysis for certain groups of cash-generating units
The key audit matter
As discussed in notes 3.10 and 16.2 to the consolidated financial statements,
the goodwill balance as of December 31, 2020 is $8,506 million, of which
$6,449 million relate to the groups of Cash-Generating Units (CGUs) in the
United States of America (USA), and $463 million to the groups of CGUs in
Spain. The goodwill balance represents 31% of the Group’s total consolidated
assets as of December 31, 2020. During 2020, management of the Group
recognized impairment of goodwill for $1,020 million related to the groups
of CGUs in USA. Goodwill is tested for impairment when required upon the
occurrence of internal or external indicators of impairment or at least once a
year, during the last quarter of such year.
We have identified the evaluation of the goodwill impairment analysis for
these two groups of CGUs as a key audit matter because the estimated value
in use involved a high degree of subjectivity. Specifically, the discount rate
and the long-term growth rate used to calculate the value in use of the two
groups of CGUs (USA and Spain) were challenging and changes to these
assumptions had a significant impact on the value in use.
How the matter was addressed in our audit
Our audit procedures in this area included, among others, the following:
We performed sensitivity analyses over the discount rate and the long-term
growth rate assumptions to assess their impact on the determination of the
value in use of the two groups of CGUs (USA and Spain).
We evaluated the Group’s forecasted long-term growth rates for these
two groups of CGUs by comparing the growth assumptions to publicly
available data.
We compared the Group’s historical cash flow forecasts to actual results to
assess the Group’s ability to accurately forecast. In addition, we involved our
valuation specialists, who assisted in:
— Evaluating the discount rates for these two groups of CGUs, by comparing
them with a discount rate range that was independently developed
using publicly available data for comparable entities; and
— Developing an estimate of the value in use of the groups of CGUs using
the Group’s cash flow forecasts and determining an independently
developed discount rate and comparing the results of our estimates to
the Group’s estimates of value in use.
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Evaluation of certain tax proceedings
The key audit matter
As discussed in notes 3.11, 3.13 and 20.4 to the consolidated financial
statements, the Group is involved in significant tax proceedings in Spain
and Colombia related to uncertain tax treatments. The Group recognizes
the effect of an uncertain tax treatment when it is probable that it would be
accepted by the tax authorities. If an uncertain tax treatment is considered
not probable of being accepted, the Group recognizes the effect of such
uncertainties in its tax balances.
We have identified the evaluation of certain tax proceedings in Spain and
Colombia and the related disclosures made as a key audit matter because
it requires significant challenging auditor judgment and audit effort, due to
the nature of the estimates and assumptions, including judgments about
the likelihood of loss and the amounts that would be paid in the event of loss.
How the matter was addressed in our audit
Our audit procedures in this area included, among others, the following:
We evaluated the competence and capabilities of the in-house and external
tax advisers of the Group that assessed the likelihood of loss and the estimate
of the outflow of resources.
In addition, together with our tax specialists, we assessed the amounts
disclosed by:
— Inspecting letters received directly from the Group’s in-house and
external tax advisers that assessed the likelihood of loss and the amounts
that would be paid in the event of loss to the tax proceedings, comparing
these assessments and estimates to those made by the Group; and
— Inspecting the latest correspondence between the Group, in-house
and external tax advisers of the Group and the various tax authorities,
as applicable.
We assessed that the disclosures reflect the underlying facts and
circumstances of each tax proceeding.
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Evaluation of certain legal proceedings
The key audit matter
As discussed in notes 3.11 and 25 to the consolidated financial statements, the
Group is involved in legal proceedings in Mexico (Corporate) and Colombia.
The Group records provisions for legal proceedings when it is probable that
an outflow of resource will be required to settle a present obligation and when
the outflow can be reliably estimated. The Group discloses a contingency for
legal proceedings whenever the likelihood of loss from the proceedings is
considered possible or when it is considered probable, but it is not possible
to reliably estimate the amount of the outflow of resources.
We have identified the evaluation of certain of these legal proceedings in
Mexico (Corporate) and Colombia and the related disclosures made as a key
audit matter because it requires significant challenging auditor judgment
and audit effort, due to the nature of the estimates and assumptions,
including judgments about the likelihood of loss and the amounts that
would be paid in the event of loss.
How the matter was addressed in our audit
Our audit procedures in this area included, among others, the following:
We evaluated the competence and capabilities of the in-house and external
lawyers of the Group that assessed the likelihood of loss and the estimate of
the outflow of resources.
In addition, together with our legal specialists, we assessed the amounts
disclosed by:
— Inspected letters received directly from the Group’s external and in-house
lawyers that assessed the likelihood of loss and the amounts that would
be paid in the event of loss to these legal proceedings and comparing
these assessments and estimates to those made by the Group; and
— Inspected the latest correspondence between the Group, in-house and
external lawyers of the Group and the various authorities or plaintiffs, as
applicable.
We assessed that the disclosures reflect the underlying facts and
circumstances of each legal proceeding.
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Other Information
Management is responsible for the other information. The other information comprises the information included in the Group’s annual report for the year
ended December 31, 2020, to be filed with the National Banking and Securities Commission (Mexico) (Comisión Nacional Bancaria y de Valores) and the
Mexican Stock Exchange (Bolsa Mexicana de Valores) (“the Annual Report”) but does not include the consolidated financial statements and our auditors’
report thereon. The Annual Report is expected to be made available to us after the date of this auditors’ report.
Our opinion on the consolidated financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above when it becomes
available and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge
obtained in the audit, or otherwise appears to be materially misstated.
When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged
with governance.
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS, and for such internal
control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing,
as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group
or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditors’ report that includes our opinion. ‘Reasonable assurance’ is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud
or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
–
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform
audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
– Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
– Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
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– Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether
a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, then we are required to draw attention in our auditors’ report to the related disclosures in the consolidated
financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the
date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.
– Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated
financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
– Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an
opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain
solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit
findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and
communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the
consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated
in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
KPMG Cárdenas Dosal, S.C.
Monterrey, N.L.
February 3, 2021
C.P.C. Joaquín Alejandro Aguilera Dávila
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Non-Financial
Information
HEALTH AND SAFETY1
2018
2019
2020
OUR PEOPLE
2018
2019
2020
Fatalities (Nº)
Employees
Contractors
Employee Fatality Rate (per 10,000 employees)
Lost Time Injuries (LTIs) (Nº)
Employees
Contractors
Lost Time Injury Frequency Rate (LTI FR)
(per million hours worked)
Employees2
Contractors3
Employee Lost Time Injury Severity Rate (LTI SR) (lost days
per million hours worked)3
Employee Total Recordable Injury Frequency Rate (TRI FR)
(per million hours worked)
0
5
0.0
49
46
1
5
0.2
55
43
3
4
0.8
49
39
Workforce by age (%)
Under 30
31-40
41-50
51 and over
Workforce by gender (%)
Male
Female
Female employees by position (%)
0.5
0.6
56.5
0.6
0.5
56.1
0.5
0.2
66.9
Executive
Non-executive
Operational
2.4
2.6
2.6
Lost Days from Employee Lost Time Injuries (No.)3
1,241
1,000
1,127
Employee Sickness Absence Rate (%)
Employee Occupational Illness Frequency Rate (OIFR)
(incidents per million hours worked) 3
Sites with a Health and Safety Management System
implemented (%)
1.5
0.2
1.6
0.2
2.2
0.1
100
100
100
Sites certified with OHSAS 18001 (%)3
64
67
62
Women to men remuneration ratio by region
Mexico
United States
Europe, Middle East, Africa and Asia
South, Central America and the Caribbean
Others4
Total
Women to men remuneration ratio by position
Executive
Non-executive
Operational
Employee highest to median compensation ratio by region
OUR PEOPLE
Workforce by region (Nº)
Mexico
United States
Europe, Middle East, Africa and Asia
South, Central America and the Caribbean
Others4
Total
2018
2019
2020
9,697
8,617
9,290
12,189
8,866
8,489
Mexico
United States
13,767
12,828
11,819
Europe, Middle East, Africa and Asia
5,701
4,242
5,660
3,996
5,300
3,866
42,024
40,640
41,663
South, Central America and the Caribbean
Others4
Total
Workforce by type of employment contract (%)
CEMEX entry level vs. local minimum wage ratio by region
Permanent
Temporary
Workforce by employment type (%)
Full-time
Part-time
Workforce by position (%)
Executive
Non-executive
Operational
98
2
97
3
13
29
58
92
8
99
1
12
34
54
92
8
99
1
11
35
54
Mexico
United States
Europe, Middle East, Africa and Asia
South, Central America and the Caribbean
Others4
Total
17
30
27
26
86
14
20
33
3
1.51
1.08
1.06
1.33
0.32
0.99
0.84
0.98
0.87
65.2
26.1
15.8
17.1
90.4
38.3
1.3
1.6
1.1
2.7
7.3
2.1
15
30
27
28
85
15
30
34
2
0.83
0.93
0.97
0.96
0.54
0.93
0.71
1.00
0.98
78.4
23.1
15.0
65.1
47.5
25.0
1.2
2.7
1.2
3.0
2.1
4.1
16
31
27
25
84
16
21
35
2
1.45
1.08
0.95
1.29
0.67
0.95
0.85
0.90
0.84
71.7
34.4
22.8
23.3
42.3
23.8
1.7
1.6
1.5
1.9
2.4
2.2
SASB EM-CM-320a.1
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OUR PEOPLE
2018
2019
2020
OUR PEOPLE
2018
2019
2020
Increase in annual compensation by region (%)
Employee training by position (average hours/year)
Mexico
United States
Europe, Middle East, Africa and Asia
South, Central America and the Caribbean
Others4
Total
Employee Turnover (%)
Voluntary
Involuntary
Total
Employee Voluntary Turnover by gender (%)
Male
Female
Employee Voluntary Turnover by age (%)
Under 30
31-40
41-50
51 and over
Employee Involuntary Turnover by gender (%)
Male
Female
Employee Involuntary Turnover by age (%)
Under 30
31-40
41-50
51 and over
Employees covered by a collective bargaining agreement
by region (%)
Mexico
United States
Europe, Middle East, Africa and Asia
South, Central America and the Caribbean
Others4
Total
Notice to employees regarding operational changes
(average days)
Countries with practices to promote local hiring (%)
Employee training by gender (average hours/year)
Male
Female
Total
6.8
3.0
3.6
4.8
6.5
4.5
11.5
8.3
19.7
11.4
11.9
19.7
12.6
8.5
7.9
8.6
6.5
11.7
8.9
7.2
6.4
58
29
34
44
0
36
18
74
33
28
26
5.0
3.2
3.8
3.7
5.3
4.3
10.4
10.9
21.4
10.4
10.5
21.1
11.9
7.4
6.4
11.5
7.9
16.2
11.4
9.3
9.2
58
28
61
45
0
36
24
72
21
21
23
4.0
3.2
2.8
4.0
1.1
3.7
6.1
7.9
14.0
6.5
4.1
9.5
5.9
4.5
5.9
8.5
4.6
10.5
7.5
6.8
7.9
49
28
47
21
0
36
18
86
11
11
10
Executive positions
Non-executive
Operational
Investment on Employee Training and Development (US
million)
Employees that are engaged to the company [EEI -
Employee Engagement Index] (%)5
Employee Net Promoter Score (eNPS)
SUSTAINABLE CONSTRUCTION
Installed concrete pavement, volume delivered (million m3)
Affordable and resource-efficient buildings where CEMEX is
involved (million m2)
Green building projects under certification where CEMEX is
involved (million m2)
Annual sales from cement and ready-mix concrete products
with outstanding sustainable attributes (%)
19
31
21
22
36
35
25.9
17.7
76
-
2018
0.94
0.17
86
32
2019
1.12
0.05
10
11
13
8.9
89
48
2020
2.82
0.39
5.83
5.25
4.98
43
48
53
SOCIAL IMPACT
Families participating in Patrimonio Hoy (thousand)6
Individuals positively impacted from Patrimonio Hoy
(thousand)6
2018
602
2019
616
2020
626
2,899
2,963
3,013
Livable space enabled by Patrimonio Hoy (thousand m2)6
4,636
4,779
4,889
Families participating in our social and inclusive businesses
(thousand)6
Individuals positively impacted from our social and inclusive
businesses (thousand)6
Community partners (i.e. individuals positively impacted
from our social initiatives) (thousand)6
736
756
778
3,503
3,596
3,693
16,133
17,616
23,277
Countries with volunteering programs (%)
Volunteering programs implemented (Nº)
Individuals benefited from volunteering programs
(thousand)
84
324
137
91
497
227
100
529
530
Employees participating in volunteering programs (Nº)
4,642
7,030
2,689
Employee hours invested in volunteering programs (Nº)
29,281
28,031
20,498
People with disabilities benefited from programs led by
CEMEX (Nº)
Priority sites from all businesses that have implemented
Community Engagement Plans (%)
Cement sites that have implemented Community
Engagement Plans (%)
Cement sites with Local Stakeholder Management (%)
Cement sites with Community Risks Mapping and
Management (%)
1,676
926
1,819
88
95
94
90
92
96
96
94
90
98
90
98
GRI 102-41
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CARBON STRATEGY AND ENERGY
Absolute gross CO2 emissions (million ton)7
Absolute net CO2 emissions (million ton)7
Specific gross CO2 emissions (kg CO2/ton of cementitious
product)7
Specific net CO2 emissions (kg CO2/ton of cementitious
product)7
Reduction in CO2 emissions per ton of cementitious product
from 1990 baseline (%)
Scope 1 CO2 emissions (million ton)
Scope 2 CO2 emissions (million ton)
CO2 Emissions Intensity (Scope 1 + 2)8
Clinker Factor (Cementitious) (%)
Alternative raw material rate (%)9
Specific heat consumption (MJ/ton clinker)
Specific power consumption (kWh/ton cem)
Fuel Consumption (TJ)
Power Consumption (GWh)10
Total Energy Consumption (GWh)10
Fuel Mix (%)
Primary Fuels
Petroleum coke
Coal
Fuel oil + Diesel
Natural gas
Alternative Fuels
Fossil-based waste
Biomass waste
Power consumption from clean energy in cement (%)11
WASTE MANAGEMENT
Hazardous waste sent for disposal (thousand ton)12
Non-hazardous waste sent for disposal (thousand ton)
Total waste sent for disposal (thousand ton)
Total consumption of waste-derived sources from other
industries (thousand ton)
Ratio of consumption from waste-derived sources from
other industries vs. waste sent for disposal
2018
43.0
40.0
674
2019
38.7
36.1
667
2020
37.2
34.9
658
630
622
620
21.6
22.4
22.6
43.4
39.0
3.6
3.3
78.6
8.5
3.4
3.2
77.8
9.6
37.5
3.4
3.2
77.0
10.2
3,987
3,999
4,024
121
122
123
208,154
186,190 181,071
7,814
7,517
7,297
65,634
59,236
57,594
72.9
37.0
25.8
4.4
5.8
27.1
16.4
10.7
26
72.0
39.3
26.3
0.7
5.7
28.0
16.8
11.2
30
74.7
50.5
17.3
0.7
6.2
25.3
14.5
10.8
29
2018
106.4
307.7
414.1
2019
2.4
427.9
430.3
2020
2.1
403.4
405.5
13,230
13,387
12,396
32
31
31
ENVIRONMENTAL AND QUALITY MANAGEMENT
2018
2019
2020
Sites with CEMEX Environmental Management System
(EMS) implemented (%)
Cement
Ready-mix
Aggregates
Sites with ISO 14001 Certification (%)
Cement
Ready-mix
Aggregates
Sites with ISO 9001 Certification (%)
Cement
Ready-mix
Aggregates
Environmental investment (US million)
Environmental incidents (Nº)
Category 1 (Major)
Category 2 (Moderate)
Category 3 (Minor)
Complaints
Social Incidents (Nº)
Environmental fines above US$10,000 (Nº)
Total Environmental fines (Nº)
Environmental fines above US$10,000 (US million)
Total Environmental fines (US million)
AIR QUALITY MANAGEMENT
Clinker produced with continuous monitoring of major
emissions (dust, NOx and SOx) (%)
Clinker produced with monitoring of major and minor
emissions (dust, NOx, SOx, Hg, Cd, TI, VOC, PCDD/F) (%)
Absolute dust emissions (ton/year)
Specific dust emissions (g/ton clinker)
Absolute NOx emissions (ton/year)
Specific NOx emissions (g/ton clinker)
Absolute SOx emissions (ton/year)
Specific SOx emissions (g/ton clinker)
Reduction in dust emissions per ton of clinker from 2005
baseline (%)
Reduction in NOx emissions per ton of clinker from 2005
baseline (%)
Reduction in SOx emissions per ton of clinker from 2005
baseline (%)
89
97
88
93
81
43
54
84
46
41
83
1
37
238
114
80
2
37
0.44
0.58
91
97
90
93
95
43
55
83
47
42
80
0
30
398
154
113
4
49
0.16
0.23
92
97
93
87
97
39
47
83
47
33
78
0
33
525
141
79
6
50
0.18
0.27
2018
2019
2020
98
80
97
80
97
76
1,911
1,553
1,585
39
36
38
56,228
49,415
54,446
1,141
1,109
11,543
12,047
233
87
45
64
270
88
47
58
1,274
9,483
222
87
39
66
SASB: EM-CM-110a.1, EM-CM-110a.2, EM-CM-120a.1, EM-CM-130a.1, EM-CM-150a.1
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2018
2019
2020
ETHICS AND COMPLIANCE
WATER MANAGEMENT 13
Total water withdrawals by source (million m3)
Surface water
Ground water
Municipal water
Harvested rainwater
Sea water
Quarry water used
External wastewater
Other
Total water discharge by destination (million m3)
Surface water
Subsurface/well water
Off-site water treatment
Ocean
Beneficial/other
Total water consumption (million m3)
Cement
Ready-mix
Aggregates
Specific water consumption
Cement (l/ton)
Ready-mix (l/m3)
Aggregates (l/ton)
Sites with water recycling systems (%)
65.6
18.9
30.6
12.0
0.3
0.0
-
-
0.2
24.7
12.3
11.1
1.0
0.0
0.2
40.9
14.6
13.6
12.7
232
258
102
83
59.0
15.4
30.7
10.8
0.6
0.0
0.8
0.7
-
22.8
15.7
6.5
0.7
0.0
0.0
36.1
13.2
10.8
12.1
229
214
100
83
53.7
14.0
26.9
9.7
0.6
0.0
2.2
0.4
-
16.0
10.5
4.0
1.1
0.0
0.3
37.8
13.2
10.4
14.2
233
219
123
82
BIODIVERSITY MANAGEMENT
2018
2019
2020
Active sites with quarry rehabilitation plans (%)
Active quarries located within or adjacent to high
biodiversity value areas (No.)
Active quarries located within or adjacent to high
biodiversity value areas where Biodiversity Action Plans
(BAPs) are implemented (%)
96
58
91
97
40
93
Quarry rehabilitation plans, Biodiversity Action Plans (BAPs),
and third-party certification (% from target quarries)
65
72
99
40
98
77
CUSTOMERS AND SUPPLIERS
Purchases sourced from locally-based suppliers (%)
Sustainability assessment executed by an independent party
for our critical suppliers (% spend evaluated)
Countries that conduct regular customer satisfaction
surveys (%)
2018
2019
2020
90
44
90
44
90
63
100
100
100
Net Promoter Score (NPS)
44
50
68
Reports of alleged breaches to the Code of Ethics received
by Local Ethics Committees (Nº)
Ethics and compliance cases reported during the year that
were investigated and closed (%)
Disciplinary actions taken as a result of reports of non-
compliance with the Code of Ethics, other policies or the law
(Nº)
Target countries that participated on the Global Compliance
Program (antitrust and anti-bribery) (%)
Countries with local mechanisms to promote employee
awareness of procedures to identify and report incidences of
internal fraud, kickbacks, among others (%)
Investigated incidents reported and found to be true related
to fraud, kickbacks among others corruption incidents to
government officials (Nº)
Implementation of Ethics and Compliance Continuous
Improvement Program (%)
Footnotes:
2018
630
2019
745
2020
620
77
83
83
166
313
269
100
100
100
100
100
100
0
0
0
50
87
76
1. All KPI data is accurate at the time of reporting and is in accordance with the Global Cement and Concrete Association (GCCA) guidelines
2. Our 2019 LTI rate changed slightly from 0.5 to 0.6-part way through 2020 as a result of some eventual surgery needs, which subsequently changed
the injury classification
Includes Neoris and employees performing corporate functions in different locations
3. Cement only
4.
5. Measured through our Workforce Experience survey, change in methodology starting 2019
6. Cumulative figures as of year 1998
7. Calculation according to the GCCA Sustainability Guidelines for the monitoring and reporting of CO2 emissions from cement manufacturing
8. Scopes 1 + 2 per total revenues in thousand USD
9. As of 2019, calculation according to GCCA Sustainability Guidelines for co-processing fuels and raw materials in cement manufacturing. Historical
figures have been recalculated accordingly to make them comparable
10. Historical figures updated considering consumption of self-generated renewable energy
11. Our definition of clean energy includes renewable energy sources such as solar, wind, hydro and biomass, together with power generated from
waste heat recovery systems
12. Due to changes in local regulation as of 2019, waste previously considered as hazardous was classified as non-hazardous accordingly
13. As of 2019, classification according to GCCA Sustainability Guidelines for the monitoring and reporting of water in cement manufacturing
GRI 102-48, GRI 102-49, SASB: EM-CM-140a.1
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Direct
Economic
Impacts
DIRECT ECONOMIC IMPACTS
Customers: Net sales 1
IFRS16
2018
IFRS16
2019
IFRS16
2020
13,531
13,130
12,970
Suppliers: Cost of sales and operating expenses 2
8,675
8,554
8,358
Employees and their families: Wages and benefits 3
2,169
2,198
2,152
CEMEX, S.A.B. de C.V. and Subsidiaries
(Millions of U.S. dollars)
Investments: CAPEX 4 plus working capital
Creditors: Net financial expense
Government: Taxes
Communities: Donations 5
Communities donations as % of pre-tax income
Shareholders: Dividends 6
Others
Free cash flow from discontinued operations 7
Consolidated free cash flow
Net income (loss) before taxes & non-controlling interest net income (loss)
1118
1107
721
230
701
179
681
715
160
0.78%
1.95%
0.40%
0
108
-132
636
718
150
-4
-71
461
253
0
180
-15
734
1,274
1. Excludes sales of assets
2. Excludes depreciation and amortization
3. Wages and benefits include non-operational and operational employees
4. Capital expenditures for maintenance and expansion
5. Donations as percentage of pre-tax income
6. Dividends paid in cash, this effect doesn't affect the Consolidated Free Cash Flow, it is presented below FCF
7. Free Cash Flow from Pacific Northwest, Pipe, and Brazil operations 2019-2020 free cash flow from Latvia & Nordics, part of Germany, France, the UK, USA (Kosmos), and Spain white cement.
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Independent Limited Assurance Report on Key Indicators of Sustainability Performance
(Non-Financial Information)
To the Board of Directors of CEMEX, S.A.B. de C.V.:
We were engaged by the Administration of CEMEX, S.A.B. de C.V. (hereinafter "CEMEX") to
report on Key Indicators of Sustainability Performance (Non-Financial Information), prepared and
presented by the Corporate Sustainability Department of CEMEX, included in the CEMEX 2020
Integrated Report for the period from January 1 to December 31, 2020 (“the Report”), that are
detailed in Annex A attached to this report (the "Contents"), in the form of an independent
conclusion of limited assurance, regarding whether, based on the procedures performed and the
evidence obtained, nothing has come to our attention that causes us to believe that the Contents
are not prepared in all material respects, in accordance with the criteria established in the Standards
of the Global Cement and Concrete Association (“GCCA”) and the internal procedure of CEMEX
called Social and Environmental Incident Reporting Procedure.
Management responsibilities
CEMEX Corporate Sustainability Department is responsible for the preparation and presentation
of the information subject to our review and the information and statements contained within it.
CEMEX Management is responsible for designing, implementing and maintaining the relevant
internal control for the preparation and presentation of the information subject to our review, in
order to be free from material errors, whether due to fraud or error.
CEMEX Management is also responsible for ensuring that the personnel involved in the
preparation of the Contents are adequately trained, information systems are duly updated and that
any change in the presentation of data and/or in the form of reporting, include all significant
reporting units.
Our responsibilities
Our responsibility is to carry out a limited assurance engagement on the information concerning
the Contents included in the CEMEX 2020 Integrated Report and to express an independent
conclusion of limited assurance based on the evidence obtained. We carry out our work based on
the International Standard on Assurance Engagements (ISAE) 3000, "Assurance Engagements
Other than Audits or Reviews of Historical Financial Information", issued by the International
Auditing and Assurance Standards Board, that standard requires that we plan and perform the
engagement to obtain limited assurance about whether, based on our work and the evidence
obtained, nothing has come to our attention that causes us to believe that the Contents included in
the CEMEX 2020 Integrated Report for the period from January 1 to December 31, 2020, are not
(Continue)
prepared in all material respects, in accordance with the criteria established in the Standards of the
Global Cement and Concrete Association (“GCCA”) and the internal procedure of CEMEX called
Social and Environmental Incident Reporting Procedure.
KPMG CARDENAS DOSAL S.C. (the “Firm”) applies International Standard on Quality Control
1 and accordingly maintains a comprehensive system of quality control including documented
policies and procedures regarding compliance with ethical requirements, professional standards
and applicable legal and regulatory requirements.
We have complied with the independence and other ethical requirements of the Code of Ethics for
Professional Accountants issued by the International Ethics Standards Board for Accountants,
which is founded on fundamental principles of integrity, objectivity, professional competence and
due care, confidentiality and professional behavior.
The procedures selected depend on our knowledge and experience of the Contents presented in
the Report and other circumstances of the work, and our consideration of the areas in which
material errors may occur.
When obtaining an understanding of the Contents included in the Report, and other work
circumstances, we have considered the processes used to prepare the Contents, in order to design
assurance procedures that are appropriate in the circumstances, but not for the purpose of
expressing a conclusion as to the effectiveness of CEMEX's internal control over the preparation
and presentation of the Contents included in the Report.
Our engagement also included assessing the appropriateness of the main subject, the suitability of
the criteria used by CEMEX in the preparation of the Contents, assessing the appropriateness of
the methods, policies and procedures, as well as models used.
The procedures performed in a limited assurance engagement vary in nature and timing from, and
are less in extent than for, a reasonable assurance engagement, and consequently the level of
assurance obtained in a limited assurance engagement is substantially lower than the assurance
that would have been obtained has a reasonable assurance engagement been performed.
Criteria
The criteria on which the preparation of the Contents has been evaluated refer to the established
requirements and in accordance with the criteria established in the Standards of the Global Cement
and Concrete Association (“GCCA”) and the internal procedure of CEMEX called Social and
Environmental Incident Reporting Procedure.
Inherent limitations
Due to the inherent limitations of any internal control structure it is possible that errors or
irregularities in the information presented in the Report may occur and not be detected. Our
engagement is not designed to detect all weaknesses in the internal controls over the preparation
and presentation of the Report, as the engagement has not been performed continuously
throughout the period and the procedures performed were undertaken on a test basis.
Conclusion
Our conclusion has been formed based on, and is subject to, the matters outlined in this report.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for
our conclusions.
Based on the procedures performed and the evidence obtained, as described above, nothing has
come to our attention that causes us to believe that the Contents detailed in Annex A attached to
this assurance report, prepared by the Corporate Sustainability Department of CEMEX and
included in the CEMEX 2020 Integrated Report for the period from January 1 to December 31,
2020, are not prepared in all material aspects, in accordance with the criteria established in the
Standards of the Global Cement and Concrete Association (“GCCA”) and the internal procedure
of CEMEX called Social and Environmental Incident Reporting Procedure.
Restriction of use of our report
Our report should not be regarded as suitable to be used or relied on by any party to acquire rights
against us other than the Corporate Sustainability Department of CEMEX, for any purpose or in
any other context. Any party other than the Corporate Sustainability Department of CEMEX who
obtains access to our report or a copy thereof and chooses to rely on our report (or any part thereof)
will do so at its own risk.
To the fullest extent permitted by law, we accept or assume no responsibility and deny any liability
to any party other than CEMEX for our work, for this independent limited assurance report, or for
the conclusions we have reached.
Our report is released to CEMEX, on the basis that it shall not be copied, referred to or disclosed,
in whole or in part, without our prior written consent.
KPMG CARDENAS DOSAL S.C.
Alberto Dosal Montero
Partner
2
(Continue)
Monterrey, Nuevo León, March 19th, 2021.
3
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Biodiversity indicators according to the GCCA Sustainability Guidelines for quarry rehabilitation
and biodiversity management de la GCCA, including:
• Percentage of quarries with high biodiversity value where a biodiversity management
plan has been implemented.
• Percentage of quarries where a rehabilitation plan has been implemented.
Water indicators, according to the GCCA Sustainability Guidelines for the monitoring and
reporting of water in cement manufacturing de la GCCA, including:
• Total water withdrawal by source (GRI 303-1) for cement plant
• Total water discharge by quality and destination (GRI 303-1)
• Total water consumption
• Amount of Water consumption per unit of product
Number of Environmental Incidents Category 1 and 2 as defined in the internal procedure of
CEMEX called CEMEX Environmental and Social Incident Reporting Procedure.
Number of Social Incidents Category 1 and 2 as defined in the internal procedure of CEMEX
called CEMEX Environmental and Social Incident Reporting Procedure.
Appendix A
Description of the Contents object of the limited assurance engagement.
Scope 1 and Scope 2 of CO2 emissions according to the GCCA Sustainability Guidelines for the
monitoring and reporting of CO2 emissions from cement manufacturing, including:
• Total direct, gross and net CO2 emissions.
• Specific gross and net CO2 emissions per ton of cementitious material.
Scope 2 CO2 emissions:
•
Indirect CO2 emissions.
Scope 3 CO2 emissions, category "Purchased goods and services":
• CO2 emissions from purchased Clinker.
Circular economy indicators according to the GCCA Sustainability Guidelines for co-processing
fuels and raw materials in cement manufacturing, including:
• Alternative fuel rate (used in kilns).
• Biomass fuel rate (used in kilns).
• Specific heat consumption for clinker production.
• Clinker / cement (equivalent) factor.
• Alternative raw materials rate
Health and safety indicators in accordance with the GCCA Sustainability Guidelines for the
monitoring and reporting of safety in cement and concrete manufacturing, including:
• Number of fatalities of direct employees, contractors/subcontractors and third parties.
• Fatality rate for directly employed.
• Lost time injury frequency rate of direct employees.
• Lost time injury frequency rate for contractors/subcontractors (on site).
• Lost time injury severity rate of direct employees.
Other emissions according to the GCCA Sustainability Guidelines for the monitoring and
reporting of emissions from cement manufacturing, including:
• Overall coverage rate.
• Coverage rate continuous measurement.
• Absolute and specific dust emissions
• Absolute and specific NOx emissions
• Absolute and specific SOx emissions
• Absolute and specific emissions of VOC / THC, PCDD / F, Hg, HM1 and HM2.
• Coverage rate of VOC / THC, PCDD / F, Hg, HM1 and HM2.
4
5
CEMEX 2020 INTEGRATED REPORT
Company Overview
How We Create Value
Our Performance in 2020
Governance
Results in Detail
About This Report
188
About This
Report
Our integrated report provides a holistic
analysis of our company’s strategic vision,
performance, governance, and value creation.
CEMEX 2020 INTEGRATED REPORT Company Overview
How We Create Value
Our Performance in 2020
Governance
Results in Detail
About This Report
189
Scope and
Boundaries
General Considerations
CEMEX, S.A.B. de C.V. is incorporated as a
publicly traded variable stock corporation
(sociedad anónima bursátil de capital variable)
organized under the laws of Mexico. Except as
the context otherwise may require, references
in this integrated report to “CEMEX,” “we,” “us”
or “our” refer to CEMEX, S.A.B. de C.V. and its
consolidated entities.
Reporting Scope
CEMEX began publishing Environmental,
Health, and Safety (EHS) reports in 1996, and
has annually published its Sustainable Devel-
opment Reports since 2003, covering a broad
range of issues related to economic, environ-
mental, social, and governance performance.
our stakeholders found of highest importance
for our operations, as reflected in our recently
updated Materiality Matrix covering both
financial and sustainability issues.
Unless otherwise indicated, the information
provided in this report is for the company as a
whole. We have included information for the
operations in which we have financial and
operative control. If a plant is sold, its informa-
tion is no longer included in our data or con-
sidered in our targets. If we have restated
certain data sets from previous years because
of improvements to our data-collection sys-
tems or changes to our business, each case is
clearly marked. Unless something else is
explicitly indicated, all monetary amounts are
reported in U.S. dollars. All references to “tons”
are to metric tons.
Since 2016, our Integrated Reports are
intended to provide a holistic analysis of the
company’s strategic vision, performance, gov-
ernance, and value creation, while fostering a
more in-depth understanding of the financial
and nonfinancial key performance indicators
that the company uses to manage its business
over the short, medium, and long term.
Boundary and Reporting Period
In preparation of this report, we consolidated
information from all of our countries and
operations. It covers our global cement, ready-
mix concrete, and aggregates business lines,
presenting our financial and nonfinancial
performance, progress, achievements, and
challenges for the 2020 calendar year, which is
also the company’s fiscal year. Our materiality
analysis guided our reporting process, and the
issues included in this report particularly
match those that CEMEX management and
The information in our 2020 Integrated Report
came from several sources, including internal
management systems and performance
databases, as well as annual surveys applied
across all of our countries.
We continually aim to improve the transpar-
ency and completeness of each report that we
produce, while streamlining our processes and
the way in which we provide information. To
this end, we include a limited assurance state-
ment from KPMG, an independent organiza-
tion that verified the data and calculation
process for our annual indicators associated
with CO2 and other emissions, health and
safety, circular economy, biodiversity, environ-
mental and social incidents, and water.
In addition, we continued the engagement
with our External Advisory Panel, whose mem-
bers provide very valuable and objective feed-
back on our reporting every year.
Data Measurement Techniques
We employ the following protocols and tech-
niques for measuring the sustainability key
performance indicators (KPI) that we report:
CO2 emissions: CEMEX reports absolute and
specific CO2 emissions following the Global
Cement and Concrete Association (GCCA)
Sustainability Framework Guidelines and the
GCCA Sustainability Guidelines for the moni-
toring and reporting of CO2 emissions from
cement manufacturing (November 2018),
based on the CEN Standard EN 19694-3 (Sta-
tionary source emissions – Determination of
Greenhouse Gas (GHG) emissions in ener-
gy-intensive industries – Part 3: Cement
Industry). The measurement is based on the
mass balance methodology, fully described in
the CEN standard on CO2 emission from the
cement industry EN-19694-3, and applied
through the spreadsheet of the Cement CO2
Protocol (previously known as WBCSD-CSI
Cement CO2 and Energy Protocol v. 3.1). It
considers direct emissions occurring from
sources that are owned or controlled by the
company, excluding those from the combus-
tion of biomass that are reported separately
(Scope 1) and indirect emissions from the
generation of purchased electricity consumed
in the company’s owned or controlled equip-
ment (Scope 2). For countries covered by the
European Union Emission Trading System (EU
ETS), CO2 data corresponds to the one vali-
dated by an independent verifier in accor-
dance with the applicable Accreditation and
Verification Regulation.
GRI 102-45, GRI 102-46, GRI 102-48, GRI 102-49, SASB: EM-CM-110a.1, EM-CM-110a.2, EM-CM-160a.1
CEMEX 2020 INTEGRATED REPORT Company Overview
How We Create Value
Our Performance in 2020
Governance
Results in Detail
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Dust, NOx, and SOx emissions: Absolute and
specific figures are calculated based on kiln
measurements taken from Continuous Emis-
sions Monitoring Systems (CEMs) (in those
sites where kilns are equipped with such
technology) or spot analysis. These methods
fully comply with GCCA Guidelines for Emis-
sions Monitoring and Reporting. All informa-
tion is reported to CEMEX databases,
processed, calculated, and validated to provide
a final group value. The values are calculated
in Standard for 0°C, 1 atmosphere and 10%
Oxygen (O2) content at measuring point.
Health and safety: Intelex, which feeds an
internal database, collects all related health
and safety information from each site and
automatically provides the appropriate infor-
mation to calculate the indicators. The data-
base is configured using the GCCA definitions.
health and safety indicators are calculated
according to the Sustainability Guidelines for
the monitoring and reporting of safety in
cement manufacturing, October 2019 version.
This report has been prepared in accordance
with the GRI Standards: Comprehensive
option.
To access our 2020 GRI Content Index, go
to https://www.cemex.com/sustainability/
reports/global-reports
United Nations Global Compact –
Communication on Progress
Alignment with Global Reporting
Initiative (GRI) Standards
Energy: Fuel consumption indicators are
reported to internal CEMEX databases in
which “conventional,” “alternative,” and “bio-
mass fuels” are classified according to the
Cement CO2 Protocol spreadsheet. Heat val-
ues are obtained from on-site analysis (where
applicable), provided by suppliers or standards
from recognized sources.
To enhance our sustainability communication
to our stakeholders and comply with interna-
tionally agreed disclosures and metrics, CEMEX
uses the GRI Sustainability Reporting Stan-
dards to prepare its Sustainable Development
Reports. From 2008 to 2013, we met an applica-
tion level of A+ using GRI-G3. From 2014 to
2016, we applied the GRI-G4 Guidelines.
Clinker factor and alternative fuels: All mate-
rial consumption is reported to internal
CEMEX databases in which “alternative mate-
rials” are defined following the standards from
the GCCA Sustainability Guidelines for co-pro-
cessing fuels and raw materials in cement
manufacturing (November 2018). The “clinker/
cement factor” is calculated using the Basic
Parameters set out in the GCCA Sustainability
Framework Guidelines and according to GCCA
Sustainability Guidelines for the monitoring
and reporting of CO2 emissions from cement
manufacturing, procedures indicated in
Cement CO2 Protocol spreadsheet with infor-
mation obtained from the databases.
Starting in 2017, we have migrated to the GRI
Standards. For the Materiality Disclosures
Service, GRI Services reviewed that the GRI
content index is clearly presented and the
references for Disclosures 102-40 to 102-49 align
with appropriate sections in the body of the
report. Furthermore, our GRI Content Index
cross-references with the UN Global Compact
principles and the UN Sustainable Develop-
ment Goals (SDGs). We have also submitted the
current report to the GRI requesting the Mate-
riality Disclosures Service, which is reflected in
the corresponding GRI mark.
This report also constitutes our Communica-
tion on Progress (CoP) toward the commit-
ments of the UN Global Compact (UNGC). As
a participant in the UNGC, we work to align
our company’s operations and strategies with
its 10 principles. As demonstrated within the
content of this report, we are also committed
to helping the world meet the targets of the
Paris Agreement and contribute to the
achievement of the UN SDGs.
Sustainability Accounting Standard
Board (SASB)
In 2019, we started reporting aligned to the
Sustainability Accounting Standard Board
(SASB) for the Construction Material indus-
try-specific requirements. To see the align-
ment, go to the GRI Content Index.
GRI 102-45, GRI 102-46, GRI 102-48, GRI 102-49, GRI 102-54, SASB: EM-CM-110a.1, EM-CM-110a.2, EM-CM-160a.1
CEMEX 2020 INTEGRATED REPORT
Company Overview
How We Create Value
Our Performance in 2020
Governance
Results in Detail
About This Report
191
Advisory Panel Statement
for CEMEX Integrated
Report 2020
The Advisory Panel recognizes this fifth Integrated Report as an
important resource to provide all stakeholders with a comprehensive
overview of CEMEX’s strategic approach to value creation,
performance, and governance, as well as an understanding of key
topics that shape the business today and into the future.
External Advisory Panel Members
Irma Gómez
Ex-Undersecretary for
Management, Mexican
Ministry of Public Education
Felipe Pich-Aguilera
Founding Director Pich-
Aguilera Architects
Margareth Flórez
Executive Director of
RedEAmérica
Ramón Pérez Gil Salcido
President of FAUNAM and
Elected Counsellor of the
International Union for the
Conservation of Nature (IUCN)
Martin Hollands
Senior Advisor on Business
and Biodiversity with BirdLife
International
To learn more about our Advisory Panel members, visit: https://www.cemex.com/
sustainability/reports/external-advisory-panel
Scope of Our Review
Governance and Diversity
As in previous years, the Advisory Panel reviewed an
advanced draft of CEMEX's 2020 Integrated Report
and convened in late November 2020 to discuss the
advisory process and evaluation. The Panel reviewed
two drafts of the Integrated Report, providing spe-
cific advice for improvement in strategy, perfor-
mance, and reporting. The comments on the report
focus mainly on current activities, recommendations,
and strategic ideas worth exploring in the future.
Reporting Framework, Style, and
Improvements
The Panel is pleased to witness the continued evolu-
tion of the CEMEX 2020 Integrated Report, which
provides stakeholders with a comprehensive view of
CEMEX's strategic vision, giving a thorough descrip-
tion about the extent of the achievements during
the period of the report, the impacts generated, the
challenges, and the risks and opportunities, the
company is facing and the actions it is implement-
ing in response, whether to mitigate or to take up.
The report also conveys the company's effort to
visualize and anticipate changes in the business
environment and the broader context.
The facts and achievements highlighted in the
report are evidence that the company is dynamic,
forward-thinking, and resilient in a scenario of com-
plex challenges and great uncertainty. The measures
implemented by CEMEX to mitigate the effects of
the health emergency on strategy and business,
operation and on its wider stakeholders, reveal sig-
nificant results: 2.9 million people benefited, more
than 70 alliances created in social actions, 84% of
workers satisfied with the measures implemented.
The Panel recognizes and appreciates CEMEX's
commitment to preparing the report following the
Global Reporting Initiative (GRI) Sustainability
Reporting Standards, which brought focus to the
most material aspects in the business and helped
craft a document that communicates in an open
and transparent way with CEMEX's stakeholders.
The Panel recognizes that CEMEX's board has an
independent majority of 10, and that one member is
a woman, which added independence and enables
it to effectively fulfill its critical role of overseeing
management on behalf of stakeholders. However, as
before, the Panel emphasizes its recommendation to
continue with the inclusion of additional qualified
women for the next generation of board members
and encourages CEMEX to adhere to international
standards on board composition and diversity.
Sustainability as Part of the Strategic Pillars
of CEMEX
The Panel commends CEMEX on continuing to
include sustainability as one of the company's top
priorities, as mentioned in the Letter to Stakeholders.
This commitment is reflected in the progress on CO2
emissions reductions; the launching of Vertua®, the
first Net-Zero CO2 Concrete solution in the industry;
and by the reduced sustainability risk that allows the
company to have access to one of the largest sus-
tainability-linked loans in the world. CEMEX is mak-
ing great progress in finding and developing
sustainable products and solutions, and we encour-
age the company to continue the strong emphasis
on R&D by increasing its research capacity in the
future. However, we found that having the innova-
tive materials available does not mean customers
are going to buy them, especially if the price is
higher when compared to other similar products.
More needs to be done to show how these products
will become the norm.
The Panel recommends including more informa-
tion about CEMEX's strategy to promote new and
innovative materials, as well as how sustainability
helps create business value and how the company
helps customers meet their sustainability aspira-
tions in the next report.
The Panel acknowledges the formulation of the 2030
Sustainability Goals, which express and communicate
the strong and explicit purpose of CEMEX's senior
management to advance towards sustainability and
CEMEX 2020 INTEGRATED REPORT
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Our Performance in 2020
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Results in Detail
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become a guide for all its employees. We would also like to
highlight that compliance with the 2030 Sustainability Goals
has been associated with the variable compensation of
senior management. This is a major step to strengthen
sustainability as part of the company's culture.
increase activity on the Zero4Life objective to improve and
reinforce safety culture across all operations, focusing on
employees, contractor management, and driving safety.
We also congratulate the company for the rapid response
to release and implement 52 hygiene and safety protocols
to cope with COVID-19 challenges.
Another move in the right direction is including in the
report the issues addressed by the Board-level Sustainabil-
ity Committee during 2020 and its contribution to the
critical and strategic challenges at CEMEX. The Panel
welcomes the fact that the 2020 Integrated Report dis-
closes the topics discussed in the Sustainability Commit-
tee's quarterly meetings as well as the outcomes coming
from them. By doing so, it conveys confidence that this
Board Committee plays a key role in building a sustainable
business model.
Materiality Topics
CEMEX has been improving its Materiality Matrix, which
brings together the most important financial and non-fi-
nancial topics for the company and its stakeholders. The
matrix facilitates CEMEX's effort to define risks, opportuni-
ties, and key performance indicators, and to set and report
on strategic targets. The Panel is pleased with the improve-
ments achieved in the materiality assessment and with the
company continuing to follow the Global Reporting Initia-
tive framework for its construction.
The Panel appreciates that CEMEX included a very clear
table that shows at a glance the communication mecha-
nism with its stakeholders, how to connect the key stake-
holders' concerns with the engagement channels the
company uses, and with strategic outcomes.
On Net Value to Society, CEMEX makes a valuable
attempt to estimate its positive and negative economic,
social, and environmental impacts. However, as in last
year's report, the Panel encourages the company to
include more detailed information on how these impacts
are calculated for next year's report.
Safety
The Panel is pleased that during a year made complex by
the pandemic, top management continued to significantly
Additionally, we are pleased that CEMEX continues invest-
ing in the initiative "Building a Strong Health and Safety,
Culture" which has standardized global programs, and
focuses on sharing best practices, and using of innovation
and technology to instill a safety culture across all the
company's operations. In regard to the importance of
Health and Safety, the Panel once again recommends
being transparent across the entire supply chain.
Emissions and Other Environmental Issues
The Panel recognizes that Climate Change has been a
priority for CEMEX for many years and congratulates the
company for its continuous work on implementing actions
and technologies to mitigate its impacts. The Panel is
especially pleased with CEMEX's achievement of close to
35% net CO2 reduction per ton of cementitious in 2020 vs.
1990 baseline in its European operations and setting a 55%
target for 2030 for this region.
Post COVID-19 recovery is being driven by public funds
with increased sustainability requirements (e.g., Europe
Green Deal and the U.S. re-joining Paris agreement). How-
ever, the Panel could not see how the company intends to
utilize this growing commitment to sustainability to move
customers towards the innovative materials CEMEX is a
global leader in developing. We recommend including a
section addressing CEMEX's progress in capturing these
market opportunities in the next report.
The Panel also acknowledges the company's ambitious
goal to deliver globally net-zero CO2 concrete by 2050 and
the concerted effort that it is making in product research
and development. However, the report is not clear enough
on how these initiatives link to the business strategy of the
company. The Panel is looking forward to seeing the
advances on plans and targets and how they relate to the
main business in next year's report.
Energy and Water Consumption
The Panel is pleased that CEMEX leads the industry in the
use of clean electricity and that it has established a target
of sourcing 40% of their projected power consumption in
the cement operations from clean energy. We celebrate
the initiative with Synhelion SA to harness solar energy to
fully decarbonize the clinker manufacturing process and to
have a pilot installation by 2022. The Panel encourages
additional development in this area.
On water consumption, the Panel acknowledges that
cement production is not a water-intensive process and
that the company had a good start with the water stress
map updated in 2019, which identified more than 1,500
cement, ready-mix concrete, and aggregates sites located
in water-stressed zones. The Panel again exhorts the com-
pany to put in place a water action plan as soon as possible
and implement it with clearly defined targets, as it has
done with CO2.
Biodiversity and Ecosystem Services
The Panel recognizes CEMEX's commitment to protecting
biodiversity and the environment using the highest inter-
national standards. The company's Corporate Biodiversity
Policy, aligned with the Convention on Biological Diversity
and its Aichi Biodiversity targets, has been key to align
CEMEX's biodiversity initiatives with their decision-making
process, management system, and business model. The
excellent implementation of this policy helped CEMEX to
be awarded the Corporate Conservation Leadership Award
by Wildlife Habitat Council in 2020.
The Panel celebrates that the company is close to the goal
of implementing local Biodiversity Action Plans (BAP) in
every quarry that overlaps with high-value biodiversity
areas, and also the commitment to enhance biodiversity
(i.e., Net Positive Impact) at a quarry level.
The Panel is also pleased to see further progress at El Car-
men Reserve for introducing 60 specimens of genetically
pure bison, after 20 years of preserving the site. The results,
the impact, and the importance of El Carmen initiative are
of paramount significance. The world is in need of more
protected places that provide valuable ecosystem services,
CEMEX 2020 INTEGRATED REPORT Company Overview
How We Create Value
Our Performance in 2020
Governance
Results in Detail
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193
and likewise have key educational value. The planet needs
more people and organizations like CEMEX with a clear
understanding of the importance of nature for our species
survival and with a proven active role in promoting this
understanding and acting consequently.
The Panel feels that there are further opportunities for
CEMEX to do more, by working with other stakeholders at
a landscape level, to mitigate risk, and bring capture
opportunities, and to achieve integrated management of
water, carbon, biodiversity, ecosystem services – and sus-
tainable production.
Working Conditions
The Panel acknowledges CEMEX's commitment to building
a truly diverse team and workplace through the global
Workplace Diversity and Inclusion Policy. We also recognize
the creation of the Diversity Committees in the different
business units, and the training of personnel on non-dis-
crimination policies and on how to identify and report dis-
crimination issues. These initiatives will help in the
implementation of the company's strategy, and to address
"Employee diversity and inclusion," which was identified as
high risk in the materiality assessment. The Panel encour-
ages CEMEX top management to continue efforts to
become a more inclusive and gender diverse company.
Regarding work-life balance, the panel celebrates the 500
initiatives the company rolled out in this area, benefitting
employees across all business units. We are also pleased
that CEMEX University quickly adapted and developed
online learning experience as part of the response to
COVID-19 and introduced relevant content to the new
working conditions. For next year's report, the Panel rec-
ommends including more detailed data on how many
employees are trained in each area of knowledge offered
by the University.
Human Rights and Ethics
The Panel underlines the actions taken to strengthen the
code of ethics, policies, measures, and mechanisms aimed at
consolidating a culture of integrity in the company. In addi-
tion, we recognize the actions undertaken to communicate
these instruments and train more than 26,000 employees.
The Panel encourages further progress in this and recom-
mends systematically analyzing the challenges and achieve-
ments at the highest management level of the company.
Strengthening a culture of integrity is critical to the growth,
competitiveness, and durability of every business.
For next year's report, the panel recommends including
information on trends and the nature of cases and disci-
plinary actions taken in response to a violation of the code
of ethics. This would allow evaluation of the severity of the
problems, progress made in their prevention, and the
impacts generated on the business itself.
Supply Chain Management
The Panel acknowledges the CEMEX Global Procurement
Model, which has helped the company to align suppliers to
the core values of CEMEX, especially on health and safety,
innovation-driven culture, the pursuit of excellence, and
compliance with the CEMEX Code of Ethics and Conduct.
We also recognize how, during the COVID-19 pandemic,
the company maintained effective communication with its
suppliers.
Even though CEMEX has been progressing on assessing
suppliers' compliance with the company's standards, the
Panel cautions that the strategy for supply chain sustain-
ability is not strong enough and could pose a risk for the
company, especially during the ongoing global pandemic
where supply chains are a key risk for many companies.
The Panel sees that in setting a goal of assessing the
sustainability practices of only 80% of critical suppliers by
2030, CEMEX will be hard-pressed to be able to make
claims for its own products.
Social Impact
carried out by CEMEX in the vicinities in which its various
operations are located. Measuring benefited people shows
the coverage of actions but does not adequately convey
the full impact CEMEX generates.
Moreover, the Panel would like to stress that the thematic
focus chosen and addressed by CEMEX's Social Impact
strategy over the past several years becomes even more
important in the face of the challenges of the post-
COVID-19 world. Strengthening local education systems
and creating better learning conditions, building skills and
opportunities for employment and entrepreneurship with
a focus on young people and women; these are some of
the most momentous issues by which the company can
contribute to social and economic revitalization in its oper-
ating environments over the next few years.
The main risks facing the company are well-identified from
various perspectives. The Panel would like to note that the
spaces for dialogue with the community and other actors,
which CEMEX has created through the ECPs, are a relevant
means of mitigating the risks of social instability and politi-
cal uncertainty.
Concluding Remarks
The Panel praises CEMEX for the excellent strategy and
performance described in the 2020 Integrated Report that
clearly shows the company's efforts at the top manage-
ment to integrate sustainability into the core business,
during a very challenging year. This is especially important
given that COVID-19 has created new opportunities for
sustainable products and accelerated the rate of change in
the building sector. It is encouraging to see that CEMEX
has the ambition, the culture, and the innovative materials
to be a key player under this new scenario.
We wish CEMEX every success and remain grateful for the
opportunity to offer our recommendations, which we do
with the sole purpose of supporting CEMEX in achieving its
shared mission to build a better future for its stakeholders.
The report shows that CEMEX has continued strengthen-
ing the implementation of its Human Rights Policy wher-
ever the company operates, following the UN Guiding
Principles on Business and Human Rights, including
Human Rights in both the Code of Ethics and Business
Conduct.
The Panel deeply values the stated goal of developing
community engagement plans through dialogue in 100%
of prioritized locations. We continue to encourage the
company to complement this with an objective aimed at
measuring the impacts and benefits of the social actions
CEMEX 2020 INTEGRATED REPORT Company Overview
How We Create Value
Our Performance in 2020
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Terms
We Use
Financial
bps (basis point) is a unit of percentage measure
equal to 0.01%, used to measure the changes to inter-
est rates, equity indices, and fixed-income securities.
Free cash flow CEMEX defines it as operating EBITDA
minus net interest expense, maintenance capital
expenditures, change in working capital, taxes paid,
and other cash items (net other expenses less pro-
ceeds from the disposal of obsolete and/or substan-
tially depleted operating fixed assets that are no
longer in operation). Free cash flow is not a GAAP
measure.
LIBOR (London Interbank Offered Rate) is a reference
rate based on the interest rates at which banks borrow
unsecured funds from other banks in London.
Maintenance capital expenditures CEMEX defines it
as investments incurred with the purpose of ensuring
the company’s operational continuity. These include
capital expenditures on projects required to replace
obsolete assets or maintain current operational levels
and mandatory capital expenditures, which are proj-
ects required to comply with governmental regula-
tions or company policies. Maintenance capital
expenditures are not a GAAP measure.
Net working capital CEMEX defines it as net trade
accounts receivables plus inventories plus other
accounts receivable including advanced payments
minus trade payables minus operative taxes excluding
income tax minus other accounts payable and
accrued expenses. Working capital is not a GAAP
measure.
Operating EBITDA CEMEX defines it as operating
earnings before other expenses, net, plus depreciation
and amortization. Operating EBITDA does not include
revenues and expenses that are not directly related to
CEMEX’s main activity, or which are of an unusual or
non-recurring nature under International Financial
Reporting Standards (IFRS). Operating EBITDA is not a
GAAP measure.
pp equals percentage points.
Strategic capital expenditures CEMEX defines it as
investments incurred with the purpose of increasing
the company’s profitability. These include capital
expenditures on projects designed to increase profit-
ability by expanding capacity, and margin improve-
ment capital expenditures, which are projects
designed to increase profitability by reducing costs.
Strategic capital expenditures are not a GAAP mea-
sure.
TIIE (Tasa de Interés Interbancaria de Equilibrio) is a
measure of the average cost of funds in pesos in the
Mexican interbank money market.
Total debt CEMEX defines it as short-term and long-
term debt plus convertible securities, liabilities
secured with account receivables, and capital leases.
Total debt is not a GAAP measure.
Industry
Aggregates are sand and gravel, which are mined
from quarries. They give ready-mix concrete its neces-
sary volume and add to its overall strength. Under
normal circumstances, one cubic meter of fresh con-
crete contains two tons of gravel and sand.
Clinker is an intermediate cement product made by
sintering limestone, clay, and iron oxide in a kiln at
around 1,450 degrees Celsius. One ton of clinker is
used to make approximately 1.1 tons of Gray Portland
cement.
Fly ash is a combustion residue from coal-fired power
plants that can be used as a non-clinker cementitious
material.
Gray Portland cement is a hydraulic binding agent
with a composition by weight of at least 95% clinker
and 0–5% of a minor component (usually calcium
sulfate). It can set and harden underwater and, when
mixed with aggregates and water, produces concrete
or mortar.
Metric ton is the equivalent of 1.102 short tons.
Petroleum coke (petcoke) is a by-product of the oil
refining coking process.
Ready-mix concrete is a mixture of cement, aggre-
gates, and water.
Slag is the by-product of smelting ore to purify metals.
CEMEX 2020 INTEGRATED REPORT Company Overview
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Our Performance in 2020
Governance
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Cautionary statement
regarding forward
looking statements
This report contains forward-looking state-
ments within the meaning of the U.S.
federal securities laws. We intend these
forward-looking statements to be covered
by the safe harbor provisions for for-
ward-looking statements within the mean-
ing of the U.S. federal securities laws. In
some cases, these statements can be iden-
tified by the use of forward-looking words
such as “may,” “assume,” “might,” “should,”
“could,” “continue,” “would,” “can,” “con-
sider,” “anticipate,” “estimate,” “expect,”
“envision,” “plan,” “believe,” “foresee,” “pre-
dict,” “potential,” “target,” “strategy,”
“intend,” “aimed” or other similar words.
These forward-looking statements reflect,
as of the date such forward-looking state-
ments are made, or unless otherwise indi-
cated, our current expectations and
projections about future events based on
our knowledge of present facts and cir-
cumstances and assumptions about future
events. These statements necessarily
involve risks and uncertainties that could
cause actual results to differ materially
from our expectations. Some of the risks,
uncertainties and other important factors
that could cause results to differ, or that
otherwise could have an impact on us or
our consolidated entities, include, but are
not limited to:
» the impact of pandemics, epidemics or
outbreaks of infectious diseases and the
response of governments and other third
parties, including with respect to the
novel strain of the coronavirus identified
in China in late 2019 (“COVID-19”), which
have affected and may continue to
adversely affect, among other matters,
the ability of our operating facilities to
operate at full or any capacity, supply
chains, international operations, availabil-
ity of liquidity, investor confidence and
consumer spending, as well as availability
of, and demand for, our products and
services;
» the cyclical activity of the construction
sector;
» our exposure to other sectors that impact
our and our clients’ businesses, such as,
but not limited to, the energy sector;
» availability of raw materials and related
fluctuating prices;
» competition in the markets in which we
offer our products and services;
» general political, social, health, economic
and business conditions in the markets in
which we operate or that affect our oper-
ations and any significant economic,
health, political or social developments in
those markets, as well as any inherent
risks to international operations;
» the impact of our below investment
grade debt rating on our cost of capital
and on the cost of the products and
services we purchase;
» loss of reputation of our brands;
» our ability to consummate asset sales,
» declarations of insolvency or bankruptcy,
or becoming subject to similar proceed-
ings; and
» natural disasters and other unforeseen
events (including global health hazards
such as COVID-19); and
fully integrate newly acquired businesses,
achieve cost-savings from our cost-re-
duction initiatives, implement our pricing
initiatives for our products and generally
meet our “Operation Resilience” strate-
gy’s goals;
» the increasing reliance on information
technology infrastructure for our sales,
invoicing, procurement, financial state-
ments and other processes that can
adversely affect our sales and operations
in the event that the infrastructure does
not work as intended, experiences tech-
nical difficulties or is subjected to
cyber-attacks;
» changes in the economy that affect
demand for consumer goods, conse-
quently affecting demand for our prod-
ucts and services;
Readers are urged to read this report and
carefully consider the risks, uncertainties
and other factors that affect our business
and operations. The information contained
in this report is subject to change without
notice, and we are not obligated to publicly
update or revise forward-looking state-
ments after the date hereof or to reflect the
occurrence of anticipated or unanticipated
events or circumstances. Readers should
review future reports filed by us with the
U.S. Securities and Exchange Commission.
» the regulatory environment, including
» weather conditions, including but not
environmental, energy, tax, antitrust, and
acquisition-related rules and regulations;
» our ability to satisfy our obligations under
our material debt agreements, the inden-
tures that govern our outstanding senior
secured notes and our other debt instru-
ments and financial obligations, includ-
ing our perpetual debentures;
» the availability of short-term credit lines
or working capital facilities, which can
assist us in connection with market
cycles;
limited to, excessive rain and snow, and
disasters such as earthquakes and floods;
» trade barriers, including tariffs or import
taxes and changes in existing trade poli-
cies or changes to, or withdrawals from,
free trade agreements, including the
United States-Mexico-Canada Agree-
ment;
» terrorist and organized criminal activities
as well as geopolitical events;
CEMEX 2020 INTEGRATED REPORT Company Overview
How We Create Value
Our Performance in 2020
Governance
Results in Detail
About This Report
196
Investor, Media and Sustainability Information
Exchange
Listings
Contact and
Feedback
CEMEX, S.A.B. de C.V.
Av. Ricardo Margain Zozaya 325
66265, San Pedro Garza Garcia,
N.L. Mexico
Tel: +52 (81) 8888-8888
twitter.com/cemex
facebook.com/cemex
instagram.com/cemex
youtube.com/cemex
Bolsa Mexicana de Valores
(bmv)
Mexico
Ticker Symbol: CEMEXCPO
Listed securities: CPO
(representing two Series A
shares and one Series B share)
New York Stock Exchange
(nyse)
United States
Ticker symbol: CX
Listed securities: ADS
(representing 10 cpos)
Corporate Communications
and Public Affairs
corporate.communications@cemex.com
Media Relations Contact
mr@cemex.com
Phone: +52 (81) 8888-4327
Investor Relations Contact
ir@cemex.com
From the US: 1 877 7CX NYSE
From other countries:
+1 (212) 317-6000
Sustainability Contact
sd@cemex.com
Web Address
www.cemex.com
© 2021 CEMEX S.A.B DE C.V. All rights reserved.
CEMEX 2020 INTEGRATED REPORT