Cemex (NYSE:CX) executives used the company’s fourth-quarter 2025 earnings call to highlight a second-half rebound in key markets, progress on a multi-year transformation plan, and a shift toward higher shareholder returns supported by stronger free cash flow generation.
2025 performance: second-half recovery, cost savings, and free cash flow gains
CEO Jaime Muguiro said his first year in the role featured “sharp contrasts,” with headwinds in the first half tied to Mexico’s transition to a new government administration, a weaker peso, and soft demand conditions in the U.S. That environment improved materially in the second half, driven by a recovery in Mexico and early results from the company’s transformation program announced in the second quarter.
On cash generation, management emphasized that free cash flow from operations reached $1.4 billion in 2025, representing a 46% conversion rate after adjusting for one-off items such as severance and discontinued operations. Muguiro said the company is working toward a longer-term goal of 50% conversion. He also noted that total adjusted free cash flow increased by more than $550 million versus the prior year after factoring in growth capital spending, intangible assets, and other expenses.
Cemex also recorded $538 million in goodwill impairment during 2025. Muguiro said that excluding this effect, net income would have increased 41% to $1.5 billion. CFO Maher Al-Haffar said net income in the fourth quarter was mainly affected by goodwill impairment and an asset write-down totaling $493 million, while full-year net income rose 2% as lower financial expense and a gain on the sale of operations in the Dominican Republic offset higher income taxes and impairments.
Demand, pricing, and regional trends
Management said consolidated cement and aggregates volumes in the fourth quarter increased 1% and 2%, respectively, while consolidated prices for cement, ready-mix, and aggregates rose by a low single digit in 2025. Cemex reported mid-single digit price increases in Mexico and in South, Central America and the Caribbean during the year, despite demand challenges earlier in 2025.
- Mexico: Chief Communications Officer Lucy Rodriguez said sales growth in the quarter marked the first year-over-year growth quarter since Mexico’s 2024 election period. Cemex reported 20% like-for-like EBITDA growth in Mexico and 5 percentage points of margin expansion. Average daily cement sales increased 8% sequentially, which management said outperformed typical seasonality. Cemex discussed early signs of pickup in public spending and activity in rural road projects, certain rail projects (including Querétaro–Irapuato and the AIFA Airport–Pachuca line), and work linked to preparations for the 2026 World Cup. Management also highlighted Mexico’s social housing program, noting Cemex doubled participation in projects under construction to 58,000 units and cited 105,000 units under negotiation.
- United States: Cemex said its U.S. operations produced a record fourth-quarter EBITDA with margins near record highs, helped by Project Cutting Edge and the consolidation of Couch Aggregates. The company described infrastructure demand as firm, with industrial “bright spots” offset by softness in residential. Aggregate volumes rose 10% in the year, driven by investments coming online and the acquisition’s impact. Cemex also cited competitive pressure in certain markets after three consecutive years of cement volume declines, which it said contributed to a slight sequential decline in cement prices. Management identified Houston, Northern California, and areas around the Mid-South (including Atlanta) as markets under pressure. For 2026, Cemex said it announced an $8 per short ton cement price increase across markets except Houston, effective April 1.
- EMEA: Cemex reported record 2025 EBITDA and margin in the region, citing higher volumes and prices and cost efficiencies. Cement and ready-mix volumes grew 7% and 3% in the fourth quarter, with mid-single digit cement and ready-mix volume growth for the year. Management said pro forma for certain one-off adjustments, EMEA EBITDA rose at a double-digit rate in the fourth quarter, with 1 percentage point of margin expansion. In response to a webcast question, Muguiro said that excluding one-offs, EMEA margin would have been 0.9 percentage points higher, with impacts including write-offs, an electricity reimbursement present in the prior-year quarter, and changes in variable compensation provisions.
- South, Central America and the Caribbean: Cemex said the region delivered full-year EBITDA growth for the third consecutive year, supported by pricing discipline and Project Cutting Edge, though fourth-quarter results were affected by Hurricane Melissa in Jamaica and higher maintenance activity in Colombia and Trinidad and Tobago. Colombia’s cement volumes increased 7% in the quarter, while Jamaica posted record full-year EBITDA with cement volumes up 7%. Cemex also pointed to the completion of a kiln debottlenecking project in the third quarter of 2025, which it said should allow profitable import substitution and better support export markets.
Transformation priorities: capital allocation, portfolio actions, and decarbonization
Muguiro said Cemex expanded Project Cutting Edge’s target to $400 million of recurring savings by 2027, with half tied to overhead actions already taken in 2025. Those actions are expected to generate $125 million of additional savings in 2026. He also said the company introduced new operating performance metrics including EBIT, free cash flow conversion, and ROIC spread over WACC, and cited operating initiatives such as kiln efficiency improvements in the U.S. and fuel mix optimization in Mexico.
On portfolio strategy, Cemex said it divested most of its operations in Panama while investing in targeted U.S. businesses, including the consolidation of Couch Aggregates to strengthen its aggregates position in the Southeast. Management said it will continue to evaluate divestments in non-core markets to expand primarily in the U.S., with an emphasis on aggregates and adjacent businesses such as mortars, stuccos, renders, and plasters.
On decarbonization, Cemex said consolidated gross CO2 emissions declined 2% in 2025, largely due to further reductions in clinker factor. Management said Europe reached the Cement Europe Association’s 2030 gross CO2 emissions reduction targets five years early, and noted record clinker factor levels in Mexico and in South, Central America and the Caribbean.
Shareholder returns, balance sheet, and refinancing commentary
Executives highlighted a greater focus on shareholder returns. Al-Haffar said the board will propose an annual cash dividend of $180 million at the general shareholders meeting scheduled for late March, representing an almost 40% increase versus the prior year. Cemex also said it intends to activate its buyback program with the goal of repurchasing up to $500 million in shares over the next three years, subject to shareholder approval and other formalities. Management noted an existing authorization for up to $500 million in buybacks remains available through late March.
On leverage, Al-Haffar reiterated Cemex’s steady-state net total financial leverage target of 1.5x to 2.0x, which includes net debt plus $2 billion of subordinated perpetual notes. At the end of 2025, the ratio was 2.26x. He said the company aims to reach and maintain a “solid BBB rating.”
In response to a question on upcoming maturities and callable debt, Al-Haffar outlined liability management opportunities, including subordinated notes that reset in early September at a spread he described as “prohibitively expensive” at 454 basis points over Treasuries. He also referenced work on a potential bank-market transaction that could address some euro funding and an ongoing offering of MXN 5 billion to MXN 7.5 billion in five-year floating-rate notes in Mexico, with closing expected in mid-February. Cemex guided to flat interest expense for 2026 but said there could be upside depending on execution.
2026 guidance: EBITDA growth and key moving pieces
For 2026, Muguiro said Cemex expects a more favorable demand environment with material contributions from Mexico and EMEA. The company guided to high single-digit EBITDA growth, driven by incremental Project Cutting Edge savings, completed growth projects expected to add $80 million in incremental EBITDA (with about half dependent on volume recovery), and operating leverage as volumes improve.
Management emphasized FX sensitivity given Mexico’s EBITDA contribution and said the company is using an assumed exchange-rate range of 18.25 to 18.50 pesos per dollar for guidance. Muguiro added that each peso of appreciation could increase EBITDA by roughly $75 million to $80 million.
On capital spending, Cemex said it is providing guidance for intangible asset investments, with flat guidance reflecting purchases of additional aggregate reserves and mining rights in 2026. Muguiro said maintenance CapEx and growth investments (including growth CapEx and intangibles) are expected to contribute about $195 million positively to free cash flow versus the prior year. He also referenced a favorable comparison against $183 million in severance payments in 2025 as another driver of improved free cash flow conversion.
Separately, in response to an energy cost question, management said 2026 guidance assumes lower fuel costs but higher electricity costs, with about 65% of the electricity increase expected in Mexico due to a prior-year one-off incentive that will not repeat, and the remainder in the U.S. based on utility cost increases.
Cemex said it will provide additional details on its value creation strategy and medium-term financial targets at its CEMEX Day event on February 26.
About Cemex (NYSE:CX)
Cemex (NYSE: CX) is a global building materials company headquartered in Monterrey, Mexico. The company produces, distributes and sells cement, ready-mix concrete and aggregates, as well as related building materials, to construction markets in more than 50 countries. Cemex’s product portfolio also includes asphalt and mortar mixes, waste-derived fuels and other complementary construction solutions, supported by a network of production facilities, distribution centers and logistics operations.
Founded in 1906 as Cementos Hidalgo, the company adopted the Cemex name in 1976 following a series of domestic mergers and expansions.
