Although a Challenging Environment, Profits Improved Significantly

We Maintain Our Outperform Ratings

• Although the environment remained challenging (with still bad weather conditions, higher comps, and weak demand), the Cement companies under coverage posted positive operating results.
• Total revenues in 3Q25 increased by 5% YoY, while total EBITDA was up 15% YoY (improving also on a QoQ basis +10%). As a result, the implicit EBITDA margin in the sector expanded by 1.9 pp YoY to 22.2%. In that context, CEMEX (CX) posted the strongest EBITDA margin expansion (+253 bps), while GCC's EBITDA performance saw a 2% YoY drop, resulting in a 481 bps contraction in its EBITDA margin (mainly due to a high comparison base). The sector's solid financial position remained strong, with low leverage debt ratios.
• We reiterate our positive outlook for the sector. Current prices offer attractive upside potential for long-term investors, supported by appealing valuations and a more optimistic outlook for 2026 demand. Our Outperform rating is reiterated for CEMEX and GCC, while our 12M price target for CEMEX remains at P$22.0, and GCC's PT is up to P$223.0 from P$218.0 per share.

3Q25 in a Nutshell. The quarterly figures of CEMEX and GCC came in better than our estimates. Total revenues in 3Q25 for the sector were up 5%, while total EBITDA increased 15% YoY, implying a 1.9 pp YoY expansion in the EBITDA margin. CX posted the strongest EBITDA margin expansion (+253 bps), mainly explained by a positive performance across all CEMEX’s regions, with EMEA, Mexico, and the SCAC region recording double-digit growth. On the other hand, GCC's EBITDA performance declined 3% YoY, driven by a high comparison base. However, on a QoQ basis, total EBITDA increased 37%, with an implicit 281 bps expansion in its margin

2025 Guidance. CX reiterated its 2025 guidance, expecting flat performance with potential upside at the EBITDA level. In addition, GCC reiterated its EBITDA guidance, anticipating a midsingle-digit decline. Although the environment will remain challenging, signs of volume recovery and increased demand support a robust 4Q25.

CEMEX and GCC top management remained overall optimistic in the outlook for the coming months. In the U.S., cement demand is expected to improve in the infrastructure/energy and industrial sectors, supported by local and federal investment under the Big Jobs Act. In Mexico, increased investments in trains, rural roads, and infrastructure related to the 2026 World Cup support a better outlook, as well as the Mexican housing program, which has started to deliver the first homes.