Cemex 2013 Annual Report Download - page 7

able margins and returns in all of our core businesses
—and we have begun delivering on that goal.
Another key strategy is based on the recognition that we
can produce better returns for our investors by outsourc-
ing key support activities to best-in-class providers. One
leading example is a 10-year strategic agreement that
we executed in 2012 with IBM to provide world-class IT
and back-office business process services. By partner-
ing with one of the leaders of the global IT industry, we
expect to generate savings of approximately US$1 billion
during the life of the contract. We are already seeing
some of those savings, and equally important, we know
that our managers have more time to focus on what they
do best: managing our core businesses.
I certainly expect to explore and to execute other
value-creating opportunities with other partners in the
years ahead.
gies that will result in a recurring EBITDA improvement of
about US$20 million to US$30 million per year. We will
also receive a one-time cash payment of approximately
€70 million when the transaction closes.
Over the course of 2013, we continued to strengthen our
capital structure and to improve our debt maturity profile in
line with our goal of regaining our financial flexibility. Through
We achieved an alternative
fuel utilization rate of 28%
out of our total fuel mix
during 2013.
28%
An integral part of transforming CEMEX into a lean-
er, more agile, global competitor has been our ongoing
effort to optimize our portfolio. In this context, in August
2013, we announced a series of transactions designed to
improve our return on capital employed. First, CEMEX will
acquire all of Holcim’s operations in the Czech Republic;
second, we will divest our assets in the western part
of Germany to Holcim; third, CEMEX and Holcim will
combine operations in Spain. Through these milestone
transactions, which are subject to regulatory approval and
other conditions, we will optimize our regional network
of assets, increase our productivity, and extract syner-
four separate transactions, we placed US$3.1 billion of
senior secured notes, demonstrating the strong support for
CEMEX in the global capital markets. As a result of these of-
ferings, the pro forma average life of our debt was 4.6 years
at the end of the year; in the process, we also generated
annual cash interest savings of approximately US$55 million.
In addition, during 2013, we bolstered our liquidity; more-
over, as of today, we do not have any significant maturities
until 2015. Thanks to our improved financial performance
and capital structure, both Standard & Poor’s and Fitch have
upgraded our company’s credit ratings to B+, which means
we are on track to regaining investment-grade ratings.
A successful year, however, must be measured in ways
that go beyond operating performance and balance
sheet figures. I am proud that, as a company, we have
continued to deliver on our long-standing commitment
to sustainability. Among other initiatives, we further re-
duced our company’s carbon footprint—and lowered our
costs—by expanding our conversion of waste into more
economic, eco-friendly alternative fuels. In 2013, we
achieved an alternative fuel substitution rate of 28%, the
highest among our global peers.
An integral part of transforming CEMEX
into a leaner, more agile, global com-
petitor has been our ongoing effort to
optimize our portfolio.
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