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Monterrey, Mexico, April 23, 2009. CEMEX CEO, Lorenzo H. Zambrano, reflected on the company's performance in 2008 and the upcoming challenges for 2009 in his presentation to CEMEX shareholders at the Luis Elizondo amphitheater in Monterrey, Mexico. Around 500 people attended the annual shareholder meeting and took advantage of the opportunity to learn more about the company's goals and top management's expectations.
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As part of the annual meeting, Mr. Zambrano addressed the worldwide context in which the company is presently operating. "The results we obtained in 2008 were created in a situation marked by a deep recession, and all our markets have been affected," noted Mr. Zambrano.
He assured all shareholders that this context is not new for the company and that measures have been implemented to adapt all operations to market conditions. He also provided insight into the measures that are being taken worldwide by governments and global organizations and institutions.
In 2008, CEMEX's results were affected by factors such as the fall in sales volumes, the increase in energy costs, the expropriation of its Venezuelan operations, and the increase in transportation costs.
However, its geographic diversity and its cost savings programs allowed the company to partially compensate for these variables. Consequently, CEMEX's net sales held steady compared with 2007, totaling US$21.7 billion.
"We are committed to sustain our history of disciplined growth and our value creation," noted CEMEX CEO, "This is why the company has been working hard and promptly in adapting itself, in an effort to quickly achieve financial flexibility." |
The company has been taking immediate actions in order to successfully confront the current situation. First, since 2008, CEMEX has been implementing an aggressive efficiency and cost savings program, applying the tools and disciplines that the company has successfully used several times during and after acquisitions. Through its actions, CEMEX remains focused on:
- Debt reduction
- Adjust the size of its operations to meet the market conditions
- Reduce its capital investments
- Identify and divest some assets
"But I want to be very clear, our commitment to the safety and health of all our employees and our neighbors will not be affected at all by this," ensured Mr. Zambrano.
Second, the company is in the process of negotiating the refinancing of its bank debt as part of its financial strategy. "Talks with the banks are positive in order to renegotiate US$14.5 billion which represents our bank debt and as soon as we have news on the progress you will be informed," stated Mr. Zambrano.
Third, CEMEX CEO pointed out the importance of strengthening the loyalty of our customers; it is an absolute priority to search for new ways to better serve our clients worldwide.
Mr. Zambrano also informed the audience about an additional US$200 million in cost savings for this year. "These US$200 million in savings, together with the US$700 million already identified, add up to an unprecedented US$900 million in cost savings."
In a difficult environment, it is important to remember the achievements of the company over the past years. CEMEX is facing and will face many challenges in the future. However, the company has an incredible amount of talent in its people and in its management team. It also has a strong business model to ensure that, once the current situation passes, CEMEX's long history of growth resumes.
"To conclude, I want to thank you all for your trust and confidence in CEMEX, and assure you that all of us, who work in this great company, are dedicated to obtain the best results for you," ended Mr. Zambrano.
All of this information can be found in the 2008 Annual Report, which is now available online through our Reports page in this website.
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