Good morning, and welcome to the CEMEX third quarter 2021 conference call and webcast. My name is Matt, and I'll be your operator for today. At this time, all participants are in a listen-only mode. We will conduct a question and answer session. If at any time you require operator assistance, please press star followed by zero and we will be happy to assist you. Now, I will turn the conference over to Lucy Rodriguez, Executive Vice President of Investor Relations, Corporate Communications and Public Affairs. Please proceed. Good morning. Thank you for joining us today on our third quarter 2021 conference call and webcast. I hope this call finds you and your families in good health. I am joined today by Fernando Gonzalez, our CEO, and Maher Al-Haffar, our CFO. As you are aware, we hosted the second part of our annual Analyst Day three weeks ago. As a result, today's commentary will be more abbreviated and focused on the quarter. We encourage you to access the full recording and the slides of our Analyst Day on cemex.com. As always, we will spend a few minutes reviewing the business, and then we will be happy to take your questions. I will now hand it over to Fernando. Thanks, Lucy, and good day to everyone. In third quarter, we had strong top-line growth of 8% on a like-for-like basis, reflecting continued demand for our products, as well as the acceleration of our pricing efforts to compensate for input cost inflation. Pricing was the most important lever in performance, with all regions contributing to growth. In this, cement prices rose 6% year-over-year, the biggest year-over-year pricing percentage gain since fourth quarter 2016. However, this achievement was not sufficient to protect us against supply chain issues, as well as the sudden rise in fuels, electricity, and transportation. As a result, consolidated EBITDA margin dropped 1.6 percentage points. As always, we move decisively to address cost headwinds through pricing actions, and you should expect that we will continue to do so in the future. Meanwhile, our cost discipline continued to pay off as we maintained record low levels of OpEx as a percentage of sales. Free cash flow after maintenance CapEx was approximately $370 million, decreasing versus last year due to higher maintenance and working capital investment. Importantly, year-to-date free cash flow after maintenance CapEx doubled versus the prior year. We continue to make progress on deleveraging with our leverage ratio now at 2.74x, a reduction of 0.11x on a sequential basis. Finally, I'm pleased to announce that in the next days we will be refinancing $3.25 billion of bank debt with an improvement in terms and conditions more reflective of an investment grade credit. The security underlying the bank loans as well as the rest of our senior debt has fallen away. Importantly, the bank debt under the new agreement will be aligned with our recently announced Sustainability-Linked Financing Framework. Maher will elaborate on this during his remarks. Despite weather impact in several major markets, volumes were an important driver to sales with growth in all regions. Total domestic cement, which includes cement, mortars, and concrete, as well as aggregate, grew 2% on an average daily sales basis. With formal construction recovering in emerging markets, ready-mix volumes were up 5%. While sales of our new business line of Urbanization Solutions continued to expand with growth of 16%. Pricing, however, was the most important driver of sales, with all regions and products contributing to growth. Year-to-date cement pricing gain was complemented in third quarter by a second round of pricing increases in Mexico, United States, and Europe. In the case of the United States and Europe, this was the first time in almost 15 years that we have introduced a second round of national cement price increases in the same year. These announcements were successful, as evidenced by sequential pricing gains in all three regions. In the third quarter, EBITDA declined 1% like-for-like. Volume contribution at the EBITDA level largely reflects product mix in a quarter where ready-mix volumes and Urbanization Solutions sales grew more than cement. Pricing was the largest contributor to EBITDA. While pricing was sufficient to cover the fixed and variable costs and freight, largely energy related, it was not enough to compensate for the rising cost of imports. Imports, primarily in the U.S., were responsible for 1.8 percentage points headwind in margin. While we do believe some of these cost headwinds, such as shipping and fuel shortages, are transitory in nature, we are moving quickly to adjust pricing. With tight supply demand dynamics in most markets, we expect such actions to be successful. In our bag cement markets, you should expect continued rapid adjustment to recover input cost inflation. While in our developed market portfolio, we are seeking to increase the frequency of pricing increases to better reflect cost headwinds. For all markets, we are currently preparing 2022 pricing announcements, which for many developed markets may include two pricing increases in the year. OpEx as a percent of sales was flat sequentially at 7.4%, equal to second quarter 2021, a record low, and 1.4 percentage points lower than the prior year. With new initiatives such as our Working Smarter program, our global initiative designed to utilize digital platforms and automation technologies to standardize and centralize business processes, you should expect continued savings on this front in 2022. Finally, we benefited from an important FX tailwind in the quarter of $21 million. The gain came primarily from the appreciation of the Mexican peso and British pound. In the quarter, we continued to advance on our operation resilience targets. Despite the rising inflationary costs we experienced in the third quarter, we are still within the range of our EBITDA margin goal of 20%. We continue to make sequential progress in deleveraging with a decline of 0.11 of a turn in leverage. We increased our bolt-on and margin enhancement portfolio of approved projects by $90 million- $800 million. Finally, with regard to our sustainability agenda, it was a big quarter. Most tangibly, we reduced carbon emission by 1% sequentially. We received validation of our 2030 Scope 1 and 2 targets from SBTi under the well below 2 degrees Celsius scenario. Currently, the most ambitious pathway available for our industry. We signed the Business Ambition for 1.5 degrees Celsius commitment, aligning CEMEX with the goal of the Paris Agreement to keep global temperature rise to 1.5 degrees Celsius above pre-industrial levels. With this agreement, CEMEX also joined the Race to Zero initiative, a global effort backed by the United Nations, by which governments and the private sector come together to create a carbon neutral economy by 2050. Finally, we are proud that the Global Cement and Concrete Association, of which we are a founding member, has launched an industry roadmap to reach net zero in concrete by 2050. The roadmap includes an ambitious 2030 target for the industry to eliminate 5 billion tons of CO2 by 2030. Importantly, the roadmap marks the biggest global commitment by an industry to net zero to date, with major cement and concrete producers responsible for 80% of total production outside China signing on. Now back to you, Lucy. Thank you, Fernando. Despite heavy rains and hurricanes in the quarter, the U.S. continued to enjoy strong demand across all products, with most of our markets sold out. Cement volumes grew double-digit in three of our four key states. The outlier was once again Texas, which experienced significant weather issues in the quarter. Demand continues to be driven primarily by the residential sector. In response to severe input cost inflation related to imports and energy, we announced a second round of pricing increases for third quarter. The first time in 15 years we have introduced a second round of pricing throughout our U.S. footprint. The pricing announcement, which covered our cement and ready-mix businesses, resulted in prices increasing 2% sequentially. While we are pleased by the new cadence of pricing increases, it is still not enough to compensate for today's rising cost in energy and imports. We will continue to consider these costs in our 2022 pricing increases. We have already announced price increases for January for Florida and Southern California, an area which represents approximately 35% of our cement volumes. We will soon be announcing pricing increases for April for the remainder of our markets, and we intend to announce a subsequent pricing increase for the summer or early fall. During the quarter, we experienced inflationary headwinds driven by a 34% increase in the year-over-year cost of imports and a 19% rise in energy costs. As a result, our EBITDA margin declined by 3.6 percentage points. As we look forward, we remain optimistic on the outlook for volumes in the U.S. We believe that while residential growth is slowing from the strong pace of the last 12 months, it will continue to add incremental volumes over the medium term. We also expect industrial and commercial demand to rebound in 2022. Finally, for infrastructure, we remain optimistic regarding the passage of the infrastructure plan, which we would expect to yield incremental demand for our products towards the end of 2022. In Mexico, net sales increased 10%, driven by strong pricing and volumes. With continued recovery of the formal sector, ready-mix and aggregates showed strong growth. Aggregates have now joined bagged and bulk cement as products that have surpassed pre-pandemic levels, while ready-mix continues to recover. Cement volumes declined 3% in the quarter due to adverse weather and more difficult year-over-year comps. The decline also reflects a slowdown in bagged product after 5 quarters of double-digit growth. The moderation was due to more difficult year-over-year comparisons, as well as front-ended government social program spending in an election year. With the acceleration in formal sector activity, bulk cement volumes grew, partially offsetting the decline in bagged product. While EBITDA rose 7% in the quarter, EBITDA margins compressed 0.8 percentage points, mainly due to higher fuel and freight cost and product mix. Despite good traction in our pricing actions year-to-date, pricing gains have not been sufficient to compensate for input cost inflation, particularly fuels. To this effect, we announced a price increase of mid-single digits for bagged cement effective end of October. You should expect that our pricing strategy will continue to reflect input cost inflation. Demand fundamentals in Mexico remain strong with a high level of capacity utilization for the industry. Formal housing continues to gain momentum and drive formal sector demand. Housing starts and permits increased more than 60% year-to-date September. Going forward, low levels of inventories, attractive mortgage rates and availability, as well as job creation should support volumes. As mentioned at our CEMEX Day, the industrial segment is also picking up momentum. We continue to see development of warehouses and manufacturing facilities in border states and the build-out of distribution centers and logistic hubs throughout the country. As travel restrictions ease, the tourism sector is growing once again and previously stalled tourism projects are resuming. We remain optimistic regarding the prospects of the Mexican market. We expect cement demand to continue to grow over the medium term, but at more moderated levels. Bagged cement growth rates will be supported by strong remittances, job creation, consumer spending, and the government's prioritization of social programs that use bagged cement. Meanwhile, bulk cement, ready-mix, and aggregates should continue improving on the back of GDP growth and the acceleration of formal construction. Formal residential demand coupled with industrial activity and flagship infrastructure projects should drive volumes going forward. In EMEA, top-line growth in Europe, driven by strong volumes in pricing, more than offset a slight decline in sales in Asia, Middle East, and Africa. European cement volumes were up 4%, led by double-digit growth in the U.K. and Poland, as these markets continue to benefit from important infrastructure and residential projects. Given the tight capacity utilization in Europe and the sudden run-up in input cost inflation, we implemented a successful second price increase in several European markets. As a result, European cement prices are up 2% sequentially. Price achievements to date, however, are still not sufficient to offset the cost of inflation we are experiencing in most European markets. This inflationary cost story played out throughout the entire EMEA region in the form of higher energy, distribution, and import cost, with consequences for EBITDA and margins. EBITDA for the region declined 9% year-over-year. In Israel, after adjusting for holidays in the quarter, average daily sales volumes showed significant momentum, with ready-mix up 10% and aggregates up 3%. In the Philippines, cement volumes were stable year-over-year, impacted by the rainy season and a difficult prior year comparison base. Operational costs in the Philippines also rose due to the higher cost of imports. For more information, please see our CHP quarterly earnings, which will be available this evening. Finally, in Egypt, we are seeing improved supply-demand dynamics after a government decree to rationalize cement production. Our South, Central America and the Caribbean operations continue showing strong growth dynamics, with net sales up 10% year-over-year. Despite a lockdown in Jamaica in the quarter, regional cement volumes increased 5%, driven by double-digit growth in the Dominican Republic and Central America. With successful pricing actions year to date in most markets, prices in the quarter, however, declined sequentially, largely due to product and geographic mix. While EBITDA increased 3%, EBITDA margins for the region declined as a result of higher fuels, imports, and maintenance. In Colombia, cement growth was supported by housing, self-construction, and infrastructure. The outlook for cement volumes in Colombia remains favorable, supported by a healthy self-construction sector, 4G highway projects, as well as the rollout of new infrastructure programs. In the Dominican Republic, cement volumes grew 11% on the back of the dynamic self-construction sector and the reactivation of delayed tourism projects. Going forward, we expect the self-construction sector to continue to benefit from a high level of remittances while the formal sector maintains its recovery trajectory. We expect that our strong logistics network, coupled with the introduction of our planned cement capacity additions into a largely sold-out region, will continue to be an important competitive advantage. I invite you to review CLH's quarterly results, which were also published today. Now I will pass the call to Maher to review our financial performance and energy cost structure. Thank you, Lucy, and good day to everyone. As Fernando mentioned at the beginning of the call, our results year to date have been quite strong, with free cash flow more than doubling from last year. This growth in free cash flow is driven mainly by strong operational results and lower financial expenses, partially offset by higher CapEx and investment in working capital. We've refinanced approximately 50% of our debt stack this year at a lower cost. That has translated into a reduction of 60 basis points in our cost of debt. This figure includes the refinancing of our bank facility in the next few days, as Fernando mentioned. This, in conjunction with debt reduction, has translated into interest expense savings of $92 million year to date. We expect to reach savings of $120 million for the year. Investment in working capital is higher than last year, driven primarily by inventory buildup and related inflation, among other effects. In terms of days, however, we are seeing a reduction of 2 days working capital to -14 days year to date, driven primarily by better collections efficiency. Net income for the quarter is $1.2 billion higher than last year, driven by better operating performance and lower financial expense. However, for the quarter, it resulted in a loss of $376 million, driven primarily by a close to $500 million non-cash impairment, mostly related to goodwill in our operations in Spain and the United Arab Emirates. Year to date, net income is up $2.1 billion year over year, reflecting better operational results, sale of CO2 credits, as well as lower impairment charges this year versus last. As Fernando said, we are pleased to announce that we have syndicated a new bank facility for $3.25 billion, which is replacing our previous $3.1 billion facility. This is, of course, subject to final documentation and customary closing conditions. The new facility represents a major milestone in our path to investment grade. It's single currency with a term loan of $1.5 billion with final maturity in 2026, and with a larger committed revolving credit facility of $1.75 billion, a little more than $600 million higher than our previous committed revolving credit line. This larger committed facility will further strengthen our liquidity position, which is very favorable from a company risk and credit rating perspective. The interest rate is based on our leverage ratio and is about 25 basis points lower on average than what we currently have. It is unsecured with a simpler guarantor structure. Earlier this month, we announced that the security underlying all our senior debt, including our senior secured bonds, had fallen away after reaching certain leverage milestones. Our new financial covenants are consistent with an investment-grade capital structure with a maximum leverage ratio of 3.75x throughout the life of the loan and a minimum interest coverage ratio of 2.75x. Finally, this facility represents the first indebtedness under our recently published Sustainability-Linked Financing Framework, which we intend to replicate across our debt stack over time. As a result of the refinancing activities we've executed during the year and pro forma the new bank credit facility, we have the best runway in our maturity schedule in more than a decade, with a record high average life of debt of 6.4 years and with the lowest cost of debt in recent times. Our improved financial profile and better operational results led S&P to recently improve our credit outlook from negative to positive with a strong liquidity assessment. As you can see on the chart, for the next 4 years, our maturities are less than $1 billion each year, which should be more than covered by our expected free cash flow generation. We will continue lowering our cost of funding while maintaining a prudent maturity profile. Given the recent spike in energy markets, I would like to spend a few minutes to address this topic in our most energy-intensive part of our business, which is cement. In 2020, energy in the production of cement was approximately $930 million. With regards to kiln fuel, alternative fuels are almost 30% of our fuel mix and growing, and almost half of that is with biomass content. This is important not only because they have lower CO2 footprint, but also on a per calorie basis, they represent a fraction of what fossil fuels cost. In addition, they have different price drivers than fossil fuels. In some geographies, alternative fuels are no longer a cost, but have been converted into a revenue stream. For example, in Europe, three of our major markets have negative cost of alternative fuels, an excellent example of how the cement industry can contribute to a circular economy with the right public policy incentives. Our CO2 roadmap has a target of 50% of alternative fuels usage by 2030. Progress on this goal should help us further reduce our carbon footprint and fuel costs, as well as dampening price volatility. Now, moving to electricity. Approximately 30% of our needs are sourced from clean power, which is less volatile than electricity generated from fossil fuels. In total, for 2021, in terms of price exposure, approximately half of our energy consumption has been fixed for periods ranging from 6 months to 20 years. As you can see in the line graph, despite sharp volatility in primary fuels, our energy cost per ton of cement produced has remained fairly stable, growing 12% year-to-date, and we are expecting 14% for the full year. Finally, we also have exposure to energy outside of cement production, specifically diesel, which is used in our transportation activities. Diesel accounts for approximately 2% of total COGS plus OpEx, or $230 million. We typically hedge at least 50% of our total annual diesel needs, and that strategy has certainly paid off this year. Now back to you, Fernando. Thank you, Maher. As you are aware, at CEMEX Day, we gave a preliminary estimate of a cost headwind of approximately $100 million due to supply chain, transportation, and inflationary pressures. After closing third quarter and considering recent volatility and supply chain disruptions, we believe there could be downside risks to our initial estimate. As a result, we are lowering our 2021 EBITDA guidance to a range of $2.95 billion-$3 billion. This range considers a marginally higher adjustment from what was discussed at CEMEX Day. We expect that pricing increases going forward will offset this input cost inflation, but it will occur with a lag. Given the high capacity utilization in most of our markets, we are confident that we will be able to price through this cost with time. We think this is already happening, since in third quarter we saw the best percentage price growth in cement since 2016. Importantly, we are not making changes to our expectations of sales growth. Our regional volume guidance, which is available in the appendix of the presentation, remains unchanged. We have adjusted our guidance for energy costs in the production of cement to 14% growth versus our prior 12% estimate. Due largely to supply chain disruptions, we are lowering our total CapEx guidance by $100 million. Finally, for working capital, we are expecting an investment of approximately $200 million for the year. The economic outlook for our footprint is favorable. In what is a cyclical business, most of our markets are operating at sustainable mid-cycle levels, while others are entering an upcycle after years of decline. While we expect volume growth will be more muted due to more difficult prior year comps, we continue to expect growth driven by pandemic reopening and fiscal and monetary stimulus. Supply-demand dynamics across the portfolio are tight and should be supportive of pricing. With our production and logistics network, we are uniquely positioned to deliver on this growth opportunity. Energy will remain a headwind for the foreseeable future, but we believe our energy diversification strategy and pricing will provide counterbalance. We will remain vigilant on costs until there is more visibility on supply chain resolution. Our investment focus remains on our bolt-on investment portfolio, and we believe there are ample opportunities for us over the next 2-3 years. The return on these investments should continue to support EBITDA growth in 2022 and beyond. Finally, we will continue to advance on our climate action goals, not only because it creates value for stakeholders, but because it is the right thing to do for future generations. Now back to you, Lucy. Before we go into our Q&A session, I would like to remind you that any forward-looking statements we make today are based on our current knowledge of the markets in which we operate and could change in the future due to a variety of factors beyond our control. In addition, unless the context indicates otherwise, all references to pricing initiatives, price increases or decreases refer to prices for our products. Now we will be happy to take your questions. In the interest of time and to give other people an opportunity to participate, we kindly ask that you limit yourself to only one question. If you wish to ask a question, please press star followed by one on your touchscreen telephone. If your question has been answered or you wish to withdraw your question, press star followed by two. Press star one to begin. The first question comes from Adrian Huerta from JPMorgan. Adrian, please go ahead. Thank you, Lucy. Hi, Fernando, Maher. I wanna talk about the. Hi. Hi. I wanna talk about this year's guidance and next year's expectations. Number one, based on the new EBITDA guidance that you provided, the implied 4Q EBITDA seems to be with a growth of around 10%-18% year-on-year, which is much better than 3Q's growth of +2%. What will be different in fourth quarter versus the third quarter, and what gives you confidence on this implied EBITDA for 4Q when energy costs and imports will likely not change much versus three Q? That's number one, and then number two is, there's very good momentum on prices, and so far cement prices are 4% in local currency year over year in the first 9 months, stronger in the last quarter aggregates and ready-mix 1% and 2%. Should we expect stronger pricing next year given the comments that you have mentioned? Should we expect a couple percentage points more, and if that will be more than enough to offset the higher energy cost pressure that we will see next year? Thanks, Adrian. Let me start with the first question about the fourth quarter EBITDA growth. I would like to refer mainly to two variables. The first one is the inertia of our adjusted pricing strategy, and the second one is the low level of maintenance we are gonna be having during the fourth quarter. You know, since last year originated by the pandemic, you know, our maintenance have been changing its timing because of initially some plants slowing down or even shutting down and now all plants are running to full capacity. We have some adjustments in maintenance, but we do expect a lower maintenance during the last quarter. Now let me refer to the inertia of our adjusted pricing strategy because it is impacting already. It will impact even more within the fourth quarter and it will set expectations on pricing for next year. To try to briefly describe the process, we all know what happened. You know, there were some signs of inflation early during the year, but nothing as clear and as high as we know nowadays. We started feeling the impact of the input cost inflation and started reacting during the second quarter. Now, you can hardly react immediately to this phenomenon. We have seen it in the past and it takes some time for us to react, to announce, to adjust, and for customers to accept, and for the whole market to move forward with a different pricing strategy. When I say this is a process, but it's going very well and there will be some additional inertia for the fourth quarter. Let me refer to the fact that our prices, if we measure them comparing point to point, comparing December 2020 to September 2021, prices have increased 15% in EMEA, 9% in Mexico and 7% in the U.S. That will continue happening in the fourth quarter, and we do believe it will continue. The same inertia with the additional pricing strategy of 2022 will allow us to minimize the impact of inflation for next year. Why am I talking about an adjusted pricing strategy? Because that's what you have to do, and we have managed to increase depending on the market, the conditions, the users in the market. We have increased prices 2x-4x during the year to adjust to these new levels of inflation. I think we will be better prepared in our pricing strategy for next year because, you know, we can say that this year we started reacting in the second quarter and effectively already by the summer. Next year this will start from January the first. The impact of our pricing strategy will be much larger than what it was this year. I hope I did answer both questions, Adrian. Yeah, I think that's included. What I was gonna say, just a follow-up on when you said on the maintenance, the lower level of maintenance. Can you quantify that a little bit on what it would be in 4Q versus what we saw in 3Q? I don't have that info handy. I don't know if Maher or Lucy. Yeah. Yeah, Fernando, I can comment on that. Adrian, one thing I wanted to add to, which is on the maintenance topic, is that remember that third quarter last year, we were in kind of virtual lockdown. I mean, maintenance was relatively low compared to third quarter of this year. So I think that when you're looking at the sequential, you know, third quarter to fourth quarter, you have to consider that. I mean, we have increased scope of maintenance quite significantly in the third quarter. Going into the fourth quarter, you know, I mean, we have an estimate mid-teens to low twenty difference between, you know, third quarter and fourth quarter in terms of maintenance differential. That in itself is a big item. The other thing I wanted to mention also, Adrian, complementing what Fernando said, on the supply chain side, again, we need to take a look at what happened in the third quarter. We had a particular spike in imports and purchases in one of our biggest markets, which is the U.S., and, you know, we think that will be managed, you know, more, you know, better, I would say, or let's say without the surprise that we had in the second quarter. You have the ramp-up of CPN and other imports coming from Mexico, which should also help in that. You know, you have the pricing, you have the cost effect, you have the supply chain effect, and then the maintenance effect. That's what gives us the comfort that we should have the sufficient sequential growth to get us to the full year range that Fernando guided to. Good. Thank you. Fernando, Maher. Thank you. Thank you. The next question comes from Francisco Chavez from BBVA. Francisco, please go ahead. Hi. Thanks for the call, Fernando, Maher, and Lucy. My question is regarding the drop in EBITDA margins. Besides the increase in cement prices, do you have a specific strategy to offset this margin erosion, specifically cost savings plans? Or maybe can we expect the bolt-on investment to offset this margin erosion? Thank you. Sure. Let me start with a few comments and perhaps afterward, either Maher or Lucy can complement. I think there is not a single bullet to deal with the levels of inflation we've seen in the last few months. I would like to refer to three issues. The more relevant one is our pricing strategy. That of course is the best response for higher levels of inflation. As I commented in the previous question with Adrian, we have already adjusted since we started early, meaning during second quarter, adjusting our prices according to our inflation expectations for the rest of the year. As I said, we have already managed to increase 2x-4x prices depending on market conditions and practices. I think as of September, when comparing point to point, our price increases have shown being extraordinary compared to previous years. We do believe they will continue being extraordinary in terms of higher increases to cope with higher inflation. That's the first comment. There are other issues related to cost reductions. I'm not going to make a you know a full disclosure on issues, but let me refer to two of them. With impact this year, but higher impacts, positive impacts in next year, is the increase in the use of alternative fuels. You know, alternative fuels, in our case, using basically RDF is a fuel coming from waste with high contents of biomass. Those fuels do not correlate to the price of oil or coal or petcoke or any other. When we see these high prices in petcoke and others, alternative fuels tend to be much more attractive. We continue increasing the level of alternative fuels. We are just finishing the last investment in our Rugby plant in the U.K. You can expect, Maher already mentioned, in the case of Europe, in some countries, not all of them, but this is a trend moving forward, when achieving levels of about 90% alternative fuels, our highest production cost fuel turns into an income stream. Next year we will have some positive impact because of these issues. Another one is the progress we are doing in our digitization strategy. In this case, I'm not referring to 7 years ago, which is our digital strategy towards customers. I'm referring to what we call Working Smarter, which is no different than digitizing all internal processes, administrative processes, that we initiated this year, and we will start having full impact next year. The other thing that I would like to comment on top of what I consider the most important variable, which is an adjusted pricing strategy and the comments I made on the cost part. I would also like to call the attention to the fact that there are relevant reductions in margins that are caused by mix effects and not necessarily because of inflation. You know, in the case of the U.S., our cement plants are sold out. Any additional volume that we need in order to serve the market, a market that is growing, it's coming from imports. Cement imports do have a much lower margin than the cement we produce and sell in the U.S. We have materially increased volumes in the U.S., increasing our import business, let's put it that way, which is having around three percentage points of impact in margin that has nothing to do with inflation. It's just this business of imports with lower margin increasing much more than the production we have in the U.S. A similar story, meaning similar in terms of margin impact, but not similar in terms of what is causing it, is in Mexico. As we have been describing during the year, you know, the first segment in the case of Mexico and other countries in emerging countries, the first segment reacting after the lockdowns and after the impact of the coronavirus in the second quarter of last year was the bagged cement segment. What we've seen already after the V-shaped recovery we saw in the second quarter last year is that bagged cement increased very rapidly while the segments related to the formal economy in Mexico started a moderate recovery. That has continued. Nowadays in Mexico, we have a much larger proportion of the segments related to the formal economy, namely ready-mix, bulk cement and aggregates. This increase in these segments have impacted our margins by about 1.5 percentage points, again, because of mix, not because of inflation. Again, most important part, an adjusted pricing strategy, continuing efforts to reduce costs and expenses, and this clarification on margins because of the different segments of our business accommodating to the way that the coronavirus recovery has been happening in different markets. Our final comment is referred to the impact in our growth strategy, the impact that supply chain constraints is having. Definitely our projects, which, you know, most of our growth projects are bolt-on investments, meaning they are greenfield, brownfield type of investments, and we have seen a delay in those investments just because, you know, we have not had timely equipment, permits. You know, everything has been sort of slowed down because of this supply chain constraints. We have adjusted our expectations also because of that. Now, what is it that we are doing in that regard? We are paying more attention and we are trying to position and to require purchase orders to gain slots and to perform all those projects as fast as possible. That's what I can comment on your question. Thanks so much. Thank you. The next question comes from Nikolaj Lippmann from Morgan Stanley. Nik, please go ahead. Thank you very much. Thanks for the call and for taking my question. I was wondering, just changing a little bit to South America and ask, perhaps a similar question. You had very positive language with regards to pricing in the Caribbean, Colombian market. When can you give some color on when you think that we'll see that materialize? We'll see, you know, pricing into 2022, some of the dynamics that you're seeing in those particular markets. Thanks a lot. Well, thanks, Nik. I think the process itself and the strategy itself is very similar to the one that I have described. You know, each country and each market is different. What we have seen clearly, that this adjusted pricing strategy has been taken by the market. For instance, in the case of the U.S. and Mexico, in the case of SCAC, some countries, you know. Because of basically being sold out, then this pricing strategy sticks and evolves very nicely. In the case of South America, there might be some markets, some countries where capacity is not fully utilized and the strategies of trying to cope with the input cost inflation are not as effective as others. In the case of South America, there might be a couple of markets. You know, one example is Panama, that is still you know, well, not excess capacity, but capacity is not fully utilized. We might have some issues in that type of market in South America. Maybe if I could just add one point that I think is important to just highlight for the quarter. In SCAC, a very important market is Jamaica, particularly in the Caribbean. Jamaica was under a very strict lockdown because of the emergence of COVID again in third quarter. That affected volumes tremendously, as well as we had significant maintenance there. I think Jamaica is one of the higher priced markets. I think when you look at pricing performance of SCAC for the, you know, for the quarter, it is impacted by that from a mix effect again. Just to keep that in mind. Got it. Thanks a lot. Thanks, Fernando. Thank you. The next question comes from Carlos Bernal from Bank of America. Carlos? Thank you, Lucy. Thanks for taking my question. Question is also related to pricing. You mentioned that the new strategy will be to increase pricing at least twice a year. I wanted to ask if this applies also to SCAC and EMEA, if they're going to also be following this strategy of at least two increases a year. Besides the increases you mentioned in Florida, California and Mexico, have you announced any other price increase for next year or for the remainder of the year in the other regions? Let me start with the first question, and I will pass the other one to Maher and to Lucy. Just to clarify, Carlos, we do not. We have a general new strategy in pricing. Well, it's really not new. It's the basis of the strategy we always have, which is at least recovering input cost inflation. The thing is that inflation has increased dramatically. The adjustment is how to cope with these levels of inflation as fast as possible. You know, we are not. We do not have a global type of pricing strategy. It is a global intent, but the specific pricing strategy has to be accommodated to each and every market and the conditions in the market. Just to clarify that, I did mention that this year we have been increasing in some markets, we have been increasing price twice a year. In some other markets we have increased 4x already. Perhaps the pricing strategy of two and perhaps 3x a year is more related to developed markets like Europe and the U.S., and the 3x and 4x per year is more related to markets in emerging. That's because of the characteristics of each market and business. I think regardless of the number of times we adjust, you know, when I remember with very high inflation, you know, long time ago, you know, there were monthly price increases or weekly price increases. I think what we It should be clear that what we are doing is to at least recuperate input cost inflation. Next year we will try to recuperate whatever inflation happens in 2022 and whatever we have lost in 2021. The other consideration that I think I consider is relevant is, again, remember that our reaction to a much higher inflation in our pricing strategy didn't start in January this year. It started second quarter, at the end of second quarter, let's say during the summer. Next year it has already started. The prices that we have announced are already considering much higher levels of inflation. And the frequency of those increments will be also different during next year. So that's what I have to say. I don't know, Maher, can you comment on the second part please? Yeah. Carlos, could you repeat the second piece? I mean, because I feel like Fernando maybe covered it. What was the second part of your question? The second part, Maher, was whether they have already announced price increases in other regions apart from Mexico, California and Florida that Fernando mentioned. Yes, yes, of course. I mean, again, Europe is difficult to talk about, but in Europe we've had announcements in July and there are announcements for, you know, later this year in Spain. You had, you know, obviously the beginning of the year, and then you had in October also some pricing increases in Poland. You had announced increases both in April and Spain, and September. In Colombia you had, you know, two pricing increases in January and then in May during the year. In the Philippines, although the market there is a little bit difficult, you know, there was an announcement in August. So it is really throughout our portfolio that there has been, you know, multiple pricing increases. as Fernando said, I mean, going into 2022, you know, there's probably likely to be more timely pricing increases proactively than probably this year. Carlos? We believe the traction, I mean. I'd like to come back to a point that Fernando mentioned early on in his Q&A, and that is the acceleration of pricing on a sequential basis. The point-to-point pricing in our markets is really critical, Carlos. I mean, having a 15% pricing increase in EMEA, primarily as a consequence of the pricing actions in Europe, point to point, December to September, very important. Mexico, 9% point to point. U.S., 7%. These are happening roughly from middle of the year into the third quarter. We're likely to see better pricing acceleration into the fourth quarter and certainly into next year, right? As Fernando said, with several of the markets we're operating in being sold out, the dynamics for traction should be more favorable. Understood. Thank you. Thank you very much, Carlos. Thanks. The next question comes from Barbara Halberstadt from JP Morgan Fixed Income. My question is on the cost increases seen particularly in the U.S. and Europe. How persistent do you think these pressures are? Also, how do you see these inflationary pressures in Mexico and SCAC, which seems to have been more contained this quarter? I think we've talked a little bit about the last point, but maybe how persistent do you think these pressures are in the U.S. and Europe? Well, I think what we can comment is that we are considering as our base case scenario that inflation will continue, that shipping costs are not gonna be declining or not in the very short term. That the inflationary costs in oil, natural gas, coal, petcoke will be maintained, perhaps even going a little bit further. But all in all, I think in our base case scenario, we are assuming that this inflation will be sustained. That's the base case we are considering again for our adjusted pricing strategy. That is basically what we see on how persistent this inflation will be. We all have heard that this inflation is caused because of a demand and as well as a supply shock, and it is temporary, and most probably that will be the case. This is our base case scenario in inflation for the rest of the year and for 2022. If I can add, Fernando, I think, Barbara, the other component here is a good portion, as you saw in the presentation, was the purchase of cement and clinker, or the imports of cement and clinker, primarily in the U.S. and to a lesser extent in the U.K. because we shut down a plant there. In the U.S., you know, there was a spike in need for product because we're sold out and the market grew at a fairly high rate. Now, as you know, we are ramping up production in a couple of our plants in Mexico for exports into the U.S. That is likely to help going into next year. Also, you know, managing better the transportation contracting transportation. I mean, as Fernando said, we don't expect transportation to go down. If you're contracting transportation, you know, on a very short-term basis, it's likely to be higher than if you were managing it on a longer term basis. We do expect inflation to be persistent, but we also expect, you know, managing the costs going into 2022 in the US and in all of our markets, but particularly in the US where the source of input costs there because the business was doing very well. I mean, not because of bad reasons, it's because of good reasons that that's happened, frankly. Lucy, I think we can go to the next question. Yes. Okay. Sorry, I seem to be having one of those virtual hazards from working from home with the lawn crew here. The next question comes from Vanessa Quiroga from Credit Suisse, and I will go on mute. Thank you. Hi, Fernando. Maher Al-Haffar. My question is regarding the early 2022 guidance that you have provided of 10% growth in EBITDA. How comfortable do you feel right now with this potential growth? Maybe just quickly, if you could break down the reduction in margin, in EBITDA margin for Mexico, how much was it due to less favorable mix, how much higher energy costs, and how much was higher maintenance? That would be extremely helpful. Thanks. I will take the first part, and I would like to ask Maher to take the second one. Vanessa, as you know, we have reduced our guidance for this year to $2.95 billion-$3 billion. That's already a lower base when we gave the guidance of 2022, 10% growth of the 2021 base. We feel still. Let me tell you the positives and the concerns we have on that guidance. We feel positive in terms of our markets and volumes continue evolving in a very positive manner. Using as an example the U.S. and Mexico. Although we've seen adjustments to lower numbers in GDP growth in general terms, so decimals or one percentage point here and there, we have not seen that translated into a lower direct impact in our activity, in our sector in construction. You know the story very well. In the case of the U.S., we do see housing still very positive, not to say booming. A couple of pieces of info. I mean, inventory levels are getting into a level 2, 3 months. That's already, I consider that already as some sort of scarcity. It is too low. At the same time, there are very positive variables like still the cost of mortgages, employment. We believe that housing in the U.S. will continue being very positive. Infrastructure, even without the new infrastructure bill that of course we do expect to pass, during the fourth quarter. Even without that, infrastructure has been contributing. In a moderate manner, but it's been contributing. In the case of industrial and commercial, it's little by little, but it's coming back. That's the part of the economy that is coming back, after the heavy impact of COVID-19 in the economy. Same thing for Mexico. Mexico, housing permits 60% growth. Mortgages, all the public works already at high speed of execution, the airport, the train, the project in the water sector, Istmo. We feel that top line volumes are doing okay. We have not changed our view in that regard. When commenting on the other part of top line, which are prices, I think I have already described that we have adjusted our pricing strategy. That you can expect it for us trying to cope, at least to cope with inflation that we didn't manage to recover in 2021. Plus inflation we are expecting in 2022. I already said that our base case scenario is that we believe that this inflation will be sustained during next year. I think that is very positive. I already mentioned a few positive issues on cost reductions. You know, alternative fuels being one of them. I already described one specific example that we are gonna be finishing next month in the U.K., moving our revenue down from around 60% of alternative fuels to 90% or even more. Those are the positives. The variable that we need to pay lots of attention is the balance between inflation and our pricing strategy. Why is it that we are positive on the pricing strategy? Because we have seen already, we have commented a couple of times, you know, how our pricing strategy, when looking at it from point to point, December to September, this year, it's been effective. Not effective enough to cope with inflation. Again, it only started January 1, but it's been effective. We are very positive because, you know, most of our markets are sold out, and that is a condition needed in order for us to be effective on passing inflation to our markets and not eroding margins. Now, the other thing when thinking of next year, we need to be clear, and we will clarify that in much more detail once we have all the data of the year in when we report in the first quarter is how the process that we've been evolving since COVID-19 second quarter last year and all that we're doing now is impacting margin just because of mix, not because of losing margins to inflation. All in all, we do. I do believe that next year is gonna be growth. Not sure on the percentage. We need to evaluate this new starting point, this $2.95 billion-$3 billion, and translate that into percentage terms for next year. We will do that in our fourth quarter call. Vanessa, on the margin, I mean, a couple of things were happening in Mexico. I mean, of course, It did drop by 80 basis points. The product mix was about 1.5 percentage points of that. That was primarily due to if you take a look at particularly in the quarter, cement volumes moderated versus you know very healthy growth in ready-mix volumes and in aggregates volumes. There's a little bit of that's the product mix effect that is taking place. On the full year basis of course, I mean, on a year-to-date basis, cement volumes continue to outstrip the growth that we're seeing in ready-mix, and to a lesser extent in the case of aggregates. We also had higher wages and salaries in the quarter, and that's primarily because of maintenance costs and inflation as well in terms of salaries. Energy was, of course, a very important contributor. That was, you know, that had a negative impact of almost 3 percentage points because of the really important spike in petcoke prices, almost 150% on a year-over-year basis. Now, of course, you know, all of that is being offset by very good pricing actions, which was almost 4.5 percentage points, offsetting some of these drops. Then the other component also that was growing tremendously is Urbanization Solutions. Urbanization Solutions also, you know, have lower margins, good return on capital, but lower margins, and that contributes a little bit to the product mix as well. I hope that covers the question, Vanessa, that you had on that. If I could just add one point on that. Yeah, of course. On the higher wages, Vanessa, a lot of that is related to the outsourcing law in Mexico that took place, so just to be clear. Okay? The next question. That's it. it. Thank you very much. Thanks, Vanessa. The next question, I think we can answer fairly quickly because we've done part of it already, but it's from Francisco Suarez from Scotiabank. How far, Fernando, can you go to increase your fossil fuel substitution rate in the short term to mitigate the rise in energy costs, and in which region? It is my understanding that at very high rates of capacity utilization, you can't add more alternative fuels unless you add hydrogen. Sure. Thanks for the question, Francisco. As you may know, our substitution of primary fuels with alternative fuels and in alternative fuels, mainly RDF, meaning the fuel coming from household and industrial waste, has been evolving through time. It was like 15 years ago when we started decisively to move forward with this type of fuels, and we have managed to get to almost 30% substitution. You know, we have a target of almost doubling that amount by 2030. We continue the process. I have already mentioned a couple of times that the specific project that is going to be finished by next month and will contribute to the increasing alternative fuels as we've already done. We continue with this investment everywhere. There are material differences on the solutions from this type of alternative fuels in different countries, basically developed and emerging, but there are solutions. In Mexico, we are using about 25% of our fuels as alternative fuels. The US, about 20% or slightly more percent. What you can expect that is that we will continue this efforts. Now, the observation you are making on the high rates of capacity utilization and alternative fuels are right. That is the case, and that is why we have proactively already incorporated hydrogen equipment in all our cement plants in Europe. That is done. The reason being, we do not want to slow down our alternative fuel strategy to the lack of capacity. We are using hydrogen injection. We are also using oxygen injection to be able to cope with both our strategy in alternative fuels, which has an impact in our climate action plan as part of our commitment to reduce more than 40% of CO2 by 2030, and also to be sure that we can cope with the market. Now, with all solutions put in place, if needed, you know, we can always turn to additional inputs to cope with our market position. So far, we have not needed to do that. We have managed properly to keep the capacities in our plants with these two solutions you are mentioning in your question. Great. Thank you very much. Unfortunately, we only have time for one more question. Anne Milne from Bank of America Merrill Lynch, please go ahead. Thank you. Good morning, Fernando, Maher, Lucy. Thank you for the call as well. Interesting and challenging times. I want to ask, I guess Maher would be the best one to answer this question about some of the news on the debt front that you have. You've released the collateral that was backing the financing agreements, and for those of us who followed you for a while, that's been in place for a long time. That's a big deal. I think you mentioned, Maher, that you've simplified the guarantees. I was wondering if you could tell us what those simplified guarantees would be. Just to confirm, is it still the same that when you reach investment grade, those guarantees might fall away as well? I just want to see what on this new financing that you're negotiating with your new margins and with your sustainability framework, how much do you think will be initially outstanding? Because I believe the current amount under your bank facilities is less than the $3.25 billion, which is what you're agreeing to right now. If you have any information on that would be helpful. Thank you very much. Sure, Anne. Thank you for your question. I mean, just for everybody to know. You know, under the previous, the current facilities agreement, we have about nine guarantors, and we're simplifying it to four guarantors. Two of the guarantors are new, CEMEX Operaciones de Mexico and CEMEX Innovation Holdings. For those of you who are interested in this, in the details of the corporate structure, you can get that on our investor relations website. There's a very thorough org chart that shows all of the guarantors there. We're simplifying it. We're taking essentially CEMEX España and all of that chain that was involved with CEMEX España just because of the cumbersomeness of dealing with any amendments and all of that. It's very costly to administer. So that's the simplification. We're going from 9- 4, and we're offering two new guarantors that are higher level essentially than CEMEX España essentially. In terms of the pricing, you know, as we said, it's gonna be about a quarter of a percentage point on average tighter than the current facility with the added benefit also, and that the facility is going to be instead of being multicurrency, it's gonna be 100% in dollars. Then we're gonna swap half of the dollar amounts into euros. The reason we're doing that, because that gives us the ability to benefit from the negative EURIBOR that exists today. As you know, EURIBOR is negative by somewhere around 56, 57 basis points. That effectively brings the overall weighted average cost even more than that because of that ability to do which we did not have under the previous agreement. In terms of the sustainability piece, I mean, this is the first time that we do a financing under our sustainability framework. As you know, the framework has three elements to it, CO2 emissions, clean power into our cement operations and alternative fuels. There's a 2 basis point up or down spread on the first metric, and then there's 1.5 basis point each on the other two metric, again, up and down. Those metrics are very consistent with other high non-investment grade or low that come to the market recently. I mean, we're right there within that level. I forget, is there anything that I did not cover in your question? Just the amount that you will initially have outstanding under the new facility. That's all. Mm-hmm. Yeah, of course. The old facility was $3.1 billion, and we had $2 billion. And right you know, literally in the last month or so, we did a small prepayment on that. Out of the box next week when we close the transaction, we will have outstandings under the facility, $1.5 billion under the term loan, and we will have the full availability. We will not have any utilization under the committed revolving credit facility, which will be for $1.75 billion. It will be $1.5 billion outstanding under the term loan, and that's it. Okay, great. Thank you very much. Good luck with that, and congratulations. Thank you very much, Anne, for your question. We appreciate you joining us today for our third quarter webcast and conference call. If you have any additional questions, please feel free to reach out to investor relations, and we look forward to seeing you again on our fourth quarter results. Many thanks. Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.