building a STRONGER foundation - Cemex

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Africa and the Middle East Our operations in Africa and the Middle East consist of our operations in Egypt, the most significant operations in this geographic segment, and the United Arab Emirates (UAE) and Israel. Our domestic cement sales volumes from our operations in Africa and the Middle East increased approximately 22% in 2009 compared to 2008, and ready-mix concrete sales volumes decreased approximately 14% during the same period. The increase in domestic cement sales volumes was primarily a result of the increase in sales volumes in our operations in Egypt. For the year ended December 31, 2009, Africa and the Middle East represented approximately 7% of our total net sales in Peso terms, before eliminations resulting from consolidation. Our average domestic sales price of cement from our operations in Africa and the Middle East increased approximately 8% in Dollar terms in 2009, and the average price of ready-mix concrete decreased approximately 8% in Dollar terms over the same period. For the year ended December 31, 2009, cement represented approximately 52%, ready-mix concrete approximately 37% and our other businesses approximately 11% of our net sales of our operations in Africa and the Middle East before intra-sector eliminations within the segment and before eliminations from consolidation, as applicable. Our domestic cement sales volumes from our operations in Egypt increased approximately 13% in 2009 compared to 2008, and Egyptian ready-mix concrete sales volumes increased approximately 9% during the same period. The increases in volumes resulted primarily from the positive trend in the informal residential and infrastructure sectors, which led to higher sales volumes of <strong>building</strong> materials. The high-income housing sector started to slow down in response to the macroeconomic situation, while the selfconstruction sector maintained its stability. For the year ended December 31, 2009, Egypt represented approximately 4% of our total net sales in Peso terms, before eliminations resulting from consolidation. The average domestic sales price of cement increased approximately 13% in Egyptian pound terms in 2009 compared to 2008, and ready-mix concrete sales prices increased approximately 12% in Egyptian pound terms. During 2009, our operations in Egypt did not export any cement as production was only directed to meet increased domestic demand. As a result of the increases in domestic cement and ready-mix concrete sales volumes and sales prices, net sales of our operations in Egypt, in Egyptian pound terms, increased approximately 27% in 2009 compared to 2008. For the year ended December 31, 2009, cement represented approximately 89%, ready-mix concrete approximately 9% and our other businesses approximately 2% of net sales for our operations in Egypt before intra-sector eliminations within the segment and before eliminations from consolidation, as applicable. Our ready-mix concrete sales volumes from our operations in the Rest of Africa and the Middle East decreased approximately 17% in 2009 compared to 2008 primarily as a result of economic conditions, which have had a negative effect on the commercial and residential sectors, and the average ready-mix concrete sales price decreased approximately 3%, in Dollar terms, in 2009 compared to 2008. For the year ended December 31, 2009, Rest of Africa and the Middle East represented approximately 3% of our total net sales in Peso terms, before eliminations resulting from consolidation. As a result of the decreases in ready-mix concrete average sales price and sales volumes, net sales of our operations in the Rest of Africa and the Middle East, in Dollar terms, decreased approximately 23% in 2009 compared to 2008. The decrease in net sales, in Dollar terms, in our operations in the Rest of Africa and the Middle East was due to a 4% decrease in net sales in Israel and a 36% decrease in net sales in the UAE. They represent 66% and 34%, respectively, of our operations in the Rest of Africa and the Middle East. For the year ended December 31, 2009, cement represented approximately 12%, ready-mix concrete represented approximately 66% and our other businesses approximately 22% of our net sales of our operations in the Rest of Africa and the Middle East before intra-sector eliminations within the segment and before eliminations from consolidation, as applicable. As a result of the decreases in ready-mix concrete average sales price and sales volumes in our operations in the Rest of Africa and the Middle East, partially offset by the increase in average sales price and sales volumes in our operations in Egypt, net sales before eliminations resulting from consolidation in our operations in Africa and the Middle East, in Dollar terms, decreased approximately 2% in 2009 compared to 2008. Asia Our operations in Asia in 2009 consisted of our operations in the Philippines, Thailand, Bangladesh, Taiwan, Malaysia, and the operations we acquired from Rinker in China. Our domestic cement sales volumes from our operations in Asia remained flat in 2009 compared to 2008. Our ready-mix concrete sales volumes from our operations in Asia decreased approximately 18% in 2009 compared to 2008, primarily as a result of the decrease in our ready-mix concrete sales volumes in our operations in Malaysia. Our cement export volumes from our operations in Asia, which represented approximately 16% of our cement sales volumes in 2009 from our operations in Asia, decreased approximately 12% in 2009 compared to 2008 primarily due to decreased cement demand in the Europe region. Of our total cement export volumes during 2009 from our operations in Asia, approximately 21% was shipped to Africa, 57% to Europe and 22% to the Southeast Asia region. For the year ended December 31, 2009, Asia represented approximately 3% of our total net sales in Peso terms, before eliminations resulting from consolidation. The average sales price of domestic cement increased 1% and the average sales price of ready-mix concrete in our operations in Asia remained flat in Dollar terms in 2009 compared to 2008. The main drivers of demand in the segment continue to be the commercial and infrastructure sectors. 104
For the year ended December 31, 2009, cement represented approximately 70%, ready-mix concrete approximately 24% and our other businesses approximately 6% of our net sales of our operations in Asia before intra-sector eliminations within the segment and before eliminations from consolidation, as applicable. Our domestic cement volumes from our operations in the Philippines increased approximately 9% in 2009 compared to 2008. For the year ended December 31, 2009, the Philippines represented approximately 2% of our total net sales in Peso terms, before eliminations resulting from consolidation. Our average domestic sales price of cement from our operations in the Philippines increased approximately 7% in Philippine Peso terms in 2009 compared to 2008. As a result, net sales of our operations in the Philippines, in Philippine Peso terms, increased approximately 15% in 2009 compared to 2008. For the year ended December 31, 2009, cement represented 100% of net sales for our operations in the Philippines before intra-sector eliminations within the segment and before eliminations from consolidation, as applicable. Our ready-mix concrete sales volumes from our operations in the Rest of Asia, which include our operations in Malaysia and China (representing nearly all our ready-mix concrete sales volumes in the Rest of Asia region), decreased approximately 18% in 2009 compared to 2008 due to the finalization of large infrastructure projects and reduced exports. The average sales price of ready-mix concrete remained flat, in Dollar terms, during 2009. For the reasons mentioned above, net sales of our operations in the Rest of Asia, in Dollar terms, decreased approximately 18% in 2009 compared to 2008. For the year ended December 31, 2009, cement represented approximately 28%, ready-mix concrete approximately 58% and our other businesses approximately 14% of our net sales of our operations in the Rest of Asia before intra-sector eliminations within the segment and before eliminations from consolidation, as applicable. For the reasons described above, net sales from our operations in Asia before eliminations resulting from consolidation, in Dollar terms, decreased approximately 4% in 2009 compared to 2008. On October 1, 2009, we completed the sale of our operations in Australia to a subsidiary of Holcim Ltd. for approximately $2.02 billion Australian Dollars (approximately U.S.$1.7 billion). Our consolidated statement of operations present the results of our operations in Australia, net of income tax, for the nine-month period ended September 30, 2009 and the twelve-month period ended December 31, 2008 in a single line item as “Discontinued operations.” Accordingly, our consolidated statement of cash flows for the year ended December 31, 2008 was reclassified. See note 3B to our consolidated financial statements included elsewhere in this annual report. Others Our Others segment includes our worldwide cement, clinker and slag trading operations, our information technology solutions company and other minor subsidiaries. Net sales of our Others segment decreased approximately 45% before eliminations resulting from consolidation in 2009 compared to 2008 in Dollar terms, primarily as a result of a decrease of approximately 54% in our worldwide cement, clinker and slag trading operations and a decrease of approximately 17% in sales of our information technology solutions company. For the year ended December 31, 2009, our trading operations’ net sales represented approximately 48%, and our information technology solutions company 32%, of our Others segment’s net sales. Cost of Sales. Our cost of sales, including depreciation, decreased approximately 9%, from Ps154.0 billion in 2008 to Ps139.7 billion in 2009, primarily due to the decrease in sales volumes mentioned above. As a percentage of revenues, cost of sales increased from 68% in 2008 to 71% in 2009, mainly as a result of lower economies of scale due to lower volumes, especially in the United States, Spain and Mexico. In our cement and aggregates business, we have several producing plants and many selling points. Our cost of sales includes freight expenses of raw materials used in our producing plants. However, our costs of sales excludes (i) expenses related to personnel and equipment comprising our selling network and those expenses related to warehousing at the points of sale, which were included as part of our administrative and selling expenses line item in the amount of approximately Ps11.1 billion in 2008 and Ps9.3 billion in 2009; and (ii) freight expenses of finished products from our producing plants to our points of sale and from our points of sale to our customers’ locations, which were included as part of our distribution expenses line item (except for distribution or delivery expenses related to our ready-mix concrete business, which are included in our cost of sales), and which, for the years ended December 31, 2008 and 2009, represented expenses of approximately Ps13.4 billion and Ps13.7 billion, respectively. Gross Profit. For the reasons explained above, our gross profit decreased approximately 19%, from Ps71.7 billion in 2008 to Ps58.1 billion in 2009. As a percentage of revenues, gross profit decreased from approximately 32% in 2008 to 29% in 2009. In addition, our gross profit may not be directly comparable to those of other entities that include all their freight expenses in cost of sales. As described above, we include freight expenses of finished products from our producing plants to our points of sale and from our points of sale to our customers’ locations within distribution expenses, which in aggregate represented costs of approximately Ps24.4 billion in 2008 and Ps23.0 billion in 2009. 105
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CEMEX 2010 20F REPORT building a ST
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Securities registered or to be regi
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Qualitative and Quantitative Market
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INTRODUCTION CEMEX, S.A.B. de C.V.
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As a result of the foregoing transa
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In the U.S., the recession was long
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The Financing Agreement contains ev
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The Financing Agreement restricts u
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During 2009, we reduced the aggrega
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The instruments governing our debt
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On the legislative front, during th
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Our operations in South America, Ce
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the depositary to vote the CPOs und
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Beginning in 2008, MFRS B-10 has el
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(1) Cost of sales includes deprecia
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Item 4 - Information on the Company
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As a condition to closing the RMC a
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Provide our customers with the best
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In connection with the implementati
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In 2010, as a result of our efforts
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In addition, we are one of the worl
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(2) Our cement raw materials operat
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Our Corporate Structure We are a ho
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Cement in Mexico is sold principall
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Aggregates. Our aggregates operatio
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Beginning on June 30, 2008, Ready M
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Products and Distribution Channels
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On December 26, 2008, we sold our C
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Ready-Mix Concrete. Our ready-mix c
Page 61 and 62: Aggregates. In 2010, we reduced fix
Page 63 and 64: Our Operating Network in France Des
Page 65 and 66: In April 2006, we initiated an expa
Page 67 and 68: Our Operating Network in Colombia P
Page 69 and 70: Our Operations in Nicaragua Overvie
Page 71 and 72: Our Operations in the United Arab E
Page 73 and 74: Our Trading Operations In 2010, we
Page 75 and 76: On December 10, 2010, after receivi
Page 77 and 78: To prevent, control and remediate e
Page 79 and 80: As required by the directive, each
Page 81 and 82: For the 2010 fiscal year, CEMEX wil
Page 83 and 84: Separately, the government of Venez
Page 85 and 86: and CEMEX was required by August 11
Page 87 and 88: January 1, 2008, however, under MFR
Page 89 and 90: foreign subsidiaries. These instrum
Page 91 and 92: Valuation reserves on accounts rece
Page 93 and 94: Stage 1. Communication to the organ
Page 95 and 96: Year Ended December 31, 2010 Compar
Page 97 and 98: Geographic Segment 89 Variations in
Page 99 and 100: United Kingdom Our domestic cement
Page 101 and 102: ended December 31, 2010, Africa and
Page 103 and 104: Operating Income. For the reasons m
Page 105 and 106: Our comprehensive financing result
Page 107 and 108: The following tables present select
Page 109 and 110: Mexico Our domestic cement sales vo
Page 111: As a result of the decreases in dom
Page 115 and 116: South America, Central America and
Page 117 and 118: For the year ended December 31, 200
Page 119 and 120: For the year ended December 31, 201
Page 121 and 122: On August 14, 2009, we entered into
Page 123 and 124: As of December 31, 2010, we had U.S
Page 125 and 126: Our Perpetual Debentures As of Dece
Page 127 and 128: The Financing Agreement, as amended
Page 129 and 130: In 1999, CEMEX entered into an agre
Page 131 and 132: Our Equity Derivative Forward Contr
Page 133 and 134: As of December 31, 2009 and 2010, C
Page 135 and 136: In addition, we have entered into f
Page 137 and 138: Private Cash Tender Offer to Holder
Page 139 and 140: Name, Position (Age) Experience Jai
Page 141 and 142: Name, Position (Age) Experience Ram
Page 143 and 144: Tomás Milmo Santos (46) Has been a
Page 145 and 146: Set forth below are the names of th
Page 147 and 148: Consolidated ESOP Information Stock
Page 149 and 150: Item 7 - Major Shareholders and Rel
Page 151 and 152: The following table sets forth the
Page 153 and 154: Item 10 - Additional Information Ar
Page 155 and 156: exempt from registration pursuant t
Page 157 and 158: Our board of directors shall prepar
Page 159 and 160: Under our by-laws, shareholders rep
Page 161 and 162: On June 2, 2008, CEMEX, through one
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Exchange Controls See “Item 3 —
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The gross amount of any dividends p
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We have agreed to pay some of the o
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Item 16G - Corporate Governance Sec
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Item 17 - Financial Statements Not
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4.17 Debenture Purchase Agreement,
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4.27.3 Amendment No. 1 to U.S.$525,
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4.41.4 Accession Letter, dated Janu
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4.57 Amended and Restated Dealer Ma
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SIGNATURES CEMEX, S.A.B. de C.V. he
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The Board of Directors and Stockhol
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CEMEX, S.A.B. DE C.V. AND SUBSIDIAR
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1. DESCRIPTION OF BUSINESS CEMEX, S
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C) USE OF ESTIMATES CEMEX, S.A.B. D
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J) IMPAIRMENT OF LONG LIVED ASSETS
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Contingencies and commitments (note
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V) CONCENTRATION OF CREDIT CEMEX, S
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Net sales by product and geographic
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4. CASH AND INVESTMENTS CEMEX, S.A.
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II. Equity forwards in third party
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14. EMPLOYEE BENEFITS Defined contr
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17. EXECUTIVE STOCK-BASED COMPENSAT
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18. EARNINGS (LOSS) PER SHARE CEMEX
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D) CONTRACTUAL OBLIGATIONS CEMEX, S
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Reconciliation of stockholders’ e
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(k) Other U.S. GAAP Adjustments Def
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building a STRONGER foundation - Cemex

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