Managing Director and Head at Bank of America Corp. /de/
Carlos Peyrelongue is a Managing Director and Head at Bank of America Securities, specializing in equity research focused on the Industrials and Materials sectors, with prominent coverage of companies such as GAP Airports and other regional leaders. He has earned a reputation for in-depth analysis, maintaining a 54.55% success rate and delivering an average return of 12.76% on his calls, as well as achieving multiple top rankings in Institutional Investor’s All-Latin America Research Team awards. Peyrelongue began his career in equity research prior to joining Bank of America Merrill Lynch, where he rose to senior leadership roles, and he continues to be recognized for his expertise in North Andean and Latin American equities. He holds relevant financial industry credentials and is registered with FINRA, underscoring his professional qualifications.
Carlos Peyrelongue asked about Cemex's expected cash conversion rates for 2026 and 2027, inquiring what factors beyond Project Cutting Edge would drive these improvements.
CEO Jaime Muguiro projected a free cash flow conversion from operations of around 45% for 2026 and approximately 50% beyond 2026. He attributed these improvements to reductions in strategic CapEx, optimization of platform CapEx, and continued decreases in interest expenses.
Carlos Peyrelongue asked about CEMEX's cash conversion rate, specifically inquiring about expectations for 2026 and 2027, and identifying drivers beyond Project Cutting Edge that could enhance cash conversion in the coming two years.
CEO Jaime Muguiro projected a free cash flow conversion from operations of around 45% for 2026, with further improvement targeting 50% beyond 2026. He attributed this to reductions in strategic CapEx, optimization in platform CapEx, and continued decreases in interest expenses.
Carlos Peyrelongue from Bank of America inquired about CEMEX's pricing strategy for 2025, seeking more detail on the approach in the U.S. and Europe, and asked about the market traction of the recent double-digit price increase in Mexico.
CFO Maher Al-Haffar and CEO Fernando Olivieri reiterated that the core pricing strategy is to exceed input cost inflation to protect or expand margins. They are cautiously optimistic about the announced U.S. (mid-single-digit) and Mexico (double-digit) price increases, believing competitors face similar cost structures. Fernando Olivieri detailed the price-cost dynamic of the last three years, emphasizing the consistent goal of maintaining margin integrity.
Carlos Peyrelongue asked about the outlook for pricing in Mexico and the U.S. for the second half of the year, questioning if there is room for further increases given the market dynamics.
Executive Maher Al-Haffar stated that pricing strategy follows inflation. With inflation remaining high in Mexico, the company announced mid-single-digit price increases for bagged products and is seeing good traction. In the U.S., increases have been implemented across 75% of the portfolio, with additional selective increases in Texas. Al-Haffar noted that a pricing tailwind exists for the second half even without further actions.
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