Good morning. Welcome to the CEMEX First Quarter 2025 Conference Call and Webcast. My name is Bailey, and I'll be your operator for today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] And now, I will turn the conference over to Lucy Rodriguez, Chief Communications Officer. Please proceed.

Good morning and thank you for joining us for our first quarter 2025 conference call and webcast. We hope this call finds you well. We have several changes to talk about on this quarterly call, beginning, of course, with the appointment of our new CEO. In February, our Board of Directors appointed Jaime Muguiro as Chief Executive Officer, effect April 1. This appointment is part of a planned leadership transition following our former CEO Fernando Gonzalez's decision to retire after a successful career at CEMEX. Jaime has almost three decades of experience at CEMEX, where he has held senior executive positions in different regions. Most recently, he served as President of CEMEX in the United States. Additionally, we have new regional presidents who are bringing extensive experience and new eyes to our operations. We have also made some changes to our quarterly documents, moving our free cash flow disclosure closer to a cash basis as well as providing more detailed sources and uses information. Starting this quarter, we are reporting price variations for our products on an FOB basis. We believe this is more reflective of actual pricing dynamics as well as industry practice. In March, we published our 2024 integrated report discussing our strategy, ESG efforts and metrics as well as financial performance. I encourage you to review it on our website. And now it is my pleasure to introduce Jaime Muguiro, and of course, Maher Al-Haffar, our CFO, both of whom are joining us today. As always, we will spend a few minutes reviewing the business and outlook for the rest of the year, and then we will be happy to take your questions. And now, I will hand the call over to Jaime.

Thanks, Lucy, and good day to everyone. I am excited and deeply honored to take on the role of CEO at CEMEX. While I am still settling into my new role, I'd like to highlight several of my strategic priorities that will guide my tenure as CEO. This is a pivotal moment in our company's history as we close in on realizing our deleveraging objectives. And having substantially consolidated our operations, we're now well positioned to drive sustainable and profitable growth. Our strategic focus will be to continue investing in the U.S. while enhancing shareholder return and creating long-term value for all the stakeholders. Since the CEO transition announcement, I have spent the last few weeks speaking to as many people within the Company as possible, reviewing our key objectives, areas of improvement within the Company and the main risks and opportunities in our markets. I am looking forward to expanding further on these discussions with external stakeholders such as yourselves over the next few months. From what I have learned so far, there is much to be done, but my first priority will be on the basics: achieving industry-leading excellence throughout our operations while shaping an agile organization that delivers profitable growth to our shareholders. Core to my plan is Project Cutting Edge, our cost-savings program introduced by Fernando Gonzalez last quarter. While it was originally conceived to address a challenging market environment, I intend to use this program as the foundation to drive lasting and transformational change. A key element is to simplify and streamline our corporate structure to empower our regional operations, enhancing execution speed and accountability throughout the organization. Project Cutting Edge should enhance our EBITDA margin, increase free cash flow and improve our free cash flow conversion rate. As I look to reshape our business,…

Thank you, Jaime. First quarter results from Mexico are aligned to our guidance for the year, which anticipated a challenging first half with improving conditions in the back half. First half expectations were based on the typical construction slowdown in the first year of the new administration in Mexico, a strong prior year comparison base driven by pre-electoral spending and a significant peso headwind. Peso depreciation accounted for $65 million or 60% of the variation in EBITDA. The prior year pre-electrical spend in infrastructure projects and rural roads explain about 50% of the decline in cement volumes. Volume drop was most acute in the South, which benefited disproportionately from 2024 pre-electoral spend. Importantly, we are seeing sequential improvement in daily cement volumes in April month-to-date. In the case of ready-mix, the Northeast region continues to outperform, supported by ongoing industrial projects and state-level infrastructure works, such as the new metro line in Monterrey. The decline in aggregates volumes is attributable to large infrastructure projects in the prior year, where we supplied low-margin-based products. Adjusting for these volumes, our aggregates volumes declined by 1% with a significant expansion in EBITDA margin. There is positive traction from our January pricing increase with cement and aggregate prices rising 5% sequentially, while ready-mix increased 3%. Effective April 1, we announced a 9% price increase in bagged cement. We will continue to look for opportunities to at least recover input cost inflation going forward. EBITDA margin was supported by favorable pricing and lower energy and freight cost, which offset much of the volume effect. In our path of profitable decarbonization, we achieved a new record in clinker factor of 65.9%. In the second half, we expect a pickup in construction activity as the new government settles in and begins to execute its budget for rural…

Thank you, Lucy, and good day to everyone. Our free cash flow from operations during the quarter reflects normal seasonality of our working capital needs in the early part of the year. Free cash flow was primarily impacted by EBITDA, free cash flow from discontinued operations and severance payments related to Project Cutting Edge, which were partially offset by a reduction in cash taxes and net interest paid. Interest paid was $34 million lower than last year, while cash taxes due to timing effects were $113 million less. While investment in working capital during the quarter was higher than last year, the average working capital days declined by six days driven by the targeted management actions we implemented last year to improve our working capital. We expect this investment in working capital to reverse throughout the rest of the year. We remain on track to reach our expected savings of $500 million on free cash flow elements from operations versus prior year. On the cost side, energy cost on a per ton of cement basis declined by 17% driven by lower power and fuel prices and a continued improvement in clinker factor and thermal efficiency. For 2025, we have closed hedges for 76% of our annual spend related to electricity, diesel, freight, pet coke and natural gas. Record net income of $734 million was driven primarily by the sale of our operations in the Dominican Republic. Given the volatility in the Mexican peso, I would like to remind you of our ongoing Mexican peso hedging strategy, fully covering our operating cash flow from Mexico that effectively lowers the volatility of the exchange rate at which we convert pesos into dollars for tenors of up to two years. During April, we fully redeemed our [9 and 1/8] $1 billion subordinated notes due to a change in methodology from S&P for these kinds of instruments. That triggered the option of redeeming the notes at 101. The redemption of these notes will result in important savings. Our leverage ratio stood at 1.9x, 1/10 of a turn higher versus December. In this volatile market conditions with heightened macro uncertainty, I want to underscore that we enjoy a strong liquidity position bolstered by recent divestitures with substantial availability under our $2.3 billion in committed bank facilities after calling the [9 and 1/8] notes in April. We have a comfortable debt maturity schedule with no need to access the capital markets, and we remain committed to further strengthening our capital structure, as Jaime commented in his remarks. And now back to you, Jaime.

Thank you, Maher. As Maher pointed out, we're currently navigating an uncertain macro-outlook. And while first quarter results were very much in line with our full year expectations, we must recognize aren't lack of macro visibility. The organizational transformation I am envisioning is driven by strategy. Certainly, today's economic landscape only adds urgency and makes our plan even more relevant. In this environment, we will focus on managing the variables we can control. I will be expanding the scope of Project Cutting Edge and expect to deliver incremental EBITDA savings. We will keep you updated on the progress achieved on this important initiative. Recognizing the uncertain macro-outlook as well as our intention to drive incremental savings under Project Cutting Edge, we continue to expect a flat EBITDA performance with significant improvement in free cash flow from operations in 2025. And 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 our prices for our products. And 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. [Operator Instructions]. And the first question comes from Adrian Huerta from JPMorgan. Adrian?

Jaime, first of all, congrats on your new role and best wishes. And I mean you spoke a lot already about this organization transformation and things that you would like to focus on. What other details can you give us in terms of, let's say, for example, first, on the cost side on this program that you guys released at the end of the fourth quarter? Could we say that, that is just the beginning of even more potential achievements in terms of cost reductions as the year progresses? Is that something that you want to look into detail, understanding the big opportunity that the Company has to reduce costs and enhance margins? And then as the year goes out, how can we think about your agenda in terms of what you would look in terms of geographical mix and investments? And I am assuming that these three things are -- there are key three things that you're going to be focusing on, unless there's something else that you would like to add.

Adrian, thank you for congratulating me. Good talking to you. I hope that you're doing great. Regarding Project Cutting Edge, the answer is yes. Beyond what we were working on, mainly significant savings around supply chain network, logistics, that includes freight on procurement, right? I'm also looking at incremental savings by reducing materially overheads. Basically, after deleveraging and after achieving great milestones, most of our past strategic initiatives, we can now move on and do many less but very relevant things with many less resources. And that's what we're planning to do. We will be empowering our regions to deliver significant improvements to margins, looking at every part of our portfolio, making sure that every asset in our portfolio delivers ROCE above WACC. I'm planning to, together with some of my peers, to engage very close with the regions in two performance reviews every year in which we will talk about margin expansion, operational efficiency and much higher free cash flow conversion rates. So yes, Adrian, do expect that we're working on incremental structural cost savings by reducing materially overheads. And that -- it means overheads across the whole portfolio, not just corporate in central. So that was your first question. And could you remind me the second question, Adrian? Sorry about that.

Yes. The second one was also within those things that you're going to be focusing on. What -- and how soon we could expect also changes -- not changes, more activity regarding the geographic mix that you have and investments?

Yes. Okay. On geographic mix, we will continue to focus on Mexico, the U.S. and Europe, as we've done so far. The difference might be that, whether it's emerging or a developed market, we're going to be focusing relentlessly on improving free cash flow conversion from every asset we operate. And we're going to be optimizing CapEx to reduce it by either improving pieces of our portfolio to the point that they should deliver a significant free cash flow conversion on a ROCE above WACC or otherwise. If it's worth more to others, we might see some further divestments. So, we're going to be looking at that, and we're going to be working a lot on operational excellence, which means recovering competitiveness, being very agile and with a very competitive cost structure. I hope I have answered your question, Adrian. Thank you.

You did, Jaime.

And the next question comes from Francisco Suarez from Scotiabank. Paco?

Congrats, Jaime, for the new role. The questions I have is actually a follow-up on Project Cutting Edge. To me, it seems that it's far more than just a cost-cutting reduction program, and it is about more aligning the entire organization with investors and your overall new strategic objectives. If the answer is yes, can you provide more details on how you expect to change the entire organization in ways that it could be better aligned with what investors care about, and if possible, to add any specific KPIs that you have in mind to -- for these efforts?

Yes. Francisco, thanks for your question. The answer is yes. And what we're planning to do is to introduce EBIT free cash flow conversion on ROCE over WACC. And we're going to be trickling down these KPIs to every P&L owner in the organization. And we're going to be relentlessly reviewing them in these performance reviews that I will be doing with my peers twice a year across the portfolio. In addition, in the semester of the year, planning to review executives' compensation to align those with these additional KPIs, Francisco. So, I hope that I have answered your question.

This is perfect. Congrats again.

Thanks for that, Paco.

And the next question comes from Gordon Lee from BTG Pactual. Gordon?

Gordon, where are you?

I'm not sure he's on the call. So maybe we will move on and come back to him if we can reconnect. The next question comes from Paul Roger from BNP Paribas via our webcast. Could there be any change in strategy regarding Urbanization Solutions under new leadership, maybe expanding into light side verticals, for example?

Thanks, Paul, for the question. The way I look at Urbanization Solutions is as follows. I do see certain verticals with great potential to provide sustainable unprofitable growth in our portfolio. I see great opportunities in Mexico, in the U.S. and in Europe. I'd like to be more exposed to the innovation industry and not just new construction. And I like the verticals where we can achieve significant operating synergies, both by vertically integrating further into cement, aggregates and admixtures through those Urbanization Solutions businesses, but also achieving synergies by market segment and customer segment with cross-selling opportunity. Personally, I like motors, stockers, renders, installation and is cretes for flooring solutions and also circularity, particularly in Europe. So, the conclusion is we will continue responsibly deploying capital to grow our urbanization solutions businesses, but we were going to do it with very focused strategy around those specific verticals. And I repeat Mexico, where we have a very strong customer base, the U.S. and Europe. And yes, it includes, therefore, light side solutions.

Thank you, Jaime. I'm going to try one more time to see if Gordon can hear. Gordon, he's actually on the line. So, Gordon, are you there? And if not, I'll read his question.

I'm here. Can you hear me?

Yes.

Yes, Gordon, I can hear you.

Okay. Perfect. Super. Well, first of all, Jaime, let me again echo congratulations for your new role. And obviously, my best wishes, very exciting. I have a very quick question, going back to your sort of the priorities you mentioned at the beginning of the call as you take over the new role, but focusing a little bit more on the financial/capital allocation side of things. I was wondering if you could tell us where share buybacks rank in your list of capital allocation priorities and whether we can expect CEMEX to be more aggressive on that front going forward given the stock's current valuation?

Gordon, thanks for congratulating me. The straight answer is that share buybacks is in our tool kit. The shareholders' general meeting approved a program for up to $500 million. And as part of our capital allocation, I see three main buckets. I see opportunities to continue deleveraging because we can save materially interest expenses and boost free cash flow conversion. So that's one. Number two, I do want to enhance shareholder returns with progressive dividends, combined with share buybacks when they become opportunistic and at the right time. And third, we don't want to miss opportunities for growth through a very responsible accretive to free cash flow, small to medium-sized acquisitions in the U.S. mainly. So, the answer is yes, share buybacks is in our tool kit. Having said that, I also want to share, Gordon, that in this uncertain macro environment, I do want to preserve cash in hand and definitely continue paying the principal of our debt to lower interest expenses. It makes a lot of sense. And finally, we're walking away from strategic CapEx. We've done enough. I will be working with the team to relentlessly make sure the incremental EBITDA and free cash flow from current strategic OpEx spot line meet our targets over time. That doesn't mean that we wouldn't approve any strategic CapEx, but we're now shifting from strategic CapEx to other uses of capital. So, I hope that I answer your questions, Gordon.

You did, Jaime.

Thanks, Gordon. And the next question comes from Anne Milne from Bank of America. Anne?

Jaime, yes, I will also congratulate you on the role. I've known you for many years in different functions. It's very nice to see you in the CEO position. My question is on the financial side. Now that you have called the [9 and 1/8] perps, you haven't called the [5 and 1/8]. Obviously, it has a low coupon. Maybe you could just walk us through a couple of things on the financing side. I assume that you will pay down the other perpetual, at least by the call date, if not sooner, just because it is expensive -- well, it's not so expensive, but it doesn't give you any sort of equity treatment. And then just your thoughts on delay doing a new perpetual without the penalizing language going forward and if you have any other plans on doing anything else on the financial side this year?

Okay. Thanks, Anne. I will ask Maher to answer your question. Please, Maher.

Thank you, Jaime. So, let's go through all of the questions in series, right? I mean our biggest concern is to reduce interest expense. As you know, if we take a look at our interest expense, plus the coupons on the subordinated notes, we're probably using about 1/4 of our EBITDA to pay interest. So very importantly, during the year, we will continue, as Jaime said, to the extent there are other opportunities to do anything else, to deleverage, to continue to deleverage and reduce our interest expense. The change in ratings methodology from S&P definitely gives us -- as you know, gave us an opportunity to call the notes at 101. Currently, the -- we do see the perpetual notes as part of the capital structure of the Company for the foreseeable future. So, we will be monitoring the markets to renew the [9 and 1/8] definitely at significant savings from what we had before. The -- just to remind the audience, the coupon is [9 and 1/8], and we bought it 101. So, the other perpetual, frankly, today is trading at below par and would be expensive to call. And so, for the time being, I don't anticipate that we would do anything on that. And then we are working on some other financings in euros that may enable us to reprice or extend some of our euro-denominated outstandings that we can manage during the course of the year. Now in terms of the call of the [indiscernible [9 and 1/8], we used a little bit of cash and some of the revolver during the quarter. But frankly, that was just because of seasonality. Pretty much now, it's all cash essentially. And so, we're monitoring the market with a view to potentially refi-ing that towards the end of the year. But we're not in a hurry. I mean we're patient, and we're monitoring the markets to see what we can do in terms of our financial strategy.

Thanks, Maher.

Okay. And just -- can I just ask a clarification? On the purchase of the -- or the repayment of the ERPs, you said you used cash and some revolver but that the revolver is due to seasonality. Has that been repaid now? Or will it be repaid in the near term?

Yes, exactly. Yes. Yes, exactly. It was just intra-quarter. And so now we're kind of back to pretty much no drawn amounts under that.

And the next question comes from Yassine Touahri from On field. Yassine?

Again, congratulations, for your new position, Jaime, and best of luck for the future. My question would be on your peers, Holcim and Hidden Materials are targeting EBITDA to free cash flow conversion rate above 50%. When I'm looking at your 2025 guidance, it suggests less than 25%. So, my question is, do you believe that CEMEX can achieve best-in-class conversion -- cash conversion in the coming years? And if so, what would be the level of cash financial expenses and strategic CapEx that you would target midterm? And also, is your higher exposure than peers to ready-mix increase a problem or difficulty to achieve a better cash conversion?

Yassine, thank you so much for congratulating me. Let me respond to your first question. That's exactly what I'm doing right now, benchmarking to those who are achieving better metrics. And our target is to at least meet the best in class. I do believe that we can achieve best-in-class cash conversion in the short to medium term. Now what are the drivers? Number one, we're going to be working to increase EBITDA. That's going to happen because we're going to see in the midterm after the macro uncertainty goes away, a recovery of volumes in many of our markets. And that will boost operational leverage. Second, we will also benefit from incremental EBITDA and free cash flow conversion from -- on free cash flow, sorry, from our strategic CapEx that's undergoing right now from our top line, those at a steady state to generate around $0.68 million of incremental EBITDA with solid free cash flow as well. So those are two factors. The third factor is that we're going to be reducing strategic CapEx, and again, focusing on realizing the committed incremental EBITDA and free cash flow from the ongoing top line. Fourth, we're going to be doing portfolio management from a ROCE to WACC point of view, meaning that assets that do not deliver a ROCE above WACC. As I said, target's top down for every asset in the portfolio and provided that it is worth more to others would go away. We will be working relentlessly, therefore, to improve margins and return on asset. And finally, regarding your question about ready-mix concrete, we are -- as we did in the U.S., I think in the U.S. is a good template because there, we exited by divesting and/or shutting down but divested some ready-mix positions that although contributed for vertical integration, we could achieve that vertical integration through other means. Being a long-term supply contract or a joint venture would retain a minority holding. So, as part of our performance reviews across our portfolio, we are revisiting our ready-mix concrete positions. And wherever we think that they wouldn't achieve our ROCE-to-WACC metrics we would take action. So, the overall answer is we do have the -- we do know what we need to do, and I do believe that we can improve our free cash flow conversion, meeting those that are today generating more. I hope I answered your question.

Okay. And then the next question comes from Jose Espitia from BBVA. We might have lost him. So let me move on to the next one. And the next question comes from Alejandra Obregon from Morgan Stanley. Ali?

Jaime, congratulations on your new position. My question is a little bit related to all the previous ones. As you put together -- you mentioned Project Cutting Edge, cost savings, free cash flow generation and initiatives and above, WACC returns. My question is a little bit perhaps on a horizontal view of that. Where do you think, from a regional perspective or perhaps from a product perspective, you're going to get to see more benefits from all the strategy? Where do you see more opportunities as you do perhaps an early assessment of where things are today?

Thanks for the question, Alejandra. First of all, what are the main legs, if you allow me to use that expression, for Project Cutting Edge? First, supply chain optimization. That's -- you're going to see improvements, particularly in the cement, and potentially aggregate business. We have another pillar, which is fuel sourcing. That's going to be primarily cement-driven. We do have a material improvement in operational efficiency in the U.S. That's something that we've been working on. That also applies to cement. So far, we've -- the team did a great job improving operational efficiency by 5 percentage points year-over-year in 1Q at 25. Then you're going to see procurement savings, and those are targeting all third-party addressable spend. So that cuts across not just for cement but also aggregates, ready-mix across the Company, then do expect a material reduction on overheads and that targets across the board. And finally, as we revised our ready-mix network, do expect some enhanced margins in the ready-mix business. That's how we're looking at it. I hope I answered your question, Alejandra.

You did. Congratulations again on the role.

Thanks, ma'am.

Thank you, Ali. The next question comes from Ben Theurer from Barclays. Ben?

I'll just follow suit, Jaime. Congrats. Best of luck in your new role as CEO. So, I wanted to follow up, I mean, taking off the advantage that you were in charge of the U.S. business in the past. You've been very detailed in terms of some of the issues in the first quarter. So wanted to understand what you're seeing in the U.S. market and the three main buckets of demand, i.e., infrastructure, but also you flagged industrial, commercial, and the softness in housing. How much do you think is already related to the fear of a potential slowdown in economic activity? Or how much of that is yet to come? And if you've seen any improvement in April versus what was clearly a challenging first quarter?

Okay. Thanks, Ben, for congratulating me and thank you for the question. The first quarter in the U.S. was pretty slow. Indeed, the weather was very difficult, and it even affected the states such as Florida with heavy snow. We have seen since January, an increased quarter -- sorry, month after month, so sequentially, of daily sales across cement and ready-mix and also aggregates because of much better weather in Florida. Therefore, I can confirm you that we've seen that increase month after month. So, it's not just seasonality of winter, but also, we saw it on better daily sales, and that is encouraging. We still see a robust infrastructure spending, and we see more projects coming along. According to our data, we think that only 35% of the funding from the infrastructure bill has been deployed. And I think that the best is yet to come, probably picking up, what, maybe in 2026. But we do see a strength there. We also have a pretty solid backlog in ready-mix, and we're vertically integrated upstream with aggregates and cement. And the backlog in ready-mix is resilient, particularly in industrial and heavy commercial. We're doing data centers, second phases of semiconductor facilities. And we have also a lot of work around Cape Canaveral. So, the data centers, the industrial and heavy commercial are pretty resilient. Where we see weakness is in residential, both multifamily and single-family homes. Let's see what happens with multifamily after dropping quite significantly in the last 18 months and see if it behaves on anti-cyclical, right, to a worst single-family home environment because of lack of affordability because of high mortgage rates. So, the weak segment is indeed residential. That's how we see things then in the next months. Obviously, we do want macro uncertainty to disappear as fast as possible so that investors can continue and resume some of their investment projects that were planned that, indeed, some of them were put on hold because of uncertainty. I hope I answered your question, Ben.

Yes, you did, Jaime.

Thanks, Ben. The next question is coming from Carlos Peyrelongue from Bank of America. Carlos?

My question has been answered, but I want to thank Jaime as well on the new position, and best of lucks.

Thanks, Carlos.

So, I think we have time for one last question, and it's coming from Jorel Guilloty from Goldman Sachs. Jorel?

Congrats, Jaime. So just wanted to focus a little bit more on the near term. So, we're nearly about a month from the initial tariff announcements that came on and came off. But just wanted to get a sense of how this uncertainty might be impacted impacting the flows that you're seeing for cement imports. It can be at an industry level, it can be at your level, but just wanted to get a sense if you're seeing any changes in how flows have been changing by country of origin. And also, you mentioned that you could flex your imports from Mexico, but I just wanted to get a sense of how much of your imports Mexico can address total imports and which states would be impacted. Those are my questions.

All right. Jorel, thank you so much for your question. Overall picture, if the targets were confirmed 90 days -- in 90 days, as far as I know, there is some sources such as Vietnam, for example, that would be subject to 46%, I think it was, and obvious Chinese, but there are no Chinese imports into the United States right now. And then the rest would be 10%, excluding imports from Canada and Mexico that are part of the free trade agreement. So let me start with the West. If those -- if that 46% tariff was confirmed, we would be ready to materially increase our price through a surcharge, the tariff surcharge. We're familiar with this type of situations. We lifted back in 2022 with a hyperinflation, when we faced the $60 per ton landed incremental cost in a very short time. And we were able to increase prices to more than offset that cost, preserving margins. In the West, most of the cement imported comes from Vietnam. Therefore, I do expect to be able to introduce that surcharge. And we've already communicated that to our customers. Having said that, regarding the West, again, because we didn't -- we -- last year, we decided not to walk in all imports we needed for the year. Why? Because we wanted to keep flexibility on our ability to switch sources. And that allow us to rely more on our Mexican network, both maritime and rail, to tap the West using our cement, which is covered by the free trade agreement. Therefore, we can do that and cover a lot of our needs for the West replacing Vietnam inputs. Now if you look at the East, Florida and the Gulf Coast, there, we -- there are some industry players who might be importing Vietnam most of the sourcing comes from Turkey, Saudi Arabia, in some European countries, particularly maybe Greece, but the largest player is Turkey. And there, the tariff is 10%. What I can tell you is that we have already communicated to our customers that should those tariffs be implemented, we would be introducing a surcharge immediately to pass along to consumers that cost increase. Having said that, we do have flexibility because we didn't fix costs for everything we need to input. And therefore, we are planning to leverage both rail out of Torreon plant and maritime out of our East Mexican capacity to displace the sources that would be subject to 10% import tariffs. And finally, we do have -- we own two vessels that can do those planes effectively. And finally, the great news, which is that we are improving operational efficiency in the U.S., as I said, 5 percentage points year-over-year. And that means that we're producing more cement locally. We do plan to replace inputs. So, I think that we are in a good position to navigate current uncertainty on tariffs. I hope I answered your question, Jorel.

Thank you for the color.

Thanks, Jorel. We appreciate you joining us today for our first quarter results. We hope that you'll come back again for our second quarter 2025 webcast on July 24. If you have any additional questions, please feel free to reach out to Investor Relations. Many thanks.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.