Cementos Argos S.A.

Good morning, everyone. Thank you for being here with us today to discuss our third quarter results. My name is Carolina Velasquez. I am Cementos Argos Investor Relations Officer, and I will be hosting today's call. On the call today are Juan Esteban Calle, our CEO, Felipe Aristizabal, our CFO, Marisabel Echeverry, the VP of Legal Affairs, Carlos Yusti, the VP of the Columbia Division, and Gustavo Uribe, the leader of Central America. First, I would like to ask you to carefully read the legal disclaimer that is currently being projected on the screen, which is also available on the presentation that is posted on our website. Please consider that all the discussions of the financial and operational results held during the call will be based on the adjusted figures, excluding non-recurring and non-core operations. For a detailed reconciliation of the adjustments, please refer to the annexes of our presentation. Today, after the initial remarks, there will be a Q&A session. If you have a question, please raise your hand by pressing the icon at the bottom of your screen at any time during the conference. We will record this session and upload it to our webpage. It is now my pleasure to turn the call over to Juan Esteban.

Thank you, Carolina, and welcome to everyone joining us today. I would like to begin by highlighting three important developments during the quarter. We delivered strong operating results with volume growth across all of our operations thanks to improved market dynamics, especially in Colombia, and broad-based EBITDA and EBITDA margin expansion driven by the disciplined execution of our pricing strategy and efficiency programs. This position is on track to achieve our 25% margin target one year ahead of schedule. Second, we made significant progress in our growth strategy to re-enter the U.S. market with key achievements, including operational readiness for the initiation of aggregate shipments starting in November and the securement of two additional port positions on the U.S. south-eastern coast, strengthening our logistic capabilities for this strategic market. Third, on September 30, we held an extraordinary shareholders meeting where a $230 million share buyback proposal at fixed price was approved. The funding for this distribution primarily comes from the interest income generated by the proceeds obtained from the divestment in summit materials completed earlier this year without compromising our growth strategy. These accomplishments underscore our commitment to sustainable growth and long-term value creation. Now, I would like to invite Felipe to discuss further the execution of our spring program.

Thank you Juan, and good morning everyone. Before diving into the execution of our flagship spring program, I'd like to highlight some of the key metrics that reflect the strength of our share price performance. This year has marked a historic high in shareholder distributions, combining dividends, Grupo Suarez share spinoff, and buybacks to deliver a total return of 25%. The implied share price today stands at over 14,000 pesos per share. or five times our starting point in 2023, underscoring the value we've created over this period. Also, our analyzed three-month average trading value ratio increased from 10% to 27%, reinforcing the liquidity and attractiveness of our stock. We are highly focused on committed to gallery creation for our shareholders, with significant progress on each pillar of the Spring 3.0 program as follows. With respect to our first pillar, in terms of financial results, we are encouraged to share that we are on a solid path to achieving our guidance of 25% EBITDA margin one year ahead of time, as we are already at 24% on a year-to-date basis. This was possible thanks to disciplined pricing execution and the implementation of efficiency initiatives across all our geographies that included, among others, the resizing of operations and overhead. Furthermore, our LVM return on capital employed reached 15.7%, which surpasses our end-of-year guidance range of 14 to 15%. Part of the second, third, and fifth pillars aim at boosting the TSR via distributions to our shareholders, and as Juan just mentioned, to date we have formalized total distributions for 2025, totaling 3.5 trillion pesos, representing a 25% yield. These distributions include 1 trillion pesos of ordinary and extraordinary dividends. 1.5 trillion pesos represented by the Grupo Suárez Spanoff and close to 1 trillion pesos represented by our Ongoing Sure Buyback Program and Recent Extraordinary Buyback. Regarding our Ongoing Sure Buyback Program, we have executed 74% of the 500 billion pesos authorized under the current phase, equivalent to approximately 370 billion pesos. Beyond the scope of Sprint 3.0 and as part of our broader shareholder distribution strategy, we are successfully completing this week a $207.3 million share buyback, funded by the proceeds from the divestment of our U.S. operations. This transaction is being executed at a fixed price of $13,659 per share through an independent offer mechanism. Importantly, this distribution represents less than 10% of our cash reserves and does not compromise our robust financial position or the strategic redeployment plan outlined in our growth roadmap. Regarding our fourth pillar, we remain highly optimistic about the inclusion in the MSCI Emerging Market Index in the near future. Notably, our 30-day average trading volume has increased tenfold over the past two years, a clear reflection of growing investor interest and market visibility. Finally, under the sixth pillar, first strategy, focus on growth, we've made substantial progress in strengthening our aggregates platform, with a clear emphasis on product quality and logistics, as previously mentioned by Juan Esteban. We have successfully initiated commercial operations and have made relevant progress on building the production and logistical capabilities needed to support the business plan. As part of our reentry strategy to the U.S., we reiterate our goal of organically generating approximately $200 million in EBITDA by 2030 with an investment of less than $500 million. In parallel, Our inorganic growth strategy includes a series of volatile acquisitions aimed at reinforcing our local presence in the U.S. and unlocking synergies through integration of the Axe platform. It is also important to add that we are temporarily investing the proceeds of the divestment through a number of globalized managers in low-risk liquid investments. We expect to generate close to $100 million of interest income by the end of 2025. To conclude, I'd like to reinforce that we are executing our strategy with discipline and remain firmly on track to achieving the objectives of each pillar of the program.