Investor Update

Dec 3, 2020

Slides

Good morning and welcome. My name is Lucy Rodriguez and I am the Head of Investor Relations for CEMEX. We are pleased to be with you today for our very first Climate Action Panel. In September of this year, we rolled out our medium term strategy, Operation Resilience, in which sustainability assumes a leading role and achievement of our 02/1930 carbon goal is a key pillar. This event stems from the escalation of climate action within our corporate priorities as well as the groundswell of interest in sustainability we have seen from the financial community since the beginning of the year. We intend for this event to be the beginning of a robust dialogue with the market around sustainability at CEMEX. We have with us today Juan Romero, our Executive Vice President of Sustainability, Commercial and Operational Development and a member of our Executive Committee. He is one of our most experienced operators, having managed, I believe, pretty much every region except for one within our operations. Most recently, he was in charge of the Mexico business. Juan brings valuable operational, commercial and strategic knowledge of the industry to the sustainability effort. Vicente Saicel is the Head of Sustainability at CEMEX. He is responsible for defining our global sustainability strategy and overseeing that initiative across all our business units. He represents the company at the World Business Council for Sustainable Development as well as the Global Concrete and Cement Association. We are also pleased to have with us today Davide Zandini, who heads CEMEX's global research and development effort out of Switzerland. He leads a multidisciplinary group of scientists and specialists that spearhead new technologies and solutions for the global building materials market. He is a civil engineer by training and has been with Cemex for over fifteen years. Juan will begin with a brief overview of our climate action strategy, followed by Vicente and Davide. The panel will then be available for your questions. You may submit a question using the Q and A option at the bottom of your screen. We ask that you identify yourself and your company along with your question. We also request that you limit yourself to one question. We will do our best to address as many submissions as possible within the time constraints. 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 other words, all references to pricing initiatives, price increases or decreases refer to prices for our own products. Without further delay, I am pleased to introduce Juan Romero, EVP of Sustainability Commercial and Operations Development. Thank you very much, Lucie. Good morning. Climate action is one of the biggest challenges in our times, and we support productivity action to achieve compliance with the Paris Agreement commitment and United Nations Sustainable Development Goals on climate actions. Sustainability as you know is one of our top priorities under Operation Brazilian, but it is not new to us. We have been focused on sustainability since 1998, and we play a leading role in our industry in this regard. We are a founding member of the cement sustainability initiative that was created in 1999. In 2018, we helped create the Global Cement and Concrete Association, a global industry platform to facilitate sustainable development of the cement and concrete sector under value chains. GCCA includes 40 of the leading companies in the world and offers a reseller development hub called Innovanti to accelerate global collaboration on cement and concrete. Vicente, who you will be hearing from shortly, has a leadership role in the GCCA, while David also did represent the seats on the steering committee of the InnoValley. And we have had success. So our effort to date, SEMES has reduced emission by 22% versus 1990 industry baseline. Concrete, which is typically the final product we deliver to customers in our cement value chain, plays an integral role in society. It is the second most widely used material in the world after water. They are not substitute for the key attributes of concrete, strength and resilience. Its key ingredient, limestone, is widely available in the herd class, which makes its unique strength quality support. While the world is reengineering itself on an extraordinary pace, we do not see disruption in the form of substitution for concrete in the foreseeable future. Rather, we see the more likely disruption occurring in the treatment and ability to contain carbon within the concrete production process, and we believe concrete will continue to have a critical role in a low economy cargo economy. In March, we rolled out our Climate Position Paper, in which we committed to a certified reduction in CO2 emission by 02/1930 and set an ambition plan to deliver net zero CO2 concrete globally by 2015. The tool to reach our 02/1930 goals are known to us. In fact, these are the same lever we have used to achieve the '22 reduction in addition today. Now it is simply a matter of accelerating our existing effort in Europe and replicating those efforts across all of our markets. As you will hear from the center, the price tag to achieve this goal is reasonable. Our team to hit the ambition of net zero CO2 Concrete is more challenging and much of the technology to meeting these targets is not yet developed. We have a national plan in place to test what we believe We have a separate excuse me, but I just have some problem here with my market. We believe products of carbon action will be competitive, as I said at the beginning. Our target for 02/1950 is an ambition plan. We have an action plan in place to place that we believe that our most promising solution will execute in a data plan via our research and development hub as well as a venture. We are working with partners across all industries as well as academia to tap into the latest innovation. And we are working alongside government and multilateral institutions to co finance much of the technology. In our industry, we have seen how quickly technology has evolved over time. Just look at the speed at which solar and wind energy as well as an alternative fuel has developed and are now able to compete with the cost of more traditional fossil fuels used in our industry. We strongly believe that the same will be true for our 2,050 carbon solutions. We believe progress on carbon action will be a competitive advantage both within the industry and versus other construction material. There will be a significant business opportunities in the transition to a low carbon economy and we intend to take full advantage of that. Indeed, we have found this to be true already in Europe, where we have been able to significantly reduce the fuel cost while addressing a pressing need of society and promoting sustainability. Vicente will go into more detail later in the presentation. We are covering in the climate challenge from a position of strength. We have been successfully navigating the carbon emission protocols in Europe since 02/2005. We expect that our other markets will model their own carbon regulatory framework at the development in Europe and our experience there will be an important competitive advantage. Our European operation leads the way for us in the carbon channel. By the end of this year, we expect the European business will reduce its emission by 35%, effectively reaching our 02/1930 goals, just ten years ahead of the consolidated company. In this, the 02/1930 target for our European business is 55%. We are fortunate in Europe to have a lot of inventory for carbon credits in order to last us through 02/1930 under current regulation that will help us transition to a lower carbon footprint. Our experience in Europe and the expertise we have gained, they will be redeployed across our global network. In some markets, the regulatory environment will need to evolve, but we do believe that this happened in not too distant future. And finally, but most importantly, climate action is the right thing to do for society and future generation. As such, consideration of carbon must be an internal element of everything that we do. In this regard, since 2016, we have started including carbon cost as a factor in our capital allocation decisions. We pride ourselves on building the future, and Climate Action is now part of that future. We intend to play a leading role in the industry in kicking this carbon at it. And now I will pass it over to Vincente to discuss carbon in our industry and our 23 goals in more detail. Thank you, Juan. Glad to be here and excited to present to everybody. First, I would like to quickly review the source of carbon emissions in our business. In the image, we are showing direct and indirect carbon emissions in our business. It includes Scopes one, two and three of CO2 emissions. Direct emissions are both related to our production process. Indirect emissions include those from electricity consumption, transport and supplies. 90% of our total emissions are in the cement business. 80% of these are direct emissions, out of which 60% are process emissions that come from decarbonization of limestone and 40% are emissions from fuel consumption. Our 30% target our thirty-thirty target, which I will explain in detail later, is focused on direct emissions in cement so we can have the biggest and most immediate impact. We also believe the most relevant assessment of carbon emissions for building materials should be done over the life cycle of a product. This is particularly important for concrete, which has a unique ability to absorb up to 25% of its embodied CO2 process emissions over its lifetime. As Juan mentioned before, we have set an aggressive 02/1930 goal for the 35% reduction in net CO2 emissions versus the 1990 baseline. These targets refers to direct emissions, which account for the large majority of the industry's footprint. We have been working to reduce carbon emissions since the late 1990s, and we have made significant progress. To date, we have reduced CO2 emissions by 22% versus the 1990 industry baseline. This has been achieved through our leadership position in alternative fuel use where we have the highest biomass substitution rate among global competitors as well as our recycling capabilities. We recycle waste from other industries into alternative fuels and raw materials, consuming 32x the waste that we generate and send to Landscape every year. Going forward, we are confident in our ability to achieve the 35% reduction by 02/1930. Given that the majority of levers to reach this target are existing technology that we have been using for many years. Europe has been our testing ground for these levers since carbon regulation came into place in 02/2005. As Juan mentioned, we expect our European region to reach the 35% reduction target by the end of this year and to achieve a 55% reduction by 02/1930. The work for 02/1930 lies in accelerating the adoption of these levers in Europe as well as in the rest of our regions. We have a detailed plan by plan road map to take us there. Under our road map, alternative fuels with high biomass content and zinc factor are the two most important levels, contributing about 65% of the reduction necessary for our 02/1930 target. We have some plants in Europe today for alternative fuel is above 80% of fuel mix. A reduction in clinker factor will also be an important contributor. We continue to source additional local cementitious materials with active properties, including porcelain and calcined clay. The remaining 35% will come from more recent technologies, which include a wider use of decarbonated raw materials, which reduce process emissions and the developments of new types of clinker that reduce both heat consumption and process emissions. I would also like to point out at the role of hydrogen as a fuel, which has great potential. We have used hydrogen in our plants in Europe with very promising results. We have found that it allows for higher alternative fuel substitution, and it can reduce heat consumption in a significant way. We are now rolling out this technology to all of our other regions. We not only have significant experience with the reduction levels, but we also have a very realistic road map that sets yearly targets on a plan by plan basis. And the cost to achieve our 2,030 target is manageable. Approximately $130,000,000 in total CapEx with most of this expenditure happening in the next five years. Finally, our road map has been validated by Carbon Trust, an internationally recognized consulting company that provides a rigorous third party assessment of carbon reduction plans. In their verification process, CarbonTrust assess the technology, the expected benefit of each lever on carbon reduction as well as the cost to implement the plan for its viability. I truly believe that we have the most proposed 02/1930 target and road map in our industry, and we are keeping track of its implementation closely. When looking at climate change, we have opportunities to generate relevant savings on the cost side of our business. Under European waste directives, we have been able to take our largest production cost, which is fuel, and convert it to an income stream in some European operations. In many countries in Europe, landfill and insemination of waste is extremely expensive or even prohibited. Given the high temperature of our kilns, we can burn municipal waste for energy. And in Europe, we are paid to do it. Coprocessing is a very efficient waste management solution and an important example of the simpler economy. We help society solve a complex environmental problem. Our unitary fuel cost in Europe has declined 53% since 2011, while alternative fuel usage has increased by seven percentage points. There are some countries within the European region today that actually have a negative fuel cost. I would include Poland, Germany and soon The U. K. In this category. Today, alternative fuels constitute 60% of our fuel use in Europe, thus we still have room to increase it further. Additionally, we expect to expand this opportunity to all of our geographies as country regulations in waste and CO2 evolve over time. This is already happening in countries such as Mexico and Colombia today. We also believe that there are significant opportunities on the revenue side in a low carbon economy. As an example, we have launched globally the Bertoa brand umbrella for low CO2 products. The first products were launched in the concrete business in Europe, and we are now quickly expanding to all other regions. This product line allows customers to customize the carbon content to meet their construction needs. With Bertoa Ultra Zero, we are offering for the first time to our customers a net zero CO2 concrete product. It is a CEMEX technology with geopolymers, which allows us to reduce up to 70% of CO2 emissions. For the remaining 30%, we provide a carbon neutral certificate through a complementary use of carbon offsets from reforestation projects. As Olivier will present shortly, our 2,050 ambition contemplates other solutions apart from carbon offsets to reach this net zero concrete. Importantly, the VERTULA line of product is a value added product that carries premium pricing. This offering has had a good reception from customers in several markets and is already being used in some emblematic projects, like the HS2 high steel railway in The U. K, which is the largest infrastructure project in Europe happening at the moment. We expect that the segment for low carbon building materials will gradually grow to become relevant, first in Europe and then in other regions of the world. Now I will pass the presentation on to David to discuss our two and fifty ambition. Thank you. Thank you, Vicente, and greetings to everybody. In continuation, I will highlight the key considerations and actions we're taking to achieve the 2,050 ambition, which is to deliver a net zero CO2 concrete in all products and solutions across the geographies where we operate. Going through the considerations, I would like to draw your attention to the fact that our 02/1950 ambition is based on concrete. Why concrete? Concrete is the product that is consumed by users, and the concrete production process affords more ways to deal with carbon. As Vicente mentioned, carbon concrete absorbs up to 25% of its embodied CO2 process emissions during its lifetime, an important CO2 mitigation feature of this construction material that should be underlined and taken advantage of. Unlike our 02/1930 goal, our 02/1950 ambition of net zero concrete requires work to be done on the technology side, and therefore, R and D and innovation are fundamental. Leverage to reach our 02/1950 ambition have been identified, but much of this technology is embryonic and currently cannot be scaled at a competitive cost. Given the research and development required for the 2,050 levers as well as the time period we are covering, these CO2 mitigation contributions are best estimates based on the current state of the art and may change in the future. To reach our 2,050 ambition, we continue to rely on further gains from the 2,030 levers we simply spoke about. The 2,030 levers should contribute about 40% of the carbon reduction. But where is the rest coming from? Carbon capture, utilization and storage is one of the most promising opportunities out there. Roughly one third of the emissions reduction for the 02/1950 emission is expected to come from carbon capture utilization and storage, but it's not enough. Further development is required on the concrete technology side, and it's going to be very important to develop novel binding materials with lower CO2 footprint compared to ordinary Portland cement and also develop a company admixtures that will enable us to use these novel binders, the development of products and processes that will accelerate the natural carbonation of concrete over its lifetime. The importance of the circular economy to reach our 02/1950 ambition cannot be overstated. While the percentage contribution for concrete is small, approximately 4%, we are not including important benefits from the circular economy in cement, which is part of the 2,030 levers. The contribution from concrete includes recycling of aggregates, recycling of concrete at end of life as well as improvements in the durability of the concrete. With the levers identified to reach our goal of net zero CO2 by 02/1950, we're investing across spectrum of technologies and managing the challenges to address the scaling of cost and cost issues. We're establishing alliances with industry, governments, NGOs, academia and in cross industries partnership among others. We're adopting an open innovation approach to foster creativity and technological breakthroughs. While we are experts on the cement process, there's a lot happening regarding carbon capture in other industries that we want to tap into. As you will see in the following slides, we're working with start ups that have experience in successfully applying carbon capture solutions in other industries. Additionally, we will we are also working within the industry. An example is Indovani, which is the industry think tank part of GCCA, and it's mandated to collaborate and identify key innovation areas for sustainability in cement and concrete. On the other hand, much of the research being done is on a bilateral as well as industry basis and relies on government funding. We have been active in both The U. S. And Europe in securing government funding for various projects. The role of governments in financing projects will be key in accelerating as well as validating the most promising technologies. Our investments in 2,050 technology are being executed by our R and D team as well as some extensions. Now as I indicated in the previous slide, these are the areas where we think technological developments will be the most critical for reaching our February '50 ambition, the carbon capture technologies that I mentioned in concrete and the circular economy. We're investing across our value chain and across multiple levers to achieve our ambition. To date, we have made roughly 30 investments through our R and D department and some expenditures. Under carbon capture, I point to LILAC, an example of an EU funded project where we're working with Heidelberg and key equipment manufacturers and Calyxt, who are the owners of the idea and the core technology, to develop a novel calcination technology that will facilitate and render carbon capture more efficient. Synhelion is another project in this category with the exciting opportunity to reduce emissions to zero. I will elaborate shortly on this. In the circular economy category, like to highlight the FAST CARB project, where we are trying to accelerate the carbon absorption quality of concrete that was discussed earlier by carbonating recycled concrete to utilize it as aggregates. In each of these projects, we're working with partners from outside our industry to facilitate innovation and quickly adapt it to our manufacturing process. R and D and some extent just work hand in hand to identify and critically review technologies, fostering alliances and promoting our open innovation approach. Now as I mentioned and as I promised, we're going to talk about the Synhelion project, which is a great example of capture utilization as well as the use of renewable energy source, which is solar radiation. Synhelion is a startup whose expertise is to convert CO2 and sunlight into fuels. The key breakthrough in Synhelion's solar receiver is actually Synhelion's solar receiver because it's possible to heat gases, specifically CO2 and water vapor, up to 1,500 degrees. And this is unprecedented. This is key for cement manufacturing. 1,500 degrees is a temperature high enough to burn raw materials to produce clinker. The solar heated CO2 and water vapor mixture substitutes conventional fuel. The gases exiting from the kiln are also used to decarbonate the limestone. The result is a gas mixture very rich in CO2 and water vapor. It's very easy to separate the water from the CO2, thus allowing for the capture of 100% of the CO2 emissions. Similion innovations include the technology to convert CO2 to green fuels. This thus allowing us to create value in the captured CO2. Such a technological development will allow us for us to close the carbon cycle. We are very excited to work on this project, advance it and bring it to the pilot stage by the end of twenty twenty one and early twenty twenty two. And then let's go back to Vicente to discuss climate disclosure. Thank you, David. We are leading the industry in climate change disclosure. We disclose on pretty much every standard investors refer to, the Task Force for Climate related Financial Disclosure, Sustainability Accounting Standards Board, United Nations Global Compact, CDP, GRI, etcetera. We have been recognized by CDP as a member of the AD East, which means we have the highest level of disclosure, and we are one of the two in the whole cement industry with this distinction. We make all these reports available on our website and transparent to all of our stakeholders. Very importantly, our key climate change related metrics are audited yearly by a third party, KPMG. The verification includes visits to our plants and a very thorough review of the soundness of our metrics. Regarding ESG performance evaluation, there is a lot of confusion out there because there are so many different reporting standards. We believe that with time, consensus will emerge and there will be consolidation. Disclosure is very relevant but is not enough. What is more important is moving forward and showing progress against our targets. And now I will leave you with Juan Romero as he will provide you the closing remarks for this session. Thank you. Okay. Thank you, Vincente. I would like to recap the most important takeaways from today's presentation. First, there are no substitute for contracts that offer a comparable strength across private. The challenge for the industry lies in finding the answer to deal with the capital emissions. We have already made significant progress, and we know we can do more. We have an aggressive 2,030 CO2 target that relies on technology and tools we know and have been using for the last twenty years. Our experience in Europe provides us with the blueprint for how we need to move forward globally. Our 2,050 ambition of net zero concrete is where we need additional R and D and innovation. While carbon reduction is a challenge, it has presented unique business opportunities in Europe today. We expect that this as well as new opportunities will be available in other geographies as we move forward on this challenge. By the view of our footprint and effort today, we are well positioned to succeed. We are working across industry and across the cement sector as well as with government and academia to develop solution to the scaling of carbon capture technology for our products. Our business has developed a quickly adopted breakthrough technology in the past, and we've kept every reason to expect that this time will be no different. We have always been associated with building the future, and we believe that the future is in a low carbon world. Finally, we are committed to kicking the carbon habit because it is the right thing to do for society and future generations. My apologies for the technical things that we have at the beginning. And now we are we will be happy to take your questions. Thank you very much. So just to remind you, you may submit a question using the Q and A option at the bottom of your screen. We ask that you identify yourself and your company along with your question. I'm going to take advantage of the mic and ask the first question. Juan, I think this is for you. I'm not letting you off the hook very easily. Can you talk about the commercial demand you are seeing for our zero to low carbon products under the virtual line, how do you see it developing across our geographical footprint? Okay. Thank you. I really believe that we are in the beginning of the demand of these kind of products. Just during the last five years, we have been contributing by using different products to help some people to reduce the or to to to make some sustainable construction. But maybe probably the main one is by installation and different other techniques that we have been using some different type of concrete to do these kind of things. Up to date, every day, more. We are seeing how our customer are looking for products that have a a producer due to footprint. And we have been responding to the market with our new products that we have been presenting during the last month. You know? The the demand for those products are starting to be much more relevant in Europe. It's it's probably where they are much more much more, I don't know, conscious of all the people is much more conscious there. The society is making more pressure to to the different institution to to reduce the the CO2 footprint. And maybe in in some countries like The UK, France, or Germany. You know? Up to date, the the monies have been probably mainly for Prados to build some iconic buildings or iconic construction that that up to date is that we're we're applying to to start this topic. But every day, we figure out that the customer are starting to be much more insight to to to find the different products to to see how they can be much more win, how they can reduce the the the footprint, the complete footprint for the social side of different hotels. No? And that's happening in Europe mainly up to date, and it is starting to have some other movement in other countries. You know perfectly that in The US, California has been always more advanced than the government stated in The US, and we have been working with some people in there. We are launching new products right now in California. And we have been starting to have some people interested to develop or to see or to understand what kind of product they can use to reduce the footprint in other countries, even in emerging market that is happening probably in countries like Mexico or or Colombia, I guess, only to to to to some contact. The the key question here is we we are at the beginning, and we are now even explaining to our customer because in many cases, they don't really know what it is available, how it evolves and different things. And I think that it's a matter of time to start to have much more people demanding those kind of product. Now it's as I said, it's very, very it's going very, very fast in June. I hope it will be happening in other countries. Great. Thank you very much for that one. I have a question from Vanessa Quiroga from Credit Suisse. When we look at CEMEX's per ton Scope one emissions, they appear to be slightly above your European peers, even though CEMEX's metrics in terms of kiln efficiency and usage of alternative fuels are better. What explains the discrepancy? Vicente, I think this might be for you. Yes, I can take it. Thank you very much, Lucy. Yes, I think the main explanation for that is factor. And within clinker factor, there's a geographical mix that can explain that. We are located in markets. Approximately 40% of the markets where we are or we operate are, let's say, not favorable for the use of cementitious materials in cement. In some countries like The U. S. And The U. K, there's a strong limitation for the use of cementitious in cement. And then in other markets, either there's not a lot of availability of cementitious materials or there are commercial practices that have gone for many, many years that favor type one and and not blended cements that cause the the clinker factor to be quite high. No? Countries like Spain, Czech Republic, then in Central And South America, Costa Rica, Panama, Jamaica, Trinidad, Tobago, etcetera. No? So so those countries that are not in favor of that, we are always working on how to change things. Of the examples that Juan was providing are going to serve us to educate customers when we start to launch and have a broader portfolio of low CO2 products, including cement. Of course, this will drive the segment for these products and need or the interest in products with additions. I think that will help us change. And obviously, in some other places, regulations and specifications for products, we also have to work on those and work with authorities to change the mindset and for them to create a more federal environment for a wider use of blended cements that will allow us to reduce our clinker factor in a significant way. Thank you very much, Vicente. Davide, I think I'm going to try to bring you into the conversation. Our next question comes from Francisco Chavez from DBVA. What role will your fourth core business, Urbanization Solutions, play in your climate change targets? Will this business help or make it more challenging the path to achieve your 02/1930 and 02/1950 goals? And can you share with us the role of prefabricated products within CEMEX's climate change strategy? Thank you for the question, Francisco. And, yes. So I think, know, our fourth core business, Urbanization Solutions, will definitely, reinforce everything that we have been talking about today. It's, you know, it's one of the, let's say, if you can look at it as a channel where we can actually, you know, provide our, you know, let's say, low CO2 footprint products and solutions. And if you look at the, you know, our core business of urbanization solutions, I mean, they have identified certain cities with high growth markets and, you know, we're developing products, you know, to meet the needs of those growing cities and especially the smart cities there to come. And what are some of the solutions that we're offering? We have first of all, we have, I think, a key differentiation with our admixtures business where we're developing technology chemical admixtures to actually be able to design the properties of the concrete solutions that we're providing. And a lot of those, you know, admixtures help reduce the CO2. And then, you know, we have, you know, a strong focus in circular economy. You know, part of the business is gonna begin with how do we waste management, how do we recycle a material. So there's a waste recycling platform in Paris that we have put in place. And we're gonna also, you know, start focusing on energy efficiency of buildings and be able to provide solutions that address that very important issue of energy efficient buildings because when you look at cities, I mean, 36% of this of the emissions is coming from buildings that are not really conformed with when it comes to energy efficiency. And that brings us to the precast now is that we're starting to get into the precast. Recently, announced WALEX, which is a joint venture between CEMEX and Aventia. And if you look at, you know, the particular type of technology that we're putting forth in in those Precast elements, it has to do with thermal insulation, and we're addressing that as well. And the whole, let's say, prefabrication and off-site construction is very sustainable resource management type of solution where you bring all the resources in one point and you're manufacturing and putting in place the elements then to be delivered on-site. So I think, you know, we are definitely reinforcing everything that we're doing with the urbanization solutions core business. And so I think, you know, it's going to even, I think, help channel everything that we are capitalizing in terms of our CO2 mitigation efforts into the market. Thank you, Vincent. Thank you, Davide. Sorry. I think the next question might be both for Vicente and Davide potentially. It's from Adrian Huerta from JPMorgan. Ready mix seems to be the low hanging fruit to reduce CO2 footprint as you can substitute the clinker with other binding factors into the mix. What are the sources of CO2 reduction in the cement business? Are there higher opportunities in specific countries? I don't know if David wants to address the ready part of that. I mean, I think that, you know, on the ready mix side, I mean, we, of course, you know, substitutes are for clinker is one option. And, of course, you know, the key always there is to being able to find resources that are available. But I think one of the important things that we're going to see in the future is that, you know, we're going to be able to tap into, let's say, thanks to technology and thanks to, you know, the developments that we're looking at, we're going to be tapping into additional ways to reduce the CO2 footprint of the concrete either by the clinker substitution or by, you know, introducing materials that somehow have a much lower CO2 footprint as compared to let's say what the substitutes that we're using today. So that's one means as we see moving forward. And related to cement and the opportunities to reduce emissions in cement, I would say that traditional levers still have a role to play in alternative fuels. We are globally at 28%. And as I and we as we talked during the conversation, there are countries and plants in semi geographies where we are above 80% substitution, and we know how to do it. It will depend on the availability of of the waste and and the regulatory framework that facilitates the whole process for it to for it to make it viable. So we still have a lot of of room to grow in alternative fuels. In timber factor, I I also explained that there are opportunities to work with customers, with authorities, with the market to push for more blended cements in many markets that today are not doing it. That has already been proved to be a good solution in many other places that we can take it there. And in addition to that, we have additional levers always innovating and always getting our hands in technology that we think that it works and that it's proven. There are new types of clinker that reduce heat consumption and also reduce process emissions. We can also use more decarbonated raw materials that will reduce process emissions in in our clinical production. So, actually, there's there's there's a lot of levers that we are putting together, and and it's just a matter to to push them and and also to work to create the market conditions and the regulatory framework that is required for this to happen at a bigger scale in all of our geographies across the world as we have been seeing that it can happen in Europe. Yeah. Just to maybe complement on the ready mix side, there's a couple of things also maybe that, you know, that, you know, as I mentioned during the presentation, I mean, the carbonation, the characteristics of of concrete and some just materials to be able to take in CO two is a very important feature that, you know, we plan to capitalize on and to be able to, you know, accelerate the process. And there will also get an important benefit. And I think, you know, what we're doing with VirTra and bringing in, you know, new binder technologies that can be clinker free can be also very important, we're exploring different options and also improving already on the existing, you know, products that we have today. Thank you both. We have a question from Francisco Suarez from Scotiabank. Some of the potential solutions may require partnerships with other companies in other industries such as steel and hydrogen driven solutions. Are you considering partnering with other cement companies or a company from another industry like cement or like other cement companies are doing? Sorry. Maybe, Davide, you want to start with that? And I don't know if either Vicente or Juan has anything they want to add there. Yes. So I think we are in the midst of, you know, discussions with with other industries. And and specifically, let's say, can give you an example where we're talking to industries where they have had already gone through, you know, the the carbon capture bit. Now they have applied certain technologies, and they they're even exploring new technologies. And in talking to them, you know, they're very interested in, you know, seeing what they're developing and evolving and improving for their industry and applying it to cement. So those conversations are taking place. We are indeed exploring, you know, and the key there is exploring the most, let's say, viable, most interesting and the experience of the companies that we're talking to. And then you've seen also throughout the the presentations that some start ups, you know, present some very interesting experience also in in other fields. You know, like the example that I gave from is, you know, they they are working, you know, with the oil and gas industry to actually use the CO2 captured there to produce fuels, and we're capitalizing on that as well. And as we move along, I think we're going get we're going see more and more opportunities. But we're being selective because also we want to, you know, focus on the technologies that are the most promising and the ones that we can, you know, readily adapt and capitalize on the experience from those partners. I would complement Darideth's response saying that we are also working with the cement industry in this effort. I think the cement industry has come together in certain developments of key technology. We are presently in the Inno Bandi Research Center, that is in the Global Cement and Concrete Association. We are a very active player in that. We think Inno Bandi will be a think tank where there's going to be a lot of collaboration happening in the pursuit of the most promising technologies. And, certainly, I think everybody is in the same line of thought, you know, that for some key technologies, it's in the best interest of the cement industry to come together and co develop. Yeah. And even what's even more interesting also is that Imovandi is today open its scope, you know, let's say its R and D scope, only just to the industry players. You know, so that's why we're collaborating and working with other industry players. But there are also, you know, equipment manufacturers, their admixture suppliers and other, you know, industries are being contemplated as as the network moves forward. So it's not, you know, it's not just close to the the cement industry, and that's, I think, very important, and we've seen that as being a very good, you know, approach. Yeah. It is clear to me that this is worldwide challenge. That means that the people is making alliances, and we are making alliances with different kind of companies or different industries. Also, with different companies trying to shift on the strength to develop the best technology for for maybe for carbon capture, that is the most challenge that we're having from now. At at the same time, that we are working together with some government institution and academia as not to to to progress as as soon as possible or to to to be ready as soon as possible to offer the different technologies that we class to produce the the carbon footprint. It's an open thing. I think every everyone is is already ready to to open the different alliances. Thank you, all three of you. We have another interesting question from Arnel Pinatel at On Field Investments Research. How do you educate clients in blended cement in The U. S, I. E, to use it in concrete instead of someone when they do their own mix at the concrete batching plant level? What is their incentive to switch? I think we are doing several things. First, on the cement front, there are limitations to to the use of of cementitious materials, but there are some that you can use. For example, the the use of limestone in subgroup, and and and it can happen, and and we are pursuing all the opportunities related to that. That also requires informing customers that we are now having a a more blended cement that is available for them. So that education process happens with product offering. I think that's one of the most effective things. Even if the market is not demanding it, you offer the product, and then you start to work with customers. And then you start to do demonstrations and pilot tests, etcetera, and and and you help to create that segment. No? In The US, the use of cement issues in concrete is happening, and it's happening for for many years. So so from that point of view, the that culture of using cementitious materials at the concrete site is is is very common practice. What we are doing there is also launching our Bertois concrete product line, and we are also going to contribute to make the end user, the final construction site aware that there is all these low CO2 products that can help contribute. And for example, when we add the possibility of a customer to get to net zero concrete by using some offsets, if if the technology or the of the material there don't allow to go all the way up to net zero concrete, we are going to offer that. And and for sure, in some places like California, where there's climate action and climate regulation in place, for sure, this is attractive proposition. But we expect that these offerings and these experiences that we have with customers, we can can help us to educate the rest of the market and together develop a very strong segment for low CO2 carbon products. That, for sure, will help The U. S. Progress in a new scenario that they are going into right now. I think it's a compliment what you said is that, you know, a lot of the things, you know, that maybe the other things that we're doing also in other regions, like for example, Europe, it will serve as part of the experience, part of the demonstration of how these new technologies, how these new ways of producing concrete can also be easily adapted to other markets. And we have had experience, you know, where, for example, in certain markets where it was not usual to introduce additions into the cement. And through our experience and through demonstrating, you know, that and validating that substitutions of clinker can be possible, slowly those markets change over time. So there's experience in the company of doing that. Just to complement David and Vincent, you know, with the launch of VirTra, we are ready to do that in The US right now. We are starting to to to some way give some information to our customer, not mainly in California. We said we have been making an extra effort because they are much more cautious today about this kind of thing, But we are attending to a part of the of The US. No? It is another time that we'll give them information. In some cases, they don't they don't really even know the what are possibilities because we are speaking about something that is happening in the market for for years, and they are are retreated to do this kind of thing. No? And they are not thinking about to do this kind of thing. But at the end of at the end of the equation, if we don't do something different as what we just said at the beginning, the the type one or something like that, having the possibility to do much more addition to the cement as limestone and different of it, the the equation at the end is exactly the same one because if you fix the the addition in the cement type or maybe in the in the concrete, at the end, the the two thing of the 20 mixes is continuing to be the same one. No? That's I don't think, you know, that that we need to to to be sure. I mean, in this regard is that we are taking to make sure the the the footprint in the revenues that we are selling in different in different countries, you because it's a it's a it's a valid in other places. No? But it's a matter of time. It's a market there are some markets that they are really working in this way for deals, and we need to, in some ways, help our customers understand different ways to work. Thank you. I think we have time for one last question. We have one, and please forgive me if I pronounce this incorrectly, from Saqar Agarwal from HSBC. And Vicente, I think that this is for you. You mentioned some plants in The EU have negative fuel costs. Can you please throw some light on how that is and if it could be replicated across other plants? And if so, by when? Yeah. That's a very good question. Yeah. We do have some plants in Europe that that have that. Some plants in in Poland, for example, where we have up to 90% substitution. What what they have done there is that, first, they have a very strong regulatory framework in place. Landfilling is very expensive, and it's even prohibited for some type of waste. That creates economic viability of diverting waste that is very expensive to send to landfill that can go into other places. So in that market, we are actually paid for burning municipal solid waste. It is also a business for the intermediary that is processing that waste. They are also successful companies that are working in that field. So you create new business opportunities for new players in the in the market, in the value chain. And when you create that virtuous cycle, obviously, we have all the incentives to do it. No? The the we get paid for that. And given the very high level of substitution that we have, which is at 90%, it is become now an income instead of a cost. No? So the whole fuel cost, which is one of our highest or or the highest element in our cost structure, goes down to zero and need all these parts of the equation and the puzzle, this can happen. And I think these examples in Europe, also in The UK and also Germany. So there there are more places. If if users use it, you do the same things that happened there, for sure, we can extrapolate to to other places. And by by the way, we make a big effort through the different industry associations to take experiences from Europe and and to take them to other parts of the world and then explain authorities in in many other geographies of how this regulatory framework has to be put in place for this to work in an ideal way and properly. Well, Juan, this and Dave Davide, I thank you for taking the time to speak with the financial community today. I hope this is just the first of many conversations that we'll be having. I would like to thank everyone in the audience for joining us for the Climate Action Panel. We hope that you found it informative, and we welcome further discussion on this very important initiative in the future. Many thanks, and happy holidays. Thank you. Happy holidays. Thank you. Happy holidays. Thank you. Goodbye.