Earnings call transcript: GCC’s Q2 2025 sees steady growth amid market challenges

GCC, S.A.B. de C.V. reported a modest increase in consolidated sales and a strong performance in the U.S. market during its second-quarter earnings call. The company highlighted a 7.7% growth in U.S. revenues, driven by increased cement volumes. Currently trading at $21.58, with a market capitalization of $162.86 million, GCC’s stock has shown resilience with a 15.35% year-to-date return, despite a 1.08% decline following the earnings announcement. According to InvestingPro analysis, the stock trades at a low earnings multiple, suggesting potential value for investors.

Key Takeaways

• U.S. revenues grew by 7.7%, bolstered by a 4.2% rise in cement volumes.
• The company reported a 67.7% increase in free cash flow.
• GCC’s stock price fell by 1.08% post-earnings.
• Full-year EBITDA is expected to decline by mid-single digits.

Company Performance

GCC demonstrated resilience in the second quarter of 2025, posting a 1% year-over-year increase in consolidated sales. The company capitalized on its strong presence in the U.S., particularly in Texas, where cement volumes rose by 4.2%. This growth was largely attributed to infrastructure and renewable energy projects. However, the residential housing segment faced challenges, with housing starts hitting a five-year low.

Financial Highlights

• Revenue: Consolidated sales increased by 1% year-over-year.
• Earnings per share: $0.22.
• EBITDA: $118.4 million, representing a 32.5% margin.
• Free cash flow: $48.6 million, a 67.7% increase.
• Net income: $73.5 million.

Outlook & Guidance

GCC revised its full-year guidance, anticipating flat cement volumes and mid-teen growth in ready-mix volumes. Cement prices are expected to remain stable, while concrete prices may increase by mid-single digits. In Mexico, cement and concrete volumes are projected to decrease by mid-single digits. The company also revised its full-year CapEx to $400 million.

Executive Commentary

CEO Enrique Escalante emphasized the company’s experience in navigating volatile conditions, stating, "We have successfully navigated volatile conditions before, and we are drawing on this experience now." CFO Maik Strecker highlighted the focus on operational efficiencies and cost optimization, noting, "We are laser focused on what we can control: operational efficiencies, cost optimization, and disciplined capital deployment."

Risks and Challenges

• Residential housing market pressures: With housing starts at a five-year low, GCC faces challenges in this segment.
• Margin pressures in Mexico: The company discussed ongoing margin pressures in its Mexican operations.
• Softer demand in the oil and gas sector: This could affect GCC’s sales and profitability.

Q&A

During the earnings call, analysts inquired about the stability of the wind farm projects and the Odessa plant expansion strategy. The company addressed concerns over pricing challenges in the U.S. market and explained its approach to managing these issues effectively.

Full transcript - GCC SAB de CV (GCC) Q2 2025:

Conference Operator: Good morning and welcome to GCC, S.A.B. de C.V.’s second quarter 2025 earnings results conference call. Before we begin, I’d like to remind you that this call is being recorded and that all participants will be in the listen-only mode. Please also note that a slide presentation accompanies today’s webcast. The link is available on the company’s IR website at gcc.com. I’d like to turn the call over to Sahory Ogushi, Head of Investor Relations. Please go ahead.

Sahory Ogushi, Head of Investor Relations, GCC, S.A.B. de C.V.: Good morning everyone and thank you for joining. With me today are Enrique Escalante, our Chief Executive Officer, and Maik Strecker, Chief Financial Officer. The earnings release detailing this quarter’s results was released yesterday after market close and is available on GCC’s IR website. This conference call is also being broadcast live within the investors section at gcc.com, and both the webcast replay of the call and transcript will be available on the same site approximately one hour after the end of today’s call. Before we begin, I would like to remind you that our remarks today will include forward-looking statements. Actual results may differ materially from those contemplated by this forward-looking statement.

Maik Strecker, Chief Financial Officer, GCC, S.A.B. de C.V.: Factors that could cause these results to differ.

Sahory Ogushi, Head of Investor Relations, GCC, S.A.B. de C.V.: Differ materially are set forth in yesterday’s press release and in our quarterly report filed with the Mexican Stock Exchange. Any forward looking statements that we make on this call are based on assumptions as of today and we undertake no obligation to update this statement as a result of new information or future events. With that, let me now turn the.

Maik Strecker, Chief Financial Officer, GCC, S.A.B. de C.V.: Call over to Enrique.

Enrique Escalante, Chief Executive Officer, GCC, S.A.B. de C.V.: Thank you, Saul, and good morning, everyone. This year has brought its share of complexity. Yet, despite persistent inflationary pressure, evolving trade dynamics, and the depreciation of the Mexican peso, we continue to execute with discipline and deliver. A 1% increase in consolidated sales driven by a 7.7% increase in U.S. sales, which totaled $272 million. We have successfully navigated similar environments in the past, relying on our operational agility, disciplined execution, and long-term strategic focus. This foundation continues to guide our decisions today. The second quarter of 2024 set a high benchmark with record margin, and while the margin contraction was more pronounced than initially projected, we are taking strict and targeted action to strengthen our position for the second half of the year.

It is also important to note that the second quarter 2024 included several one-off benefit and timing effects that are not recurring or directly comparable in 2025. Among the most significant were a $4 million downward adjustment in natural gas costs, a higher proportion of lower margin real estate sales for development this year, and unscheduled outages at our Odessa and Rapid City plant. In addition, the depreciation of the Mexican peso contributed to a more difficult year-over-year comparison. On a like-for-like basis, EBITDA for the second quarter of 2025 declined by 1.5% compared to the same period. Last year, we launched a company-wide cost and expense optimization program designed to adjust our cost structure in line with current market dynamics, improve internal efficiency, and protect margins without compromising service, safety, or long-term growth.

The program includes targeted actions across our operations, logistics, and support functions with clearly defined priorities and accountability to ensure we see a meaningful impact in the second half of the year. As part of this effort, we committed to a $12 million expense reduction, of which $5 million has already been realized. The remaining $7 million is on track for the second half. This is supported by the strength and commitment of our teams. We continue to respond with resilience, agility, and a clear focus on execution. That’s why our priorities around safety, development, and workplace culture remain unchanged. As part of our People Pillar structure training program, 13 technical courses have been completed year to date, with 19 additional sessions currently underway across our cement plant. Several of these courses are being led by former employees, helping transfer valuable operational knowledge to the next generation.

Our commitment to a world-class safety company remains at the core of our operations. Our safety performance continues to improve. During the first half of the year, we achieved a 37% reduction in recordable incidents, including lost time incidents, compared to the same period in 2024. This quarter, we partnered with Wolters Kluwer and Avetta, a leading software platform specializing in health and safety, sustainability, and environmental management, to upgrade our safety management system. This platform will enable us to standardize processes, better integrate and analyze information, and enhance decision-making across the organization. Our culture of progress continues to be recognized externally. In the second quarter, GCC, S.A.B. de C.V. was ranked number 26 in the category in the 2025 Great Place to Work Survey in Mexico, a meaningful acknowledgment of the strong workplace environment we continue to build.

Turning to our planet pillar, the second quarter reflected steady progress on our sustainability commitments. Clean fuel usage increased, notably supported by higher natural gas consumption and greater alternative fuel substitution, particularly at our Samalayuca plant. These improvements are the result of ongoing investments to expand fuel flexibility across our network. We currently have several projects underway to strengthen our alternative fuels program. This includes investing in a tire shredding operation at our Rapid City plant and a railroad-type chipper for Pueblo, both of which will support continued growth in our fuel substitution rate. We also increased the share of blended cement in our product mix, driven largely by pozzolanic cement production at our Tijeras cement plant. Blended cement now represents 78% of our total cement volume, up 3.5 percentage points from the second quarter last year.

As a result, we achieved a 1 percentage point reduction in our clinker factor and a 3.7% year-over-year reduction in Scope 1 CO₂ emissions. As part of our strive to further reduce our clinker factor and expand our low-carbon product portfolio, we are also advancing research into the use of calcined clays as supplementary cementitious materials at several of our plants, with a pilot project underway at the Chihuahua plant. All of these actions reflect our broader sustainability strategy, which we detailed in our 2024 Integrated Report released during the quarter. The report highlights our broader ESG priorities and strategy with transparent disclosure of our commitment and progress beyond what we have covered here today. Finally, moving to our profit pillar and market performance in the U.S., cement volumes grew by mid single digits while concrete operations delivered strong double-digit growth driven by renewable energy projects.

Our ready-mix operations run at capacity throughout the quarter, supported by the investments we made earlier this year in portable plants, fleet expansion, and personnel. We are currently supplying five wind farm projects across North Dakota, Colorado, and New Mexico, with more scheduled to begin later this year. Infrastructure demand remained solid. We recently began the second phase of the three-phase expansion of the I-10 highway project in El Paso, Texas, and continued work at Denver International Airport. Along with multiple other paving contracts across our network, these projects contributed to a stable and consistent activity throughout the quarter. By contrast, the residential segment remains under pressure. Housing inventory accelerated nationwide, and home affordability continues to decline with the 30-year mortgage rate well above the estimated 5.5% threshold needed to stimulate meaningful construction activity.

Reflecting these headwinds, housing starts fell in May to their lowest level in five years, and even markets that previously demonstrated resilience have begun to soften. We anticipate continued weakness in this segment until mortgage rates become more favorable. We also saw a shift in activity within the oil and gas sector during the quarter. We experienced softer demand driven by declining rig count and pressure on oil prices. Additionally, the unplanned outage in one of the cement mills at our Odessa plant earlier this year led some customers to secure cement from competitors. While we have successfully regained those customers during the second quarter, oil well cement now represents a smaller portion of our overall sales mix. Given the premium pricing associated with this product, the changing mix placed additional pressure on average cement pricing.

This, combined with softer overall demand, resulted in only partial acceptance of the spring construction. Cement price increase and graded product availability generated that total cement prices remained essentially flat year over year. We continue to monitor these strengths closely and adjust our commercial strategy accordingly, maintaining focus on execution, customer service, and cost efficiency. In addition to these commercial dynamics, we also experienced a temporary disruption at our Rapid City cement plant due to an incident during scheduled maintenance. The plant was offline for half of the quarter and has since resumed normal operations. Thanks to our integrated network of plants and terminals, we were able to redirect supply from our Pueblo and Dryden plants to ensure uninterrupted service to our customers in the region, proving again the unique advantage of the network we have built.

While this ensured continuity, the use of higher cost routes and reduced production volumes put additional pressure on our margin during the period. Turning now to Mexico, market conditions remained challenging throughout the quarter, primarily due to the ongoing softness in the industrial demand and adverse weather. Juárez recorded the highest wind speed in over 90 years, creating safety and quality challenges that impacted construction activity and our ability to deliver concrete consistently. Industrial developers remain cautious, influenced by persistent macro uncertainty and evolving trade policies. While tariffs have not directly impacted GCC, the broader environment continues to delay decision making and project starts. The mining segment also remains mute as expected following the end of life closure of two key customer mines in the second half of last year. This creates a higher comparison base for 2025 and continues to affect volume performance.

Despite this headwind and in contrast with our U.S. market, residential demand in Chihuahua has remained strong, posting double-digit growth year to date. We’re encouraged by the federal housing initiative targeting 1 million new homes in the next five years. Chihuahua stands to benefit meaningfully and we’re working closely with Infonavit to support the planning phase. With construction anticipated to start towards the end of the year, infrastructure also continues to present meaningful opportunity under planned Mexico. The government has prioritized connectivity and we are participating in the Sonora Chihuahua Highway Project, one of the largest infrastructure investments in the region in recent years, as well as supplying back cement for the construction of rural roads in the Chihuahua Mountains under the Rural Roads Plan. Overall in Mexico, our focus remains on careful planning and preparation for the months ahead.

We are actively participating in bids for infrastructure projects expected to begin in the coming quarters, ensuring we are well positioned to capital growth as market conditions improve. From a capital allocation standpoint, a key milestone achieved during the quarter was the completion of our new cement distribution terminal in Trenton, Texas, just northeast of Dallas. This investment directly addresses growing customer demand and strengthens our ability to serve the I-35 corridor between Dallas and Oklahoma City. One of the most dynamic markets in the country, the Dallas–Fort Worth area leads the nation in real estate investments and development, serving as a vibrant hub for financial and business activities. Our new terminal positions us strategically to capitalize on this growth, particularly across the residential, office, and industrial sectors. Operations at the Trenton terminal began in the first week of July with cement initially supplied from our San Malayuca plant.

Consistent with our conservative market strategy of dispersing small incremental volumes across several markets, the terminal, along with others currently in the planning stage, not only strengthens our ability, our service capabilities in Texas, but also prepares our network for the additional volumes expected from the Odessa expansion once it comes online. On that front, the expansion remains fully on track both in terms of timing and budget. To date, we have deployed approximately $458 million on total investment, with $174 million remaining for the balance of this year. With that, let me now turn the call over to Maik for his financial review.

Maik Strecker, Chief Financial Officer, GCC, S.A.B. de C.V.: Thank you, Enrique, and good morning to everyone. Starting with consolidated sales, we reported a 1% increase compared to the second quarter of last year, supported by volume growth in the U.S. and positive pricing trends in Mexico. Excluding the depreciation of the Mexican peso, consolidated sales increased 4% year over year. In the U.S., revenues grew by 7.7%, driven by a 4.2% rise in cement volumes. Our concrete operations experienced particularly strong performance, benefiting from renewable energy sector demand, with volumes increasing by 20.7%. Pricing dynamics proved more challenging during the quarter. Cement pricing increased 0.6%, impacted by a lower production of blended cement. In our total sales mix, concrete pricing continued to perform well, increasing 9.5% year over year. In Mexico, revenues declined by 14.8%, mainly due to the depreciation of the Mexican peso.

Excluding the currency effect, sales decreased by 4.6%, cement volumes declined 6.2%, and concrete volumes were down 13.1%. Pricing remained firm, with cement and concrete prices up 4.2% and 3% respectively. From a cost perspective, our cost of sales represented 66.7% of revenues, up 5.8 percentage points compared to last year. This increase was largely driven by one-off or timing-related factors, including lower production volumes due to the timing of plant maintenance and the Rapid City incident, which reduced inventory levels during the quarter, an effect that is expected to normalize in the second half of the year. Additional impacts included the absence of the natural gas hedge benefit recognized in the second quarter of 2024, higher transfer freight expenses related to the Rapid City incident, a greater share of real estate sales in Mexico which carry a higher cost to sales ratio, and increased fuel prices in general.

It’s also worth noting that fuel costs in the prior year quarter were unusually low. Widening the year-over-year comparison, SG&A expenses represented 8.3% of revenues, improving by 50 basis points year over year thanks to our ongoing expense discipline and optimization efforts. As a result, EBITDA for the quarter was $118.4 million with a 32.5% EBITDA margin. Net financial income was $8.5 million, reflecting the impact of the Mexican peso depreciation, lower financial income due to a reduced average cash balance, and the interest capitalization associated with the Odessa expansion. Consolidated net income reached $73.5 million, translating to earnings per share of $0.22. Free cash flow for the quarter totaled $48.6 million, representing a 67.7% increase. This improvement was driven by lower working capital requirements, reduced maintenance CapEx, and lower cash taxes.

In terms of capital allocation, we returned $30 million to shareholders during the quarter in the form of dividends, and we continued executing on strategic investments with $88 million allocated primarily to the Odessa plant expansion. We closed the quarter with a strong balance sheet. Cash and equivalents totaled $827 million, and we maintained a solid financial position with a negative net debt to EBITDA ratio of negative 0.48x. In closing, we remain confident in our ability to manage through near term pressures while continuing to build long term value. We are laser focused on what we can control, operational efficiencies, cost optimization, and disciplined capital deployment. With that, I will hand the call back to Enrique for his closing remarks.

Enrique Escalante, Chief Executive Officer, GCC, S.A.B. de C.V.: As explained, the second quarter brought a more difficult set of conditions than we initially anticipated, and visibility remains limited. Therefore, we are revising our full year guidance. As we look into the third quarter, we expect activity in our U.S. markets to remain broadly in line with larger levels. As a result, we now anticipate cement volumes to finish the year flat. In the ready-mix business, strong performance in the first half led us to expect volume growth in the mid-teens range for the full year. In terms of pricing, soft price increase traction and changes in the product mix with less oil well cement have led us to revise our expectations. We now anticipate cement prices will remain flat, while concrete prices are expected to increase in the mid-single digits. The pace of recovery in Mexico remains uncertain.

Therefore, we now expect cement and concrete volumes to decrease mid-single digit and pricing. We anticipate cement prices will increase in the mid-single digits and concrete prices in the low-single digits. In light of these revised expectations, we are also adjusting our full year EBITDA guidance to reflect the pressure experienced in the first half and the outlook for the remainder of the year. We now expect a mid-single digit decline for the full year. Additionally, as part of our disciplined approach to capital deployment, we’re also revising our full year CapEx guidance. We now expect to invest $400 million, primarily due to the project timing and the deferral of certain noncritical initiatives in 2026. While these adjustments reflect the cyclical nature of the construction industry, we remain confident in our strategy and in the resilience of the industry, especially of our organization.

We have successfully navigated volatile conditions before, and we are drawing on this experience now. With that, this concludes our prepared remarks, and I will now turn the call over for your questions. Operator, please begin with the first question.

Conference Operator: Certainly, we’re not conducting a question and answer session. If you’d like to be placed into the question queue, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you’d like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing 1. One moment, please, while we poll for questions. Our first question today is coming from Alejandra Oberkon from Morgan Stanley. Your line is now live.

Hi, good morning GCC team. Thank you for taking my questions. I actually have two. The first one on the cost. It feels like there’s multiple moving parts. There are several one-offs in the second quarter. I wanted to understand a little bit better what happened on the cost side in Mexico. You mentioned some real estate sales and some other moving parts that perhaps are not going to be a repeat into the second half of the year. I am wondering if you can help us break down the multiple drivers in the quarter and how to think of that on a reasonable basis for the remainder of the year. That would be the first question. The second one is on the U.S. We are seeing multiple positive news.

On the non-resi starts we have seen major projects being announced in some of what are your core markets in the U.S. I am just wondering what does that mean in terms of your demand backlog in the ground on some of your core regions and how you’re thinking of it for 2025 and 2026.

Thank you.

Enrique Escalante, Chief Executive Officer, GCC, S.A.B. de C.V.: Hi, Alejandra. Good morning. This is Enrique. Thank you for your question. I’ll address first the second question and then I will turn it on to Maik to be more specific on the cost side. Yes, we feel cautiously optimistic, I mean about the volumes and especially infrastructure in the second half of this year. Obviously, the problem we already have because of the delay that we had already in the first half, both with some weather and then with the effect of these unscheduled outages that we had in a couple of our plants, all of that has been resolved. Yes, the second part of the year will be, I mean, of growth. That’s how we are going to get them into a final flat number when we compensate for the volumes that we meet in the first half.

Maik Strecker, Chief Financial Officer, GCC, S.A.B. de C.V.: Good morning, Alejandra.

This is Maik.

Regarding the cost in Mexico, yes, there were three key drivers that kind of one offs and impacted us. The first one is the natural gas hedge that we had last year that really performed very well in that second quarter, which accounts for about $4 million that we benefited last year that we didn’t have this year. The second, you already mentioned the real estate. We have still some properties here in Mexico that over the business course we’re divesting and selling, and they just carry a higher cost of sales, roughly impacting us in the quarter around $2 million on that one. Last but not least, we had a little bit lower production. The inventory impact in the quarter kind of had the rest of the balance, which then you saw the negative cost impact for Mexico. Again, all three kind of timing and or one offs.

We should see none of that really happening in the second half of the year.

Gotcha. That was very clear. If I can follow up, what is the FX assumption embedded in your new guidance?

We have a question about FX, correct? Yeah, our assumption is around 20 pesos per dollar.

Thank you. That was very clear.

Enrique Escalante, Chief Executive Officer, GCC, S.A.B. de C.V.: Thank you.

Conference Operator: Next question today is coming from Adrian Reta from JP Morgan. Your line is now live.

Thank you.

Enrique Escalante, Chief Executive Officer, GCC, S.A.B. de C.V.: Good morning everyone. I just wanted to ask on the acquisition of the three aggregate quarries that you did. Any comments on how that is going? Positive surprises that you have seen from that, new opportunities.

Anything that you can share with us?

On how that new growth venue is going to. Thanks. Morning, Adrian.

This is.

Thanks for the question, Adrian. The acquisition of aggregates is going very well. Volumes are a little bit below what we included in the purchase projections. However, we’ve found several price improvement opportunities that we have been acting on, plus some savings in the operations. So far, the EBITDA is going better than what we projected. We expect this trend to continue for the rest of the year. These acquisitions that, if you remember, were around $100 million are going to perform as we expected for the full year. Thank you, Nikim.

Thank you.

Conference Operator: Next question today is coming from Alejandro Azar from GBM. Your line is now live.

Hi Enrique. Maik, thank you for taking my question. Two quick ones on the figures that you disclosed on the CapEx for the Odessa plant. I was just wondering if the $174 million remaining balance for the year, is that, and is that something that we will not see any more CapEx from the Odessa plant next year? That was my first question and the same also on the ramp up of this investment. I mean, when it ramps up next year, would you substitute the imports from other plants in order to stabilize the plant? Any color on how should we expect perhaps utilization rate here in 2026 would help us.

Thank you.

Enrique Escalante, Chief Executive Officer, GCC, S.A.B. de C.V.: Enrique Escalante, thank you for the questions again. First, on your question on the CapEx, the $174 million that we’re going to spend, the rest of the year, it’s cash. We’ve been financing everything with our cash position in the company and the remaining investment for 2026 to complete the budget is around $67 million to get to around the $700 million figure that we have disclosed all the time. Everything is going well in terms of timing and budgets. We expect to make this final cash flow draws next year around the first half of the year. In terms of the ramp up, I’ll address first. Yes, strategically what we try to do is to optimize our network.

Since Odessa is going to have more capacity with KION 3, we’re going to try to produce as much as we can to serve the local market instead of shipping cement from that region. In that way we optimize the system and save the freight.

Maik Strecker, Chief Financial Officer, GCC, S.A.B. de C.V.: In addition to that, the phrase the network optimization, that’s why we mentioned these smaller terminals that we’re implementing. That will really help us and should continue our margin improvement. The other aspect, of course, we have that incremental volume that we’re very strategically placing in the market. Last but not least, this expansion comes with very little additional fixed cost. That’s really helping us. Again, the plant will operate pretty much with the same crew with some few additions. That’s an important benefit that we’re going to harvest when the plant comes online.

Okay, that’s very clear. Thank you. Thank you, guys.

Enrique Escalante, Chief Executive Officer, GCC, S.A.B. de C.V.: Thank you.

Conference Operator: Our next question today is coming from Marcelo Ferlan from Itaú. Your line is on live.

Enrique Escalante, Chief Executive Officer, GCC, S.A.B. de C.V.: Hi Hickey.

Hi Maik. Thanks for taking my question here. I have two. The first is related to this ready-mix upward guidance revision that you guys mentioned for the U.S. I just would like to understand what has been supporting this more bullish bill for ready-mix in the U.S., and my second question is related to Mexico. You guys mentioned that you have these cost efforts for the second half and maybe don’t have the three headwinds that you have seen in the first half. For Mexico specifically, what could you expect in terms of margins for the second half for EBITDA margins here? This is my second question. Thank you.

Hi Marcelo, this is Enrique. Thanks for the question. Let me address the U.S. ready-mix in the U.S., and then Maik will give you some more specific numbers on Mexico’s margin. We since last year knew that there were several wind farm projects on the horizon, and we are expected to be able to capitalize on those given the experience we have already in that segment. We decided to invest in several additional portable plants and trucks, and train additional people, and chase those projects throughout several states. As I mentioned, we’re now working in Colorado, North Dakota, New Mexico in project, and we have several more that we’re going to start soon. This will carry us even into 2026.

That’s why when you combine those incremental projects with the steady work in our province regions in El Paso, Texas, and the northern markets in Iowa, South Dakota, and Minnesota, we feel that we continue running almost at full capacity in ready-mix. That’s what supports our growth and our margins in that business.

Maik Strecker, Chief Financial Officer, GCC, S.A.B. de C.V.: Yes, for Mexico margin outlook for the rest of the year you should see and we should see a stabilization again. The one offs will not occur. That inventory element will kind of work its way out through the second half of the year. In your models you can expect kind of back to normalization typically second half of the year in the low 30%. That’s where our Mexico margins are.

Okay, thank you so much, guys.

Enrique Escalante, Chief Executive Officer, GCC, S.A.B. de C.V.: Thank you.

Conference Operator: Next question is coming from Daniel Rojas from Bank of America. Your line is now live.

Enrique Escalante, Chief Executive Officer, GCC, S.A.B. de C.V.: Good morning, gentlemen. Thank you for taking my questions. I wanted to follow up on the wind farm question in the U.S. It’s our impression that now that we have Trump’s big, beautiful bill, that part of this funding might tail off into next year. I just wanted to get your view on how these projects related to alternative energy might develop and if we should expect wind farms to be something that is structural and stay with us and you guys are going to benefit from this. Thank you, Daniel. That’s a very pertinent question we hear very frequently, obviously with all the unknowns and uncertainty related to the policy. However, these projects that I’m referring to are fully funded, and there’s total security that those are going to happen and are ongoing beyond 2026.

It’s a difficult thing to say, of course, because of the low visibility that we just expressed that we have. In terms of finishing this year with those projects, it’s unquestionable that we are going to achieve that.

Maik Strecker, Chief Financial Officer, GCC, S.A.B. de C.V.: Maybe to add to that, we’re still actively looking for additional projects for 2026. There are still projects in the pipeline that we’re bidding on and actively working on. Like Enrique said, for this year, I think good planning, security, and even very active on looking at 2026.

Enrique Escalante, Chief Executive Officer, GCC, S.A.B. de C.V.: If I may follow up, do.

Maik Strecker, Chief Financial Officer, GCC, S.A.B. de C.V.: You think that spending at the state.

Enrique Escalante, Chief Executive Officer, GCC, S.A.B. de C.V.: Level might offset some of the losses.

Maik Strecker, Chief Financial Officer, GCC, S.A.B. de C.V.: At the federal level?

Thank you.

Conference Operator: Our next question today is coming from Lucan Kanye from Onco Disaster Research.

Your line is now live.

Enrique Escalante, Chief Executive Officer, GCC, S.A.B. de C.V.: I’m sorry, we were cut off a little bit. I mean, there’s a go ahead.

Maik Strecker, Chief Financial Officer, GCC, S.A.B. de C.V.: Yeah, just to quickly answer, sorry we got cut off here, but you know, on the state level funding, there’s not yet 100% kind of visibility how that will all play out. Again, we have a good underlying base for infrastructure projects. How the new bill will really impact kind of the outlook, it’s a little bit too early to really make a specific statement on that. Thank you.

Enrique Escalante, Chief Executive Officer, GCC, S.A.B. de C.V.: Thank you.

Conference Operator: Our next question is coming from Ethan Cunningham from On Film Investment Research. Her line is now live.

Hi, good morning. Thank you for taking my questions. The first one regards your EBITDA contribution from Mexico, which you reported was 15%, which I believe is a historic low. Do you mind why was this contribution so low?

Enrique Escalante, Chief Executive Officer, GCC, S.A.B. de C.V.: Hi, Dan, good morning. Can you repeat the question?

Maik Strecker, Chief Financial Officer, GCC, S.A.B. de C.V.: Because.

Enrique Escalante, Chief Executive Officer, GCC, S.A.B. de C.V.: Yeah, I think yes, we probably, I mean, have different numbers.

Yes.

I’m sorry, are you referring to the percentage contribution of Mexico to the 12% company EBITDA?

Yes, you said that in your report. It’s for Q2 for this quarter. Q2 2025, the EBITDA contribution was 15%.

Yes.

For this quarter, with everything that we explained in terms of especially the exchange rate and the mining sector, yes, this quarter was around 15% which was abnormally low compared to the traditional EBITDA that Mexico contributes to the total.

Maik Strecker, Chief Financial Officer, GCC, S.A.B. de C.V.: To add on the exchange rate, the exchange rate in the quarter of Q2 2024 on average was 17.2 and this past quarter in Q2 2025 was 19.5. For us, that has an important impact, mainly then reflecting on Mexico.

Enrique Escalante, Chief Executive Officer, GCC, S.A.B. de C.V.: To be more specific, I mean a very large portion of the like-for-like EBITDA of the Mexico division was kind of wiped out by the change in the peso-dollar rate.

Okay, thank you. That’s extremely clear. Thank you very much. May I just follow up? It’s again staying in Mexico. It seems that you’re looking at your peers, your volumes are below and you’re also guiding that, but your pricing is also guiding as positive. I’m assuming that the strategy is to push price over volumes, but the risk of losing market share. Is this a fair assumption to make? If so, is this strategy, will this continue moving forward?

Maik Strecker, Chief Financial Officer, GCC, S.A.B. de C.V.: The context for our market is again we have a little bit more tilted toward the industrial segment, which again from a volume perspective is softer, as mentioned because of the kind of the uncertainties that projects are facing, number one. Number two, we mentioned the mining segment also, as we had anticipated, is lower, which then tilts our business more to that residential segment, which is more from a price perspective, more better for us. That kind of explains softer volumes but still very stable pricing for our Mexico business.

Okay, thank you very much. Just lastly, moving to the U.S., I guess it’s the opposite really. Your footprint doesn’t seem overly exposed to seaborne inputs, yet you’re guiding on flat prices in cement. Are you seeing any pushback in prices from independent import terminals? If not, what is the origin of your guidance of flat cement prices?

In the U.S., as I explained.

Enrique Escalante, Chief Executive Officer, GCC, S.A.B. de C.V.: The majority came from a mix effect because obviously oil, well, cement prices command a very nice premium compared to construction cement. Of course, our volumes have been lower than what we expected in that segment. That’s one of the reasons. The other reason, yes, in construction cement we did experience some pushback in several markets. Price increase in the spring, in April, went effective only on some markets and some customers partially. That combination of the two factors is what is leading us to basically remain flat compared to the strong pricing that we had last year.

Okay, thank you very much.

Thank you. Thank you.

Conference Operator: Next question today is coming from Enrique Escalante from Fundamental Capital. Your line is now live.

Hi, good morning. Thanks for taking my question. I wanted to quickly ask about your U.S. EBITDA margin expectations for the second half of the year. Last year’s second half margins were practically a historic high. I wanted to see how much of that may be explained because of variable energy costs or other factors that we won’t necessarily see this year. Thank you.

Enrique Escalante, Chief Executive Officer, GCC, S.A.B. de C.V.: In terms of the U.S. market, in terms of amine volumes, as I already commented, we are again cautiously optimistic and expecting to run higher than in the first quarter, both because of less internal issues, as I mentioned, with a couple of incidents we had in Rapid City and Odessa, and also because, just naturally speaking, our geographic situation and titles, I mean to higher volume shipments in the second half of the year just because of the normal seasonality that we have. The combination of both will give us a much better second half in terms of volume than the first half of the year.

I was referring to margins. Yeah.

Margins. We don’t see any negative effect on margins going forward. All our prices for energy and fuel are very constant and very well managed. Obviously, we are beyond all the maintenance outages for all the plants. We just are seeing a much more steady operation of all our plants as we speak. We expect our margins to remain within budget.

Great. Just a quick follow up if I may, once Odessa comes into effect, should we see significant efficiencies in margins?

We have, obviously, an improvement in margin with the Odessa plant coming online. It’s a much more, I mean, competitive plant, obviously. That’s one thing. The other one, of course, is what Maik explained, that we’re going to be saving on freight cost, which will obviously go all the way to the bottom line. Yes, margins are going to be better once the Odessa plant comes online.

Great.

Do you have some kind of fallback?

Figure.

Maik Strecker, Chief Financial Officer, GCC, S.A.B. de C.V.: I would maybe add?

Enrique Escalante, Chief Executive Officer, GCC, S.A.B. de C.V.: There is going to be a lot.

Maik Strecker, Chief Financial Officer, GCC, S.A.B. de C.V.: Of timing into this.

Right.

This is part of the longer term strategy really to expand the margins. These benefits need to work through the system. You should see kind of the DIODESA project helping us sustaining that and systematically building those out over a one to two year period of time.

Great, thank you.

Conference Operator: Thank you, ladies and gentlemen. That concludes our question and answer session. I’ll turn the floor back to Ms. Ogushi.

Sahory Ogushi, Head of Investor Relations, GCC, S.A.B. de C.V.: Thank you again for your time and continued interest in GCC. We look forward to speaking with you again soon.

Enrique Escalante, Chief Executive Officer, GCC, S.A.B. de C.V.: Thank you.

Conference Operator: That does conclude today’s teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.

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