dicussion and analysis


Operational results and financial condition of the company

Consolidated Results

Consolidated net sales decreased 8% to US$14.2 billion in 2015. On a like-to-like basis for our ongoing operations and for foreign exchange fluctuations compared with 2014, consolidated net sales increased 5% for the year. The increase on a like-to-like basis was the result of higher prices of our products, in local currency terms, in most of our operations, as well as higher volumes in Mexico, the U.S., and Asia region.

Cost of sales as a percentage of net sales decreased 1.1 percentage points, from 67.7% in 2014 to 66.6% in 2015. The decrease in cost of sales as a percentage of net sales was mainly driven by our cost-reduction initiatives.

Operating expenses as a percentage of net sales decreased 0.1 percentage points, from 21.6% in 2014 to 21.5% in 2015, mainly driven by lower distribution expenses, as well as our cost-reduction initiatives.

Operating EBITDA decreased 2% to US$2.6 billion in 2015. On a like-to-like basis, operating EBITDA increased 9% for the year. The increase on a like-to-like basis was due mainly to higher contributions from our Mexico, U.S., Northern Europe, and Asia regions.

Operating EBITDA margin increased 1.1 percentage points, from 17.6% in 2014 to 18.7% in 2015.

We reported a loss on financial instruments of US$171 million in 2015. This loss resulted mainly from our equity derivatives related to CEMEX shares.

We reported a foreign exchange gain of US$130 million in 2015, resulting mainly from the fluctuation of the Mexican peso versus the U.S. dollar, partially offset by the fluctuation of the euro versus the U.S. dollar.

We reported controlling interest net income of US$75 million in 2015 versus a loss of US$507 million in 2014. The annual income primarily reflects higher operating earnings, lower financial expenses, lower income tax, and increased discontinued operations, partially offset by a higher loss on financial instruments and a lower foreign exchange gain.

Total debt plus perpetual notes decreased US$964 million to US$15.3 billion at the end of 2015.

5% and 9%

increase in net sales and EBITDA, respectively, on a like-to-like basis in 2015

Net sales and operating EBITDA
(billions of US dollars)
Free cash flow after maintenance capital expenditures
(billions of US dollars)