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Argos’ EBITDA increased 27 % during the third quarter and it accomplished an EBITDA margin expansion in the same period

  • During this year, Argos has recorded the highest levels of sales and EBITDA in our history, COP 8.5 trillion and COP 1.5 trillion, respectively.
  • The United States, Argos´ main operation, has grew 23% in revenue and 26% in EBITDA in the quarter.
  • We have reached a consolidated leverage level of 2.8 times, the lowest in the last 9 years.

 

Consolidated results:

 

Argos, the cement company of Grupo Argos, whose purpose is to make possible the construction of housing and infrastructure dreams that enable more sustainable, thriving and inclusive communities, presented results leveraged on its supply strategy and logistics network that allowed it to achieve record high in exports, as well as positive market dynamics.

Year-to-date, and in comparable terms, as of September, the company reported the highest levels of sales and EBITDA in its history, with figures of COP 8.5 trillion and COP 1.5 trillion, and increases of 20.7 % and 4.3 %, respectively. It should be noted that during the third quarter the EBITDA increased 27% and we had an increase of 20 basis points in the EBITDA margin during the period.

Regarding volumes, from January to September, Argos delivered 12.3 million tons of cement, 2.3% less and 5.8 million cubic meters of concrete, 8.7% more.

 

«We are excited to deliver positive results to our shareholders which exhibit that the strategies we are implementing, in terms of deleveraging, efficiency, logistics network integration and price recovery, are bearing fruit. Amid strong inflationary pressures in all markets, we were able to expand profitability and margins versus last year. On the other hand, in Cementos Argos we are aware that the value of the share does not yet reflect the fundamentals of our company and we are committed to continue carrying out initiatives such as the listing on the NYSE that generate more value for shareholders and other stakeholders».

Juan Esteban Calle, CEO

 

USA:

 

During the third quarter, revenues were USD 414 million, which represents an increase of 22.9 % compared to the same term in 2021. For its part, EBITDA reached USD 77 million and increased 26%.

 

Regarding volumes, from July to September, we sold 1.6 million tons of cement, which represents an increase of 6.2% and 1.1 million cubic meters of concrete, 3.6% more than in the same months of last year. The foregoing, in large part, thanks to the solid demand in the states where we are present.

 

Colombia

 

Revenues during the quarter reached COP 705 billion, which means an increase of 10.6%, mainly leveraged in an efficient commercial strategy that seeks to offset inflation. For its part, EBITDA reached COP 157 billion, 14.5 % higher than the same period of the previous year. Likewise, the EBITDA margin was 22.3% and registered an expansion of 75 basis points. In addition, we highlight that the exports from Cartagena grew 37% and reached 319,000 tons, the highest quarterly figure in Argos´ history.

 

During these three months, cement shipments remained stable, while the concrete business has continued its sustained recovery, supported by infrastructure and formal housing projects. The latter were 712,000 cubic meters and increased by 7.8 %.

 

Caribbean and Central America:

 

During this quarter, we highlight the positive performance of revenue, which was USD 136 million and grew 8.3%. For its part, the EBITDA was USD 31 million and remained stable compared to the same months of 2021.

 

On the other hand, cement shipments were around one million tons and decreased 12.7%, affected, in part, by the serious social situation that Haiti is going through, the winter and the government transition in Honduras and scheduled maintenance in the Dominican Republic. In contrast, concrete shipments were 77,000 cubic meters and increased 59.2%.

 

Note: The financial and operating figures shown here are based on adjusted numbers, excluding non-recurring operations.

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PIEDAD MONSALVE

Gerente de Comunicaciones
pmonsalve@argos.com.co
(57 4) 3198700

RAQUEL YEPES

Directora de Comunicaciones
ryepess@argos.com.co
(57 4) 3198700 | Extensión: 64318
313 791 6901

Atmospheric emissions

We are committed to reducing our emissions through actions that achieve more efficient processes and the implementation of abatement measures, contributing to good air quality in the places where we operate.  Our cement-, concrete- and aggregate-production processes generate punctual and scattered particulate matter (PM) emissions, as well as emissions of sulfur oxides (SO2) and nitrogen oxides (NOx) in the clinkering furnaces of the cement plants.

  • For society:  To contribute to mitigating the impact on air quality in the areas where we operate, acting responsibly and promoting relationships of trust with our Stakeholders.

 

  • For the company:  To develop more efficient processes that allow us to reduce our atmospheric emissions and contribute to responsible production, complying with local regulations in the countries where we operate and – in some cases – going beyond compliance with said regulations, contributing to the profitability of the business and preparing to face future challenges.

The “Emissions” pillar of our Environmental Strategy focuses on: Working on the adequate measurement, control and reduction of SO2, NOx and particulate-material (PM) emissions generated by our production processes in the cement business and on the prevention and mitigation of our dispersed emissions of particulate material (dust), originated mainly by the activities of transportation, transfer, unloading and storage of materials in the cement, concrete and aggregate processes. The foregoing, through operational control, optimization and renewal of emission-control systems to achieve continuous improvement.

Industry positioning

We position ourselves as strategic allies for the development of the territories where we are present, directly and through the empowerment of our value chain.  We do it through the construction of housing and sustainable infrastructure that enables the closing of socioeconomic gaps, the generation of employment, the improvement of the quality of life and the reduction of the impacts generated.

  • For society:  To sustainably respond to the growing demand for housing and infrastructure of the world population with the aim of improving people’s quality of life, interconnecting regions and developing innovative solutions. 

 

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    For the company:  To be strategic allies of the actors in our value chain in order to maintain the Company’s leadership in the market, ensure its competitiveness over time and increase the generation of sustainable value.

We are committed to the role we have as a Company in the achievement of the 2030 Agenda goals, the consolidation of territorial development plans where we operate, and the economic reactivation of the countries affected by the pandemic. Therefore, we focus our efforts in the development of sustainable housing and infrastructure projects that contribute to closing socioeconomic gaps, generating employment under safe conditions, environmental protection, and investment in improving people’s health systems and quality of life. 

Our work unfolds in three large lines:

 

Cities for everyone:

 

With nearly 54% of the world  population living in urban areas, the pandemic made inequality of those who live in the cities of the world

manifest. Nearly 90% of the COVID-19 cases are concentrated in the urban

centers that have, among others, challenges associated with access to basic services and decent housing conditions. For this reason, we work together with our value chain to develop projects that benefit the lessfavored population, facilitate access to housing, and promote development in

the areas of influence.

 

Interconnected cities

 

The need to connect urban areas with rural areas to expand the coverage

of basic services, such as health, has been a priority of developing countries

since before the pandemic. Therefore, during 2020, we continued working on creating innovative solutions that allow us to be present in the large projects of the countries and territories where we are present.

 

Intelligent cities

 

In recent years, the acuteness of the effects of climate change became the

risk of greatest impact to the world. Therefore, in the global stage, a need

has grown to transition to a low-carbon economy, an opportunity that becomes more relevant amid post-pandemic recovery scenarios and the effort we are making as a Company to generate new business models that respond to environmental and social challenges. For this reason, our Climate-Change Strategy includes actions aimed at mitigating the impacts associated with our productive processes, adapting our operating model and innovating from the identification of optimization opportunities.

Supplier management

Supplier management is a fundamental pillar of our Supply Chain Strategy; it seeks to build and strengthen relationships with strategic allies who have the ability to contribute to the Company in terms of efficiency, productivity, customer service and innovation.  For this reason, we carefully select our suppliers, transfer knowledge to promote their development, promote good practices and recognize those who are an example of sustainable, innovative, safe and responsible management.

  • For society:  To develop our suppliers, promote transparent practices and responsible conduct, to improve the productivity and competitiveness of our society and support the construction of a better future.

 

  • For the company:  To seek to add value throughout the Company’s supply chain, from the purchase of goods and services to the delivery of products to clients.  Through the mitigation of risks and potentiation of opportunities, the implementation of good contracting practices and service excellence, we create relationships of trust and turn suppliers into business allies.

Our management is divided into five stages:

  1. Identification: We determine the goods and services required for our operation and the category to which they belong, according to our Category Tree. This groups our suppliers into macro-categories which – in turn – are subdivided into two more specific levels.
  2. Pre-Selection: We validate the suitability of suppliers through due diligence and review aspects of sustainability and financial health to ensure long-term relationships.
  3. Negotiation: We select suppliers with high standards, considering technical, economic, sustainability and service aspects.
  4. Retention and evaluation: We carry out knowledge-transfer processes with those suppliers with growth potential.
    • We characterize our suppliers as critical suppliers or with potential risk in sustainability.
    • We measure the management of critical suppliers through performance evaluations in terms of quality, service, occupational health and safety, having constant feedback and identifying key factors for their development.
    • We apply the Sustainability Index to suppliers with potential sustainability risks, to identify challenges, opportunities, and to develop joint action plans in environmental, economic, social and Human-Rights matters.
    • We implement additional controls and development plans to suppliers belonging to categories where the greatest potential risks have been identified. This is how, for example, we develop road-safety strategies for our logistics suppliers; with mining suppliers, we carry out a more rigorous pre-selection process, and with contractors, we have special controls on occupational health and safety.
    • We have a Transparency Line for Stakeholders to report possible improper actions and to implement the pertinent corrective actions. 
  5. Recognition:  Every two years, through Growing Together (Creciendo Juntos), we recognize the suppliers that have shown outstanding performance in innovation, sustainability, health and safety and development and comprehensiveness.

 

Additionally, we have:

 

Contracting manual: transparent action framework that guides the negotiation and contracting of our suppliers to allow the process to be agile, make use of best practices and carry out adequate risk management.

 

Code of conduct for suppliers: in which we define the principles and behaviors that we expect from our allies in terms of respect for human rights, protection of workers, environmental management, business ethics and responsible business practices.

Ethics and compliance

We are convinced that ethics and integrity are fundamental and non-negotiable; that is why we live by these principles, integrating them into our operations, processes, and strategy, thus generating value responsibly for our business, our Stakeholders, and for society.  Through the Global Governance and Compliance Program, our ethics and business conduct system, we seek to promote that our actions are consistent with the pillars of corporate culture and integrity as the guiding principle of our business activity.

  • For society:  To promote transparent, competitive, and sustainable business environments that strengthen trust and ethics in business, generating positive impacts for the market and society.

 

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    For the company:  To promote that our actions are consistent with the pillars of culture and that integrity is the inspiring principle of all members of the Organization.  This is how we consolidate ourselves as a competitive, reliable company in the eyes of investors and other Stakeholders.

We have voluntarily adopted a self-regulatory framework that confirms our commitment to business ethics as a way to promote transparent practices that contribute to the development of competitive environments. This framework* incorporates mandatory principles of ethics and conduct:

 

 

For the proper implementation and application of these guidelines, the strengthening of the ethical culture, the prevention and control of incorrect actions, our Board of Directors approved the Global Governance and Compliance Program (GGCP, in Spanish). The program structure incorporates international best practices to evaluate compliance programs, such as ISO 37001, ISO 19600 and the United States Department of Justice (DOJ) guidelines. The program has the following scope:

 

 

Likewise, it systematically groups together the activities carried out to promote integrity in the Company’s actions, its employees, and members

of the value chain, which allow the updating and permanent strengthening

of the program. Operating Scheme:

 

Efficiency and productivity

We materialize our Corporate Strategy through actions aimed at the efficient use of resources, the improvement of our financial flexibility and the maximization of income generation and business profitability.  We focus on the application of efficient, safe production processes and circular economy models, on the diversification of energy management models and on the efficient management of the supply chain.

  • For society:  To provide solutions and products that meet the needs of our clients through the responsible, appropriate use of resources and the incorporation of raw materials and alternative energy sources.

 

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    For the company:  To guarantee business sustainability, optimize working capital and capital investments, reduce costs and the level of indebtedness, and mitigate risks regarding the availability of resources necessary for our operation and the emergence of new business realities, environmental requirements and new regulations.

Creamos valor construyendo relaciones sólidas que transforman el futuro de la sociedad

Creamos valor a través de nuestro compromiso con el desarrollo responsable y transparente de nuestras actividades.