CEMEX global profile. Key Figures, 2014 Annual Sales US$ 15.7 billion EBITDA, US$ 2.7 billion Worldwide employees 44,000

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2 CEMEX global profile CEMEX worldwide is: One of leaders in each of our core businesses: Cement, Concrete and Aggregates Largest concrete producer in the world Present in more than 50 nations, Trade relations with more than 100 nations Key Figures, 2014 Annual Sales US$ 15.7 billion EBITDA, US$ 2.7 billion Worldwide employees 44,000 Capacities, 2014 Cement 94 million tons Aggregates 168 million tons Concrete 56 million m³ 2

3 CEMEX in the Baltics Timeline 1906 founded as Cementos Hidalgo 1976 listed Mexico stock exchange 1980s Enters USA market 1990s (early) Entry to Spain, Venezuela, Caribbean, Central America 1990s (late) Entry to Egypt, Philippines, Costa Rica, further expansion in USA 1999 listed on the NYSE 2000s (early) Entry to Thailand, Puerto Rico, Nicaragua 2005 acquisition of RMC group (20 new markets, including Latvia) investment into new production capacity in Latvia 2008 Acquisition of Rinker 3

4 CEMEX investment in Latvia Total investment > 330 million Operations Cement plant (1) Concrete plants (7) Aggregates quarries (1 + 2) Key data EBITDA 22 million Liepaja Broceni Riga Sauleskalns Daugavpils Cement Concrete Aggregates 4

5 Expansion of exports post-crisis period Main export markets Russia Finland Estonia Sweden Belarus 5

6 Benefits brought as an international investor Capital investment growth in exports, value add, jobs (direct, in-direct) Transparency tax compliance, code of ethics for all transactions Ethical workplace focus on safety, internal ethics code Environmental responsibility CO2, emissions, re-cultivation Technology transfer most advanced plant in the region, concrete roads Investment in local comunities charities, education, infrastructure 6

7 Example CO2 footprint 1,150 1,100 1,050 1,115-37% 1, CO2 reduction equal to emissions of ~200,000 cars (driving 20,000km annual) Old plant EU benchmark 3rd period 725 New plant

8 Some positive points of doing business in Latvia Generally good security (NATO member, public safety) Access to Russia, Scandinavia, Baltics markets EU membership, with legal framework and currency Higher than average GDP growth for Europe Labor cost benefits compared to Western Europe Positioning as a European outpost with access to CIS 8

9 Issues facing CEMEX as investor in Latvia Energy cost and MPC (OIK) Reliability of infrastructure, especially roads Weak enforcement leading to unfair competition: Taxes and grey market Quality and certifications Safety and regulation of transport Competitivity of SOEs, especially rail transport Legal system transparency and speed Workforce skills and education 9

10 Example: Energy Cost and MPC (OIK) Electricity in production cost OIK evolution Electricity % Other BGT Renewable Cogeneration CEMEX energy cost, 2014 Electricity cost for large consumers Transmission OIK - renewable /MWh* OIK co-generation Power Latvia Poland Lithuania UK Estonia Bulgaria Germany France Finland Russia Sweden Siberia Norway *KPMG study,

11 Example: Reliability of infrastructure Plant Limestone quarry Required for Cement production 30 km distance to quarry ~ 400 truck trips (daily) 1.8 million tons (annual) Critical importance to operations Impacts: Safety Reliability Efficiency Cost of operations 11

12 Example: Unfair competition in concrete market CEMEX Salaries with full social and income taxes Trucks loaded to legal limits for deliveries No cash deals always including VAT Only certified raw materials used Transparent quality control, with additional safety margins Grey producers Cash salaries (avoid social charges, tax) Overloaded trucks to save delivery costs Cash deals w/o VAT for private customers Purchase of non-certified materials No quality control, provision of unsafe and under-spec products Legal working time in high / low season Overtime in high season, unemployment in low Impacts: ~20% cost advantage for grey producers due to lax enforcement More than 2 million unpaid tax in 2014 for Riga concrete market alone Significant deterioration of road and building safety 12

13 Example: Concrete market social taxes Social tax paid per employee, k, CEMEX Unfair competition Source: Publically available information 13

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