2021 has seen higher than expected demand for our products and our expectation is that 2022 will be a strong year too.

We appreciate that while these record levels of demand are very positive they do also put a strain on some of our sites and teams. We therefore wanted to reflect on the past year and set out some information to help everyone understand what the business has experienced over the last 12 months and what we are doing to strengthen our operation further in 2022 and beyond.

First of all, let’s talk about demand:

• Our Aggregates team have produced and supplied our customers with more volume than target, and with more tonnes than we sold in 2019 or 2020.
• Our Cement team have supplied more Cement than target and the volume sold has been higher than in both 2019 and 2020.
• Our Readymix teams have increased sales of our Value Added Products including our Low Carbon Vertua® Concrete and they have managed the volatility of demand that has been challenging for the full industry.
• Urban Solutions have also had a busy year and have beaten revenue targets by close to 10% whilst delivering record results in many parts of the business.

These are good results and everyone across the business should feel proud of the role they have played to achieve them.

To meet these increased levels of demand we have had to rely on many production records across the business. Two notable highlights are mentioned below from a long list of excellent performance.

• Our Aggregates team have delivered record results and we have moved record volumes through our rail and depot system. Our Marine business has grown sales and commissioned our new dredger.
• Our Cement team has produced more Cement in Rugby and Tilbury than in any previous year and we have produced and sold more Cement this year than we did in the final years of operating the inefficient South Ferriby Cement Plant. This has also been achieved with a lower environmental footprint.

These production records are impressive but even with such high levels of performance we have struggled at times to meet daily demand. Along with the wider industry we have experienced some days of driver shortages, while the higher levels of demand mean that the daily inventory we hold is often not enough to meet all requests. This has meant that there have been days when we were sold out in some markets for Cement, Aggregates and Concrete and therefore not able to always meet all our customers’ demands.

The good news is that we have been adding flexibility and capacity to elements of our business throughout 2021 which will help us to meet what we anticipate to be an even higher level of demand in 2022. The new Aggregates Rail terminal in Birmingham, improved contracts with our rail providers and the expanded storage capacity and loading points in Tilbury Cement Plant are all examples of improvements that help to reinforce our supply plans. The impact on Cement capacity is that in 2022 we will have the ability to supply up to an additional 15% of demand beyond the record levels set in 2021. We will also be dedicating an additional large cement silo in Rugby for the sole use of our Readymix customers.

These expanded capabilities will give further confidence to our Readymix teams to keep securing targeted volumes without concerns about Aggregate or Cement supply.

In addition to these plans for 2022 we also have key mid-term capacity expansion projects underway:

• In Materials we have more than $150 million of approved investment projects planned for multiple Readymix and Aggregates sites and in the Marine business. These projects are designed to add capacity to our business between now and 2025.
• In Cement we completed a number of projects this year totalling more than $40 million which give enhanced production reliability as well as a better environmental footprint. We also have close to $100 million in capacity expansion and product development projects underway in Rugby and Tilbury which are scheduled to add a further 1 million tonnes of cement capacity by 2025 whilst delivering our Future in Action goals.
• In Urban solutions we are in the process of constructing our new Rail Sleeper factory and we continue to expand capacity in our Asphalt and Mortar business.

It is particularly exciting to see the considerable investment that is being made into the UK operation, to transform and grow our business for a sustainable future. When we look together at the results from this year we should be happy with the record levels of production and sales we have seen in many businesses in 2021. Special thanks go to all our operations and supply chain teams for making sure that production and supply keeps pace with demand and critically that this is always done with Safety as our number one consideration.

Thank you to all for your hard work and we look forward to continuing to build the success of CEMEX UK together.