Maher Al-Haffar: Maybe I’ll take that, Fernando, the question. And Paco, thank you very much for the question. I think in terms of — maybe I’ll start in terms of geographic allocation, right? Number one, this is in terms of the investments. We are — we have been very consistent for the last three years saying that we are very biased in our investments towards the U.S., Europe, developed Europe and Mexico. And I think that as we see Mexico increasing stability, increasing integration into the U.S. market, we’re evaluating the bias between U.S. and Mexico. But clearly, our focus is additional investment in the U.S. because the outlook on a risk-adjusted basis is the most attractive in all of our portfolio. And the growth prospects in the U.S. is probably one of the best in our portfolio.
I mean, we are seeing aggregate demand very positive. We’re seeing GDP growing, inflation is much more under control than other places. So in terms of geographic allocation, it’s the U.S., Northern Europe, Mexico and Mexico is kind of rising in its importance in terms of allocating investments there as there’s further integration. In terms of the areas that we’re investing in, I mean, clearly, there is some completion of investments in cement in many of the right markets that are sold out that we’re being capacity in. And the other is, as I mentioned, is aggregate replenishment, particularly in the U.S. and Europe. In the U.S., we’ve made several investments, and that’s an area that is very attractive and that is going to continue to be an area of interest to us.
And then investments that we believe are extremely important that have double materiality in our future in action area and climate agenda area, a lot of the use of alternative fuels, green types of products, whether it’s cement or ready-mix, a lot of these investments are going into those areas. Those are highly accretive investments at the end of the day and have payback periods that are on average, four to five years, six years. And so that’s kind of the areas that we’re looking to allocate into in terms of investments. Now as far as the dividend concerned and the allocation of cash flow to dividends, we would not have announced the dividend payment unless we really were very confident that sometime this year, we would get our investment-grade rating, but also it’s a very important sign of our confidence of the outlook that we have in terms of the business, free cash flow generation and having sufficient operating free cash flow to continuously systematically provide the dividend payments that we have.
Now we’re starting — compared to our peers, we’re starting early, and we looked at about 10% of our operating free cash flow, and that’s where we’re starting. And of course, we’re hoping is that as our business grows, that our dividend on average will grow throughout time. So that’s kind of the logic behind it, and we’re very comfortable with it. I don’t know if there was another part of the question that I — because you had several parts of the question. I don’t know if I’ve missed not answering one of them.
Francisco Suarez: No, no, Maher that this is perfect and wonderful rational that we think for that.
Lucy Rodriguez: The next question comes from Adam Thalhimer from Thompson Davis.
Adam Thalhimer: I wanted to ask quickly about the EBITDA guidance for 2024. I’m wondering if low to mid-single-digit growth is a touch conservative if we’ve got flat volumes, but pricing up, margins up some. I’m just curious if there’s a little bit of upside to that in your view?
Maher Al-Haffar: Adam, I mean, look, we’re taking — I don’t want to say cautious, but the world is volatile. And we — I don’t want to say that we’re taking the same approach that we did in last year where we gave one guidance that turned out to be super exceeded, but we’re definitely being cautious. As Fernando mentioned, the dynamics, both on pricing and on volumes are quite different from where they were last year. And so navigating into a dynamic is quite different requires prudence and caution on our part. I mean, there’s — frankly, I mean, we’re very optimistic about what’s happening in Mexico. We’re very optimistic about what’s happening in the U.S. We’re cautious, obviously, on EMEA and Europe, and we’re expecting stability there.
We’re cautious on South Central America, Caribbean. There are potentially upsides in energy. I mean, I know, for instance, in the case of Mexico, we have been taking advantage of the drop in the price of natural gas, for instance, Mexico typically, we’ve been using a big dose of alternatives and a big dose of petcoke And of course, natural gas has dropped quite materially. And in Mexico, the differential between nat gas and petcoke is almost one-third and many of our plants in Mexico are located near and are able to use nat gas. So there are potential input cost elements that may contribute to better performance than we had expected. We are locking in some of the lower cost of energy that we’re doing. We’re hedging some of our pet coke uses as well.
We’ve already locked in a lot of the diesel cost. There may be some upside to that as well. So there are a number of things that they’re on the cost side that may have some upside, but we need to be cautious. I mean, honestly, we need to be cautious, and that’s where we are on our guidance.
Lucy Rodriguez: And the next question comes from Anne Milne from Bank of America.
Anne Milne: Congratulations. It’s very nice to see that EBITDA number for 2023. My question has to do with what the rating agencies still might be looking at for an IG rating? And I’m just thinking of other companies that I’ve seen that have been in positions where they were looking at upgrades. And there are two things that I see that when I look at your balance sheet, I — that occurred to EMEA. And I just wanted to get your comments on them. One, it’s large cash balances. You have a healthy cash balance, but some of these people have much larger. I think you have committed credit facility. So I was just wondering if you could comment on that. And the second one is a long runway in debt maturities, and you do have a relatively short debt maturity profile over the next few years. Have you thought about extending that?
Maher Al-Haffar: Yes. Thanks, Anne. I mean, look, the — we are probably right in the — at the CHIP edge of being IG metrics from a leverage perspective, of course, the rating agencies don’t just look at that. They look liquidity, they look at stability of earnings, they look at the cycle, they look at management’s behavior and so forth and so on. And I think that we’re looking at that matrix as well. And we’re making sure that we’re ticking every one of those, and I believe we’ve picked every one of them. Now specifically regarding cash balances. I mean, we typically have $500 million to $600 million of cash balances on an ongoing basis. That number gets a little bit lower, gets a little bit higher depending on when we are seasonally during the year.
But because of that and because of the — we want to make sure that we don’t have anything that keeps us awake overnight in terms of liquidity. As you know, last year, when we refinanced our bank facility, we increased our revolving credit facility by $0.25 billion. And there are opportunities to further increase our liquidity on the euro side, which we are pursuing as well. So I think at the end of the day and last year, on average, we had between cash on hand and availability under the revolver, probably an average of about $1.8 billion, $1.9 billion of available committed liquidity on hand. With the additional — with the increase in the revolver and even potential expected increase, we are going to probably be increasing our revolving facility a little bit more.
We’re going to have more than sufficient liquidity for us to go through any really cyclical or seasonal change to take place. So I’m not — I’m really not worried about that, and I think that, that should not be an issue. Now in terms of the maturity schedule, I mean, I think we’re ending the year with a maturity schedule, which is very comfortable and well within our free cash flow from operations generation that we have today. Now having said that, we’re not — we’re never done in terms of liability management, and we are looking at a number of transactions. Some of them are already in the market. As you know, we’re in the market with the reopening of the sabores, which should help us push funding out. We are in the bank market on the euro transaction, which would — should help us push maturities out.
I think after everything is said and done, we should be looking definitely at a much more smooth out maturity schedule, which is well within what the rating agencies are expecting. Now of course, as rates drop, we’re looking at potentially issuances very long dated that would materially change the average life of our portfolio. But given the fact that we’re seeing — we’re expecting rates to drop in the back half of the year, given our improvement in creditworthiness and given the liquidity in the market for both in the bank market and in the bond market, frankly, having an average life of five years doesn’t really concern me with the very long runway to any material maturities. I’m — we’re very comfortable with that.
Anne Milne: And could you just tell me what is the current amount of your — the total amount of your revolving credit facility?
Maher Al-Haffar: It’s $2 billion. The committed revolving facility.
Anne Milne: No, I would agree that your numbers are most definitely comfortable. I’m just thinking sometimes the rating agencies don’t like things excessive. So I just wanted to get an update, and that was a very good one.
Lucy Rodriguez: We have time for one last question. And the last question comes from Gordon Lee from BTG Pactual.
Gordon Lee: Congratulations on the numbers. I just have a question sort of on the Urbanization Solutions business. I was wondering if you could just give us general color on maybe the geographic breakdown of where that EBITDA is coming from. And whether you expect to provide more disclosure on that unit, given how large it is now? And I’m going to — this is a clarification, not a question. So we see [indiscernible] set. But just wanted just to confirm that in your $1 billion cash tax guidance, you are including the full amount of the sort of one-off payment that you’re expected to make in Spain?
