Maher Al-Haffar: Yes. Maybe I’ll take the first — the second part of your — the second question first, Gordon, because that’s very important. I mean we’ve never had a cash payment of $1 billion for taxes, I don’t know, ever that I remember. So the answer to that is definitively yes. We are expecting that to happen. Now having said that, it may be tranched out for a longer period of time. So it may be not as bad in terms of free cash flow draw this year. But yes, it is included. And I think it’s very important, however, to take a look at if we adjust the cash taxes for the payment, assuming that we pay 100% of that this year and you compare the cash taxes that we paid last year versus what is implied in our guidance, I think you would see that we’re actually expecting cash taxes from operations, excluding this one-off to actually be declining for 2024.
Now the — as you know, the cash taxes from ’22 to ’23 stepped up the biggest two drivers of cash taxes stepping up between ’22 to ’23 are two things, maybe three things. Number one is that the Mexican business had a spectacular year, had a record year in terms of earnings. Second thing is that we’ve consumed all of our — or most of our NOL’s in ’22. And so we did not have the benefit of that. And third, we have this incredible situation where the vessel appreciated dramatically inflation did not go down. And so we had this kind of extraordinary income that is taxable that — which was probably the biggest contributor to our increase in cash taxes. That dynamic is not likely to happen in ’24, ’25. And if it did, the positive impact of that, meaning if we have another 15% appreciation of the Mexican peso, yes, that might imply a little bit more cash taxes.
But guess what, that is probably going to be phenomenally positive to our EBITDA in terms of cash flow generation in Mexico. And when you take out the impact of the FX and the inflation in Mexico and adjust our tax rate, the tax rate is actually going down from ’22 to ’23, and the expectations, the implication of our guidance is that it will go down as well in ’24. So I don’t know if that answers the tax question.
Gordon Lee: Perfect. It was a clarification [indiscernible]
Maher Al-Haffar: A second question, Urbanization Solutions, Gordon. We’re very excited about that business, okay? I mean, that business is growing high double-digits, as you saw this year, EBITDA grew — I mean, ’23, EBITDA grew 30%, almost twice as much as sales, very high operating leverage. This business has become definitely without any doubt, a core business. It complements all of the value offerings and solutions that we have in cement, ready-mix and aggregates, highly integrated into those businesses. The areas — the regions that are contributing the most and where our investments are the most are really Mexico and the U.S. And the areas that we’re focusing on in the case of Mexico, for instance, is admixtures — we’re certainly focusing on circularity.
You know that we purchased — we invested into that area. The multiproduct area is also another very important area of expanding. And then the U.S., the U.S. is also almost contributing one-third of the overall EBITDA. Now in ’23, the contribution of our Urbanization Solutions is almost $300 million and with a double-digit EBITDA margin. And so we’re very excited about that, and we’re likely — part of our investment strategy definitely is going to continue supporting this area. It’s very broadly diversified. It’s relatively low risk. Some of the investments are countercyclical to our — the rest of our business. And very importantly, it complements our future in action and our climate action strategy as well because it enables us to accelerate the strategy in our product strategy in the virtual family of products, whether in cement or ready-mix.
As you have seen, I mean, we’ve exceeded our targets in cement. We’re about to get to our target in ready-mix. And so it’s very complementary, and it’s a very important part of our strategy.
Gordon Lee: And there presumably also, presumably a very ROIC accretive business as well, right, to your overall mix?
Maher Al-Haffar: Absolutely. I mean a lot of the — I would say the return on capital employed in this business, it’s very much in line with our growth investment parameters, I mean, which are very accretive. We’re talking 25% plus IRRs, and we’re talking about, and particularly in the case of the admixtures, relatively speaking, shorter payback periods.
Lucy Rodriguez: We appreciate you joining us today for our fourth quarter results. We hope you will join us again for CEMEX Day taking place on March 20 and then again for our first quarter 2024 webcast on April 25. If you have any additional questions, please feel free to contact Investor Relations. Many thanks for your time today.
Operator: Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect. Good day.
