Pacasmayo’s Holcim Deal Validates 7-Decade Strategy

Date of Call: Feb 13, 2026

Financials Results

• Revenue: Q1 2025: PEN 559.5 million, up 6.2% YOY. Full year 2025: up 7% YOY.
• Gross Margin: Q4 2025: increased 0.4 percentage points YOY. Full year 2025: increased 1.9 percentage points YOY.

Guidance:

• For 2026, management expects volumes to be stronger than 2025.
• EBITDA margins are expected to remain stable or increase due to efficiencies, including energy-saving projects in the second half of the year.

Business Commentary:

Holcim Acquisition and Strategic Validation:

• Cementos Pacasmayo announced an agreement with Holcim for the acquisition of Inversiones Aspi, which holds a 50.01% controlling stake, valued at PEN 5.1 billion, representing a strong multiple of 9x record EBITDA.
• The deal is seen as a powerful endorsement of Pacasmayo's long-term strategy, operational excellence, and consistent performance over nearly seven decades.

Sales Volume and Market Demand:

• The company reported an 8.2% decrease in sales volumes for the quarter compared to the same period last year, but a solid 7.2% increase for the full year 2025 relative to 2024.
• Growth was driven by stronger demand for infrastructure projects and consistent performance in the self-construction segment.

Financial Performance and Cost Efficiencies:

• Excluding one-off expenses related to the Holcim agreement, EBITDA for the quarter reached $158.7 million, marking an 11.4% increase compared to the same period last year.
• This growth was attributed to disciplined execution, a relentless focus on cost efficiencies, lower raw material costs, and higher use of their own clinker.

Sustainability and ESG Recognition:

• Cementos Pacasmayo achieved 3-star recognition from Peru's Minister of Environment for consecutive years of reduced greenhouse gas emissions.
• The company maintained its leadership in the Merco ESG responsibility ranking for the tenth consecutive year, highlighting its commitment to sustainability, environment, society, and corporate governance.

Project Impact and Future Outlook:

• The pause of the Motupe River Bank protection project led to a 25.1% decrease in concrete, pavement, and mortar sales in the fourth quarter, but full-year sales increased by 6.3%.
• Despite this, the company remains optimistic about future margins, anticipating improvements from energy-saving projects in the second half of the year.

Sentiment Analysis:

Overall Tone: Positive

• CEO states: 'We are immensely proud... Holcim's decision serves as a powerful endorsement of Pacasmayo's long-term strategy...' and 'We are confident that the momentum we have built is there and we remain motivated to keep improving our performance.' The tone is optimistic regarding Holcim acquisition, operational momentum, and future volumes/margins.

Q&A:

• Question from Johan Clavijo (Sagil Capital): Could you please provide more details about the transaction with Holcim? Which steps are planning to close the transaction? Is there any risk we should be aware of? And how do you feel about the regulatory approvals for the deal?
  Response: CEO: The process is running smoothly, expected to close in the upcoming months with no foreseeable impediments.

• Question from Mariane Tadeo (CreditCorp): Please, could you explain why your acquisition-related expenses are assumed by Pacasmayo and why are they so high?
  Response: CEO: Expenses relate to long-standing contractual obligations for change of control; part will be assumed by Holcim post-approval, and the price is considered reasonable.

• Question from Gerald Fort (AFP Integra): Could you help us understand why Pacasmayo had to recognize the PEN 77 billion to PEN 80 million in expenses related to the Holcim transaction... What about the obligations required Pacasmayo to incur these costs?
  Response: CEO: The expenses are tied to existing long-term contracts for change of control, and the board approved the deal structure, expecting regulatory approval.

• Question from Gabriel Ramos (Kallpa): Given the pause of the Motupe River Bank protection project and its impact on volumes and margins in the fourth quarter of 2025. Should we expect similar project-related disruptions or margin pressures in the coming quarters?...
  Response: CEO: EBITDA margins should remain at last year's levels or slightly higher, with energy-saving projects in the second half enhancing margins. Public spending may pick up after elections in June.

• Question from Gerard Fort (AFP Integra): Could you provide any guidance on revenue growth and EBITDA margins expected for 2026?
  Response: CEO: Expects 2026 volumes to be stronger than 2025, with EBITDA margins stable or increasing due to efficiencies, particularly energy-saving projects in the second half.

Contradiction Point 1

Impact of Upcoming Elections on Economic Activity and Public Spending

Contradiction on whether elections will cause a pause or disruption in public spending and economic activity.

What is Gabriel Ramos' role at Kallpa? - Gabriel Ramos (Kallpa)

2025Q4: It anticipates a slower start to public spending in early 2026 due to an upcoming election, with activity expected to pick up in the second or third quarter. - Humberto Reynaldo Nadal Del Carpio(CEO)

Will similar project-related disruptions or margin pressures to those seen with the Motupe River Bank protection project pause occur in upcoming quarters, and how might this affect concrete pavements, mortar performance, and overall margins through 2026? - Marcelo Palhares (Itaú Corretora de Valores S.A., Research Division)

2025Q3: The CEO does not anticipate a significant impact from the upcoming elections, as 80% of Peru's economy is not greatly affected, and the current president is pushing regional governments to spend remaining budgets. - Humberto Reynaldo Nadal Del Carpio(CEO)

Contradiction Point 2

EBITDA Margin Expectations

Guidance on EBITDA margins changes from a specific range to a general stability expectation.

What are the key takeaways from the recent earnings report? - Gerald Fort (AFP Integra)

2025Q4: The company expects 2026 volumes to be stronger than 2025 and is optimistic about maintaining stable EBITDA margins. - Humberto Reynaldo Nadal Del Carpio(CEO)

What guidance is provided for revenue growth and EBITDA margins for 2026? - Marcelo Sá (Itaú Corretora de Valores S.A., Research Division)

2025Q2: The EBITDA margin is expected to remain between 28% and 29%. - Humberto Reynaldo Nadal Del Carpio(CEO)

Contradiction Point 3

Volume Growth Expectations

Forecast for volume growth shifts from a continued high single-digit trend to a comparison with the previous year.

What is Gerald Fort's role at AFP Integra? - Gerald Fort (AFP Integra)

2025Q4: The company expects 2026 volumes to be stronger than 2025. - Humberto Reynaldo Nadal Del Carpio(CEO)

What guidance is expected for revenue growth and EBITDA margins in 2026? - Marcelo Sá (Itaú Corretora de Valores S.A., Research Division)

2025Q2: For volumes, the trend of high single-digit growth is expected to continue in the second half of the year. - Humberto Reynaldo Nadal Del Carpio(CEO)

Contradiction Point 4

Project Outlook and Margin Stability

Contradiction on near-term margin stability due to project-related disruptions.

What is Kallpa's outlook under Gabriel Ramos' leadership? - Gabriel Ramos (Kallpa)

2025Q4: The company expects EBITDA margins to remain at recent levels or potentially improve, supported by energy-saving projects planned for the second half of 2026. - Humberto Reynaldo Nadal Del Carpio(CEO)

With the Motupe River Bank project paused affecting Q4 2025 volumes and margins, should we expect similar disruptions or margin pressures in the coming quarters, and how might this impact concrete pavements, mortar performance, and overall margins into 2026? - Natalia Leo (JPMorgan)

2025Q1: The 9.2% expense increase is a one-time provision... EBITDA margins should remain stable for the rest of the year. - Humberto Nadal(CEO)

Contradiction Point 5

Capital Allocation and Dividend Policy

Contradiction on the priority of debt reduction versus dividend payments.

What are your key priorities for the next quarter? - Gerald Fort (AFP Integra) - Follow-up

2025Q4: The capital allocation path will remain consistent: maintaining a solid dividend policy while continuously lowering debt. - Humberto Nadal(CEO)

What guidance is expected for 2026 revenue growth and EBITDA margins? - Marcelo (Itau)

2025Q4: The board approved the transaction, considering the price paid by Holcim for the controlling stake to be reasonable. Part of these expenses will be assumed by Holcim in a subsequent mandatory tender offer for the remaining shares. - Humberto Reynaldo Nadal Del Carpio(CEO)