Bolsa Mexicana de Valores, S.A.B. de C.V.

Greetings, and welcome to the Bolsa Mexicana de Valores conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Ramon Guemes. Please go ahead, sir.

Thank you. Good morning and welcome to Bolsa Mexicana de Valores Fourth Quarter 2025 Earnings Conference Goal. Before proceeding, I would like to provide a brief safe harbor statement. This presentation contains forward-looking statements and information related to Bolsa that are based on the analysis and expectations of its management, as well as assumptions made and information currently available at Bolsa. Such statements reflect the current views of PULSA related to future events and are subject to risk and uncertainties. Many factors could cause the current results, performance, or achievements to be somewhat different from any future results or performance that may be expressed or implied by such forward-looking statements, including, among others, changes in general economic, political, governmental, and business conditions, both in a global scale and in the individual countries in which PULSA does business. such as changes in monetary policies, inflation rates, prices, business strategy, and various other factors. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary considerably from those described herein as anticipated, estimated, expected, or targeted. Bolsa does not intend and does not assume any obligation to update these forward-looking statements. This call is intended for the financial community only, and the floor will be open at the end to address any questions you may have. Joining us for today's call are Jorge Alegria, Chief CEO, Claudio Vivian, Chief Information Officer, Gabriel Rodriguez, DeFiCap CEO, Alfredo Piquen, Managing Director of Equity Markets, Jose Miguel de Dios, Managing Director of Derivatives Markets, Luis Rene Ramon, Chief Commercial Officer, Canarribas, FP&A and IR Director, and myself, Ramon Gómez, CFO. With that, I'd like to turn the call over to our CEO, Jorge Alegria.

Thank you, Ramon, and good morning, everyone. Yesterday evening, we released our earnings results, including a detailed review of our fourth quarter 2025 performance. The press release and slide deck are available on BNB, in the investor relations section. Before turning to our ongoing initiatives, I'd like to briefly frame where we are headed as a group. Our focus is clear, positioning the company as a market leader through innovation supported by advanced technology and a stronger infrastructure that enables advancement, access to new markets, and long-term value creation. We remain committed to disciplined capital allocation that supports our strategy while maintaining shareholder returns. As mentioned and communicated since 2024, our strategic plan contemplates higher investment levels to support growth initiatives. Accordingly, in 2025, we invested over 250 million pesos to maintain the competitiveness of our core systems and advance to our NASDAQ platforms, making the start of a multi-year investment cycle with capex declining from 2027 onward. In 2026, we are planning an additional investment of approximately 500 million pesos supporting a data-driven business, the expansion of our debt CCP, enhanced surveillance cybersecurity, cloud migration, and stronger continuity and recovery plans. Initial deliveries are expected with the completion of the derivatives platform under the NASDAQ Eclipse solution, followed by the repo CCP, both this same year towards 4Q26. While executing a significant investment program, we continue to balance this investment program with our shareholder return. So we are maintaining a dividend of 2.05 per share and a buyback program of at least 160 million pesos, implying a distribution of 81% of 2025 net income. With flexibility to complement this objective, through an extraordinary dividend toward year end if required. In 2026, our focus will be on the execution of our initiatives, laying the groundwork for revenue generating initiatives that we are expecting to see generating revenues and contributing from 2027 onwards. Let us begin also with a brief overview of the quarter's most relevant initiatives. We continue advancing on our new bond services for our CCP. November 2025 marked a significant milestone for the Mexican market with the launch of the first central counterparty for fixed income bonds. The first live transactions cleared by five banks through two inter-dealer brokers confirmed the successful launch of the CCP. While participation is not mandatory and adoption is expected to be gradual, Its introduction lays the foundation for the debt market's transition from a traditionally voice-based environment to a fully electronically centrally cleared marketplace. Experience from other markets shows the impact of combining centralized clearing and electronic trading. Mexican equities is an example. Experienced a nearly 20-fold increase in activity over two decades, while U.S. treasury volumes expanded by roughly 10-fold after adoption. These examples show how CCPs and electronic trading support growth across asset classes, and in this context, the Mexican bond market is a people's coin. With an average trading daily volume of around $6 billion, the introduction of a CCP and the shift toward electronic trading are setting the stage for higher volumes, more access, and greater liquidity. Consisting with our roadmap, The initiative is to advance for a second phase, the repo service on our CCP. This is expected to be completed by the end of 2026. And unlike the initial phase, adoption is expected to be faster, given strong market demand and benefits. With approximately $100 billion daily trading volumes, the repo segment materially expands the scope of centralized clearing and sets the stage of a surface extending to securities lending. On our data agenda, we are defining a unified data infrastructure strategy. This includes designing the target architecture to support the new trading and trading platforms for derivatives, along with data requirements across the rest of the business. A core element is the transition from an on-premise desktop to a cloud-based model, which will support advanced analytics Customizable reporting, data-driven products, and coordination with Merced and Asigna. New data product releases are planned for late 2026, aligned with the launch of the new derivatives platform. I would also like to briefly update you on our efforts and progress in market data. As part of a long-term strategy initiated several years ago, we have focused on increasing the international visibility of the Mexican markets by reducing access barriers and bringing market information closer to global participants. Complementing this solution, during 2025, we further evolved our access model through the deployment of the Global Access Network product, a fully virtualized co-location solution now operating in production. And under this model, Bolsa provides the core access and connectivity infrastructure enabling scalable framework for direct market access. This architecture enables more competitive pricing, faster time to market. As adoption instruction, the existing client pipeline supports a potential 5% uplift in market data revenues for 2026. Turning to derivatives, we see growth potential for Mesler given that substantial share of activity in the derivatives market remains in the OTC. This creates an opportunity to keep migrating volume towards listed and clear products over time. To address this, we are focusing on three levers, international exposure, retail product expansion, such as single stock derivatives and SIC options, and also supporting institutional participation through the ASICNA Liquidity Alternative Framework. At the same time, we are advancing the migration of our transactional services to NASDAQ Eclipse trading solution, which essentially, and this is essential to provide the scalability required for the long-term growth in the listed derivatives marketplace. As mentioned regarding the liquidity alternatives initiative for ASCINA, progress is still being made, gradual, but continuous. We have three major banks advancing in their implementation, while regulators are working on aligning the legal framework. From a Cigna side, the infrastructure is already in place, and the initiative is expected to materialize in the coming months. In parallel, equity listing activity resumed with the IPOs announced in the prior quarter materializing through Essentia, Aeromexico, and FibraNext, the follow-on transactions. This reflected an improvement in market conditions after several years of inactivity, with momentum continuing beyond the quarter. Currently, there are four companies actively exploring potential IPOs on a confidential basis. In parallel, the IPC index has reached historical highs, and equity valuations have improved. So together, all these factors affect strengthening equity market conditions and growing interest in public markets as a source of capital. Beyond the recovery in equity listings, market activity is also strengthening across other asset classes with record levels in 2025. As total financing reached MXN 755 billion pesos, 24% increase compared to 2024. Demand for debt listings is increasing across short- and long-term activities supported by a pipeline of approximately more 80 billion pesos for the first two months of the year, with high-profile transactions that increase visibility. Most of these issues are expected to be listed on BNB. Finally, structured products are also showing strengthening activity with higher demand for listed warrants driven by private banking and wealth management participation. Following on, the simplified listing initiative reminds an ongoing long-term initiative. The same confidential company is still in process, alongside with our ongoing efforts to promote the regime and build market awareness. This is a constant effort that with adoption expected to be gradual. Turning to our equity fee schedule, and as noted last quarter, we received a regulatory authorization to adjust our fees. However, implementation reminds our discretion with no requirement regarding timing or application. Currently, we are not planning any changes on our fees. Let me now move to our key financial highlights in the following slides. Please keep in mind that all figures are expressed in message competitors. On the slide three and four, for the key 2025 financial highlights, Q4 2025 revenues were flat at 1.1 billion pesos, while operating expenses rose 15% using our accelerated strategic investments. This pressure operating leverage driving a 9% EBITDA decline to MSN 608 million pesos, and with a 900 basis point margin contraction to 54%. Net income fell 20%, and at the full year level, revenues grew 7% to MXN 4.5 billion. Operating expenses increased 11%, and EBITDA rose 5% to 2.5 billion pesos. Despite the investment cycle, Margins remain strong at 56%, only 198 basis points below 2024 as expected. Net income shows resilience, easing 2% year over year. Taken together, Q4 reflects the timing of our accelerated and planned investments, not a change in the business structural profitability. The full-year results provide the right lens with solid revenue growth, higher EBDA in absolute terms, and structurally strong margins. Let's turn to the next slide, please. Revenues by business line across both 4Q 2025 and the full-year. Top-line behavior followed with the same pattern and was driven by revenue mix. Growth consistently came from equity and derivatives trading, $7 million, and 4 million, and for equity clearing, 10 million. Information services, 19 million, and capital formation for 8 million pesos. Steady growth in central security depository in the value of 10 million, and these gains were partially offset in both periods, seeing declines in the derivatives clearing space for 19 million, and our OTC trading for 6 million. Top line involved periods reflected a similar mix of strong growth segments and areas of softness, highlighting our model of the stability of the business fundamentals. Turning to the next slide on equity trading and trading activity, we see on 4Q2025 equity trading activity strengthening. Average daily trading value increased 10% versus Q424. This performance was driven mostly by growth across local and global markets. In addition, global markets transaction rose 23%, reflecting higher investor participation. BNB's market share remained stable, ranging between 78% and 80%. In the Cleveland businesses, revenues increased 19% in Q4-25, reaching the highest four-quarter level and delivering a strong year-over-year increase. Meanwhile, equity segment revenues rose 10%, reflecting a solid year-over-year recovery and remaining broadly stable compared to the previous quarter. Let us go on the next slide to review derivatives. Next there, posted 16% year-over-year revenue growth. However, this increase was offset by a significant decline in the derivatives creating business, resulting in a 19% increase in quarterly revenues for the derivative segment. Against this, trading dynamics remain active, particularly in dollar futures, where the average daily notional value increased 68%, an open interest group 1.2 times compared to 2024, Regarding margin deposits in ASCINA, year-to-date average balance in 2025 decreased by 15% compared to the prior year. On slide nine, we can see OTC trading results moving to SIPICA. OTC trading revenues declined 4% year-over-year, both Mexico and Chile, experienced an appreciation of their currencies, so Mexico revenue grew 6% and Chile decreased 8%. The performance in Chile was driven by lower market interest rates combined with volume discounts. On the slide 10, we have figures for our capital formation segment, where revenue increased by 6%. mainly driven by a 58% increase in medium and long-term debt listing activity. As a result of this record-breaking issuance phase, total outstanding long-term listings rose 8% year over year, reaching 546 issuers as of December of 2025. While the equity market has shown renewed activity, as previously noted, the debt market continues to strengthen. In 2025, BNB Finance 636 Mexican pesos, billion Mexican pesos. This represents an 8% year-over-year increase. This momentum has been further reinforced by the addition of new high-profile participants such as CFE, AMS, and SACI. Moving to the Central Securities Depository, slide 11 shows in the value revenue increase by 2% driven by more dynamic cross-border activity and higher assets under custody across both domestic and global markets.