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

Greetings and welcome to the Bolsa Mexicana de Valores SAV-DCV First Quarter 2026 Earnings 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. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Ramon Gomez. Chief Financial Officer. Thank you, sir. You may begin.

Thank you. Good morning, and welcome to Bolsa Nigena de Valores First Quarter 2026 Earnings Conference Goal. Before proceeding, I'd 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. Folsom does not intend and does not assume any obligation to update this forward-looking statement. I'd like to remind participants that today's call is being recorded with a replay available online on April 23rd at Pulse's corporate website, www.dmv.com.mx. The press release and slide deck can also be accessed in the investor relations section in the same site. 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, our CEO, Claudio Vivian, Chief Information Officer, Roberto Gonzalez, Chief Post-Grade Officer, Gabriel Rodriguez, CPICAP CEO, Alfredo Guillen, Managing Director Equity Markets, Jose Miguel Rios, Managing Director Derivatives Markets, Luis Rene Ramon, Managing Director Sales and Marketing, Jana Rivas, SPNA and IR Director, and myself, Ramon Guemes. With that, I'd like to turn the call over to Jorge Alegria. Thank you.

Thank you, Ramon. Good morning, everyone. As you are likely aware, yesterday, besides the financial results, we also announced that after 18 years in the exchange and 13 years as a CFO, Ramon has decided to secretly retire from B&B and focus on new personal and professional endeavors. I want to thank him for his many contributions during this tenure as both an IRO and CFO. On a personal note, I started collaborating with Ramon during the IPO Roadshow back in 2008. So, I wish him well, and I am very proud and happy to see him leave as a good friend of the Mexican licensing. Also yesterday, as mentioned, we released our earnings results, including a detailed review of our performance in the first three months of 2020. To begin with, I would like to highlight strong operating results achieved this quarter. These were driven by market volatility, also from international geopolitical events, as well as a market that continues to show increased dynamism generating favorable effects across the entire value chain, from financing to settlement and custody. Financing activity rose by 84% in the first quarter of 2026 when compared to the same period of 2025. representing an additional 105 billion pesos of financing and reaching a total of 230 billion pesos. This is led by a 270% increase in long-term debt financing, which reached 146 billion pesos, while the number of new listings increased 200% from 11 to 33. we had two FIBRAS or REIT deals for 9 billion pesos. The new FIBRA Park Life and a follow-on on FIBRA Monterrey. Short-term debt listings remain constant even though the amount financed was lower than last year. The financial impact of these operations and this activity is partly reflected in a 53% or 8 million pesos growth in our listing revenues. However, we will see the largest impact next year reflected in maintenance revenues for 2027 onwards. We now have 580 long-term programs totaling at 1.8 trillion pesos. Both are record numbers. And as you know, I mentioned the revenue impact for this year is limited due to the cap we have on listings. This strong performance reflects issuers growing trust and highlights the role of the Mexican stock exchange in efficiently channeling capital towards productive investments. In the equity market, we saw both local and global momentum with average daily trading volume and value approaching 21 billion pesos. This is over 20% when compared to 2025 and one of the highest levels in recent years. along these same lines, activity in our CCP, the CCB for equities, also grew by over 20%, both in amounts and operations cleared. Growth was also evident in futures trading, particularly in the dollar-peso contract, where the activity doubled when compared to Q1 2025. This is supported by peso appreciation and other market volatility factors already explained. We have continued with our efforts to lease new equity contracts, joining the ranks of previously listed names such as Apple, Nestle, Netflix, Nvidia, and Tesla from our SICK cash equity trading division. But in the event of clearing growth, this was impacted by reduced margin deposits So, in spite of the increased trading volumes, we had a small net negative impact in Asigna because of the reduction of the margins managed. Indeval reaffirmed its strength during quarter, excelling in three key areas. Assets on the custody, settlements, and cross-border transactions through the SIC. Assets on the custody rose 14% driven mainly by funds, pension managers, and equities, reaching 47 trillion pesos. Settlements average 11 trillion pesos per day, and this is a 25% increase in market instruments, in equity market instruments, reflecting the segment's demand. Volatility during the period provided additional momentum to cross-border transactions of usage and ETF via the SIC, which grew 29% in trade value and 45% in the number of operations, consolidating in the role as a key player in international market integration. Overall, Q1, 2026 was particularly solid for Grupo BNB with outstanding operating performance across multiple business lines. This confirms the resilience of our business model, which remains robust and consistent across diverse scenarios. And this performance is reflected also in our financial results as follows. Our revenues grew 7% of 83 million pesos driven mostly by the volatility mentioned before. Growth was concentrated in interval, which saw strong growth in assets under custody, as explained, settlement activity, and cross-border transactions. Cash equity trading and clearing, which combined grew 19%, as explained, due to the daily average trading volume increase. and we are maintaining our market share of around 80% in equity trading. Lifting revenues are 53% above Q125 due to the strong lifting activity I mentioned, and as I said, the most important impact for this will be next year reflected as maintaining revenues. In derivatives, we saw strong performance in Negrer with a peso dollar contract driving revenue growth of 24%, However, reduced margin deposits are affecting a little bit of revenues in Africa. C5 cap's good results are worth mentioning. In Mexico, revenues grew 12%, and we have very good results in our bond and on our D2C debt. While in Chile, even though the revenues are down, we have a very, very strong activity in March. Expenses are growing by 10%. led by personal and technology costs, both of which reflect investments in our strategic project made last year. This expense level is in line with our plans for this quarter, and the growth rate is also in line with our expectations, which we have shared with you in the past, along with the investments in our strategic projects, where we continue and will continue with our cost control efforts across the company. CapEx for this quarter was 41 million, and not because we are slowing down in any way, but because of the timing of the payments to be made in our CapEx plans for this year. With this, we have an FBA of 685 million, 6% above last year, while the margin is 56.5%, one percentage point below. To properly analyze this number, we have to take into account the appreciation of the currency, almost three pesos versus Q1 of 2025. This is an impact of around 40 million pesos in our ADBA. Our net income was 437 million, same as last year. And the difference between the EBITDA growth and the flat net income is explained by the lower interest rate income. Interest rates, as you may recall, for the quarter fell from 10% last year to 7% this year. Looking ahead, our priority for 2026 is the execution of our strategic project that will strengthen our infrastructure. broaden our portfolio, and deepen our integration into global markets. Building on this priority, I would like to share progress on the two main initiatives scheduled to be released by year-end, the new derivatives market platform and the new repo clearing segment. The derivatives platform is a transformative project for our group. It integrates measure operations a signal clearing, market surveillance, and a new data offering, all supported in the cloud. Execution follows a defined plan, technical testing beginning June, and will be followed by functional testing with market participants in September. This will progress from isolated files to comprehensive system-wide validation. The project is set to conclude on Q4 2026 and go live on Q1 2027. Currently, we have working groups with trading firms and trading members, which are addressing anticipated changes, the challenges, the implications, and market alignment. The repo trading segment will be incorporated into our CCD service portfolio, end-to-end industry testing is scheduled for Q3 2026 as well. with design completions targeted for December this year. This initiative, the repo clearing, follows the same agile methodology applied to other projects. We expect to have a much faster adoption in this segment because of the reduced capital requirements and benefits it will bring to market participants. Both of these projects are supported by a dedicated project management office and multidisciplinary teams, including experts in operations, products, technology, and data, alongside representatives from compliance, internal lobbies, finance, and legal. So this structure ensures orderly execution, comprehensive risk and opportunity assessment, and a strict adherence to corporate governance standards. So beyond these initiatives, We are also advancing on our broader portfolio of projects within the digital evolution program. Altogether, they represent a comprehensive transformation for B&B Group, modernizing our infrastructure, expanding our reach, and reinforcing our role as the backbone for Mexico's financial system. With discipline, innovation, and , we are shaping the future of market infrastructure and creating lasting value for all participants. With that, I conclude our remarks for the quarter. We remain focused on executing our priorities with discipline, advancing our key initiatives, and adapting to evolving market conditions. Thank you again. to all of you for joining, and together with my colleagues, we are more than glad to address any questions you may have. Thank you very much again.

Thank you. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. In the interest of time, we ask that you each keep to one question and one follow-up. Thank you. Our first question comes from the line of Ernesto Gabalando with Bank of America. Please proceed with your question.

Thank you. Hi, good morning, Jorge, Hanna. Good morning to all your team. And Ramon, we will miss you and good luck in your next chapter. Thank you, Ernesto. Thank you, Ramon. So I have three questions from my side. I will do the first one, and then I can elaborate the other two. My first question will be on your revenues. You mentioned in the press release that revenues benefited because of the volatility experience during the quarter, and you do not discard this to moderate in the next quarters. So having said that, how do you see revenues evolving this year Should we expect around mid-single-digit growth? And what will be the drivers behind the revenues?

Thank you.

How are you?

This is Jorge Alegria. Yes, you're right. I mean, I think it's fair to say that this quarter we have seen quite a lot of volatility and changes. I mean... globally and locally as well, internet rate movements, FX. So that has impacted positively our volumes. And also we saw very strong issuers activity due to interest rate movements as well as FX helping domestic participants to be more active in the peso market than in the US market. This is something that is good for us. We cannot assume that we'll continue. We never know. So I guess here is Ramon, but I think you're right in single digits is a fair assumption.

Yes, that's correct, Ernesto. We had a very good month of March.

Last year, revenues were relatively stable. around the 1.1 billion. So, you know, around mid-single, I think, is good. It also depends on the volatility we get. If we get more help from volatility, you could see that increase to high single.

Perfect. Perfect. Thank you. And then my other two questions, the second one is also related. How should we expect the evolution of revenue growth versus expenses growth given your investment plan? How are you seeing both of them? Should we expect OPEX to be a little bit higher versus revenue growth? Any trend that you can guide us could be very helpful. And then my last question is in terms of regulation. I don't know if there's any update. on discussions related to a potential market spill related to hedge funds, and also if there is any other type of regulation in the pipeline. Thank you.

Expenses, we are projecting them to grow at high single digits, Ernesto. So depending on how revenues perform this year, as we have said before, we would be expecting a slight decrease in margins.

Just like we saw this Q1.

We are working very close to authorities because mainly because of our project, Ernesto, and we have heard again quite often that the authorities, mainly the Treasury and the Mexican Securities Commission are moving now faster to the hedge fund regulation. So hopefully we will see something this same year, as you know, the law is there, the law was approved. So it's the secondary market ruling. We are working together also with the Mexican Brokers Association on this. And yes, we agree this will be great news on the hedge funds to increase market participants. I am not aware of any other rules coming on the market. on the market from the regulators.

Perfect. Now, thank you very much, Jorge, and again, good luck, Ramon, and thanks for all your help.

Thank you, Ernesto.

Thank you. Our next question comes from the line of Daniel Miranda with Santander.

Please proceed with your question. Hi, good morning.

Thanks for taking my question and conducting the results. Just a very quick one from my side. Just wondering if you could help us better understand the sensitivities affecting performance. On one hand, for financial income, how should we think about the impact of further rate cuts and lower cash balances, and how much additional downside could we expect on that line? And on the other hand, FX appreciation had negative impacts across your P&L. So, how should we think about FX sensitivity going forward? And do you hedge any of these exposures?

Yes. Thank you, Diane. Interest income, it's going to be impacted by the reduced interest rates on a year-on-year comparison. Mm-hmm. The first way is just straight off the cash balance. It's not all in Mexico, but I think that's the best approximation you can have. Just the interest rates to the cash balance. On FX, we have two impacts. First of all, on the P&L, we have for each peso, for each peso, the currency appreciates. we get around 50 or 60 million pesos less in EBITDA. That means our operation is long US dollars. So for us in the short term, a peso depreciation helps our P&L. Roughly, as I said, one peso is equivalent to 50, 60 million pesos on a full year basis. On the balance sheet, we started hedging this quarter. We had a bit of an effect still, but we'll continue with our efforts to reduce the impact on the balance sheet, on the difference between assets and liabilities in the balance sheet.

Perfect. Very clear. Thank you.

Thank you.

Thank you.

Our next question comes from the line of Edson Muglia with Sumacat. Please proceed with your question.

Hi, good morning, and thank you for taking my questions. Specifically about the expenses and the investment projects, just trying to figure out and doing the dots about CAPEX, those projects that Alegría mentioned in the call are the main one, or related to these increasing expenses in the CAPEX. And my second question is, could you use more detail about the deferred income? It seems odd to try to understand why this quarter increased 125 million. Thank you.

Our main projects are the ones Jorge mentioned. This technological evolution, upgrading basically all of our technology in derivatives, trading and clearing, in post-trade, the cash equity CCV, the having the new technology for the bond and the repo CCV, new data, and moving to the cloud. Those are our main projects. That's where our expense is concentrated on those efforts, and that is the majority of the capex. On your second question, I didn't quite get it. Could you repeat it, please?

Yes. This quarter, there is $525 million in deferred income in the balance sheet. But historically, the deferred income, it's a low single-digit.

between 8, 11? What you have is seasonality, Edson. The maintenance fees from issuers is collected in advance. We have seasonality in the cash balance. Usually we have an increase in cash balance in Q1 because we collect all these annual fees on a one-time basis in Q1. What you collect, we recognize the income on a linear basis throughout the year. The net of the balance is in deferred income. So if you look at historical, you're going to see this deferred income, and it goes down. Every quarter can get very close to zero towards Q4.

Okay. Okay, got it. Thank you so much, and good luck. Thank you. Thank you.

Thank you. Ladies and gentlemen, as a reminder, if you'd like to join the question queue, please press star 1 on your telephone keypad. Our next question comes from the line of Carlos Gomez-Lopez with HSBC. Please proceed with your questions.

Hello and good morning. First of all, thank you for your service of many, many years, Ramon. You have been the face of continuity and good humor from Bolsa. So we will all meet you enormously, and I'm very glad to hear that we will no longer be talking to you.

Thank you, thank you, Carlos. Did you know?

Really?

Sí, por último. That would be me. You know, the entire group I work with.

I have, in the spirit of analysis, three questions. The first one is to Jorge, what are you going to do without Ramón? Because that's a difficult decision to make. On the numbers thing, last year you had a margin of 56.2%. And I want to understand correctly, do you expect that margin to go up or down this year? Because, you know, even with single digit, you know, high single digit revenue growth, I mean, given your expenditure class, it would seem that... the margin should go down rather than up. So we would like to understand that. And finally, we understand that you have started to hedge the foreign position on the balance sheet. We understand that. Does that also impact the income statement? And that is why perhaps the impact of the appreciation of the peso has not been as extreme in this quarter. Thank you so much.

Thank you, Carlos.

On a full year basis, Even the margin was 57% last year, and as I said, yes, it could go down. We need to have volatility to maintain the margins. If we don't have volatility, margins could be coming down.

On the hedging efforts, what we're doing is

Managing our long position, it means trying to sell the dollars that we have at the end of the month. We're not, as of now, doing any derivatives or efforts on that side. We're just trying to net the balance to zero.

Okay, so that shouldn't have an impact on the P&L?

No, it should not. Okay. Thank you so much. Thank you.

Thank you. Our next question comes from the line of Yuri Fernandez with JP Morgan. Please proceed with your question.

Thank you, and thank you, Ramon, for all the help those years. Good luck. I have a question regarding just a follow-up on CapEx. If anything has changed for your previous guidance of $500 million, given this quarter starts a little bit soft, I think you are doing less than 10% of the budget for the year, so just checking if... I know the investments are still there and the modernizations are still there, like the big scheme of things, but if maybe... stronger payers, or I don't know, maybe the CapEx budget will be less than the 500 million pesos you mentioned in the previous call. And then a second question regarding competition on equities. I think like this was acquired to that. I know this is volatile, it changes all the time, but you gain some market share. So just on competition dynamics, if anything has changed between you and the competitor. Thank you.

Thank you, Judy. No, CapEx is still expected to be around 500. We had a slow start. As Jorge said, it's basically the payment, the timing of payments. But we're still expecting to finish the year close to 500 million pesos in CapEx. And for competition dynamics, I'll let Alfredo Guillen take that one.

Hello, Yuri. We have been experiencing improvement in market share explained by some initiatives that were requested to us by our brokerage, mainly two initiatives. First, the improvement in block trading dissemination in real time, which is very important for traders to make decisions, and we're lacking detailed information on that. And then we also were requested an improvement in trading reports that are now released by our central counterpart. And this information now includes block trading. So this gives brokers accurate information regarding their place in the equity markets, and therefore, driving more trades to the Mexican Stock Exchange. So basically, we experienced better information to the market. and better decision-making regarding the depth of the books and trading activity in Mexico Stock Exchange.

Super clear. Thank you for the explanation. Thank you, Yuri.

Thank you. Our next question is a follow-up from the line of Carlos Gomez-Lopez. with HSBC. Please proceed with your question.

Yes, thank you. Just a follow-up on the dividend. Have you decided what dividend level you would recommend and what should we expect in terms of buyback for the year?

Thank you. The dividend is what we have said, Carlos, 2.5 euro pesos per share. That is going to be proposed for the General Assembly, which is going to be next Monday? Next week. Next week? Yes. And for the buybacks, we don't have a fixed amount. As we said, our purpose was to give back 80% of net income. The dividend amounts to 70%. If the buyback does not cover the remaining 10%, we will be proposing an extraordinary dividend for Q3. More than a specific amount for buybacks, we have a specific amount for overall capital return, which is 80% of net income from last year.

Okay. Very clear. Thank you. Thank you.

Thank you. Ladies and gentlemen, that concludes our question and answer session. I'll turn the floor back to Mr. for any final comments.

Well, thank you very much for joining. We had a pretty interesting quarter. We will continue to strengthen our initiatives on the technology side, keeping a very strong control on costs and expenses. I want to reiterate my appreciation to Ramon, to Ramon Gómez for all those years working with us. In the meantime, while we made our definitive appointment, you all will be dealing with Luis Ramon I'm sure pretty much all of you know, he has been working for the company more than 10 years, specifically in the finance area. He was in charge of investor relations for many years. I mean, he led our marketing and sales and commercial efforts for almost two years now for the exchange with extraordinary positive results. So he will be, in the meantime, taking over the so I'm sure that he will have plenty, plenty of things to deal with, and happy to answer your questions moving forward. So thank you, Ramon, again. We are going to meet you on a lot of things, not on your humor, definitely, but we wish you well, and above all, thank you all for your time listening our remarks and see you and talk to you soon if not in the next quarter thank you this concludes today's conference call you may disconnect your lines at this time thank you for your participation