Grupo Traxión, S.A.B. de C.V.

Good morning. Welcome to the Traxian Third Quarter 2021 Earnings Call Results. At this time, all participants are in a listen-only mode and the floor will be open for your questions and comments following the presentation. It is now my pleasure to turn the floor over to your host, Avi Litson, Vice President and Co-Founder. Sir, the floor is yours.

Good morning. Welcome again. Let me start by saying that this strong set of results especially relevant because traction continued to post notable growth rates over those of last year, which was a particularly challenging period, but very beneficial for us, mainly due to an excessive demand of several of our services, which has been normalizing. Despite of that, during this year, we have shown an attractive growth. There are several highlights in all fronts, financial, operational, ESG, and commercial. Our numbers speak by themselves, especially the accumulated results over the first nine months of the year. Rodolfo Wolf Antonio will provide you with more color and details, but I just want to share with you some thoughts. The company delivered record high figures in revenue, EBITDA, and net income. but perhaps the most important number to bear in mind is that accumulated net income for the nine months ended in September is more than 52% higher than the same period of 2020. Moreover, traction continues to leverage the balance despite the growth, while running at a 1.56 times net debt to EBITDA. There is something worse mentioning in terms of depth. Two of our rating agencies have increased their rating on Tracción, which is great news since such ratings confirm the strength of our business model and balance. In operating terms, our logistics and technology segment continues to expand in line with our objectives. Our logistics services that serves the e-commerce channel develop and penetrate. And we believe that there is still a tremendous opportunity for us. In this line, I want to let you know that we want to maximize the growth of this division, which we like a lot because it's asset-light nature. So far, we have been able to tackle opportunities and to generate organic growth. but we're also open to engage in M&A activity in this segment in order to achieve higher goals. Tracción has become a relevant participant in the last-mile solution business and a key player on the supply chain. There has been a paradigm shift on consumption patterns that is here to stay, and Tracción has been very well-positioned to continue to capture such opportunities. Now I handle the call to Rodolfo. Please, Rodolfo, go ahead.

Thank you, Avi. Good morning, everyone. Welcome. There are two special operational highlights this quarter. First is that we continue to improve our profitability in the 3PL business, since we carry on better margins than the competition. And second is that there is a very positive balance in the last mile operations. with significant improvements in the efficiency side. There is one element I would like to mention before we enter into further discussion. As all of you are aware, there is a global shortage of microchips that has affected several industries, especially the auto sector. This situation has not been beneficial for Traction because we have been experiencing delays in deliveries of trucks and buses, which has had an impact in renewal and expansion plans. We're working out with our fleet suppliers and managing our demands well into advance in order to sort out this situation favorably and with no further delays for 2022. Moving on, in terms of last mile solution, Traction has increased more than 35% of his handling volume and has accomplished a 98% rate on on-time deliveries. This was achieved mainly by carrying out technology improvements, and extended training programs, which have resulted in increase of level of service and client satisfaction. Perhaps one of the most relevant operational highlights this quarter is the expansion of more than 146,000 square meters 3PL logistic warehousing because of our strong commercial activity. Several existing clients have requested expansion in their capacity, while we continue to gain new accounts. We have complied with all certifications and audit for our clients. and recently obtained a best practice certification because of our inclusive organizational culture. On the personal transportation segment, we experienced some operational adjustments due to a more normalized success in demand generated by the contingency and the schools reopening. In mid-July, we started shifting fleets and preparing units, which resulted in a pre-operating cost and expenses which have, at the moment, were not offset by revenues from schools. since operations and billing process started in September. Because of that, we believe that there is no full comparability between quarters in this specific segment. Finally, in terms of mobility of cargo, there was a growth of more than 74% in refrigerated cargo operations and a good improvement in margins also. We continue to see market opportunities Since we entered this business three years ago, Traction has built a very strong competitive position, especially in the cross-border markets to and from the United States. Well, with this, I wrap up my remarks. As you can see, it was a very busy quarter. Thank you for your attention. I will now hand it over to Wolf. Please go ahead.