Grupo Traxión, S.A.B. de C.V.

Good day, ladies and gentlemen, and welcome to the TRAXION 4Q21 and 2021 earnings call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Abhi Litzen. Sir, the floor is yours.

Good morning. Welcome again. I'm very pleased to speak to you after another outstanding year. TRAXION, has maintained its leadership position in the logistics and mobility industry. The company posted record high figures in net income and revenues and has broken its own records. But most important is that we continue to grow after two of the most complex years in recent history. The COVID contingency and the semiconductor scarcity limited our growth. but Traccion achieved the goal nonetheless, mainly due to a better than expected outcome of our asset-light division. During 2021, Traccion started reporting its logistics and technology segment separately, and it performed beyond its forecast. This division generated revenues of more than $220 million in 2021, which was beyond of our initial expectations. And such contribution now represents more than 27% of total consolidated revenues, well ahead from the original outlook. Moreover, just the growth of revenues from this segment represented basically half of the income growth of the whole company. We're very excited about what we see moving forward in this division. It is worth mentioning as well that Traccion has evolved quite favorably in terms of ESG. If you look at our report, you will find some interesting achievements that place us on a vintage point in such matters. We're one of the few Latin American companies to be included in the Dow Jones Sustainability Mila Pacific Index. Shifting gears, We just released our guidance for 2022, which considers a growth of approximately 13% in revenues and a margin around 19% figure. This margin level is mainly due to a higher contribution of the asset-light division that typically carries margins around 10%. To achieve such growth, we are considering a capex of approximately 3 billion pesos during the year. For 2022, we prefer to continue to be conservative and prudent, especially given recent events in Eastern Europe. Uncertainty prevails and we must act accordingly. Please be advised that this guidance considers only organic growth. Now, in terms of M&A, as we have been mentioning, we are resuming our activity and have some things lined up in the pipeline. mainly for the logistics and technology division, which we expect to announce in the coming months. As you see, we plan to privilege the expansion of our asset-light business lines while continue to take care of our traditional segments, which will allow us to develop our logistic interests. In 2022, Traction will keep moving ahead with profitable steps. Thanks for your attention. I will now hand over to Rodolfo.

Thanks, Javi. Hello, everyone. Welcome again. I just want to share with you some interesting facts, mainly on the operating front. As Javi just said, this was a very good year for our logistics segment. In terms of 3PL, we exceeded the goal both in new clients and revenues. Traction expanded his warehouse footprint by more than 50,000 square meters, and became significantly more efficient in space utilization and overflow management. During the fourth quarter, the company introduced an app for both clients and staff members so that they can have real-time information about their merchandise and processes throughout an accurate and reliable tool. We will continue to approach this business as the sector gains more penetration. Traction has a very strong commercial force in place and is very active on client targeting. Moving on, our last mile solution business continued to grow, mainly due to increase in e-commerce activity. In this division, Traction grew more than 42% its handling capacity and started a series of new initiatives to provide 100% product visibility. We further enhance our website to improve customer experience and show them a new image. Last mile solutions represent a great portion of our logistic and technology division. And we expect a healthy growth rate in 2022, as many logistics services continue to gain penetration in Mexico. And we capitalize on such opportunities. Moreover, and speaking about traditional business lines, we've made significant progress on the personal mobility segment. We finished 2021 with a very strong commercial momentum that paved the way for growth in 2022. We started operation with several clients totaling 300 new buses. We also kick off trails to automate some administrative processes. With this, we are one step ahead of competition in our client needs. Finally, in terms of mobility cargo, the company became more efficient. We focused more on more profitable services, such as refrigerated and petrochemicals, which typically carry better prices and margins. If you see in 2021, income of the division grew 11.5%, while kilometers volume increased 8.5%. And revenues per kilometer expanded 4.2%. This means that we generated more kilometers and we are able to sell them at a better price with a marginal increase in cost. As you can see, we had a very busy quarter and a very fruitful year. With this, I wrap my remarks. Please, Wolf, go ahead.