Grupo Traxión, S.A.B. de C.V.

Greetings. Welcome to Traxion's 2Q23 earnings 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, Abi Li Cheng, Executive President at Traxion. You may begin.

Thank you. Good morning. Welcome, everyone. I am very pleased to share an all-record high quarter, both in financial and operating terms. Tracción continues to come across robust demand in all three business segments, and our CAPEX plan moved forward as expected. Consolidated revenue grew 21% and came at almost 6 billion pesos, which is the highest revenue figure in the history of the company. EBITDA came in for the first time above the 1 billion pesos mark, another record high figure. In terms of fleet, traction exceeded also for the first time 10,000 units this quarter, mainly boosted by organic growth in the mobility of people segment. Such expansion was driven by strong demand mainly from related activities. The logistics and technology division posted a 47% growth and continued gaining relevance in our operations. Moreover, the mobility of people segment recorded a 20% growth, mainly driven by increased demand and very interesting opportunities in the North and Bajajillo regions. In terms of cargo, Tracción moved forward with its field renovation program and continued to shift capacity to international and cross-border services, which has resulted in a higher revenue per kilometer. Shifting years, Speaking about M&A activity, in June, we closed the acquisition of VBA Logistics, a door-to-door and cross-border cargo brokerage company in the United States, with a 100% asset-light model, which mainly offers door-to-door service from Mexico to the United States and back. With this addition, we complement Transporta with control of cargo operations into American destinations. and a strong commercial leverage within Traction's client base, to whom we can now offer the complete service to the USA using Transporta's technological platform. This is a very relevant milestone as it marks our entrance to the United States market, a natural step to the company's international expansion, and yet an additional service to continue to size nearshoring opportunities. As you can see, were very active, working hard to capitalize the most profitable and strategic opportunities. Thanks for your attention. I will now hand over to Rodolfo Wolf Antonio for a more detailed discussion on financial and operating figures. Please, Rodolfo.

Thank you, Avi. Good morning, everyone. There are many positive highlights to point out this quarter. First, We continue with our growth plan in the people mobility segment. Perhaps the most important milestone is that we start operations with more than 300 units for new clients. This is especially relevant as it represents about a third of our growth budget of the year in this division. As a result, we are operating an average of more than 1,000 buses in this segment compared to the same period of last year. We also concluded the setup of our first operation of mobility of people in Ciudad Juarez, which is also very important as this city has been capturing much growth from the new showing trend, and it's expected to continue to expand significantly. We are entering this market with great momentum, taking advantage of our operating capabilities, commercial muscle, and IT platforms. We believe that Traction is going to be able to expand and gain market share in such location in the following years. Finally, we launched an online app in this segment aimed to clients that require special trips and private charters. With this technology, we believe we will be able to provide as much better service as we maximize our fleet utilization. Moving on, our 3PL business continues to grow. Warehouse area under management expanded an average of more than 148,000 square meters compared to the same period of last year. This represents 24.5% more area. Indeed, a relevant figure that was driven by both the farm operations and a strong response to commercial activity in our typical 3PL business. In terms of mobility of cargo, we continue with our renovation and fleet management program. the average fleet decreased more than 100 units. Kilometer volume decreased 12 percent as well. However, revenues show a marginal increase of 2.8 percent. Despite of that, EBITDA came in more than 48 percent higher than the second quarter of last year, mainly driven by an increase of 18.8 percent in revenue per kilometer. This was achieved by increased activity in specialized cargo operations, which typically carry barrier economics with reduced distances, which basically means that we're becoming increasingly more efficient on a per-unit basis. All of that resulted in an EBITDA margin of 21.2%, which is well within our long-term target. We expected to keep operating this segment with such efficiency. As you can see, we continue to be very busy, and the prospects for next year are looking promising. Thank you for your attention. With this, I end my remarks. Please, Wolf, go ahead.