Grupo Traxión, S.A.B. de C.V.

As you can see, we post another very good set of operating and financial results. The year looks good with great momentum and strong demand, especially the asset division and the people mobility business. Traction is off to a good start. However, as you know from the past, the first quarter of the year is always the mildest when seasonality is much more visible. In addition, there were several investments made in the quarter that require upfront expenses, which are not mature, and there is a ramp-up period for them to display their benefits. Moving on, if you look at the figures, they look similar to the same period of the last year, but with important efficiencies regarding operating margin and net income. As usual, Rodolfo Wolf Antonio will talk about several metrics in more detail, but I just want to highlight several strategic aspects. First, please note that the logistics and technology division boosted almost 29% growth in top line. That means that the asset-like business now represents more than 36% of total consolidated revenues. and is fast approaching to the same level as the people mobility segment. All of that is in line with our long-term plan to become asset lighter while we continue to leverage our operating and commercial position to boost search expansion. This segment should represent more than 50% of top line within the next few years. As we have discussed many times, these logistics services are under-presentated in Mexico, and we are developing such penetration with a strong commercial effort and scalable IT platforms. Moreover, Traxporta continues to grow progressively, and we expect another year of high growth rates for this marketplace that has proven to be a sales success. In terms of people mobility, we continue to see expansion driven by current and new clients, with strong demand, especially in the northern regions, which have been the low-hanging fruit locations for industries seeking ensuring. As you can see, we have more than 1,245 additional bosses in average compared to the same period of 2023. And the plan is to start operating a similar amount of units in 2024. The company is performing well within its plan for 2024. The market is there. The opportunities are much more tangible. And Tracción advanced with a very efficient and profitable approach to capitalize opportunities in the three business divisions. We believe that the initial trend will continue to advance and penetrate with strong momentum over the following years. And we're prepared to face such growth as we have been doing for the past three years. Thanks for your attention. I will now hand over to the others. Please, Rodo, go ahead.

Thank you, Avi. Welcome, everyone. I will now discuss some operating details worth mentioning. First of all, we continue to become increasingly more efficient in cargo, especially on a per-unit basis. Even though the top line has remained flat, mainly due to the exchange rate that has an effect on the U.S. dollar denominated services, Both operating income and EBITDA continue to grow, with healthy margin expansions that have been sustainable over the most recent quarters. Moreover, the spread between the increase of revenues compared to cost per kilometer is now even wider, with less kilometer volume and a marginal growth in fleet, which has to do with the reconfiguration program of our trucking operations. In addition, we have been implementing several state-of-the-art tech features that have increased efficiencies in our operations at the border and have enhanced the security on many routes. Second, this quarter, you're able to see the growth we experienced in the people mobility fleet with more than 1,200 new buses on average in operation during the quarter. Demand levels keep coming strong, mostly from new clients starting operations and current clients expanding, all of that being driven by new shoring. Tracción carries on expanding organically in this segment with great momentum. The sheer size of our infrastructure, together with our high-quality services, are attributes that place Tracción in a very special niche. where the company is one of the very few players, if not the only one, capable of serving large clients with extensive and complex mobility needs. Our premium services include various features such as route design and planning, well in advance of our client needs, which grow more complex as the nearshoring evolves, and industrial parks are developed farther away from urban areas. Finally, in the logistic division, we continue to expand and grow. As you know, many of these services are very under-penetrated in Mexico. Traccion has been moving forward with a very strong commercial effort to both gain market share and develop further markets for these services. As a result, our 3PL division continues to expand both areas and revenue per square meter. The intermodal services keep expanding, and Traxporta has been posting high growth rates. Many thanks for your attention. With this, I end my remarks, and we'll hand it over to Wolf. Please.

Thanks, Rodo. Hello, everyone. There are many financial highlights to discuss. First, it is worth mentioning, as Savi said, that the first quarter exhibits the most seasonality within the year, as it tends to be the softest. Despite that, we're starting to see the effects of the investments that we made in 2023, which was a high growth year for Traction. Having said that, total revenue grew 15.5% on a consolidated basis, in line with the company's expectations and plans. Moving down, operating income grew 21.8%, mainly due to an 80 basis point efficiency in costs as a percentage of revenues. In this line, it is important to highlight that the labor costs post that much more normalized growth compared to the last four quarters. General expenses posted an increase higher than that of revenue, but it has behaved in line with the past quarters, having represented between 13 and 14% of total revenues historically, which is due to pre-operating expenses needed to sustain the level of growth. In terms of comprehensive financial result, you can observe a marginal increase in interest expense, which is explained by a small change in net debt. This was offset by some effects that resulted in a small deficiency in the overall financial result. Operating cash flow posted a healthy increase of 571 million pesos, driven by working capital improvement and recorded more than 1 billion pesos. Perhaps One of the most important figures, it is net income that were more than 92% to reach 139 million pesos, mainly driven by operating income. The CAPEX plan evolves favorably also. We're about to complete the deployment of the proceeds of last summer equity follow one. At first, we said that we are going to be able to invest such resources within 12 to 18 months, but we were able to do so in less than a year. Finally, in the leverage line, we continue to operate with a prudent debt utilization under a disciplined approach and a strong, solid balance sheet. Once again, thanks for your attention. I will now hand over to Tonya.

Thank you, Wolf. Hello, everyone. I'll be brief. I just wanted to highlight some ESG and other relevant matters. As Wolf said, the CAPEX plan evolves according to plan. Please bear in mind that we plan to deploy approximately 80% of the CAPEX for organic growth in the People Mobility Division, while 15% will be allocated to renew our cargo fleet, which as of today has an average age of less than 3.2 years. The remaining CAPEX, around 5%, will be used to upgrade technological platforms and our 3PL infrastructure, together with some ESG-related matters. On this line, we are very proud to share that during the first quarter of this year, we started trials with the very first 100 electric zero emissions bus in Mexico. This 45 seat unit has a range of 210 kilometers, a three stage advanced braking mechanism, comfortable interiors, and the high impact bodywork to transport people safely. With this, Traction is once again the first and the pioneer in the industry. The company further reinforces its commitment with the environment and with the reduction of emissions, as it has done with its trucking fleet, with consistent emissions reduction over the past years. We are the absolute leader in the industry, and our commitment is to lead also on ESG matters across the board. Our four-pillar strategy has so far proven to be effective, and we believe that we have one of the most robust ESG strategies in place among companies in LATAM. With this, I end my remarks. Thanks again for your attention. I will now open the floor to Q&A.