Greetings. Welcome to Traxión fourth quarter and full year 2022 results 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 that this conference is being recorded. I will now turn the conference over to your host, Executive President, Aby Lijtszain. You may begin. Thank you for joining. Welcome. As you can see, despite global macro difficulties, Traxión once again deliver a strong set of operating and financial results. Most important is that quarterly revenues and EBITDA came in as record high in the company's history. We're pretty in line with 2022 items. Traxión survives its revenue figure. EBITDA margin came 130 basis points lower than our estimate. It is very important to note that fuel cost grew more than 57% in the year. Given such large impact, 130 basis points compression in margin is not material. Quite the contrary, it represents a tremendous effort and achievement from Traxión management to reduce such adverse effect and still pose a very good margin. We have increased our prices to reflect such impact. Today, fuel prices are virtually in the same level as one year ago. I feel very comfortable this year. Having said that, before passing on to the rest of the team, I want to discuss a matter that has been addressed in virtually every meeting, conference, and event, the nearshoring trend. For us, nearshoring is a reality. We have been capturing many opportunities for some years now, and we expect a significant increase in volume derived from such trend over the following years. Currently, we estimate an approximately 50% of our revenues are related to nearshoring. Such phenomenon is a paradigm shift for Mexico, as it was NAFTA back in 1994. It's transformational for the country. Traxión is an ensuring pure-play. The company has a large logistic footprint, an extensive cargo solution portfolio, and the absolute largest and most modern personnel mobility platform to move personnel from and to factories. Furthermore, Traxión has a deep understanding of the lay of the land, together with a strong know-how and know-who. We're the partner of choice for foreign aid companies seeking nearshoring. Finally, I just want to highlight our 2023 guidance. We expect to grow our revenue by 16% with an 18% margin and approximately MXN 2.2 billion of CapEx. Wolf will give you more detail breakdown shortly. We're very excited about the commercial opportunities we see ahead. Thanks for your attention. I will now hand over to Rodolfo. Please, Rodolfo. Thank you, Abby. Welcome, everyone. There are significant operating advances that I would like to discuss. First, we carry on with our strong dynamics in the logistic and technology division. Traxporta, our digital cargo marketplace, continues to penetrate and gain market throughout different avenues. One of them is to operate increasingly more services from Traxión regular base with third parties, which at the end of the day, turns a cargo business into a technology-driven one with an asset-light approach. This has two effects. First, it fuels growth of an asset-light technology-based platform via an organic chip of operations serving the same clients. Second, it allows our traditional mobility of cargo segment to become more efficient by increasing the specialized services volume without the need to grow the fleet and incurring expansion CapEx, which increases prices while keeping virtually the same volume. This is exactly where we wanted to be when we launched our apps. We are running as planned and well within our expectations. Moreover, as we have mentioned many times in the past, we expect the technology and asset-light business lines to become the majority of revenues in a few years. That is, to contribute more than 50% of our revenues by 2025. As we always say, technology is our most significant competitive advantage and represents the highest value of entry in our sector. This is precisely what will continue to enable Traxión to keep seizing opportunities that will arise from the nearshoring trend. Moving on, our 3PL logistic division show a very relevant expansion of more than MXN 183 million, an impressive 57.7% growth compared to the fourth quarter of 2021, excluding the pharma operations. There is a 96,000 square meter growth of warehouse area, which was mainly driven by the integration of approximately 65,000 square meters of the pharma operations. The rest is organic growth of our regular 3PL division. Indeed, it is an important milestone as we continue to gain market share and penetrate in this service. Finally, there are other important highlights in the personal mobility segment that I would like to discuss. We started operation totaling more than 300 new buses in the quarter, while advancing in our pricing strategy and expanding our footprint. Traxión also achieved a couple of technology milestones in the division. First, we launched an automatic billing system that is 100% linked to operations, which significantly increase transparency and expedites the payment process. Second, we improved our operator coordinator profiling mechanism to better monitor daily services. As you see, it was again a very busy quarter. With this, I end my remarks. Wolf, please go ahead. Thank you, Rodo. Hello, everyone, thanks for joining. First, I want to start by saying that Traxión's revenue figure is truly outstanding. Top line came over 20% higher in the quarter and 19% higher in the year compared to the same periods of 2021. To achieve that, Traxión invested roughly MXN 3.4 billion of CapEx, slightly above our original estimate for the year. This was mainly driven by some additional opportunities we found in the personal mobility segment, together with some investments needed to strengthen our infrastructure to properly serve the pharma vertical, that were not considered at the beginning of 2022 when we released our guidance. However, the effect of the fuel costs softened such growth towards the bottom line. We conducted strict cost and expense controls throughout the year to offset such very large impact in our P&L. At the end, there's just 130 basis point compression in margin compared to 19% of our original guidance figure. A positive feature given the size of the increase in fuel cost, which was over 50%. This represents an enormous effort from our team that, as always, did a great job. Our three business segments post healthy double-digit growth rates. Being the logistic and technology division, the one that posted the highest and contributed the most to revenue expansion. We're very excited about what we are seeing in such business lines. Moving on, during the year, we experienced continuous hikes in interest rates, which together with the additional debt we took during the year, basically double our interest expense. Our leverage ratios are still in a very comfortable zone in line with our policy. All of that, together with the growth in fuel costs, affected the bottom line. Finally, let me go over 2023 guidance. As Ali said, we will invest around MXN 2.2 billion, of which approximately 70% will be for organic growth, mainly in the personal mobility segment, while the remainder will be allocated to renew our cargo fleet, which as you know, is very important to keep it efficient, and to conduct some investments to strengthen our technological infrastructure, which is of paramount importance for Traxión. We estimate that such investments will result in a top-line growth of around 16% with an EBITDA margin in 18% area. Well, thanks for your attention. With this, I end my remarks, and will hand over to Tonio. Please, Tonio. Thank you, Wolf. I just want to briefly highlight some other important financial matters. First, we successfully conducted the passthrough to our clients. We expect to see a margin inflection point during the first quarter of this year. Second, growth in revenues is significantly higher than data for installed capacity, which basically means two things. One, that our asset light division is running efficiently as expected. Two, that growth was more driven by price rather than volume. Both are very good news, especially given the global macro landscape. Third, operating cash flow increased MXN 685 billion, which represents a 25% growth, mainly due to a better working capital management. The total figure came in at over MXN 3.4 billion, slightly above our CapEx figure. The company made significant investments in 2022, both in growth and M&A. Those investments did not fully reflected their benefits in the reported period, but we expect them to continue in 2023. Fourth, net income came in lower than expected and was mainly driven by a mixture of increase in fuel costs and interest expense. However, we expect this effect to be temporary as we continue the fuel passthrough and our new companies start contributing to both revenue and EBITDA. Moving on, Traxión made significant advances in terms of ESG. There are several important milestones in 2022 that were discussed in previous quarters. Perhaps the most significant this period is that our program in drug-free education delivered its 51st middle and high school graduates. In October, Traxión received a Standard & Poor's CSA rating, which came in within the top 10% of companies assessed through a wide range of ESG metrics and indicators in line with the Dow Jones Sustainability Indices. Such rating position Traxión 30 percentage points above the sample average. Indeed, a very important improvement. It was a very successful year in every front. Traxión made significant progress in its overall strategy. We are excited about what we are seeing for 2023. Well, with this, I wrap up my management remarks. I will open the floor to Q&A. Certainly. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would 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 keys. Please hold just one moment while we pull for questions. Your first question is coming from Juan Ponce with Bradesco BBI. Please pose your question, your line is live. Hi, good morning, everyone. Thanks for taking my question. My question's on potential labor cost pressures in 2023 in Mexico, specifically on how you see the impact of these minimum wage hikes, the doubling of vacation days and the gradual increase of employer pension contributions impacting the way you think about pricing in 2023. Also related to this question, if you can give us some type of update or expectation, let's call it on when you think you will pass through 100% of these fuel costs to your clients. Thank you very much. Hi, Juan, this is Aby. We see that the labor cost will increase related to inflation in Mexico. We need to see that Mexico's has a very competitive workforce. I mean, it increase every year, so we are used to that increase. We see that it's gonna be something similar that we have seen in the past years. Talking about the fuel cost is already passed through to the clients. Thank you very much. 100% of this is already passed through, correct? Yeah. Yeah. Okay, thank you very much for that clarity. Thank you. Your next question is coming from Javier Gana with DCG. Please pose your question, your line is live. Hi. Yeah, this is Javier from DCG. I have a question regarding the guidance and what are the plans for the company in terms of the source of money for CapEx and debt payments? I think if I could summarize it in, how are you guys planning on funding the CapEx and the operations going forward? Do you think there's more room for leverage or are you planning something in terms of getting additional capital? Or will it be from the source of the operations? Just to understand a little bit how are you guys thinking on capital allocation. Thank you. Hi, Javier. Good morning. This is Wolf. In terms of our investment for this 2023, we're planning to use our free cash flow and also a part of that we usually use some debt. We're going to mix both airlines, the great asset that we have and also the cash flow of the company. We're not seeing anything that it will mix in a different way for this 2023 than the previous ones. We're planning to make it in a mixed way. Thank you very much, Wolf. Just to be very clear, this CapEx guidance does not include any M&A activity, right? Right. Correct. This is only organic growth. Okay. Thank you very much, and, congrats on a great year. Thank you, Javier. Your next question is coming from Alex Demichelis with NAU Securities. Please pose your question. Your line is live. Good morning, gentlemen. one quick question on your margin guidance, actually. Aby, you mentioned that fuel prices are virtually at the same level as one year ago. Antonio said first quarter of 2023 should have an inflection point of margins. trying to understand why margins should be, say, 18% for this year versus the 19% that you were kind of indicating a year ago. If there is anything structural in the company that should prevent you from reaching that 19%, 20%. No, I mean, I think there are two factors. First, that the logistics and technology division it's growing. It's growing faster than the other divisions. The second, it's, we want to be cautious because, I mean, the world it's rough. That's why we decided to give the guidance of 18% margin. If things continue as you're seeing today, without any kind of disruption or kind of the world falling apart or anything like that, is there a chance that we can see those margins going back to those levels then? I think yes. Yeah, I mean, maybe close to it, because as I mentioned, the logistics and technology division is growing, but I think that they can improve. Okay. Thank you. Your next question is coming from Pablo Monsivais with Barclays. Please pose your question. Your line is live. Hi. Actually it's a follow-up question. To what extent do you think it's structural on the growth regarding the EBITDA margin guidance? To what extent do you think it's because of the growth of logistics and technology and to what extent is just your of you being cautious about your profitability levels? That's one. The other is to have a sense of how much is gonna be debt from the CapEx and how much is gonna be free cash flow because you said that it's gonna be a combination of the two. I don't know if you can share a percentage there. That's about it. Thank you. Hi, Pablo. This is Tonio. Good morning. Thanks for your question. I'll ask the first part of your question regarding margin. We estimate that around 70% of the margin should be from the growth and expansion of logistics and technology. That's why we are cautious with that because obviously, that's the fastest growing segment of the company right now. It is going to be so in this year and perhaps the coming years as well. Remember that we said always that we expect this segment to be the majority of the business that is more than 50% of revenues by 2025. We expect that to be a reality. As this segment continues to grow faster than the other two traditional business lines, margins are going to be around the 18% or perhaps between 18% and 19%, depending on the year, area. The second. I'll ask Wolf to answer the second part of your question. Hi, Pablo. How are you? Regarding the second question, we were planning to fund the CapEx for this 2023 around 40% with the cash flow of the company and 60% maybe about some credit facilities that the company has. At the end of the year, we're planning, if you see these numbers, that the company will deleverage a little bit more by the end of 2023. Perfect. Thank you. I have one more question if I may. Sure. Given that you expect your logistics and technology segment to be more than 50% of your revenues by 2025, what's the run rate or your expected revenues for the other two parts of the business? Pablo, can you please repeat the question? Yes. You expect your logistics and technology segment to be more than 50% of your revenues by 2025, right? My question is, on the other two parts, cargo and personal, what is the expected growth that you are estimating for 2025, from here to 2025, roughly? Yes, Pablo. In terms of the other two segments, we're seeing something around 15% growth in terms of the mobility of people segment. Usually in the cargo side, we're trying to get more specialized in that segment. We are growing a little bit slower in that division. That's making the a little bit the mix that you're mentioning. Okay, thank you. You're welcome. Your next question is coming from Martín Lara with Miranda Global Research. Please pose your question. Your line is live. Hi. Good morning, thank you for the call. I have two questions. The first one is what can we expect in terms of EBITDA margins by division in 2023? The second one is, where do you see your leverage by the end of the year? Hi, Martín. This is Tonio. How are you? Thanks for your question. Hi, Tonio. We are expecting in 2023, in terms of margins, we are expecting the personal mobility segment around 24%-ish. Cargo is gonna recover somewhat to be around 21%, over 20%, which is a very good news indeed. Logistics should be around 10%. At the end of the day, if you take into consideration that every business segment is going to weigh around 1/3 for 2023, that should give you something in the 18% arena. Okay. The leverage, Tonio? Hi, Martín. In terms of leverage, we're expecting something closer to 2 times. Again, as I mentioned before, we're hoping to leverage a little bit more the company in this 2023. Okay. Thank you very much. You're welcome. Our next question is coming from Stephen Trent with Citi. Please pose your question. Your line is live. Good morning, guys, and thanks very much for the time. I actually just had a quick follow-up. You mentioned logistics and technology as the fastest growing area. When I try to match the relative growth of that segment with what you're seeing in nearshoring, is it fair to say that segment is seeing the biggest boost from nearshoring, and maybe the personnel transport division is not seeing much of an impact? I wasn't sure if that's a fair characterization. Thank you. Hi, Steven. This is Aby. Hey- We're seeing a boost in all... Hi, how are you? We're seeing a boost in all segments. I mean, also logistics and technology because we do the warehouse management for these companies that are getting to Mexico to another part. Also mobility of people because we take the employees from their houses to these new factories. Mobility of cargo because we move the cargo from Mexico to USA, and we have a leadership in that arena. We see the boost in all of them, but the company it's pushing more the growth for logistics and technology because as we know, we don't do CapEx there. It's, we see it more profitable. That's why we're growing more in- Okay, great. Appreciate it, Aby. Just one quick follow-up question as well, on the, on the M&A side. You know, is it still the case that you guys would look at opportunities to do acquisitions? You know, and if so, what sort of minimum returns are you thinking about in a potential acquisition? Yes. I mean, yes, we are seeing some acquisitions. The acquisitions that we are looking for are related also to nearshoring, to add new services for nearshoring. As, for example, a tax agency or, I mean, something so we can do or improve our door-to-door service from Mexico to the States. We're looking these companies on the logistics and technology division. The returns that we see there are very big because what we do is we buy a company because we see a lot of synergies and the main synergy that we see in these companies is commercial or let's say commercial and financial. When we plug these synergies, the companies that we buy, they grow a lot in the short term. The returns that we see are very good. I mean, all of the time the acquisitions are strategic, that we can enter into a new service. Okay, very helpful. Thanks for taking the time. Thanks to you. Your next question is coming from Hugo Perea with GBM. Please pose your question. Your line is live. Hello, good morning. I'm just trying to understand better the cargo segment. How much of the revenue comes from special cargo? I would like to know also, how this segment developed in the past and what do you expect in 2022? Hi, Hugo. This is Aby again. The strategy of Traxión is to focus on specialized services and also to high-value products. For example, when we transport, let's say, I will use example as potatoes. The cost of transportation is high of the or from a percentage of the total cost of the products, maybe could be 20%. When we transport electronics, the cost of transportation maybe it's around 1% of the total cost of the product. We are focusing on transport these high-value products that the companies prefer to have good service or the best service and to save some in transportation. Going from that, we are also focusing in specialized transportation as the whole strategic of the company, where we are very good in international transportation from Mexico to the States, also to the ports and refrigerated cargo, but also to the States. Those are the kind of services that we offer in Traxión. I can say that the strategies is like when we use our own equipment, we do specialize. What we are doing is the services that are not very specialized, we're sending to Traxporta. We offer the service transportation but through the app. Okay, that's right, because that means that most of the cargo segment is specialized at this moment? I didn't hear. Can you repeat it, please? Yeah, I'm just trying to understand the share of the specialized on the cargo segment. Does that mean that most of the cargo segment is nowadays specialized transportation? Yeah, it's, most of the cargo I can say at least, I don't know, 80%, 90% is specialized. Okay. Thank you. Thanks to you. Once again, if you do have any questions or comments, please press star one on your phone at this time. Your next question is coming from Lucia Gomez with Compass Group. Please pose your question. Your line is live. Hi, good morning. Thank you for taking my question. Two quick questions. The first would be on the logistic and technology segment I know that this year we're gonna start seeing the vertical operations on the pharmaceutical segment start coming in. If you could maybe just share how much are you expecting of additional EBITDA from this business. My second would be on the last mile segment, how much percentage of total sales in technology is that still at? I remember it was at 60% of sales of logistics and tech. Hi, Lu. Can you repeat your first question please? Yes. Sorry. On the logistics and technology segment, we are gonna start seeing the pharmaceutical vertical integrations for this year. I was just wondering how much of additional EBITDA is that gonna bring to the logistics segment. Like, how much EBITDA growth are we gonna see from the pharmaceutical coming in? Hi, Lu. The first one is the last mile, weight, approximately 41% this year, in our revenue base total of the logistics and technology division. As of your second question, as regarding your first question, the one with the EBITDA contribution of the pharma vertical to total EBITDA. It's a tricky question because we started this year the pharma vertical. We know that such businesses have slightly higher margins than the average of other businesses. What we are focusing right now is into unplug and unleash the commercial synergies of such vertical, of the pharma verticals. You know, we always say that our intention is to double or triple revenues of the pharma division that we acquired this year. As of to EBITDA, it's hard to tell, but I'll ask Wolf to answer with more detail. Hi, Lucia. How are you? In terms of the pharma vertical, we're expecting something around 7%-10% of total EBITDA of the company. We're coming from this niche, so we're working on this for 2023. Perfect. Clear. Thank you. You're welcome. We have reached the end of the question and answer session. I would now like to turn the call back over to Aby Litson, Executive President and Co-founder for the closing remarks. I just want to finish by saying that we are seeing very interesting opportunities this year, both organic and inorganic. Nearshoring will continue to push the growth for the company, and Traxión is well prepared and ready to take advantage. The company has a strong balance sheet and one of the most powerful solution for nearshoring in Mexico. Thanks for your attention, and have an excellent week. Thank you. This does conclude today's conference. You may disconnect your phone lines at this time. Thank you for your participation.