Greetings. Welcome to Traxión First Quarter 2023 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, Executive President, Aby Lijtszain. You may begin. Thank you for joining. Welcome. As you can see, Traxión deliver a strong set of operating and financial results. Once again, quarterly revenues and EBITDA posted record high figures in the company's history. There are several details worth mentioning this period. As always, Rodolfo, Wolf, Antonio will elaborate more in a moment. I want to share with you some thoughts. First, we are seeing increased activity in the most dynamic markets of the north of the country, driven by the initial increment. Tijuana, Juárez, and the Monterrey, Saltillo, Nuevo Laredo corridor are where the most expansion opportunities are emerging. As you know, we have a tremendous presence in such geographies and plan to continue to expand our operating capabilities to better serve our cross-border clients and those foreign companies seeking proximity to final consumer markets. Traxión has a large logistic footprint and an extensive cargo portfolio to render tailor-made solutions between Mexico and the US. Likewise, the company has the absolute largest and most modern people mobility platform to serve factories and industrial parks. In this segment, we are also finding greater commercial activity, and we are very close to complete our growth plan for 2023, which involves a large portion of our CapEx. Moving on, fuel costs have normalized. This item increased 10%, which is significantly lower than the growth of the revenues. The path to it effectively reflected this quarter, and the margins of our traditional business segments reveal that. Consolidated EBITDA margin came in at 17.7%, which was mainly driven by the higher contribution of the logistics and technology division, which posted almost 50% growth. Finally, Traxión made significant advances in ESG terms. Tonio will give you more details in a moment. What is important to highlight that we continue to strengthen our sustainability strategy according to our leadership commitment. We think that our current ESG framework is one of the most robust in Latin America, and our ratings and standards are proof of such advanced guidelines. We're very excited about the commercial opportunity we see ahead. Thanks for your attention. I will now hand over to Rodolfo. Thank you. Welcome, everyone. As Aby just mentioned, there are significant operating advances that I want to discuss. First, Traxporta, our digital cargo marketplace, continues to penetrate and gain market throughout different avenues. This quarter, such application posted more than 82% growth in revenues compared to the same period of last year. Second, we continue developing our pharma and intermodal verticals. In this line, I just want to highlight that we currently operate the absolute best pharmaceutical warehouses in Latin America, and we will leverage such capacities to keep expanding such business. There is a great scarcity value in the pharma supply chain, and Traxión is the natural player to properly explore such businesses. Third, our cargo operations advance ahead of expectations. Cross-border activity increased mainly by volume derived from nearshoring. We have an expansion of approximately 80 refrigerated trailers, which are mainly fresh produce exportations to the US. We like this business very much, basically because of its resilient nature in US dollar exposure. Traxión continues to build up a strong reputation in the Bajío region in this service and to grow its market share and penetration into North America. Moving on to the personal mobility segment, we continue to absorb great demand for our service in the most important economical regions. This quarter, we started operation with new clients and increased capacity with existing ones, totaling more than 200 new buses. Traxión continues exploring new markets where personal mobility is still a challenge, and we believe that our solutions have an enormous value added for our clients. Finally, our 3PL logistic division posted a healthy expansion due to a strong commercial activity and the incorporation of pharma businesses. All that increased our warehousing area in more than 142,000 square meters, an impressive 23.3% growth. As we always say, Technology is the most significant competitive advantage and represents the highest barrier of entry in our sector. This is precisely what will continue to enable Traxión to keep seizing opportunities that arise from mutual interest. As you see, it was again a very busy quarter on the commercial and operating arenas. With this, I end my remarks. Wolf, please go ahead. Thanks, Rolo. Hello, everyone, and welcome. There are many interesting details worth mentioning for this quarter. First, there is a healthy double-digit growth in our three business segments that was driven by both price and volume as the fuel impact of the fuel pass-through keep in this quarter and the logistics and technology division both an almost 50% growth in revenue. This year, we expect additional growth coming in the following quarters. Traxión has made significant investments that have not yet shown their full potential and contribution to the top line. Let us also bear in mind that usually the first quarter is the soften in terms of activity, so there is an expectation of increased volumes with higher prices in 2023. Moving on, I want to discuss the recent refinancing we obtained. It is a 6 billion MXN credit facility. The plan was to refinance and prepay the outstanding line at the end of March and to strengthen the company's leverage strategy according to our commitment to optimize overall financial profile. The spread of this facility is 50 basis points lower on average compared to the previous credit. There is an increase in comprehensive financial results that was mainly driven by a growth of approximately MXN 3 billion in gross debt compared to the same period of last year, and the hike of interest rates that basically double the company's interest expense. Our leverage ratio remains in the same level as in the past quarter, and we expect to lower it progressively throughout 2023. In terms of CapEx, our program moves according to plan and with no surprises. A large portion of such investment is to grow organically our personal mobility fleet. This business continues to present us with very profitable opportunities as industrial activity expands, partly driven by the nearshoring trend, especially in the northern markets. Finally, there is a very good piece of news. In February, we opened our first 3PL facility in Laredo, Texas, that we are managing for an e-commerce client. This represents a great milestone as we start operating logistics in the United States. As you see, there were several good news this quarter. This year started with strong activity in line with our guidance expectations. With this, I end my remarks. Thanks for your attention, and I will hand over to Tonio. Thank you, Wolf. I just wanna briefly highlight some more important financial energy matters. First, fuel costs have normalized. We successfully conducted the pass-through to our clients, and we are now observing a margin inflection point in our traditional business lines. Our asset-light division is running efficiently as expected, and overall growth was more driven by price rather than volume, reflecting increased fares. Both are very business. Third, operating cash flow decreased MXN 205 million, was mainly driven by two things. First, the increase in pre-operating costs and expenses required to start new business, mainly in terms of working capital. Second, a higher interest expense compared to the same period of last year. Earlier in the quarter, we announced that we will cancel up to 35 million shares that Traxión has in the repurchase fund, which is approximately 6.4% of shares outstanding. Management will propose the matter during the next shareholders meeting later this week in order to proceed with such cancellation. This initiative is indeed very good news as well and reinforces our commitment of long-term value creation. Furthermore, net income came in lower than expected and was mainly due to a mixture of higher interest and pre-operating costs and expenses for new business that are not contributing yet to the bottom line. However, we expect this effect to be temporary as such business start contributing to the top line. Moving on, Traxión made significant advances in terms of ESG. We expanded our educational program to the states of Mexico and Puebla, and we plan to certify more than 3,500 high school graduates there. We will continue such expansion to another three states by the end of this year. Moreover, Traxión was recognized as the company with the best corporate sustainability strategy in 2023 by Global Banking & Finance Review. These are indeed very important achievements that place the company in a higher level in terms of ESG and in line with our leadership commitment. We have a very successful quarter in every front. Traxión made significant progress in its overall strategy, and we are very excited about what we see coming this year. With this, I wrap up management remarks, and we open the floor to Q&A. Thank you. Thank you. The floor is now open for questions. If you would like to ask a question at this time, you may press star one on your telephone keypad to enter the queue. We do ask, if listening on speaker phone this morning, that you pick up your handset to provide optimal sound quality. Once again, if you would like to ask a question, please press star one on your telephone keypad at this time. Please hold a moment while we poll for questions. The first question is coming from Juan Ponce, from Bradesco. Juan, your line is live. Please go ahead. Hi, good morning. Good afternoon, everybody. Thank you for taking my question. I believe in the you mentioned in the last conference call of potential upside on EBITDA margins this year due to greater contribution of the technology and logistics divisions. Given where we were then relative to what you're seeing on the ground today, could you say you are more optimistic or conservative about the second half of 2023? Thanks. Hi, Juan, this is Tony. Good morning. Thanks for your question. Remember that we always said that the logistics and technology margin on a normalized basis, on a long-term basis as well is on the 10% neighborhood. This quarter it was below because mainly of pre-operating expenses and costs that were required to start new operations. We don't expect that to be on a long-term basis, but we do expect some more pre-operating costs in this segment, not on the same proportion. We also expect the margin of this segment to be more on the 10% neighborhood. Okay. Thank you. The next question today is coming from Alejandro Demichelis from Nau Securities. Alex, your line is live. Please go ahead. Good morning, gentlemen. A couple of questions please. The first one is just to follow up on the margin from logistics and technology. Can you please walk us through how you see this evolution from the 7% that we saw this quarter to the 10% neighborhood that you're talking about? Within that, could you please explain how the mechanics are working? Because when you acquire our Medistik, that business have much higher margins. Trying to understand how all that comes together, the first question. The second question is, could you please indicate us how you see the working capital evolution through the rest of the year? Because obviously there was a big working capital gain this quarter. Hi, Alejandro. Good morning. This is Raul. In terms of the logistics margins, first, if we talk about the pharma division, as you already mentioned, with Medistik, that's correct about talking about the margins. We already started new clients and new contracts over the same division in terms of the pharma vertical. That is why it's taking us more pre-operating expenses in this particular quarter. This is why the margin is below in this niche. We are expecting to have like a mature contract in the next quarters. In that terms, we can raise the 10% area as Tony just mentioned. In terms of the second question with the working capital, also, this quarter, it's very normal for us to have that difference mainly. We have two different things where we start in the net income. The second thing, it's also because usually we have a lot of contracts that we have to renew in this first quarter in the year, so it takes a little bit more of time to recover also the collect accounts. This is mainly what was the impact. In terms of the working capital, we expect to be very normal as the previous quarters in the next three quarters of the year. Wonderful. Great. Given that you mentioned you started operations on the logistics side in the U.S., could you please give us some kind of flavor of how you see that side of the business evolving in terms of growth, in terms of margins? What's the opportunity for you in the U.S.? Yeah. Hi, Alex, this is Rodolfo. Yes, we're really proud that we just began our first operation cross-border in Laredo in the warehousing business. We began in first of March, and we see a lot of potential of growing this business, of course, in the cross-border section of U.S. and Mexico, but also in a little inside more in the U.S. The margins we are seeing around that, it's the same as the logistics segments, around 10%. 10%-12% is the margins we're seeing. We're seeing a lot of potential and we're looking forward to expanding that business there. Okay. Thank you. Thank you. The next question is coming from Priscilla Rangel from Comcast Group. Priscila, your line is live. Please go ahead. Hi. Can you hear me? Yes, we can hear you, Priscila. Please go ahead. Okay. My question is just a little follow-up on the logistics. My understanding, the margin is a little had a confession due to pre-operating expenses. Once we start to see a more stabilized growth, we should expect more to 10%. What are you seeing in terms of when will it be a more stabilized? Maybe in the next- 2 quarters? Hi, Priscila. How are you? We expect to normalize a little bit more in the next quarter, so it will be in a softer way, but we have to reach we're at 10% in the next maybe one or two quarters. It will depend. Remember that we grow this segment by almost 50%, so it takes us a little bit more to operating in this particular quarter. As we can mature that contract, we are expecting maybe in the next quarter or maybe one more to be around the 10%. Okay. Thank you. Thank you. Thank you. you. The next question is coming from Silvia Serrano from Citi. Silvia, your line is live. Please go ahead. Hello. Good morning and good afternoon, and thanks for taking my question, guys. I have two questions on my side. First one is what are you seeing in terms of upside when it comes to return on equity or return in investment capital over the next 5 years versus today? Do you see any room for expansion here? What is the level more or less that you expect to reach in the mid to long term? Have you heard any concerns from cargo customers regarding governmental proposals to weaken concession contracts and make it easier for the government to expropriate property? Any color on that would be appreciated. Thank you. Hi, Silvia. How are you? Good morning. In terms of the return, the previous years, 2022, it was quite hard because of the fuel cost impact to the company. And we invest a high amount in the previous year. In terms of what we're looking forward, all the investments that the company made are going to have more than 20% IRR or ROIC. The incremental ROIC or all the financial metrics that we're looking for should be going forward and better for the next future. If we looking for the midterm, we should or we should see like in a better margins also in the net income, and that will be in other returns in terms of capital. Hi, Silvia, this is Aby. Talking about the government, I mean, we feel very confident and comfortable with Mexico and for investing in Mexico. We have grown here for many years and we are planned to continue growing. We haven't hear any news that change our vision for Mexico. Great. Thank you, guys. Thank you. The next question is coming from Martín Lara from Miranda Global Research. Martín, your line is live. Please go ahead. Good morning, and congratulations for these results. I have one question. Do you expect an additional margin improvement in mobility of cargo and mobility of personnel this year? Hi, Martín. Yes, as Aby just mentioned also before, we are almost getting the same margin that we had before the impact of the previous year. Yes, we should expect something better than we're looking in the first quarter. Remember that it's also the softening during the year, the first one. We should be in the better margins also in the next quarters of the year. Okay. Thank you very much. Thank you. Your next question is coming from Douglas Turnbull from Invesco. Douglas, your line is live. Please go ahead. Hey, guys. I just wanted to double-check I'm kinda looking at the Medistik integration correctly, 'cause I think you said historically it did something like MXN 600 million revenue in a year at about a 30%+ EBITDA margin, which would be a run rate of about MXN 45 million of EBITDA per quarter. Yet, if I look at the EBITDA in the logistics and technology year-over-year, it only grew by, I think, MXN 18 million. I'm just trying to make sure, am I looking at that correctly? Does that mean something else has gone backwards or have we significantly diluted the margin in that in the short term by adding new contracts? I guess I would have expected it to increase more given that wasn't in the base. I'm sorry, Douglas. Maybe I couldn't understand well the question. If you can repeat it, please. Sure. I think historically we said that the Medistik business did a revenue of about MXN 600 million in a year at about a 30% or so EBITDA margin, which would assume that it would add about MXN 45 million of EBITDA per quarter. Given that isn't in the base for the first quarter of 2022, I would have expected a bigger jump in the EBITDA number once we've included that in the base for the first quarter of 2023. I wonder if I'm not looking at that correctly or whether it was the fact the margin declined elsewhere or did adding new contracts in Medistik in the short term diminish the margin? Or, why did the EBITDA in logistics and technology not increase more with Medistik being, included in the run rate? Thanks, Douglas. Yes. We are starting new operations with big contracts in this particular segment. This is why the pre-operating expenses that we have to have in this particular quarter are impacting the segment and in terms of margins and EBITDA also. This is why you're not looking that far in terms of the margins about Medistik. If you see that particular business, and you were saying MXN 600 million pesos in terms of revenues per year, if you make it for the quarter, it's almost less than 10% of the revenues of the total division. This is why the impact of the pre-operating are higher than the revenues in terms of just Medistik. You will see better margins when we can mature and we have less pre-operating in the next 2 quarters of this year for this particular division. Thank you. You're welcome. Thank you. Once again, the floor is open for questions at this time. If you would like to ask a question, please press star one on your telephone keypad to enter the queue. Once again, the floor is now open for questions. If you would like to ask a question at this time, please press star one on your telephone keypad to enter the queue. Please hold a moment while we re-poll for questions. We do have another question coming from Fernanda Pereyra from BTG. Fernanda, your line is live. Please go ahead. Hey, guys. Thank you for taking my question. Two questions on my side. The first one is actually a follow-up regarding the logistics new logistics operations that you are opening in the US. If you maybe could provide us some information regarding the size or estimate of this operation, if you already have contract signed with clients? You also commented about a lot of potential, but is this coming from organic or inorganic moves that you are expecting? Also, my second question is kind of related to this, but if you could provide us an update of your M&A pipeline, what you're seeing of targets, if we could have any news if still this year? Thank you. Hi, Fernanda. This is Rodolfo. Regarding the warehousing business in the U.S., we began this with the business we already had with e-commerce, especially Amazon, bringing all the importations, all the imports that they do from the U.S. to Mexico. We're now doing also the warehousing there and doing all the fulfillment in the U.S. to do the cross-border in Mexico. That's the beginning of this business. Yes, the pipeline for saying all the opportunities we see, it's mainly from Mexican clients that are multinational companies that also need this type of service or services in the U.S. They have been contacting us to help us do the service in USA. That's why... that's what, we're seeing of opportunities there. Regarding the second question, Aby. Yeah. Hi, Fernanda. Yes, talking of M&A, we should expect to close our first M&A of the year soon. Thank you. There are no further questions in queue at this time. I would now like to turn the floor back to Aby Lijtszain for closing remarks. The nearshoring is blowing the winds in our favor. We have a very strong footprint in the northern part of Mexico with more than 1,000 industrial clients. With the logistics and mobility solutions for them, Traxión is very well positioned to capture this big opportunity. I see a great future for this company. Thank you for joining. Thank you. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.