GRUPO TRAXION PRESENT INVESTOR PRESENTATION MAY 2019
LEGAL DISCLAIMER The material that follows presents general background information about Grupo Traxion, S.A.B. de C.V. (the “Company”) as of the date of the presentation. This information consists of information concerning the Company. It is information in summary form and does not purport to be complete. It is not intended to be relied upon as advice to potential investors and does not form the basis for an informed investment decision. This presentation is strictly confidential and may not be disclosed to any other person. The information in this presentation is preliminary in nature and subject to change. No representation or warranty, express or implied, is made concerning, and no reliance should be placed on, the accuracy, fairness or completeness of the information presented herein. All information in this presentation is subject to verification, correction, completion and change without notice. In giving this presentation, none of the Company, any of its affiliates, directors, officers, agents or employees, nor any placement agents, managers or initial purchasers undertake any obligation to provide the recipient with access to any additional information or to update this presentation or any information or to correct any inaccuracies in any such information. This presentation may contain statements that are forward-looking. Such forward-looking statements are only predictions and are not guarantees of future performance. Investors are cautioned that any such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the operations and business environments of the Company and its subsidiaries that may cause the actual results of the Company to be materially different from any future results expressed or implied in such forward-looking statements. None of the Company, any of its affiliates, directors, officers, agents or employees, nor any placement agents, managers or initial purchasers, shall be liable to any third party (including investors) for any investment or business decision made or action taken in reliance on the information and statements contained in this presentation or for any consequential, special or similar damages. Securities may not be offered or sold in the United States unless they are registered or exempt from registration under the U.S. Securities Act of 1933, as amended (the “Securities Act”) . This presentation is being made only to investors that, by means of their attendance at this presentation, represent that they are “qualified institutional buyers” as that term is defined in Rule 144A under the Securities Act. Any offering of securities to be made outside of Mexico will be made by means of an offering memorandum that will be sent to you at the address that you provided today. Such offering memorandum will contain, or incorporate by reference, detailed information about the Company and its business and financial results, as well as its financial statements. Investment decisions should be solely made on the basis of the offering memorandum and not on the basis of this presentation. This presentation does not constitute an offer, or an invitation or solicitation for an offer, to subscribe for or purchase any securities, nor shall any part of it nor the fact of its dissemination form part of or be relied on in connection with any contract or investment decision relating thereto. Neither this presentation nor anything contained herein shall form the basis of any contract or commitment. If the Company should at any time commence an offering of securities, any decision to invest in such offer to subscribe for or acquire securities of the Company must be based wholly on the information contained in the offering memorandum to be issued by the Company in connection with any such offer and not on the contents hereof. By reading this presentation, you agree to be bound by terms and conditions set out above. The Company’s management highly recommends the investment community to thoroughly review the information contained in the offering memorandum and consult with independent advisors deemed necessary before making any investment decisions. A stock investment is complex, is subject to a variety of risks and uncertainties and may result in significant losses, including the full amount invested. 2
TRAXION- MUCH MORE THAN A LOGISTICS AND MOBILITY PLATFORM: A BUSINESS DEVELOPER THE PERSONNEL With an outstanding entrepreneurial and innovating team, and through LIPU, TRAXION transformed the student and TRANSPORTATION INDUSTRY personnel transportation segment with accelerated growth and the ability to seize opportunities and develop the sector TRANSFORMER TRAXION is the first company in the transportation and logistics industry in Mexico that has sought to become THE FIRST INSTITUTIONAL IN institutionalized and develop a best-practices and value creation approach by involving not one, but two private equity THE INDUSTRY WITH A BEST- funds, seeking to broaden its vision and resources to optimize the Company’s Operations and profitability PRACTICES APPROACH THE FIRST CONSOLIDATOR IN TRAXION is the first consolidator of the logistics and transportation industry in Mexico capable of conducting acquisitions to THE LOGISTICS AND broaden its service portfolio and successfully integrating them into its business model, creating a unique operating platform in TRANSPORTATION INDUSTRY the market IN MEXICO Due to its wish to reshape the perception of the industry and increase its growth capabilities through access to greater capital, THE FIRST COMPANY IN THE SECTOR TO CONDUCT AN TRAXION was the first company to conduct an Initial Public offering in the Mexico Stock Exchange INITIAL PUBLIC OFFERING IN MEXICO Thanks to its structure and broad service portfolio, TRAXION is the only logistics player in Mexico capable of providing an SUPPLIER OF INTEGRATED integrated solution to its clients through the whole transportation supply chain MOBILITY SERVICES TRAXION’s superior execution capabilities and high-quality service have positioned it as the leading supplier of logistics and transportation services in Mexico, and shifting the paradigms of conducting business in the industry, comparable to top international peers 03
TRAXION’S KEY ATTRIBUTES PROFITABILITY APPROACH SUSTAINABLE GROWTH SCALE ATTRACTIVE VALUATION Exploiting its purchasing power and Through a robust capital structure , TRAXION has a large, diverse and TRAXION trades at a significant operating leverage , TRAXION has profitability and diversification of flexible fleet (including last-mile units) discount versus IPC and other optimized its operations and improved services, TRAXION has showed fast and that is 2.5x larger tan that of the next comparables its profitability sustainable growth during the past competitor years TRAXION expects to increase its EBITDA Moreover, the fleet has grown 27x since margin by 200 bps TRAXION expects to record a 33% 2011 CAGR in EBITDA from 2017 to 2019 The synergies plan is a continuous and sustainable effort to maintain P/BV EV/EBITDA efficiencies and profitability 2019E TRAXION vs IPC 34% 67% TRAXIONvs Comparables 23% 67% EBITDA MARGIN % EBITDA FLEET SIZE 1 TACC ’17 - ’19 E: 33.1% 8,002 ~ 3.6x 5,272 17.8% 19.0% 19.8% 1,259 2,231 2,730 2,189 5.2x 7.8x 6.7x 0.7x 2.1x 2.1x 2017A 2018A 2019-G 2017A 2019G TRANSPORTES FV/EBITDA 19G P/BV LTM MONTERREY TRAXION IPC COMPARABLES 2 CARGO & LOGISTICS PASSENGER FLEET 1 Average fleet on 4Q19; includes last-mile fleet: 86 trucks, 338 light trucks, 34 cars and 169 motorcycles 2 Comparables INCLUDE JB Hunt, XPO Logistics, Landstar, K night-Swift y TFI International; multiples as fo 03/28/19 04
WHY INVEST IN TRAXION? 1 2 3 4 5 LEADING PLAYER IN MANAGEMENT TEAM PROFITABLE AND BUSINESS MODEL LEADING COMPANY IN LOGISTICS AND WITH SUPERIOR ACCELERATED FOCUSED ON THE SECTOR THAT TRANSPORTATION EXECUTION GROWTH PROFITABILITY PRESENTS STRONG WITH THE MOST CAPABILITIES, A AND TO SERVE FUNDAMENTALS AND COMPLETE SERVICE DIVERSE DIFFERENT GREAT GROWTH Expected CAGR of 22.8% and PORTFOLIO SHAREHOLDER BASE, INDUSTRIES POTENTIAL 23.2% in revenue and EVITDA, AND A POSITIVE respectively from 2016 to 2019 PERSPECTIVE Key sector to the economy in TRAXION’s diversity translates in Expected increase of 200 bps of World-class client base, with Mexico with stable prospects an uparalleled service provider EBITDA margin from 2017 to sound, lomg-lasting and strong fundamentals within logistics and mobility 2019 relationships and presence in Professional and institutional several industries, with broad management team with more Its scale boosts profitability by footprint in áreas of strong than 100 years of aggregated leveraging purchasing power economic dynamics experience and an unparalelled and operating expenses track record Resilient business model through different economic Diverse shareholder base cycles (institutional and retail) with representative float 05
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