Investor Presentation

Transcription

1 Investor Presentation

2 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 attending 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.

3 Agenda About Traxion P.4 Industry Outlook P.11 Investment Rationale P.14 Performance P.20

4 About Traxion

5 Traxion - The Mexican Ground Transportation and Logistics Platform Unique success story evolving into the largest company in the Mexican ground transportation and logistics industry (1) with an owned fleet of 5,268 (2) power units We believe we are the first and only player capable to consolidate the ground transportation and logistics segment in Mexico We operate through two complementary business segments Cargo Transportation and Logistics ( Cargo & Logistics ) Contracted Personnel and Student Transportation ( Contracted Passenger Services ) Broad portfolio of services providing a onestop solution Ps$6,690MM (3) in Revenue +345 MM kms driven per year (214 million miles) Nationwide Presence +9,500 Employees 16x Fleet Growth over the last 6 years Notes: 1. According to T21 Magazine (December 2016) and public filings of companies in the ground transportation industry 2. Average power units for the nine-month period ended September 30, 2017 (includes Egoba, MyM, Grupo SID, LIPU and AFN); XXX owned and XXX leased power units 3. LTM Accumulated figure as of September 30, 2017, using pro-forma results as of 2016, which include revenue or Adjusted EBITDA, respectively, of Grupo SID and LIPU for the full year and exclude 2016 Revenues or Adjusted EBITDA, respectively, of AFN prior to its acquisition; converted using 2016 average exchange rate of Ps$18.66 per US$ according to Banxico 4. Calculated as per audited financials 131.8% Revenue growth (4) over the last 2 years Adjusted EBITDA of Ps$1,294MM (3) 4 companies acquired over the last 6 years +900 Customers 5

6 About Traxion: Business Segments Distribution and moving International cargo Logistics and distribution International cargo and intermodal Contracted Personnel and Student Transportation Cargo & Logistics One of the largest Cargo & Logistics service providers in Mexico with the broadest array of service offerings Cargo transportation services are offered on a spot or dedicated basis Contracted Passenger Services Largest contracted personnel and student transportation platform in the country with unmatched scale and regional reach Dedicated service 1,555 Power units (1)(2) 3,406 Dry vans 3,713 Power units (1)(3) 5.2 Avg. fleet age vs in the industry 303k sqm of warehousing facilities (1) 6.0 Avg. fleet age Source: Company information, SCT Notes: 1. Accumulated average as of September 30,

7 History of Growth and Excellence for +65 Years Acquisition of Lipu, adding 3,399 units IPO Lijtszain Family (Founders) Founded Muebles y Mudanzas ("MyM") in 1952 Capital raise and partnership to create Acquisition of Grupo Mudancero (MyM), adding 428 units Acquisition of AFN, adding 222 units Acquisition of Grupo SID, adding 580 units 4,963 Capital Raise PROCEEDS Capital Raise 776 Acquisition of Egoba, adding 300 units '11-'16 Fleet CAGR: 75.3% Average fleet size (# of power units) Proven strategy to deliver profitable growth through organic expansion and M&A Note: 1. CAGR = Compound Annual Growth Rate 7

8 About Traxion: Footprint Sonora 3.9% Nationwide Presence with focus on the fastest growing regions in the country Nuevo Leon 4.0% Baja California San Luis Potosi 3.9% 3.3% 5.4% Guanajuato 6.3% Queretaro 2.8% Average National GDP growth 5.0% Quintana Roo Aguascalientes Main Operations / Economic Regions 5.4% Jalisco 3.8% All Subsidiaries Presence Source: INEGI, Company information No Presence 8

9 About Traxion: Portfolio Provider with the broadest offering of integral services on a large scale and reach under a competitive cost structure Cargo & Logistics Contracted Passenger Truckload Intermodal Logistics Personnel Student Tourism Company Number of Units (1) Domestic Freight Int l Freight & Transfers Moving LTL Intermodal Logistics Personnel Student Tourism 4,963 (2) Transportes Monterrey 2,189 Senda 1,887 AutotransportesT resguerras Transportes Castores 1,867 1,724 Grupo TUM 1,641 Fletes México 990 Transportes Marva T. Monroy Schiavon Source: T21 Magazine (December 2016), Management estimates, companies websites Note: 1 Including trucks, buses and vans, excludes trailers 2 Pro-forma, includes Egoba, MyM, Grupo SID, LIPU and AFN Material level of service offering No service offering 9

10 We Serve a Large, Blue-Chip Customer Base Blue-Chip Customer Base Over 900 customers nationwide High Levels Of Customer Satisfaction Contract Renewal Rate Long-Standing Relationships Years working together 65 Over ~95% in Source: Company information 10

11 Industry Outlook

12 An Industry with a Paramount Role in the Mexican Economy Road is the Backbone of the Mexican Transportation Industry Total Revenue (1) : Ps$1,668 billion (US$105Bn) (2) Ps$1,432 billion (US$90Bn) (2) Road Transportation Ps$64 billion (US$4Bn) (2) Rail Transportation Ps$153 billion (US$10Bn) (2) Air Transportation Ps$19 billion (US$1Bn) (2) Maritime Transportation Share of Total Revenue (1) 14% 5.9% (3) Contribution to GDP Road Freight (billion ton-kilometers) (5) % Road Transportation Other Transportation Modes Road represents 96.0% (4) of Passenger Transportation E 2017E 2018E 2019E 2020E 2021E Source: INEGI, SCT, EMIS Insights, BMI Research Notes: 1. Includes air, maritime, rail. cargo and passenger road transportation, as of Using 2015 average exchange rate of Ps$15.85 per US dollar according to Banxico 3. Includes transportation, postal and storage services according to INEGI, as of Autotransporte Federal de Pasajeros, Estadistica Basica del Autotransporte Federal SCT, as of BMI Research 11

13 that is Highly Fragmented with Room for Consolidation Largest Player in a Highly Fragmented Industry Cargo & Logistics Road Cargo Transportation Industry Structure (Participation in the Market Category Per Unit) 140.8k companies 864.8k units (1) More than 900 sizable potential 16% 1% 2% 29% targets with +245K units present enormous opportunity to consolidate the industry 17% 81% 30% 25% Owner Operators (1-5 units) % Companies % Units Small Companies (6-30 units) Medium Companies ( units) Large Companies (+100 units) Source: SCT, as of 2016 Notes: 1. Includes trucks, trailers and semi-trailers 12

14 Investment Rationale

15 Investment Rationale: Strong Positioning Portfolio Broadest portfolio of service offering in the industry Pursuit of expansión opportunities in new segments Outlook Considerable growth potential in the segments where the Company operates Performance Creation of synergies between freight segment and recent acquisitions Margin stability Continuos fleet modernization Improvement in the customer mix at the cargo segment Financial Position Ps.9,043 million 1 capitalization Healthy levels of indebtedness and liquidity Efficient capital allocation We recently lanched our IPO, whose proceeds will be deployed to accelerate our profitable and disciplined growth plans in the coming months Source: Company s public information and Bloomberg. 1) Considering 543,478,261 outstanding shares and closing price of the Traxion share on October 30, 2017 (Ps.16.64) 15 15

16 Investment Rationale: Well-Defined Strategy Proven ability to grow organically and inorganically thanks to a well-defined strategy Operations Commercial M&A Financial Continuous monitoring and improvement to drive margin expansion Seamless nationwide reach and international connection One-stop solution Brand differentiation Strong customer relationships Increased share of customers wallet Cross-selling Smart capital allocation & selective acquisitions Opportunistic acquisitions Synergy analysis and implementation Disciplined use of leverage Cost control and efficiency Allocation of growth capital to maximize returns Reliability and quality in our services An integrated approach to support further growth 16

17 Investment Rationale: Proven Business Model Diversified Business Model that Provides Resiliency and Flexibility in Different Economic Cycles Balanced exposure to fast-growing sectors: Diversified transportation services: Mining Tourism Oil & Gas Cargo Logistics Retail Manufacture Farming Student and Personnel No single customer represents more than 5% of our revenue Focus on fast-growing regions Our business is generated through long-term relationhips with out customers Maximization of fleet s profitability 17

18 Investment Rationale: Value-adding acquisitions Robust incorporation process of new businesses Transfer of best practices Procurement efficiencies Commercial intelligence Egoba MyM Grupo SID AFN LIPU Acquired: Dec 2011 Fleet: 300 Acquisition: June 2013 Fleet: 428 Acquisition: May 2016 Fleet: 580 Acquisition: June 2016 Fleet: 222 Acquisition: October 2016 Fleet: 3,399 Commercial strategy Management professionalization (business plan and KPIs) Increase profitability of business structure Professionalization (business plan and KPIs) Cargo: fleet utilization Logistics: optimize customer base Accelerate fleet growth Growth opportunities with additional equity Expand number of clients Extract economies of scale Growth opportunities with additional equity We Have Maintained Financial Discipline in Each of our Acquisitions 18

19 Investment Rationale: Acquisition Criteria We have a solid acquisition strategy of new businesses that boost the Company s performance Key Target Selection Criteria Medium and large companies Successful, well-run and profitable companies Strong commercial footprint in region / niche Professional and engaged management Focus on Companies with Core Competencies Add incremental services Increase share in existing services Synergy potential Opportunistic Approach 19

20 3Q17 Results

21 ,000,000,000,000,000,000 6,000 5,000 4,000 3,000 2,000 1, % 21.0% 20.0% 19.0% 18.0% 17.0% 16.0% 6,000 5,000 4,000 3,000 2,000 1,000 - Robust Growth Revenue 7% growth in 3Q17 vs. PF 3Q16 Millions of MXP EBITDA Millions of MXP 3Q17 revenue registered a strong exogenous increase (+70.1%) thanks to the incorporation of the contracted personnel and student transportation segment 20.0% 2,223 5, % 21.4% 1, % 1, On a endogenous pro-forma basis, revenue increased 7%, thanks to a more efficient operation at the contracted personnel and student transportation segment YTD16 YTD17 3Q16 3Q17 EBITDA Margin (%) YTD16 YTD17 km driven 189% increase in YTD17 vs. YTD16 Thousands Fleet Size 239% growth in YTD17 vs. YTD16 Power Units 281,130 5,268 5,319 97,192 45,137 92,360 YTD16 YTD17 3Q16 3Q17 1,554 1,560 YTD16 YTD17 3Q16 3Q17 21

22 Segment Performance Cargo & Logistics Segment Indicators Contracted Personnel and Student Transportation Services Segment Indicators As of September 30 Financial indicators (Ps.Mills.) Total Revenue 2,990 2,223 Total Costs 2,218 1,589 Operating expense Operating income EBITDA EBITDA margin (%) 18.8% 21.3% Ch.% (2.5pp) As of September 30 Financial Indicators (Ps.Mills.) 2017 Total Revenue 2,221 Total costs 1,529 Operating expense 401 Operating income 314 EBITDA 424 EBITDA margin (%) 19.1% Operating Indicators (Ps.Mills.) Kilometers driven (thousands) 130,378 97,192 Average fleet size (units) 1,555 1,554 Average fleet age (years) Average revenue per km driven (Ps.) COGS/km (incl. D&A) Storage space (m 2 ) 302, ,265 Average revenue per m 2 (Ps.) COGS/m 2 (Ps) (0.5) 0.2 (6.6) Operating Indicators (Ps.Mills.) Kilometers driven (thousands) 150,752 Average fleet size (units) 3,713 Average fleet age (years) 6 Average revenue per km driven (Ps.) COGS/km (incl. D&A) Revenue growth in the Cargo & Logistics segment was driven by higher rates and the acquisitions of Grupo SID and AFN Given that LIPU was incorporated in 4Q16, there is no base for annual comparison in this segment The incorporated companies increased out freight capacity both in number of power units and logistics services edge, including storage and other value-added services 22

23 Solid Financial Position Balance Sheet Summary as of September 30, 2017 Thousands of MXP Leverage Ratios Assets Sep-17 Dec-16 Current Assets $6,803,412 Non-current Assets $8,526,948 Total $15,330,360 Total Debt / EBITDA Net Debt / EBITDA Post-IPO Net Debt / EBITDA (1.02) - Total Liabilities / Equity Liabilities + Stockholders Equity Current Liabilities $1,909,418 Non-current Liabilities $3,779,984 Total Liabilities $5,689,402 Shareholders Equity $9,640,958 Total Liabilities + Shareholders Equity $15,330,360 Debt Maturity Profile Millones de MXP % % 12% 2,351 63% Notes: 1. Without considering leases of 462,027 Thousands of MXP and EBITDA LTM of 1,294,225 Thousands of MXP Up to 1 year Up to 2 years Up to 3 years > a 3 años 23

24 Supplemental Information

25 Financial Statements Summary Income Statement As of December 31 As of September 30 (Ps$ MM) Pro-Forma 2016 (2) Cargo & logistics revenues (1) 1, , , ,789.2 Contracted passenger services revenues ,310.9 Other revenues Total revenues 1, , , ,134.1 Total costs (1,222.1) (1,257.8) (2,654.6) (4,512.1) Gross profit , ,622.0 General expenses (229.3) (255.6) (712.9) (1,067.8) Allowance for doubtful accounts (6.1) (32.7) (56.3) (61.6) Other (expenses) income, net 9.9 (1.4) Operating income Comprehensive financial results, net (65.6) (51.2) (195.2) (481.1) Profit before income taxes Total income taxes (45.9) (75.9) (121.3) (199.6) Consolidated net income (108.9) Pro-Forma 2016 (2) , , , , , ,210.5 (3,649.4) (3,746.6) 1, ,463.9 (702.8) (957.7) (51.3) (20.8) (540.1) (338.4) (44.9) (258.8) Source: Company audited financial statements Notes: 1. Includes revenues from freight and logistics 2. Pro-Forma figures include Grupo SID and LIPU for the full relevant period and include AFN figures from audited financials 25

26 Financial Statements Summary Balance Sheet As of December 31 As of September 30 (Ps$ MM) Cash and cash equivalents Accounts receivable, net ,037.7 Other receivables, net Other current assets (1) Total current assets , ,331.9 Transportation equipment and machinery, net ,526.7 Goodwill ,370.5 Other assets (2) ,391.2 Total Assets 1, , ,620.3 Current installments of long-term debt Obligations under capital leases Suppliers Accruals Income taxes Related parties Other current liabilities (3) Total current liabilities ,303.0 Long-term debt, excluding current installments ,927.9 Obligations under capital leases, excluding current installments Other non-current liabilities (4) ,162.4 Total liabilities 1, , ,614.0 Total stockholders' equity , ,006.2 Total liabilities and stockholders' equity 1, , , , , , , , , , , , , , ,330.4 Source: Company audited financial statements Notes: 1. Includes related parties, inventories, prepayments and security deposits 2. Includes long-term prepayments, prepayments for purchase of shares, investment in associated companies, receivable convertible into shares, intangible assets and other assets and deferred income taxes 3. Includes other liabilities, other taxes, employee statutory profit sharing and advances from customers 4. Includes related parties, financial liability for stock purchase option, contributions for future capital stock increases, financial instruments, employee benefits and deferred tax liabilities 26

27 Financial Statements Summary Consolidated Stataments of Cash Flows (Thousands of MXN) Sep-17 Dec-16 Net cash flows from (used in) operating activities 378, ,877 Net cash flows from (used in) investing activities (274,454) (405,048) Net cash flows from (used in) by financing activities (45,526) 326,878 Net increase (decrease) in cash and cash equivalents 58,409 41,707 Cash and cash equivalents at beginning of period 467, ,275 Cash and cash equivalents at end of period 526, , Source: Company s public information.

28 THANKS!