Presentación de PowerPoint · 3PL logistics & warehouse management 10 STATE-OF-THE-ART...
Transcript of Presentación de PowerPoint · 3PL logistics & warehouse management 10 STATE-OF-THE-ART...
GRUPO TRAXION
CORPORATE PRESENTATIONMARCH 2020
DISCLAIMER
2
The information contained in this document is strictly confidential and is subject to the provisions established in the Securities MarketLaw regarding the obligations of confidentiality and disclosure or transfer of privileged information. This document can be used exclusivelyby the receiver as an investor or possible investor of Grupo Traxion, S.A.B. of C.V. ("Traxion"), otherwise, the information contained in thisdocument may not be disclosed without the prior authorization of Traxion.
Certain information included in this document may contain certain future statements and information that reflects plans, objectives,expectations, estimates, and intentions. Derived from several risks and uncertain future events, the fulfillment of the same could differmaterially from what is mentioned in said forward-looking statements and information that reflects plans, objectives, expectations,estimates, and intentions. Neither Traxion nor any of its affiliates, directors, officers, agents or employees shall be liable to third partiesfor any investment, business decision or actions taken based on the information and statements contained in this document.
59%
41%
Products and Goods People
MOBILITY SERVICES
CARGO AND LOGISTICS PERSONNEL AND STUDENT TRANSPORTATION
Cargo and logistics services through the entiretransportation supply chain
Corporate and industrial personneltransportation, student transportation and
charter services
SERVICES PORTFOLIO
REVENUE BREAKDOWN
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SUPERIOR EXECUTION CAPABILITIES
Fleet: +8,170 Power Units
+430,200 sqm3PL logistics area
+1,000 Clients
7Highly-renowned brands
+65 HectaresManeuvering yards and terminals
22 Operating terminals
19 Confinements
12Operational and comercial centers
MANUFACTURE
SUPPLIER
CUSTOMS/PORTS
INTERNATIONALCARGO
INTERMODAL CARGO
STORAGE DISTRIBUTION RETAIL/E-COMMERCE CONSUMER
MANUFACTURER CUSTOMS/PORTS
DOMESTIC CARGO LOGISTICS
WAREHOUSE MANAGEMENT
“HARD TICKET” AND MOVING
LAST MILE
DISTRIBUTION CENTER
RETAIL
E-COMMERCE
CONSUMER
INFRASTRUCTURE (2019)
▪ 2,191 trucks and thortons
▪ 621 last-mile units
▪ +4,400 trailers: dry, refrigerated, hoppersand platforms
▪ 430,225 SQM 3PL Logistics warehousespace
CARGO & LOGISTICS
MOBILITY OF PRODUCTS AND GOODS
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FREIGHT SERVICES
▪ Dry truckload
▪ Refrigerated
▪ Intermodal
▪ Border transfers
▪ Specialized: petrochemicalsand other materials
▪ Platforms & lowboys
▪ Relocation and moving
▪ 3PL warehouse management
▪ Distribution
▪ Less-Than-Truckload
▪ Last mile
▪ Courier and packaging
▪ Forwarding
LOGISTICS SOLUTIONS
BRANDS CERTIFICATIONS
Leading player both national and regional, with the largest footprint and infrastructure in Mexico
SERVICES
▪ Personnel transportation
▪ Student transportation
▪ Charters
BRANDS
Pioneer and innovator of the personnel and student transportation industry in Mexico
CERTIFICATIONS FLEET
2019
2018
2017
2016 3,399
3,833
4,039
5,364
Corporate staffManufacturing personnelService personnel
Students
Charters
Corporate officesIndustrial parks and manufacturing hubsHotels, resorts and communities
Schools and universities
Private-group trips
PERSONNEL TRANSPORTATION
STUDENT TRANSPORTATION
CHARTERS
COMPETITIVE ADVANTAGES
▪ +65 years of experience in the market through different brands
▪ State-of-the-art technological platform
▪ +500,000 people transported daily
Ranking Super Companies: in process ofcertification with Top Companies
PERSONNEL & STUDENT TRANSPORTATION
MOBILITY OF PEOPLE
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INNOVATION ANDTECHNOLOGY
SUSTAINABLE GROWTH SCALE EFFICIENCY ANDPROFITABILITY
TRANSPARENCY ANDINSTITUTIONALIZATION
TRAXION…
… is the first consolidator in a
highly fragmented industrydominated by family-ownedcompanies
… operates in a sector withstrong fundamentals and growthpotential
+ Accelerated growth in recent
years through:
▪ Solid capital structure;
▪ Profitable and effectiveinvestment process
+ Also…
▪ EBITDA CAGR: ’17 - ’19: 42%
▪ Fleet growth: ’11 - ’19: 27x
TRAXION has:
▪ State-of-the-art, tailoredsupport systems focused onefficiency and profitability
▪ Internally-developed systems
• 24/7 monitoring andtracking
• Telemetry and informationsystems for continuousimprovement and training
• Commercial intelligence
• Operational intelligence
• Optimal fleet maintenance
TRAXION…
… has a diverse and flexible fleet,+2.5x larger than that of thenext competitor
… operates more than 430,200sqm of 3PL logistics warehouse
… has a diverse customer base ofmore than 1,000 clients with astrong presence in severalindustries and various regionswith strong economic indicators
… has a workforce of more than15,390 employees
TRAXION…
… is able to generate anoperating leverage, driven bypurchasing power, capacity andvolume
… has a long-term, continuousand sustainable synergiesapproach
… has a proven business modelwith a successful acquisition andintegration track-record
… has maintained and improvedits operating margins duringeconomic cycles
TRAXION…
… has an entrepeneurial andinnovative team with superiorexecution capabilities
… was created as an institutionalcompany
… is the only company in theindustry backed by two privateequity funds
… is the first transportationcompany to develop a best-practices approach
… is the first and only companyof its kind to carry out an InitialPublic Offering in financialmarkets
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WHY INVEST IN TRAXION?
1,259
1,785
2,553
2017 2018 2019
337
442 451
2017 2018 2019
434
1,064
2,102
2017 2018 2019
7,072
9,403
12,157
2017 2018 2019
OPERATING CASHFLOW NET INCOME
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REVENUE EBITDA
CAGR ‘17-’19: 31.1% CAGR ‘17-’19: 42.4%
CAGR ‘17-’19: 120.1% CAGR ‘17-’19: 15.7%
Figures in million pesos (MXN)
PROFITABLE GROWTH
17.8%
19.0%
21.0%
TRAXION EBITDA Margin
FAVORABLE DEMOGRAPHIC PROFILE
MANUFACTURING AND INDUSTRIAL ACTIVITY
Installedmanufacturing
capacity
Demographic bonus
Emerging middle-class
Geographic location
Qualified and skilledworkforce
Employment level
Drives Internal
Consumption
AttractiveInvestmentDestination
Women Men
DEMOGRAPHIC PYRAMID1 – Mexico
65.2% of thepopulation isbetween 15 and 65 years
old
450.6
239.7
75.5 61.6 48.9 41.8
México Brasil Chile Argentina Perú Colombia
1.9x
EXPORTS 20182 – Billion USD
POSITIVE GROWTH PROSPECTS
>85
1 INEGI2 World Trade Organization 8
Year
s
Source: Transportation Minisitry (SCT)
TRAXION is the leading company in a sector trending towards intitutionalization and high growth
194 199 206 215 221 232
226 235 245 260 273 290
123 127 133 143 152 162186 202 222246
272299
2013 2014 2015 2016 2017 2018
3 3 3 3 4
7 7 7 7 7
11 12 12 12 13
27 27 29 3234
2014 2015 2016 2017 2018
LARGE COMPANIES HAVE SHOWN GREATER GROWTH… …IN A KEY SECTOR TO MEXICO´S ECONOMY
729 763806
865917
983
48 49 5155
CARGO TRANSPORTATIONThousand of power units
PASSENGER TRANSPORTATIONThousand of power units 58
10.0%
5.6%
5.2%
3.6%
CAGR ’13 -’18
6.2%
Owner-operator(1-5 units)
Small companies(6-30 units)
Medium companies(31-100 units)
Large companies(>100 units)
6.3%
3.1%
1.5%
5.7%
CAGR ’14 -’18
3.9%
▪ The transportation industry in Mexico represents 5.6% of GDP
▪ Within the industry, cargo and passenger transportation are the most relevant
Cargo transportation
50.7%
Passenger transportation
31.8%
Services7.7%
Air3.2%
Rail3.1%Maritime
1.2%Pipeline1.2%
Storage and refrigeration
1.2%
▪ Contribution to GDP is lower in other countries:
➔ 4.6% of GDP
➔ 3.0% of GDP
➔ 5.0% of GDP
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SECTOR WITH SOLID FUNDAMENTALS AND POSITIVE OUTLOOK
Constant innovation
Initiatives plan
Best practices
Robust platform
Investment in technology
BASIC FOUNDATIONS SUPPORT SYSTEMS
Efficient fleet management
Telemetry and safety protocols
Constant tracking and monitoring
Commercial and businessintelligence
Commercial and administrative support
RESULTS
EFFICIENCY
PROFITABILITY
CLIENT SATISFACTION
+ Internally-developed systems
+ Tailored support systems
▪ Business management
▪ Commercial inteligence
▪ Telemetrics
▪ 3PL logistics & warehousemanagement
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STATE-OF-THE-ART TECHNOLOGICAL PLATFORM
1,000,000
430,225 400,000
322,000 320,000 300,000
215,000 200,000 190,000 170,000
The size and volume of TRAXION’S operations allow for economies of scale, ensure the continuity of the sinergies plan and guarantee long-term efficiency
1 Source:TRAXION Quarterly Earnings Release 4Q19 & 2019: ; Senda: Company information , as of June 30, 2017; Grupo Transportes Monterrey: Magazine T21, as of December 20182 Source : Integration Mexico; TRAXION space as of December 31st, 2019 11
THE TRAXION FLEET IS SIGNIFICANTLY GREATER THAN THAT OF ITS NEAREST COMPETITORS
Power units1
TRAXION IS ONE OF THE LARGEST 3PL LOGISTICS OPERATORS IN MEXICO
SQM 3PL logistics warehouse space2
2,191 2,199
5,364
1,887
621
TRAXIÓN Transportes Monterrey Grupo Senda
Cargo Fleet Personnel Transportation Fleet Last-Mile Fleet
8,176
2,1991,887
THE SCALE OF TRAXION
Figures as of December 2018
36%
23%
19%
6%
6%
6%4%
Retail
Auto
Industrial
Education
Electronics
Government
Other
Top 1026%
Top 2038%
Top 3046%Top 40
52%
Top 5057%
Other43%
INDUSTRY BREAKDOWN CLIENT CONCENTRATION
67
2723 23 23 22 21 20
1 2 3 4 5 6 7 8
THE SCALE AND DIVERSIFICATION OF TRAXION´S CLIENT BASE RESULTS IN A BUSINESS MODEL RESILIENT TO VOLATILE ECONOMIC CYCLES
WORLD-CLASS CLIENTS… …WITH LONG-LASTING RELATIONSHIPS
Average: 26 years
SEARS WALMART
% of revenue
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EXTENSIVE AND DIVERSE CLIENT BASE
TRAXION HAS A BUSINESS MODEL FOCUSED ON EFFICIENCY AND PROFITABILITY
TRAXION has an investment and follow-up process that guarantees the CapEx profitability at all times
CAPEX ANALYSIS
MONITORING, WITHDRAWAL AND FLEET REALLOCATION
MONITORING of the approved CapEx
performance
Key metrics:
Revenue EBITDA ROIC IRR
WITHDRAWAL of non-profitable clients that
don´t comply with the profitability metrics of theCompany
REALLOCATION of the fleet to more profitable
clients
▪More kilometer volume with virtually the same fleet size
▪ Revenue per kilometer has consistently grown many times more than cost per revenue
GREATER PRODUCTIVITY AND EFFICIENCY
Thorough CapEx allocation process to maximize profitability:
▪ Clear, predetermined parameters for quoting and pricing ofnew business opportunities
▪ CapEx approval through the CapEx Committee, depending on:
• Internal Rate of Return (IRR) >20%
• Return on Invested Capital (ROIC) >14%
New Client / Business Opportunity
Contract Drafting / Pricing Process
Analysis from CapEx Committee
ROIC IRR
CAPEX APPROVAL FOR CLIENT
1 Average fleet for the period; kilometer volumen in million kilometers; revenue and cost in pesos (MXN)2 2019 fleet includes 485 units from Bisonte and 76 units from Roncalli, both acquired in October 2018. 13
Segmento de Carga1 2017 2018 20192 CAGR 4Q17 4Q18 4Q19 CAGR
Average Fleet 1,570 1,543 2,191 +18.1% 1,596 2,103 2,192 +17.2%
Kilometer Volume 172.9 189.3 253.7 +21.1% 42.5 59.0 64.5 +23.2%
Avg. Revenue / km. 19.58 21.55 21.92 +5.8% 20.39 22.83 21.45 +2.6%
Avg. Cost / km. 14.95 15.63 15.97 +3.4% 15.56 16.84 15.86 +1.0%
The Shared-Services Center ensures a sustainable long-term synergies plan
FRONT
BACK
SHARED-SERVICES CENTER
Effective corporate structureBack-office and administrative
processes centralizationImproved procurement
conditions
Shared infrastructure in offices, terminals, yards and
maintenance shops
High cross-selling potentialacross services and
subsidiaries
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SHARED-SERVICES CENTER
TRAXION was founded in 2011 and has had solid institutional infrastructure, with the support of Discovery Americas and Nexxus Capital, two of the leading private equity funds in Mexico
ABY LIJTZSAIN – Executive President
▪ +21 years of experience
▪ Founded TRAXION in 2011
▪ Founded Transportes LIPU in 1998,pioneer in personnel and studenttransportation, and created the largestcompany in Mexican transportationsector.
▪ Led the capitalization processes ofDiscovery Americas and Nexxus Capital
▪ Has a track record of acquiring andintegrating more tan 15 companies
▪ Responsible for executing the TRAXIONbusiness plan with a 100% strategicapproach, leading planning, new-business development, and supervisingthe capital deployment
▪ Certified Public Accountant fromInstituto Tecnológico Autonomo deMexico
RODOLFO MERCADO - CEO
▪ +20 years of experience
▪ COO of SETTEPI from 1994 to 2014
▪ COO of LIPU from 2014 to 2016
▪ COO of TRAXION from 2016 to 2018
▪ Responsible for the Company´sexpansion and development plans
▪ 100% operational vision andmanagement, with a focus onprofitability and sustainable growth
▪ Certified Public Accountant withdiploma in senior management fromInstituto Tecnológico de EstudiosSuperiores de Monterrey
WOLF SILVERSTEIN – CFO
▪ +12 years of experience
▪ CFO of LIPU since 2013; held otheradministrative and operative positionssince 2007.
▪ Led the implementation of the Shared-Services Center of LIPU
▪ Actively participated in thecapitalization processes of DiscoveryAmericas and Nexxus Capital and playeda fundamental role in the Initial PublicOffering process of TRAXION
▪ 100% operational vision and focus onefficiency and performance
▪ Bachelor of Arts and BusinessAdministration from UniversidadIberoamericana and Master in Financeby Instituto Tecnológico de EstudiosSuperiores de Monterrey
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SOLID CORPORATE GOVERNANCE GUIDELINES AND A MANAGEMENT TEAM WITH SUPERIOR EXECUTION CAPABILITIES
DIVERSIFIED SHAREHOLDERS´BASE POSITIVE PERSPECTIVE
Research Coverage
RECOMMENDATIONS AND REMARKS ABOUT TRAXION
“Traxion has a positive outlook with defined grow th
avenues and a clear strategy of leveraging its services
through cross selling and efficiencies from economies of
scale”
“In our opinion, the company should continue to make
progress and prove quarter after quarter that its
business model creates value in the long term. As of
now, we believe that Traxion is well positioned to take
advantage of a fragmented industry”
“Traxion has a low to the current political risks;
however a pressing concern could be the gasoline price
policy that the federal government will pursue,
nonetheless, we believe the company is well prepared for
any near-term changes in this regard”
MOST RECENT DATE TARGET PRICE RECOMMENDATION
01 NOV 19 $17.00 BUY
12 NOV 19 $21.00 OVERWEIGHT
21 NOV 19 $22.70 BUY
29 ABR 19 $16.80 NEUTRAL
29 ABR 19 $18.30 BUY
07 NOV 19 $21.00 BUY
AVERAGE $19.47
43.5%
25.3%
10.0%
11.7%
9.5%
Float
Discovery Americas
Nexxus Capital
Founders
Management
43.5% of float is distributed amongst more than 15 institutional
investors, with a broad base of retail investors
16.7%
83.3%
Neutral
Buy / Overweight
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DIVERSIFIED SHAREHOLDER BASE AND FAVORABLE PERSPECTIVE
Our goal is to do good long-term business, develop our staff, take care of the environment and contribute to society; bearing in mind the sustainable use of resources and the responsibility of our actions.
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Process of sustainability adoption in Traxion
2019
▪ Improvement and generation of relevant policies
▪ Mapping and communication of existing best practices.
▪ Alignment of Traxion´s sustainability objectives with itsstakeholders and with the business – materiality study
▪ Start of dialogue with potential allies
▪ Design of the sustainability strategy
2020
▪ Sustainability strategy implementation.
▪ Integrated Report elaboration and publication
Objectives
1. Strengthen Company's
sustainability in an integral way:
Economic Capital, Governance,
Human Capital, Industrial and
Technological Capital,
Intellectual Capital, Products and
Services, Social / Relational
Capital, and Natural Capital.
2. Position the brand as a leader in
the sector in environmental and
social issues: social
responsibility, reduction of
environmental impacts.
3. Generate capacities to attract
capital with an ESG approach
and eventually incorporate
TRAXIN into the BMV's
Sustainable IPC.
Special Sustainability Award (cargo segment)
The evaluation considered:
• Incorporation to the Clean Transportation Program
• The commitment to vehicle renewal
• Work with suppliers, ecotechnologies in facilities,tire renewal and disruptive technologies
• Reduction in fuel consumption with concreteactions
OUR SUSTAINABILITY STRATEGY
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SUSTTAINABILITY BEST PRACTICES