Grupo Traxión (TRAXIONA) Q2 2024 earnings summary

Executive summary

• Achieved record-high quarterly revenue of Ps. 7,369 million in 2Q24, up 23.2% year-over-year, and record EBITDA of Ps. 1,259 million, up 8.3%. Net income nearly doubled to Ps. 222 million, reflecting strong operational execution and segment growth.

• Strategic shift from B2C to more profitable B2B last mile operations, with restructuring and efficiency initiatives underway.

• CapEx guidance for 2024 reduced by Ps. 600 million to Ps. 3,600 million, with no impact on growth or EBITDA targets; company expects to be cash flow neutral for the year.

• No need to tap equity markets for growth; sufficient cash and leverage capacity maintained, with leverage to remain below 2.5x net debt/EBITDA.

• Implemented company-wide efficiency program targeting annual savings of approximately MXN 700 million.

Financial highlights

• Consolidated revenue: Ps. 7,369 million (+23.2% YoY); EBITDA: Ps. 1,259 million (+8.3% YoY); Net income: Ps. 222 million (+98.2% YoY).

• Logistics and Technology division contributed nearly 37% of consolidated revenues, growing over 40% year-over-year.

• Adjusted EBITDA margin compressed by 230 bps to 17.1% due to cost increases and last-mile restructuring.

• Interest expense growth significantly lower than revenue growth, reflecting prudent debt management.

• Net debt to EBITDA ratio improved to 2.16x from 2.41x YoY.

Outlook and guidance

• 2024 revenue and EBITDA guidance reaffirmed, targeting approximately 19% growth.

• CapEx for 2024 revised to Ps. 3,600 million (12% of revenue), down from 13.8% in 2023, with ratio expected to continue declining.

• Double-digit revenue growth expected to continue despite CapEx reduction.

• Margin improvements anticipated from Q3, with significant benefits expected by Q4 2024.

• No plans to raise equity; leverage to remain below 2.5x net debt/EBITDA.