GMXT Initiation of Coverage September 28, 2018

Equity Research Me xico

www.banorte.com Railway system leader with attractive valuation @analisis_fundam

. We are initiating coverage on Grupo México Transportes (GMXT), with a PT 2019 of MXN$37.00, which represents a FV/EBITDA 2019e Marissa Garza of 8.8x (vs 8.6x current) with a BUY recommendation Mining/Chemicals/Industrials/Financials/Railways [email protected] . GMXT is GMexico’s transportation subsidiary and the leading operator of rail services in Mexico, as well as the largest railway BUY regional owner of the US in the east coast of Florida (FEC) Current Price MXN$31.00 PT2019 MXN$37.00 . It holds a strategic position, first class assets, a diversified portfolio, Dividend 2019 MXN$1.20 solid customer base, favorable growth and profitability perspectives Dividend (%) 3.8% along with an attractive valuation Upside Potential 23.2% Max – Mín LTM 36.01-25.63 Market Cap (USD$m) 6,714.2 It stands as the only investment vehicle of its kind in Mexico, with solid Shares outstanding (m) 4,100.6 outlooks and an attractive valuation. GMXT shares stand as the only Float 30.0% Daily Turnover (MXN$m) 25.3 vehicle in Mexico to invest in the rail system and also post attractive growth Valuation Metrics LTM * opportunities and profitability improvements that, in our view, its current FV/EBITDA Adj 8.6x P/E 19.0x valuation still does not reflect. Its strategic position, coupled with an experienced management team and important investments in world-class assets, have allowed it to be the leader in the industry, with a market share Relative performance to MEXBOL (LTM) close to 65%. The company intends to make important investments, which 10% should be reflected mainly in a better operating profitability. Our estimates 5% assume a revenue growth and Adjusted EBITDA of 13.6% and 14.4% in 2018 0% and for 2019 of 8.1% and 9.8%, respectively. Currently, the company's shares -5% trade at a 2018e FV/EBITDA multiple of 8.4x, which represents a discount of -10% around 25% vs. global peers. The main risks associated with the company, -15% -20% such as NAFTA and the COFECE ruling regarding the conditions of effective nov-17 feb-18 may-18 ago-18 competition in the industry have been left behind, and any change in terms of MEXBOL GMXT* concessions seems difficult.

Financial statements Valuation and financial metrics MXN, million 2016 2017 2018E 2019E 2016 2017 2018E 2019E

Rev enues 32,905 38,577 43,827 47,361 EV/EBITDA 9.2x 9.7x 8.4x 7.7x Operating Income 9,819 10,506 13,902 15,595 P/E 19.0x 21.3x 11.8x 12.3x

Adjusted EBITDA 14,441 16,526 18,905 20,750 P/BV 3.9x 2.7x 2.3x 2.0x EBITDA Margin 43.9% 42.8% 43.1% 43.8%

Net Income 6,677 5,967 10,740 10,341 ROE 20.4% 12.5% 19.0% 15.9% Net margin 20.3% 15.5% 24.5% 21.8% ROA 12.8% 5.8% 9.9% 8.9% EBITDA/ Interest ex penses 68.7x 13.4x 7.2x 8.7x

Total Assets 51,969 102,115 108,356 116,331 Net Debt/EBITDA -0.2x 1.5x 1.2x 1.1x Cash 7,887 6,642 5,172 5,186 Debt/Equity 0.1x 0.6x 0.4x 0.4x

Total Liabilities 11,476 46,398 43,645 42,687 This document is provided for the reader’s convenience Debt 5,528 31,476 28,439 28,439 only. The translation from the original Spanish version was made by Banorte’s staff. Discrepancies may Common Equity 40,492 55,717 64,711 73,644 possibly arise between the original document in Spanish Source: Banorte and its English translation. For this reason, the original research paper in Spanish is the only official document. The Spanish version was released before the English translation. The original document entitled “GMXT: Líder en sistema ferroviario con atractiva valuación” was released on September 28, 2018. 1 Document for distribution among public

GMXT Financial Statements Revenue & EBITDA Margin MXN, million MXN, million

Income Statement Year 2016 2017 2018E 2019E CAGR 43.9% 50,000 43.8% 44.0% 43.8% Net Revenue 32,905.0 38,577.0 43,827.0 47,361.2 12.9% 40,000 43.6% Cost of goods sold 30,119.2 35,311.0 40,116.5 43,351.5 12.9% 43.1% 43.4% Gross profit 2,785.8 3,266.0 3,710.5 4,009.7 12.9% 30,000 43.2% General expenses (7,033.2) (7,240.0) (10,191.1) (11,585.5) 18.1% 42.8% 43.0% Operating Income 9,819.0 10,506.0 13,901.6 15,595.1 16.7% 20,000 42.8% Operating Margin 29.8% 27.2% 31.7% 32.9% 3.3% Depreciation 2,865.0 3,917.0 5,003.6 5,155.2 21.6% 10,000 42.6% EBITDA 14,441.0 16,526.0 18,905.1 20,750.4 12.8% 42.4% 0 42.2% EBITDA Margin 43.9% 42.8% 43.1% 43.8% -0.1% 2016 2017 2018e 2019e Interest income (expense) net (399.0) (793.0) (3,788.0) (2,668.8) 88.4% Interest expense 404.0 1,430.0 2,819.9 2,843.9 91.7% Revenues EBITDA Margin Interest income 194.0 195.0 206.8 465.5 33.9% Exchange Income (loss) (189.0) 442.0 (1,174.8) (290.3) 15.4% Unconsolidated subsidiaries 73.0 83.0 37.1 Net Income before taxes 9,798.0 8,829.0 12,463.2 13,507.0 11.3% Provision for Income taxes 1,464.0 1,216.0 637.8 2,835.0 24.6% Consolidated Net Income 4,947.0 4,238.0 9,618.4 10,009.0 26.5% Net Income & ROE Minorities 1,730.0 1,729.0 1,122.1 331.5 -42.3% MXN, million Net Income 6,677.0 5,967.0 10,740.4 10,340.6 15.7% Net Margin 20.3% 15.5% 24.5% 21.8% 2.5% EPS 1.628 1.455 2.619 2.522 15.7% 12,000 25.0% 20.4% 19.0% Balance Sheet (MXN, million) 10,000 20.0% Total Current Assets 13,063.5 13,970.0 13,469.0 12,900.1 -0.4% 15.9% 8,000 Cash & Short Term Investments 7,887.0 6,642.0 5,172.3 5,185.5 -13.0% 12.5% 15.0% Long Term Assets 38,905.0 88,145.0 94,887.3 103,431.0 38.5% 6,000 Property, Plant & Equipment (Net) 37,078.0 71,469.0 86,148.9 87,993.7 33.4% 10.0% Intangible Assets (Net) 1,827.0 16,676.0 8,738.4 15,437.4 103.7% 4,000 Total Assets 51,968.5 102,115.0 108,356.3 116,331.1 30.8% 2,000 5.0% Current Liabilities 4,064.9 17,059.0 6,370.9 6,758.6 18.5% Short Term Debt 180.0 11,288.0 109.7 109.7 -15.2% 0 0.0% 2016 2017 2018e 2019e Accounts Payable 3,884.9 5,771.0 6,261.3 6,649.0 19.6% Long Term Liabilities 7,412.0 29,339.0 37,274.0 35,928.1 69.2% Net Income ROE Long Term Debt 5,349.0 20,188.0 28,329.3 28,439.0 74.5% Total Liabilities 11,476.9 46,398.0 43,645.0 42,686.8 54.9% Common Stock 40,492.0 55,717.0 64,711.3 73,644.3 22.1% Preferred Stock 7,840.0 8,069.0 8,215.0 8,546.5 2.9% Total Equity 32,652.0 47,648.0 56,496.3 65,097.8 25.9% Liabilities & Equity 51,968.9 102,115.0 108,356.3 116,331.1 30.8% Net Debt & Net Debt to EBITDA Net Debt (2,358.0) 24,834.0 23,266.7 23,363.1 MXN, million

Source: Banorte

30,000 2.0x 1.5x 25,000 1.2x 1.1x 1.5x 20,000 15,000 1.0x

10,000 0.5x 5,000 -0.2x 0.0x 0 2016 2017 2018e 2019e (5,000) -0.5x

Net Debt Net Debt to EBITDA

Valuation: BUY, PT2019 MXN$37.00

Discounted Cash Flow Valuation (DCF)

In order to obtain GMXT shares price, we used discounted cash flow valuation model, with the objective of reflecting the upside value of the company's shares.

It is noteworthy that within our model, when calculating the target price we use an EBITDA that does not include the tax benefit derived from deducting the Special Tax on Production and Services (IEPS by its Spanish acronym) in terms of the company’s consumption of diesel, and that in our opinion should simply be reflected in a lower effective tax rate. Even though GMXT does not deduct this benefit from its costs, it does it with the adjusted EBITDA reported and this represents around 10% of the consolidated. Therefore, EBITDA (2019e MXN $ 18,619m and 2020e MXN $ 20,215m) differs from Adjusted EBITDA (2019e MXN $ 20,750m and 2020e MXN $ 22,214m) mentioned in our estimates, in which we did include the benefit with the aim of having comparable figures with those of the company. As a consequence of the latter, should the authorities decide to eliminate this tax benefit, our model would already reflect this effect. Refer to the Risk Factors section.

Based on our estimates and valuation model, we obtained a PT2019 of MXN $ 37.00, which represents a 2019e FV/Adjusted EBITDA multiple of 8.8x (9.9x excluding the tax benefit from diesel purchase), slightly above vs. the multiple the company currently trades (8.6x). This multiple represents a discount of 16.2% vs. the 2019e average of global peers, which in our opinion is unjustified, given the estimated growth and moreover all the profitability improvements reflected in an interesting cheapening according to our projections in the following years: 2018e FV/Adjusted EBITDA of 8.4x, 2019e of 7.7x and 2020e of 7.0x (if tax benefit were to be excluded, multiples would amount 2018e FV/EBITDA of 9.5x, 2019e of 8.5x and 2020e of 7.7x) Our target price offers an upside potential of 23.2% by including a return on dividends of 3.8% on current prices. Therefore, we have a BUY rating.

Our target price has been calculated through a discount rate for flows (WACC) of 11.68%, which assumes a cost of capital of 12.95%, through a risk-free rate of 8.55% (preliminary estimate of the 10-year Mexico bond), a beta of 0.8 and an equity risk premium of 5.5%. The average debt cost is 8.0%, and the debt-to-capital ratio is 17.2%. For the terminal value (perpetuity), we are considering a FV/EBITDA multiple of 10.0x, below the 2019e multiple for peers according to the Bloomberg consensus of 10.5x. It is worth mentioning that the IEPS benefit only applies to companies with Mexico-based operations and that is why we considered fair to use an output multiple similar to that of the peers average.

Discounted Cash Flow Model (DCF) MXN, million 2019e 2020e 2021e 2022e 2023e 2024e 2025e Perpet.

(+) EBITDA 18,619 20,215 21,327 22,500 23,287 24,102 24,946 (-) Change in Working Capital (376) (302) (320) (337) (349) (362) (374) (-) Capex (7,000) (7,000) (7,000) (5,000) (5,150) (5,305) (5,464) (-) Tax es (2,835) (3,182) (2,986) (3,150) (3,260) (3,374) (3,492) (=) Free Cash Flow 8,408 9,731 11,021 14,012 14,528 15,062 15,616 (+) Perpetuity 0 0 0 0 0 0 0 258,192 (=) Total Cash Flow 8,408 9,731 11,021 14,012 14,528 15,062 15,616 258,192

YE19 Risk-Free Rate (RF) 8.6% (+) Present Value of Cash Flow s 53,659 Equity Risk premium (RP) 5.5% (+) Present Value of Perpetuity 119,122 Beta 0.80 = Firm Value 172,781 9,817.11 8,325.00 CAPM 12.9500% (+) Otras inv ersiones (-) Net Debt (20,391) Debt Cost 8.00% (-) Interés minoritario Tax rate 30% (=) Equity value 152,390 8,658.55 Net Cost of Debt 5.60% Shares Outstanding 4,101

Debt / Capitalization 17.2% Precio Objetiv o P$ 37.16 Price Target MXN$ 37.16 185.93 WACC 11.68% Terminal Value 10.0x Source: Banorte

Within the following charts we performed a sensitivity exercise trying to reflect the variations in the GMXT target price by assuming different levels in the FV/EBITDA multiple for the terminal value. Sensitivity Analysis TV vs BETA Sensitivity Analysis TV vs WACC

Terminal Value Terminal Value

37.16 8.00x 9.00x 10.00x 11.00x 37.16 8.00x 9.00x 10.00x 11.00x

BETA 0.70 32.21 35.20 38.19 41.18 WACC 10.68% 33.28 36.37 39.47 42.56 0.75 31.78 34.73 37.67 40.62 11.18% 32.30 35.30 38.29 41.29

0.80 31.35 34.26 37.16 40.07 11.68% 31.35 34.26 37.16 40.07 0.85 30.93 33.80 36.66 39.52 12.18% 30.44 33.25 36.07 38.88 0.90 30.52 33.34 36.16 38.99 12.68% 29.55 32.28 35.01 37.74

Source: Banorte

Relative Valuation

Source: Bloomberg

Investment Fundamentals GMXT is a leader in the Mexican rail system, with a strategic position and first class assets along with an experienced management. The main fundamentals that support our investment thesis are: a well-balanced and diversified portfolio, a solid base of clients, a healthy balance, favorable growth prospects and above all expectation of greater profitability backed by important investment plans coupled with a valuation very attractive to us.

Proven leadership in the railway industry. Grupo México Transportes (GMXT) is the leading rail operator in Mexico, with the largest extension and connectivity, and a strategic position to transport products between Mexico, the US and Mexico and Canada, mainly. Its network covers 9,954Kms of main lines which stretch through 24 states, and extends 629Kms in Texas through the Texas Pacific Railroad. In mid-2017, GMXT acquired the largest US regional rail operator, in terms of revenue, located on the East Coast of Florida - Florida East Coast Railway (FEC). This acquisition has been a fundamental component to achieve exclusive and direct access to main ports and efficient transportation of goods in Florida. In addition, the alliances it holds with Union Pacific and Burlington Northern-Santa Fe Railway (BNSF) by providing rail exchanges at the border crossings of Nogales, Cd. Juárez and Piedras Negras, with respect to Mexico’s rail network, and with CSX Corporation and Norfolk Southern Corporation in terms of the rail network in Florida, are fundamental for getting into new markets and geographic scope. See Business Description.

Balanced and diversified portfolio. The company's revenue comes from the transportation of a balanced and diversified portfolio of basic products and finished goods in conventional rail cars and intermodal containers for international shipments. Merchandise flux consists of agricultural, mineral, automotive, energy, chemical and fertilizer, industrial, metallurgical and cements products. The company also offers intermodal services, passenger transport, use of rail cars for storage and transportation in exchange for a daily fee and other services. In Florida, revenues are also generated from regional truck transport and local transportation, services not related to the transport of goods and right-of-way. Revenue not related to goods transportation derives from rentals of cars and stop over, additional charges for transportation, exchange and other services. Toll revenues are generated by granting of licenses to third parties stemmed from railroad use. It is important to mention that no sector accounts for more than 30% of consolidated revenues.

Revenue Distribution Estimated Revenue Distribution by Segment Accumulated to 2Q18 Thousands

Source: GMXT, Banorte

Solid and diversified customer base. GMXT’s main costumers in Mexico, in terms of sales are Ternium, Pemex, Constellation Brands, Cemex Mexico, Proan Group, Mexican Starches, General Motors, Nissan Mexicana, Minera Mexico and Grupo Deacero. The 50 top clients represent around 75% of revenues; however, no client represents more than 7% of sales. US’ main clients in terms of sales were Cemex Construction, UPS, CSX and Titan Florida. The top 10 clients represent around 35% in terms of revenues; nonetheless, none represents more than 10%. Most of contracts with customers are long-term, which gives stability to the company's revenue.

Blue - chip customer base

Source: GMXT

Proven growth trend with significant profitability improvements, hoping that both continue in the coming years. The low penetration of land transport through railways establishes interesting growth opportunities. According to figures from Mexico’s Ministry of Communications and Transportation and the American Trucking Association, only between 20% and 35% of the cargo is transported through railroads. This, together with

GMXT's leading position in the industry, gives it competitive advantages which are difficult to replicate thanks to significant investments carried out. As a result, the company has managed to increase its revenues from 2014 as of today to a CAGR of 14.1%, while the Adjusted EBITDA margin has been expanded by 8.3pp reflecting the significant efficiencies obtained. By 2020, we expect a CAGR of 11.5% in the company's revenues while the EBITDA margin will have expanded to 44.5% (+10pp vs 2014). See section of Estimates.

Revenue EBITDA MXN, million MXN, million 60,000 25,000 47.5% 44.5% 43.9% 43.8% 50,000 42.8% 43.1% 45.0% 20,000 TCACe +11.5% 42.5% 40,000 15,000 40.0% 30,000 36.7% 10,000 37.5% 20,000 34.5% 35.0% 5,000 10,000 32.5%

- - 30.0% 2014 2015 2016 2017 2018e 2019e 2020e 2014 2015 2016 2017 2018e 2019e 2020e

Adjusted EBITDA Adj. EBITDA Margin

Source: GMXT

Solid financial structure. Despite the company has carried out an aggressive investment program, it holds a healthy balance that allows it to take advantage of opportunities that might arise. Even after the acquisition of FEC in mid- 2017, the stock placements of its shares and cash generation have allowed it to keep very manageable debt levels. Virtually most of the firm’s debt is MXN- denominated (97%) and 78% of it expires after 2023. At the end of 2Q18, the Net Debt / EBITDA ratio totaled 1.3x, and according to our estimates we expect it to decrease to 1.1x by 2019.

Debt profile Currency distribution MXN, million as of 2Q18 As of 2Q18 24,000 22,069 3% 21,000 18,000 15,000 12,000 9,000 97% 6,000 4,542 3,000 1,608 67 43 110 MXN USD -

2018 2019 2020 2021 2022 >2023

Source: GMXT

Attractive dividends. Although the company does not have an established policy of dividend distributions, it does so on a quarterly basis as part of its value strategy. So far in 2018, it has distributed a total of MXN $ 0.60 per share (in 3 installments) which represents a return of 2.0% on current prices. For the rest of 2018, we expect it to decree the payment of MXN $ 0.30 per share (a similar amount to the last dividend granted) therefore, during 2018, it would distribute in total, just over 60% of the profits generated in 2017. For 2019 we anticipate a dividend of MXN $ 1.20 per share to be distributed in 4 equal exhibitions (MXN $ 0.30 each quarter) and that would be equivalent to a return close to 3.8% and around 45% of 2018e profit.

Relevant investments aimed at continuing to increase profitability. The railway industry requires significant capital investments with the objective not only of boosting growth, but also of maintaining the quality of assets. In that sense, since 1998 GMXT has invested around USD $ 6,300m in the modernization of the railway network, safety improvement, renewal of its trains and cars with a more efficient fuel consumption and lower pollutant emissions, patios, hillsides, terminals, communication infrastructure, cutting- edge technology, mainly. The company’s goal is to continue investing, now with a USD$ 2,100m plan that began in 2017 and towards 2020 that should continue to aid it in terms of improving profitability relevantly.

Investments USD, million 10,000 7,862 8,000 6,048 6,000 3,962 4,000

2,000 1,134

- 2005 2012 2016 2020e

Source: GMXT

Some projects in which the company is currently working include: Signage expansion project (USD $ 228m) - expansion of the CTC (Centralized Traffic Control) from 610Kms to 2.730Kms in order to increase the railroad capacity; Patios and terminals (USD$140m) – in land acquisitions to build new patios and terminals in Celaya, Jesús de Nazareno and the Center of Florida, expansion of patios of I Tepalcates and Río Escondido, and expansion of patios in Monterrey, South Florida and Huehuetoca; Celaya bypass (USD $ 142m) – backbone expansion from 6Kms to 25Kms, construction of two patios and the release of 65 hectares of rights-of-way; Monterrey bypass (USD $ 139m) - construction of a 21km bypass, recovery of the right-of-way and rehabilitation of 18km of track in the San Juan-Lobos corridor; Bridge of Ojinaga-Presidio (USD $ 33m, of which USD $ 15m will be contributed by the State of Texas) - reconstruction of the international bridge and improvement of the railroad; investments in railway capacity in the Bajío

region (USD $ 22m) - construction of 15.3km of double track in the Irapuato- Celaya corridor, increasing double-track coverage by around 80% in this line.

These investments should help trains speed so in kilometers per hour terms, in Mexico, can go from 34.2 to 39.8 km/hr (+ 16.4%) whilst fuel consumption will be reduced by 38%.

Opportunity to improve efficiency in benefit of profitability

Source: GMXT

Experienced management team. One of GMXT strengths is that it has a well experienced team in the industry, which has allowed it to achieve a rapid and efficient development, by taking advantage of opportunities that have been presented in order to achieve the leadership position it holds. Below a brief description of GMXT Top Chiefs:

 Germán Larrea Mota Velasco: Chair of the Board of Directors and Executive Chairman of Grupo México.  Alfredo Casar Pérez: CEO / Executive Chairman since 2008. He has been a member of the Board of Directors of Grupo México since 1997. He was appointed Executive Chairman of Grupo Ferroviario Mexicano (GFM) and Ferromex on March 5th, 2008; He served as President and CEO of GFM and Ferromex since November 16, 1999.  Fernando López Guerra Larrea: CFO since July 1st, 2015. Previously, in charge of sales, marketing, customer service and fleet manager. He has worked in different areas within Ferromex and has been part of GMXT for 14 years.  Hugo Rafael Gómez Díaz: COO since 2015. Prior to this position, he was responsible for the Transportation Division for 3 years, and before that he was responsible in charge of the Operations Division in Ferrosur, for 13 years.  Lorenzo Reyes Retana Padilla: General Manager of Corporate Projects since September 2015. Previously, from November 1997 to September 2015, COO of Ferromex. Prior to that, he held several positions at Ferronales, including: Director of the Southeast Railway, Vice manager of Infrastructure and Telecommunications and Construction Manager, he was also Coordinator of the Commissioning of the Electrified Double Track Mexico-Querétaro.

2018 and 2019 Estimates

One of GMXT main goals is to continue with its leadership position. In this sense, the company maintains a continuous investment strategy that will allow it to continue strengthening and improving the railway network, with a strict costs control that should translate into continuous improvements in terms of profitability. Although growth is closely linked to economy expansion, the advantages that the company has allow it to offer faster services, with more competitive rates, which translate into more efficient services, and therefore a higher load volume transported.

In that sense and in accordance to our projections model, in 2018 we expect the company's revenues will reach MXN $ 43,827m while Adjusted EBITDA will totaled MXN $ 18,905m, which would represent inter-annual growths of 13.6% and 14.4%, respectively. This would be the first full year of operations with FEC, which contributes about 20% of the consolidated revenues of the company. The growth strategy will continue to focus on increasing the contribution of the Intermodal segment, and take advantage of the increased transportation flow, especially in the Energy segment, where GMXT's current share is less than 15% and the infrastructure requirements are immense, which augurs an interesting growth potential in the following years. A few months ago, the company signed an agreement with IEnova/Valero in order to transport fuel from the sea terminal under construction in Veracruz to Puebla and Mexico, the latter is expected to start operations at the beginning of 2019. In that sense, we anticipate an increase of 9.4% in the volume of cargo transported and 3.3% in average prices yoy. The aforementioned costs control coupled with higher efficiencies will be reflected in a 30bp expansion in the Adj. EBITDA margin to 43.1%. In 2019 our estimates assume increases of 8.1% in revenues and 9.8% in Adj. EBITDA yoy. We forecast an increase of 4.1% in the volume of cargo transported and 3.8% in average prices. The expected expansion in the Adj. EBITDA margin represents 70 bp to stand at 43.8%. It is important to remember that fuel is the most relevant of the costs as it represents around 30% of such item, so that the efficiencies achieved in terms of speed are relevant to the company's profitability and that depends on the infrastructure under which it operates. The company expects to achieve efficiency levels similar to those of Class 1 trains, increasing speed by around 14% (from 34.2 to 39.8 Kms/hr), decreasing the time in terminals by 23% (26.6 to 20.6. hours) and improving fuel efficiency by up to 38% (from 4.2 to 2.6 Lt diesel/1000TKB).

As we detailed in the company's investment plan, our estimates assume MXN $ 7,000m per year until 2021. While the Net Debt /EBITDA ration should continue at low levels of 1.2x in 2018 and 1.1x in 2019. See Investment Fundamentals.

Risk Factors

Economic conditions and their impact on the volume of cargo and variety of products. The company's revenues are closely linked to Mexico's GDP growth levels, the integration of different industrial sectors in Mexico and North America and a positive outlook derived from energy and structural reforms. The above has a direct effect on the demand and availability of the inputs and products that are transported. If GDP growth in Mexico decreases or if there is an economic slowdown at the regional or global level, the results could be negatively affected.

Fuel prices. Fuel prices represent a significant part of operating costs (close to 30%). As a result, consolidated operating results are highly affected by fluctuations in fuel prices. Although they can now recover a significant part of them through the collection of fuel surcharges from customers, nothing guarantees that the company can continue to do so.

Deductibility of the IEPS on fuels. In accordance with the Federal Income Law, it is possible to deduct the amount paid for the Special Tax on Products and Services (IEPS by its Spanish acronym) on imported or purchased diesel (MXN $ 4.73 per liter) used in public or private transportation of persons, cargo or tourism purposes. Although there is no date to eliminate this fiscal stimulus, in the case of GMXT this stimulus represents around 10% of the company's EBITDA, so if it is eliminated, this could represent a short-term impact for the company, while it passes such effect towards customers. In spite of the latter, it is important to remember that for the calculation of our target price, we are using an Adjusted EBITDA that does NOT include this tax benefit, so if it is not eliminated, our estimates could seem conservative.

Infrastructure investments. The business requires substantial and constant investments in order to improve and increase the infrastructure, technology, trains and railway equipment. This, in order to reduce costs, improve performance and meet volume requirements of customers. As a result of this, the ability to achieve greater efficiency in the sake of profitability is highly linked to the effectiveness of the investments carried out.

As for concessions. The concession titles that GMXT holds in Mexico grants it the right to operate railway lines, but it does not own the lands, roads, facilities or associated structures that are necessary to operate the railway network. In the event that concessions are terminated, revoked or called back, the Federal Government would be the one that would control and manage the assets related to the operation of railways. See Concessions section

Lease agreement for the Texas-Pacific line. GMXT operates this line under a 40-year contract signed since January 2001, subject to five 10-year expansions. The contract could be terminated due to the failure to a default in the rent payment or the breach of any obligation foreseen therein. See Concessions

Competition. GMXT faces competition from other railroad concessionaires, motor carriers and sea carriers in Mexico and the US. This could have an impact on the company's results. See Industry and Competition

Exclusivity rights and fees. According to the concession titles, the company has exclusivity rights, subject to certain rights of way established in the titles themselves, to provide rail services in the territories included in its network. In that sense, GMXT can set fares freely, in terms that allow the provision of services with good conditions of quality, efficiency, competitiveness, security and permanence; unless the Mexican government determines that there are no conditions of effective competition in the railway market in Mexico. Should the Federal Economic Competition Commission resolve absence of conditions for effective competition; the Railway Transport Regulatory Agency (ARTF by its Spanish acronym) may establish additional rights of way in addition to those provided in the concession titles as well as fares applicable to the same. Recently, COFECE was investigating GMXT regarding the interconnection services. Last March, the plenary session of the COFECE issued a resolution in which it concluded that there are not sufficient elements to support the definition of the relevant markets of the preliminary ruling, in which it indicated that there were no effective competition conditions in the interconnection service in the form of rights-of-way to provide public services of rail freight transport. The aforementioned preliminary ruling was declared ineffective unanimously along with a file closure without any affectation to GMXT.

NAFTA. The company’s results rely heavily on trade levels, mainly between Mexico, United States and Canada, so the renegotiation of NAFTA is relevant for GMXT. Around 60% of rail traffic in terms of volumes is international and is mainly directed to the US, so any change in that direction could impact the volumes transported at least in the short term, as trade traffic would tend to look for alternative markets and these should be done through ports, where GMXT strong position would be an advantage. In any case, with the recent Mexico-US bilateral agreement one of the main risks has been mitigated, while a likely agreement with Canada might be reach in the upcoming weeks. See NAFTA renegotiation

FX fluctuation. Following the acquisition of FEC, GMXT revenue mix is much more balanced, since now 52% of revenues are USD-denominated. As for the company's debt, it is almost entirely MXN-denominated.

Business Description

General facts GMXT Rail Network

Source: GMXT

Grupo México Transportes (GMXT) is the leading rail operator in Mexico, with the largest extension and connectivity, offering transportation services in industries like agricultural, automotive, cement, chemical and fertilizer, energy, industrial, metals, minerals, intermodal, and some others as logistics services and passenger transport. Mexican railroad operation goes back to 1998 and since then the capacity has been doubled and the Mexican rail system has been modernized. As the largest rail network in Mexico, it covers 9,954 km of main lines that expand in 24 states, and extends 629 km in Texas through the Texas Pacific Railroad. It holds exclusive operations in the northwest corridors (from the northwest portion of Mexico to Mexico City) and southeast Mexico (from Mexico City to the Gulf of Mexico). Through 5 interconnection points and ports, it connects Mexico directly with the US and indirectly with Canada, by interconnecting international cargo with US Class I trains. Likewise, it connects Mexico with the rest of the world through 5 major ports in the Pacific Ocean and 4 major ports in the Gulf of Mexico, which allows the company to be an important link in Mexico’s global supply chain. In mid-2017, GMXT acquired the largest regional rail operator, in terms of revenues, from US, on the East Coast of Florida - Florida East Coast Railway (FEC).

Mexico`s Rail Network Ferromex Rail Network Ferrosur Rail Network

Source: GMXT

Ferromex was the first concession granted to GMXT in 1997 and started operations in 1998. It has the largest rail network in Mexico, with 8,132 km of roads and covers the main industrial and commercial areas of Mexico (Mexico City, Guadalajara, Monterrey, Chihuahua and Hermosillo). It connects with the rest of the world through 9 sea ports and 5 border crossings. It has the largest fleet of trains and train cars in Mexico. It offers passenger transportation services between Ojinaga, Chihuahua and Topolobampo, Sinaloa and two tourist routes in Guadalajara (Tequila Herradura Express and José Cuervo Express).

Ferrosur it is the third railroad network in the country with 1,823 km of tracks. It feeds the ports of Veracruz, Coatzacoalcos and Salina Cruz with coverage to Edo de México, Puebla, Tlaxcala, Hidalgo, Oaxaca, Morelos and Veracruz. This concession was initially granted to GCarso/Inbursa, to subsequently be associated in 2005 with GMXT.

Intermodal Mexico is one of the leading logistics companies nationwide, with operations in 40 major cities in 12 states of Mexico. It offers terminal services that include loading and unloading goods and land transport and works in conjunction with Ferromex and Ferrosur.

US Rail Network FEC Rail Network Texas Pacific Rail Network

Source: GMXT

Texas Pacific operates in West Texas on the South Orient Rail Line with 629Kms of tracks. It goes from the Mexican border city of Presidio, Texas to San Angelo Junction. It connects with Union Pacific Railroad in Alpine, Texas and with BNSF Railway and Fort Worth and Western Railroad in San Angelo. It is operated under a 40-year lease agreement that the company entered into with the state of Texas on January 31st, 2001.

GMXT also owns and operates the largest US regional railroad, in terms of revenue, on the east coast of Florida -Florida East Coast Railway (FEC)-. In Florida, the rail network has 565Kms of main line that runs along the east coast from Jacksonville to Miami and has exclusive direct access to two of Florida’s largest ports (Miami and Everglades) and also direct access to the ports of Palm Beach and Cañaveral. The rail network in Florida acts as a critical extension of the Class I rail networks of CSX Corporation and Norfolk Southern Corporation, transporting intermodal freight and major industrial products to and throughout the state of Florida and central US.

Company Strategy

One of GMXT main goals is to continue with its leadership position and evolve into the base of the supply chain of Mexico and Florida. In that sense, the company intends to concentrate its strategy on the following points:

Strengthening and continuous improvements of the railway network. The strategic investments that the company has implemented over the years (around USD $ 6,300m since 1998) have allowed it to achieve a solid position in the industry, with world class assets along with important technological advances and an efficient network. As a consequence of the above, one of the central points of GMXT's strategy is to continue with important investments that allow it not only to continue improving the efficiency of operations, with faster trains and shorter waiting times, but also through better utilization of its capacity, expanding through new patios and terminals, new branches and investments in digitalized communication systems. Hence, the company has held a 5-year USD$ 2,100m investment plan since 2017.

To obtain a leadership position in intermodal services. The potential growth of logistics services that include freight loading and unloading and ground transportation is very attractive for GMXT. Prior to the acquisition of FEC, this type of service represented just over 10% of consolidated revenues and now represents around 15%. This percentage is still very low if we consider that the average percentage of this type of services in terms of revenues of US Class I trains is higher than 40%. The advantage offered by this type of service is the connection with customers from more markets than any other railroad in the regions where the company operates. GMXT believes that the competitiveness of its services and the integral system will help to convert users of motor transport into users of rail services in the coming years. Investments in this type of transport have been continuous. In 2013, a service was launched in conjunction with Union Pacific designed primarily to support the growing transportation needs of the automotive industry and intermodal markets in Mexico that extends from Monterrey, Nuevo León, to Chicago, Illinois, Los Angeles, California and St. Louis, Missouri. In addition, in 2015 FEC acquired Raven, a cargo truck operator from Jacksonville, thus it more than doubled the volumes of the intermodal segment in one year.

Achieve excellence in services, providing value-added rail transport services that work with the highest standards of safety, reliability and efficiency in an environmentally responsible manner. With the commitment to offer high quality, efficient and sustainable rail services to customers, GMXT will achieve a stronger and more effective market presence, taking advantage of the opportunities of a growing volume with current and potential customers.

Strict cost control. An efficient structure in terms of costs is crucial when creating a resilient business model that allows strengthening services to improve volumes and profitability, particularly during difficult economic cycles. Historically, the company has implemented initiatives to maintain a competitive cost structure and maintains the strategy of continuing to work to

be more efficient, strengthen competitiveness and improve profitability through the implementation of cost control initiatives. Corporate structure

The four main subsidiaries through which GMXT operates and which represent close to 99% of the company's revenues are (i) Ferromex, through Grupo Ferroviario Mexicano (GFM) -74% of participation- in partnership with Union Pacific, the largest rail operator in the US. –the remainder 26%-; (ii) FEC, through GMXT US; (iii) Ferrosur, through Infraestructura y Transportes Ferroviarios (ITF); and (iv) Texas Pacific Transportation, through Líneas Ferroviarias de México. GMXT Corporate structure

(1) Union Pacific Railroad Company Source: GMXT Concessions

Mexico. The Federal Government owns the rail system of Mexico, which operates under concessions. In 1996, the government privatized and divided the rail network into three regional rail systems.

The Railway Service Regulatory Law (LRSF) establishes that concessions will be granted through public bidding, up to a term of 50 years and only to Mexican legal entities (foreign investment may participate in the capital of such entities, but it requires a favorable resolution from the National Foreign Investment Commission should such foreign participation exceeds 49% of the share capital).

The concessions grant exclusive rights to provide cargo transport services on the railway lines (subject to certain rights-of-way and entrainment granted to

other railway concessionaires). Concessionaires have the right to use, but not to own, the land, roads, buildings and facilities necessary for the operation of the railway lines, and have the obligation to maintain the rights of way, structure of the road, buildings and facilities related to maintenance in accordance with the operational standards established in the concession titles.

In Mexico, GMXT operates under five long-term rail concessions, which include two of the three regional systems and three short lines. As consideration for the concessions, GMXT must pay the government the equivalent of 0.5% of the gross income for the first 15 years of the concession period and 1.25% of such gross income for the remaining period.

Length Exclusivity Concession Award date Term Date Routes Kms up to Ferromex Principal: México-Cd. Juárez, Irapuato-Manzanillo, Tampico-Gómez Palacio, Piedras Negras-Ramos Arizpe, Guadalajara-Nogales, Pacífico-Norte Rail Network Mexicali-Benjamín Hill 6,867 22-jun-1997 19-aug-2033 19-feb-2048 (trunk system) Short line: Cadena-Dinamita, Calles-Tamuin, Jiménez-Parral, Salinas Victoria-Chipinique, Manzanillo-Peña Colorada, Guadalajara- Guadalajara and Hércules-Mariscala Connected throughout the states of Chihuahua and Sinaloa. The route Ojinaga-Topolobampo crosses the municipalities of Aldama, Chihuahua, Cuauhtémoc, La 943 22-jun-1997 19-feb-2028 19-feb-2048 (short line) Junta, San Juanito, Bocoyna y San Rafael en Chihuahua; and the municipalities of Loreto, Sufragio and Los Mochis in Sinaloa Nogales-Nacozari Connected throughout the municipalities of Nogales and Nacozari in 320 27-aug-1999 01-sep-2017 01-sep-2029 (short line) Sonora Ferrosur Principal: Teotihuacán-Veracruz, Córdoba-Medias Aguas, Medias Southeast Rail Network 1,565 29-jun-1998 18-dic-2028 18-dic-2048 Aguas-Coatzacoalcos-El Chapo, Puebla-Tehuacán-Sánchez, Apizaco- (trunk system) Puebla and Huehuetoca-Tula-Pachuca-Irolo South Connected throughout the states of Hidalgo, Puebla, Morelos, Tlaxcala 259 14-oct-2005 14-feb-2023 14-feb-2035 (short line) and Edo. de México

Source: GMXT

Fees. In accordance with concessions and the law, GMXT can establish fees/rates freely, in terms that allow provision of services in satisfactory conditions of quality, efficiency, competitiveness, security and layover; unless the Mexican government determines that there are no conditions of effective competition in Mexico’s rail market. Likewise, fees have to be the same for users under equal conditions for comparable services and cannot be applied in a discriminatory manner. The company has the obligation to register the rates, except those that are mutually agreed between GMXT and the users, which must be available at all times. Should customers are charged with fees higher than those recorded, customers must be reimbursed the amount collected in excess plus interest and it is possible that the corresponding concession will be terminated.

Concessions Term. The Federal Government is authorized to revoke the exclusivity after a certain time has elapsed and if it determines there is not enough competition in the market. In terms of the LRSF the concessions end as a consequence of: (1) Expiration of the term established in the concession; (2) Waiver of the owner; (3) Revocation - the SCT may revoke the concessions and permits immediately, in the event that it does not exercise the rights conferred in a 180-day period, or in case it transfers them or taxes them,

and if the concessionaire changes its nationality. Additionally, if it does not comply with certain requirements and is sanctioned 3 times in a period of 5 years by defaulting, for example, operation halts, limits or prevents the use of interconnection services, or rights of way, applies higher fees to those registered, not complies with the payment of compensation in case of damages, does not validate the guarantee of fulfillment of the concession and insurance and does not provides maintenance to concessioned railways according to pre-established standards, among others; (4) Rescue - The Federal Government may terminate and redeem the concessions at any time if, in accordance with the applicable law, it determines that it is in the public interest to perform the corresponding rescue; (5) Disappearance of the concession or permit, and (6) Liquidation or bankruptcy of the concessionaire.

Should a concession is revoked by the government for any reason attributable to the company, GMXT will not receive any compensation and all rights and assets covered by the concession, as well as all improvements made with respect to said assets, will be reversed in favor of the Federal Government. In case of concession termination for any external cause, the government would have to compensate GMXT and pay any investment not recovered plus the annual rate of return contained in the concession title.

United States. In US and Canada railroads are private. In the State of Texas, the Texas Pacific Railroad extends 629Kms on the South East Railway Line from the San Angelo Branch to Presidio and is operated under the 40-year lease contract that GMXT entered into with the State of Texas on January 31st, 2001.

In Florida, the company owns the Florida East Coast Railway and the corresponding right-of-way, which extends 565 kilometers along the east coast from Jacksonville to Miami.

Industry and Competition

The rail industry focuses on freight transport. However, trains are part of a broader industry that includes truckers, boat operators and air carriers. According to figures from Mexico’s Ministry of Communications and Transportation and the American Trucking Association, between 20% and 35% of the cargo is made through freight trains, and the rest is done with trucks.

Obviously competition varies in accordance to the type of route and cargo. However, trains have the advantage at long routes and can carry larger cargo. Greater efficiencies in terms of fuel usage and lower carbon emissions give freight trains an additional competitive advantage over truck drivers. Market Share in Borders % Market Share in Ports %

Trains Trains 20% 36% Trucks 64% Trucks 80%

Source: SCT (Anuario Estadístico Ferroviario), GMXT

The company also faces competition from other private rail companies in Mexico, particularly with Kansas City Southern de Mexico (KCSM), whose central route is the direct road network between Mexico City and Laredo, Texas. Through Laredo, more than half of all US and Mexico rail and truck traffic from Mexico crosses the border. KCSM competes with GMXT in some areas where it provides services, including Tampico, Tamaulipas and Mexico City. Also, under its concession, KCSM has the right to control and operate the southern half of the railroad bridge in Laredo, Texas, which encompasses the Rio Grande between the US and Mexico. In spite of the above, the volume carried by GMXT is almost doubles the volume transported by KCSM, as it has more efficient routes thanks to investments it has carried out and by leveraging its competitive advantages such as access to its border crossings and seaports.

GMXT Market Share% Others 1% KCSM 35%

GMXT 64%

Source: SCT, GMXT

U.S. is connected by the best rail transportation system in the world, according to the Association of American Railroads (AAR). It consists of 225.308 km of tracks operated by seven Class I trains, 21 regional trains, and 510 local trains. The US freight rail system carries more cargo than any other rail freight system in the world. Freight transport railways are privately owned and operated entirely by individuals and operate with infrastructure of which they own, build, maintain and pay for.

Trains that are not Class I (also known as secondary trains and regional trains) vary in size, from small handling operations of certain loads per month to operations in several states comparable to the size of Class I trains. The main function of secondary trains is to provide traffic to Class I and regional operators. When compared to Class I, which operates on a complicated rail network over long distances, secondary and regional trains have more predictable and simple operations.

FEC's participation in the Florida market was 32.0% in 2016, allowing a significant growth in opportunities, particularly in the Orlando and Tampa areas. In Florida, the main competitor is CSX Corporation, which operates in much of the territory in which FEC operates.

Certification of Analysts. We, Gabriel Casillas Olvera, Delia Maria Paredes Mier, Alejandro Padilla Santana, Manuel Jiménez Zaldívar, Tania Abdul Massih Jacobo, Katia Celina Goya Ostos, Juan Carlos Alderete Macal, Víctor Hugo Cortes Castro, Marissa Garza Ostos, Miguel Alejandro Calvo Domínguez, Hugo Armando Gómez Solís, Gerardo Daniel Valle Trujillo, José Itzamna Espitia Hernández, Valentín III Mendoza Balderas, Santiago Leal Singer, Francisco José Flores Serrano, Francisco Duarte Alcocer and Leslie Thalía Orozco Vélez, certify that the points of view expressed in this document are a faithful reflection of our personal opinion on the company (s) or firm (s) within this report, along with its affiliates and/or securities issued. Moreover, we also state that we have not received, nor receive, or will receive compensation other than that of Grupo Financiero Banorte S.A.B. of C.V for the provision of our services.

Relevant statements. In accordance with current laws and internal procedures manuals, analysts are allowed to hold long or short positions in shares or securities issued by companies that are listed on the Mexican Stock Exchange and may be the subject of this report; nonetheless, equity analysts have to adhere to certain rules that regulate their participation in the market in order to prevent, among other things, the use of private information for their benefit and to avoid conflicts of interest. Analysts shall refrain from investing and holding transactions with securities or derivative instruments directly or through an intermediary person, with Securities subject to research reports, from 30 calendar days prior to the issuance date of the report in question, and up to 10 calendar days after its distribution date.

Compensation of Analysts.

Analysts’ compensation is based on activities and services that are aimed at benefiting the investment clients of Casa de Bolsa Banorte Ixe and its subsidiaries. Such compensation is determined based on the general profitability of the Brokerage House and the Financial Group and on the individual performance of each analyst. However, investors should note that analysts do not receive direct payment or compensation for any specific transaction in investment banking or in other business areas. Last-twelve-month activities of the business areas. Grupo Financiero Banorte S.A.B. de C.V., through its business areas, provides services that include, among others, those corresponding to investment banking and corporate banking, to a large number of companies in Mexico and abroad. It may have provided, is providing or, in the future, will provide a service such as those mentioned to the companies or firms that are the subject of this report. Casa de Bolsa Banorte or its affiliates receive compensation from such corporations in consideration of the aforementioned services. Over the course of the last twelve months, Grupo Financiero Banorte S.A.B. C.V., has not obtained compensation for services rendered by the investment bank or by any of its other business areas of the following companies or their subsidiaries, some of which could be analyzed within this report. Activities of the business areas during the next three months.

Casa de Bolsa Banorte, Grupo Financiero Banorte or its subsidiaries expect to receive or intend to obtain revenue from the services provided by investment banking or any other of its business areas, by issuers or their subsidiaries, some of which could be analyzed in this report. Securities holdings and other disclosures.

As of the end of last quarter, Grupo Financiero Banorte S.A.B. of C.V. has not held investments, directly or indirectly, in securities or derivative financial instruments, whose underlying securities are the subject of recommendations, representing 1% or more of its investment portfolio of outstanding securities or 1 % of the issuance or underlying of the securities issued.

None of the members of the Board of Grupo Financiero Banorte and Casa de Bolsa Banorte, along general managers and executives of an immediately below level, have any charges in the issuers that may be analyzed in this document.

The Analysts of Grupo Financiero Banorte S.A.B. of C.V. do not maintain direct investments or through an intermediary person, in the securities or derivative instruments object of this analysis report. Guide for investment recommendations.

Reference

BUY When the share expected performance is greater than the MEXBOL estimated performance. HOLD When the share expected performance is similar to the MEXBOL estimated performance. SELL When the share expected performance is lower than the MEXBOL estimated performance. Even though this document offers a general criterion of investment, we urge readers to seek advice from their own Consultants or Financial Advisors, in order to consider whether any of the values mentioned in this report are in line with their investment goals, risk and financial position.

Determination of Target Prices

For the calculation of estimated target prices for securities, analysts use a combination of methodologies generally accepted among financial analysts, including, but not limited to, multiples analysis, discounted cash flows, sum-of-the-parts or any other method that could be applicable in each specific case according to the current regulation. No guarantee can be given that the target prices calculated for the securities will be achieved by the analysts of Grupo Financiero Banorte S.A.B. C.V, since this depends on a large number of various endogenous and exogenous factors that affect the performance of the issuing company, the environment in which it performs, along with the influence of trends of the stock market, in which it is listed. Moreover, the investor must consider that the price of the securities or instruments can fluctuate against their interest and cause the partial and even total loss of the invested capital.

The information contained hereby has been obtained from sources that we consider to be reliable, but we make no representation as to its accuracy or completeness. The information, estimations and recommendations included in this document are valid as of the issue date, but are subject to modifications and changes without prior notice; Grupo Financiero Banorte S.A.B. of C.V. does not commit to communicate the changes and also to keep the content of this document updated. Grupo Financiero Banorte S.A.B. of C.V. takes no responsibility for any loss arising from the use of this report or its content. This document may not be photocopied, quoted, disclosed, used, or reproduced in whole or in part without prior written authorization from Grupo Financiero Banorte S.A.B. of C.V. History of PT and Ratings Stock Date Rating PT GMXT September 28, 2018 BUY MXN$37.00

GRUPO FINANCIERO BANORTE S.A.B. de C.V. Research and Strategy

Chief Economist and Head of Research Gabriel Casillas Olvera [email protected] (55) 4433 - 4695

Raquel Vázquez Godínez Assistant [email protected] (55) 1670 - 2967

Economic Analysis

Delia María Paredes Mier Executive Director of Economic Analysis [email protected] (55) 5268 - 1694 Katia Celina Goya Ostos Senior, Global Economist [email protected] (55) 1670 - 1821 Juan Carlos Alderete Macal, CFA Senior Economist, Mexico [email protected] (55) 1103 - 4046 Miguel Alejandro Calvo Domínguez Economist, Regional [email protected] (55) 1670 - 2220 Francisco José Flores Serrano Economist, Mexico [email protected] (55) 1670 - 2957 Lourdes Calvo Fernández Analyst (Edition) [email protected] (55) 1103 - 4000 x 2611

Fixed income and FX Strategy

Alejandro Padilla Santana Head Strategist – Fixed income and FX [email protected] (55) 1103 - 4043

Santiago Leal Singer FX Senior Strategist [email protected] (55) 1670 - 2144

Leslie Thalía Orozco Vélez Fixed Income and FX Strategist [email protected] (55) 1670 - 1698

Equity Strategy

Director Equity Research — Manuel Jiménez Zaldivar [email protected] (55) 5268 - 1671 Telecommunications / Media Víctor Hugo Cortes Castro Technical Analysis [email protected] (55) 1670 - 1800 Equity Research – Conglomerates / Financials/ Marissa Garza Ostos [email protected] (55) 1670 - 1719 Mining / Petrochemicals / Railways Equity Research – Airlines / Airports / Cement / José Itzamna Espitia Hernández [email protected] (55) 1670 - 2249 Infrastructure / REITs Equity Research – Auto Parts/ Consumer Valentín III Mendoza Balderas [email protected] (55) 1670 - 2250 Discretionary / Real Estate / Retail Francisco Duarte Alcocer Analyst [email protected] (55) 1670 - 2707 Itzel Martínez Rojas Analyst [email protected] (55) 1670 - 2251

Corporate Debt

Tania Abdul Massih Jacobo Director Corporate Debt [email protected] (55) 5268 - 1672 Hugo Armando Gómez Solís Senior, Corporate Debt [email protected] (55) 1670 - 2247 Gerardo Daniel Valle Trujillo Analyst, Corporate Debt [email protected] (55) 1670 - 2248

Wholesale Banking

Armando Rodal Espinosa Head of Wholesale Banking [email protected] (81) 8319 - 6895 Alejandro Eric Faesi Puente Head of Global Markets and Institutional Sales [email protected] (55) 5268 - 1640

Alejandro Aguilar Ceballos Head of Asset Management [email protected] (55) 5268 - 9996 Head of Investment Banking and Structured Arturo Monroy Ballesteros [email protected] (55) 5004 - 1002 Finance Head of Transactional Banking, Leasing and Gerardo Zamora Nanez [email protected] (81) 8318 - 5071 Factoring Jorge de la Vega Grajales Head of Government Banking [email protected] (55) 5004 - 5121

Luis Pietrini Sheridan Head of Private Banking [email protected] (55) 5004 - 1453

René Gerardo Pimentel Ibarrola Head of Asset Management [email protected] (55) 5268 - 9004 Ricardo Velázquez Rodríguez Head of International Banking [email protected] (55) 5004 - 5279 Víctor Antonio Roldan Ferrer Head of Corporate Banking [email protected] (55) 5004 - 1454