Jan. 19, 2021

Antonio Tejedo


Antonio Tejedo

Vice President Investor Relations, Traxion

“Traxion is not only focused on large, tier-one players, but also on tier-two players such as department stores and smaller retailers.”


Antonio Tejedo has more than 19 years of solid experience in the financial sector, mainly in investment banking, wealth management and investor relations. Before joining TRAXIÓN, Mr. Tejedo was Investor Relations and Capital Markets Director with Fibra Uno, were he coordinated the investor relations department and participated in both debt and equity transactions, and in a co-investment vehicle for real estate development. He was also founder and managing partner of Investia Asesores Financieros, were he advised real estate companies in both debt and equity transactions and engaged in the development of the business model of Bolsa Institucional de Valores (BIVA). Prior to that, he worked for Casa de Bolsa Santander in private banking and investment banking positions, where he participated in several equity issuances for more than 8.3 billion dollars. Mr. Tejedo holds a BS in Industrial Engineering from Universidad Iberoamericana and earned his Master of Business Administration from Kelley School of Business, Indiana University.

What factors led to the company's successful second quarter in 2020 despite the pandemic?

Traxion started seeing an opportunity way back, because logistics channels were under-penetrated in Mexico, especially those linked to e-commerce. Management saw an opportunity, and in 2018 we acquired a last-mile and parcel company, as we wanted a solid platform to seize on the opportunities that the market would ultimately provide. The pandemic was the catalyst of the logistics business, mainly e-commerce, last mile, distribution, warehousing, and so on. Traxion was positioned to capture that, which was a tremendous element of our results in 2Q and 3Q of 2020. We reported excellent results in the second quarter and even better in the third, which was a record quarter in every relevant financial metric, from revenues to net income. The company issued a MXN2.5 billion unsecured secure bond in September, and with that we were able to repay some liabilities and shift our debt to a long-term profile. We ended up with not only record high financial metrics but also less leverage, a strong balance sheet, and a comfortable cash position, the highest the company has ever had.

What added value does Traxion bring to the market?

Traxion is not only focused on large, tier-one players, but also on tier-two players such as department stores and smaller retailers that are less sensitive to price compared to other large companies, which struggle more with pricing. The added value is the service, as people were skeptical about e-commerce, which is why the sector was under-penetrated in Mexico. However, the pandemic forced people to turn to e-commerce, and they discovered that it not only works but is also efficient. People did not know if their package would even arrive. It is not like the US, where one can order six pairs of shoes, and if they do not like five of them, or they do not fit, the client can put them back in the box, attach a label, return it, and get a refund three days later with no questions asked. In Mexico, that is not possible now, and such infrastructure needs to be developed quickly. The value of Traxion is the high-quality service together with a one-stop, door-to-door solution across the whole supply chain. We are the only Mexican company capable of conducting such services by using both its own infrastructure and that of third parties.

Why does the transportation sector in Mexico have a greater economic impact in comparison to other countries?

Virtually everything in Mexico moves by truck as there is no other large or reliable alternative. We have two main sources of growth. Mexico has an attractive demographic bonus with a middle class that is growing. Pre COVID-19, everyone was spending, and that fuels internal consumption and makes transportation an important part of the GDP. Mexico also has a large manufacturing installed capacity- perhaps the most important in LatAm, and when we put that together with its geographic position, being the southern neighbor of one of the largest consumption economies in the world with access to two oceans, it is logistically convenient to operate in Mexico. We have virtually every car manufacturer in the world, with German, American, Korean and Japanese car manufacturers. We also have aerospace, medical devices, energy, and a number of other sectors of the economy that operate out of Mexico. Our demography and manufacturing capacity are the drivers of our growth. As infrastructure improves, with more highways and ports, it will improve further our sector.

Do you plan to expand internationally or create better logistics solutions for Latin and North America?

We are not planning to expand to other countries in the short or midterm, as we still see many attractive opportunities in Mexico. Cargo is a fragmented business, dominated by small players that are usually family-owned companies. There are few large fleets, so there is a great chance of consolidation there, and there are opportunities to grow organically regular cargo services by using third-party assets through technology and digitalization. We developed an app called Traxporta where we connect cargo operators with clients. We launched it in 2Q2020, so it is still new, and these are the kinds of opportunities we are taking in terms of technology and innovation. We are developing an asset-light model while taking care of the core business, which is still profitable, with excellent opportunities for growth. We have another division called Traxion Logistics, which is like the control tower that coordinates everything with Traxion subsidiaries, thus providing a one-stop solution, unique in Mexico. The idea is to provide all the services using Traxion or third parties and only bill one single invoice to the client.

Do you plan to establish or acquire more companies in the coming years?

It is not part of the current growth model of Traxion. Traxion was founded in 2011 and has acquired and successfully integrated seven companies, which resulted in significant synergies and economies of scale. However, since 2019 M&A has no longer been a part of the plan. At the same time, we always analyze and take a look at opportunities, as we cannot deny that we come from an M&A background, and if we encounter a great M&A transaction we will likely take it, as pandemics and crises usually present various opportunities.

What are your main goals and priorities for the rest of 2020 and for 2021?

If we assume that the pandemic will continue in 2021, then our priorities are to keep providing capacity for our clients and seizing the opportunities that the logistics sector presents us. For example, the personal transportation segment is not efficient in Mexico, and the infrastructure has not changed much in the past decades and remains unsafe. Our clients need to provide their employees with an efficient and safe commuting option, which we provide. With the pandemic, our clients have started asking for increased capacity, as they could not transport 40 people in a bus due to social distancing. They needed twice or even thrice their original capacities, so we are now running more than 1,000 buses of over demand in that segment, in addition to our 5,500 bus fleet. We are temporarily satisfying that demand with a fleet that usually is dedicated to schools. We are also outsourcing rental units from local competitors with idle capacity. In cargo, we moved many of our trucks when the pandemic started, as the auto industry came to a halt and the panic shopping triggered. We later shifted our fleet from the auto industry to retail, consumer, and food and beverage sectors. The auto industry came back, and we shifted back, so we are facing continuous change. This will probably remain if the pandemic prevails. If the pandemic is under control and there is a vaccine or treatment in 1Q2021, then a potential return to normalcy would present us with growth opportunities, both organic or inorganic.