Good morning. My name is Nadia, and I'll be the conference operator today. At this time, I would like to welcome everyone to America Movil's Third Quarter 2024 Conference Call and Webcast. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there'll be a question-and-answer session. Thank you. Now, I will turn the call over to Ms. Daniela Lecuona, Head of Investor Relations to begin.

Thank you. Good morning, everyone. Thank you for joining us today to discuss our third quarter financial and operating results. We have on the line Mr. Daniel Hajj, CEO; Mr. Carlos Garcia Moreno, CFO; and Mr. Oscar Von Hauske, COO.

Hi, good morning. Welcome to America Movil third quarter financial and operating report, and Carlos is going to make a summary of the results.

Thank you, Daniel. Good morning, everyone. Well, interest rates in the US and several other countries continued their downward trend in the third quarter, with 10-year US Treasury yields falling 85 basis points from the beginning of the quarter through mid-September to a low of 3.6%. The decline was driven by concern about the cooling US economy and its corresponding impact on the labor market. It prompted the Fed to finally declare its first discount rate reduction in 2.5 years, a period in which it brought about a 5 percentage point increase in such rate. Shortly after the end of the third quarter, 10-year yields have bounced back to more than 4% on the back of unexpectedly strong non-farm payroll numbers for September, wiping out half of the reductions that have taken place through mid-September. Throughout the quarter, Central Bank discount rates fell by 50 basis points in Mexico and Peru, 1 percentage point in Colombia, and 25 basis points in Chile, but were going up once again in Brazil by 25 basis points. In the third quarter, we added 1.8 million subscribers, of which 1.4 million were postpaid. These include regular subscribers as well as data dongles and mobile devices. Austria contributed 430,000 of them, Brazil contributed 291,000, Colombia contributed 59,000, and Mexico 108,000 postpaid subscribers. Our prepaid segment obtained 468,000 net additions led by Colombia with 251,000, Eastern Europe with 213,000, and Argentina with 200,000, but registered 343,000 connections in Brazil and 136,000 in Mexico. In the fixed line segment, we connected 327,000 broadband accesses, 116,000 in Mexico, 59,000 in Brazil, and approximately 43,000 in Argentina and Central America. We disconnected 83,000 landlines and 30,000 PayTV units in the quarter. Mobile postpaid and fixed broadband continued to be the main drivers of access growth with 5.9% and 5.2%, respectively, year-on-year. Third quarter revenue totaled MXN223 billion with service revenue expanding 11.3% in Mexican peso terms and EBITDA 11.9%, partly reflecting the depreciation of the Mexican peso versus most of the currencies in our region of operations, with the notable exception of the Brazilian real, approximately 10% depreciation versus both the dollar and the euro, 8% versus the Colombian Peso, and 12% versus the Peruvian sol. At constant exchange rates, service revenue was up 5.5% year-on-year, an improvement on the 4.7% rate observed in the prior quarter, while adjusted EBITDA increased 7.3%. Mobile service revenue growth accelerated somewhat from the prior quarter to 5.2%, posting its best performance in over a year on the back of postpaid revenue growth. On the fixed line space, service revenue rose 5.9%. Broadband revenue decelerated slightly from the prior quarter to 7.4%, and corporate network revenue expanded 10.1%, faster than the precedent quarter. The decline in PayTV revenue continues but has become less and less significant. Brazil and Colombia continued the trend over the last year of posting improved steady revenue growth every quarter, while Central America presented better growth rates than in the preceding two quarters. Mexico and Peru maintained their pace from prior quarters. Our operating profit reached MXN47.4 billion. It was up 14.2% in Mexican peso terms and 10% at constant exchange rates. Adjusted for one-offs, as mentioned above, our operating profit increased 12% at constant exchange rates. We posted a net profit of MXN6.4 billion in the quarter, nearly trebling the one obtained a year before. It was equivalent to MXN0.10 per share or $0.11 per ADR, and came about on the back of a higher operating profit, as mentioned before, but also as comprehensive financing costs came down 4.8% relative to the same period of 2023 to MXN28 billion. Our net debt ended September at MXN433 billion, having increased by MXN7.3 billion relative to December 2023, partly reflecting the impact of the depreciation of the Mexican peso on our non-peso financial obligations. In cash flow terms, our net debt increased by MXN19.7 billion. In the nine months to September, our capital expenditures totaled MXN86.7 billion, shareholder distributions MXN32.9 billion, split almost evenly between share buybacks and dividend payments and we reduced our labor obligations in the amount of MXN23.7 billion, particular of these curtailments. Our net debt excluding leases to EBITDA after lease ratio ended September at 1.34 times last 12 months EBITDA, practically at the lower leverage limit that we committed to maintain in our Investor Day. And finally, I'd just like to highlight that we received our third ESG rating upgrade by MSCI in as many years, reflecting improvements in corporate governance, security, and data progress. With that, I would like to pass it back to Daniel. Thank you.

Thank you, Carlos, and we can start with the Q&A.

Our first question goes to Milenna Okamura of Goldman Sachs. Milenna, please go ahead.

Hey, thank you for taking my questions. The first one is if you have any updated views on the competitive dynamics of the fixed broadband market in Mexico. And my second question would be on your CapEx guidance. Is your target for the year still at about $7.1 million? Thank you.

The second question, can you repeat the second question? We didn't hear you.

Sorry, on the CapEx guidance for 2024.

Well, on the CapEx, I think we are on target for this year. We said that we're going to do around $7.2 billion and that's our target and we are more or less on that range. So, no significant difference on that. And on the dynamics, on the fixed broadband in Mexico, Oscar can talk a little bit about that.

Thank you. Over the years, the competitive landscape in Mexico has become increasingly challenging. Telmex has responded by investing in network upgrades, and currently 83.7% of fixed broadband connections are on fiber. They have also worked on bundling various streaming services to create attractive packages for the market. Just last week, we introduced a new package that boosts speeds from 50 to 80 Mbps at the same price and includes six months of Netflix for free, along with Claro Video and Claro Drive. We've only had this product available for a week, but the market reception has been very positive. Although competition continues, we believe we have enhanced our network to be highly competitive. Additionally, the B2B market in Mexico is performing well, particularly in areas such as cloud computing, cybersecurity, and horizontal solutions, which is contributing to improved revenues in this segment.

To clarify what Oscar mentioned, we have invested significantly in fiber over the past few years, not just by laying down fiber but also by upgrading our customers to fiber. Currently, about 84% of our customers are using fiber, which offers good speeds and quality. Our IT infrastructure has greatly improved in Mexico, and we've focused on enhancing IT to offer better customer service, quicker installations, and faster repair times. Additionally, we have improved the quality of service. The competitive landscape in both fixed and mobile services in Mexico remains strong. We have not raised prices in a long time, providing more value without increasing costs. We believe we currently hold a strong advantage in quality, capacity, coverage of networks, and customer care centers. Overall, we feel we are performing well in Mexico.

Super clear. Thank you.

Thank you. The next question goes to Walter Piecyk of Lightshed Partners. Walter, please go ahead.

Thanks. I think just first, if I can start with a macro question. Obviously, there are some questions regarding what’s going to happen going forward and into 2025. You have many data points in terms of what you're seeing with your customers, forget about Europe, just throughout Latin America in terms of recharges, subscriber activity, and upgrades of phones. Can you just give us a general sense of what you've seen most recently and what you think or what your outlook is for the coming quarter and 2025?

Well, it's a very interesting question. I think I can divide it into two parts; prepaid is very different than postpaid. I think prepaid depends a lot on how the economies are doing in Latin America. So people recharge depending on their purchasing power, so that's one factor they need to consider. There's a lot of prepaid that are moving to 5G in Mexico and Latin America, so we have been expanding 5G overall, but its implementation depends significantly on the economic situation in each country. On postpaid, I think we've been performing well. We have been upgrading our customers, providing them with better handsets and more data, and they are paying more. So that's the trend we have been establishing over the last two years since implementing 5G, and I hope that this trend will continue into 2025.

So I think in the first part of your answer, Daniel, you mentioned that it does depend on the economy. From what you've seen currently, is the economy still instigating very good recharge rates on the prepaid side? Has that started to cool at all?

If you look at rates of growth of our prepaid revenues, in Mexico, they were 4.1% in the quarter, last quarter was 4.3%, and a year ago they were at 4.1%, so we haven't really seen as much slowdown as some people had expected due to the slowing down of the economy. As Daniel said, I think postpaid revenues are also holding up well. So generally, we haven't observed significant changes. This is a very defensive industry, as you know, and revenue tends to hold up well across all GDP scenarios.

Yeah, and many things we do are essential, I think people need to use their phones more, and they will increasingly utilize their phones more. So if they can have a better device and access to 5G, faster networks, and more data, that's what you will see in the coming years, not just in the next year but in the upcoming years; everything will revolve around mobile connectivity.

Thanks for the opportunity. I have a quick follow-up question. Could you provide an update on who you anticipate partnering with to connect your customers' phones to satellite constellations? I believe you may have had an agreement with AST at one point, but I'm interested in your perspective on market partnerships related to direct satellite connectivity for your customers in Latin America.

Well, I think we are utilizing multiple partners, not just one. We have a couple of partners that we are evaluating regularly to ascertain which one is providing the best services for connecting rural cellular sites. Satellite is used for mobile backhaul, and there's the situation where the phone connects when we lack coverage. So these are two separate services we're currently assessing. As for the number of vendors we're working with for backhaul, we're reviewing continuously. I don't have specific insights on the current partnerships we have.

We have Star One, Starlink, and SpaceX, along with AST - we are collaborating with AST as well.

So, we’re utilizing multiple partners for various segments of our services.

For SpaceX, do you have an agreement, or are you exploring a potential agreement with Starlink?

We already have an agreement for resale.

Their service, and we are currently exploring an agreement so they can provide backhaul as well.

We are already using their services in Chile for mobile backhaul.

Backhaul. Okay. Yes.

Great. Thank you.

Thank you.

Thank you. The next question goes to Marcelo Santos of JPMorgan. Marcelo, please go ahead.

Hi, good morning. Thank you for taking my questions. I wanted to double-click a bit on broadband dynamics. The first question would be in Mexico; you had good net additions, but it was a bit less than in the second quarter. Is this because you had lower gross additions or because there was a bit of higher churn in the market? I'd like to understand if the market is getting more competitive. The second question is if you could comment on the competitive dynamics of Brazilian broadband. This is a more general question.

Carlos? Take Brazil broadband.

Yeah, we experienced a bit more churn in Mexico in the second and third quarters attributed to economic factors. So yes, we've been observing a consistent pattern over the last two quarters. In Brazil, in broadband, we are the leaders in high-speed Internet services. Even we were awarded the best WiFi in Latin America in Brazil, delivering our services. So we hold the leading market share in Brazil. While we face significant competition from other internet service providers (ISPs), we keep growing our subscriber base. We have upgraded our network to deliver 1 gigabit speed with DOCSIS 3.1 technology, and we have almost 11 million home passes with fiber forthcoming. I believe we are very well-positioned. Additionally, the convergence strategy has been receiving a positive reception as we combine mobile and PayTV services. We’ve recently launched a new package that goes beyond traditional PayTV; it’s more of an entertainment hub combining popular channels with Netflix, and Apple+ under favorable market conditions. This integration of services should continue to drive growth in broadband.

Just to give you a clearer perspective regarding Mexico, in the third quarter of '23, we registered 20,000 net additions in broadband. In the fourth quarter of '23, we had 165,000. In the first quarter of '24, it was 325,000. In the second quarter of this year, we had 148,000. And in the third quarter 116,000. So we hope to maintain around 100,000 to 150,000 for the next quarter. We believe we are prepared, as we stated, and the market is quite competitive. That’s why we are experiencing some churn, as the competition is intense. However, we are working to regain some of the market share we lost last year.

Okay. Very clear. Thank you very much for the answers.

Thank you.

Thank you. The next question goes to Gustavo Farias of UBS. Gustavo, please go ahead.

Hi, everyone. Thanks for taking my questions. Two from my end. First one, I was seeing some negative net additions in mobile in Brazil, of course, driven by prepaid. I just want to check what you guys expect in terms of trends going forward, and of course, in terms of competition in the region as well in mobile specifically. My second question is regarding the increase in net debt this quarter, and if you could share some color on your debt strategy and how you're looking at FX impacts going forward as well? Thank you, guys.

Well, let's start with Brazil. I think in Brazil, we're doing very good. We are transitioning many prepaid subscribers to postpaid subscribers, which is why we've seen a negative change, as you mentioned. However, the overall trend for postpaid is very positive. We are very proactive in ensuring that our prepaid base remains strong, so we are aggressive if a customer isn’t active; they won't be counted as a customer. This is a strategic approach we're implementing, resulting in successful migration from prepaid to postpaid subscribers. And what was your second question?

Regarding how you see your debt strategy and FX impacts going forward.

You have a bad connection, Gustavo. Can you please repeat the question or send it via chat or email to me?

Yeah, of course, I can repeat the question. I'm just wondering how you see your debt strategy regarding FX going forward?

Hello, Gustavo. We are currently not looking to take on additional debt. As you can see, we have reduced our leverage. We face very limited refinancing in the next year. It's probably the year with the least amount of maturities we will have, probably less than MXN1 billion. I believe we have made significant progress with our Mexican global peso bonds, having issued more than MXN55 billion in just over a year. We expect to continue this consolidation program and will also be looking to raise a bit more financing in some of our local markets, including Peru, Colombia, and Brazil. Hence, that's more our strategy to focus on local currency generally. Bear in mind, this would be primarily for refinancing existing debt, which we aim to maintain at similar levels. We have short term debt available, which is variable, and we can adjust accordingly in the upcoming months.

Alright. Thank you.

Additionally, we will adjust our short-term debt downwards in the following months.

Thank you, Carlos.

Thank you. The next question goes to Ernesto Gonzalez of Morgan Stanley. Ernesto, please go ahead.

Hi, thank you for taking our question. It's just one, can you please provide any color on your CapEx plans for Chile? Thank you.

It's too early to see. As we indicated in our results, we're going to start consolidating Chile on the 1st of November. We will include its CapEx. We haven’t finalized our CapEx plans for next year, so I can't provide the final number just yet, but it's not expected to change significantly from our current budget.

Crystal clear. Thank you.

Thank you. The next question goes to Phani Kanumuri of HSBC. Phani, please go ahead.

Thanks for taking my questions. So the first one is that LatAm currencies have depreciated significantly in the last six months. Do you see any change in your shareholder remuneration or CapEx direction compared to the targets you set during your Analyst Day in May? The second question is actually on the constant-currency growth rate for fixed broadband; you had given a number of 5.9%. I wanted to check which countries have registered a better-than-average growth rate among your major countries. Thank you.

We don't fully understand your first question. But regarding the second, regarding the average growth in broadband, I think the growth on broadband has been positive every quarter. Overall, we are witnessing slightly less competition from fiber companies, especially those using wholesale networks across Latin America, and that will allow us to be more aggressive and increase our sales. In summary, broadband's penetration remains low in Latin America, and we anticipate good growth in the upcoming years.

We don’t have precise figures at hand, but you can discuss the specifics with Daniela, and she can provide you with the exact growth rates for each country above that 5.9% benchmark and those that are below. I think Brazil is performing well, but I'm not sure what the specific growth rate is in Brazil.

Our performance in Brazil is 8.8%, Colombia at 7.2%.

Remember, broadband also includes the corporate segment. You can consult with Daniela for disclosure on specific growth rates.

Very quickly, it's 8.8% for Brazil, 7.2% for Colombia, 15.7% for Eastern Europe.

8.6% in Central America.

Yes, and it’s 10.9% in the Dominican Republic.

And the corporate networks side has grown 10% for America Movil, including 12.8% in Mexico, 7.9% in Brazil, 14.1% in Colombia, and 7.5% in Central America.

Okay. I'll connect with Daniel regarding specifics on this. The first question was that due to the depreciation of currencies across LatAm in the last six months, have you made any adjustments to shareholder remuneration or CapEx that you laid out during your Analyst Day in May?

No. We haven't altered our CapEx. We've completed our target for this year, and we're reviewing CapEx for the next year, but we don't anticipate any changes in that aspect or in shareholder remuneration either. We are aligned with our objectives currently.

From January to the present in the third quarter, we’ve executed buybacks totaling about MXN14 billion.

MXN14 billion. Okay.

Thank you. The next question goes to Alejandro Lavin of Santander. Alejandro, please go ahead.

Hi, good morning, everyone. Can you hear me? Okay. Thanks for taking my question. First of all, congrats on the results. You’re witnessing solid top-line results. I mean now that currency was a headwind, now it’s a tailwind; you're seeing rising profitability, stable CapEx, and low leverage, so it sounds like the stars are aligning for a very positive outlook for the end of next year, and especially for all of next year, right? So congratulations on that. My second question is regarding M&A possibilities, right? There are some opportunities in the near term in LatAm, but in general, strategically, what kind of assets or regions would you be interested in?

Regarding mergers and acquisitions, we are currently not seeing any viable opportunities, particularly in Latin America, which is quite challenging. Our focus in the region is on growth, enhancing our capital expenditures and market penetration while ensuring we utilize the best technology, an approach we have maintained over the past few years. We are beginning to see the fruits of our investments; we've been digitizing operations, enhancing customer service, and effectively managing costs. We have upgraded our platforms, and our 5G network is the largest in Latin America. Overall, we have the latest technology that offers better quality, increased speeds, and competitive pricing compared to our rivals. We will continue to focus on these areas in the upcoming year. We remain open to potential opportunities, but at this moment, we have no specific plans. The only consolidation taking place is in our operations in Chile, where we need to make significant improvements due to intense competition. As mentioned, we have been enhancing our mobile network, forming agreements within the wholesale market, and expanding fiber. We are finalizing all mergers with Liberty to take advantage of any available synergies.

Okay. Thank you. Understood. Congrats on the results.

Thanks.

Thank you. The next question goes to Lucca Brendim of Bank of America. Lucca, please go ahead.

Good morning, everyone. Thank you for taking my questions. I have two here. The first one is on Colombia. Results accelerated this quarter, reaching a three-year high in terms of service revenue growth. Is this already reflecting a more rational market following the recent changes we observed in this region? The second one for Brazil, how do you see pricing dynamics in mobile going forward? Is there still potential for further price hikes? Should we be focusing more on upselling or indirect price hikes for ARPU expansion next year? Thank you.

We are always focusing more on upselling our customers because if you upsell your customers, you provide them with more, and they pay you more. Therefore, I think it’s more beneficial to upsell than to increase prices directly, okay? I'm uncertain about what developments we will see in Brazil right now, but I believe we will continue to focus on upselling and providing more data to our customers while moving them from prepaid to postpaid.

In Colombia, just on the service revenue growth, it’s worth mentioning how it has improved; it's not just mobile, but fixed as well. For instance, in the first quarter this year, we were growing at 0.4% in mobile; now we’re at 4.0%. In fixed line, we started at 2% and have now reached 5.2%. It’s critical to note that this recovery spans all segments of our business and is quite significant.

To add to Carlos's comments about Colombia: we monitor our 5G network closely, and we leveraged frequency auctions effectively. We have been implementing this for nearly eight months before the auctions, and presently, around 20% of our traffic is facilitated through 5G in Colombia. This upgrade translates to superior quality and service for our customers, which drives them to utilize more data and therefore spend more.

Very clear. Thank you for the answers.

Thank you. The next question goes to Carlos Sequeira of BTG Pactual. Carlos, please go ahead.

Hi, good morning. Thank you for taking my question. Today, we model for AMX to generate a little more than $5 billion in free cash flow next year, and I was wondering, with leverage close to the bottom of the range, is there any reason why you wouldn't return this free cash flow to investors in 2025, all of it or a good part of it at least? Thank you.

Hey, Carlos, well, as you recall, we met with you guys at the Investor Day in May and stated our leverage ratio band, which is between 1.35 to 1.5. We are currently right at the lower end of this band. Therefore, I believe there is no necessity to reduce leverage significantly beyond this point, though we might slightly reduce short-term debts.

Thank you. The next question goes to Carlos Legarreta of ITAU. Carlos, please go ahead.

Hi, thank you. Good morning. My question relates to Argentina, please. I would like to be reminded of your plans there in fixed revenue. Obviously, that is growing strongly due to your expanding footprint, and I know you're doing mainly fiber. So if you could elaborate on that, and also how the wireless business is doing. Obviously, it was very positive this quarter, but any color on market trends would be helpful. Thank you.

Very good that you are asking about Argentina. I think Argentina is doing okay. We have continued to invest. We haven't halted any operations in Argentina over the last years. So we laid fiber during challenging times and we're growing. How many broadband customers do we have right now?

Argentina is doing okay. We have continued to invest and have not halted any operations there over the last few years. We laid fiber during challenging times, and we are growing. How many broadband customers do we have right now?

More than 1 million. We have achieved growth, with 1.4 million broadband subscribers as of September. We have maintained strong growth, and we are also upgrading our mobile network. I hope Argentina sees a reduction in inflation, leading to improved economic conditions, ultimately resulting in more robust business dynamics for us.

Thank you for the answer. And regarding your 5G plans, do you have the necessary spectrum? Are you still waiting for an auction to happen?

Yes, we are deploying 5G and increasing our number of 5G cell sites, which is how we aim to grow there. We are making investments, and we have a CapEx plan assigned specifically for Argentina.

Thank you for the update.

Thank you.

And the next question goes to Camila Koga of BBI. Camila, please go ahead.

Hi, guys. Thanks for taking my question. My connection is not good, so I apologize if you have already answered this. I have a quick one on the regional investment bank. If you could give us more details about it, I want to understand how aggressive Nubank can be if the agreement allows the bank to compete in pricing in a shortened manner.

Look, we didn't hear you very well, but let me add a little bit on the last question that was raised: regarding Argentina, because we often focus on Mexico, Brazil, and Colombia, but I'd like to highlight that across America Movil, we have been performing very well. If we talk about Peru, we have been consistently growing revenues and EBITDA through fiber investment and Network upgrades. We’re increasing our plans as well. If we look at Central America, Central America has also shown remarkable growth with our share expansion, improved fiber and coverage, and excellent growth rates in both mobile and fixed services. Lastly, in the Dominican Republic, our performance has also been exceptional. Moving over to Eastern Europe, we've made significant progress, enhancing our network coverage and expanding our fixed broadband services. So, in all countries, outside of the main focus areas, we are also performing well and gaining market share. Apologies for not covering your question properly, but I wanted to share these insights since we concentrate heavily on just two or three key markets.

Sorry, my question was on the investment bank.

Thank you.

Thank you. That's all the questions that we have time for today. I will now turn the call back over to Daniel Hajj for any final remarks.

Thanks to everyone for the call, and see you next quarter. Bye-bye.

Thank you, all.

Thank you. This now concludes today's call. Thank you for joining. You may now disconnect your lines.