Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. American Depositary Receipt

Company Overview

Business Model: Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. (GACN) operates, maintains, and develops 13 international airports in Mexico's central and northern regions under 50-year concessions, renewable for up to 50 additional years. The core value proposition is providing essential aviation infrastructure and services, generating primary revenue from aeronautical and non-aeronautical operations, as well as construction services related to concession improvements. The company also diversifies revenue through hotel operations and an aero industrial park.

Market Position: In 2024, GACN's airports collectively accounted for approximately 14.3% of all arriving and departing total aviation passengers in Mexico. Monterrey Airport, a key asset, is the 4th busiest airport in Mexico. The company holds a significant regional presence, serving a population of approximately 29.0 million across 9 of Mexico's 32 states.

Recent Strategic Developments: GACN is actively investing in infrastructure expansion and modernization across its airport network. Key projects include the opening of Terminal A East Public Area at Monterrey Airport in June 2024 and the completion of Wing 1 connected to Terminal C in June 2023, increasing Monterrey's capacity to 13.9 million passengers annually with a target of 15.9 million after Phase 2 expansion by mid-2026. Other significant terminal expansion and remodeling projects are underway at Mazatlán International Airport (expected 2025), Culiacán International Airport (expected H1 2025), Ciudad Juárez International Airport (expected H1 2025), and Durango International Airport (inaugurated Sept 2024). The company also expanded its OMA Carga bonded warehouses and OMA-VYNMSA Aero Industrial Park.

Geographic Footprint: GACN's operations are entirely within Mexico, encompassing 13 airports strategically located in the central and northern regions. These airports serve major metropolitan, tourist, regional, and border destinations, including Monterrey, Acapulco, Mazatlán, Zihuatanejo, Chihuahua, Culiacán, Durango, San Luis Potosí, Tampico, Torreón, Zacatecas, Ciudad Juárez, and Reynosa. All 13 airports are designated as international.

Cross-Border Operations: While GACN's physical assets and direct operations are confined to Mexico, its business has significant cross-border elements. International passenger traffic constituted 14.3% of total terminal passengers in 2024, with 79.2% of these passengers traveling to or from the United States. Revenue from international passenger charges represented 15.7% of consolidated revenues (excluding construction services) in 2024. The company's international business structure includes 24 consolidated subsidiaries, all incorporated and operating in Mexico, and joint ventures for hotel and industrial park operations. GACN benefits from a Technical Assistance Agreement with SETA, a subsidiary of VINCI Entities, which provides management and consulting services, transferring industry expertise and technology.

Financial Performance

Revenue Analysis

Profitability Metrics (2024):

• Gross Margin: 71.9%
• Operating Margin: 53.6%
• Net Margin: 32.7%

Investment in Growth:

• Capital Expenditures: Ps.2,726,820 thousand (2024)
• Strategic Investments: Ps.311,317 thousand in industrial warehouse capital expenditures (2024). Major investments are directed towards Master Development Programs for airport expansions and modernizations.

Currency Impact Analysis:

• The Mexican peso depreciated by 23% against the U.S. dollar from December 31, 2023, to December 31, 2024.
• International passenger charges, which represented 15.7% of consolidated revenues (excluding construction services) in 2024, are U.S. dollar-denominated but collected in pesos, creating a natural exposure to exchange rate fluctuations.
• As of December 31, 2024, GACN had U.S.$5.2 million in U.S. dollar-denominated liabilities and U.S.$20,036 thousand in U.S. dollar cash balances, resulting in a net U.S. dollar asset position of U.S.$18,193 thousand.
• A hypothetical 10% peso appreciation would have decreased revenues by Ps.191,837 thousand in 2024.
• The Mexican peso is the Company’s functional currency. GACN was not party to any financial derivative instruments for hedging as of December 31, 2024.

Business Segment Analysis

Monterrey Airport (Metropolitan Destination)

Financial Performance (2024):

• Revenue: Ps.6,842,886 thousand (+10.1% YoY)
• Operating Income: Ps.1,502,974 thousand
• Operating Margin: 22.0%
• Key Growth Drivers: 18.0% increase in international passenger charges, 20.3% increase in international passenger traffic, 21.4% increase in food and beverage operations, and 20.6% increase in car rental operations. Product Portfolio:
• Operates three commercial passenger terminals (A, B, C) with a total area of approximately 78,589 square meters.
• Terminal A East Public Area (6,253 sq meters) opened in June 2024. Wing 1 (5,811 sq meters, 7 gates) connected to Terminal C was completed in June 2023.
• Current terminal capacity is 13.9 million passengers annually, with an expected capacity of 15.9 million after Phase 2 expansion (mid-2026).
• Features two runways with a capacity of 38 air traffic movements per hour. Market Dynamics:
• The 4th busiest airport in Mexico.
• Principal airlines in 2024 included VivaAerobus, Aeroméxico, Volaris, American Airlines, and United Airlines.
• Serves 64 direct destinations (40 domestic, 24 international). Geographic Revenue Distribution:
• Contributed 44.5% of GACN's sum of aeronautical and non-aeronautical revenues in 2024.

Acapulco Airport (Tourist Destination)

Financial Performance (2024):

• Revenue: Ps.274,171 thousand (-36.1% YoY)
• Operating Income: Ps.62,311 thousand
• Operating Margin: 22.7%
• Key Growth Drivers: Passenger traffic decreased by 32.7% in 2024 compared to 2023 due to Hurricane Otis in October 2023, which suspended commercial air travel until November 2023. Ps.137,930 thousand was recognized for repair works.

Mazatlán International Airport (Tourist Destination)

Financial Performance (2024):

• Revenue: Ps.889,434 thousand (+19.1% YoY)
• Operating Income: Ps.218,487 thousand
• Operating Margin: 24.6%
• Key Growth Drivers: 24.0% increase in domestic passenger charges, 16.1% increase in domestic passenger traffic, 39.7% increase in food and beverage operations, and 51.6% increase in VIP lounges operations. Product Portfolio:
• Undergoing a terminal redesign project, started in October 2021, expected to operate in 2025, increasing capacity by approximately 2,372 square meters (13% increase).

Zihuatanejo International Airport (Tourist Destination)

Financial Performance (2024):

• Revenue: Ps.388,547 thousand (+19.1% YoY)
• Operating Income: Ps.86,280 thousand
• Operating Margin: 22.2%
• Key Growth Drivers: 15.5% increase in international passenger charges, 11.5% increase in international passenger traffic, 71.1% increase in retail services, and 29.0% increase in food and beverage operations. Product Portfolio:
• Structural reinforcement of the terminal building was completed in 2023 with a Ps.134 million investment.

Chihuahua International Airport (Regional Destination)

Financial Performance (2024):

• Revenue: Ps.997,070 thousand (+17.0% YoY)
• Operating Income: Ps.202,178 thousand
• Operating Margin: 20.3%
• Key Growth Drivers: 15.6% increase in international passenger charges, 20.5% increase in international passenger traffic, 34.2% increase in food and beverage, and 18.3% increase in retail services.

Culiacán International Airport (Regional Destination)

Financial Performance (2024):

• Revenue: Ps.1,214,729 thousand (+1.6% YoY)
• Operating Income: Ps.239,274 thousand
• Operating Margin: 19.7%
• Key Growth Drivers: 9.6% increase in food and beverage operations, 41.4% increase in VIP lounges, and 13.1% increase in advertising operations, despite a 14.8% decrease in domestic passenger traffic. Product Portfolio:
• Terminal expansion and remodeling started in August 2022, expected completion H1 2025, with a Ps.544 million investment to increase total area by 82% to 22,128 square meters.

Ciudad Juárez International Airport (Border Destination)

Financial Performance (2024):

• Revenue: Ps.1,078,725 thousand (-13.8% YoY)
• Operating Income: Ps.208,856 thousand
• Operating Margin: 19.4%
• Key Growth Drivers: 39.9% increase in food and beverage and 14.2% increase in car rental operators, despite a 3.9% decrease in domestic passenger charges and 5.7% decrease in domestic passenger traffic. Product Portfolio:
• Terminal expansion and remodeling started in March 2020, expected completion H1 2025, with a Ps.591 million investment to increase total area by 107% to 15,088 square meters.

Other Regional Airports (Durango, San Luis Potosí, Tampico, Torreón, Zacatecas, Reynosa)

• Durango International Airport: Revenue Ps.287,268 thousand (+10.5% YoY), Operating Margin 21.7%. Terminal expansion and remodeling inaugurated Sept 2024, increasing annual capacity to 760,000 passengers.
• San Luis Potosí International Airport: Revenue Ps.443,485 thousand (+15.0% YoY), Operating Margin 23.1%. Key growth from international passenger charges (+11.0%) and traffic (+12.5%).
• Tampico International Airport: Revenue Ps.313,013 thousand (+10.0% YoY), Operating Margin 21.0%. Growth driven by international passenger charges (+7.3%) and traffic (+5.6%).
• Torreón International Airport: Revenue Ps.426,026 thousand (+18.0% YoY), Operating Margin 22.3%. Strong growth in international passenger charges (+17.4%) and traffic (+25.1%).
• Zacatecas International Airport: Revenue Ps.175,950 thousand (-17.0% YoY), Operating Margin 24.5%. Experienced decreases in domestic passenger charges (-31.7%) and traffic (-21.7%).
• Reynosa International Airport: Revenue Ps.198,183 thousand (-1.0% YoY), Operating Margin 25.9%. New terminal building inaugurated Feb 2021, tripling passenger capacity to 970,000/year.

Terminal 2 NH Collection Hotel

Financial Performance (2024):

• Non-Aeronautical Revenues: Ps.329,353 thousand (+16.2% YoY)
• Operating Income: Ps.94,758 thousand
• Operating Margin: 28.8%
• Key Growth Drivers: 16.2% increase in average rates per room and 86.7% annual average occupancy.

Hilton Garden Inn Hotel

Financial Performance (2024):

• Non-Aeronautical Revenues: Ps.135,650 thousand (+17.8% YoY)
• Operating Income: Ps.45,296 thousand
• Operating Margin: 33.4%
• Key Growth Drivers: 17.8% increase in average rates per room and 76.1% annual average occupancy.

OMA-VYNMSA Aero Industrial Park

Financial Performance (2024):

• Non-Aeronautical Revenues: Ps.153,095 thousand (+26.8% YoY)
• Operating Income: Ps.78,434 thousand
• Operating Margin: 51.2%
• Key Growth Drivers: Increase in leased commercial warehouses. As of December 2024, 17 warehouses (132,010 sq meters) were built and fully leased, with one additional warehouse under construction.

International Operations & Geographic Analysis

Revenue by Geography (Ps. thousands):

International Business Structure:

• Subsidiaries: GACN operates through 24 consolidated subsidiaries, all incorporated and operating within Mexico. These include 13 airport services companies, 2 hotel companies, and 9 services companies.
• Joint Ventures: OMA Logística, S.A. de C.V., a wholly-owned subsidiary, holds interests in OMA-VYNMSA Aero Industrial Park, S.A. de C.V. (51% owned by GACN), Consorcio Hotelero Aeropuerto Monterrey, S.A.P.I. de C.V. (85%), and Servicios Hoteleros Aeropuerto de Monterrey, S.A. de C.V. (85%). These joint ventures are also based in Mexico.
• Licensing Agreements: GACN has a Technical Assistance Agreement with SETA, a subsidiary of VINCI Entities, which grants an exclusive license in Mexico to use technical assistance and expertise, contributing to operational and technological advancements.

Cross-Border Trade:

• Export Markets: The primary international passenger flow is to and from the United States, accounting for 79.2% of GACN's international passengers in 2024. Major international routes include Monterrey-Houston, Monterrey-Dallas, Monterrey-Madrid, San Luis Potosí-Houston, Chihuahua-Dallas, Mazatlán-Phoenix, Mazatlán-Los Angeles, Zihuatanejo-Los Angeles, and Torreón-Dallas.
• Transfer Pricing: GACN engages in related-party transactions, including technical assistance fees with SETA (Ps.235,499 thousand in 2024) and administrative services fees with other affiliates like NH Hotels, Grupo Hotelero Santa Fe, and VYNMSA (Ps.66,412 thousand in 2024). Transactions with VYNMSA and its affiliates for the OMA-VYNMSA Industrial Park development amounted to Ps.311,317 thousand in 2024.

Capital Allocation Strategy

Shareholder Returns (Ps. thousands):

• Share Repurchases: Ps.1,500 million authorized for Series B shares (April 26, 2024, for 2024 results; April 25, 2025, for 2025 results). No cash flow generated from repurchases in 2024. 3,942,131 repurchased shares are held in treasury.
• Dividend Payments: Ps.4,220,653 (2024), Ps.3,738,054 (2023), Ps.6,615,798 (2022).
• Future Capital Return Commitments: A cash dividend of Ps.4,500,000 thousand was approved on April 25, 2025, for 2024 results, to be paid in two installments by May 31, 2025, and November 30, 2025.

Balance Sheet Position (Ps. thousands):

• Cash and Equivalents: Ps.1,656,365 (2024)
• Total Debt: Ps.11,281,880 (2024)
• Net Cash Position: Ps.(9,625,515) (2024)
• Debt Maturity Profile: As of December 31, 2024, 34.9% of long-term debt had a variable interest rate indexed to the 28-day TIIE. The debt portfolio includes green notes and sustainability-linked notes with maturities ranging from 2026 to 2030. Monterrey, Culiacán, and Chihuahua airports act as guarantors for notes issued between 2021 and 2023.

Cash Flow Generation (Ps. thousands):

• Operating Cash Flow: Ps.6,196,669 (2024)
• Free Cash Flow: Ps.3,469,849 (2024)
• Cash Conversion Metrics: Operating cash flow has consistently covered capital expenditures, enabling significant free cash flow generation.

Currency Management:

• Cash holdings by major currencies: U.S.$20,036 thousand as of December 31, 2024.
• Natural hedging through operational diversification: While GACN's revenues are primarily peso-denominated, international passenger charges are U.S. dollar-denominated, providing some natural offset to U.S. dollar-denominated costs or liabilities.
• Financial hedging instruments and strategies: GACN was not party to any financial derivative instruments for hedging as of December 31, 2024.

Operational Excellence

Production & Service Model: GACN's operational model focuses on the comprehensive management of airport concessions, encompassing the operation, maintenance, and development of airport infrastructure. This includes managing aeronautical services (e.g., landing, parking, passenger charges) and a diverse range of non-aeronautical services (e.g., retail, food & beverage, car rental, VIP lounges, advertising). The company also operates hotels and an aero industrial park, diversifying its service offerings.

Global Supply Chain Architecture: Key Suppliers & Partners:

• Complementary Services: Menzies Aviation Mexico, S.A. de C.V., AGN Aviation Services, S.A. de C.V., Servicios Aeroportuarios Monterrey, S.A. de C.V., Aero Cocina, S.A. de C.V. (aggregate Ps.71,866 thousand in 2024).
• Industrial Park Development: VYNMSA and its affiliates are key partners in the development of the OMA-VYNMSA Aero Industrial Park.
• Technical Assistance: SETA (a VINCI Entities subsidiary) provides crucial management and consulting services, transferring industry expertise and technology under a Technical Assistance Agreement.

Facility Network:

• Manufacturing: Not applicable as GACN is a service provider.
• Research & Development: Not explicitly detailed as a separate function, but innovation is driven by continuous improvement in airport operations and sustainability initiatives.
• Distribution: GACN operates 13 airports across Mexico. Its OMA Carga subsidiary manages 3 bonded warehouses (2 in Monterrey, 1 in Chihuahua), with an expansion of the Monterrey bonded warehouse completed in December 2022 and another expected in April 2025. The OMA-VYNMSA Aero Industrial Park includes 17 fully leased warehouses (132,010 sq meters) as of December 2024, with an additional warehouse under construction.

Operational Metrics:

• Total terminal passengers: 26.5 million (2024), a slight decrease from 26.8 million in 2023, but up from 23.2 million in 2022.
• Total cargo (metric tons): 136,099 (2024), an increase from 131,802 in 2023.
• Air traffic movements: 311,616 (2024), a slight decrease from 312,711 in 2023.
• Average passengers per air traffic movement: 85.5 (2024).
• Commercial aviation movements: 206,418 (2024).
• Total area available for commercial activity: 24,766 square meters (December 31, 2024), with 95.9% occupancy.
• Total Employees: 1,326 (December 31, 2024), with 44.7% unionized.

Market Access & Customer Relationships

Go-to-Market Strategy: Distribution Channels:

• Direct Sales: GACN directly manages its airport operations and commercial spaces, engaging directly with airlines, concessionaires, and other service providers.
• Channel Partners: The company partners with various commercial operators for retail, food and beverage, car rental, and other non-aeronautical services.
• Digital Platforms: While not explicitly detailed, the company likely leverages digital channels for passenger information and potentially for certain commercial bookings.

Customer Portfolio: Enterprise Customers:

• Tier 1 Clients (Airlines): Key airline customers by 2024 aeronautical revenues include VivaAerobus (43.3%), Aeroméxico and affiliates (20.2%), and Volaris (19.1%). Passengers on discount/low-cost carriers (VivaAerobus, Volaris) accounted for 71.1% of commercial aviation passenger traffic in 2024, indicating a strong focus on this segment.
• Strategic Partnerships (Commercial): Major commercial customers in 2024 include Alquiladora de Vehículos Automotores, Grupo Areas, Priority Pass, Inc., 5M2 Airports, Grupo Alsea, Mera Corporation, CMR, Grupo Dufry, Corporativo Gaviotas, and Comercial Ariete.
• Customer Concentration: The high reliance on a few major airlines, particularly low-cost carriers, represents a concentration risk.

Regional Market Penetration:

• GACN's airports collectively hold approximately 14.3% of the total Mexican aviation passenger market.
• Growth Markets: The company's ongoing Master Development Programs and terminal expansions across its network, particularly in Monterrey, Culiacán, and Ciudad Juárez, aim to enhance capacity and service offerings to capture future passenger growth in these key metropolitan, regional, and border markets.

Competitive Intelligence

Global Market Structure & Dynamics

Industry Characteristics: The Mexican airport industry is characterized by a concession model, where private groups operate public airports under long-term agreements. The market is dynamic, influenced by domestic and international passenger traffic, economic conditions, and regulatory changes. In 2024, GACN's airports handled 14.3% of total Mexican aviation passengers.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors:

• Mexican Airport and Auxiliary Services Agency (ASA): Operates 4 smaller airports, serving 1,064,694 passengers in 2024. ASA represents a smaller, government-owned competitor primarily focused on regional airports.
• Mexican military-overseen airports: This includes major hubs like Mexico City International Airport and Felipe Angeles International Airport, which collectively served 56.2 million passengers in 2024 (+4.0% vs 2023). These airports represent the largest competitive threat, particularly for traffic to and from the capital region.
• Administradora de Servicios Aeroportuarios de Chihuahua, S.A. de C.V.: Operates Bocoyna airport, a very small regional airport serving 2,526 passengers in 2024.
• Aeropuerto Internacional del Norte: Operated by Grupo Aeroportuario, Ferroviario de Servicios Auxiliares y Conexos, Olmeca-Maya-Mexica since April 30, 2024, but currently has no commercial air traffic.

Regional Competitive Dynamics: Competition varies by region. Monterrey Airport faces competition from other major Mexican hubs for international and domestic connections. Regional airports compete for local traffic and specific international routes, often influenced by airline strategies and local economic conditions. The presence of military-operated airports, particularly in the Mexico City area, impacts overall market share distribution.

Risk Assessment Framework

Strategic & Market Risks

Global Market Dynamics:

• Technology Disruption: While not explicitly detailed, the aviation industry is subject to evolving technologies in air traffic management, passenger experience, and security, requiring continuous investment.
• Customer Concentration: High reliance on a few major airlines (VivaAerobus, Aeroméxico, Volaris) for aeronautical revenues and passenger traffic creates a concentration risk. Diversification of non-aeronautical services and ongoing infrastructure development aim to mitigate this.

Operational & Execution Risks

Global Supply Chain Vulnerabilities:

• Supplier Dependency: Reliance on key complementary service providers and construction partners for ongoing development and operations.
• Regional Disruptions: Operations are vulnerable to natural disasters (e.g., Hurricane Otis in Acapulco in 2023, which suspended operations), and security incidents (e.g., drug cartel violence in Culiacán and Mazatlán in 2023, leading to airport closures).
• Trade Restrictions: Not explicitly detailed, but potential trade restrictions could impact international passenger and cargo traffic. Cybersecurity Breach: A cybersecurity breach involving ransomware and data exfiltration occurred on October 18, 2024, affecting business customers, suppliers, and employees. While no material adverse effects on operations or financial condition were reported, such incidents pose ongoing risks. Aircraft-related Issues: Global issues like RTX/Pratt & Whitney engine inspections (V2500, PW1100G, PW1500G) and temporary grounding of Boeing 737-9 MAX aircraft can impact airline operations and, consequently, airport traffic.

Financial & Regulatory Risks

Currency & Financial Risks:

• Foreign Exchange: Exposure to Mexican peso depreciation against the U.S. dollar, as international passenger charges are U.S. dollar-denominated but collected in pesos. GACN does not use financial derivatives for hedging.
• Interest Rate Risk: 34.9% of long-term debt (Ps.11,281,880 thousand in 2024) has variable interest rates indexed to the 28-day TIIE, exposing the company to fluctuations in borrowing costs. A hypothetical 10% unfavorable change in TIIE would result in Ps.38,660 thousand in additional financing expenses in 2024.
• Credit & Liquidity: Total debt increased to Ps.11,281,880 thousand in 2024, resulting in a net debt position of Ps.9,625,515 thousand. Regulatory & Compliance Risks:
• Multi-Jurisdictional Compliance: Subject to Mexican federal and local regulations, including the Airports Law, Federal Civil Aviation Agency rules, and environmental standards.
• Trade Regulations: Changes in international trade policies or travel advisories (e.g., US Department of State Travel Advisory for Mexico) can impact international passenger traffic.
• Tax Regulations: Increase in Concession Tax Payment from 5% to 9% effective January 1, 2024, and increased groundwater extraction fees at Monterrey Airport in 2025, directly impact profitability. Amendments to the Bases for Tariff Regulation (effective January 1, 2024) could affect aeronautical revenue generation.
• Labor Regulations: Recent amendments to the Mexican Federal Labor Law regarding extended work shifts, vacation rights, and human trafficking crimes could increase operational costs and compliance burdens.
• Sustainability Reporting: CNBV amendments require IFRS Sustainability Disclosure Standards (S1 and S2) from 2026, with external assurance from 2027, adding new reporting obligations.

Geopolitical & External Risks

Country-Specific Risks:

• Political Risk: Constitutional amendment dissolving COFECE (competition commission) in December 2024 could alter the regulatory landscape.
• Economic Risk: General economic instability in Mexico or key international markets (e.g., the U.S.) can impact passenger demand and commercial activity.
• Regulatory Changes: Ongoing land disputes at Ciudad Juárez, Monterrey, Durango, and Reynosa airports, and property tax claims in Acapulco and Chihuahua, pose risks of concession termination or financial impact, though the company expects indemnification from the Federal Government or favorable resolutions.
• Security Risks: US government designation of six Mexican cartels as Foreign Terrorist Organizations in February 2025, coupled with past incidents of drug cartel violence impacting airport operations, highlights ongoing security risks.

Innovation & Technology Leadership

Research & Development Focus: Global R&D Network: While GACN does not explicitly detail a dedicated R&D network, its innovation efforts are focused on sustainability and operational efficiency. All 13 airports achieved Level 3 "Optimization" accreditation under the Airport Carbon Accreditation program on February 13, 2025, demonstrating a commitment to environmental performance. Innovation Pipeline: The company's ongoing Master Development Programs for airport expansions and modernizations incorporate new technologies and design principles to enhance passenger experience and operational efficiency.

Intellectual Property Portfolio:

• Patent Strategy: Not explicitly detailed.
• Licensing Programs: GACN benefits from an exclusive license to use technical assistance and expertise provided by SETA (VINCI Entities) under a Technical Assistance Agreement.
• IP Litigation: Not explicitly detailed. Certifications: All airports obtained ISO 14064-1:2018 certification in 2024 for GHG emissions quantification and reporting, reflecting a commitment to international environmental standards.

Technology Partnerships:

• Strategic Alliances: The Technical Assistance Agreement with SETA (VINCI Entities) serves as a key strategic alliance, facilitating the transfer of industry expertise and technology in airport management.
• Research Collaborations: Not explicitly detailed.

Leadership & Governance

Executive Leadership Team

International Management Structure: The executive leadership team includes individuals with international experience (e.g., Alvaro Leite, Yann Le Bihan from VINCI Airports). The Board of Directors also features several French nationals associated with VINCI Entities, indicating a strong international influence on management and strategic direction.

Board Composition: The Board of Directors consists of 11 members, with 5 independent directors (exceeding the 25% Mexican legal requirement) and 3 female directors. SETA, a VINCI Entities subsidiary, has the right to appoint certain directors and retains special powers, including nominating CEO candidates, appointing/removing half of executive officers (CFO, COO, Commercial Director), electing three Board members, and appointing at least one member to each committee, as long as it holds at least 7.65% of Series BB shares. The Audit Committee is composed of three independent directors: Katia Eschenbach (Chairman), Martin Werner Wainfeld, and Federico Patiño Márquez. The Corporate Practices, Finance, Planning and Sustainability Committee consists of Luis Solorzano Aizpuru (Chairman), Katia Eschenbach, and Regina García-Cuéllar.

Regulatory Environment & Compliance

Multi-Jurisdictional Regulatory Framework: Primary Regulatory Environments:

• Mexico: GACN operates under concessions granted by the Ministry of Infrastructure, Communications and Transportation and is subject to the Mexican Airports Law, Federal Civil Aviation Agency regulations, and Mexican Securities Law.
• Key Regulations:
  • Concession Tax Payment: Increased from 5% to 9% of gross annual revenues from public domain assets, effective January 1, 2024.
  • Tariff Regulation: Amendment to Bases for Tariff Regulation (Annex 7 of concessions) effective January 1, 2024.
  • Airports Law: Amended May 3, 2023, contributing to Mexico’s FAA safety rating restoration to Category 1 in September 2023.
  • Mexican Federal Labor Law: Amendments in December 2024 (effective June 2025) on extended work shifts and employee seating, and in December 2022 (effective January 2023) on vacation rights, impact labor costs and practices.
  • Environmental Regulations: Increased groundwater extraction fees by almost 170% at Monterrey Airport in 2025.
  • Financial Reporting: CNBV amendments (January 28, 2025) require IFRS Sustainability Disclosure Standards (S1 and S2) from 2026, with external assurance from 2027.

Cross-Border Compliance:

• Export Controls: Not explicitly detailed, but as an international airport operator, GACN would be subject to regulations governing the movement of goods and technology.
• Sanctions Compliance: Not explicitly detailed, but compliance with multi-jurisdictional sanctions regimes is implicit for international operations.
• Anti-Corruption: Not explicitly detailed, but adherence to anti-corruption laws (e.g., FCPA, local anti-bribery laws) is a standard requirement for companies with international exposure.

International Tax Strategy:

• Transfer Pricing: GACN engages in related-party transactions with SETA and other VINCI affiliates, necessitating adherence to transfer pricing regulations.
• Tax Treaties: Dividends paid to non-Mexican holders are subject to a 10% Mexican withholding tax, which may be affected by tax treaties.
• BEPS Compliance: Not explicitly detailed, but as a multinational entity, GACN would be subject to Base Erosion and Profit Shifting (BEPS) regulations.

Environmental & Social Impact

Global Sustainability Strategy: Environmental Commitments:

• Climate Strategy: All 13 airports achieved Level 3 "Optimization" accreditation under the Airport Carbon Accreditation program on February 13, 2025, demonstrating a commitment to reducing carbon emissions.
• Carbon Neutrality: Not explicitly stated as a net-zero commitment, but the accreditation indicates progress towards carbon management.
• Renewable Energy: Not explicitly detailed. Certifications: All airports obtained ISO 14064-1:2018 certification in 2024 for GHG emissions quantification and reporting. Green Bond Framework: GACN created a Green Bond Framework in March 2021, aligned with ICMA Green Bond Principles (GBP) 2018 and UN Sustainable Development Goals, indicating a commitment to sustainable financing.

Regional Sustainability Initiatives:

• Mexico: All 13 airports received the Distinctive “S” from the Ministry of Tourism in 2023, recognizing sustainable tourism practices. All airports maintained the Health Security Distinction from IMSS in 2023 and 2024. 10 of 13 airports hold Safe Company certifications from the Mexican Ministry of Labor and Social Welfare. All airports have the Environmental Quality Certificate from the Federal Office for the Protection of the Environment.
• Supply Chain: Global supplier ESG requirements and sustainability standards are not explicitly detailed.

Social Impact by Region:

• Community Investment: Not explicitly detailed.
• Labor Standards: GACN was recognized in the Bloomberg Gender-Equality Index in 2022 and 2023. The company rejoined the UN Global Compact in 2023 and 2024. It received the Socially Responsible Company distinction from CEMEFI in 2024 (14th time). Approximately 44.7% of employees were unionized in 2024, with collective bargaining agreements in place. Recent amendments to Mexican Federal Labor Law regarding vacation rights and extended work shifts impact employee welfare.

Currency Management & Financial Strategy

Multi-Currency Operations: Currency Exposure (Ps. thousands):

Hedging Strategies:

• Transaction Hedging: GACN does not utilize financial derivative instruments for short-term foreign exchange risk management.
• Translation Hedging: Not explicitly detailed, but the company monitors exchange rate changes.
• Economic Hedging: The U.S. dollar-denominated international passenger charges provide a natural hedge against some U.S. dollar-related exposures.

Debt Maturity Profile (Ps. thousands):

• Green Notes: Ps.1,000,000 thousand 5-year notes (April 2021) mature April 2026, variable rate TIIE 28 + 0.75%.
• Fixed Rate Notes: Ps.2,500,000 thousand 7-year notes (April 2021) mature April 2028, fixed rate 7.83%.
• Sustainability-Linked Notes:
  • Ps.1,700,000 thousand 5-year notes (March 2022) mature March 2027, variable rate TIIE 28 + 14 bps.
  • Ps.2,300,000 thousand 7-year notes (March 2022) mature March 2029, fixed rate 9.35%.
  • Ps.640,000 thousand 3.4-year notes (March 2023) mature July 2026, variable rate TIIE 28 + 22 bps (0.2% principal step-up if sustainability objectives not met by 2025).
  • Ps.2,560,000 thousand 7-year notes (March 2023) mature March 2030, fixed rate 10.26% (25 bps interest rate step-up if sustainability objectives not met).
• Short-term Loans: Ps.600 million obtained November 2024, mature May 2025, TIIE 28 + 60 bps.
• Unused Lines of Credit: Ps.950 million in unused non-committed lines of credit as of April 25, 2025.