—EBITDA increases 35% to Ps.3,887 million in the period—
—Continued dynamism in both commercial and financial businesses generates 17% increase in consolidated revenues to Ps.23,508 million—
—Gross portfolio of Banco Azteca Mexico grew 27%, to Ps.67,743 million—
—Notable reduction in the delinquency rate of Banco Azteca Mexico; decreases more than two percentage points to 2.6%—
MEXICO CITY, Feb. 21, 2017 (GLOBE NEWSWIRE) -- Grupo Elektra, S.A.B. de C.V. (BMV: ELEKTRA ) * (Latibex: XEKT) , Latin America’s leading specialty retailer and financial services company and the largest non-bank provider of cash advance services in the United States, reported today its financial results for the fourth quarter, and 2016.
Consolidated fourth quarter results
Consolidated revenue was Ps.23,508 million, 17% above the Ps.20,049 million for the same quarter of last year. Costs and operating expenses were Ps.19,620 million, compared to Ps.17,177 million for the same period of 2015.
As a result, Grupo Elektra reported EBITDA of Ps.3,887 million, 35% higher than the Ps.2,871 million of the previous year’s quarter; EBITDA margin was 17% this period, three percentage point above the previous year.
Operating profit grew 44% to Ps.3,207 million during the quarter, from Ps.2,222 million in same period of 2015.
The company reported net income of Ps.2,924 million, compared to a net income of Ps.808 million a year ago.
| 4Q 2015 | 4Q 2016 | Change | ||||||
| Ps. | % | |||||||
| Consolidated revenue | $ | 20,049 | $ | 23,508 | $ | 3,459 | 17 | % |
| EBITDA | $ | 2,871 | $ | 3,887 | $ | 1,016 | 35 | % |
| Operating profit | $ | 2,222 | $ | 3,207 | $ | 984 | 44 | % |
| Net result | $ | 808 | $ | 2,924 | $ | 2,116 | ---- | |
| Net result per share | $ | 3.43 | $ | 12.53 | $ | 9.10 | ---- | |
| Figures in millions of pesos EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization. As of December 31, 2015, Elektra* outstanding shares were 235.4 million and as of December 31, 2016, were 233.3 million. | ||||||||
Revenue
Consolidated revenue increased 17%, as a result of growth of 22% and 14% in commercial sales and financial revenues, respectively.
The increase in commercial division sales ̶ to Ps.9,801 million compared to Ps.8,051 million last year ̶ reflects strategies that generate growing customer satisfaction through an optimal mix of merchandise on the sales floor, offered by a highly trained sales force under the most competitive market conditions.
The increase in financial revenue ̶ to Ps.13,706 million from Ps.11,997 million from the previous year ̶ results mainly from a 7% growth in revenue of Banco Azteca Mexico, together with an 11% increase in revenue from Advance America during the period.
Costs and expenses
Consolidated costs for the quarter increased 12% to Ps.9,320 million, from Ps.8,332 million in the previous year, as a result of a 21% increase in commercial costs, in line with the performance of commercial revenue, and a 6% decrease in financial cost, largely driven by a reduction in provisions for loan losses, along with the strength in asset quality.
Sales, administration and promotion expenses increased 16% to Ps.10,300 million, as a result of higher personnel expenses due to higher compensation plans that encourage productivity; an increase in advertising, which achieves a better positioning of Grupo Elektra brands, and an increase in operating expenses.
EBITDA and net result
Consolidated EBITDA grew 35% to Ps.3,887 million this quarter. Operating income increased 44% to Ps.3,207 million, from Ps.2,222 million for the same quarter of 2015.
The most significant changes below EBITDA were the following:
A negative variation for Ps.3,030 million in other financial results, as a consequence of smaller gain this period in the market value of the underlying assets of financial instruments owned by the company – which does not imply cash flow – compared to the previous year.
A decrease of Ps.3,592 million in the impairment of intangible assets, as a result of a partial reversal of the impairment of intangible assets –brands and licenses– of Advance America registered a year ago, due to improved financial performance and projected cash flows of the company.
Grupo Elektra reported net income of Ps.2,924 million, compared to net income of Ps.808 million a year ago.
Consolidated balance sheet
Loan portfolio and deposits
Banco Azteca Mexico, Advance America and Banco Azteca Latin America’s consolidated gross portfolio as of December 31, 2016 grew 24% to Ps.83,471 million, from Ps.67,207 million for the previous year. Consolidated delinquency rate was 3.4% at the end of the period, compared to 6.1% in the previous year.
The gross portfolio of Banco Azteca Mexico grew 27% to Ps.67,743 million, from Ps.53,215 million a year ago.
The delinquency rate for the bank at the end of the quarter was 2.6%, more than two percentage points lower than the 5.3% from the previous year. The average term of the credit portfolio for principal credit lines – consumer, personal loans and Tarjeta Azteca – was 63 weeks at the end of the fourth quarter.
The Advance America loan portfolio was Ps.6,032 million, 22% higher than the Ps.4,941 million a year ago.
Grupo Elektra consolidated deposits increased 5% to Ps.105,124 million, from Ps.100,573 million a year ago. Deposits of Banco Azteca Mexico were Ps.101,718 million, 5% higher than the Ps.96,457 million a year ago.
As of December 31, 2016, the estimated capitalization index of Banco Azteca Mexico was 15.34%.
Debt
Consolidated debt with cost as of December 31, 2016, was Ps.18,279 million, from Ps.18,119 million for the prior year.
Consolidated debt was comprised of Ps.15,779 million for the commercial business, and Ps.2,500 million for the financial business. The total balance of cash, cash equivalents and marketable securities for the commercial business was Ps.17,213 million at the end of the period; as a result, the net cash commercial balance – excluding debt with cost – is a positive Ps.1,434 million.
As previously announced, during the quarter, Grupo Elektra paid US$275 million in advance and canceled out US$45 million of its senior notes of US$550 due in 2018.
In addition, on February 20, 2017, the company paid in advance the remaining US$230 million of such senior notes, thus redeeming its dollar-denominated bonds.
To cover both payments during the quarter, Grupo Elektra issued three certificates in local currency for a total of Ps.6,000 million and used cash generated by the company, within the framework of solid financial performance.
These debt transactions reflect Grupo Elektra's firm strategy to further strengthen its strong capital structure.
Infrastructure
Grupo Elektra currently has 7,396 points of contact, compared to 7,963 units a year ago. The reduction is a result of strategies to focus on maximizing profitability of units.
The company has 4,602 points of contact in Mexico, 2,105 in the United States, and 689 in Central and South America. The extensive distribution network allows the company to maintain close contact with clients, granting superior market positioning in the countries where it operates.
Twelve month consolidated results
Total consolidated revenue in 2016 increased 9% to Ps.81,242 million, from Ps.74,360 million in 2015, boosted mainly by 19% growth in the commercial business.
EBITDA was Ps.13,988 million, 28% higher than the Ps.10,893 million for the previous year; the EBITDA margin in 2016 was 17%, two percentage points above the prior year. Operating profit grew 36% to Ps.11,422 million during the period.
The company registered consolidated net income of Ps.5,334 million, compared to a loss of Ps.5,114 million a year ago, mainly due a smaller reduction in the market value of underlying financial instruments that the company holds, which doesn’t imply cash flow, compared to the prior year.
| 2015 | 2016 | Change | |||||||
| Ps. | % | ||||||||
| Consolidated revenue | $ | 74,360 | $ | 81,242 | $ | 6,881 | 9 | % | |
| EBITDA | $ | 10,893 | $ | 13,988 | $ | 3,095 | 28 | % | |
| Operating profit | $ | 8,387 | $ | 11,422 | $ | 3,035 | 36 | % | |
| Net result | $ | (5,114 | ) | $ | 5,334 | $ | 10,448 | ---- | |
| Net result per share | $ | (21.72 | ) | $ | 22.66 | $ | 44.38 | ---- | |
| Figures in millions of pesos EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization. As of December 31, 2015, Elektra* outstanding shares were 235.4 million and as of December 31, 2016, were 233.3 million. | |||||||||
Grupo Elektra is Latin America’s leading financial services company and specialty retailer and the largest non-bank provider of cash advance services in the United States. The group operates more than 7,000 points of contact in Mexico, the United States, Guatemala, Honduras, Peru, Panama and El Salvador.
Grupo Elektra is a Grupo Salinas company ( www.gruposalinas.com ), a group of dynamic, fast-growing, and technologically advanced companies focused on creating shareholder value, contributing to building the middle class of the countries in which they operate and improving society through excellence. Created by Mexican entrepreneur Ricardo B. Salinas ( www.ricardosalinas.com ), Grupo Salinas operates as a management development and decision forum for the top leaders of member companies. The companies include TV Azteca ( www.tvazteca.com ; www.irtvazteca.com ), Azteca America ( us.azteca.com ), Grupo Elektra ( www.elektra.com.mx : www.grupoelektra.com.mx ), Banco Azteca ( www.bancoazteca.com.mx ), Advance America ( www.advanceamerica.net ), Afore Azteca ( www.aforeazteca.com.mx ), Seguros Azteca ( www.segurosazteca.com.mx ), Totalplay ( www.totalplay.com.mx ) and Enlace TP ( enlacetp.mx ). Each of the Grupo Salinas companies operates independently, with its own management, board of directors and shareholders. Grupo Salinas has no equity holdings. However, the member companies share a common vision, values and strategies for achieving rapid growth, superior results and world-class performance.
Except for historical information, the matters discussed in this press release are forward-looking statements and are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Other risks that may affect Grupo Elektra and its subsidiaries are identified in documents sent to securities authorities.
| GRUPO ELEKTRA, S.A.B. DE C.V. AND SUBSIDIARIES | ||||||||||||||||
| CONSOLIDATED INCOME STATEMENTS | ||||||||||||||||
| MILLIONS OF MEXICAN PESOS | ||||||||||||||||
| 4Q15 | 4Q16 | Change | ||||||||||||||
| Financial income | 11,997 | 60 | % | 13,706 | 58 | % | 1,709 | 14 | % | |||||||
| Commercial income | 8,051 | 40 | % | 9,801 | 42 | % | 1,750 | 22 | % | |||||||
| Income | 20,049 | 100 | % | 23,508 | 100 | % | 3,459 | 17 | % | |||||||
| Financial cost | 2,921 | 15 | % | 2,754 | 12 | % | (167 | ) | -6 | % | ||||||
| Commercial cost | 5,411 | 27 | % | 6,566 | 28 | % | 1,155 | 21 | % | |||||||
| Costs | 8,332 | 42 | % | 9,320 | 40 | % | 988 | 12 | % | |||||||
| Gross income | 11,716 | 58 | % | 14,187 | 60 | % | 2,471 | 21 | % | |||||||
| Sales, administration and promotion expenses | 8,845 | 44 | % | 10,300 | 44 | % | 1,455 | 16 | % | |||||||
| EBITDA | 2,871 | 14 | % | 3,887 | 17 | % | 1,016 | 35 | % | |||||||
| Depreciation and amortization | 651 | 3 | % | 742 | 3 | % | 92 | 14 | % | |||||||
| Other income, net | (2 | ) | 0 | % | (62 | ) | 0 | % | (60 | ) | ---- | |||||
| Operating income | 2,222 | 11 | % | 3,207 | 14 | % | 984 | 44 | % | |||||||
| Comprehensive financial result: | ||||||||||||||||
| Interest income | 397 | 2 | % | 186 | 1 | % | (212 | ) | 53 | % | ||||||
| Interest expense | (318 | ) | -2 | % | (519 | ) | -2 | % | (201 | ) | -63 | % | ||||
| Foreign exchange gain, net | 34 | 0 | % | 464 | 2 | % | 430 | ---- | ||||||||
| Other financial results, net | 3,327 | 17 | % | 297 | 1 | % | (3,030 | ) | 91 | % | ||||||
| 3,439 | 17 | % | 428 | 2 | % | (3,012 | ) | 88 | % | |||||||
| Participation in the net income of | ||||||||||||||||
| CASA and other associated companies | (361 | ) | -2 | % | (22 | ) | 0 | % | 340 | ---- | ||||||
| Income before income tax | 5,300 | 26 | % | 3,612 | 15 | % | (1,688 | ) | 32 | % | ||||||
| Income tax | (1,126 | ) | -6 | % | (1,251 | ) | -5 | % | (125 | ) | -11 | % | ||||
| Income before discontinued operations | 4,174 | 21 | % | 2,361 | 10 | % | (1,813 | ) | 43 | % | ||||||
| Result from discontinued operations | (426 | ) | -2 | % | (89 | ) | 0 | % | 337 | 79 | % | |||||
| Impairment of intangible assets | (2,940 | ) | -15 | % | 652 | 3 | % | 3,592 | ---- | |||||||
| Consolidated net income | 808 | 4 | % | 2,924 | 12 | % | 2,116 | -262 | % | |||||||
| GRUPO ELEKTRA, S.A.B. DE C.V. AND SUBSIDIARIES | ||||||||||||||||
| CONSOLIDATED INCOME STATEMENTS | ||||||||||||||||
| MILLIONS OF MEXICAN PESOS | ||||||||||||||||
| 12M15 | 12M16 | Change | ||||||||||||||
| Financial income | 48,302 | 65 | % | 50,207 | 62 | % | 1,905 | 4 | % | |||||||
| Commercial income | 26,059 | 35 | % | 31,035 | 38 | % | 4,976 | 19 | % | |||||||
| Income | 74,360 | 100 | % | 81,242 | 100 | % | 6,881 | 9 | % | |||||||
| Financial cost | 14,598 | 20 | % | 10,318 | 13 | % | (4,280 | ) | -29 | % | ||||||
| Commercial cost | 17,559 | 24 | % | 20,354 | 25 | % | 2,795 | 16 | % | |||||||
| Costs | 32,157 | 43 | % | 30,671 | 38 | % | (1,485 | ) | -5 | % | ||||||
| Gross income | 42,204 | 57 | % | 50,570 | 62 | % | 8,366 | 20 | % | |||||||
| Sales, administration and promotion expenses | 31,311 | 42 | % | 36,582 | 45 | % | 5,271 | 17 | % | |||||||
| EBITDA | 10,893 | 15 | % | 13,988 | 17 | % | 3,095 | 28 | % | |||||||
| Depreciation and amortization | 2,503 | 3 | % | 2,617 | 3 | % | 114 | 5 | % | |||||||
| Other expense (income), net | 2 | 0 | % | (51 | ) | 0 | % | (53 | ) | ---- | ||||||
| Operating Income | 8,387 | 11 | % | 11,422 | 14 | % | 3,035 | 36 | % | |||||||
| Comprehensive financial result: | ||||||||||||||||
| Interest income | 666 | 1 | % | 839 | 1 | % | 174 | 26 | % | |||||||
| Interest expense | (1,398 | ) | -2 | % | (1,526 | ) | -2 | % | (128 | ) | -9 | % | ||||
| Foreign exchange gain, net | 198 | 0 | % | 791 | 1 | % | 593 | 300 | % | |||||||
| Other financial results, net | (9,790 | ) | -13 | % | (3,677 | ) | -5 | % | 6,112 | 62 | % | |||||
| (10,324 | ) | -14 | % | (3,572 | ) | -4 | % | 6,751 | 65 | % | ||||||
| Participation in the net income of | ||||||||||||||||
| CASA and other associated companies | (739 | ) | -1 | % | (640 | ) | -1 | % | 100 | 13 | % | |||||
| (Loss) income before income tax | (2,676 | ) | -4 | % | 7,210 | 9 | % | 9,886 | ---- | |||||||
| Income tax | 1,170 | 2 | % | (2,370 | ) | -3 | % | (3,540 | ) | ---- | ||||||
| (Loss) income before discontinued operations | (1,506 | ) | -2 | % | 4,839 | 6 | % | 6,345 | ---- | |||||||
| Result from discontinued operations | (668 | ) | -1 | % | (157 | ) | 0 | % | 511 | 76 | % | |||||
| Impairment of intangible assets | (2,940 | ) | -4 | % | 652 | 1 | % | 3,592 | ---- | |||||||
| Consolidated net (loss) income | (5,114 | ) | -7 | % | 5,334 | 7 | % | 10,448 | ---- | |||||||
| GRUPO ELEKTRA, S.A.B. DE C.V. AND SUBSIDIARIES | ||||||||||||||
| CONSOLIDATED BALANCE SHEET | ||||||||||||||
| MILLIONS OF MEXICAN PESOS | ||||||||||||||
| Commercial Business | Financial Business | Grupo Elektra | Commercial Business | Financial Business | Grupo Elektra | |||||||||
| Change | ||||||||||||||
| At December 31, 2015 | At December 31, 2016 | |||||||||||||
| Cash and cash equivalents | 2,866 | 20,043 | 22,909 | 2,584 | 21,791 | 24,375 | 1,465 | 6 | % | |||||
| Marketable financial instruments | 23,238 | 45,622 | 68,860 | 14,629 | 41,506 | 56,135 | (12,725 | ) | -18 | % | ||||
| Performing loan portfolio | - | 45,699 | 45,699 | - | 55,123 | 55,123 | 9,425 | 21 | % | |||||
| Total past-due loans | - | 3,986 | 3,986 | - | 2,704 | 2,704 | (1,282 | ) | -32 | % | ||||
| Gross loan portfolio | - | 49,685 | 49,685 | - | 57,827 | 57,827 | 8,143 | 16 | % | |||||
| Allowance for credit risks | - | 7,426 | 7,426 | - | 6,841 | 6,841 | (585 | ) | -8 | % | ||||
| Loan portfolio, net | - | 42,258 | 42,258 | - | 50,986 | 50,986 | 8,728 | 21 | % | |||||
| Inventories | 6,586 | - | 6,586 | 7,208 | - | 7,208 | 622 | 9 | % | |||||
| Other current assets | 1,978 | 13,542 | 15,521 | 4,822 | 12,197 | 17,018 | 1,498 | 10 | % | |||||
| Total current assets | 34,669 | 121,465 | 156,134 | 29,242 | 126,480 | 155,722 | (412 | ) | 0 | % | ||||
| Financial instruments | 6,223 | 299 | 6,522 | 18,437 | 337 | 18,775 | 12,253 | 188 | % | |||||
| Performing loan portfolio | - | 17,417 | 17,417 | - | 25,530 | 25,530 | 8,113 | 47 | % | |||||
| Total past-due loans | - | 105 | 105 | - | 114 | 114 | 10 | 9 | % | |||||
| Loan portfolio | - | 17,522 | 17,522 | - | 25,644 | 25,644 | 8,123 | 46 | % | |||||
| Other non-current assets | 628 | 912 | 1,540 | - | 672 | 672 | (868 | ) | -56 | % | ||||
| Investment in shares | 3,210 | - | 3,210 | 2,727 | - | 2,727 | (482 | ) | -15 | % | ||||
| Property, furniture, equipment and | ||||||||||||||
| investment in stores, net | 3,628 | 2,784 | 6,412 | 3,603 | 2,991 | 6,594 | 182 | 3 | % | |||||
| Intangible assets | 581 | 5,275 | 5,856 | 664 | 6,934 | 7,598 | 1,742 | 30 | % | |||||
| Other assets | 1,063 | 379 | 1,442 | 903 | 600 | 1,504 | 61 | 4 | % | |||||
| TOTAL ASSETS | 50,002 | 148,636 | 198,637 | 55,576 | 163,659 | 219,236 | 20,599 | 10 | % | |||||
| Demand and term deposits | - | 100,573 | 100,573 | - | 105,124 | 105,124 | 4,551 | 5 | % | |||||
| Creditors from repurchase agreements | - | 4,364 | 4,364 | - | 4,200 | 4,200 | (164 | ) | -4 | % | ||||
| Short-term debt | 6,064 | 123 | 6,187 | 2,876 | 411 | 3,287 | (2,900 | ) | -47 | % | ||||
| Short-term liabilities with cost | 6,064 | 105,059 | 111,123 | 2,876 | 109,735 | 112,611 | 1,487 | 1 | % | |||||
| Suppliers and other short-term liabilities | 11,101 | 6,337 | 17,438 | 11,085 | 9,089 | 20,173 | 2,735 | 16 | % | |||||
| Short-term liabilities without cost | 11,101 | 6,337 | 17,438 | 11,085 | 9,089 | 20,173 | 2,735 | 16 | % | |||||
| Total short-term liabilities | 17,165 | 111,397 | 128,562 | 13,961 | 118,823 | 132,784 | 4,222 | 3 | % | |||||
| Long-term debt | 10,472 | 1,460 | 11,932 | 12,903 | 2,089 | 14,992 | 3,060 | 26 | % | |||||
| Long-term liabilities with cost | 10,472 | 1,460 | 11,932 | 12,903 | 2,089 | 14,992 | 3,060 | 26 | % | |||||
| Long-term liabilities without cost | 3,292 | 3,065 | 6,357 | 7,705 | 4,679 | 12,384 | 6,027 | 95 | % | |||||
| Total long-term liabilities | 13,764 | 4,525 | 18,289 | 20,608 | 6,768 | 27,376 | 9,087 | 50 | % | |||||
| TOTAL LIABILITIES | 30,929 | 115,922 | 146,851 | 34,569 | 125,591 | 160,160 | 13,309 | 9 | % | |||||
| TOTAL STOCKHOLDERS' EQUITY | 19,072 | 32,714 | 51,786 | 21,008 | 38,068 | 59,076 | 7,290 | 14 | % | |||||
| LIABILITIES + EQUITY | 50,002 | 148,636 | 198,637 | 55,576 | 163,659 | 219,236 | 20,599 | 10 | % | |||||
| INFRASTRUCTURE | ||||||||||||||
| 4Q15 | 4Q16 | Change | ||||||||||||
| Points of sale in Mexico | ||||||||||||||
| Elektra | 970 | 12 | % | 995 | 13 | % | 25 | 3 | % | |||||
| Salinas y Rocha | 51 | 1 | % | 50 | 1 | % | (1 | ) | -2 | % | ||||
| Banco Azteca | 1,226 | 15 | % | 1,244 | 17 | % | 18 | 1 | % | |||||
| Freestanding branches | 2,446 | 31 | % | 2,313 | 31 | % | (133 | ) | -5 | % | ||||
| B-Store | 246 | 3 | % | - | 0 | % | (246 | ) | -100 | % | ||||
| Total | 4,939 | 62 | % | 4,602 | 62 | % | (337 | ) | -7 | % | ||||
| Points of sale in Central and South America | ||||||||||||||
| Elektra | 173 | 2 | % | 167 | 2 | % | (6 | ) | -3 | % | ||||
| Banco Azteca | 173 | 2 | % | 167 | 2 | % | (6 | ) | -3 | % | ||||
| Freestanding branches | 355 | 4 | % | 355 | 5 | % | - | 0 | % | |||||
| Total | 701 | 9 | % | 689 | 9 | % | (12 | ) | -2 | % | ||||
| Points of sale in North America | ||||||||||||||
| Advance America | 2,323 | 29 | % | 2,105 | 28 | % | (218 | ) | -9 | % | ||||
| Total | 2,323 | 29 | % | 2,105 | 28 | % | (218 | ) | -9 | % | ||||
| TOTAL | 7,963 | 100 | % | 7,396 | 100 | % | (567 | ) | -7 | % | ||||
| Floor space (m²) | 1,560 | 100 | % | 1,500 | 100 | % | (60 | ) | -4 | % | ||||
| Employees | ||||||||||||||
| Mexico | 49,590 | 76 | % | 50,152 | 77 | % | 562 | 1 | % | |||||
| Central and South America | 9,125 | 14 | % | 8,838 | 14 | % | (287 | ) | -3 | % | ||||
| North America | 6,631 | 10 | % | 5,947 | 9 | % | (684 | ) | -10 | % | ||||
| Total employees | 65,346 | 100 | % | 64,937 | 100 | % | (409 | ) | -1 | % | ||||
Investor Relations: Bruno Rangel Grupo Salinas Tel. +52 (55) 1720-9167 jrangelk@gruposalinas.com.mx Rolando Villarreal Grupo Elektra S.A.B. de C.V. Tel. +52 (55) 1720-9167 rvillarreal@elektra.com.mx Press Relations Luciano Pascoe Grupo Salinas Tel. +52 (55) 1720-1313 ext. 36553 lpascoe@gruposalinas.com.mx Daniel McCosh Grupo Salinas Tel. +52 (55) 1720-0059 dmccosh@gruposalinas.com.mx
