—Continuous Dynamism in Sales From the Commercial Business; 16% Increase to Ps.6,438 Million in the Period—
—14% Growth in Consolidated Deposits to Ps.97,843 Million Generates Solid Perspectives in the Financial Business—
MEXICO CITY, July 23, 2015 (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 second quarter and first half of 2015.
Consolidated second quarter results
Consolidated revenue totaled Ps.18,105 million, compared to Ps.18,205 million for the same period last year. Costs and operating expenses were Ps.16,022 million, from Ps.16,066 million for the same period of 2015.
As a result, Grupo Elektra reported EBITDA of Ps.2,083 million, from Ps.2,140 million for the previous year's quarter; EBITDA margin was 12% this period.
The company reported a net loss of Ps.1,423 million, from a net loss of Ps.1,114 million a year ago.
| 2Q 2014 | 2Q 2015 | Change | ||||||
| Ps. | % | |||||||
| Consolidated revenue | $18,205 | $18,105 | $ (100) | -1% | ||||
| EBITDA | $2,140 | $2,083 | $ (57) | -3% | ||||
| Net result | $ (1,114) | $ (1,423) | $ (309) | -28% | ||||
| Net result per share | $ (4.70) | $ (6.07) | $ (1.37) | -- | ||||
| Figures in millions of pesos | ||||||||
| EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization. | ||||||||
| As of June 30, 2014, Elektra outstanding shares were 235.8 million and as of June 30, 2015, were 234.6 million. | ||||||||
Revenue
Consolidated revenue decreased 1%, as a result of a reduction of 8% in financial revenue, partly compensated with a 16% increase in commercial sales.
The decrease in financial revenue —to Ps.11,668 million from Ps.12,668 million from the previous year— results mainly from a 11% reduction in revenue from Banco Azteca Mexico, to Ps.7,894 million, compared to ps.8,830 million from previous year.
Commercial sales —of Ps.6,438 million from Ps.5,537 million last year— increased as a result of strategies that generate growing customer satisfaction through an optimal mix of merchandise on the sales floor, which is offered by a highly trained sales force under the most competitive market conditions.
Costs and expenses
Consolidated costs for the quarter increased 5% to Ps.8,138 million, from Ps.7,728 million from the previous year. The change is mainly due to a 14% increase in commercial cost —in line with the performance of merchandise sales— and a 4% decrease in financial cost, derived mainly for less interest paid.
Sales, administration and promotion expenses decreased 5% to Ps.7,884 million, in the context of strategies that generated important operating efficiencies during the quarter.
EBITDA and net result
Consolidated EBITDA decreased 3% to Ps.2,083 million this quarter.
The most significant change below EBITDA was a decrease of Ps.506 million in other financial results, as a consequence of a bigger reduction in the market value of the underlying assets of financial instruments owned by the company –which does not imply cash flow– compared to last year.
Grupo Elektra reported a net loss of Ps.1,423 million, compared to a net loss of Ps.1,114 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 June 30, 2015, was Ps.65,745 million, compared to Ps.77,204 million from the previous year. Consolidated delinquency rate was 9% at the end of the period.
The gross portfolio of Banco Azteca Mexico was Ps.51,173 million, compared to Ps.63,382 million a year ago. The delinquency rate of Banco Azteca Mexico at the end of the quarter was 9.2%. The non-performing loan portfolio is reserved 1.47 times. The average term of the credit portfolio for principal credit lines –consumer, personal loans and Tarjeta Azteca– was 61 weeks at the end of the second quarter.
The Advance America loan portfolio was Ps.4,527 million, 12% higher than the Ps.4,035 million a year ago. More dynamism in the operations of the company is expected with the successful launch of title loans in a growing number of points of sale in the U.S.
Grupo Elektra consolidated deposits grew 14%, to Ps.97,843 million, compared to Ps.85,628 million a year ago. Deposits of Banco Azteca Mexico were Ps.91,632 million, 15% higher than the Ps.79,800 million a year ago. Financial products that satisfy clients in the best way, with world class service, resulted in the increase in deposits. The higher deposit base sets a strong foundation for future financial business growth.
As of June 30, 2015, the estimated capitalization index of Banco Azteca Mexico was 17.5%.
Debt
Consolidated debt with cost as of June 30, 2015, was Ps.18,589 million, from Ps.18,572 million from the prior year.
Consolidated debt at the end of June 2015 was comprised of Ps.17,206 million for the commercial business, and Ps.1,382 million for the financial business. The balance of cash, cash equivalents and marketable securities for the commercial business was Ps.14,434 million at the end of the period; as a result, that division net debt balance is Ps.2,772 million.
Expansion
Grupo Elektra currently has 6,473 points of sale, compared to 6,872 a year ago.
Grupo Elektra has 3,496 points of sale in Mexico, 2,372 in the United States, and 605 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.
Six months consolidated results
Total consolidated revenue in the first six months of the year was Ps.37,204 million, 5% higher than the Ps.35,394 million for the same period of 2014, boosted mainly by a 19% growth from the commercial business.
EBITDA was Ps.5,248 million, 10% higher than the Ps.4,753 million for the same period a year ago; the EBITDA margin in the first six months of 2015 was 14%, one percentage point above the prior year. The company registered a consolidated net loss of Ps.4,703 million, compared to a loss of Ps.1,289 million a year ago, mainly due a decrease in the market value of underlying financial instruments that the company holds, which doesn't imply cash flow, compared to the prior year.
| 6M 2014 | 6M 2015 | Change | ||||||
| Ps. | % | |||||||
| Consolidated revenue | $35,394 | $37,204 | $1,810 | 5% | ||||
| EBITDA | $4,753 | $5,248 | $495 | 10% | ||||
| Net result | $ (1,289) | $ (4,703) | $ (3,414) | -- | ||||
| Net result per share | $ (5.47) | $ (20.05) | $ (14.58) | -- | ||||
| Figures in millions of pesos | ||||||||
| EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization. | ||||||||
| As of June 30, 2014, Elektra outstanding shares were 235.8 million and as of June 30, 2015, were 234.6 million. | ||||||||
Company Profile:
Grupo Elektra (www.grupoelektra.com.mx) 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 over 6,000 points of sale in Mexico, USA, Brazil, 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 build 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 Azteca (www.irtvazteca.com), Azteca America (www.aztecaamerica.com), Grupo Elektra (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 TPE (www.enlacetpe.com.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 | ||||||
| 2Q14 | 2Q15 | Change | ||||
| Financial income | 12,668 | 70% | 11,668 | 64% | (1,001) | -8% |
| Commercial income | 5,537 | 30% | 6,438 | 36% | 901 | 16% |
| Income | 18,205 | 100% | 18,105 | 100% | (100) | -1% |
| Financial cost | 3,855 | 21% | 3,708 | 20% | (147) | -4% |
| Commercial cost | 3,873 | 21% | 4,430 | 24% | 557 | 14% |
| Costs | 7,728 | 42% | 8,138 | 45% | 410 | 5% |
| Gross income | 10,478 | 58% | 9,968 | 55% | (510) | -5% |
| Sales, administration and promotion expenses | 8,338 | 46% | 7,884 | 44% | (454) | -5% |
| Depreciation and amortization | 674 | 4% | 632 | 3% | (43) | -6% |
| Operating expenses | 9,012 | 50% | 8,516 | 47% | (496) | -6% |
| Operating income | 1,465 | 8% | 1,452 | 8% | (14) | -1% |
| EBITDA | 2,140 | 12% | 2,083 | 12% | (57) | -3% |
| Comprehensive financial result: | ||||||
| Interest income | 88 | 0% | 84 | 0% | (4) | -5% |
| Interest expense | (387) | -2% | (389) | -2% | (2) | -1% |
| Foreign exchange gain, net | 33 | 0% | 36 | 0% | 3 | 8% |
| Other financial results, net | (2,560) | -14% | (3,066) | -17% | (506) | -20% |
| (2,826) | -16% | (3,336) | -18% | (510) | -18% | |
| Other (expense) income, net | (270) | -1% | 29 | 0% | 300 | 111% |
| Participation in the net income of | ||||||
| CASA and other associated companies | 48 | 0% | (131) | -1% | (179) | -- |
| Loss before income tax | (1,583) | -9% | (1,986) | -11% | (403) | -25% |
| Income tax | 507 | 3% | 574 | 3% | 67 | 13% |
| Loss before discontinued operations | (1,076) | -6% | (1,412) | -8% | (335) | -31% |
| Result from discontinued operations | (37) | 0% | (11) | 0% | 26 | 70% |
| Consolidated net loss | (1,114) | -6% | (1,423) | -8% | (309) | -28% |
| GRUPO ELEKTRA, S.A.B. DE C.V. AND SUBSIDIARIES | ||||||
| CONSOLIDATED INCOME STATEMENTS | ||||||
| MILLIONS OF MEXICAN PESOS | ||||||
| 6M14 | 6M15 | Change | ||||
| Financial income | 24,772 | 70% | 24,542 | 66% | (230) | -1% |
| Commercial income | 10,623 | 30% | 12,662 | 34% | 2,039 | 19% |
| Income | 35,394 | 100% | 37,204 | 100% | 1,810 | 5% |
| Financial cost | 7,452 | 21% | 8,407 | 23% | 955 | 13% |
| Commercial cost | 7,274 | 21% | 8,629 | 23% | 1,355 | 19% |
| Costs | 14,726 | 42% | 17,035 | 46% | 2,309 | 16% |
| Gross income | 20,668 | 58% | 20,169 | 54% | (500) | -2% |
| Sales, administration and promotion expenses | 15,916 | 45% | 14,921 | 40% | (995) | -6% |
| Depreciation and amortization | 1,327 | 4% | 1,231 | 3% | (96) | -7% |
| Operating expenses | 17,243 | 49% | 16,152 | 43% | (1,091) | -6% |
| Operating Income | 3,426 | 10% | 4,017 | 11% | 591 | 17% |
| EBITDA | 4,753 | 13% | 5,248 | 14% | 495 | 10% |
| Comprehensive financial result: | ||||||
| Interest income | 216 | 1% | 198 | 1% | (18) | -8% |
| Interest expense | (765) | -2% | (725) | -2% | 40 | 5% |
| Foreign exchange gain, net | 117 | 0% | 77 | 0% | (40) | -34% |
| Other financial results, net | (4,548) | -13% | (9,811) | -26% | (5,263) | -116% |
| (4,981) | -14% | (10,261) | -28% | (5,281) | -106% | |
| Other expense, net | (282) | -1% | (7) | 0% | 275 | 98% |
| Participation in the net income expense of | ||||||
| CASA and other associated companies | 11 | 0% | (261) | -1% | (272) | -- |
| Loss before income tax | (1,826) | -5% | (6,512) | -18% | (4,687) | -257% |
| Income tax | 623 | 2% | 1,837 | 5% | 1,214 | -195% |
| Loss before discontinued operations | (1,203) | -3% | (4,676) | -13% | (3,473) | -289% |
| Result from discontinued operations | (86) | 0% | (27) | 0% | 59 | 68% |
| Consolidated net loss | (1,289) | -4% | (4,703) | -13% | (3,414) | -265% |
| 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 June 30, 2014 | At June 30, 2015 | |||||||||||||
| Cash and cash equivalents | 2,785 | 15,644 | 18,429 | 2,685 | 20,350 | 23,035 | 4,606 | 25% | ||||||
| Marketable financial instruments | 11,998 | 24,351 | 36,349 | 11,749 | 52,301 | 64,050 | 27,702 | 76% | ||||||
| Performing loan portfolio | -- | 52,773 | 52,773 | -- | 43,753 | 43,753 | (9,020) | -17% | ||||||
| Total past-due loans | -- | 5,875 | 5,875 | -- | 5,606 | 5,606 | (269) | -5% | ||||||
| Gross loan portfolio | -- | 58,648 | 58,648 | -- | 49,359 | 49,359 | (9,289) | -16% | ||||||
| Allowance for credit risks | -- | 8,670 | 8,670 | -- | 8,691 | 8,691 | 22 | 0% | ||||||
| Loan portfolio, net | -- | 49,978 | 49,978 | -- | 40,668 | 40,668 | (9,311) | -19% | ||||||
| Inventories | 6,390 | -- | 6,390 | 6,261 | 6,261 | (129) | -2% | |||||||
| Other current assets | 4,623 | 5,490 | 10,113 | 2,108 | 6,248 | 8,356 | (1,758) | -17% | ||||||
| Total current assets | 25,797 | 95,463 | 121,260 | 22,803 | 119,567 | 142,370 | 21,110 | 17% | ||||||
| Financial instruments | 9,814 | 222 | 10,037 | 11,504 | 251 | 11,755 | 1,718 | 17% | ||||||
| Performing loan portfolio | -- | 18,210 | 18,210 | -- | 16,083 | 16,083 | (2,127) | -12% | ||||||
| Total past-due loans | -- | 345 | 345 | -- | 303 | 303 | (43) | -12% | ||||||
| Loan portfolio | -- | 18,556 | 18,556 | -- | 16,386 | 16,386 | (2,170) | -12% | ||||||
| Other non-current assets | 1,449 | 969 | 2,418 | 1 | 912 | 913 | (1,505) | -62% | ||||||
| Investment in shares | 4,420 | -- | 4,420 | 3,975 | 3,975 | (445) | -10% | |||||||
| Property, furniture, equipment and | ||||||||||||||
| investment in stores, net | 4,816 | 2,839 | 7,654 | 4,106 | 2,850 | 6,956 | (698) | -9% | ||||||
| Intangible assets | 629 | 6,537 | 7,166 | 547 | 7,605 | 8,152 | 985 | 14% | ||||||
| Other assets | 659 | 682 | 1,341 | 1,112 | 410 | 1,521 | 181 | 13% | ||||||
| TOTAL ASSETS | 47,584 | 125,268 | 172,852 | 44,048 | 147,980 | 192,029 | 19,177 | 11% | ||||||
| Demand and term deposits | 85,628 | 85,628 | 97,843 | 97,843 | 12,214 | 14% | ||||||||
| Creditors from repurchase agreements | 2,792 | 2,792 | 3,963 | 3,963 | 1,171 | 42% | ||||||||
| Short-term debt | 3,182 | 493 | 3,674 | 7,634 | 253 | 7,887 | 4,212 | 115% | ||||||
| Short-term liabilities with cost | 3,182 | 88,913 | 92,095 | 7,634 | 102,059 | 109,693 | 17,597 | 19% | ||||||
| Suppliers and other short-term liabilities | 9,751 | 6,130 | 15,881 | 7,291 | 8,210 | 15,501 | (380) | -2% | ||||||
| Short-term liabilities without cost | 9,751 | 6,130 | 15,881 | 7,291 | 8,210 | 15,501 | (380) | -2% | ||||||
| Total short-term liabilities | 12,933 | 95,043 | 107,976 | 14,925 | 110,269 | 125,194 | 17,218 | 16% | ||||||
| Long-term debt | 13,490 | 1,408 | 14,898 | 9,572 | 1,129 | 10,702 | (4,196) | -28% | ||||||
| Long-term liabilities with cost | 13,490 | 1,408 | 14,898 | 9,572 | 1,129 | 10,702 | (4,196) | -28% | ||||||
| Long-term liabilities without cost | 4,578 | 1,294 | 5,872 | 3,319 | 2,887 | 6,206 | 334 | 6% | ||||||
| Total long-term liabilities | 18,068 | 2,702 | 20,770 | 12,891 | 4,016 | 16,908 | (3,862) | -19% | ||||||
| TOTAL LIABILITIES | 31,001 | 97,745 | 128,746 | 27,816 | 114,286 | 142,102 | 13,356 | 10% | ||||||
| TOTAL STOCKHOLDERS' EQUITY | 16,583 | 27,523 | 44,106 | 16,232 | 33,695 | 49,927 | 5,821 | 13% | ||||||
| LIABILITIES + EQUITY | 47,584 | 125,268 | 172,852 | 44,048 | 147,980 | 192,029 | 19,177 | 11% | ||||||
| INFRASTRUCTURE | ||||||||||||
| 2Q14 | 2Q15 | Change | ||||||||||
| Points of sale in Mexico | ||||||||||||
| Elektra (1) | 984 | 14% | 973 | 15% | (11) | -1% | ||||||
| Salinas y Rocha (1) | 55 | 1% | 53 | 1% | (2) | -4% | ||||||
| Freestanding branches | 2,439 | 35% | 2,207 | 34% | (232) | -10% | ||||||
| Blockbuster | 326 | 5% | 263 | 4% | (63) | -19% | ||||||
| Total | 3,804 | 55% | 3,496 | 54% | (308) | -8% | ||||||
| Points of sale in Central and South America | ||||||||||||
| Elektra (1) | 206 | 3% | 190 | 3% | (16) | -8% | ||||||
| Freestanding branches | 422 | 6% | 415 | 6% | (7) | -2% | ||||||
| Total | 628 | 9% | 605 | 9% | (23) | -4% | ||||||
| Points of sale in North America | ||||||||||||
| Advance America | 2,440 | 36% | 2,372 | 37% | (68) | -3% | ||||||
| Total | 2,440 | 36% | 2,372 | 37% | (68) | -3% | ||||||
| TOTAL | 6,872 | 100% | 6,473 | 100% | (399) | -6% | ||||||
| (1) Each store has a Banco Azteca branch. | ||||||||||||
| Floor space (m²) | ||||||||||||
| Elektra Mexico | 844,600 | 49% | 838,780 | 51% | (5,820) | -1% | ||||||
| Elektra Central and South America | 150,662 | 9% | 143,315 | 9% | (7,347) | -5% | ||||||
| Salinas y Rocha | 58,995 | 3% | 56,327 | 3% | (2,668) | -5% | ||||||
| Freestanding branches | 242,274 | 14% | 199,862 | 12% | (42,412) | -18% | ||||||
| Advance America | 334,320 | 19% | 324,964 | 20% | (9,356) | -3% | ||||||
| Blockbuster | 109,664 | 6% | 82,000 | 5% | (27,664) | -25% | ||||||
| TOTAL | 1,740,514 | 100% | 1,645,248 | 100% | (95,266) | -5% | ||||||
| Employees | ||||||||||||
| Mexico | 62,242 | 77% | 51,577 | 75% | (10,665) | -17% | ||||||
| Central and South America | 11,324 | 14% | 10,062 | 15% | (1,262) | -11% | ||||||
| North America | 6,848 | 9% | 6,822 | 10% | (26) | 0% | ||||||
| Total employees | 80,414 | 100% | 68,461 | 100% | (11,953) | -15% | ||||||