—Solid dynamism in consolidated bank deposits, growing 15% to Ps.78,589 million—
—Continued increase of gross loan portfolio; 6% expansion to Ps.77,092 million—
—The company acquired Blockbuster Mexico, further expanding its distribution network to 6,800 points of sale—
— Strategies to further strengthen financial and commercial businesses are expected to translate into future yields —
MEXICO CITY, Feb. 27, 2014 (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 2013.
Consolidated fourth quarter results
Consolidated revenue was Ps.18,963 million, compared to Ps.19,312 million for the same period last year. Costs and operating expenses were Ps.16,878 million, 2% below the Ps.17,212 million for the same period of 2012.
Grupo Elektra reported EBITDA of Ps.2,085 million, compared to Ps.2,099 million for the previous year's quarter; EBITDA margin was 11% this quarter, constant from the prior year. The company reported net income of Ps.1,863 million, from Ps.2,259 million a year ago.
| 4Q 2012 | 4Q 2013 | Change | ||||||
| Ps. | % | |||||||
| Consolidated revenue | $19,312 | $18,963 | $(348) | -2% | ||||
| EBITDA | $2,099 | $2,085 | $(14) | -1% | ||||
| Net result | $2,259 | $1,863 | $(396) | -18% | ||||
| Net result per share | $9.53 | $7.85 | $(1.68) | -18% | ||||
| Figures in millions of pesos | ||||||||
| As of December 31, 2012, Elektra outstanding shares were 237.1 million and as of December 31, 2013, were 237.2 million. | ||||||||
Revenue
Consolidated revenue fell 2%, as a result of an increase of 3% in financial revenue and an 11% reduction in commercial sales.
Financial revenue grew to Ps.13,255 million, from Ps.12,929 million last year. The development of revenue from Banco Azteca Mexico contributed significantly to the growth of the financial business, increasing 4% to Ps.9,203 million, from Ps.8,871 million, mainly as a result of an expansion of personal loans and Presta Prenda credits.
The decrease in commercial revenue is in the context of the removal of low-margin products, as well as the reorganization of sales activities, seeking to provide superior customer attention, as well as specialized service on the sales floor; building the basis for future sales growth.
Costs and expenses
Consolidated costs for the quarter increased 5% to Ps.8,952 million, from Ps.8,557 million from the previous year. The change mainly derives from a 24% increase in financial cost —to Ps.4,802 million compared to Ps.3,887 million a year ago— and an 11% reduction in commercial cost, in line with revenue performance.
The change in financial cost mainly resulted from the creation of loan loss reserves—in the context of growth of the consolidated portfolio; as well as more interest paid to savers, as a result of a firm increase in traditional deposits.
Consolidated operating expenses decreased 8% to Ps.7,926 million, compared to Ps.8,655 million for the same quarter of the previous year; as a result of high operational efficiency in the period.
EBITDA and net result
Consolidated EBITDA was Ps.2,085 million, compared to Ps.2,099 million a year ago; the EBITDA margin for the quarter was11%.
The most significant changes below EBITDA were i) a positive Ps.671 million in other financial results, as a consequence of a larger increase 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, and ii) an increase of Ps.1,039 million in tax provisions, according to the tax rate applicable to the results for the company.
Grupo Elektra reported net income of Ps.1,863 million, compared to net income of Ps.2,259 million a year ago.
Consolidated balance sheet
Loan portfolio and deposits
Banco Azteca Mexico, Advance America — the largest non-bank provider of cash advance services in the US — and Banco Azteca Latin America's consolidated gross portfolio as of December 31, 2013 was Ps.77,092 million, 6% higher than the Ps.72,891 million from the previous year, as a result of the growing preference of customers for our credit products, which directly improve quality of life. The consolidated delinquency rate was 8.1% at the end of the period.
The gross portfolio of Banco Azteca Mexico was Ps.62,281 million, compared to Ps.61,466 million a year ago. The delinquency rate of Banco Azteca Mexico at the end of the quarter was 8.2%. The non-performing loan portfolio is reserved 1.4 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 fourth quarter.
The Advance America loan portfolio was Ps.4,174 million, 12% higher Ps.3,716 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 15%, to Ps.78,589 million, compared to Ps.68,511 million a year ago.
Financial products that satisfy clients in the best way, with the best market conditions, and with world class service, resulted in strong increases in deposits and credit portfolios, which anticipate strong future yields.
As of December 31, 2013, the capitalization index of Banco Azteca Mexico was 13.3%. The company considers the index to be at a level that optimizes equity profitability.
Debt
As of December 31, 2013, consolidated total debt with cost was Ps.22,673 million, of which Ps.18,064 million correspond to the commercial business, and Ps.4,609 million to the financial business.
The balance of cash, cash equivalents and marketable securities for the commercial business was Ps.17,115 million at the end of the period; as a result, net cash for the commercial business –excluding debt with cost– was a positive Ps.949 million.
Acquisition of Blockbuster Mexico
In January 2014, the company acquired 100% of the shares of Blockbuster México, which adds 321 points of sale to the distribution network of Grupo Elektra, in 108 cities in Mexico, and are mainly located in the B and C demographic areas, which will expand the customer base of Grupo Elektra.
In the new locations, the company plans to offer commercial products, in addition to strengthening its current financial services platform, and promote the transformation of the digital entertainment distribution network.
On a pro forma basis, including the acquisition, the company has 6,800 points of sale, 6% more than the 6,397 from a year ago. There are 3,725 points of sale in Mexico, 2,454 in the United States, and 621 in Central and South America. The wide distribution network allows the company to keep its proximity and closeness to clients; granting superior market positioning in the countries where it operates.
Grupo Elektra extends its geographical distribution and service to additional markets, further strengthening the financial and commercial business, and expands the prospects for growth and profitability.
Twelve months consolidated results
Total consolidated revenue in 2013 was Ps.70,732 million, 2% higher than the Ps.69,179 million for 2012. The company reported EBITDA of Ps.9,679 million, compared to Ps.11,526 million for 2012; the EBITDA margin in the year was 14%.
The company registered consolidated net income of Ps.829 million, compared to a loss of Ps.19,219 million a year ago, mainly due to lower depreciation this period in the market value of underlying financial instruments that the company holds, which doesn't imply cash flow, compared to the prior year.
| 2012 | 2013 | Change | ||||||
| Ps. | % | |||||||
| Consolidated revenue | $69,179 | $70,732 | $1,552 | 2% | ||||
| EBITDA | $11,526 | $9,679 | $(1,847) | -16% | ||||
| Net result | $(19,219) | $829 | $20,048 | ---- | ||||
| Net result per share | $(81.06) | $3.49 | $84.55 | ---- | ||||
| Figures in millions of pesos | ||||||||
| As of December 31, 2012, Elektra outstanding shares were 237.1 million and as of December 31, 2013, were 237.2 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) and Grupo Iusacell (www.iusacell.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 | ||||||
| 4Q12 | 4Q13 | Change | ||||
| Financial income | 12,929 | 67% | 13,255 | 70% | 326 | 3% |
| Commercial income | 6,382 | 33% | 5,708 | 30% | (674) | -11% |
| Income | 19,312 | 100% | 18,963 | 100% | (348) | -2% |
| Financial cost | 3,887 | 20% | 4,802 | 25% | 915 | 24% |
| Commercial cost | 4,670 | 24% | 4,150 | 22% | (520) | -11% |
| Costs | 8,557 | 44% | 8,952 | 47% | 395 | 5% |
| Gross income | 10,755 | 56% | 10,011 | 53% | (743) | -7% |
| Sales, administration and promotion expenses | 8,655 | 45% | 7,926 | 42% | (729) | -8% |
| Depreciation and amortization | 729 | 4% | 888 | 5% | 159 | 22% |
| Operating expenses | 9,385 | 49% | 8,814 | 46% | (570) | -6% |
| Operating income | 1,370 | 7% | 1,197 | 6% | (173) | -13% |
| EBITDA | 2,099 | 11% | 2,085 | 11% | (14) | -1% |
| Comprehensive financial result: | ||||||
| Interest income | (351) | -2% | 173 | 1% | 524 | --- |
| Interest expense | (387) | -2% | (365) | -2% | 22 | 6% |
| Foreign exchange gain, net | 253 | 1% | 48 | 0% | (204) | -81% |
| Other financial results, net | 800 | 4% | 1,472 | 8% | 671 | 84% |
| 316 | 2% | 1,328 | 7% | 1,013 | --- | |
| Other expense, net | (5) | 0% | (37) | 0% | (32) | --- |
| Participation in the net income of | ||||||
| CASA and other associated companies | 420 | 2% | 258 | 1% | (163) | -39% |
| Income before income tax | 2,101 | 11% | 2,746 | 14% | 645 | 31% |
| Income tax | 173 | 1% | (866) | -5% | (1,039) | --- |
| Income before discontinued operations | 2,274 | 12% | 1,880 | 10% | (394) | -17% |
| Loss from discontinued operations | (15) | 0% | (18) | 0% | (2) | -13% |
| Consolidated net income | 2,259 | 12% | 1,863 | 10% | (396) | -18% |
| GRUPO ELEKTRA, S.A.B. DE C.V. AND SUBSIDIARIES | ||||||
| CONSOLIDATED INCOME STATEMENTS | ||||||
| MILLIONS OF MEXICAN PESOS | ||||||
| 12M12 | 12M13 | Change | ||||
| Financial income | 45,031 | 65% | 50,513 | 71% | 5,482 | 12% |
| Commercial income | 24,148 | 35% | 20,219 | 29% | (3,930) | -16% |
| Income | 69,179 | 100% | 70,732 | 100% | 1,552 | 2% |
| Financial cost | 12,347 | 18% | 15,082 | 21% | 2,735 | 22% |
| Commercial cost | 17,517 | 25% | 14,258 | 20% | (3,258) | -19% |
| Costs | 29,864 | 43% | 29,340 | 41% | (523) | -2% |
| Gross income | 39,316 | 57% | 41,392 | 59% | 2,076 | 5% |
| Sales, administration and promotion expenses | 27,790 | 40% | 31,713 | 45% | 3,922 | 14% |
| Depreciation and amortization | 2,321 | 3% | 2,932 | 4% | 611 | 26% |
| Operating expenses | 30,111 | 44% | 34,645 | 49% | 4,533 | 15% |
| Operating Income | 9,204 | 13% | 6,747 | 10% | (2,457) | -27% |
| EBITDA | 11,526 | 17% | 9,679 | 14% | (1,847) | -16% |
| Comprehensive financial result: | ||||||
| Interest income | 765 | 1% | 451 | 1% | (314) | -41% |
| Interest expense | (1,783) | -3% | (1,625) | -2% | 158 | 9% |
| Foreign exchange loss, net | (49) | 0% | (194) | 0% | (145) | --- |
| Other financial results, net | (36,579) | -53% | (5,114) | -7% | 31,465 | 86% |
| (37,646) | -54% | (6,482) | -9% | 31,164 | 83% | |
| Other expense, net | (19) | 0% | (21) | 0% | (2) | -13% |
| Participation in the net income expense of | ||||||
| CASA and other associated companies | 503 | 1% | 289 | 0% | (214) | -43% |
| (Loss) income before income tax | (27,957) | -40% | 533 | 1% | 28,491 | 100% |
| Income tax | 8,837 | 13% | (70) | 0% | (8,907) | -100% |
| (Loss) income before discontinued operations | (19,121) | -28% | 463 | 1% | 19,583 | --- |
| (Loss) profit from discontinued operations | (99) | 0% | 366 | 1% | 465 | --- |
| Consolidated net (loss) income | (19,219) | -28% | 829 | 1% | 20,048 | --- |
| GRUPO ELEKTRA, S.A.B. DE C.V. AND SUBSIDIARIES | ||||||||
| CONSOLIDATED BALANCE SHEET | ||||||||
| MILLIONS OF MEXICAN PESOS | ||||||||
| Commercial | Financial | Commercial | Financial | |||||
| Business | Business | Grupo Elektra | Business | Business | Grupo Elektra | Change | ||
| At December 31, 2012 | At December 31, 2013 | |||||||
| Cash and cash equivalents | 6,387 | 13,089 | 19,476 | 3,302 | 16,476 | 19,778 | 303 | 2% |
| Marketable financial instruments | 23,778 | 11,380 | 35,158 | 13,813 | 20,596 | 34,409 | (749) | -2% |
| Performing loan portfolio | 374 | 50,843 | 51,216 | -- | 51,626 | 51,626 | 409 | 1% |
| Total past-due loans | 275 | 4,255 | 4,530 | -- | 6,027 | 6,027 | 1,497 | 33% |
| Gross loan portfolio | 649 | 55,097 | 55,746 | -- | 57,653 | 57,653 | 1,907 | 3% |
| Allowance for credit risks | 279 | 7,452 | 7,730 | -- | 8,632 | 8,632 | 902 | 12% |
| Loan portfolio, net | 371 | 47,646 | 48,016 | -- | 49,021 | 49,021 | 1,005 | 2% |
| Inventories | 7,180 | 7,180 | 6,043 | 6,043 | (1,137) | -16% | ||
| Other current assets | 8,601 | 9,443 | 18,043 | 1,320 | 7,907 | 9,227 | (8,816) | -49% |
| Total current assets | 46,316 | 81,556 | 127,873 | 24,479 | 94,001 | 118,479 | (9,394) | -7% |
| Financial instruments | -- | -- | -- | 10,522 | 214 | 10,736 | 10,736 | --- |
| Performing loan portfolio | 36 | 16,566 | 16,602 | 19,224 | 19,224 | 2,622 | 16% | |
| Total past-due loans | 3 | 540 | 543 | 215 | 215 | (328) | -60% | |
| Loan portfolio | 39 | 17,106 | 17,145 | -- | 19,439 | 19,439 | 2,294 | 13% |
| Other non-current assets | 868 | 0 | 868 | 6,001 | 2 | 6,003 | 5,134 | --- |
| Investment in shares | 3,895 | -- | 3,895 | 4,317 | 4,317 | 422 | 11% | |
| Property, furniture, equipment and | ||||||||
| investment in stores, net | 4,262 | 2,866 | 7,128 | 4,664 | 2,971 | 7,634 | 507 | 7% |
| Intangible assets | 571 | 6,708 | 7,279 | 624 | 6,687 | 7,311 | 32 | 0% |
| Other assets | 808 | 183 | 991 | 664 | 494 | 1,158 | 167 | 17% |
| TOTAL ASSETS | 56,760 | 108,419 | 165,179 | 51,270 | 123,807 | 175,077 | 9,898 | 6% |
| Demand and term deposits | 68,511 | 68,511 | 78,589 | 78,589 | 10,078 | 15% | ||
| Creditors from repurchase agreements | 3,321 | 3,321 | 4,140 | 4,140 | 820 | 25% | ||
| Short-term debt | 6,386 | 2,411 | 8,797 | 3,341 | 738 | 4,079 | (4,718) | -54% |
| Short-term liabilities with cost | 6,386 | 74,242 | 80,628 | 3,341 | 83,467 | 86,808 | 6,180 | 8% |
| Suppliers and other short-term liabilities | 7,385 | 6,561 | 13,945 | 7,578 | 7,978 | 15,556 | 1,611 | 12% |
| Short-term liabilities without cost | 7,385 | 6,561 | 13,945 | 7,578 | 7,978 | 15,556 | 1,611 | 12% |
| Total short-term liabilities | 13,770 | 80,803 | 94,573 | 10,918 | 91,445 | 102,364 | 7,790 | 8% |
| Long-term debt | 13,786 | 1,118 | 14,904 | 14,723 | 3,871 | 18,594 | 3,690 | 25% |
| Long-term liabilities with cost | 13,786 | 1,118 | 14,904 | 14,723 | 3,871 | 18,594 | 3,690 | 25% |
| Long-term liabilities without cost | 8,990 | 1,214 | 10,204 | 6,945 | 1,274 | 8,219 | (1,985) | -19% |
| Total long-term liabilities | 22,776 | 2,332 | 25,108 | 21,668 | 5,145 | 26,813 | 1,705 | 7% |
| TOTAL LIABILITIES | 36,546 | 83,135 | 119,682 | 32,586 | 96,591 | 129,177 | 9,495 | 8% |
| TOTAL STOCKHOLDERS' EQUITY | 20,213 | 25,284 | 45,497 | 18,683 | 27,217 | 45,900 | 403 | 1% |
| LIABILITIES + EQUITY | 56,760 | 108,419 | 165,179 | 51,270 | 123,807 | 175,077 | 9,898 | 6% |
| GRUPO ELEKTRA, S.A.B. DE C.V. AND SUBSIDIARIES | ||||||
| INFRASTRUCTURE | ||||||
| 4Q12 | 4Q13 | Change | ||||
| Points of sale in Mexico | ||||||
| Elektra (1) | 967 | 15% | 977 | 15% | 10 | 1% |
| Salinas y Rocha (1) | 55 | 1% | 55 | 1% | -- | 0% |
| Freestanding branches | 2,327 | 36% | 2,372 | 37% | 45 | 2% |
| Total | 3,349 | 52% | 3,404 | 53% | 55 | 2% |
| Points of sale in Central and South America | ||||||
| Elektra (1) | 220 | 3% | 205 | 3% | (15) | -7% |
| Freestanding branches | 435 | 7% | 416 | 6% | (19) | -4% |
| Total | 655 | 10% | 621 | 10% | (34) | -5% |
| Points of sale in North America | ||||||
| Advance America | 2,393 | 37% | 2,454 | 38% | 61 | 3% |
| Total | 2,393 | 37% | 2,454 | 38% | 61 | 3% |
| TOTAL | 6,397 | 100% | 6,479 | 100% | 82 | 1% |
| (1) Each store has a Banco Azteca branch. | ||||||
| Floor space (m²) | ||||||
| Elektra Mexico | 836,194 | 52% | 841,100 | 52% | 4,906 | 1% |
| Elektra Central and South America | 164,796 | 10% | 150,162 | 9% | (14,634) | -9% |
| Salinas y Rocha | 58,995 | 4% | 58,995 | 4% | -- | 0% |
| Freestanding branches | 229,217 | 14% | 241,243 | 15% | 12,027 | 5% |
| Advance America | 328,000 | 20% | 338,000 | 21% | 10,000 | 3% |
| TOTAL | 1,617,201 | 100% | 1,629,500 | 100% | 12,299 | 1% |
| Employees | ||||||
| Mexico | 58,928 | 77% | 65,460 | 78% | 6,532 | 11% |
| Central and South America | 11,609 | 15% | 12,166 | 14% | 557 | 5% |
| North America | 6,053 | 8% | 6,708 | 8% | 655 | 11% |
| Total employees | 76,590 | 100% | 84,334 | 100% | 7,744 | 10% |