Grupo Elektra Announces Revenue of Ps.17,067 Million, and EBITDA of Ps.2,664 Million in 3Q13

—Continued increase of Banco Azteca's gross loan portfolio; grows 12% to Ps.63,382 million—

—Solid dynamism in bank deposits; 15% expansion to Ps.70,434 million—

—Strategies to further strengthen financial and commercial businesses will translate into future yields—

MEXICO CITY, Oct. 22, 2013 (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 third quarter, and nine months of 2013.

Consolidated third quarter results

Consolidated revenue was Ps.17,067 million, compared to Ps.18,060 million for the last year. Costs and operating expenses were Ps.14,404 million, 2% below the Ps.14,769 million of the same period of 2012.

Grupo Elektra reported EBITDA of Ps.2,664 million, compared to Ps.3,290 million for the previous year; EBITDA margin was 16% this quarter. The company reported a net income of Ps.672 million, from Ps.1,543 million a year ago.

3Q 2012 3Q 2013 Change
Ps. %
Consolidated revenue $18,060 $17,067 $ (992) -5%
EBITDA $3,290 $2,664 $ (627) -19%
Net result $1,543 $672 $ (871) -56%
Net result per share $6.51 $2.83 $ (3.68) -56%
Figures in millions of pesos
As of September 30, 2012, Elektra outstanding shares were 237.1 million and as of September 30, 2013, were 237.3 million.

Revenue

Consolidated revenue fell 5%, as a result of an increase of 6% in financial revenue and a 28% reduction in commercial sales.

Financial revenue grew to Ps.12,690 million, from Ps.11,967 million last year. The development of revenue from Banco Azteca Mexico contributed significantly to the growth of the financial business, increasing 6% to Ps.8,831 million, from Ps.8,300 million, mainly as a result of an expansion of personal loans and Presta Prenda credits.

The continuous growth of the financial business translates into a robust proportion of financial income in the consolidated revenue, representing 74% in the quarter, compared to 66% a year ago.

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 decreased 3% to Ps.6,758 million, from Ps.6,997 million from the previous year. The change mainly derives from a 46% increase in financial cost —to Ps.3,731 million compared to Ps.2,562 million a year ago— and a 32% 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 significant growth of the consolidated portfolio; as well as higher interest paid to savers, as a result of a firm increase in traditional deposits.

Consolidated operating expenses were Ps.7,646 million, 2% below the Ps.7,772 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.2,664 million, compared to Ps.3,290 million a year ago; the EBITDA margin for the quarter was 16%.

The most significant change below EBITDA was a decrease of Ps.698 million in other financial results, as a consequence of a larger 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 net income of Ps.672 million, compared to net income of Ps.1,543 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 September 30, 2013, was Ps.77,576 million, 15% higher than the Ps.67,342 million from the previous year, as a result of the growing preference of customers for our credit products, which directly improve quality of life. Consolidated delinquency rate was 7.3% at the end of the period.

The most significant driver of the consolidated gross portfolio was a 12% growth in the gross portfolio of Banco Azteca Mexico, to Ps.63,382 million from Ps.56,730 million.

The delinquency rate of Banco Azteca Mexico at the end of the quarter was 7.2%. 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 third quarter.

Banco Azteca Mexico deposits were Ps.70,434 million, 15% higher than last year.

Financial products that satisfy client 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 September 30, 2013, the capitalization index of Banco Azteca Mexico was 14.3%. The company considers the index to be at a level that optimizes equity profitability.

Debt

As of September 30, 2013, consolidated total debt with cost was Ps.22,543 million, of which Ps.18,513 million correspond to the commercial business, and Ps.4,029 million to the financial business.

The balance of cash, cash equivalents and marketable securities for the commercial business was Ps.25,216 million at the end of the period; as a result, net cash for the commercial business –excluding debt with cost– was a positive Ps.6,703 million.

Expansion

Grupo Elektra currently has 6,460 points of sale, 5% more than the 6,142 from a year ago. The change derives mainly from increases in the number of points of sales for financial services, as part of the company's actions to strengthen this business segment.

There are 3,367 points of sale in Mexico, 2,465 in USA, and 628 in Central and South America. The wide distribution network allows the company to keep its proximity and closeness of clients service; granting superior market positioning in the countries where it operates.

Nine months results

Total consolidated revenue in the first nine months of the year was Ps.51,769 million, 4% higher than the Ps.49,868 million for the same period of 2012. The company reported EBITDA of Ps.7,594 million, compared to Ps.9,426 million for the same period a year ago; the EBITDA margin in the first nine months of 2013 was 15%.

The company registered a consolidated net loss of Ps.1,034 million, compared to a loss of Ps.21,478 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.

9M 2012 9M 2013 Change
Ps. %
Consolidated revenue $49,868 $51,769 $1,901 4%
EBITDA $9,426 $7,594 $ (1,832) -19%
Net result $ (21,478) $ (1,034) $20,444 95%
Net result per share $ (90.59) $ (4.36) $86.23 95%
Figures in million of pesos.
As of September 30, 2012, Elektra* outstanding shares were 237.1 million and the number of shares as of September 30, 2013 was 237.3 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
3Q12 3Q13 Change
Financial income 11,967 66% 12,690 74% 723 6%
Commercial income 6,093 34% 4,378 26% (1,715) -28%
Income 18,060 100% 17,067 100% (992) -5%
Financial cost 2,562 14% 3,731 22% 1,169 46%
Commercial cost 4,436 25% 3,027 18% (1,409) -32%
Costs 6,997 39% 6,758 40% (239) -3%
Gross income 11,062 61% 10,309 60% (753) -7%
Sales, administration and promotion expenses 7,772 43% 7,646 45% (126) -2%
Depreciation and amortization 569 3% 737 4% 168 30%
Operating expenses 8,341 46% 8,383 49% 42 0%
Operating income 2,721 15% 1,927 11% (794) -29%
EBITDA 3,290 18% 2,664 16% (627) -19%
Comprehensive financial result:
Interest income 82 0% 17 0% (65) -79%
Interest expense (480) -3% (460) -3% 19 4%
Foreign exchange loss, net (2) 0% (65) 0% (63) ----
Other financial results, net (344) -2% (1,043) -6% (698) ----
(745) -4% (1,552) -9% (807) ----
Other (expense) income, net (15) 0% 9 0% 25 ----
Participation in the net income of
CASA and other associated companies 8 0% (23) 0% (32) ----
Income before income tax 1,969 11% 361 2% (1,608) -82%
Income tax (405) -2% (63) 0% 342 84%
Income before discontinued operations 1,564 9% 298 2% (1,266) -81%
(Loss) profit from discontinued operations (22) 0% 374 2% 396 ----
Consolidated net income 1,543 9% 672 4% (871) -56%
GRUPO ELEKTRA, S.A.B. DE C.V. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
MILLIONS OF MEXICAN PESOS
9M12 9M13 Change
Financial income 32,102 64% 37,258 72% 5,156 16%
Commercial income 17,766 36% 14,511 28% (3,255) -18%
Income 49,868 100% 51,769 100% 1,901 4%
Financial cost 8,460 17% 10,280 20% 1,820 22%
Commercial cost 12,847 26% 10,108 20% (2,739) -21%
Costs 21,307 43% 20,388 39% (918) -4%
Gross income 28,561 57% 31,381 61% 2,819 10%
Sales, administration and promotion expenses 19,135 38% 23,787 46% 4,652 24%
Depreciation and amortization 1,592 3% 2,044 4% 452 28%
Operating expenses 20,727 42% 25,830 50% 5,103 25%
Operating Income 7,834 16% 5,550 11% (2,284) -29%
EBITDA 9,426 19% 7,594 15% (1,832) -19%
Comprehensive financial result:
Interest income 658 1% 278 1% (380) -58%
Interest expense (1,396) -3% (1,260) -2% 136 10%
Foreign exchange loss, net (302) -1% (243) 0% 59 20%
Other financial results, net (36,922) -74% (6,586) -13% 30,336 82%
(37,961) -76% (7,810) -15% 30,151 79%
Other (expense) income, net (14) 0% 15 0% 29 ----
Participation in the net income expense of
CASA and other associated companies 83 0% 32 0% (51) -62%
Loss before income tax (30,058) -60% (2,213) -4% 27,845 93%
Income tax 8,649 17% 795 2% (7,854) -91%
Loss before discontinued operations (21,408) -43% (1,417) -3% 19,991 93%
(Loss) profit from discontinued operations (69) 0% 383 1% 453 ----
Consolidated net loss (21,478) -43% (1,034) -2% 20,444 95%
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 September 30, 2012 At September 30, 2013
Cash and cash equivalents 1,148 15,589 16,737 1,667 15,754 17,421 684 4%
Marketable financial instruments 23,351 8,773 32,125 23,549 15,891 39,440 7,316 23%
Performing loan portfolio 390 47,695 48,085 -- 52,330 52,330 4,245 9%
Total past-due loans 264 3,278 3,542 -- 5,453 5,453 1,911 54%
Gross loan portfolio 653 50,974 51,627 -- 57,783 57,783 6,156 12%
Allowance for credit risks 266 6,048 6,314 -- 8,128 8,128 1,814 29%
Loan portfolio, net 387 44,926 45,313 -- 49,655 49,655 4,342 10%
Inventories 6,527 6,527 5,901 5,901 (626) -10%
Other current assets 13,597 5,249 18,846 4,026 6,190 10,216 (8,630) -46%
Total current assets 45,010 74,537 119,548 35,142 87,491 122,634 3,086 3%
Financial instruments 111 111 -- (111) ----
Performing loan portfolio 51 15,213 15,264 19,605 19,605 4,341 28%
Total past-due loans 2 449 451 188 188 (263) -58%
Loan portfolio 53 15,662 15,715 -- 19,793 19,793 4,078 26%
Other non-current assets 810 810 4,728 2 4,730 3,920 ----
Investment in shares 2,553 2,553 3,923 3,923 1,370 54%
Property, furniture, equipment and
investment in stores, net 4,230 2,530 6,759 4,544 2,873 7,418 659 10%
Intangible assets 613 6,639 7,252 625 6,865 7,490 238 3%
Other assets 665 121 786 696 209 904 119 15%
TOTAL ASSETS 53,934 99,600 153,533 49,658 117,233 166,891 13,358 9%
Demand and term deposits 62,140 62,140 76,240 76,240 14,100 23%
Creditors from repurchase agreements 4,134 4,134 2,430 2,430 (1,704) -41%
Short-term debt 5,534 685 6,219 3,725 2,325 6,051 (168) -3%
Short-term liabilities with cost 5,534 66,960 72,494 3,725 80,996 84,721 12,227 17%
Suppliers and other short-term liabilities 7,395 6,070 13,465 6,062 6,389 12,451 (1,014) -8%
Short-term liabilities without cost 7,395 6,070 13,465 6,062 6,389 12,451 (1,014) -8%
Total short-term liabilities 12,929 73,029 85,959 9,787 87,385 97,172 11,214 13%
Long-term debt 13,481 1,123 14,604 14,788 1,704 16,492 1,888 13%
Long-term liabilities with cost 13,481 1,123 14,604 14,788 1,704 16,492 1,888 13%
Long-term liabilities without cost 8,288 1,577 9,865 7,684 1,378 9,062 (803) -8%
Total long-term liabilities 21,769 2,700 24,469 22,472 3,082 25,554 1,085 4%
TOTAL LIABILITIES 34,699 75,729 110,428 32,259 90,467 122,726 12,299 11%
TOTAL STOCKHOLDERS' EQUITY 19,235 23,871 43,106 17,399 26,766 44,165 1,059 2%
LIABILITIES + EQUITY 53,934 99,600 153,533 49,658 117,233 166,891 13,358 9%
GRUPO ELEKTRA, S.A.B. DE C.V. AND SUBSIDIARIES
INFRASTRUCTURE
3Q12 3Q13 Change
Points of sale in Mexico
Elektra (1) 968 16% 968 15% -- 0%
Salinas y Rocha (1) 55 1% 55 1% -- 0%
Freestanding branches 2,108 34% 2,344 36% 236 11%
Total 3,131 51% 3,367 52% 236 8%
Points of sale in Central and South America
Elektra (1) 230 4% 202 3% (28) -12%
Freestanding branches 372 6% 426 7% 54 15%
Total 602 10% 628 10% 26 4%
Points of sale in North America
Advance America 2,409 39% 2,465 38% 56 2%
Total 2,409 39% 2,465 38% 56 2%
TOTAL 6,142 100% 6,460 100% 318 5%
(1) Each store has a Banco Azteca branch.
Floor space (m²)
Elektra Mexico 834,904 52% 836,625 52% 1,720 0%
Elektra Central and South America 162,346 10% 148,632 9% (13,714) -8%
Salinas y Rocha 58,995 4% 58,995 4% -- 0%
Freestanding branches 213,820 13% 241,272 15% 27,451 13%
Advance America 330,007 21% 337,745 21% 7,739 2%
TOTAL 1,600,073 100% 1,623,268 100% 23,196 1%
Employees
Mexico 58,597 78% 61,064 77% 2,467 4%
Central and South America 10,648 14% 12,071 15% 1,423 13%
North America 6,056 8% 6,522 8% 466 8%
Total employees 75,301 100% 79,657 100% 4,356 6%

CONTACT: 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@gruposalinas.com.mx Press Relations Jaime Ramos Grupo Salinas + 52 (55) 1720 1416 jramosr@tvazteca.com.mx Daniel McCosh Grupo Salinas Tel. +52 (55) 1720-0059 dmccosh@gruposalinas.com.mxSource:Grupo Elektra SAB de CV