GRUPO ELEKTRA ANNOUNCES 42% GROWTH IN EBITDA TO Ps.6,865 MILLION IN THE THIRD QUARTER OF 2024

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Oct 22, 2024, 20:29 ET

—Continuous dynamism in both financial and commercial businesses generates a 13% increase in consolidated revenue to Ps. 50,761 million—

—Firm performance of net credit portfolio of Banco Azteca México; increases 13%, to Ps.183,525 million—

—Growing strength in Banco Azteca México´s asset quality; NPL ratio decreases to 3.5% from 5.3% a year ago—

MEXICO CITY, Oct. 22, 2024 /PRNewswire/ -- 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, today announced third quarter 2024 results.

Third quarter results

Consolidated revenue increased 13% to Ps.50,761 million in the period, compared to Ps.45,003 million in the same quarter of the previous year. Costs and operating expenses rose 9% to Ps.43,896 million, up from Ps.40,163 million in the same quarter of 2023.

As a result, EBITDA was Ps.6,865 million, a 42% increase from Ps.4,840 million a year ago. Operating income rose to Ps.4,506 million, three times higher from Ps.1,252 million in the same period of 2023.

The company reported a net loss of Ps.574 million, compared to a loss of Ps.183 million a year ago.

	3Q 2023	3Q 2024	Change
			Ps.	%

Consolidated revenue	$45,003	$50,761	$5,759	13 %

EBITDA	$4,840	$6,865	$2,025	42 %

Operating profit Net result	$1,252 $(183)	$4,506 $(574)	$3,254 $(391)	260% ----

Net result per share	$(0.83)	$(2.61)	$(1.78)	----

Figures in millions of pesos.

EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization.

As of September 30, 2024, Elektra* outstanding shares were 220 million and as of September 30, 2023, were 221 million.

Revenue

Consolidated revenue increased 13% in the period, driven by a 15% growth in financial income and a 9% rise in commercial sales.

The increase in financial income — to Ps.32,536 million, from Ps.28,306 million in the previous year — largely reflects a 13% growth in Banco Azteca México's income. This growth aligns with the ongoing expansion of the gross credit portfolio, contributing to the wellbeing of millions of families and fostering business development.

The increase in the commercial business revenue to Ps.18,225 million from Ps.16,696 million a year ago is largely driven by growth in motorcycle sales, which enhance business productivity and mobility for millions; telephony, which facilitates efficient connectivity for a growing number of users; and white goods, which improve the quality of life of an increasing number of families.

Costs and expenses

Consolidated costs for the quarter increased 7% to Ps.24,538 million from Ps.22,920 million in the previous year. The increase is driven by a 14% rise in financial costs due to a higher allowance for credit risks — resulting from an increase in credit reserves within the context of strong growth in the consolidated gross portfolio, as well as higher interest payments — and a 2% increase in commercial costs, reflecting growth in merchandise sold, partially offset by supply chain efficiencies.

Consolidated costs for the period increased at a lower rate than revenues, leading to a 19% increase in the company's gross profit to Ps.26,223 million, from Ps.22,082 million a year ago. Gross margin increased three percentage points to 52% this quarter.

Selling, administration and promotion expenses increased 12% to Ps.19,358 million from Ps.17,243 million a year ago, largely as a result of higher operating and personnel expenses in the period, partially offset by lower advertising expenses.

EBITDA and net result

EBITDA grew 42% to Ps.6,865 million from Ps.4,840 million in the previous year. EBITDA margin increased three percentage points, to 14% in the period. The company reported operating income of Ps.4,506 million, compared to Ps.1,252 million in the same quarter of 2023.

The relevant variations below EBITDA were the following:

A decrease of Ps.1,168 million in other expenses, due to a net loss of Ps.1,165 million from the sale of commercial credit a year ago.

An increase in foreign exchange loss of Ps.332 million this quarter, as a result of net liability monetary position, together with greater exchange rate depreciation this period, compared to the previous year.

A negative variation of Ps.3,538 million in other financial results, which reflects an 11% loss this quarter in the market value of the underlying financial instruments owned by the company — and which do not imply cash flow — compared to a 1% loss a year ago.

Grupo Elektra reported a net loss of Ps.574 million, compared to a loss of Ps.183 million a year ago.

Unconsolidated balance sheet

A proforma balance sheet exercise of Grupo Elektra is presented, which allows knowing the non-consolidated financial situation, excluding the net assets of the financial business, whose investment is valued in this case under the participation method.

This presentation shows the debt of the company without considering Banco Azteca's immediate and term deposits, which do not constitute debt with cost for Grupo Elektra. Also, the pro forma balance sheet does not include the bank's gross loan portfolio.

This provides greater clarity about the different businesses that make up the company and allows financial market participants to make estimates of the value of the company, considering only the relevant debt for said calculations.

Consistent with this, the debt with cost as of September 30, 2024, was Ps.40,722 million, compared to Ps.38,630 million of the previous year, mainly as a result of the depreciation of the exchange rate of the peso against the dollar on the debt denominated in dollars, drawdown of bank credit, and issuance of Certificados Bursátiles linked to sustainability, partially offset by amortizations of international bonds.

Cash and cash equivalents were Ps.12,026 million, from Ps.10,438 million a year ago, and net debt was Ps.28,696 million, compared to Ps.28,192 million a year ago.

As of September 30, 2024, the Company's shareholders' equity was Ps.92,943 million, 2% higher compared to Ps.91,455 a year ago.

	As of September 30 2023	As of September 30 2024	Change
	As of September 30 2023	As of September 30 2024	Ps.	%


Cash and cash equivalents	$10,438	$12,026	1,589	15 %
Marketable financial instruments	27,688	28,189	501	2 %
Inventories	19,426	20,592	1,167	6 %
Accounts receivables	48,548	48,893	346	1 %
Other current assets	3,296	4,182	887	27 %
Investments in shares	42,447	43,886	1,439	3 %
Fixed assets	9,788	8,583	(1,205)	(12 %)
Right of use assets	12,173	12,299	126	1 %
Other assets	3,042	7,318	4,276	141 %

Total assets	$176,844	$185,970	$9,125	5 %

Short-term debt	$8,349	$10,769	2,420	29 %
Suppliers	10,881	12,148	1,267	12 %
Other short-term liabilities	19,034	23,291	4,257	22 %
Long-term debt	30,281	29,953	(328)	(1 %)
Other long-term liabilities	16,845	16,866	21	0 %

Total liabilities	$85,390	$93,027	$7,637	9 %

Stakeholder's equity	$91,455	$92,943	$1,488	2 %

Liabilities and equity	$176,844	$185,970	$9,125	5 %

Figures in millions of pesos

Consolidated Balance Sheet

Loan Portfolio and Deposits

The consolidated gross portfolio of Banco Azteca México, Purpose Financial and Banco Azteca Latinoamérica as of September 30, 2024, grew 12% to Ps.189,537 million, from Ps.168,968 million in the previous year. The consolidated non-performing loan ratio was 4.2% at the end of the period, compared to 5.7% in the previous year.

Banco Azteca México's gross loan portfolio balance increased 13% to Ps.183,525 million, from Ps.162,844 million a year ago. The Bank's non-performing loan ratio at the end of the period decreased to 3.5%, compared to 5.3% a year ago, in the context of robust credit origination processes and increasing collection efficiency.

Grupo Elektra's consolidated deposits were Ps.227,495 million, 3% higher than Ps.221,545 million a year ago. Banco Azteca México's traditional deposits were Ps.222,571 million, compared to Ps.219,639 million a year ago.

Banco Azteca México's traditional deposit to gross portfolio ratio was 1.2 times, which allows for solid growth for the Bank, with optimal funding costs.

Banco Azteca México's estimated capitalization ratio was 14.79%.

Infrastructure

Grupo Elektra currently operates 6,127 points of contact from 6,218 units from the previous year. This decrease is due to strategies aimed at maximizing the profitability of the company's points of contact.

At the end of the period, Grupo Elektra had 4,879 contact points in Mexico, 819 in the US, and 429 in Central America. This extensive distribution network ensures proximity to customers and fosters close attention, contributing to the company's superior market positioning in the countries it operates in.

Consolidated nine-month results

Consolidated revenue for the first nine months of the year grew by 9% to Ps.143,506 million, up from Ps.131,496 million in the same period of 2023. This increase was driven by a 9% growth in both sales of the commercial business and revenues of the financial business.

EBITDA was Ps.19,554 million, 18% higher than Ps.16,634 million a year ago. EBITDA margin for the period grew one percentage point to 14%. The company reported operating profit of Ps.12,569 million, up from Ps.8,256 million a year ago.

In the first nine months of 2024, net income of Ps.502 million was recorded, compared to Ps.5,220 million a year ago. The change reflects a loss in the market value of the underlying financial instruments owned by the company — which does not imply cash flow — compared to the gain of the previous year.

	9M 2023	9M 2024	Change
			Ps.	%

Consolidated revenue	$131,496	$143,506	$12,010	9 %

EBITDA	$16,634	$19,554	$2,920	18 %

Operating profit Net result	$8,256 $5,220	$12,569 $502	$4,313 $(4,718)	52% -90%

Net result per share	$23.62	$2.28	$(21.34)	-90 %

Figures in millions of pesos.

EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization.

As of September 30, 2024, Elektra* outstanding shares were 220 million and as of September 30, 2023, were 221 million.

Company Profile:

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 6,000 points of contact in Mexico, the United States, Guatemala, Honduras, and Panama.

Grupo Elektra is a Grupo Salinas company (www.gruposalinas.com), a group of dynamic, fast-growing, and technologically advanced companies focused on creating economic value through market innovation and goods and services that improve standards of living; social value to improve community well-being; and environmental value by reducing the negative impact of its business activities. 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. These companies include TV Azteca (www.TVazteca.com; www.irtvazteca.com), Grupo Elektra (www.grupoelektra.com.mx), Banco Azteca (www.bancoazteca.com.mx), Purpose Financial (havepurpose.com), Afore Azteca (www.aforeazteca.com.mx), Seguros Azteca (www.segurosazteca.com.mx), Punto Casa de Bolsa (www.puntocasadebolsa.mx), Total Play (irtotalplay.mx; www.totalplay.com.mx) and Total Play Empresarial (totalplayempresarial.com.mx). TV Azteca and Grupo Elektra trade shares on the Mexican Stock Market and in Spain's' Latibex market. Each of the Grupo Salinas companies operates independently, with its own management, board of directors and shareholders. Grupo Salinas has no equity holdings. The group of companies shares 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 concepts about the future that involve risks and uncertainty that may cause actual results to differ materially from those projected. Other risks that may affect Grupo Elektra and its subsidiaries are presented in documents sent to the securities authorities.

Investor Relations:

Bruno Rangel Grupo Salinas Tel. +52 (55) 1720-9167 [email protected]		Rolando Villarreal Grupo Elektra, S.A.B. de C.V. Tel. +52 (55) 1720-9167 [email protected]

Press Relations: Luciano Pascoe Tel. +52 (55) 1720 1313 ext. 36553 [email protected]

GRUPO ELEKTRA, S.A.B. DE C.V. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
MILLIONS OF MEXICAN PESOS


		3Q23		3Q24		Change

	Financial income	28,306	63 %	32,536	64 %	4,230	15 %
	Commercial income	16,696	37 %	18,225	36 %	1,529	9 %
	Income	45,003	100 %	50,761	100 %	5,759	13 %

	Financial cost	10,224	23 %	11,620	23 %	1,397	14 %
	Commercial cost	12,696	28 %	12,917	25 %	221	2 %
	Costs	22,920	51 %	24,538	48 %	1,618	7 %

	Gross income	22,082	49 %	26,223	52 %	4,141	19 %

	Sales, administration and promotion expenses	17,243	38 %	19,358	38 %	2,116	12 %

	EBITDA	4,840	11 %	6,865	14 %	2,025	42 %

	Depreciation and amortization	2,423	5 %	2,363	5 %	(61)	-3 %

	Other expense (income), net	1,165	3 %	(3)	0 %	(1,168)	----

	Operating income	1,252	3 %	4,506	9 %	3,254	----

	Comprehensive financial result:
	Interest income	410	1 %	586	1 %	175	43 %
	Interest expense	(1,447)	-3 %	(1,471)	-3 %	(24)	-2 %
	Foreign exchange loss, net	(158)	0 %	(491)	-1 %	(332)	----
	Other financial results, net	(301)	-1 %	(3,839)	-8 %	(3,538)	----
		(1,496)	-3 %	(5,215)	-10 %	(3,719)	----

	Participation in the net income of
	CASA and other associated companies	(14)	0 %	(109)	0 %	(95)	----

	Loss before income tax	(258)	-1 %	(818)	-2 %	(560)	----

	Income tax	76	0 %	244	0 %	167	----

	Loss before discontinued operations	(182)	0 %	(575)	-1 %	(393)	----

	Result from discontinued operations	(1)	0 %	0	0 %	1	----

	Consolidated net loss	(183)	0 %	(574)	-1 %	(391)	----

GRUPO ELEKTRA, S.A.B. DE C.V. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
MILLIONS OF MEXICAN PESOS


		9M23		9M24		Change

	Financial income	81,812	62 %	89,304	62 %	7,493	9 %
	Commercial income	49,685	38 %	54,202	38 %	4,517	9 %
	Income	131,496	100 %	143,506	100 %	12,010	9 %

	Financial cost	28,222	21 %	30,426	21 %	2,204	8 %
	Commercial cost	36,682	28 %	38,569	27 %	1,887	5 %
	Costs	64,905	49 %	68,995	48 %	4,090	6 %

	Gross income	66,592	51 %	74,511	52 %	7,920	12 %

	Sales, administration and promotion expenses	49,957	38 %	54,957	38 %	4,999	10 %

	EBITDA	16,634	13 %	19,554	14 %	2,920	18 %

	Depreciation and amortization	7,208	5 %	7,004	5 %	(204)	-3 %

	Other expense (income), net	1,170	1 %	(18)	0 %	(1,189)	----

	Operating income	8,256	6 %	12,569	9 %	4,313	52 %

	Comprehensive financial result:
	Interest income	1,301	1 %	1,510	1 %	209	16 %
	Interest expense	(4,360)	-3 %	(4,373)	-3 %	(13)	0 %
	Foreign exchange gain (loss), net	350	0 %	(1,124)	-1 %	(1,474)	----
	Other financial results, net	1,463	1 %	(7,476)	-5 %	(8,940)	----
		(1,245)	-1 %	(11,463)	-8 %	(10,218)	----

	Participation in the net income of
	CASA and other associated companies	390	0 %	(335)	0 %	(725)	----

	Income before income tax	7,401	6 %	771	1 %	(6,630)	-90 %

	Income tax	(2,185)	-2 %	(267)	0 %	1,918	88 %

	Income before discontinued operations	5,216	4 %	504	0 %	(4,712)	-90 %

	Result from discontinued operations	4	0 %	(2)	0 %	(6)	----

	Consolidated net income	5,220	4 %	502	0 %	(4,718)	-90 %

	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, 2023*			*At September 30, 2024*

Cash and cash equivalents	10,438	27,439	37,876	12,026	30,334	42,360	4,484	12 %

Marketable financial instruments	5,131	93,085	98,215	3,875	97,962	101,837	3,621	4 %

Performing loan portfolio	-	87,909	87,909	-	97,182	97,182	9,273	11 %
Total past-due loans	-	7,449	7,449	-	5,706	5,706	(1,743)	-23 %
Gross loan portfolio	-	95,359	95,359	-	102,888	102,888	7,529	8 %

Allowance for credit risks	-	12,524	12,524	-	18,971	18,971	6,448	51 %

Loan portfolio, net	-	82,835	82,835	-	83,917	83,917	1,082	1 %

Inventories	19,426	-	19,426	20,592	-	20,592	1,167	6 %

Other current assets	19,045	14,251	33,297	25,930	15,391	41,321	8,024	24 %

Total current assets	54,040	217,610	271,649	62,424	227,603	290,027	18,378	7 %

Financial instruments	22,557	3	22,560	24,314	2	24,316	1,755	8 %

Performing loan portfolio	-	71,385	71,385	-	84,466	84,466	13,081	18 %
Total past-due loans	-	2,224	2,224	-	2,184	2,184	(41)	-2 %
Gross loan portfolio	-	73,609	73,609	-	86,649	86,649	13,040	18 %

Allowance for credit risks	-	5,489	5,489	-	5,459	5,459	(30)	-1 %

Loan portfolio	-	68,120	68,120	-	81,190	81,190	13,070	19 %

Other non-current assets	20,858	370	21,228	14,342	263	14,605	(6,624)	-31 %
Investment in shares	2,667	-	2,667	2,024	12	2,037	(631)	-24 %
Property, furniture, equipment and
investment in stores, net	9,788	10,613	20,401	8,583	10,394	18,976	(1,425)	-7 %
Intangible assets	780	8,233	9,013	703	8,473	9,176	163	2 %
Right of use asset	12,007	1,959	13,966	12,147	2,163	14,310	344	2 %
Other assets	2,262	6,680	8,941	6,615	11,461	18,075	9,134	----
TOTAL ASSETS	124,958	313,588	438,546	131,151	341,561	472,712	34,165	8 %


Demand and term deposits	-	221,545	221,545	-	227,495	227,495	5,950	3 %
Creditors from repurchase agreements	-	19,915	19,915	-	33,974	33,974	14,059	71 %
Short-term debt	8,244	17	8,261	9,061	343	9,404	1,143	14 %
Leasing	2,186	814	3,000	2,134	830	2,964	(35)	-1 %
Short-term liabilities with cost	10,430	242,291	252,721	11,195	262,643	273,838	21,117	8 %

Suppliers and other short-term liabilities	27,509	19,497	47,007	33,095	26,235	59,330	12,323	26 %
Short-term liabilities without cost	27,509	19,497	47,007	33,095	26,235	59,330	12,323	26 %

Total short-term liabilities	37,939	261,788	299,728	44,289	288,878	333,167	33,440	11 %

Long-term debt	28,110	1	28,111	26,230	0	26,230	(1,881)	-7 %
Leasing	11,064	1,235	12,299	11,357	1,381	12,739	440	4 %
Long-term liabilities with cost	39,174	1,236	40,410	37,587	1,381	38,969	(1,441)	-4 %

Long-term liabilities without cost	5,782	1,173	6,954	5,509	2,124	7,633	679	10 %

Total long-term liabilities	44,956	2,408	47,364	43,096	3,506	46,602	(762)	-2 %

TOTAL LIABILITIES	82,895	264,197	347,092	87,386	292,384	379,769	32,677	9 %

TOTAL STOCKHOLDERS' EQUITY	42,063	49,392	91,455	43,766	49,177	92,943	1,488	2 %


LIABILITIES + EQUITY	124,958	313,588	438,546	131,151	341,561	472,712	34,165	8 %

	INFRASTRUCTURE

	3Q23		3Q24		Change

Points of sale in Mexico
Elektra	1,226	20 %	1,233	20 %	7	1 %
Salinas y Rocha	33	1 %	32	1 %	(1)	-3 %
Banco Azteca	1,928	31 %	1,926	31 %	(2)	0 %
Freestanding branches	1,739	28 %	1,688	28 %	(51)	-3 %
Total	4,926	79 %	4,879	80 %	(47)	-1 %

Points of sale in Central America
Elektra	122	2 %	130	2 %	8	7 %
Banco Azteca	230	4 %	234	4 %	4	2 %
Freestanding branches	67	1 %	65	1 %	(2)	-3 %
Total	419	7 %	429	7 %	10	2 %

Points of sale in North America
Purpose Financial	873	14 %	819	13 %	(54)	-6 %
Total	873	14 %	819	13 %	(54)	-6 %

TOTAL	6,218	100 %	6,127	100 %	(91)	-1 %




Floor space (m²)	1,532	100 %	1,721	100 %	189	12 %



Employees
Mexico	62,975	88 %	61,269	88 %	(1,706)	-3 %
Central and South America	5,977	8 %	6,128	9 %	151	3 %
North America	2,629	4 %	2,490	4 %	(139)	-5 %
Total employees	71,581	100 %	69,887	100 %	(1,694)	-2 %