Grupo Elektra Announces Revenue Of Ps.31,385 Million And EBITDA Of Ps.5,435 Million In The First Quarter Of 2021

-- Continuous dynamism of the commercial business; revenue grew 28%, to Ps.13,383 million in the quarter --

-- 23% increase in deposits at Banco Azteca México, to Ps.190,614 million, consolidates firm prospects for the financial business, with optimal funding cost --

-- Solid growth of Banco Azteca México's loan portfolio; increases 11%, to Ps.105,396 million in the period --

News provided by

Grupo Elektra, S.A.B. de C.V.

Apr 28, 2021, 21:13 ET

MEXICO CITY, April 28, 2021 /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 first quarter 2021 financial results.

First Quarter Results

Consolidated revenue grew 4%, to Ps.31,385 million in the period, compared to Ps.30,282 million in the same quarter of the previous year. Costs and operating expenses were Ps.25,951 million, from Ps.29,445 million in the same period of 2020.

As a result, EBITDA was Ps.5,435 million, compared to Ps.837 million a year ago. Operating income was Ps.3,493 million this quarter, from an operating loss of Ps.1,117 million in the same period of 2020.

The company reported net income of Ps.3,048 million, compared to net income of Ps.142 million a year ago.

	1Q 2020	1Q 2021	Change
			Ps.	%

Consolidated revenue	$30,282	$31,385	$1,103	4%

EBITDA	$837	$5,435	$4,598	----

Operating profit	$(1,117)	$3,493	$4,610	----

Net result	$142	$3,048	$2,906	----

Net result per share	$0.62	$13.39	$12.77	----

Figures in millions of pesos EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization. As of March 31, 2020, Elektra* outstanding shares were 228.7 million and as of March 31, 2021, were 227.7 million.

Revenue

Consolidated revenue increased 4%, as a result of a 28% growth in commercial sales, partially offset by a 9% decrease in financial income.

The growth in sales of the commercial business — to Ps.13,383 million, from Ps.10,435 million a year ago — is largely the result of a solid increase in sales of Italika motorcycles — which boosts business productivity and the mobility of families — telephony — that strengthens the connectivity of an increasing number of users — and appliances, that are commercialized with optimal customer service, in the most competitive market conditions.

Sales from the commercial business were further boosted with the development of new stores under a format that offers an optimal mix of products and services, and allows the customer to maximize the purchase experience. Similarly, Omnichannel operations, with the online store www.elektra.com.mx, which sells thousands of products at unparalleled prices, from any device and at any time, further strengthened business performance.

The reduction in financial income — to Ps.18,002 million, from Ps.19,847 million in the previous year — reflects lower interest earned by Purpose Financial in the period, derived from the effects of the health contingency in the company's target market in the US.

Costs and Expenses

Consolidated costs for the quarter decreased 21%, to Ps.13,601 million, from Ps.17,233 million in the previous year. The lower costs are explained, to a large extent, by a 58% reduction in the financial cost, to Ps.4,359 million, from Ps.10,361 million the previous year, which largely reflects the creation of lower loan loss reserves this period.

As previously announced, a year ago an important creditor of Banco Azteca initiated a bankruptcy process (Chapter 11) in the United States, for which the institution decided, prudently, to reserve 100% of the credit of Ps.7,243 million, in the first quarter of 2020.

Commercial business costs grew 34%, to Ps.9,242 million, from Ps.6,872 million, in line with the increase in commercial revenue.

Selling, administrative and promotional expenses grew 1% to Ps.12,350 million as a result, mainly, of higher operating and advertising expenses, partially offset by lower personnel expenses.

EBITDA and net result

EBITDA was Ps.5,435 million, from Ps.837 million in the previous year. The company reported operating income of Ps.3,493 million, compared to an operating loss of Ps.1,117 million in the same quarter of 2020.

The main variations below EBITDA were the following:

A reduction of Ps.2,213 million in foreign exchange gains, due to the company's net asset monetary position in dollars, together with a lower depreciation of the peso this quarter compared to the previous year.

An increase of Ps.1,055 million in other financial results, which reflects a 4% gain this quarter in the market value of underlying assets of financial instruments held by the company — which does not imply cash flow — in comparison to a 1% gain a year ago.

Consistent with the results for the quarter, there was an increase of Ps.1,077 million in the provision for taxes in the period.

Grupo Elektra reported net income of Ps.3,048 million, from a net income of Ps.142 million a year ago.

Unconsolidated Balance Sheet

In order to allow the visualization of the non-consolidated financial situation, a pro forma exercise of the balance sheet of Grupo Elektra is presented, excluding the net assets of the financial business, whose investment is valued under the equity method, in this case.

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. The pro forma balance sheet also does not include the bank's gross loan portfolio.

This proforma exercise provides greater clarity regarding the businesses that make up the company and allows financial market participants to estimate the value of the company, considering only the relevant debt for such calculations.

Consistent with this, debt with cost was Ps.34,802 million as of March 31, 2021, compared to Ps.22,632 million in the previous year. The balance of cash and cash equivalents was Ps.17,230 million, from Ps.4,789 million from the previous year. As a result, net debt as of March 31, 2021 was Ps.17,572 million, compared to Ps.17,843 million a year ago.

As previously announced, during the quarter, Grupo Elektra's subsidiary, Nueva Elektra del Milenio, S.A. de C.V., as originator, placed through a special purpose vehicle established under Luxembourg law, Senior Notes for US$500 million, for seven years, at a 4.875% rate, in international markets.

The Senior Notes are used to fund reserve accounts for the payment of obligations under the Senior Notes and strengthen the liquidity of the company, which allows to further boost the financial soundness of Grupo Elektra.

As of March 31, 2021, the company's stockholders 'equity was Ps.97,118 million, and the stockholders' equity to total liabilities ratio was 1.2 times.

	As of March 31, 2020	As of March 31, 2021	Change
	As of March 31, 2020	As of March 31, 2021	Ps.	%


Cash and cash equivalents	$ 4,789	$ 17,230	12,441	260%
Marketable financial instruments	38,697	32,562	(6,135)	(16%)
Inventories	13,980	17,060	3,080	22%
Accounts receivables	51,969	49,912	(2,057)	(4%)
Other current assets	3,843	2,678	(1,165)	(30%)
Investments in shares	40,010	36,848	(3,162)	(8%)
Fixed assets	8,133	7,119	(1,014)	(12%)
Right of use assets	8,807	8,550	(257)	(3%)
Other assets	1,377	3,248	1,871	136%

Total assets	$ 171,606	$ 175,208	$ 3,602	2%

Short-term debt	$ 11,516	$ 18,978	7,463	65%
Suppliers	8,565	8,008	(557)	(7%)
Other short-term liabilities	14,964	14,723	(241)	(2%)
Long-term debt	11,116	15,824	4,708	42%
Differed taxes	11,658	9,777	(1,881)	(16%)
Other long-term debt	9,781	10,778	998	10%

Total liabilities	$ 67,600	$ 78,089	$ 10,489	16%

Stakeholder´s equity	$ 104,006	$ 97,118	($ 6,887)	(7%)

Liabilities and equity	$ 171,606	$ 175,208	$ 3,602	2%
Figures in millions of pesos.

Consolidated Balance Sheet

Loan Portfolio and Deposits

Banco Azteca Mexico, Purpose Financial and Banco Azteca Latin America's consolidated gross portfolio as of March 31, 2021, grew 5%, to Ps.122,091 million, from Ps.116,381 million the previous year. The consolidated delinquency rate was 3.4% at the end of this period, compared to 10.9% the previous year.

The gross portfolio of Banco Azteca Mexico increased 11% to Ps.105,396 million, from Ps.95,361 million a year ago.

The Bank's delinquency rate at the end of the quarter was 3.4%, compared to 11.9% the previous year. The reduction is mainly derived from the credit of Ps.7,243 million that entered the past-due portfolio a year ago, and which at the time was fully reserved.

The average term of the credit portfolio for principal credit lines — consumer, personal loans, and Tarjeta Azteca — was 64 weeks at the end of the first quarter.

Grupo Elektra's consolidated deposits were Ps.189,105 million, 17% higher than the Ps.160,959 million a year ago. Deposits of Banco Azteca Mexico were Ps.190,614 million, 23% higher than the Ps.155,443 million a year ago.

The ratio of deposits to gross portfolio of Banco Azteca Mexico of 1.8 times, consolidates the solid growth prospects of the Bank, with optimal funding cost.

The Bank's liquidity coverage ratio — total of eligible liquid assets / total net cash out — was 626%, an outstanding figure in the Mexican banking sector.

The capitalization index of Banco Azteca Mexico was 14.25%.

Infrastructure

Grupo Elektra currently has 6,736 points of contact, compared to 7,238 units the previous year. The decrease results from the closure of 383 Purpose Financial contact points in the United States — in the context of strategies aimed at boosting online credit operations and strengthening the company's operating efficiency — as well as the closure of 318 contact points in Latin America derived, to a large extent, from the sale of Banco Azteca del Peru in the previous quarter.

In Mexico, in the last twelve months, 32 new Elektra stores were opened in strategic locations, with a format that offers an optimal mix of products and services, and allows the customer to maximize the purchase experience.

The company has 4,960 storefronts in Mexico at the end of the quarter, 1,398 in the United States, and 378 in Central and South America. The important distribution network allows the company to maintain close contact with customers and grants a superior market positioning in the countries where it operates.

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 6,600 points of contact in Mexico, the United States, Guatemala, Honduras, Panama and Peru.

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 wellbeing; 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), Totalplay (irtotalplay.mx; www.totalplay.com.mx) and Totalplay Empresarial (totalplayempresarial.com.mx). TV Azteca and Grupo Elektra trade shares on the Mexican Stock Market and in Spains' 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		Rolando Villarreal
Grupo Salinas		Grupo Elektra, S.A.B. de C.V.
Tel. +52 (55) 1720-9167		Tel. +52 (55) 1720-9167
[email protected]		[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


	1Q20		1Q21		Change

Financial income	19,847	66%	18,002	57%	(1,845)	-9%
Commercial income	10,435	34%	13,383	43%	2,948	28%
Income	30,282	100%	31,385	100%	1,103	4%

Financial cost	10,361	34%	4,359	14%	(6,003)	-58%
Commercial cost	6,872	23%	9,242	29%	2,370	34%
Costs	17,233	57%	13,601	43%	(3,632)	-21%

Gross income	13,049	43%	17,784	57%	4,736	36%

Sales, administration and promotion expenses	12,212	40%	12,350	39%	138	1%

EBITDA	837	3%	5,435	17%	4,598	100%

Depreciation and amortization	1,961	6%	2,029	6%	67	3%

Depreciation right of use asset		0%		0%	-	0%

Other expense (income), net	(8)	0%	(87)	0%	(79)	-100%

Operating income	(1,117)	-4%	3,493	11%	4,610	----

Comprehensive financial result:
Interest income	272	1%	220	1%	(52)	-19%
Interest expense	(902)	-3%	(987)	-3%	(85)	-9%
Foreign exchange loss, net	2,458	8%	244	1%	(2,213)	-90%
Monetary loss	-	0%	-	0%	-	0%
Other financial results, net	479	2%	1,534	5%	1,055	100%
	2,307	8%	1,011	3%	(1,295)	-56%

Participation in the net income of
CASA and other associated companies	(621)	-2%	(51)	0%	570	92%

Income before income tax	569	2%	4,454	14%	3,884	100%

Income tax	(238)	-1%	(1,315)	-4%	(1,077)	-100%

Income before discontinued operations	332	1%	3,139	10%	2,807	100%

Result from discontinued operations	(190)	-1%	(90)	0%	99	52%

Impairment of intangible assets		0%		0%	-	----

Consolidated net income	142	0%	3,048	10%	2,906	100%

	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 March 31, 2020*			*At March 31, 2021*

Cash and cash equivalents	4,789	41,994	46,783	17,230	32,129	49,359	2,576	6%

Marketable financial instruments	8,305	70,180	78,485	5,183	91,709	96,891	18,407	23%

Performing loan portfolio	-	67,611	67,611	-	70,809	70,809	3,198	5%
Total past-due loans	-	6,664	6,664	-	3,428	3,428	(3,235)	-49%
Gross loan portfolio	-	74,275	74,275	-	74,237	74,237	(37)	0%

Allowance for credit risks	-	9,316	9,316	-	8,577	8,577	(738)	-8%

Loan portfolio, net	-	64,959	64,959	-	65,660	65,660	701	1%

Inventories	13,980	-	13,980	17,060	0	17,060	3,080	22%

Other current assets	15,619	28,053	43,672	13,342	14,064	27,407	(16,265)	-37%

Total current assets	42,692	205,186	247,878	52,815	203,562	256,377	8,499	3%

Financial instruments	30,392	313	30,706	27,379	96	27,475	(3,231)	-11%

Performing loan portfolio	-	36,134	36,134	-	47,087	47,087	10,953	30%
Total past-due loans	-	5,972	5,972	-	767	767	(5,205)	-87%
Gross loan portfolio	-	42,106	42,106	-	47,854	47,854	5,748	14%

Allowance for credit risks	-	6,697	6,697	-	1,682	1,682	(5,015)	-75%

Loan portfolio	-	35,409	35,409	-	46,172	46,172	10,763	30%

Other non-current assets	25,781	189	25,970	26,360	358	26,719	748	3%
Investment in shares	1,429	-	1,429	1,629	-	1,629	200	14%
Property, furniture, equipment and
investment in stores, net	8,133	7,817	15,951	7,119	7,768	14,887	(1,064)	-7%
Intangible assets	658	8,157	8,815	519	7,189	7,708	(1,107)	-13%
Right of use asset	8,807	2,262	11,069	8,349	2,470	10,820	(249)	-2%
Other assets	719	683	1,402	2,729	5,857	8,586	7,184	----
TOTAL ASSETS	118,611	260,017	378,628	126,899	273,472	400,372	21,744	6%


Demand and term deposits	-	160,959	160,959	-	189,105	189,105	28,146	17%
Creditors from repurchase agreements	-	16,002	16,002	-	18,409	18,409	2,407	15%
Short-term debt	11,303	943	12,246	18,744	103	18,847	6,602	54%
Leasing	1,727	1,099	2,826	1,331	1,119	2,450	(375)	-13%
Short-term liabilities with cost	13,030	179,002	192,032	20,076	208,736	228,812	36,780	19%

Suppliers and other short-term liabilities	19,090	26,172	45,263	21,154	13,766	34,920	(10,342)	-23%
Short-term liabilities without cost	19,090	26,172	45,263	21,154	13,766	34,920	(10,342)	-23%

Total short-term liabilities	32,120	205,174	237,294	41,229	222,503	263,732	26,438	11%

Long-term debt	11,062	1,951	13,013	15,804	15	15,820	2,807	22%
Leasing	7,653	1,202	8,855	7,817	1,332	9,149	294	3%
Long-term liabilities with cost	18,715	3,153	21,867	23,621	1,347	24,968	3,101	14%

Long-term liabilities without cost	13,786	1,674	15,460	12,739	1,814	14,553	(908)	-6%

Total long-term liabilities	32,501	4,827	37,328	36,360	3,161	39,521	2,193	6%

TOTAL LIABILITIES	64,621	210,001	274,622	77,589	225,664	303,253	28,631	10%

TOTAL STOCKHOLDERS' EQUITY	53,991	50,015	104,006	49,310	47,808	97,118	(6,887)	-7%


LIABILITIES + EQUITY	118,611	260,017	378,628	126,899	273,472	400,372	21,744	6%

	INFRASTRUCTURE

	1Q20		1Q21		Change

Points of sale in Mexico
Elektra	1,135	16%	1,142	17%	7	1%
Salinas y Rocha	38	1%	36	1%	(2)	-5%
Banco Azteca	1,834	25%	1,848	27%	14	1%
Freestanding branches	1,754	24%	1,934	29%	180	10%
Total	4,761	66%	4,960	74%	199	4%

Points of sale in Central and South America
Elektra	198	3%	107	2%	(91)	-46%
Banco Azteca	402	6%	205	3%	(197)	-49%
Freestanding branches	96	1%	66	1%	(30)	-31%
Total	696	10%	378	6%	(318)	-46%

Points of sale in North America
Purpose Financial	1,781	25%	1,398	21%	(383)	-22%
Total	1,781	25%	1,398	21%	(383)	-22%

TOTAL	7,238	100%	6,736	100%	(502)	-7%




Floor space (m²)	1,771	100%	1,544	100%	(227)	-13%



Employees
Mexico	71,560	83%	61,697	88%	(9,863)	-14%
Central and South America	9,646	11%	5,090	7%	(4,556)	-47%
North America	4,812	6%	3,186	5%	(1,626)	-34%
Total employees	86,018	100%	69,973	100%	(16,045)	-19%