GRUPO ELEKTRA ANNOUNCES REVENUE OF Ps.48,297 MILLION AND EBITDA OF Ps.3,266 MILLION IN THE FOURTH QUARTER OF 2022

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Feb 21, 2023, 20:35 ET

—Continued dynamism of Grupo Elektra's consolidated gross portfolio, increases 19%, to Ps.166,944 million—

—17% increase in consolidated deposits, to Ps.215,747 million generates solid prospects for the financial business—

MEXICO CITY, Feb. 21, 2023 /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 fourth quarter 2022 and full-year 2022 financial results.

Fourth quarter results

Consolidated revenue grew 12% to Ps.48,297 million in the period, compared to Ps.43,062 million in the same quarter of the previous year. Operating costs and expenses were Ps.45,031 million, from Ps.37,123 million in 2021.

As a result, EBITDA was Ps.3,266 million, compared to Ps.5,939 million a year ago. Operating income was Ps.897 million this quarter, from Ps.3,680 million in 2021.

The company reported net income of Ps.1,411 million, compared to a net income of Ps.1,948 million a year ago.

	4Q 2021	4Q 2022	Change
			Ps.	%

Consolidated revenue	$43,062	$48,297	$5,235	12 %

EBITDA	$5,939	$3,266	$(2,673)	-45 %

Operating profit Net result	$3,680 $1,948	$897 $1,411	$(2,783) $(537)	-76% -28%

Net result per share	$8.61	$6.36	$(2.25)	-26 %

Figures in millions of pesos
EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization.
As of December 31, 2021, Elektra* outstanding shares were 226.3 million and as of December 31, 2022, were 221.7 million.

Revenue

Consolidated revenue increased 12% in the period, as a result of a 19% growth in financial income and a 5% increase in commercial sales.

The increase in financial income — to Ps.26,456 million, from Ps.22,272 million the previous year — reflects, to a large extent, a 27% increase in the revenue of Banco Azteca México, within the framework of dynamic growth of the gross credit portfolio in the period, which improves the well-being of millions of families and the growth of businesses.

The increase in sales of the retail business — to Ps.21,841 million, from Ps.20,790 million a year ago — is largely the result of strong growth in white line sales — which boosts the quality of life in households — and income related to electronic money transfers, in the context of important transfer flows from the United States to Mexico, which contribute to the well-being and progress of millions of families.

Costs and expenses

Consolidated costs for the quarter were Ps.26,197 million, compared to Ps.20,970 million for the previous year. The growth is explained by a 51% increase in the financial cost — derived from a greater creation of credit preventive reserves, in the context of solid dynamism of the consolidated gross portfolio, as well as higher interest paid, in line with growing market rates — and a 14% increase in commercial costs, largely as a result of higher costs in the supply chain and campaigns oriented to further boost merchandise sales.

Selling, administrative and promotional expenses totaled Ps.18,834 million, from Ps.16,153 million a year ago, largely as a result of higher operating expenses in the period. The increase is related to the development of supply logistics strategies that will further strengthen the product supply process, to promptly meet the growing demand for world-class merchandise by millions of customers, both on the sales floor and through the company's Omnichannel operations.

Similarly, impacting expenses are system developments to additionally promote high efficiency standards, both in digital banking which currently has more than 19 million users and which is growing dynamically — and in Omnichannel sales, with superior levels of security, comfort, and time savings —, as well as higher personnel and maintenance costs, in the context of a solid expansion of contact points, which allow maximizing the customer's shopping experience.

The company anticipates that the solid strategies to boost operational efficiency, together with strict budgets for expenses that will be implemented as of 2023, in the context of measures to streamline structures and optimize processes, will contribute to strengthen results of subsequent quarters.

EBITDA and net result

EBITDA was Ps.3,266 million, from Ps.5,939 million the previous year. The company reported operating income of Ps.897 million, compared to Ps.3,680 million in the same quarter of 2021.

The most important variation below EBITDA was an increase of Ps.2,418 million in other financial results, which reflects a 7% capital gain this quarter in the market value of the underlying financial instruments held by the company — and does not imply cash flow —compared to a 1% loss a year ago.

Grupo Elektra reported net income of Ps.1,411 million, from a net income of Ps.1,948 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.

Thus, the debt with cost was Ps.40,759 million as of December 31, 2022, compared to Ps.34,467 million of the previous year. The growth of the debt balance is related to the issuance of Certificados Busatiles and bank loans during the period.

The balance of cash and cash equivalents was Ps.9,808 million, from Ps.5,748 million the previous year.

As of December 31, 2022, the company's stockholders' equity was Ps.90,453 million, and the ratio of stockholders' equity to total liabilities was 1.1 times.


	As of December 31 2021	As of December 31 2022	Change
			Ps.	%


Cash and cash equivalents	$5,748	$9,808	4,061	71 %
Marketable financial instruments	38,181	30,244	(7,937)	(21 %)
Inventories	18,369	18,244	(125)	(1 %)
Accounts receivables	57,455	45,387	(12,068)	(21 %)
Other current assets	6,207	6,034	(172)	(3 %)
Investments in shares	39,846	38,475	(1,371)	(3 %)
Fixed assets	7,826	10,189	2,363	30 %
Right of use assets	9,013	12,810	3,797	42 %
Other assets	1,693	3,160	1,466	87 %

Total assets	$184,337	$174,351	($9,987)	(5 %)

Short-term debt	$14,862	$7,736	(7,127)	(48 %)
Suppliers	6,692	6,551	(141)	(2 %)
Other short-term liabilities	19,540	20,537	998	5 %
Long-term debt	19,605	33,023	13,417	68 %
Differed taxes	6,974	975	(6,000)	(86 %)
Other long-term debt	11,209	15,076	3,868	35 %

Total liabilities	$78,883	$83,897	$5,015	6 %

Stakeholder´s equity	$105,454	$90,453	($15,001)	(14 %)

Liabilities and equity	$184,337	$174,351	($9,987)	(5 %)
Figures in millions of pesos

Consolidated Balance Sheet

Loan Portfolio and Deposits

As previously detailed, starting on January 1, 2022, Banco Azteca México adopted IFRS-9 ('Financial Instruments') and IFRS-16 ('Leases'), contained in the International Financial Reporting Standards (IFRS) to report their financial statements. These changes implied: growth in its portfolio, in the reserve for credit risks and in the accumulated results (IFRS-9) and a growth in the assets for rights of use and in the liabilities for leases (IFRS-16), when compared to figures for 2021.

The consolidated gross portfolio of Banco Azteca México, Purpose Financial and Banco Azteca Latin America as of December 31, 2022, grew 19%, to Ps.166,944 million, from Ps.140,705 million the previous year.

Banco Azteca México's gross portfolio balance increased 31% to Ps.161,307 million, from Ps.123,197 million a year ago. The Bank's delinquency rate at the end of the quarter was 4.0%, compared to 4.7% a year earlier.

Grupo Elektra's consolidated deposits grew 17%, to Ps.215,747 million, from Ps.184,898 million a year ago. Banco Azteca México's traditional deposits were Ps.215,137 million, 17% above the Ps.183,726 million of the previous year.

The ratio of traditional deposits to gross portfolio of Banco Azteca México was 1.3 times, which allows solid growth of the Bank, with optimal funding cost.

The capitalization index of Banco Azteca México was 14.32%.

Infrastructure

Grupo Elektra currently has 6,346 contact points, compared to 6,279 units the previous year. The increase results from the opening of 310 contact points in Mexico and 40 in Central America, partially compensated by the closing of 283 Purpose Financial units in the United States, in the context of strategies oriented to promoting online credit operations and strengthening this company's operating efficiency.

The company has 4,990 storefronts in Mexico at the end of the quarter, 950 in the United States, and 406 in Central 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.

Twelve months results

Consolidated revenue for 2022 grew 13%, to Ps.164,691 million, from Ps.146,019 million registered in 2021, driven by a 17% growth in financial income and a 7% increase in commercial sales.

EBITDA was Ps.18,139 million, compared to Ps.22,015 million of the previous year. The company reported operating income of Ps.7,976 million, from Ps.13,668 million a year ago.

A net loss of Ps.7,353 million was recorded for the year, compared to a net income of Ps.12,944 million a year ago. The change reflects, to a large extent, a decrease in the market value of the underlying financial instruments held by the company — and which does not imply cash flow — compared to a gain of the previous year.

	2021	2022	Change
			Ps.	%

Consolidated revenue	$146,019	$164,691	$18,672	13 %

EBITDA	$22,015	$18,139	$(3,876)	-18 %

Operating profit Net result	$13,668 $12,944	$7,976 $(7,353)	$(5,692) $(20,296)	-42% ----

Net result per share	$57.20	$(33.17)	$(90.37)	----

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 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 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

	4Q21		4Q22		Change

Financial income	22,272	52 %	26,456	55 %	4,184	19 %
Commercial income	20,790	48 %	21,841	45 %	1,051	5 %
Income	43,062	100 %	48,297	100 %	5,235	12 %

Financial cost	5,979	14 %	9,045	19 %	3,067	51 %
Commercial cost	14,991	35 %	17,151	36 %	2,160	14 %
Costs	20,970	49 %	26,197	54 %	5,227	25 %

Gross income	22,092	51 %	22,100	46 %	8	0 %

Sales, administration and promotion expenses	16,153	38 %	18,834	39 %	2,681	17 %

EBITDA	5,939	14 %	3,266	7 %	(2,673)	-45 %

Depreciation and amortization	2,252	5 %	2,501	5 %	250	11 %

Other expense (income), net	8	0 %	(132)	0 %	(139)	----

Operating income	3,680	9 %	897	2 %	(2,783)	-76 %

Comprehensive financial result:
Interest income	245	1 %	332	1 %	87	36 %
Interest expense	(943)	-2 %	(1,351)	-3 %	(408)	-43 %
Foreign exchange (loss) gain, net	(17)	0 %	164	0 %	181	----
Other financial results, net	(435)	-1 %	1,983	4 %	2,418	----
	(1,150)	-3 %	1,128	2 %	2,279	----

Participation in the net income of
CASA and other associated companies	259	1 %	123	0 %	(136)	-52 %

Income before income tax	2,788	6 %	2,148	4 %	(640)	-23 %

Income tax	(839)	-2 %	(737)	-2 %	102	12 %

Income before discontinued operations	1,949	5 %	1,411	3 %	(538)	-28 %

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

Consolidated net income	1,948	5 %	1,411	3 %	(537)	-28 %

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

	12M21		12M22		Change

Financial income	80,489	55 %	94,291	57 %	13,802	17 %
Commercial income	65,530	45 %	70,400	43 %	4,870	7 %
Income	146,019	100 %	164,691	100 %	18,672	13 %

Financial cost	22,303	15 %	27,260	17 %	4,957	22 %
Commercial cost	46,875	32 %	52,181	32 %	5,306	11 %
Costs	69,179	47 %	79,441	48 %	10,263	15 %

Gross income	76,840	53 %	85,249	52 %	8,409	11 %

Sales, administration and promotion expenses	54,825	38 %	67,110	41 %	12,285	22 %

EBITDA	22,015	15 %	18,139	11 %	(3,876)	-18 %

Depreciation and amortization	8,446	6 %	9,258	6 %	813	10 %

Other (income) expense, net	(99)	0 %	905	1 %	1,004	----

Operating income	13,668	9 %	7,976	5 %	(5,692)	-42 %

Comprehensive financial result:
Interest income	865	1 %	996	1 %	131	15 %
Interest expense	(3,725)	-3 %	(4,538)	-3 %	(813)	-22 %
Foreign exchange gain, net	292	0 %	142	0 %	(150)	-51 %
Other financial results, net	7,183	5 %	(15,132)	-9 %	(22,315)	----
	4,615	3 %	(18,532)	-11 %	(23,147)	----

Participation in the net income of
CASA and other associated companies	304	0 %	316	0 %	12	4 %

Income (loss) before income tax	18,588	13 %	(10,239)	-6 %	(28,827)	----

Income tax	(5,513)	-4 %	2,887	2 %	8,400	----

Income (loss) before discontinued operations	13,075	9 %	(7,352)	-4 %	(20,427)	----

Result from discontinued operations	(132)	0 %	(1)	0 %	131	100 %

Consolidated net income (loss)	12,944	9 %	(7,353)	-4 %	(20,296)	----

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 December 31, 2021*			*At December 31, 2022*

Cash and cash equivalents	5,748	32,815	38,563	9,808	30,281	40,089	1,526	4 %

Marketable financial instruments	10,793	95,264	106,057	6,176	85,728	91,904	(14,153)	-13 %

Performing loan portfolio	-	75,647	75,647	-	88,492	88,492	12,844	17 %
Total past-due loans	-	5,663	5,663	-	5,730	5,730	66	1 %
Gross loan portfolio	-	81,310	81,310	-	94,221	94,221	12,911	16 %

Allowance for credit risks	-	11,344	11,344	-	13,150	13,150	1,807	16 %

Loan portfolio, net	-	69,967	69,967	-	81,071	81,071	11,104	16 %

Inventories	18,369	-	18,369	18,244	-	18,244	(125)	-1 %

Other current assets	18,294	9,644	27,939	19,906	12,825	32,731	4,792	17 %

Total current assets	53,204	207,691	260,895	54,134	209,906	264,039	3,145	1 %

Financial instruments	27,388	44	27,432	24,068	3	24,072	(3,360)	-12 %

Performing loan portfolio	-	57,772	57,772	-	70,815	70,815	13,043	23 %
Total past-due loans	-	1,623	1,623	-	1,908	1,908	284	18 %
Gross loan portfolio	-	59,395	59,395	-	72,723	72,723	13,327	22 %

Allowance for credit risks	-	3,778	3,778	-	4,908	4,908	1,130	30 %

Loan portfolio	-	55,618	55,618	-	67,815	67,815	12,197	22 %

Other non-current assets	32,069	327	32,396	18,348	438	18,785	(13,611)	-42 %
Investment in shares	2,257	-	2,257	2,208	-	2,208	(49)	-2 %
Property, furniture, equipment and
investment in stores, net	7,826	7,352	15,178	10,189	11,418	21,607	6,429	42 %
Intangible assets	542	9,100	9,642	777	8,536	9,313	(329)	-3 %
Right of use asset	8,822	2,398	11,220	12,633	2,327	14,960	3,740	33 %
Other assets	1,151	7,905	9,057	2,382	525	2,907	(6,150)	-68 %
TOTAL ASSETS	133,259	290,435	423,694	124,739	300,967	425,706	2,012	0 %


Demand and term deposits	-	184,898	184,898	-	215,747	215,747	30,849	17 %
Creditors from repurchase agreements	-	36,271	36,271	-	18,031	18,031	(18,240)	-50 %
Short-term debt	14,362	102	14,464	7,631	142	7,773	(6,691)	-46 %
Leasing	1,437	1,037	2,474	1,945	965	2,911	437	18 %
Short-term liabilities with cost	15,799	222,308	238,107	9,576	234,885	244,461	6,354	3 %

Suppliers and other short-term liabilities	24,564	16,149	40,712	24,917	16,785	41,702	990	2 %
Short-term liabilities without cost	24,564	16,149	40,712	24,917	16,785	41,702	990	2 %

Total short-term liabilities	40,363	238,457	278,819	34,493	251,670	286,163	7,344	3 %

Long-term debt	18,105	24	18,129	30,353	0	30,353	12,224	67 %
Leasing	8,314	1,496	9,810	11,767	1,502	13,269	3,460	35 %
Long-term liabilities with cost	26,419	1,519	27,938	42,120	1,502	43,622	15,684	56 %

Long-term liabilities without cost	9,869	1,612	11,482	4,283	1,184	5,467	(6,014)	-52 %

Total long-term liabilities	36,288	3,132	39,420	46,403	2,686	49,089	9,669	25 %

TOTAL LIABILITIES	76,651	241,588	318,239	80,897	254,356	335,253	17,013	5 %

TOTAL STOCKHOLDERS' EQUITY	56,608	48,847	105,454	43,842	46,611	90,453	(15,001)	-14 %


LIABILITIES + EQUITY	133,259	290,435	423,694	124,739	300,967	425,706	2,012	0 %

	INFRASTRUCTURE

	4Q21		4Q22		Change

Points of sale in Mexico
Elektra	1,159	18 %	1,220	19 %	61	5 %
Salinas y Rocha	36	1 %	33	1 %	(3)	-8 %
Banco Azteca	1,871	30 %	1,932	30 %	61	3 %
Freestanding branches	1,614	26 %	1,805	28 %	191	12 %
Total	4,680	75 %	4,990	79 %	310	7 %

Points of sale in Central America
Elektra	106	2 %	117	2 %	11	10 %
Banco Azteca	205	3 %	224	4 %	19	9 %
Freestanding branches	55	1 %	65	1 %	10	18 %
Total	366	6 %	406	6 %	40	11 %

Points of sale in North America
Purpose Financial	1,233	20 %	950	15 %	(283)	-23 %
Total	1,233	20 %	950	15 %	(283)	-23 %

TOTAL	6,279	100 %	6,346	100 %	67	1 %




Floor space (m²)	1,482	100 %	1,523	100 %	40	3 %



Employees
Mexico	59,556	88 %	64,301	88 %	4,745	8 %
Central and South America	5,339	8 %	5,949	8 %	610	11 %
North America	2,953	4 %	2,718	4 %	(235)	-8 %
Total employees	67,848	100 %	72,968	100 %	5,120	8 %