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

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Oct 23, 2024

PR Newswire

—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

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 %

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

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