Monterrey, Mexico. July 26, 2012 Grupo Famsa, S.A.B. de C.V. (BMV: GFAMSA)

Transcription

1 Second Quarter 2012 BMV: GFAMSA Monterrey, Mexico. July 26, 2012 Grupo Famsa, S.A.B. de C.V. (BMV: GFAMSA) Report from the Chief Executive Officer on Grupo Famsa, S.A.B. de C.V. s second quarter 2012 (2Q12) results with figures as of June 30, The accompanying preliminary non-audited financial statements have been prepared in accordance with IFRS and interpretations in force as of June 30, Summary of Consolidated Financial Results (Millions of Mexican pesos) Second Quarter January - June % Var. (1) % Var. (1) Net Sales 3,467 3, % 6,490 6, % Cost of Sales -1,709-1, % -3,104-3, % Gross Income 1,757 1, % 3,386 3, % Operating Expenses -1,286-1, % -2,494-2, % Operating Income % % EBITDA % 1, % Net Income % % Gross Margin 50.7% 48.3% 52.2% 49.1% EBITDA Margin 15.7% 11.8% 16.3% 13.9% Net Margin 6.2% 1.1% 6.7% 1.9% (1) Calculated from the consolidated financial statements Highlights as of June 30, Q12 consolidated operating cash flow (EBITDA) grew 39.1% year-over-year 4 Sales growth and gross margin expansion, combined with a limited growth in operating expenses, drove profitability MX 4 Famsa Mexico s SSS increased 7.4% in 2Q12 reflecting stronger demand for durable goods 4 Some of the categories that posted the greatest sales increases were Furniture (+20%) and Computers (+13%) 4 BAF s capitalization index increased to 14.1% 4 Bank deposits continued to grow consistently and reached Ps$11,398 million (+18.8% vs. 2Q11) USA 4 The EBITDA margin of the Texas region increased from 5.8% in 2Q11 to 6.8% in 2Q12; the sales mix and gross margin improved while expenses fell 4 Progress was made with the plan to exit the West during 2012; the A/R balance fell to US$63 million and expenses decreased by more than 33% Investor Relations: 1 of 14

2 LETTER FROM THE CEO Humberto Garza Valdéz, Grupo Famsa s Chief Executive Officer, explained: The increase in sales, expansion of gross margin and strict control of operating expenses, combined with a progressive recovery of Famsa USA s operations drove the 39.1% quarterly growth in consolidated operating cash flow (EBITDA). Famsa Mexico s same store sales grew 7.4% during 2Q12, reflecting a generalized improvement in demand for core categories. Banco Ahorro Famsa s capitalization index (ICAP) also improved, while deposits continued to grow steadily. In the United States, the implementation of the plan for an orderly exit from the West (CA, AZ & NV) and for improving profitability in Texas continued during the quarter. The divestment process has been focused on two fronts: i) maximizing the collection of accounts receivable and ii) minimizing the effect from discontinued operations. Meanwhile, in Texas, certain initiatives were implemented to enhance sales floor productivity with a leaner operating expense structure. In view of the positive results for the quarter, we maintain our 2012 Guidance unchanged, including the plan to open at least 12 new stores in Mexico during the second half of the year. Famsa Mexico The quarterly growth in Famsa Mexico s sales volume was 6.9%. We underpinned efforts directed at stimulating demand in diverse categories by encouraging credit sales and launching attractive promotions. Among our durable goods categories, Furniture and Computers posted some of the strongest results, where the introduction of new models and the redesign of display areas contributed to a 20% and 13% rise in sales, respectively. Furthermore, it is important to note that Personal Loan origination maintained steady growth and Motorcycles reached a new quarterly record in unit sales. Banco Ahorro Famsa (BAF) Banco Ahorro Famsa s strength continues to be reflected in its capitalization index, which increased to 14.1% (1). Deposits also continued to grow consistently as a result of the bank s stability, increasing 18.8% compared to the same period of Banco Ahorro Famsa has been able to grow time deposits in order to extend the duration of its deposit base. At the close of the second quarter of 2012, 91% of BAF s bank deposits correspond to savings instruments with an average term of 143 (1) days. Famsa USA The orderly exit from the West of the United States is progressing in line with expectations. The balance of accounts receivable has fallen US$32 million, from US$95 million in December 2011 to US$63 million in June Meanwhile, operating expenses, excluding depreciation, for the period of January to June declined 33.4% year-over-year, from US$26 million in 2011 to US$17 million in During the second quarter of the year, the first store closing was completed in California and progress was made in preparing the closure of all stores during the second half of the year. At the same time, the profitability of the Texas region grew, despite continuing pressure on sales growth. Changes in the sales mix that benefit the gross margin and a reduction in expenses resulted in an EBITDA margin expansion from 5.8% in 2Q11 to 6.8% in 2Q12. (1) Figure estimated by Grupo Famsa Investor Relations: 2 of 14

3 RETAIL STORES AND BANKING BRANCH NETWORK Retail Stores and Banking Branch Network 2Q12 2Q11 % Var. Stores % Famsa Mexico % Famsa USA Texas % Famsa USA West % Banking Branches (1) % Retail Area (Square meters) 2Q12 2Q11 % Var. Stores 536, , % Famsa Mexico 422, , % Famsa USA Texas 64,434 64, % Famsa USA West 49,912 52, % Openings and Closures of Retail Stores and Banking Branches (Year to Date) 2Q12 Openings Closures 4Q11 Stores Famsa Mexico Famsa USA Texas Famsa USA West Banking Branches (1) (1) Most banking branches are located within Famsa Mexico stores Investor Relations: 3 of 14

4 ANALYSIS OF THE FINANCIAL RESULTS The following is intended to facilitate the interpretation of Grupo Famsa s financial information as of June 30, 2012: Effect of Adopting IFRS (Millions of Mexican pesos) As of January 1, 2012, Grupo Famsa s financial statements are prepared in accordance with IFRS. The non-audited preliminary effect of adopting IFRS on some of the main line items is shown below: Income Statement Accounts: January June 2012 IFRS MFRS % Var. (1) Net Sales 6,490 6, % Cost of Sales -3,104-3, % Gross Income 3,386 3, % Operating Expenses -2,494-2, % Operating Income % EBITDA 1,059 1, % Loss from discontinued operations % Net Income % Balance Sheet Accounts: Trade Accounts Receivable 17,161 18, % Deferred Income Tax 1,554 1, % Deferred Employees Profit Sharing % Stockholders Equity 8,567 9, % Discontinued Operations (Millions of Mexican pesos) The Ps$183 million Loss from Discontinued Operations as of June 30, 2012 corresponds to Famsa USA s operations in the states of California, Arizona and Nevada. In accordance with IFRS, the effect of Discontinued Operations has been separated from Continuous Operations and is presented as an extraordinary item before Net Income. January - June % Var. (1) Net Sales % Cost of Sales % Gross Income % Operating Expenses % Operating Income % EBITDA % Loss from discontinued operations % (1) Calculated from the consolidated financial statements Investor Relations: 4 of 14

5 Net Sales (Millions of Mexican pesos) Second Quarter January - June % Var. (3) % Var. (3) Grupo Famsa (1) 3,467 3, % 6,490 6, % Famsa Mexico (2) 3,049 2, % 5,660 5, % Famsa USA % % Other % % Intercompany % % Same Store Sales Second Quarter January - June Grupo Famsa 3.9% 2.4% -1.3% 7.3% Famsa Mexico 7.4% 4.5% 1.5% 9.2% Famsa USA (4) -13.7% -11.7% -13.9% -3.2% (1) Includes sales of non-retail businesses (2) Includes Banco Ahorro Famsa (3) Calculated from the consolidated financial statements (4) Calculated in US dollars, excluding foreign exchange effects Net Sales Consolidated Net Sales for the second quarter grew 5.3% compared to the second quarter of 2011, to Ps$3,467 million. Famsa Mexico posted a quarterly growth in Sales of 6.9%, reflecting the effectiveness of initiatives implemented to improve the productivity of its store network. Furthermore, the Texas region in the United States grew sales volume by 0.3% during the second quarter of the year. However, dollar-denominated quarterly sales in Texas fell 14.1%. Meanwhile, accumulated consolidated Net Sales as of June 30, 2012 were Ps$6,490 million, 0.1% below those of the previous year. In line with the 2012 Guidance range (SSS growth: 4% to 8%), Famsa Mexico s Same Store Sales rose 7.4% year-over-year as of the close of the second quarter. The generalized sales growth in core categories drove this positive result. However, Same Store Sales in Texas fell 13.7% in 2Q12 due to the continued pressure on consumption in the United States. Cost of Sales and Gross Income During the second quarter of 2012, the consolidated Cost of Sales grew 0.4% yearover-year, to Ps$1,709 million. Consolidated Gross Income for the quarter rose 10.5%, as a result of the expansion of the consolidated Gross Margin from 48.3% in 2Q11 to 50.7% in 2Q12. This result was largely driven by the increased share of Personal Loans and Furniture in the sales mix of both Famsa Mexico and Famsa USA. The accumulated Cost of Sales as of June 30, 2012 was Ps$3,104 million, 6.1% below that of Accumulated consolidated Gross Income for the first six months of 2012 reached Ps$3,386 million, 6.3% above that of the previous year, and consolidated Gross Margin for the first semester 2012 expanded three percentage points over that of the first six months of Investor Relations: 5 of 14

6 Operating Income before Depreciation and Amortization (EBITDA) (Millions of Mexican pesos) Second Quarter January - June % Var. (3) % Var. (3) Grupo Famsa (1) % 1, % Famsa Mexico (2) % % Famsa USA % % Other % % Intercompany % % EBITDA Margin (% EBITDA / Sales) Second Quarter January - June Grupo Famsa (1) 15.7% 11.8% 16.3% 13.9% Famsa Mexico (2) 16.8% 12.2% 17.7% 14.9% Famsa USA 6.8% 5.8% 7.0% 5.1% (1) Includes EBITDA from non-retail businesses (2) Includes Banco Ahorro Famsa (3) Calculated from the consolidated financial statements EBITDA and Operating Expenses Consolidated Operating Cash Flow (EBITDA) grew 39.1% to Ps$543 million during the second quarter The increase in Famsa Mexico s sales volume, the expansion of the Gross Margin, both in Famsa Mexico and Famsa USA, and limited operating expense growth, boosted the consolidated EBITDA Margin from 11.8% in 2Q11 to 15.7% in 2Q12. Accumulated consolidated Operating Cash Flow (EBITDA) reached Ps$1,059 million as of June 30, 2012, 17.6% above that of the first six months of 2011, reflecting a three percentage point expansion in consolidated Gross Margin and a strict control of Operating Expenses. The accumulated consolidated EBITDA Margin as of June 30, 2012 was 16.3%, compared to 13.9% for the same period of Accumulated consolidated Operating Expenses for the first six months of 2012 totaled Ps$2,494 million, 1.8% above those of the previous year. During 2Q12, consolidated Operating Expenses grew 0.5% year-over-year to Ps$1,286 million. Investor Relations: 6 of 14

7 Comprehensive Financing Expense (Millions of Mexican pesos) (1) Calculated from the consolidated financial statements Second Quarter January - June % Var. (1) % Var. (1) Comp. Financing Expense, Net % % Interest Expense % % Interest Income % % Exchange (Loss) Gain, Net % % The accumulated Comprehensive Financing Expense as of June 30, 2012 increased 13.5% to Ps$596 million. Interest Expense for the first six months of the year grew 10.5% compared to the first half of the previous year, driven by the dollar-denominated interest corresponding to dollar-denominated debt and the larger balance of consolidated financing. However, compared to the first quarter of 2012, Interest Expense grew approximately Ps$15 million in 2Q12, representing an increase of 4.9%. The Foreign Exchange Gain for the first six months of 2012 fell 24.6% to Ps$34 million. Net Income Accumulated Net Income as of June 30, 2012 was Ps$434 million, 255.4% above that for the first six months of the previous year. It is important to note that Income before Income Taxes grew 105.8% to Ps$383 million. Lastly, Income Taxes posted for the first six months of 2012 were favorable compared to the first half of Investor Relations: 7 of 14

8 Main Balance Sheet Accounts (Millions of Mexican pesos) June 30, % Var. (1) Trade Accounts Receivable 17,161 14, % Consumer Loans Mexico 13,539 12, % Commercial Loans Mexico (BAF) 2,185 1, % Consumer Loans USA 1,437 1, % Inventory 1,923 2, % Net Debt 3,941 3, % Bank Deposits 11,398 9, % Stockholders Equity 8,567 8, % (1) Calculated from the consolidated financial statements Trade Accounts Receivable The balance of Accounts Receivable as of June 30, 2012 was Ps$17,161 million, 17.9% above that of the previous year. The most important variation was in the balance of Commercial Loans, which grew by Ps$1,029 million as a result of the initiatives implemented by Banco Ahorro Famsa to support Micro, Small and Medium-sized Enterprises. The balance of the Mexican Consumer Loan portfolio rose 11.6%, driven by the accumulated growth in Famsa Mexico s credit sales and the strength in personal loan origination. Lastly, the balance of Famsa USA s Accounts Receivable increased 13.0% as of the close of June 2012, which represents a 1.2% decline in U.S. dollar terms. Inventory The balance of Inventory as of the close of second quarter 2012 was Ps$1,923 million, 6.1% below that of the previous year. Bank Deposits and Net Debt As of June 30, 2012, Bank Deposits reached Ps$11,398 million, 18.8% above those of the previous year. The balance of Net Debt as of the close of the second quarter of 2012 was Ps$3,941 million, 6.7% above the balance posted as of the close of second quarter It is important to note that the balance of Grupo Famsa s Debt grew approximately Ps$400 million due to the depreciation of the Mexican peso vis-à-vis the U.S. dollar. Stockholders Equity The balance of Stockholders Equity as of June 30, 2012 was Ps$8,567 million, 6.6% above that of the previous year. Investor Relations: 8 of 14

9 CONSOLIDATED FINANCIAL STATEMENTS Grupo Famsa, S.A.B. de C.V. and Subsidiaries Consolidated Balance Sheet as of June 30, 2012, December 31, 2011, and January 01, 2011 Thousands of Mexican Pesos Assets Jun Dec Jan CURRENT ASSETS: Cash and cash equivalents Ps 1,837, % Ps 1,249, % Ps 926, % Consumer loans Mexico 13,538, % 13,086, % 11,440, % Commercial loans Mexico 2,185, % 1,840, % 1,383, % Consumer loans USA 1,436, % 1,572, % 1,375, % Taxes recoverable 1,280, % 1,279, % 1,253, % Other accounts receivable 548, % 551, % 578, % Inventories 1,923, % 2,009, % 2,215, % Discontinued operations 842, % 1,319, % 1,260, % Total current assets 23,593, % 22,910, % 20,435, % PROPERTY, LEASEHOLD IMPROVEMENTS AND FURNITURE AND EQUIPMENT 2,361, % 2,486, % 2,546, % GOODWILL 241, % 241, % 241, % DEFERRED CHARGES 56, % 57, % 68, % OTHER ASSETS 214, % 263, % 247, % DEFERRED INCOME TAX 1,554, % 1,298, % 1,101, % DEFERRED EMPLOYEES' PROFIT SHARING - 0.0% - 0.0% - 0.0% DISCONTINUED OPERATIONS - 0.0% - 0.0% 14, % Total assets Ps 28,021, % Ps 27,256, % Ps 24,656, % Liabilities and Stockholders' Equity CURRENT LIABILITIES WITH FINANCIAL COST: Interest-bearing demand deposits and time-deposits Ps 11,397, % Ps 10,436, % Ps 8,907, % Bank debt 549, % 455, % 522, % Commercial paper 1,536, % 1,557, % 1,671, % 13,483, % 12,449, % 11,101, % CURRENT LIABILITIES WITHOUT FINANCIAL COST: Suppliers 1,585, % 1,896, % 2,063, % Accounts payable and accrued expenses 540, % 776, % 864, % Income tax payable 5, % 12, % 18, % 2,131, % 2,685, % 2,946, % Total current liabilities 15,614, % 15,134, % 14,048, % NON-CURRENT LIABILITIES: Bank debt 11, % 13, % 16, % Commercial paper 3,681, % 3,789, % 2,469, % Estimated liability for labor benefits 147, % 153, % 146, % Total non-current liabilities 3,840, % 3,955, % 2,633, % Total liabilities 19,455, % 19,090, % 16,681, % STOCKHOLDERS' EQUITY: Capital stock 1,637, % 1,637, % 1,637, % Additional paid-in capital 2,778, % 2,778, % 2,778, % Retained earnings 3,388, % 3,308, % 3,308, % Stock Repurchase Reserve 110, % 110, % 110, % Net income 434, % 80, % - 0.0% Cumulative translation adjustment 192, % 228, % 120, % Total controlling interest 8,540, % 8,142, % 7,953, % Non-controlling interest 25, % 23, % 20, % Total stockholders' equity 8,566, % 8,165, % 7,974, % Total liabilities and stockholders' equity Ps 28,021, % Ps 27,256, % Ps 24,656, % Investor Relations: 9 of 14

10 Grupo Famsa, S.A.B. de C.V. and Subsidiaries Consolidated Balance Sheet as of June 30 Thousands of Mexican Pesos Assets CURRENT ASSETS: Cash and cash equivalents Ps 1,837, % Ps 1,451, % Consumer loans Mexico 13,538, % 12,126, % Commercial loans Mexico 2,185, % 1,155, % Consumer loans USA 1,436, % 1,271, % Taxes recoverable 1,280, % 1,267, % Other accounts receivable 548, % 745, % Inventories 1,923, % 2,048, % Discontinued operations 842, % 1,110, % Total current assets 23,593, % 21,177, % PROPERTY, LEASEHOLD IMPROVEMENTS AND FURNITURE AND EQUIPMENT 2,361, % 2,539, % GOODWILL 241, % 241, % DEFERRED CHARGES 56, % 62, % OTHER ASSETS 214, % 207, % DEFERRED INCOME TAX 1,554, % 1,260, % DEFERRED EMPLOYEES' PROFIT SHARING - 0.0% - 0.0% Total assets Ps 28,021, % Ps 25,487, % Liabilities and Stockholders' Equity CURRENT LIABILITIES WITH FINANCIAL COST: Interest-bearing demand deposits and time-deposits Ps 11,397, % Ps 9,595, % Bank debt 549, % 526, % Commercial paper 1,536, % 1,258, % 13,483, % 11,381, % CURRENT LIABILITIES WITHOUT FINANCIAL COST: Suppliers 1,585, % 1,591, % Accounts payable and accrued expenses 540, % 846, % Income tax payable 5, % 139, % 2,131, % 2,577, % Total current liabilities 15,614, % 13,959, % NON-CURRENT LIABILITIES: Bank debt 11, % 14, % Commercial paper 3,681, % 3,344, % Estimated liability for labor benefits 147, % 135, % Total non-current liabilities 3,840, % 3,495, % Total liabilities 19,455, % 17,454, % STOCKHOLDERS' EQUITY: Capital stock 1,637, % 1,637, % Additional paid-in capital 2,778, % 2,778, % Retained earnings 3,388, % 3,308, % Stock Repurchase Reserve 110, % 110, % Net income 434, % 122, % Cumulative translation adjustment 192, % 54, % Total controlling interest 8,540, % 8,010, % Non-controlling interest 25, % 22, % Total stockholders' equity 8,566, % 8,033, % Total liabilities and stockholders' equity Ps 28,021, % Ps 25,487, % Investor Relations: 10 of 14

11 Grupo Famsa, S.A.B. de C.V. and Subsidiaries Consolidated Income Statement from January 1 to June 30 Thousands of Mexican Pesos Net sales Ps 6,490, % Ps 6,494, % Cost of sales (3,104,451) -47.8% (3,307,562) -50.9% Gross income 3,386, % 3,186, % Operating expenses (2,493,972) -38.4% (2,450,851) -37.7% Operating income 892, % 735, % Comprehensive financing expense, net (596,085) -9.2% (525,173) -8.1% 295, % 210, % Other income (expenses), net 86, % (24,613) -0.4% Income before income tax 382, % 185, % Income tax 236, % 26, % Income before discontinued operations 619, % 212, % Loss from discontinued operations (182,883) -2.8% (88,488) -1.4% Net income 436, % 123, % Net income of non-controlling interest (1,858) 0.0% (1,460) 0.0% Net income of controlling interest Ps 434, % Ps 122, % Investor Relations: 11 of 14

12 Grupo Famsa, S.A.B. de C.V. and Subsidiaries Consolidated Income Statement from April 1 to June 30 Thousands of Mexican Pesos 2Q12 2Q11 Net sales Ps 3,466, % Ps 3,292, % Cost of sales (1,709,483) -49.3% (1,703,129) -51.7% Gross income 1,757, % 1,589, % Operating expenses (1,285,840) -37.1% (1,279,797) -38.9% Operating income 471, % 310, % Comprehensive financing expense, net (360,729) -10.4% (272,908) -8.3% 110, % 37, % Other income (expenses), net 79, % (19,566) -0.6% Income before income tax 190, % 17, % Income tax 135, % 56, % Income before discontinued operations 326, % 74, % Loss from discontinued operations (111,341) -3.2% (38,607) -1.2% Net income 214, % 35, % Net income of non-controlling interest (1,067) 0.0% (865) 0.0% Net income of controlling interest Ps 213, % Ps 34, % Investor Relations: 12 of 14

13 Grupo Famsa, S.A.B. de C.V. and Subsidiaries Consolidated Cash Flow Statement from January 1 to June 30 Thousands of Mexican Pesos Operations Income before income tax Ps 382,502 Ps 185,840 Items relating to investing activities: Depreciation and amortization 166, ,805 Allowance for doubtful accounts 474, ,990 Gain on sale of property, plant and equipment (887) (1,772) Estimated liability for labor benefits 11,401 7,765 Interest income (638) (717) Items relating to financing activities: Interest expense 630, ,772 Accounts receivable (499,264) (176,161) Inventories (84,167) (118,489) Other accounts receivable, deferred charges and other assets 13,331 (245,901) Suppliers (305,163) (472,750) Other accounts payable and accrued expenses (478,027) (348,197) Income tax paid (26,428) (11,613) Net cash flow obtained from operating activities 284,918 77,572 Investment Acquisition of property, leasehold improvements, furniture and equipment (42,311) (140,650) Sale of property, leasehold improvements, furniture and equipment 36,095 2,881 Interest collected Net cash flow used in investing activities (5,578) (137,052) Resources to be used (obtained) in financing activities 279,340 (59,480) Financing Interest paid (629,991) (549,463) New short-term debt and bank loans 146,720 2,433,911 Payments of short-term debt and bank loans (52,754) (1,844,620) Demand deposits and time deposits 961, ,452 Net cash flow from financing activities 425, ,280 Increase in net cash and cash equivalents 704, ,800 Adjustments to cash flow as a result of changes in exchange rates (117,138) (143,930) Cash and cash equivalents at beginning of period 1,249, ,946 Cash and cash equivalents at end of period Ps 1,837,782 Ps 1,451,816 Investor Relations: 13 of 14

14 This report contains, or may be deemed to contain, forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The future results of Grupo Famsa, S.A.B. de C.V. and its subsidiaries may differ from the results expressed in, or implied by, the forward-looking statements set out herein, possibly to a material degree. Investor Relations: 14 of 14