Monterrey, Mexico. October 25, 2012 Grupo Famsa, S.A.B. de C.V. (BMV: GFAMSA)

Transcription

1 Third Quarter 2012 BMV: GFAMSA Monterrey, Mexico. October 25, 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 third quarter 2012 (3Q12) results with figures as of September 30, The accompanying preliminary nonaudited financial statements have been prepared in accordance with IFRS and interpretations in force as of September 30, Summary of Consolidated Financial Results (Millions of Mexican pesos) Third Quarter January - September % Var. (1) % Var. (1) Net Sales 3,409 3, % 9,899 9, % Cost of Sales -1,633-1, % -4,737-4, % Gross Income 1,776 1, % 5,162 4, % Operating Expenses -1,279-1, % -3,773-3, % Operating Income % 1,389 1, % EBITDA % 1,631 1, % Net Income (Loss) % % Gross Margin 52.1% 49.8% 52.1% 49.3% EBITDA Margin 16.8% 13.9% 16.5% 13.9% Net Margin 2.6% -2.2% 5.3% 0.5% (1) Calculated from the consolidated financial statements Highlights as of September 30, Q12 Consolidated Operating Cash Flow (EBITDA) grew 24.6% year-overyear, to Ps$572 million 4 The EBITDA expansion was driven by the profitability of operations in Mexico and a stringent control of operating expenses MX 4 Famsa Mexico s EBITDA totaled Ps$538 million for the third quarter, resulting in an EBITDA Margin of 18.1% 4 Seasonal Products, Furniture and Motorcycles were the categories posting the most robust sales during the quarter 4 Banco Ahorro Famsa s capitalization index remains within a stable range (>13%) 4 The sustained growth in BAF s deposit base to Ps$11,521 million underscores the stability of the bank s operations USA 4 Total Sales in the Texas region increased 5.9% in dollar terms in September, growing for the first time this year 4 In the West, 16 stores were closed in September and diverse initiatives were implemented to facilitate the collection of accounts receivable Investor Relations: 1 of 14

2 LETTER FROM THE CEO Humberto Garza Valdéz, Grupo Famsa s Chief Executive Officer, stated: Grupo Famsa s quarterly consolidated Operating Cash Flow (EBITDA) grew 24.6% year-over-year, largely reflecting the enhanced profitability of our operations in Mexico and the rigorous control of operating expense. Banco Ahorro Famsa continued to gain strength, posting solid results for its main indicators: capitalization index, bank deposits and cost of funding. The rate of recovery of Famsa USA s operations in the Texas region accelerated during the third quarter of 2012, with this segment posting sales growth for the first time in 2012 in the month of September. In parallel, in the West of the United States, progress was made with the process of closing most of the Company s stores in California and Arizona, and diverse initiatives were implemented to facilitate the collection of accounts receivable. It is important to note that during the fourth quarter of the year, the growth of our operations in Mexico will be enhanced with the opening of 16 new locations, including some independent bank branches in places where Grupo Famsa does not currently offer its services. Famsa Mexico Famsa Mexico s Operating Cash Flow increased to Ps$538 million for the third quarter of 2012, resulting in an EBITDA Margin of 18.1%. The profitability of the Company s network of Mexican stores grew as a result of simultaneous initiatives implemented to grow productivity by diversifying the product offer and rolling out promotions to drive credit sales. During 3Q12, Seasonal Products, Furniture, and Motorcycles were the categories that posted the most robust sales. In addition, the sales volume of Household Appliances also grew positively after a period of prolonged contraction. Banco Ahorro Famsa (BAF) Banco Ahorro Famsa s capitalization index, which continues in a stable range (>13%) (1), reflects its ongoing strength. Additionally, the sustained growth of its deposit base shows the stability of BAF s operations. As of September 30, 2012, bank deposits totaled Ps$11,521 million with an average interest rate of 5.2% during the quarter. Banco Ahorro Famsa also continues with the development of its financing for Micro, Small and Medium-sized Enterprises. As a result, the balance of its Commercial Portfolio as of the close of third quarter 2012 was 56.1% above that of September 30, Famsa USA During 3Q12, the recovery of Famsa USA s sales in the Texas region increased and growth is expected for the fourth quarter of the year. In the month of September 2012, Total Sales for the region rose 5.9% in dollar terms. Initiatives focused on enhancing selection, displays and promotions served to reactivate the demand for core categories and reinforce our value proposal for customers in the region. Meanwhile, in the West of the United States, during the month of September 16 stores were shut down and the closing of two distribution centers that served the region was completed. The remaining 7 stores will close down operations by year end. Furthermore, with the objective of maximizing the recovery of accounts receivable, a number of kiosks were installed near certain closed stores, therefore, providing accessible payment centers for our customers. Additionally, alliances were made with MoneyGram and CheckFreePay to receive payments, and a new option of accepting payment over-the-phone either with debit or credit card was established. (1) Figure estimated by Grupo Famsa Investor Relations: 2 of 14

3 RETAIL STORES AND BANKING BRANCH NETWORK Retail Stores and Banking Branch Network 3Q12 3Q11 % Var. Stores % Famsa Mexico % Famsa USA Texas % Famsa USA West % Banking Branches (1) % Retail Area (Square meters) 3Q12 3Q11 % Var. Stores 502, , % Famsa Mexico 420, , % Famsa USA Texas 64,434 64, % Famsa USA West 17,848 52, % Openings and Closures of Retail Stores and Banking Branches (Year to Date) 3Q12 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 analysis is intended to facilitate the interpretation of Grupo Famsa s financial information as of September 30, 2012: Effect of Adopting IFRS (Millions of Mexican pesos) As of January 1, 2012, Grupo Famsa s financial statements have been 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 September 2012 IFRS MFRS % Var. (1) Net Sales 9,899 10, % Cost of Sales -4,737-4, % Gross Income 5,162 5, % Operating Expenses -3,773-3, % Operating Income 1,389 1, % EBITDA 1,631 1, % Loss from Discontinued Operations % Net Income % Balance Sheet Accounts: Trade Accounts Receivable 18,034 18, % Deferred Income Tax 1,614 1, % Deferred Employees Profit Sharing % Stockholders Equity 8,721 9, % Discontinued Operations (Millions of Mexican pesos) The Ps$312 million accumulated Loss from Discontinued Operations as of September 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 - September % Var. (1) Net Sales % Cost of Sales % Gross Income % Operating Expenses % Operating Loss % EBITDA % Loss from Discontinued Operations % (1) Calculated from the consolidated financial statements Investor Relations: 4 of 14

5 Net Sales (Millions of Mexican pesos) Third Quarter January - September % Var. (3) % Var. (3) Grupo Famsa (1) 3,409 3, % 9,899 9, % Famsa Mexico (2) 2,972 2, % 8,632 8, % Famsa USA % 1,240 1, % Other % % Intercompany % % Same Store Sales Third Quarter January - September Grupo Famsa 1.3% -0.4% -0.5% 4.6% Famsa Mexico 3.3% 5.0% 2.1% 7.7% Famsa USA (4) -4.6% -13.4% -11.2% -6.8% (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 grew 3.0% during the third quarter of 2012 to Ps$3,409 million largely driven by the 3.7% increase in quarterly sales to Ps$2,972 million posted by Famsa Mexico. The recovery rate of Famsa USA s operations in the Texas region increased during 3Q12. The third quarter sales for the region of Ps$420 million were almost the same as for the same period of However, dollar-denominated quarterly sales in Texas fell 4.4%. Accumulated consolidated Net Sales as of September 30, 2012 were Ps$9,899 million, 1.0% above those of the previous year. Famsa Mexico s Same Store Sales (SSS) rose 3.3% as of the close of the third quarter. Excluding foreign exchange effects, Same Store Sales in Texas decreased 4.6% in 3Q12. Cost of Sales and Gross Income The consolidated Cost of Sales totaled Ps$1,633 million during the third quarter of 2012, a decline of 1.8% compared to the same period of the previous year. The consolidated Gross Margin grew 230 basis points from 49.8% to 52.1%, driving the quarterly Gross Income to Ps$1,776 million. The accumulated consolidated Cost of Sales as of September 30, 2012 was Ps$4,737 million, a decline of 4.7% year-over-year. The accumulated consolidated Gross Income for the first nine months of 2012 was Ps$5,162 million, 6.8% above that posted for the same period of the previous year, resulting in an expansion in consolidated Gross Margin of 2.8 percentage points compared to the first nine months of The accumulated growth in Famsa Mexico s credit sales, combined with the increased share of Personal Loans and Furniture in the consolidated sales mix were the main factors driving this result. Investor Relations: 5 of 14

6 Operating Income before Interest, Taxes, Depreciation and Amortization (EBITDA) (Millions of Mexican pesos) Third Quarter January - September % Var. (3) % Var. (3) Grupo Famsa (1) % 1,631 1, % Famsa Mexico (2) % 1,537 1, % Famsa USA % % Other % % Intercompany % % EBITDA Margin (% EBITDA / Sales) Third Quarter January - September Grupo Famsa (1) 16.8% 13.9% 16.5% 13.9% Famsa Mexico (2) 18.1% 15.5% 17.8% 15.1% Famsa USA 6.3% -0.2% 6.8% 3.4% (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) for the third quarter of 2012 grew 24.6% year-over-year, to Ps$572 million. Famsa Mexico s sales volume, the expansion in consolidated Gross Margin and the control of Operating Expenses resulted in a 290 basis point expansion in consolidated EBITDA Margin, to 16.8% in 3Q12. The accumulated consolidated EBITDA totaled Ps$1,631 million for the first nine months of 2012, 20.0% above that as of the same period of The accumulated consolidated EBITDA Margin as of the close of September 2012 was 16.5%, compared to 13.9% for the same period of the previous year. 3Q12 consolidated Operating Expenses grew 1.3% over those of the third quarter of 2011, to Ps$1,279 million. Accumulated consolidated Operating Expenses as of September 30, 2012 were Ps$3,773 million, equivalent to an increase of 1.6% compared to the first nine months of Investor Relations: 6 of 14

7 Comprehensive Financing Expense (Millions of Mexican pesos) (1) Calculated from the consolidated financial statements Third Quarter January - September % Var. (1) % Var. (1) Comp. Financing Expense, Net % % Interest Expense % % Interest Income % % Exchange Gain (Loss), Net % % The 3Q12 Comprehensive Financing Expense fell 32.2% year-over-year to Ps$298 million. Unlike 3Q11, the third quarter of 2012 benefitted from a foreign exchange gain (which did not affect cash flow) of Ps$35 million as a result of the volatility of the peso-dollar foreign exchange rate. Quarterly Interest Expense grew 9.3%, largely reflecting the payment of interest on dollar-denominated debt. Net Income 3Q12 Consolidated Net Income totaled Ps$87 million, a growth of 220.7% year-overyear. It is important to note that Income Before Taxes grew 471.6%, to Ps$184 million. Accumulated consolidated Net Income increased to Ps$522 million as of the close of September 2012, from Ps$50 million posted as of September 30, Grupo Famsa also generated Deferred Income Taxes from the transfer of accounts to Banco Ahorro Famsa, as well as other temporary differences. Investor Relations: 7 of 14

8 Main Balance Sheet Accounts (Millions of Mexican pesos) September 30, % Var. (1) Trade Accounts Receivable 18,034 15, % Consumer Loans Mexico 14,197 12, % Commercial Loans Mexico (BAF) 2,383 1, % Consumer Loans USA 1,454 1, % Inventory 1,908 1, % Net Debt 4,519 4, % Bank Deposits 11,521 9, % Stockholders Equity 8,721 8, % (1) Calculated from the consolidated financial statements Trade Accounts Receivable The balance of Trade Accounts Receivable as of September 30, 2012 was Ps$18,034 million, an increase of 15.4% compared to The most significant variations in this item were in the balances of the Consumer and Commercial Portfolios in Mexico. The balance of Consumer Loans in Mexico grew 13.0%, largely driven by Famsa Mexico s accumulated growth in credit sales. In addition, Banco Ahorro Mexico continues to develop initiatives to support micro, small and medium-sized enterprises, and as a result the Commercial Portfolio increased by Ps$857 million as of the close of September The balance of Famsa USA s Consumer Portfolio as of September 30, 2012 declined 5.5% year-over-year but increased 1.3% in dollar terms. Inventory The balance of inventory as of September 30, 2012 was Ps$1,908 million, 3.3% below that as of September 30, Bank Deposits and Net Debt As of September 30, 2012, Bank Deposits totaled Ps$11,521 million, 18.8% above those of the previous year. Net Debt was Ps$4,519 million as of September 30, 2012, 5.5% below that posted at the close of 3Q11, reflecting a decline of 4.3% in the balance of Gross Debt compared to Stockholders Equity The balance of Stockholders Equity as of September 30, 2012 was Ps$8,721 million, 6.3% 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 September 30, 2012, December 31, 2011, and January 01, 2011 Thousands of Mexican Pesos Assets Sept Dec Jan CURRENT ASSETS: Cash and cash equivalents Ps 1,079, % Ps 1,249, % Ps 926, % Consumer loans Mexico 14,197, % 13,086, % 11,440, % Commercial loans Mexico 2,383, % 1,840, % 1,383, % Consumer loans USA 1,454, % 1,572, % 1,375, % Taxes recoverable 1,140, % 1,279, % 1,253, % Other accounts receivable 715, % 551, % 578, % Inventories 1,908, % 2,009, % 2,215, % Discontinued operations 594, % 1,319, % 1,260, % Total current assets 23,473, % 22,910, % 20,435, % PROPERTY, LEASEHOLD IMPROVEMENTS AND FURNITURE AND EQUIPMENT 2,313, % 2,486, % 2,546, % GOODWILL 241, % 241, % 241, % DEFERRED CHARGES 55, % 57, % 68, % OTHER ASSETS 368, % 263, % 247, % DEFERRED INCOME TAX 1,614, % 1,298, % 1,101, % DEFERRED EMPLOYEES' PROFIT SHARING - 0.0% - 0.0% - 0.0% DISCONTINUED OPERATIONS - 0.0% - 0.0% 14, % Total assets Ps 28,065, % Ps 27,256, % Ps 24,656, % Liabilities and Stockholders' Equity CURRENT LIABILITIES WITH FINANCIAL COST: Interest-bearing demand deposits and time deposits Ps 11,521, % Ps 10,436, % Ps 8,907, % Bank debt 500, % 455, % 522, % Commercial paper 1,514, % 1,557, % 1,671, % 13,536, % 12,449, % 11,101, % CURRENT LIABILITIES WITHOUT FINANCIAL COST: Suppliers 1,629, % 1,896, % 2,063, % Accounts payable and accrued expenses 511, % 776, % 864, % Income tax payable 16, % 12, % 18, % 2,156, % 2,685, % 2,946, % Total current liabilities 15,693, % 15,134, % 14,048, % NON-CURRENT LIABILITIES: Bank debt 10, % 13, % 16, % Commercial paper 3,573, % 3,789, % 2,469, % Estimated liability for labor benefits 66, % 74, % 68, % Total non-current liabilities 3,651, % 3,877, % 2,554, % Total liabilities 19,344, % 19,012, % 16,603, % STOCKHOLDERS' EQUITY: Capital stock 1,458, % 1,458, % 1,458, % Additional paid-in capital 2,778, % 2,778, % 2,778, % Retained earnings 3,766, % 3,686, % 3,686, % Stock repurchase reserve 110, % 110, % 110, % Net income 521, % 80, % - 0.0% Cumulative translation adjustment 59, % 108, % - 0.0% Total controlling interest 8,693, % 8,221, % 8,032, % Non-controlling interest 27, % 23, % 20, % Total stockholders' equity 8,721, % 8,244, % 8,053, % Total liabilities and stockholders' equity Ps 28,065, % 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 September 30 Thousands of Mexican Pesos Assets CURRENT ASSETS: Cash and cash equivalents Ps 1,079, % Ps 1,068, % Consumer loans Mexico 14,197, % 12,560, % Commercial loans Mexico 2,383, % 1,526, % Consumer loans USA 1,454, % 1,538, % Taxes recoverable 1,140, % 1,194, % Other accounts receivable 715, % 813, % Inventories 1,908, % 1,973, % Discontinued operations 594, % 1,313, % Total current assets 23,473, % 21,988, % PROPERTY, LEASEHOLD IMPROVEMENTS AND FURNITURE AND EQUIPMENT 2,313, % 2,556, % GOODWILL 241, % 241, % DEFERRED CHARGES 55, % 58, % OTHER ASSETS 368, % 265, % DEFERRED INCOME TAX 1,614, % 1,270, % DEFERRED EMPLOYEES' PROFIT SHARING - 0.0% - 0.0% Total assets Ps 28,065, % Ps 26,380, % Liabilities and Stockholders' Equity CURRENT LIABILITIES WITH FINANCIAL COST: Interest-bearing demand deposits and time deposits Ps 11,521, % Ps 9,697, % Bank debt 500, % 606, % Commercial paper 1,514, % 1,471, % 13,536, % 11,776, % CURRENT LIABILITIES WITHOUT FINANCIAL COST: Suppliers 1,629, % 1,534, % Accounts payable and accrued expenses 511, % 928, % Income tax payable 16, % 121, % 2,156, % 2,584, % Total current liabilities 15,693, % 14,361, % NON-CURRENT LIABILITIES: Bank debt 10, % 14, % Commercial paper 3,573, % 3,759, % Estimated liability for labor benefits 66, % 39, % Total non-current liabilities 3,651, % 3,812, % Total liabilities 19,344, % 18,174, % STOCKHOLDERS' EQUITY: Capital stock 1,458, % 1,458, % Additional paid-in capital 2,778, % 2,778, % Retained earnings 3,766, % 3,686, % Stock repurchase reserve 110, % 110, % Net income 521, % 49, % Cumulative translation adjustment 59, % 100, % Total controlling interest 8,693, % 8,183, % Non-controlling interest 27, % 23, % Total stockholders' equity 8,721, % 8,206, % Total liabilities and stockholders' equity Ps 28,065, % Ps 26,380, % Investor Relations: 10 of 14

11 Grupo Famsa, S.A.B. de C.V. and Subsidiaries Consolidated Income Statement from January 1 to September 30 Thousands of Mexican Pesos Net sales Ps 9,899, % Ps 9,805, % Cost of sales (4,737,334) -47.9% (4,970,236) -50.7% Gross income 5,162, % 4,834, % Operating expenses (3,773,176) -38.1% (3,713,775) -37.9% Operating income 1,389, % 1,121, % Comprehensive financing expense, net (893,607) -9.0% (964,315) -9.8% 495, % 156, % Other income (expenses), net 71, % (20,601) -0.2% Income before income tax 566, % 136, % Income tax 270, % 48, % Income before discontinued operations 837, % 185, % Loss from discontinued operations (312,002) -3.2% (133,296) -1.4% Net income 525, % 51, % Net income of non-controlling interest 3, % 2, % Net income of controlling interest Ps 521, % Ps 49, % Investor Relations: 11 of 14

12 Grupo Famsa, S.A.B. de C.V. and Subsidiaries Consolidated Income Statement from July 1 to September 30 Thousands of Mexican Pesos 3Q12 3Q11 Net sales Ps 3,409, % Ps 3,311, % Cost of sales (1,632,883) -47.9% (1,662,674) -50.2% Gross income 1,776, % 1,648, % Operating expenses (1,279,204) -37.5% (1,262,924) -38.1% Operating income 497, % 385, % Comprehensive financing expense, net (297,522) -8.7% (439,142) -13.3% 199, % (53,605) -1.6% Other (expenses) income, net (15,220) -0.4% 4, % Income (loss) before income tax 184, % (49,593) -1.5% Income tax 33, % 22, % Income (loss) before discontinued operations 217, % (27,090) -0.8% Loss from discontinued operations (129,119) -3.8% (44,808) -1.4% Net income (loss) 88, % (71,898) -2.2% Net income of non-controlling interest 1, % % Net income (loss) of controlling interest Ps 87, % Ps (72,487) -2.2% Investor Relations: 12 of 14

13 Grupo Famsa, S.A.B. de C.V. and Subsidiaries Consolidated Cash Flow Statement from January 1 to September 30 Thousands of Mexican Pesos Operations Income before income tax Ps 566,785 Ps 136,247 Items relating to investing activities: Depreciation and amortization 241, ,135 Allow ance for doubtful accounts 789, ,724 Gain on sale of property, plant and equipment (1,493) (2,106) Estimated liability for labor benefits 18,413 8,354 Interest income (1,079) (1,009) Items relating to financing activities: Interest expense 963, ,688 Trade accounts receivable (1,422,339) (1,506,133) Inventories (177,762) (199,255) Other accounts receivable, deferred charges and other assets (109,313) (299,924) Suppliers (259,087) (539,941) Other accounts payable and accrued expenses (516,197) (369,777) Income tax paid (42,101) (16,340) Net cash flow obtained (used) from operating activities 50,184 (837,337) Investment Acquisition of property, leasehold improvements, furniture and equipment (65,120) (202,254) Sale of property, leasehold improvements, furniture and equipment 40,554 3,818 Interest collected 1,079 1,009 Net cash flow used in investing activities (23,487) (197,427) Resources to be used (obtained) in financing activities 26,697 (1,034,764) Financing Interest paid (1,046,443) (924,839) New short-term debt and bank loans 63,500 2,726,126 Payments of short-term debt and bank loans (17,159) (1,844,620) Demand deposits and time deposits 1,085, ,597 Net cash flow from financing activities 85, ,264 Increase (decrease) in net cash and cash equivalents 111,776 (287,500) Adjustments to cash flow as a result of changes in exchange rates (281,771) 429,169 Cash and cash equivalents at beginning of period 1,249, ,946 Cash and cash equivalents at end of period Ps 1,079,971 Ps 1,068,615 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