—EBITDA increases 28% to Ps.3,842 million during the period—

—Solid performance in both commercial and financial businesses generates
increase of 16% in consolidated revenues, to Ps.23,092 million—

—Consolidated gross portfolio grows 18%, to Ps.87,874 million—

—Grupo Elektra starts its omnichannel strategy,
with the successful launch of its online store www.elektra.com.mx—

MEXICO CITY, Oct. 24, 2017 (GLOBE NEWSWIRE) -- 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, announced today its financial results for the third quarter of 2017.

Consolidated third quarter results

Consolidated revenue was Ps.23,092 million in the period, 16% above the Ps.19,971 million for the same quarter of previous year. Costs and operating expenses were Ps.19,249 million, compared to Ps.16,975 million for the same period of 2016.

As a result, Grupo Elektra reported EBITDA of Ps.3,842 million, 28% higher than the Ps.2,996 million of the previous year’s quarter; EBITDA margin was 17% this period, two percentage points above the previous year.

Operating profit grew 43% to Ps.3,269 million during the quarter, from Ps.2,285 million in same period of 2016.

The company reported net income of Ps.2,858 million, compared to net income of Ps.1,330 million a year ago.

	3Q 2016			3Q 2017			Change
							Ps.			%
Consolidated revenue	$19,971			$23,092			$3,121			16	%
EBITDA	$2,996			$3,842			$846			28	%
Operating profit	$2,285			$3,269			$984			43	%
Net result	$1,330			$2,858			$1,527			115	%
Net result per share	$5.61			$12.33			$6.72			119	%
Figures in millions of pesos
EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization.
As of September 30, 2016, Elektra* outstanding shares were 237.1 million and as of September 30, 2017, were 231.8 million.

Revenue

Consolidated revenue increased 16%, as a result of 18% and 11% growth in both financial revenues and commercial sales, respectively.

The increase in commercial division sales  ̶ to Ps.8,260 million compared to Ps.7,426 million last year ̶  reflects strategies that focus on generating optimum value propositions for the customers, through lines of merchandise that best meet their needs, with world-class service and under the most competitive market conditions. As of this year, these strategies have an additional boost with the launch of a new, larger store format, which includes a greater offer of goods and services to satisfy a growing number of families.

The increase in financial revenue  ̶ to Ps.14,831 million from Ps.12,545 million from the previous year ̶   reflect mainly a 27% growth in revenue of Banco Azteca Mexico.

Costs and expenses

Consolidated costs for the quarter increased 21% to Ps.8,957 million, from Ps.7,410 million in the previous year, as a result of a 15% increase in commercial costs, in line with the increase in commercial revenue, and 32% growth in financial cost. The increase in the financial cost results from the creation of loan-loss provisions and higher interest payments, in line with higher market interest rates, as well as increased deposits at Banco Azteca.

Sales, administration and promotion expenses increased 8% to Ps.10,292 million, as a result of higher personnel expenses due to higher compensation plans that encourage productivity; an increase in advertising, which achieves a better positioning of Grupo Elektra brands, and an increase in operating expenses. The expenses grow to a lesser extent than consolidated revenues, reflecting strong strategies that drive the company's operating efficiency.

EBITDA and net result

The Company´s EBITDA grew 28% to Ps.3,842 million this quarter. Operating income increased 43% to Ps.3,269 million, from Ps.2,285 million for the same quarter of 2016.

The most significant change below EBITDA was a positive variation of Ps.1,334 million in other financial results, as a consequence of a larger gain this period in the market value of the underlying assets of financial instruments owned by the company –which does not imply cash flow– compared to the previous year.

Grupo Elektra reported net income of Ps.2,858 million, compared to a net income of Ps.1,330 million a year ago.

Consolidated balance sheet

Loan portfolio and deposits

Banco Azteca Mexico, Advance America and Banco Azteca Latin America’s consolidated gross portfolio as of September 30, 2017 grew 18% to Ps.87,874 million, from Ps.74,341 million for the previous year. Consolidated delinquency rate was 4% at the end of the period, compared to 3.7% in the previous year.

The gross portfolio of Banco Azteca Mexico grew 20% to Ps.71,906 million, from Ps.59,903 million a year ago.

The delinquency rate for the bank at the end of the quarter was 3.4%, from 2.7% of the previous year. Past-due loan portfolio is reserved 2.6 times, which reflects a past-due portfolio of Ps.2,431 million, in comparison to allowance for credit risks of Ps.6,242 million in balance, as of September 30, 2017.

The average term of the credit portfolio for principal credit lines – consumer, personal loans and Tarjeta Azteca – was 63 weeks at the end of the third quarter.

Grupo Elektra consolidated deposits were Ps.104,814 million, from Ps.101,786 million a year ago. Deposits of Banco Azteca Mexico were Ps.104,180 million, 6% higher than the Ps.97,984 million a year ago. 

As of September 30, 2017, the estimated capitalization index of Banco Azteca Mexico was 16.8%.

Debt

Consolidated debt with cost as of September 30, 2017, was Ps.14,098 million, 25% less than the Ps.18,703 million for the prior year.

Consolidated debt was comprised of Ps.13,063 million for the commercial business, and Ps.1,035 million for the financial business.  The total balance of cash, cash equivalents and marketable securities for the commercial business was Ps.12,874 million at the end of the period; as a result, the net debt of the commercial business, recorded an amount of  Ps.189 million.

As previously announced, during the last twelve months, Grupo Elektra paid in advance its senior notes of US$550 million due in 2018.

To cover the payments, Grupo Elektra issued three certificates in local currency for a total of Ps.6,000 million, and used cash generated by the company, within the framework of solid financial performance.

Through these amortizations, the company ceased to hold dollar-denominated bonds, and the debt transactions reflect Grupo Elektra's firm strategy to further strengthen its strong capital structure.

Infrastructure

Grupo Elektra currently has 7,247 points of contact, compared to 7,391 units a year ago. The reduction is a result of strategies to focus on maximizing profitability of such units.

The company has 4,539 points of contact in Mexico, 2,072 in the United States, and 636 in Central and South America. The extensive distribution network allows the company to maintain close contact with clients, granting superior market positioning in the countries where it operates.

Omnichannel startegy

In October, Grupo Elektra launched its omnichannel strategy, with its online store www.elektra.com.mx, through which hundreds of thousands of products are commercialized, at unparalleled prices, from any device and at all times. Through the online store, the customer can receive the merchandise, safely and expeditiously in a maximum of five days, at any point of delivery.

Elektra.com.mx has an extended catalog of merchandise, access to credit, a new exclusive distribution center for e-commerce, strategically located, and more than 1,000 stores in Mexico as customer service centers, payment points and product delivery.

Grupo Elektra offers a world-class online shopping experience to a growing market, and positions itself optimally in the preference of millions of consumers for cutting-edge forms of merchandise purchase.

Nine months consolidated results

Total consolidated revenue in the first nine months of the year grew 18% to Ps.67,892 million, from Ps.57,734 million for the same period of 2016, boosted by 19% and 15% growth in both financial and commercial businesses, respectively.

EBITDA was Ps.12,470 million, 23% higher than the Ps.10,101 million for the same period a year ago; the EBITDA margin in the first nine months of 2017 was 18%, one percentage point above the prior year. Operating profit grew 31% to Ps.10,760 million during the period.

The company reported net income of Ps.14,496 million, compared to Ps.2,410 million a year ago, mainly due an appreciation this quarter in the market value of underlying financial instruments that the company holds, which doesn’t imply cash flow, compared to depreciation the prior year.

	9M 2016			9M 2017			Change
							Ps.		%
Consolidated revenue	$57,734			$67,892			$10,158		18	%
EBITDA	$10,101			$12,470			$2,369		23	%
Operating profit	$8,215			$10,760			$2,545		31	%
Net result	$2,410			$14,496			$12,086		----
Net result per share	$10.16			$62.54			$52.38		----
Figures in millions of pesos
EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization.
As of September 30, 2016, Elektra* outstanding shares were 237.1 million and as of September 30, 2017, were 231.8 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 7,000 points of contact in Mexico, the United States, Guatemala, Honduras, Peru, Panama and El Salvador.

Grupo Elektra is a Grupo Salinas company (www.gruposalinas.com), a group of dynamic, fast-growing, and technologically advanced companies focused on creating shareholder value, contributing to building the middle class of the countries in which they operate and improving society through excellence. 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. The companies include TV Azteca (www.tvazteca.com; www.irtvazteca.com), Azteca America (us.azteca.com), Grupo Elektra (www.elektra.com.mx: www.grupoelektra.com.mx), Banco Azteca (www.bancoazteca.com.mx), Advance America (www.advanceamerica.net), Afore Azteca (www.aforeazteca.com.mx), Seguros Azteca (www.segurosazteca.com.mx), Totalplay (www.totalplay.com.mx) and Enlace TP (enlacetp.mx). Each of the Grupo Salinas companies operates independently, with its own management, board of directors and shareholders. Grupo Salinas has no equity holdings. However, the member companies share 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 forward-looking statements and are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected.  Other risks that may affect Grupo Elektra and its subsidiaries are identified in documents sent to securities authorities.

Investor Relations:
Bruno Rangel Grupo Salinas Tel. +52 (55) 1720-9167 jrangelk@gruposalinas.com.mx		Rolando Villarreal Grupo Elektra S.A.B. de C.V. Tel. +52 (55) 1720-9167 rvillarreal@elektra.com.mx

Press Relations:
Luciano Pascoe Grupo Salinas Tel. +52 (55) 1720-1313 ext. 36553 lpascoe@gruposalinas.com.mx		Daniel McCosh Grupo Salinas Tel. +52 (55) 1720-0059 dmccosh@gruposalinas.com.mx

GRUPO ELEKTRA, S.A.B. DE C.V. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
MILLIONS OF MEXICAN PESOS
	3T16						3T17						Change
Financial income	12,545			63	%		14,831			64	%		2,286			18	%
Commercial income	7,426			37	%		8,260			36	%		834			11	%
Income	19,971			100	%		23,092			100	%		3,121			16	%
Financial cost	2,596			13	%		3,434			15	%		838			32	%
Commercial cost	4,814			24	%		5,524			24	%		710			15	%
Costs	7,410			37	%		8,957			39	%		1,548			21	%
Gross income	12,561			63	%		14,134			61	%		1,573			13	%
Sales, administration and promotion expenses	9,565			48	%		10,292			45	%		727			8	%
EBITDA	2,996			15	%		3,842			17	%		846			28	%
Depreciation and amortization	692			3	%		570			2	%		(122	)		-18	%
Other expense, net	19			0	%		3			0	%		(16	)		-86	%
Operating income	2,285			11	%		3,269			14	%		984			43	%
Comprehensive financial result:
Interest income	251			1	%		154			1	%		(97	)		-39	%
Interest expense	(345	)		-2	%		(346	)		-1	%		(1	)		0	%
Foreign exchange gain (loss), net	154			1	%		117			1	%		(38	)		-24	%
Other financial results, net	37			0	%		1,372			6	%		1,334			----
	98			0	%		1,297			6	%		1,198			----
Participation  in  the  net  income of
CASA and other associated companies	(402	)		-2	%		(78	)		0	%		324			81	%
(Loss) income before income tax	1,981			10	%		4,488			19	%		2,507			----
Income tax	(682	)		-3	%		(1,470	)		-6	%		(788	)		-116	%
(Loss) income before discontinued operations	1,299			7	%		3,018			13	%		1,719			-132	%
Result from discontinued operations	31			0	%		(160	)		-1	%		(191	)		----
Impairment of intangible assets	-			0	%		-			0	%		-			----
Consolidated net (loss) income	1,330			7	%		2,858			12	%		1,527			115	%

 

GRUPO ELEKTRA, S.A.B. DE C.V. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
MILLIONS OF MEXICAN PESOS
	9M16						9M17						Change
Financial income	36,501			63	%		43,397			64	%		6,897			19	%
Commercial income	21,234			37	%		24,495			36	%		3,261			15	%
Income	57,734			100	%		67,892			100	%		10,158			18	%
Financial cost	7,564			13	%		8,961			13	%		1,397			18	%
Commercial cost	13,788			24	%		16,317			24	%		2,530			18	%
Costs	21,351			37	%		25,278			37	%		3,927			18	%
Gross income	36,383			63	%		42,614			63	%		6,231			17	%
Sales, administration and promotion expenses	26,282			46	%		30,144			44	%		3,862			15	%
EBITDA	10,101			17	%		12,470			18	%		2,369			23	%
Depreciation and amortization	1,875			3	%		1,644			2	%		(231	)		-12	%
Other (income) expense, net	11			0	%		66			0	%		55			----
Operating Income	8,215			14	%		10,760			16	%		2,545			31	%
Comprehensive financial result:
Interest income	647			1	%		431			1	%		(216	)		-33	%
Interest expense	(1,007	)		-2	%		(1,142	)		-2	%		(135	)		-13	%
Foreign exchange gain (loss), net	327			1	%		(1,214	)		-2	%		(1,541	)		----
Other financial results, net	(3,967	)		-7	%		11,852			17	%		15,819			----
	(4,000	)		-7	%		9,927			15	%		13,927			----
Participation  in  the  net  income of
CASA and other associated companies	(618	)		-1	%		(21	)		0	%		597			97	%
Income before income tax	3,597			6	%		20,666			30	%		17,069			----
Income tax	(1,119	)		-2	%		(5,958	)		-9	%		(4,839	)		----
Income before discontinued operations	2,478			4	%		14,708			22	%		12,230			----
Result from discontinued operations	(68	)		0	%		(204	)		0	%		(136	)		-199	%
Impairment of intangible assets	-			0	%		(8	)		0	%		(8	)		----
Consolidated net income	2,410			4	%		14,496			21	%		12,086			----

  

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, 2016						At September 30, 2017
Cash and cash equivalents	2,719		19,494		22,214		2,577		17,879		20,456		(1,757	)		-8	%
Marketable financial instruments	12,489		52,001		64,490		10,297		47,062		57,359		(7,131	)		-11	%
Performing loan portfolio	-		51,188		51,188		-		58,599		58,599		7,411			14	%
Total past-due loans	-		2,663		2,663		-		3,344		3,344		681			26	%
Gross loan portfolio	-		53,852		53,852		-		61,943		61,943		8,091			15	%
Allowance for credit risks	-		6,693		6,693		-		7,806		7,806		1,113			17	%
Loan portfolio, net	-		47,159		47,159		-		54,137		54,137		6,978			15	%
Inventories	7,705		-		7,705		8,879		-		8,879		1,173			15	%
Other current assets	6,440		8,995		15,434		8,027		8,072		16,099		665			4	%
Total current assets	29,354		127,648		157,002		29,780		127,150		156,930		(72	)		0	%
Financial instruments	17,672		306		17,978		16,283		288		16,571		(1,407	)		-8	%
Performing loan portfolio	-		20,406		20,406		-		25,779		25,779		5,373			26	%
Total past-due loans	-		84		84		-		153		153		69			83	%
Loan portfolio	-		20,489		20,489		-		25,931		25,931		5,442			27	%
Other non-current assets	-		567		567		8,437		672		9,109		8,542		----
Investment in shares	2,736		-		2,736		2,632		-		2,632		(104	)		-4	%
Property, furniture, equipment and
investment in stores, net	3,674		2,630		6,304		4,489		3,004		7,493		1,189			19	%
Intangible assets	627		5,888		6,515		669		6,159		6,828		313			5	%
Other assets	1,005		163		1,167		818		412		1,231		64			5	%
TOTAL ASSETS	55,067		157,693		212,759		63,108		163,617		226,725		13,966			7	%
Demand and term deposits	-		101,786		101,786		-		104,814		104,814		3,028			3	%
Creditors from repurchase agreements	-		6,168		6,168		-		5,367		5,367		(801	)		-13	%
Short-term debt	55		414		469		3,496		58		3,554		3,085		----
Short-term liabilities with cost	55		108,367		108,423		3,496		110,239		113,735		5,312			5	%
Suppliers and other short-term liabilities	13,585		7,672		21,256		12,713		10,405		23,118		1,862			9	%
Short-term liabilities without cost	13,585		7,672		21,256		12,713		10,405		23,118		1,862			9	%
Total short-term liabilities	13,640		116,039		129,679		16,210		120,644		136,853		7,174			6	%
Long-term debt	16,219		2,042		18,261		9,567		977		10,544		(7,717	)		-42	%
Long-term liabilities with cost	16,219		2,042		18,261		9,567		977		10,544		(7,717	)		-42	%
Long-term liabilities without cost	5,839		3,823		9,662		6,326		3,323		9,649		(13	)		0	%
Total long-term liabilities	22,057		5,865		27,922		15,893		4,300		20,193		(7,730	)		-28	%
TOTAL LIABILITIES	35,697		121,904		157,601		32,103		124,943		157,046		(555	)		0	%
TOTAL STOCKHOLDERS' EQUITY	19,369		35,789		55,158		31,006		38,674		69,680		14,522			26	%
LIABILITIES + EQUITY	55,067		157,693		212,759		63,108		163,617		226,725		13,966			7	%

  

		INFRASTRUCTURE
		3Q16					3Q17					Change
Points of sale in Mexico
Elektra		978		13	%		1,020		14	%		42			4	%
Salinas y Rocha		50		1	%		48		1	%		(2	)		-4	%
Banco Azteca		1,228		17	%		1,259		17	%		31			3	%
Freestanding branches		2,290		31	%		2,212		31	%		(78	)		-3	%
Total		4,546		62	%		4,539		63	%		(7	)		0	%
Points of sale in Central and South America
Elektra		167		2	%		163		2	%		(4	)		-2	%
Banco Azteca		167		2	%		163		2	%		(4	)		-2	%
Freestanding branches		346		5	%		310		4	%		(36	)		-10	%
Total		680		9	%		636		9	%		(44	)		-6	%
Points of sale in North America
Advance America		2,165		29	%		2,072		29	%		(93	)		-4	%
Total		2,165		29	%		2,072		29	%		(93	)		-4	%
TOTAL		7,391		100	%		7,247		100	%		(144	)		-2	%
Floor space (m²)		1,484		100	%		1,527		100	%		43			3	%
Employees
Mexico		49,353		77	%		53,755		79	%		4,402			9	%
Central and South America		8,784		14	%		8,707		13	%		(77	)		-1	%
North America		6,007		9	%		5,754		8	%		(253	)		-4	%
Total employees		64,144		100	%		68,216		100	%		4,072			6	%

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