Earnings Release 2Q16 - investor cloudcdn.investorcloud.net/.../Reportes/2016-2T16-En.pdf · Famsa...

Earnings Release 2Q16

Paloma E. Arellano Bujanda

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Recent Developments

Financial Highlights

Consolidated Results

2Q16 2Q15 ∆% YTD 16 YTD 15 ∆%

Net Sales 4,440 4,104 8.2% 8,394 7,634 9.9% Cost of Sales (2,428) (2,187) 11.0% (4,510) (4,003) 12.7% Gross Profit 2,013 1,918 5.0% 3,884 3,632 6.9% Operating Expenses (1,742) (1,581) 10.2% (3,348) (3,018) 10.9% Other Income (Expenses), net 56 16 250.9% 82 40 105.4% Operating Profit 327 353 (7.4%) 618 653 (5.5%) EBITDA 419 461 (9.0%) 838 882 (5.0%) Net Income 162 121 34.3% 321 214 49.6% Gross Margin 45.3% 46.7% - 46.3% 47.6% - EBITDA Margin 9.4% 11.2% - 10.0% 11.6% - Net Margin 3.7% 2.9% - 3.8% 2.8% -

During 2015, an increase to the allowance of credit provisions for loan portfolios of Ps.5,091 million (Ps.3,836 million to Retained Earnings and Ps.1,255 million to 2015 Net Income) was recorded, as disclosed in our Annual Report filed on May 26, 2016. It is important to highlight that our operations and financial structure were unaffected by this accounting record.

Seeking the shareholders’ best interests, Mr. Humberto Garza, founder of Grupo Famsa, guaranteed the entire amount of this provision through his real estate companies, which own a portfolio of commercial real estate assets, without any dilutive effect for minority shareholders.

Grupo Famsa’s consolidated Net Sales grew 8.2% YoY in 2Q16

Consolidated EBITDA decreased 9.0% YoY in 2Q16, reaching Ps.419 million Consolidated Net Income grew 34.3% YoY, totaling Ps.162 million in 2Q16 Payroll credits increased 46.3% YoY in 2Q16

Participation of clients belonging to the formal sector of the economy, increased from 54.6% to 63.7% YoY in 2Q16, enhancing the consolidated portfolio risk profile

We reduced 1,085 job positions towards a lean structure, with estimated savings of Ps.120 million to be generated during the second half of the year

Famsa Mexico’s SSS rose 6.9% YoY in 2Q16

The contribution of Seasonal Goods, Electronics and Mobile Phones stood out in 2Q16

The Non-Performing loans ratio (NPL) was 9.1% as of June 30, 2016, 40 bps. above

1Q16, due to a lower participation of commercial loans in the portfolio Bank Deposits as of June 30, 2016 were +25.7% YoY, and +6.0% vs. 1Q16, with 89.6% of

time deposits with an average duration of 166 days

Famsa USA’s Net Sales in pesos increased by 14.5% YoY in 2Q16 as a result of strong

personal loans origination

EBITDA in pesos grew by 23.1% YoY in 2Q16 in the United States

Monterrey, Mexico, July 28, 2016. – Grupo Famsa, S.A.B. de C.V. (BMV: GFAMSA), a leading Mexican commercial

conglomerate in the retail, consumer credit and savings sectors, announced today its earnings results for the second

quarter 2016. The preliminary, unaudited financial statements presented in this report have been prepared in

accordance with IFRS and the interpretations in effect as of June 30, 2016. Figures are expressed in millions of current,

nominal Mexican pesos, unless otherwise stated.

Grupo Famsa

Famsa Mexico

Famsa USA

Banco Famsa



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COMMENTS FROM THE CHIEF EXECUTIVE OFFICER

First, I want to highlight Grupo Famsa’s path comprises of almost half a century in the Mexican retail sector,

empowering us to build a strong brand and commercial footprint. Since the beginning of this journey, the Garza

Valdez Family has followed a framework of appraisal, gratitude and value generation for all its partners and

stakeholders. Thus, in accordance with our core values and striving to protect the best interest of minority

shareholders, we have decided to guarantee through our real estate companies, the non-performing credit

provisions from the accounting reclassification recorded in 2015, with the firm goal of preserving the book value of

the Company.

For the second quarter 2016 results, Grupo Famsa achieved an annual growth rate of 8.2% in Consolidated Net Sales, driven by marketing campaigns and discount programs that maximized benefits of the core categories posting a higher dynamism during the period. Consequently, Consolidated Net Income increased by 34.3%, from Ps.121 million to Ps.162 million in 2Q16.

Meanwhile, Consolidated EBITDA decreased by 9.0% YoY, mainly due to a higher proportion of costs and expenses

in relation to sales. Regarding costs, the gross margin decreased, driven by the promotions offered during the

quarter. Additionally, allowances for doubtful accounts associated to the consolidated portfolio increased

attributable to a progressive participation of consumer credits. At the same time, the expenses augmented in line

with the development of the payroll credit origination platform, which required a larger deployment of associates,

and to a wide network of collectors in markets with higher delinquency rates. Finally, a natural gap between income

generation and incurred expenses applies to the origination of payroll credits. During the second half of the year,

we assess a contribution in Consolidated EBITDA of Ps.150 million from the expansion in payroll credit origination.

On top of that, we have focused in the implementation of the following initiatives: (i) boost payroll credit

participation in the consolidated portfolio mix, raising customer’s database belonging to the formal sector of the

economy, which has grown from 54.6% in June 2015 to 63.7% in June 2016, therefore decreasing the default risk

and estimating lesser allowances for doubtful receivables. In addition, (ii) increase our operational efficiency,

following the reduction of 1,085 job positions, generating savings of Ps.120 million for the second half of the year;

and, iii) expand the gross margin of our core durable goods categories through a better product mix. These efforts

will consequently strengthen our EBITDA generation during the second semester of 2016.

With regard to our operations in Mexico, results followed a similar trend than the consolidated ones. Net Sales and

SSS recorded 7.3% and 6.9% growth rates, respectively, during 2Q16 driven by robust performance from Seasonal,

Electronics and Mobile Phone categories.

Referring to our banking operations, Banco Famsa´s NPL ratio expanded by 40 bps. on a quarterly basis, closing at

9.1% at the end of 2Q16, due to a minor participation of commercial loans. Meanwhile, Bank Deposits, which

represent 100% of the bank´s funding, increased 25.7% YoY and 6.1% vs. 1Q16, totaling Ps.19,742 million in 2Q16.

Finally, in the United States, Net Sales in pesos rose 14.5% on an annual basis in 2Q16, as a result of a higher

exchange rate that offset a lower demand of durable goods. Under this context, EBITDA grew 23.1% YoY, also

following a higher exchange rate.

We initiate the second half of 2016 focused on enhancing our operations and profitability, based on the timely

execution of our scheduled initiatives, which we expect will boost our EBITDA generation.

Humberto Garza Valdez,

Chief Executive Officer



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Business Segments

Famsa Mexico

During the second quarter, Net Sales and SSS rose on an annual basis by 7.3% and 6.9%, respectively. The

following categories posted strong performance during the quarter: Seasonal Goods (+25.6% YoY), taking

advantage from the warmer months and the enhancement in the sales floor´s exhibition; Electronics

(+19.2% YoY), from higher demand of televisions, as a result of the analog switch-off (ASO) in Mexico and

solid sales of sound equipment; and, Mobile phones (+14.8% YoY), driven by the launch of new models

by major carriers.

Despite the growth in sales, the hike in costs and expenses in relation to sales dampened the segment’s

contribution margins, which consequently decreased EBITDA by 12.0% YoY.

Banco Famsa During 2Q16, the NPL ratio declined by 280 bps. vs. 2Q15, to 9.1% this quarter, but higher by 40 bps. vs.

1Q16. We expect that higher origination from payroll credits in the following quarters will contribute to

resume the downward trend in this indicator.

Source: Banco Famsa

As we widened our platform for payroll credit origination, as of June 30, 2016, the participation of clients

belonging to the formal sector of the economy was 54.6% vs. 63.7% YoY. It is expected the client risk

profile will continue to improve during the second half of the year, therefore generating operational

efficiencies, mainly in the origination and collection processes, since heavy deployment of associates is

not required in the “field”.

15.0%

14.8%14.2%

14.5%14.9%

13.3%

12.0%

12.6%

11.9%11.0%

10.7%10.4% 10.0%

9.9%9.8%9.8%9.2% 8.7%8.6%

9.3% 9.1%8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

Banco Famsa: Non-Performing Loans (NPL) Ratio



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As of June 30, 2016, Bank Deposits, distributed over 1.2 million accounts, totaled Ps.19,742 million, 25.7%

above 2Q15, and 6.1% above 1Q16, due to the commercial campaign launched on April 2016, which

offered preferential rates to customers. It is important to note the average cost of funding remained at a

level of 4.1% during 2Q16, with an average deposit duration of 166 days.

In 2Q16 Bank Deposits represented 67.1% of Grupo Famsa’s funding. Additionally, Interest on Bank

Deposits totaled Ps.195 million pesos in 2Q16, above 14.9% YoY.

Source: Banco Famsa

Famsa USA

During the second quarter of 2016, Net Sales (in MXP) grew 14.5%, driven by a higher exchange rate that

offset a lower dynamism in the operations. However, in USD terms, Net Sales declined by 6.8%, where

the 44.7% annual increase in personal loans origination was offset by lower durable goods demand. In

this context, EBITDA (MXP) rose 23.1%, mostly due to a higher exchange rate.

1,622 1,751 1,831 2,132 1,974

3,298 3,572 3,456 3,937 3,751

10,787 11,178 13,073 12,542 14,017

15,707 16,501 18,359 18,611

19,742

4.4%

4.2%4.1% 4.1% 4.1%

2Q15 3Q15 4Q15 1Q16 2Q16

Banco Famsa: Bank Deposits

Demand Deposits Time deposits with optional availability

Time Deposits Avg. Cost of Funding



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Business Units

To ease the interpretation of Grupo Famsa’s business unit results, the following breakdown of our

network of stores and bank branches is presented.

Retail Stores & Banking

Business Units Floor Space (m2)

2Q16 Openings Closures3 1Q16 2Q15 ∆% YoY 2Q16 2Q15 ∆% YoY

Total 919 4 5 920 923 (0.4%) 567,839 560,623 1.3%

Stores 433 2 0 431 416 4.1% 521,514 512,420 1.8%

Famsa Mexico 379 2 0 377 374 1.3% 450,930 443,636 1.6%

Famsa USA Texas 26 0 0 26 26 0.0% 66,434 66,434 0.0%

PL USA Branches 28 0 0 28 16 75.0% 4,150 2,350 76.6%

Banking Branches¹ 398 2 5 401 406 (2.0%) 40,192 41,140 (2.3%)

To be Conv. Bches.² 88 0 0 88 101 (12.9%) 6,133 7,063 (13.2%)

(1) Most banking branches are located within Famsa Mexico stores (2) Acquisition of branches from Monte de México, S.A. de C.V. (3) Closures refer to acquired branches converted to banking branches

Consolidated Financial Results

Net Sales

(1) Includes sales of non-retail businesses (2) Includes Banco Famsa (3) Calculated in U.S. dollars, excluding foreign-exchange rate effects

Consolidated Net Sales for 2Q16 totaled Ps.4,440 million, increasing 8.2% YoY, mostly due to higher

volume from Famsa Mexico. SSS also grew 5.1% YoY, following the similar pattern that drove Consolidated

Net Sales. YTD Consolidated Net Sales totaled Ps.8,394 million, rising 9.9% YoY.

Additionally, these results also reflected the contribution from FAMSA USA as higher origination of

personal loans and the depreciation of the MXP boosted Consolidated Net Sales in pesos.

Segment Net sales Same Store Sales (SSS)

2Q16 2Q15 ∆% YTD 16 YTD 15 ∆% 2Q16 2Q15 YTD 16 YTD 15

Grupo Famsa¹ 4,440 4,104 8.2% 8,394 7,634 9.9% 5.1% 8.8% 6.2% 8.0%

Famsa Mexico² 3,818 3,557 7.3% 7,182 6,590 9.0% 6.9% 10.0% 8.0% 9.0%

Famsa USA 592 517 14.5% 1,154 990 16.6% (6.8%) 2.7% (5.4%) 1.6%

Other 263 250 5.3% 495 452 9.4% - - - -

Intercompany (234) (220) 6.1% (438) (398) 10.1% - - - -



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Cost of Sales

2Q16 Consolidated Cost of Sales increased 11.0% compared to second quarter 2015, to Ps.2,428 million.

Our Cost to Sales ratio was 54.7%, 140 bps. higher than the 53.3% in 2Q15 as margins contracted from

discount programs and higher allowances were recorded, due to the growing origination of consumer

loans. YTD Consolidated Cost of Sales totaled Ps.4,510 million, up 12.7% YoY.

Gross Profit

2Q16 Consolidated Gross Profit rose 5.0% YoY, to Ps.2,013 million, while the Consolidated Gross Margin

dropped by 140 bps., from 46.7% in 2Q15 to 45.3% in 2Q16. This reduction was followed by a higher

proportion of costs to sales during the period. YTD Consolidated Gross Profit reached Ps.3,884 million, up

6.9% YoY.

Operating Expenses

Consolidated Operating Expenses (selling and administrative expenses) grew 10.2% year-over-year in

2Q16, to Ps.1,742 million, as this quarter comprised higher expenses from payroll credit origination

activities in Mexico (salaries and commissions) and a non-recurring severance pay expense of Ps.19

million, due to the reduction of 1,085 jobs positions during June 2016.

Accumulated Consolidated Operating Expenses increased 10.9% as of June 30, 2016, from Ps.3,018

million during the first half of 2015 to Ps.3,348 million as of June 30, 2016. However, we expect savings

of Ps.120 million for the second half of the year, due to a leaner Company structure.

23% 24% 21% 23%

19% 18% 20% 19%

16% 15% 16% 16%

13% 13% 13% 13%

10% 10% 10% 10%

10% 11% 11% 11%

6% 5% 5% 6%3% 3% 4% 3%

2Q15 2Q16 YTD 15 YTD 16

Consolidated Sales Mix

Computers

Motorcycles

Electronics

MobilePhonesAppliances

Furniture

PersonalLoansOthers

$4,104 $4,440 $7,634 $8,394



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EBITDA

Segment EBITDA % EBITDA

2Q16 2Q15 ∆% YTD 16 YTD 15 ∆% 2Q16 2Q15 YTD 16 YTD 15

Grupo Famsa¹ 419 461 (9.0%) 838 882 (5.0%) 9.4% 11.2% 10.0% 11.6% Famsa Mexico² 368 419 (12.0%) 747 811 (7.8%) 9.6% 11.8% 10.4% 12.3% Famsa USA 48 39 23.1% 93 70 33.0% 8.2% 7.6% 8.0% 7.0% Other 2 2 - (1) 2 - - - - - Intercompany 0 0 - 0 0 - - - - -

(1) Includes EBITDA from non-retail business (2) Includes Banco Famsa

Consolidated EBITDA for 2Q16 decreased by 9.0% YoY, reaching Ps.419 million. Consolidated EBITDA

Margin decreased by 180 bps., from 11.2% in 2Q15 to 9.4% in 2Q16, due to a higher proportion of costs

to sales, as well as an increase in operating expenses mainly driven by increased wage and commission

expenses from a larger staff in payroll credit origination. Excluding the non-recurring expense of Ps.19

million for severance payment, Consolidated EBITDA for the 2Q16 would have decreased 4.9% YoY,

totaling Ps.438 million.

YTD Consolidated EBITDA reached Ps.838 million, a decrease of 5.0% YoY. Excluding the above-mentioned

non-recurring expense, Consolidated EBITDA for 2Q16 would have decreased 2.8% YoY, reaching Ps.857

million.

Financial Expenses, net

2Q16 2Q15 ∆% YTD 16 YTD 15 ∆%

Interest income 96 0 - 190 0 - Interest expenses (213) (173) 23.7% (429) (340) 26.1% Exchange gain & losses, net (188) (77) 143.7% (234) (181) 29.0% Total (306) (249) 22.7% (472) (521) 9.2%

Consolidated Financial Expenses for the second quarter of 2016 increased by 22.7% YoY, reaching Ps.306

million. In 2Q16, Grupo Famsa recognized a foreign exchange (FX) loss of Ps.188 million, compared to an

FX loss of Ps.77 million in 2Q15. Furthermore, Interest Expenses increased due to a higher exchange rate,

and the rise of the Mexican reference rate, which has increased by 100 bps. during 2016. Additionally, an

interest income in 2Q16 was recorded as a result of the update of the present value of the Collection

Rights to related parties. YTD Consolidated Net Financial Expenses grew 9.2% YoY following the second

quarter trend.



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Net Income

Consolidated Net Income for 2Q16 was Ps.162 million, an increase of 34.3% vs. 2Q15. This result was

driven by the sales growth achieved and a higher deferred tax recognized during the quarter, mainly

associated to the exchange rate loss.

Financial Position Summary

Key Items 2Q16 4Q15 ∆% Trade Receivables, net 24,314 22,606 7.6%

Mexico Consumer 17,959 15,972 12.4%

Mexico Commercial 3,585 4,009 (10.6%)

USA Consumer 2,771 2,624 5.6%

Collection Rights 4,719 4,533 4.1%

Inventory 2,582 2,453 5.3%

Trade Receivables

As of June 30, 2016, the consolidated balance of Trade Receivables, net of allowances for doubtful

receivables, was Ps.24,314 million, 7.6% above that of 4Q15. Consumer portfolio in Mexico was the

main driver of receivables growth, as it reached Ps. 17,959 million, a 12.4% growth relative to year-end

2015 following the consumer credit origination progress, mostly under payroll credit terms.

Conversely, commercial portfolio in Mexico balance decreased 10.6% as of June 30, 2016 vs. December

31, 2015, due to the strategy of enhancing payroll credit origination, which has higher profitability.

Debt

Debt 2Q16 4Q15 ∆% Net Debt 7,986 6,906 15.6%

Gross Debt 9,680 9,100 6.4%

Interest Coverage Ratio 1.9 2.2 -

Net Debt as of June 30, 2016 totaled Ps.7,986 million, up by 15.6% from 4Q15 figures. The increase

reflects the effects of the devaluation of the MXP vs. USD, as well as a 22.8% decrease in cash and

equivalents, from Ps.2,194 million in 4Q15 to Ps.1,695 million in 2Q16. The decrease in cash and

equivalents was mainly originated by the increase in payroll credit origination.

Similarly, the Gross Debt balance as of June 30, 2016, excluding Bank Deposits, rose 6.4% vs. 4Q15. The

devaluation of the MXP vs. USD was the main driver behind this increase.



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Shareholders’ Equity

The Shareholders´ Equity, as of June 30, 2016, amounted to Ps.8,579 million. In May 26, 2016, we filed

our 2015 Annual Report, where we highlighted an increase in the provision of allowances for doubtful

receivables of the consolidated portfolio, thus impacting the shareholders’ equity, in net terms, by

Ps.2,100 million as of December 31, 2015. For more detail, refer to notes 2, 5.2.4, 8 and 19 of the audited

Financial Statements for the year 2015.

*****************************

Forward-looking statements

Analyst coverage

Since Grupo Famsa, S.A.B. de C.V. (“Famsa”) securities are subject to the rules and regulations included

in the Reglamento Interior de la Bolsa Mexicana de Valores (Interior Rules and Regulations of the Mexican

Stock Market), the Company would like to inform that, in compliance with that stated in Disposition

4.033.10 of the said Rules and Regulations, the following financial institutions provide formal coverage

over its stock: BBVA Bancomer, Credit Suisse, GBM and Vector. For further information on institutional

coverage, please visit www.grupofamsa.com.

57% 51%

24% 26%

19% 23%

2 Q 1 5 2 Q 1 6

Debt Profile

Foreign Debt Credit Lines Debt Certificates

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.

946 1,260

1,9296

588

318

0

4,632

2016 2017 > 2018

Debt Maturity Profile

Debt Certificates Credit Lines Foreign Debt

http://www.grupofamsa.com/



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Technical Notes and Bases for Consolidation and Presentation

Credit Portfolio: Banco Famsa’s business model focuses largely on Consumer Credit, therefore the weight of such credits in the bank’s portfolio mix differs from that of standard financial institutions in the Mexican-banking sector. Consequently, Banco Famsa’s results and figures are not directly comparable with those of the aforementioned. Net Financial Expenses: They are primarily comprised of the Financial Expenses corresponding to financing instruments and foreign exchange rate effect. Non-performing Loans Ratio (IMOR): The calculation of IMOR in this Quarterly Report includes “Collection Rights” in Banco Famsa’s total Credit Portfolio. These rights correspond to loans that are discounted via payroll. Due to an accounting reclassification that came into effect in July 2013, they are excluded from the Credit Portfolio used for the calculation of the IMOR indicator for the Mexican National Banking and Securities Commission (CNBV). Percentage rates of change: Percentage rates of change presented in this Report are calculated according to the consolidated financial statements contained herein.



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Consolidated Financial Statements

Grupo Famsa, S.A.B. de C.V. and subsidiaries Consolidated statements of financial position

Thousands of Mexican Pesos 30-Jun-16 31-Dec-15 ∆$ ∆% Assets CURRENT ASSETS:

Cash and equivalents $1,694,744 $2,194,323 ($499,579) (22.8%) Trade receivables, net 21,460,683 20,889,791 570,892 2.7% Rights to collect from related parties 4,719,428 0 4,719,428 - Recoverable taxes 640,527 953,790 (313,263) (32.8%) Other accounts receivable 2,337,405 1,845,058 492,347 26.7% Inventories 2,582,088 2,452,557 129,531 5.3%

Total current assets 33,434,875 28,335,519 5,099,356 18.0% NON-CURRENT ASSETS:

Restricted cash 311,785 311,785 - - Trade receivables, net 2,853,211 1,715,737 1,137,474 66.3% Rights to collect from related parties 0 4,533,475 0 - Property, leasehold improvements, and furniture & equipment net 1,971,509 2,065,452 (93,943) (4.5%) Goodwill and intangible assets, net 255,057 276,933 (21,876) (7.9%) Guarantee deposits 125,813 118,558 7,255 6.1% Other assets 970,694 668,356 302,338 45.2% Deferred income tax 2,810,451 2,196,445 614,006 28.0%

Total non-current assets 9,298,520 11,886,741 (2,588,221) (21.8%) Total assets $42,733,395 $40,222,260 $2,511,135 6.2% Liabilities and Stockholders’ equity CURRENT LIABILITIES:

Demand deposits $15,384,563 $14,478,945 $905,618 6.3% Short-term debt 4,123,599 4,190,162 (66,563) (1.6%) Suppliers 1,207,868 $1,627,793 (419,925) (25.8%) Accounts payable and accrued expenses 1,344,842 1,152,717 192,125 16.7% Deferred income from guarantee sales 180,486 206,888 (26,402) (12.8%) Income tax payable 31,068 55,922 (24,854) (44.4%)

Total current liabilities 22,272,426 21,712,427 559,999 2.6%

NON-CURRENT LIABILITIES: Time-deposits 4,357,461 3,879,884 477,577 12.3% Long-term debt 5,556,712 4,910,533 646,179 13.2% Deferred income from guarantee sales 128,454 102,672 25,782 25.1% Employee benefits 119,091 122,135 (3,044) (2.5%) Deferred Income tax payable 1,719,850 1,353,282 366,568 27.1%

Total non-current liabilities 11,881,568 10,368,506 1,513,062 14.6% Total liabilities 34,153,994 32,080,933 2,073,061 6.5% Stockholders’ equity Capital stock 1,703,861 1,704,085 (224) (0.0%) Additional paid-in capital 3,810,217 3,812,903 (2,686) (0.1%) Retained earnings 2,119,355 1,972,385 146,970 7.5% Net income 317,881 146,970 170,911 116.3% Reserve for repurchase of shares 234,333 233,130 1,203 0.5% Foreign currency translation adjustment 359,578 240,396 119,182 49.6% Total stockholders’ equity attributable to shareholders 8,545,225 8,109,869 435,356 5.4% Non-controlling interest 34,176 31,458 2,718 8.6% Total stockholders’ equity 8,579,401 8,141,327 438,074 5.4% Total liabilities and stockholders’ equity $42,733,395 $40,222,260 $2,511,135 6.2%



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Grupo Famsa, S.A.B. de C.V. and subsidiaries Consolidated statement of income

Thousand of Mexican Pesos

2Q16 2Q15 ∆$ YTD 16 YTD 15 ∆%

Total revenues $4,440,474 $4,104,262 8.2% $8,393,610 $7,634,464 9.9%

Cost of sales (2,427,680) (2,186,602) (11.0%) (4,509,721) (4,002,702) (12.7%)

Gross profit 2,012,794 1,917,660 5.0% 3,883,889 3,631,762 6.9%

Selling & administrative expenses (1,741,922) (1,580,657) (10.2%) (3,347,933) (3,018,060) (10.9%)

Other Income, net 55,957 15,949 250.9% 81,640 39,743 105.4%

Operating profit 326,830 352,952 (7.4%) 617,597 653,445 (5.5%)

Financial income 95,532 500 - 190,404 910 -

Financial expenses (213,418) (172,566) (23.7%) (429,003) (340,149) (26.1%)

FX gain & losses, net (188,044) (77,177) (143.7%) (234,063) (181,374) (29.0%)

Financial expenses, net (305,930) (249,243) (22.7%) (472,662) (520,613) 9.2%

Profit before income tax 20,899 103,708 (79.8%) 144,935 132,832 9.1%

Income tax 141,364 17,090 727.2% 175,665 81,419 115.8%

Consolidated net income $162,263 $120,798 34.3% $320,600 $214,251 49.6%

Controlling interest 161,275 119,390 35.1% 317,883 212,085 49.9%

Non-controlling interest 988 1,409 (29.9%) 2,718 2,166 25.5%

Consolidated net income $162,263 $120,798 34.3% $320,600 $214,251 49.6%



Investor Relations

[email protected]

Tel. +52 (81) 8389 – 3400 ext.1419

www.grupofamsa.com

13 / 13

Grupo Famsa, S.A.B. de C.V. and subsidiaries

Consolidated statement of cash flows Thousands of Mexican Pesos

YTD 16 YTD 15

Operating activities

Profit before income tax $144,934 $132,832

Depreciation and amortization 220,635 228,552

Allowance for doubtful receivables 634,923 592,090

Loss on sale of property, leasehold improvements, furniture & equipment (18,221) (511)

Estimated liabilities for labor benefits 27,378 29,970

Interest income (190,404) (910)

Interest expenses 814,330 677,261

Trade receivables (2,343,290) (2,049,943)

Inventories (129,531) (173,753)

Other accounts receivable (487,297) (354,999)

Suppliers (424,407) 134,471

Accounts payable and accrued expenses 173,707 (145,267)

Income tax paid (43,976) (28,924)

Demand deposits and time deposits 1,378,795 957,736

Interest to bank depositors (380,927) (339,538)

Exchange gain and losses, net 407,047 181,136

Net cash flows from operating activities (216,304) (159,797)

Investing activities

Acquisition of property, leasehold improvements, furniture and equipment (83,979) (117,027)

Acquisition of intangible assets (2,249) (2,176)

Proceeds from sale of furniture and equipment 20,373 3,815

Interest received 4,452 910

Net cash flow used in investing activities (61,403) (114,478)

Financing activities

Interest paid (443,033) (304,532)

Proceeds from current and non-current debt and bank loans 1,010,530 852,352

Payments of current and non-current debt and bank loans (799,074) (795,942)

Share repurchase, net (1,707) (25,750)

Net cash flow from financing activities (233,284) (273,872)

Decrease in net cash and cash equivalents (510,991) (548,147)

Adjustments to cash flow as a result of changes in exchange rates 11,412 3,020

Cash and cash equivalents at the beginning of the period 2,194,323 1,858,271

Cash and cash equivalents at the end of the period $1,694,744 $1,313,144

Notes to the Financial Statements: For a greater depth of analysis, we recommend referring to the Notes

of our Financial Statements at www.grupofamsa.com.

http://www.grupofamsa.com/

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