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4Q19 Earnings Release
1 / 12
4Q19
EARNINGS
Investor Relations
Paloma E. Arellano Bujanda [email protected] Phone: +52 (81) 8389 – 3400 ext.1419 www.grupofamsa.com
RELEASE
4Q19 Earnings Release
2 / 12
Highlights
➲ Grupo Famsa’s Consolidated Net Sales. Consolidated Net Sales amounted to Ps.5,598 million in 4Q19, vs. Ps.5,777 million in 4Q18. For FY2019, Consolidated Net Sales increased 3.3%, reaching Ps.20,535 million. ➲ Grupo Famsa’s Consolidated EBITDA. EBITDA reached Ps.785 million in 4Q19, vs. Ps.258 million in 4Q18. For FY2019, EBITDA totaled Ps.2,576 million, vs. Ps.1,565 million in 2018. This outcome considers extraordinary income generated in 2019 and effects from the adoption of IFRS 16. ➲ Funding through Banco Famsa. Bank deposits maintained their growth trend, totaling Ps.34,184 million at the end of 2019, representing a 11.4% YoY growth. ➲ U.S. operations. Famsa USA’s 4Q19 and 2019 EBITDA registered Ps.58 million and Ps.222 million, respectively, driven by a better product mix and higher operational efficiency. ➲ Financial structure. Grupo Famsa exchanged USD$80.9 million (57.8%) of its outstanding Senior Notes due 2020, for new Senior Notes due 2024.
Consolidated Financial Results
4Q19 4Q18 ∆% 2019 2018 ∆%
Net Sales 5,598 5,777 (3.1%) 20,535 19,886 3.3%
Cost of Sales (3,171) (3,041) (4.3%) (11,461) (10,867) (5.5%)
Gross Profit 2,427 2,736 (11.3%) 9,074 9,019 0.6%
Operating Expenses (2,249) (2,552) 11.9% (8,191) (8,004) (2.3%)
Other Income, net 363 (24) ‐ 691 144 379.2%
Operating Profit 541 159 239.4% 1,574 1,159 35.8%
EBITDA 785 258 204.7% 2,576 1,565 64.5%
Net Income (Loss) 457 (568) ‐ 490 (412) ‐
Gross Margin 43.3% 47.4% ‐ 44.2% 45.4% ‐
EBITDA Margin 14.0% 4.5% ‐ 12.5% 7.9% ‐
Net Margin 8.2% (9.8%) ‐ 2.4% (2.1%) ‐
Segment
Same‐store sales (SSS)
4Q19 4Q18 2019 2018
Grupo Famsa¹ (3.0%) 15.4% 2.6% 13.9%
Famsa Mexico² (2.9%) 17.8% 3.5% 15.4%
Famsa USA3 (2.4%) (13.6%) (0.6%) (3.5%)
Monterrey, Mexico, April 27th, 2020. – Grupo Famsa, S.A.B. de C.V. (BMV: GFAMSA), a leading Mexican
commercial conglomerate in the retail, consumer and savings sector, announced today its earnings results for
the fourth quarter (“4Q”) and full‐year 2019 (“FY 2019”). The audited financial statements presented in this
report have been prepared in accordance with IFRS (including the adoption of IFRS 16 “Leases”) and the
interpretations in effect as of December 31st, 2019. Figures are expressed in millions of current, nominal
Mexican pesos, unless otherwise stated.
(1) Includes sales from non‐retail businesses (2) Includes Banco Famsa (3) SSS calculated in U.S. dollars, excluding foreign exchange rates
4Q19 Earnings Release
3 / 12
MESSAGE FROM THE CEO
Grupo Famsa generated an outstanding consolidated EBITDA in 4Q19, amounting to Ps.785 million, boosted by other revenues recorded during the period. On an annual basis, consolidated EBITDA reached Ps.2,576 million in 2019 (+64.5% YoY), driven by: i) a 3.3% year‐over‐year increase in consolidated Net Sales; ii) real expense savings (excluding IFRS 15 and 16 effects); and, iii) other revenues from commercial alliances and asset monetization.
In our operations in Mexico, Net Sales decreased 3.0% YoY in 4Q19, but annually rose 3.6% during 2019. The mixed results are attributed to a weak demand of durable goods experienced in the sales floor since the third quarter. Moreover, there was a scheduled slowdown in credit sales and personal loans origination during the period, derived from the recalibration of the credit model used by Banco Famsa, which aims to strengthen the standards of consumer credit origination, in line with the objective to improve the risk profile of consumer portfolio.
Regarding the bank deposits collected through Banco Famsa, their balance totaled Ps.34,184 million, expanding 11.4% YoY, as of December 31, 2019, supported by the ongoing advertisement activities for investment and savings’ products. At year‐end, bank deposits remain as Grupo Famsa’s main source of funding (79.4% of total). Additionally, following the development of our asset monetization plan, we executed the sale of 4 properties through Banco Famsa, for a total amount of Ps.1,133 million in 2019.
In the United States, the sales volume, in USD, for both 4Q19 and FY2019, remained at similar levels to those of 2018. Nevertheless, we recorded an increased commercialization of higher‐margin products and generated certain operating efficiencies, leading to an EBITDA of Ps.58 million in 4Q19 and Ps.222 million in 2019, thus contributing to our consolidated results.
Turning to the Company’s financial position, the refinancing of the remaining USD$59.1 million of the Senior Notes due on June 2020, is still pending. It is worth noting that at early 2017 the aggregate principal amount of these Senior Notes was USD$250 million, of which 44% (USD$110 million) was settled in advance that very year, and 32% (USD$80.9 million) was refinanced through the exchange offer for new Senior Notes due 2024, issued in last December 2019.
In relation to Grupo Famsa's liquidity, the immediate objective is to restore the Company's financial flexibility, therefore we are defining a scheme to align our debt maturity profile to current conditions, in close coordination with the financial community.
Finally, we are facing a complex scenario, as the expectations regarding the growth of global economy at the end of 2019 and beginning of 2020 have faded due to the impact caused by COVID‐19 pandemic and its repercussion on world economy. For this reason, the 2020 Guidance announced on February 24th, 2020 is being withdrawn, and, as soon as we gather all necessary elements for analysis, we will update the market about the Company’s outlook.
Humberto Garza Valdez,
CEO
4Q19 Earnings Release
4 / 12
Business Segments
Famsa Mexico
4Q19 Net Sales totaled Ps.5,155 million, decreasing 3.0% YoY, due to the combined effect of a lower
demand of durable goods and a slowdown in consumer credit origination, derived from the recalibration
of our credit criteria; seeking to prioritize receivables’ quality, as the Company pursues medium‐ and long‐
term benefits over temporary short‐term gains. Offsetting these effects, outstood the 9.5% YoY growth
recorded in personal loans origination during 4Q19, mainly payroll.
In the fourth quarter, Famsa Mexico achieved a greater traction in alternative channels, driven by the
execution of commercial campaigns, highlighting "El Fin Más Grande en Ofertas", as well as a greater
visibility in digital channels, to attract other audiences.
In annual terms, following the volume sold during the first 9 months of 2019, Net Sales in Famsa Mexico
increased 3.6% YoY, reaching Ps.18,838 million as of year‐end.
Banco Famsa
Net loan portfolio totaled Ps.24,563 million at the end of 4Q19, (‐3.1% YoY), supported by a decrease
of the commercial credit portfolio balance. Banco Famsa’s consolidated NPL ratio, including payroll loans,
was 12.8% as of year‐end 2019.
At December 31, 2019, Bank Deposits amounted to Ps.34,184 million, increasing 11.4% YoY, given the
improvement achieved at digital banking solutions and customer service’s times. This growth, paired with
the rise in funding costs (7.5%, vs. 7.2% in 4Q18) fueled an annual increase in interests on bank deposits
during the quarter.
Famsa USA
During 4Q19, Net Sales, in USD and MXP, decreased by 1.6% and 4.6% YoY, respectively. On the other
hand, Famsa USA recorded an EBITDA of Ps.58 million in the quarter, compared to Ps.14 million in 4Q18.
For the full‐year 2019, U.S. Net Sales, both in USD and MXP, remained at similar levels to those of 2018.
Meanwhile EBITDA totaled Ps.222 million, compared to the outflow of Ps.19 million in 2018, following a
more efficient structure, an adequate commercial configuration (sales floor and kiosks) and a growing
contribution of personal loans.
4Q19 Earnings Release
5 / 12
Consolidated Financial Results
(1) Includes sales from non‐retail businesses (2) Includes Banco Famsa, other segments and intercompany
4Q19 Consolidated Net Sales recorded Ps.5,598 million, compared to Ps.5,777 million in 4Q18,
decreasing 3.1%, due to a weak consumption environment of durable goods and lower credit sales (in line
with the constraint of consumer credits), given the implementation of a new credit score in Mexico. As a
result, Consolidated SSS fell 3.0% in 4Q19. 2019 Consolidated Net Sales amounted to Ps.20,535 million,
recording an annual growth rate of 3.3%.
During 4Q19, Cost of Sales reached Ps.3,171 million, 4.3% higher than the Ps.3,041 million in 2018,
due to a higher allowance for doubtful receivables and the 18.0% growth in interests on bank deposits´
interests (following a larger bank deposits’ base). 2019 Cost of Sales was Ps.11,461 million, a 5.5% YoY
increase. Likewise, bank deposits´interests increased 28.8% YoY. The Cost of Sales to Net Sales ratio for
the full‐year 2019 was 55.8% (+1.2 pp. YoY).
4Q19 Gross Profit declined 11.3%, from Ps.2,736 million in 4Q18, to Ps.2,427 million. Gross Margin
was 43.3% in 4Q19, compared to 47.4% in 4Q18. During 2019, Gross Profit performed a slight increase of
0.6%, reaching Ps.9,074 million.
4Q19 Consolidated Operating Expenses dropped 11.9% YoY, while the figure for the full‐year recorded
a 2.3% increase compared to 2018. Analyzing the behavior of this item on a comparable basis, adjusted
for the effects associated to the adoption of IFRS 15 and 16, consolidated operating expenses
in 4Q19 totaled in Ps.2,177 million, 14.7% below the expenses performed in 4Q18. In an annual basis
operating expenses registered a 1.6% decrease vs. 2018, amounting to Ps.8,130 million.
In 4Q19, Consolidated EBITDA reached Ps.785 million, compared to Ps.258 million in 2018, as a result
of the Ps.374 million benefit from the monetization of 4 properties through Banco Famsa in December
2019, which was accounted at the consolidated P&L. Moreover, it is relevant to consider the adoption of
IFRS 15 and 16, in 2018 and 2019, respectively.
Segment Income Statement
4Q19 4Q18 ∆% 2019 2018 ∆% Consolidated Net Sales1 5,598 5,777 (3.1%) 20,535 19,886 3.3% Famsa Mexico² 5,155 5,313 (3.0%) 18,838 18,181 3.6% Famsa USA 442 464 (4.6%) 1,697 1,705 (0.5%)Consolidated Gross Profit 2,427 2,736 (11.3%) 9,074 9,019 0.6% Famsa Mexico² 2,197 2,521 (12.9%) 8,222 8,206 0.2% Famsa USA 230 215 7.0% 852 813 4.8%Consolidated Operating Expenses (2,249) (2,552) 11.9% (8,191) (8,004) (2.3%) Famsa Mexico² (2,030) (2,408) 15.7% (7,338) (7,213) (1.7%) Famsa USA (219) (144) (51.6%) (853) (791) (7.8%)Consolidated Operating Profit 541 159 239.4% 1,574 1,159 35.8% Famsa Mexico² 540 151 256.7% 1,579 1,200 31.6% Famsa USA 1 8 (86.4%) (5) (41) 88.0%Consolidated EBITDA 785 258 204.7% 2,576 1,565 64.5% Famsa Mexico² 727 244 198.1% 2,353 1,584 48.5% Famsa USA 58 14 322.1% 222 (19) ‐
4Q19 Earnings Release
6 / 12
In annual terms, consolidated EBITDA grew 64.5%, totaling Ps.2,576 million, vs. Ps.1,565 million in
2018. When analyzing this result on a comparable basis, the extraordinary income of Ps.574 million
generated during the year, attributable to the monetization of real estate and the alliance with BNP
Paribas Cardif (engaged in previous months), would have to be excluded. Similarly, full‐year 2019 EBITDA
would have to be adjusted for the accounting effects associated to the adoption of IFRS 15 and 16.
Financial Position Summary
As of December 31, 2019, the Consolidated Trade Receivables Balance, net of allowances for
doubtful accounts, expanded to 8.9% YoY, from Ps.29,729 million at the end of 2018 to Ps.32,386
million, driven by a stronger consumer loan origination.
Consumer Portfolio in Mexico, as of the end of 4Q19, attained Ps.26,755 million, 18.4% higher than
the Ps.22,591 million recorded in the same period of 2018, following a higher payroll credit origination.
At quarter‐end, Mexico Commercial Portfolio reached to Ps.3,730 million, decreasing 24.4% YoY. As of
December 31, 2019, US Consumer Portfolio was Ps.1,901 million, a 13.7% contraction compared to the
Ps.2,202 million at the end of 2018.
Debt
(1) Does not include leasing liabilities (2) Include leasing liabilities
Gross Debt (excluding Bank Deposits), as of quarter‐end, reported a slight increase of 1.4% when
compared to the same period of 2018. However, on a sequential basis (3Q19), it decreased 6.9%.
The growth in Gross Debt is primarily attributed to the issuance of subordinated notes, for a total of
Ps.533 million, conducted by Banco Famsa, during 2019, as well as the subscription of a Ps.500 million
long‐term credit facility with Multiva. The latter was partially offset by short‐term debt amortizations,
primarily of debt certificates and banking credits, as per payment schedule.
Loan Portfolio 4Q19 4Q18 ∆% Consolidated Portfolio, net 32,386 29,729 8.9%
Mexico Consumer 26,755 22,591 18.4%
Mexico Retail 3,730 4,936 (24.4%)
USA Consumer 1,901 2,202 (13.7%)
Banco Famsa’s NPL (including collection rights) 12.8% 10.0% 2.8 pp.
Leverage Metrics 4Q19 4Q18 ∆% Gross Debt1 8,881 8,757 1.4%
Interest Coverage 1.9 1.3 0.6
Gross Debt1 (ex. bank deposits) / LTM EBITDA 3.4x 5.6x (2.2x)
Gross Debt2 15,602 ‐ ‐
Gross Debt2 (ex. bank deposits) / LTM EBITDA 6.1x ‐ ‐
4Q19 Earnings Release
7 / 12
34% 33%
53% 53%
13% 8%6%
4Q18 4Q19
Debt Profile(1)
Senior Notes Bank Debt
Debt Securities Subordinated Debt
78% 79%
10% 8%12% 12%
1%
4Q18 4Q19
Funding Sources(1)
Bank Deposits Debt Securities
Bank Debt Subordinated Debt
(1) Does not include leasing liabilities
As of quarter‐end, Grupo Famsa’s Gross Debt was composed as follows:
(1) Does not include leasing liabilities
As of December 31, 2019, 80% of Bank Deposits were originated from time deposits, 14% from demand
deposits and 6% from time deposits with optional availability. The evolution of bank deposits and average
funding cost is depicted in the following graph:
*************************
815 422 634 512 591 531 810 432
704
1,353
66
1,478
533
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Debt Maturity Schedule(1)
Bank Debt Debt Securities Senior Notes Subordinated Debt
2,069
2,872
700
3,659 3,905 3,702 3,557 4,8852,381 2,218 2,158 2,088 2,046
24,649 26,109 26,341 27,228 27,25330,689
32,232 32,20132,873
34,184
7.2% 7.6% 7.6% 7.8% 7.5%
4Q18 1Q19 2Q19 3Q19 4Q19
Banco Famsa: Bank Deposits
Demand deposits Time deposits with optional availability Time deposits Avg. Cost of Funding
Debt Composition(1) Short‐term % Long‐term % Total % Bank Debt 1,061 36.9% 3,998 66.5% 5,059 57.0%
Debt Securities 1,811 63.1% 1,478 24.6% 3,289 37.0%
Subordinated Debt ‐ ‐ 533 8.9% 533 6.0%
2,872 100.0% 6,009 100.0% 8,881 100.0%
8,757 8,881
4Q19 Earnings Release
8 / 12
Recent Developments
➲ On October 24, 2019, at Grupo Famsa’s Annual General Meeting, with the objective of reinforcing its
corporate practices, Mr. Humberto Garza Valdez was appointed as Chairman, and Mr. Luis Gerardo
Villarreal Rosales and Mr. Leandro Martin Castillo Parada were designated as directors, the latter
qualifying as independent.
➲ On November 27, 2019, Grupo Famsa announced that Dr. Manuel Sanchez Gonzalez decided to step
down from his position as an independent director and Chairman of Banco Ahorro Famsa, S.A.,
Institución de Banca Múltiple, since his current health does not allow him to continue performing
such roles. Therefore, on last December 16, Mr. Humberto Garza Valdez was appointed as Chairman
by the Board.
➲ On October 25, 2019, Grupo Famsa announced the exchange offer of newly issued 9.75% Senior
Notes due 2024, for any and all of its outstanding 7.25% Senior Notes due 2020. On December 17,
2019, the settlement of the exchange offer was completed, with the exchange of USD$80.9 million
of the outstanding 2020 Senior Notes.
➲ On December 13, 2019, following the settlement of the exchange offer of Senior Notes due 2020,
S&P Global Ratings downgraded Grupo Famsa's global and national scale issuer credit ratings to 'CCC‐
' from 'CCC+' and 'mxCCC‐' from 'mxCCC+', respectively, since the Company is bound to refinance the
remaining USD$59.1 million of its Senior Notes due 2020.
➲ On December 18, 2019, following the exchange offering of Senior Notes due 2020, Fitch Ratings
upgraded Grupo Famsa's IDR and national long‐term rating to 'CCC‐' from 'RD' and 'CCC‐(mex)' from
'RD(mex)', respectively. Moreover, Fitch Ratings assigned a rating of 'CCC‐/RR4' to the new USD$80.9
million Senior Notes due 2024.
➲ On December 23, 2019, S&P assigned a 'CCC‐' issue level to the newly issued Senior Secured Notes
due 2024. S&P also withdrew its ratings on Senior Unsecured Notes due 2020.
Forward‐looking Statements
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.
Technical Notes and Bases for Consolidation and Presentation Non‐performing Loans Ratio (NPL): The calculation of NPL 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 NPL indicator for the Mexican National Banking and Securities Commission (CNBV).
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.
Percentage rates of change: Percentage rates of change presented in this Report are calculated according to the consolidated financial statements contained herein.
4Q19 Earnings Release
9 / 12
Tables and Graphs
Table 1: Retail stores and banking branches
(1) Most banking branches are located within Famsa Mexico stores.
Graph 1: Consolidated Product Mix
Table 2: IFRS 16 effect
Stores and Branches Business Units Floor Space (m²)
4Q19 Openings Closures 3Q19 4Q18 ∆% AsA 4Q19 4Q18 ∆% AsA
Total 789 1 9 797 802 (1.6%) 550,276 552,221 (0.4%)
Stores 430 1 0 429 424 1.4% 514,469 514,546 0.0%
Famsa Mexico 379 0 0 379 380 (0.3%) 449,918 450,735 (0.2%)
Famsa USA Texas 22 0 0 22 22 0.0% 60,287 60,287 0.0%
PL USA Branches 29 1 0 28 22 31.8% 4,264 3,524 21.0%
Banking Branches¹ 359 0 9 368 378 (5.0%) 36,807 37,675 (2.3%)
1Q19 2Q19 3Q19 4Q19 2019
Income Statement Depreciation and Amortization (177) (179) (180) (181) (717) Financial Expenses (133) (133) (132) (139) (537) Balance Sheet Assets – rights‐of‐use 5,647 5,563 5,492 6,441 6,441 Liabilities–lease 5,721 5,710 5,713 6,722 6,722
31.6% 35.4% 35.0% 37.3%
13.4% 12.8% 12.6% 11.5%14.2% 12.4% 13.3% 12.5%
10.8% 9.6% 10.4% 9.6%
11.2% 8.6% 9.7% 7.7%4.7% 3.6% 5.4% 4.6%3.7% 2.3% 3.1% 2.2%
10.4% 15.3% 10.5% 14.6%
4Q18 4Q19 2018 2019
Others
Computing
Motorcycles
Electronics
Mobile Phones
Appliances
Furniture
Loans
$5,777 $5,598 $19,886 $20,536
4Q19 Earnings Release
10 / 12
Consolidated Financial Statements
Grupo Famsa, S.A.B. de C.V. and subsidiaries Consolidated Statements of Financial Position
Thousands of Mexican pesos
31‐dec‐19 31‐dec‐18 ∆$ ∆% Assets CURRENT ASSETS:
Cash and equivalents 3,699,675 1,540,797 2,158,878 >100.0%Trade receivables, net 22,362,886 20,465,098 1,897,788 9.3%Rights to collect from related parties ‐ 800,000 (800,000) (100.0%)Recoverable taxes 635,158 471,795 163,363 34.6% Other accounts receivable 3,222,633 2,009,175 1,213,458 60.4% Inventories 2,489,941 2,766,022 (276,081) (10.0%)
Advance payments 409,223 384,785 24,438 6.4% Assets held for sale 2,482,991 ‐ 2,482,991 ‐
Total current assets $35,302,507 $28,437,672 $6,864,835 24.1%NON‐CURRENT ASSETS:
Restricted Cash 311,785 311,785 ‐ ‐Trade receivables, net 10,022,649 9,263,858 758,791 8.2%Rights to collect from related parties ‐ 2,860,678 (2,860,678) (100.0%)Property, leasehold improvements, and furniture & equipment, net 990,167 1,120,051 (129,884) (11.6%)Rights‐of‐use assets 6,440,920 ‐ 6,440,920 ‐Goodwill and intangible assets, net 504,238 459,103 45,135 9.8%Guarantee deposits 327,249 144,975 182,274 >100.0%Other assets 1,145,846 1,528,806 (382,960) (25.0%)
Deferred income‐tax 5,037,376 4,432,177 605,199 13.7% Total non‐current assets $24,780,230 $20,121,433 $4,658,797 23.2%Total assets $60,082,737 $48,559,105 $11,523,632 23.7%
Liabilities and Stockholders’ equity CURRENT LIABILITIES: Demand deposits 32,679,320 29,045,634 3,633,686 12.5%Short‐term debt 2,872,171 1,939,121 933,050 48.1%Suppliers 1,454,856 1,238,583 216,273 17.5%Leasing liabilities 522,340 ‐ 522,340 ‐Accounts payable and accrued expenses 1,724,747 1,101,547 623,200 56.6%Deferred income from guarantee sales 259,006 283,988 (24,982) (8.8%)
Income tax payable 89,399 39,104 50,295 >100.0% Total current liabilities $39,601,839 $33,647,977 $5,953,862 17.7%
NON‐CURRENT LIABILITIES: Time‐deposits 1,504,448 1,643,664 (139,216) (8.5%)Long‐term debt 5,475,979 6,818,138 (1,342,159) (19.7%)Subordinated debt 532,580 ‐ 532,580 ‐Leasing liabilities 6,199,367 ‐ 6,199,367 ‐Deferred income for guarantee sales 232,828 270,010 (37,182) (13.8%)Employee benefits 235,910 200,329 35,581 17.8%
Total non‐current liabilities $14,181,112 $8,932,141 5,248,971 58.8%Total liabilities $53,782,951 $42,580,118 11,202,833 26.3%
Stockholders’ equity Capital stock 1,699,614 1,702,539 (2,925) (0.2%)Additional paid‐in capital 3,759,260 3,794,363 (35,103) (0.9%)Retained earnings (467,223) (60,206) (407,017) >100.0%Net income 486,885 (409,722) 896,607 (>100.0%)Reserve for repurchase of shares 269,308 241,457 27,851 11.5%Foreign currency translation adjustment 466,257 627,917 (161,660) (25.7%)Total stockholders’ equity attributable to shareholders 6,214,101 5,896,348 317,753 5.4%Non‐controlling interest 85,685 82,639 3,046 3.7%Total stockholders’ equity $6,299,786 $5,978,987 320,799 5.4%Total liabilities and stockholders’ equity $60,082,737 $48,559,105 11,523,632 23.7%
4Q19 Earnings Release
11 / 12
Grupo Famsa, S.A.B. de C.V. and subsidiaries Consolidated Statement of Income
Thousands of Mexican pesos
4Q19 4Q18 ∆$ ∆% 2019 2018 ∆$ ∆%
Total revenue 5,597,711 5,776,611 (178,900) (3.1%) 20,534,793 19,885,550 649,243 3.3%Cost of sales (3,171,202) (3,040,962) (130,240) (4.3%) (11,460,571) (10,866,622) (593,949) (5.5%)Gross profit $2,426,509 $2,735,649 ($309,140) (11.3%) $9,074,222 $9,018,928 $55,294 0.6%Operating expenses (2,248,651) (2,552,084) 303,433 11.9% (8,190,858) (8,004,213) (186,645) (2.3%) Selling & Administrative
Expenses (2,004,190) (2,453,704) 449,514 18.3% (7,189,695) (7,597,833) 408,138 5.4%
Depreciation of the period (63,609) (98,380) 34,771 35.3% (284,594) (406,380) 121,786 30.0% Amortization of rights‐of‐use
assets (180,852) ‐ (180,852) ‐ (716,569) ‐ (716,569) ‐
Other income, net 362,892 (24,244) 387,136 >1,000.0% 690,994 144,185 546,809 379.2%Operating profit $540,750 $159,321 $381,429 239.4% $1,574,358 $1,158,900 $415,458 35.8%Financial income 45,723 141,366 (95,643) (67.7%) 261,401 369,038 (107,637) (29.2%)Financial expenses (354,676) (341,805) (12,871) (3.8%) (1,384,861) (1,231,424) (153,437) (12.5%)Interest paid for rights‐of‐use (139,354) ‐ (139,354) ‐ (537,356) ‐ (537,356) ‐FX (loss) gain, net 113,277 (134,352) 247,629 184.3% 106,158 (19,912) 126,070 633.1%
Financial expenses, net (335,030) (334,791) (239) (0.1%) (1,554,658) (882,298) (672,360) (76.2%)(Loss) profit before income tax $205,720 ($175,470) $381,190 217.2% $19,700 $276,602 ($256,902) (92.9%)Income tax 251,225 (392,595) 643,820 164.0% 470,231 (688,880) 1,159,111 168.3% Incurred income tax (2,717) (40,322) 37,605 93.3% (152,151) (75,158) (76,993) (102.4%) Deferred income tax 253,942 (352,273) 606,215 172.1% 622,382 (613,722) 1,236,104 201.4%Consolidated net income (loss) $456,945 ($568,065) $1,025,010 180.4% $489,931 ($412,278) $902,209 218.8%Controlling interest $456,722 ($560,213) $1,016,935 181.5% $486,885 ($409,722) $896,607 218.8%Non‐controlling interest $223 ($7,852) $8,075 102.8% $3,046 ($2,556) 5,602 219.2%Consolidated net income (loss) $456,945 ($568,065) $1,025,010 180.4% $489,931 ($412,278) $902,209 218.8%
4Q19 Earnings Release
12 / 12
Grupo Famsa, S.A.B. de C.V. and subsidiaries Consolidated Statement of Cash Flows
Thousands of Mexican pesos 2019 2018
Operating activities
Profit before income tax 19,700 276,602
Depreciation and amortization 284,594 406,380
Depreciation on right‐of‐use assets 716,569 ‐
Allowance for doubtful receivables 1,883,900 1,067,500
Income on sale of property, leasehold improvements, furniture & equipment (272,521) (19,062)
Estimated inventory loss 6,764 (8,456)
Estimated liabilities for labor benefits 37,542 42,743
Changes in incremental costs of new contracts (1,159,920) (517,776)
Interest Income (120,669) (68,097)
Amortization of debt securing cost 13,308 8,222
Interest accrued on collection rights with related parties (140,732) (300,941)
Interest expenses 1,384,861 1,231,424
Interest on right‐of‐use assets 519,510 ‐
Interest paid on bank deposits 2,455,759 1,906,945
Income from sale of assets held for sale (241,158) ‐
Unrealized exchange rate loss (gain), net (284,741) (234)
Subtotal $5,102,766 $4,025,250
Clients (4,540,479) (5,996,910)
Inventories 269,317 (312,383)
Collection rights with related parties 208,850 793,113
Increase (decrease) in other working capital items 2,395,011 (1,650,459)
Demand deposits and time deposits 3,465,955 5,651,346
Interest on bank deposits (2,427,244) (1,863,157)
Net cash flows from operating activities $4,474,176 $646,800
Investing activities
Acquisition of property, leasehold improvements, furniture and equipment (76,701) (163,794)
Acquisition of intangible assets (128,977) (76,608)
Proceeds from sale of property, furniture and equipment 288,345 125,898
Proceeds from sale of assets held for sale 241,158 ‐
Other assets and deposits in guarantee (179,693) 1,517
Affiliated entities (472,052) 837,292
Interest received 120,669 68,097
Net cash flow used in investing activities ($207,251) $792,402
Financing activities
Interest paid (1,364,924) (1,245,881)
Proceeds from short‐ and long‐term debt 2,680,258 4,760,845
Payments of short‐ and long‐term debt (2,465,214) (5,031,881)
Leasing payments (950,468) ‐
Stock repurchase, net (10,177) (20,798)
Net cash flow from financing activities ($2,110,525) ($1,537,715)
Increase (decrease) in net cash and cash equivalents 2,156,400 (98,513)
Adjustments to cash flow as a result of changes in exchange rates 2,478 (3,807)
Cash and cash equivalents at the beginning of the period 1,540,797 1,643,117
Cash and cash equivalents at the end of the period $3,699,675 $1,540,797
Notes to the Financial Statements: For a greater depth of analysis, we recommend referring to the Notes of our Financial
Statements a www.grupofamsa.com.