TV Azteca B de C : Grupo Elektra announces 92% growth in EBITDA, to Ps. 5,085 million in the 2Q21

GRUPO ELEKTRA ANNOUNCES 92% GROWTH IN EBITDA,

TO Ps. 5,085 MILLION IN THE SECOND QUARTER OF 2021

-Solid performance of both commercial and financial businesses

generates 34% increase in consolidated revenue, to Ps.36,068 million-

-Strong growth in the loan portfolio of Banco Azteca México; increases 16%, to Ps.108,858 million-

-Increasing strength in asset quality of Banco Azteca México;

NPL ratio is reduced from 5.3% to 3.8% in the period-

Mexico City, July 26, 2021-GrupoElektra, 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, today announced second quarter 2021 financial results.

Second Quarter Results

Consolidated revenue grew 34%, to Ps.36,068 million in the period, compared to Ps.26,917 million in the same quarter of the previous year. Operating costs and expenses were Ps.30,983 million, from Ps.24,275 million in the same period of 2020.

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As a result, EBITDA was Ps.5,085 million, compared to Ps.2,643 million a year ago. Operating income was Ps.3,062 million this quarter, from Ps.555 million in the same period of 2020.

The company reported net income of Ps.6,948 million, compared to a net loss of Ps.3,538 million a year ago.

	2Q 2020	2Q 2021	Change
			Ps.	%
Consolidated revenue	$26,917	$36,068	$9,151	34%
EBITDA	$2,643	$5,085	$2,443	92%
Operating profit	$555	$3,062	$2,508	----
Net result	$(3,538)	$6,948	$10,486	----
Net result per share	$(15.46)	$30.50	$45.96	----

Figures in millions of pesos

EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization.

As of June 30, 2020, Elektra* outstanding shares were 228.8 million and as of June 30, 2021, were 227.8 million.

Revenue

Consolidated revenue increased 34% in the period, as a result of a 45% growth in commercial sales and a 27% increase in financial income.

The growth in sales of the commercial business - to Ps.16,054 million, from Ps.11,102 million a year ago - results to a large extent from a solid increase in sales of Italika motorcycles - which boost business productivity and mobility of families - and telephony - that strengthens the connectivity of an increasing number of users - that are marketed with optimal customer service, in the most competitive market conditions.

Sales of the commercial business had an additional boost with the development of new stores with a format that offers an optimal mix of merchandise and services, and allows to maximize the customer's shopping experience. Similarly, the Omnichannel operations, with the online store www.elektra.com.mx, which sells thousands of products at unparalleled prices, from any device and at any time, further strengthened business performance.

The increase in financial income - to Ps.20,014 million, from Ps.15,815 million in the previous year - reflects, to a large extent, a 19% increase in Banco Azteca México's

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revenue, in the context of strong growth in the gross loan portfolio in the period, which boosts the well-being of millions of families and the growth of businesses.

Costs and Expenses

Consolidated costs for the quarter increased 49% to Ps.17,753 million, from Ps.11,923 million the previous year. The change is largely explained by a 66% increase in the commercial cost, to Ps.11,636 million, from Ps.7,014 million the previous year, derived from growth in sales of the commercial business, as well as higher costs associated with supply and merchandise distribution in stores.

Financial business costs grew 25%, to Ps.6,117 million, from Ps.4,909 million, as a result of the creation of loan loss reserves, which was partially offset by lower cost of consolidated deposits this period.

Selling, administrative and promotional expenses grew 7% to Ps.13,230 million as a result, mainly, of higher operating, advertising and personnel expenses, in the context of growing operations at the company.

EBITDA and net result

EBITDA was Ps.5,085 million, from Ps.2,643 million from the previous year. The company reported operating income of Ps.3,062 million, compared to Ps.555 million in the same quarter of 2020.

The most important variation below EBITDA was an increase of Ps.12,133 million in other financial results, which reflects an 18% gain this quarter in the market value of underlying assets of financial instruments held by the company - which does not imply cash flow - compared to a 10% decrease a year ago.

Consistent with the results of the quarter, there was an increase of Ps.4,501 million in the provision for taxes in the period.

Grupo Elektra reported net income of Ps.6,948 million, from a loss of Ps.3,538 million a year ago.

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Unconsolidated Balance Sheet

In order to allow the visualization of the non-consolidated financial situation, a pro forma exercise of the balance sheet of Grupo Elektra is presented, excluding the net assets of the financial business, whose investment is valued under the equity method, in this case.

This presentation shows the debt of the company without considering Banco Azteca's immediate and term deposits, which do not constitute debt with cost for Grupo Elektra. The pro forma balance sheet also does not include the bank's gross loan portfolio.

This proforma exercise provides greater clarity regarding the businesses that make up the company and allows financial market participants to estimate the value of the company, considering only the relevant debt for such calculations.

Consistent with this, the debt with cost was Ps.32,185 million as of June 30, 2021, compared to Ps.25,852 million in the previous year. The balance of cash and cash equivalents was Ps.10,355 million, from Ps.6,124 million from the previous year. As a result, net debt as of June 30, 2021 was Ps.21,830 million, compared to Ps.19,728 million a year ago.

As previously announced, during the quarter, Grupo Elektra's subsidiary, Nueva Elektra del Milenio, S.A. de C.V., as originator, placed through a special purpose vehicle established under Luxembourg law, Senior Notes for US$500 million, for seven years, at a 4.875% rate, in international markets.

On the other hand, during the quarter, Certificados Bursátiles Fiduciarios for Ps.2,030 million were early amortized. The amount corresponds to the outstanding balance of the DINEXCB 16 issues - for Ps.1,350 million due 2023 with a rate of TIIE + 2.8% - and DINEXCB 16-2 for Ps.680 million, due 2026 and a fixed rate of 8.8%.

As of June 30, 2021, the company's stockholders 'equity was Ps.103,700 million, and the stockholders' equity to total liabilities ratio was 1.4 times.

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	As of June As of June		Change
	30, 2020	30, 2021		Ps.	%
Cash and cash equivalents	$6,124	$10,355		4,231	69%
Marketable financial instruments	38,468	34,697		(3,771)	(10%)
Inventories	12,091	16,972		4,881	40%
Accounts receivables	47,300	57,576		10,276	22%
Other current assets	3,585	3,361		(224)	(6%)
Investments in shares	38,164	37,288		(875)	(2%)
Fixed assets	8,017	7,090		(927)	(12%)
Right of use assets	8,604	8,779		175	2%
Other assets	1,836	2,782		946	51%
Total assets	$164,191	$178,900	$	14,710	9%
Short-term debt	$11,444	$14,539		3,095	27%
Suppliers	6,578	6,462		(116)	(2%)
Other short-term liabilities	13,645	12,934		(711)	(5%)
Long-term debt	14,408	17,646		3,237	22%
Differed taxes	10,368	12,373		2,005	19%
Other long-term debt	9,804	11,248		1,444	15%
Total liabilities	$66,247	$75,200	$	8,954	14%
Stakeholder´s equity	$97,944	$103,700	$	5,756	6%
Liabilities and equity	$164,191	$178,900	$	14,710	9%

Figures in millions of pesos.

Consolidated Balance Sheet

Loan Portfolio and Deposits

Banco Azteca Mexico, Purpose Financial and Banco Azteca Latin America's consolidated gross portfolio as of June 30, 2021, grew 12%, to Ps.126,674 million, from Ps.113,174 million the previous year. The consolidated delinquency rate was 3.8% at the end of this period, compared to 5% the previous year.

Banco Azteca México's gross portfolio balance increased 16% to Ps.108,858 million, from Ps.93,595 million a year ago. The Bank's delinquency rate at the end of the quarter was 3.8%, compared to 5.3% the previous year.

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