Grupo Famsa de CV : strengthens its financial structure in 3Q17

GRUPO FAMSA STRENGTHENS ITS FINANCIAL STRUCTURE IN 3Q17

Monterrey, N.L., Mexico, October 26, 2017. - 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 third quarter of 2017, posting marked progress in the strengthening of its financial position and solid performance on its retail and banking operations in Mexico.

In this context, during September Grupo Famsa partially redeemed its Senior Notes due 2020 for a total amount of US$116.1 million, disposing the resources obtained from the credit facility subscribed with Bancomext in July of 2017 in the amount of Ps.2,634 million. With this transaction, Grupo Famsa has substantially reduced its exposure to FX fluctuation of the MXP vs. USD, and has also liquidated Ps.498 million of short-term debt.

Separately, in 3Q17 Grupo Famsa successfully completed sale negotiations of 5 properties for a total amount of Ps.630 million, pursuant of its assets monetization (cash flow is expected to be received towards 4Q17). The obtained proceeds will be primarily used for local notes amortization, thus reducing the indebtedness level of the Company.

In relation to retail operations in Mexico, in 3Q17 the Company registered an 8.0% increase in Net Sales vs. 3Q16, despite an unfavorable environment for consumption and effect of September earthquakes as we faced temporal closing of certain units located in the affected regions. EBITDA follows sales trend, recording a double- digit growth of 10.5%, outstanding the Appliances category performance.

Moving into our banking operations, Banco Famsa recorded a solid performance due to the execution of encouraging marketing campaigns as reflected in the 15.7% increase in bank deposits. NPL, on the other hand, remained at 8.3% level. Banco Famsa continued increasing participation of clients from the formal sector of the economy in its credit portfolio, which raised its participation from 62.9% in 3Q16 to 66.1% this quarter.

Finally, Famsa USA Net Sales in pesos decreased by 27.8%, mainly due to increasing uncertainty among the Hispanic population in the United States and the impact of hurricane Harvey, which affected the state of Texas. However, outstands the 18.3% YoY reduction in the expense structure, in line with the current level of operations.

In this regard, Mr. Humberto Garza Valdez, CEO of Grupo Famsa, commented: "We continue progressing in our strategic initiatives execution and financial position enhancement, allowing us to strengthen our balance sheet and cash flows. In the operating front, we have intensified our canvassing sales channel, thus expecting a greater dynamism in sales during 4Q17. Meanwhile, we continue striving to increase our commercial footprint among second and third generation of Hispanics in the US, having good perspective in hand. Lastly, we are prepared to maximize the benefit from the season of highest demand next quarter."

About Grupo Famsa

Established in 1970 in Monterrey, Nuevo Leon, Grupo Famsa has consolidated its position as a publicly-traded company with a solid presence in the retail sector, focusing its efforts on satisfying families' diverse consumption, financing and savings needs. Its target market is in the Mexican low-middle income households and the Hispanic population of the states where it operates in the USA. Retail sales of Grupo Famsa in Mexico comprise furniture, electronics, appliances, mobile phones, computers, motorcycles, clothing and other durable goods, which are mainly sold within the stores network of Grupo Famsa. In Texas and Illinois, in the USA, Grupo Famsa's offering comprises furniture, electronics, appliances, computers and other durable goods through the operation of its subsidiary Famsa, Inc.

Contact:

Investor Relations Paloma E. Arellano Bujanda [e-mail]

Phone: + 52 (81) 8389-3400 ext. 1419