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2016

Strengthening strategies to enhance profitability and improve its offer of products and financial services.

In a complex and challenging environment across the markets it serves, Grupo FAMSA reiterated its determination to continue perfecting its business model, generating value for its customers, employees, community and stockholders.

To our investors of Grupo FAMSA, we would like to reiterate the determination of our management team and associates to continue improving the Company’s performance.

In 2017, we will focus our efforts on enhancing the effectiveness of our operating and business structure, in order to grow the Company’s profitability and generation of operating cash flow.



CORPORATE PROFILE

Vision


To enhance our leadership in the retail commercialization of durable and personal goods, and specialized financial services in Mexico and the Hispanic segment in the USA.

Mision


To be the best option for our clients in the retail commercialization of durable and personal goods, and specialized financial services fitting all our clients’ needs. To assure that our stockholders receive expected yields.

Values


The values that distinguish us in the market and are an integral part of our company’s activities are: simplicity, business sense, commitment, a customer focus, quality and trust.

BUSINESS UNITS

Famsa México


Responsible for operating 380 retail stores in Mexico and focused on providing consumer goods to the Mexican population.

Banco Famsa


Established in 2007, provides a complementary portfolio of savings and credit services to retail customers in 452 branches, as well as microcredit and financing to small and medium-sized enterprises.

Famsa USA


Operates a network of 26 retail stores and 28 branches that offer personal loans in the United States, attending to the growing hispanic community.

BUSINESS MODEL

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2016

FINANCIAL HIGHLIGHTS

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406

Stores

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452

Banking Branches

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1.2 Mill.

Active Accounts

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17,667

Employees

2016

STRENGTHENING

During a challenging year, Thanks to the professionalism of its associates, Grupo FAMSA achieve a dynamic level of sales, recording an increase in Consolidated Net Sales for the year. This expansion, combined with the responsible management of costs and expenses, positioned the Company to leverage its competitive advantages.

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Consolidated Net Sales

$17,554

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USA Net Sales

$2,265

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Gross Margin

44.6%

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EBITDA Margin

8.0%

Net Sales : $17,554

EBITDA : $1,411

Operating Income: $994

Assets: $42,490

* Figures in millions of MXP

ENHANCING PROFITABILITY

Famsa Mexico


The Furniture and Appliance marketing business consolidated its industry leadership during the year, growing Net Sales by 9.2% to a total of $15,157 million pesos, compared to $13,884 million pesos in 2015.


Banco Famsa


At the close of 2016, Bank Deposits provided 67.8% of Grupo FAMSA’s source of funding. Interest to Bank Depositors recorded $844 million pesos, 23.2% higher the previous year given the higher balance of deposits received and the increase in the cost of funding.

Famsa USA


Famsa USA implemented specific initiatives to expand its customer base and drive consumption. Combined with the appreciation of the U.S. dollar vis-à-vis the Mexican peso, this resulted in an 11.8% year-over-year increase in Net Sales.

With the reliance that the actions taken in 2016 underscore the Company’s vocation to ensure profitability and continuous improvement

- Humberto Garza Valdez-
CEO

2016

Business
units


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9.5% growth in consolidated sales

The 9.5% growth in consolidated sales is just one outstanding reflection of the Company’s efforts to improve its performance, even in challenging environments, throug customer loyalty, and the implementation of successful and continuous advertising campaigns and discounts.

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EBITDA

On a consolidated level, annual EBITDA reached $1,411 million pesos in 2016. EBITDA growth was limited during the year, mainly due to the natural gap between the expenses applies to the credit portfolio origination, the recognition of the income of payroll credits and an additional allowance for doubtful accounts that was recorded during 4Q16 since the Company's Management carried out certain adjustments to its reserve estimation methodology, seeking a more conservative approach in its recovery criteria.

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Mobile Phones, Electronics and Appliances

FAMSA Mexico’s sales growth was largely driven by the categories of Mobile Phones, Electronics and Appliances, as well as the leveraging of Seasonal campaigns, both in summer and at Christmas.

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Promotions and advertising campaigns

“46 Aniversario” (46th Anniversary) was among the year’s most successful campaign, designed to increase sales through attractive promotions.

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Average cost of funding

Moreover, the average cost of funding as of year-end 2016 was 4.5%, having grown less than the TIIE (Mexican reference rate) during the year.

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Loans to MySMEs

Moreover, Grupo FAMSA continued to center its commercial portfolio on productive loans, which totaled $3,691 million pesos as of year-end 2016. Loans to MySMEs (Micro, Small and Medium-sized Enterprises) represented 14.3% of the Company’s consolidated credit portfolio and also contributed to diversifying the credit risk.

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Challenges and opportunities

Meanwhile, FAMSA USA’s operations during the second half of the year were complicated due to the election campaigns and an expectation of uncertainty among the business unit’s target market for sales, to which FAMSA USA directed its advertising and marketing efforts.

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11.8% year-over-year increase in Net Sales in MXP

FAMSA USA’s operations during the second half of the year were complicated due to the election campaigns and an expectation of uncertainty among the business unit’s target market for sales, to which FAMSA USA directed its advertising and marketing efforts. Consequently, it implemented specific initiatives to expand its customer base and drive consumption. Combined with the appreciation of the U.S. dollar vis-à-vis the Mexican peso, this resulted in an 11.8% year-over-year increase in Net Sales.

Accumulated 2016 EBITDA in pesos for FAMSA USA was $297 million pesos as of December 31st, 2016, contributing to the consolidated result.

During 2016, Grupo FAMSA sought to lower operating expenses and enhance sales-floor

efficiency

without affecting quality and customer service.

The Furniture and Appliance marketing business

consolidated

its industry leadership during the year, growing Net Sales by 9.2% to a total of $15,157 million pesos, compared to $13,884 million pesos in 2015.

Banco FAMSA also

drove consolidated results,

mainly because of the decline in the Non-Performing Loans Ratio to 8.5%, 130 basis points below that of 2015.

FAMSA USA it implemented

specific initiatives

to expand its customer base and drive consumption. Combined with the appreciation of the U.S. dollar vis-à-vis the Mexican peso, this resulted in an 11.8% year-over-year increase in Net Sales.

2016

Corporate
Governance

Social Responsibility

With a long track record of social solidarity and responsibility values, in 2016 Grupo FAMSA continued implementing initiatives to promote the safety, development and overall wellbeing of its associates, reiterating the organization’s commitment to them. The Company also continued its efforts to involve its customers to support institutions that seek to help the less fortunate people.

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Culture of risk prevention

Grupo FAMSA offers safe workplaces that helps associates to carry out their professional activities effectively and protects the integrity of consumers and suppliers, as well as those who visit its facilities, surrounding its local communities and its assets. All of this is a strategic priority which can be clearly manifested in the Company’s continuous risk evaluation and mitigation, training and solid culture of prevention.

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Training and development

Grupo FAMSA not only supports the growth of its associates’ technical capabilities to improve their workplace performance, but also includes training programs in areas related to their personal development. These efforts represent another pillar to drive the comprehensive growth of the Grupo FAMSA team.

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Community support

During the year diverse donation campaigns were launched through Banco FAMSA’s ATM machines. Thus, in partnership with its customers, Grupo FAMSA was able to support different charity institutions, such as Hogar de la Misericordia, the Mexican Red Cross and the “Bécalos” Scholarship Program. The latter initiative was carried out in conjunction with the Mexican Banking Association and the Televisa Foundation to provide support for low-income students.

In 2016, Grupo FAMSA continued to enhance the Risk Prevention Program that has been in place since 2013. This program establishes standardized safety and contingency response protocols, a culture of prevention across the Company’s work centers and business units, and also first response, and search and rescue brigades.

During 2016, 514 preventive visits were made to Grupo FAMSA’s branches and offices to inspect and guarantee the correct functioning of all the equipment and installations needed for avoiding and responding to contingencies, as well as to detect any situations of risk or danger in advance.

In addition, Risk Committees were set up and upgraded at 401 work centers, exceeding the goal of 387 planned for 2016. These Committees are made up of operations and administrative managers, HR leaders, area coordinators and members of the Internal Support Brigades.

In 2016, a total of 132,976 man-hours of training were provided for approximately 6,000 employees (1/3 of the total Grupo FAMSA workforce), both in Mexico and the United States. Courses offered covered topics such as technical training, general knowledge and individual skills.

It is important to highlight the impartation of 9,588 man-hours of training in preventing money laundering and the Code of Conduct for bank personnel, 70% more than in 2015. This important effort is evidence of the institution’s commitment to excellence and the execution of best banking practices.

With regard to community support programs, during the year diverse donation campaigns were launched through Banco FAMSA’s ATM machines. Thus, in partnership with its customers, Grupo FAMSA was able to support different charity institutions, such as Hogar de la Misericordia, the Mexican Red Cross and the “Bécalos” Scholarship Program. The latter initiative was carried out in conjunction with the Mexican Banking Association and the Televisa Foundation to provide support for low-income students.

In a year characterized by complex economic conditions across Grupo FAMSA’s markets, the Company reiterated its commitment to society in partnership with its customers and different institutions, promoted the contribution of its associates to the environment, and enhanced the safety of its facilities for the benefit of employees, customers and the general public.

2016


Highlights

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514

Preventive
visits

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401

Work
centers

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536

Evacuation
simulations

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132,976

Man-hours
of training

2016

Contact

If you need more information about our results for the year 2016, we invite you to download the PDF version or contact us directly.

Mexico

  • +52 (81) 8389 3400
  • ir@famsa.com
  • Ave. Pino Suárez No. 1202 Nte
    Monterrey, N.L.

PDF Version

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Contact Us

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