During 2019, sales of Grupo Sanborns increased 3.0% to reach Ps. 53.288 billion, with Sears, Sanborns, iShop/MixUp and other formats contributing 48%, 24%, 21% and 7%, respectively, to sales. Same-store sales increased 0.8% in the year.
The credit portfolio stood at Ps. 12.964 billion, for a marginal reduction of 0.3% from the previous year’s balance. This is the result of greater caution in the approval of new credits in order to maintain a better balance in the portfolio. In the year 253,000 new cardholders were added, with the Company operating 4.41 million proprietary credit cards. Meanwhile, the overdue period fell to 3.6% in 2019, compared to 4.4% in 2018.
Operating profit decreased by 10.0% as it reached Ps. 4.699 million. This is the result of a greater share of technology and electronics items within the product mix, together with a 4.0% increase in operating expenses resulting from increased payroll costs in same and new stores; opening new iShop stores; improvements to technology platforms; and reduced cancellation of accounting provisions.
EBITDA 2019 stood at Ps. 6.789 billion, while EBITDA margin reached 12.7%.
The Company recorded financial expenses of Ps. 377 million in 2019, compared to a financial expense of Ps. 32 million in 2018, benefitting from a foreign exchange rate fluctuation gain that year.
The controlling net income of Grupo Sanborns stood at Ps. 2.949 billion, a decrease of 20.9% compared to the net controlling income of Ps. 3.730 billion observed in 2018.
The Company’s capital expenditures were Ps. 895 million, which were channeled to iShop’s expansion plan (opening of 17 new stores and three remodeled stores), as well as the adjustment of retail spaces to higher-profit categories in Sears and Sanborns stores. At the end of the year we had 451 units with a retail area of 1,234,000 square meters.
At the end of 2019, Grupo Sanborns had no debt, while its cash position stood at Ps. 1.690 billion, a balance that compares to Ps. 2.478 billion recognized at the end of the previous year. The decrease of Ps. 787 million in the cash position was due to other investments in associates, as well as the payment of suppliers, the opening of stores, and the payment of dividends.
Sincerely,
Patrick Slim Domit
Chief Executive Officer of Grupo Sanborns, S.A.B. de C.V