Edgar Filing: GRUPO CASA SABA, S.A.B. DE C.V.

Quarterly Earnings Report Octubre 27, 2015
3Q12

Financial Highlights:
(All figures are expressed in millions of Mexican pesos. Comparisons are made with the same period of 2014, unless otherwise stated. Figures may vary slightly due to rounding).

The sales for the third quarter were minimal, and were affected by returns and allowances, consequently both the cost and gross profit were also minimal.
Operating expenses reached $94.07 million pesos.
For the third quarter the EBITDA was $-73.96 million pesos.
The administration has been immersed in an intense effort of evaluation to determine their future even if it has significant accounts receivable. In addition, it has received preliminary offers to buy their assets and / or rights and / or part of its operations and / or all or part of its assets; however, none has materialized.
Agreements have been signed and debts have been settled with most major suppliers.
This quarter, the bank loan was paid.

Mexico City, Mexico, October 27, 2015. Grupo Casa Saba (SAB) (Saba, GCS, the Company or the Group), distributor of pharmaceutical products as well as health, beauty aids and consumer goods in Mexico, announces its consolidated financial and operating results for the third quarter of 2015.

QUARTERLY EARNINGS

Net sales have been minimal this quarter, having almost a 100% decrease compared to the $1,168.09 million pesos reported in the same quarter 2014. This decrease is mainly explained by the disincorporation process in the distribution and government division and the sale of the division of pharmacies in the 3Q2014

NET SALES

Net sales for the quarter totaled $11,023.9 million, a decrease of 11.4% compared to $12,446.2 million in 3Q2011. This decrement resulted mainly due to the disincorporation of Peru’s operations from Casa Saba.

SALES BY DIVISON

DISTRIBUTION DIVISION

PHARMA, HEALTH, BEAUTY AND CONSUMER GOODS

The net sales for the third quarter 2015 from our Pharma, Health, Beauty and Consumer Goods division were minimal, consequently there was a decrease of a 100% compared to the same quarter 2014. The share of total sales for this division in the 3Q2014 was 97.26%.

GOVERNMENT PHARMA

In our Government Pharma division, there were no sales in the current quarter, as a result of the divestiture of the distribution division. The share of total sales was 2.74% in the 3Q2015.

RETAIL PHARMACY

Pharmacies division was sold in 2014, thus there were no sales reported in the third quarter of 2015.

The mixture 3Q2015 sales started as follows:

                                         Division                            % of Sales
                                         Retail Pharmacy                            0.00%
                        Total Distribution 0.00%
    Pharma, Health & Beauty 0.00%
               Government Pharma                      0.00%
            Publications                               0,00%
                                                 TOTAL                        0.00%

GROSS INCOME

In the third quarter of 2015 gross loss was minimal, since both sales and costs were minimal, the 3rd quarter of 2014 the gross profit amounted to $556.78 pesos The decreased is explained by the divestiture of the distribution division mention previously.

OPERATING INCOME (LOSS)

The operating loss for the quarter was $-94.38 million pesos, 85.00% lower than the $-629.09 million pesos reported during 3Q2014. The operating margin stood at 3Q2015 was -71088.01% vs -53.86% for the 3Q2014.

OPERATING INCOME

Quarterly operating income for 3Q2012 was $292.9 million, a higher amount than the $270.5 million reported in 3Q2011. This increase in operating income was the result of an operating expenses reduction.

Operating income margin for the 3Q2012 was 2.66%, versus 2.17% in 3Q2011.

OPERATING INCOME PLUS DEPRECIATION AND AMORTIZATION (EBITDA)

EBITDA of 3Q2015 was $-73.96 million, lower than the $-605.53 millon reported during 3Q14.

EBITDA margin for the third quarter of 2012 was 3.58%.

COMPREHENSIVE COST OF FINANCING (CCF)

The integral cost of financing (CCF) of the Group reached $7.58 million pesos 91.29% lower than 3Q2014.
Such decrease was mainly due to lower interest payments for the settlement of bank debt we had in prior periods.

NET DEBT

At the end of the third quarter of 2015, there was no bank loans to report. The bank loan that the group had, was totally paid with capital coming from the main shareholders of the group.

OTHER EXPENSES (INCOME)

During the third quarter other income were recorded for $761.56 million pesos. This was mainly due to the sale of various assets in order to settle liabilities to creditors, as well as the cancelation of some accounting estimations and/or provisions due to the current status of the company.
During the 3Q14, it was recorded in other income a total of $1,807.08 million pesos. This is mainly explained by the income from selling FASA.
It is important to highlight that the amounts stemming from this line, other items, are not normal business operations, so they are not necessarily recurring activities.

TAX PROVISIONS

There was no provision for income taxes in the current quarter.

NET INCOME (LOSS)

In the third quarter of 2015 GCS posted a net income of$659.59 million pesos, compared to the same quarter 2014 the difference is $-431.31 million pesos, due mainly to the sale of FASA in the 3Q14.

Analysis Coverage: We do not currently have analyst coverage from a brokerage firm or from a credit institution.

The 328.5 million shares issued by Grupo Casa Saba are listed on the Mexican Stock Exchange under the symbol SAB.

Grupo Casa Saba was founded in 1892 and is one of the leading distributors of pharmaceutical products, beauty, personal care and consumer goods, general merchandise, publications and other goods in Mexico. With more than 115 years of experience, the Company distributes to the majority of pharmacies, chains, self-service and convenience stores, as well as other specialized national chains. With the acquisition of FASA in October of 2010 the company now has retail pharmacy outlets located in Mexico, Chile and Brazil.

As a precautionary note to investors, except for the historic information contained herein, certain topics discussed in this document constitute forward-looking statements. Such topics imply risks and uncertainties, including the economic conditions in Mexico and those countries in which Grupo Casa Saba operates, directly or indirectly, including the United States of America, Brazil and Chile, as well as variations in the value of the Mexican peso as compared with the currencies of the previously-mentioned countries.

Contacts:
GRUPO CASA SABA                                                                    IR Communications:
Carlos Mora                                                                       Jesús Martínez Rojas

GRUPO CASA SABA, S.A.B. DE C.V. 'Figures are expressed in thousands Mexican pesos as of September 2015

Jan-Jun

Difference

Apr-Jun

Difference

Income Statement

2014

% of sales

2015

% of sales

2014

% of sales

2015

% of sales

NET SALES

17,113.389

100.00%

188,803

100.00%

(16,924,587)

(98.90%)

1,168,087

100.00%

133

100.00%

(1,167,954)

(99.99%)

COST OF SALES

13,403,082

78.32%

(497,120)

(263.30%)

(13,901,102)

(103.71%)

611,315

52.33%

441

331..88%

(610,875)

(99.93%)

Gross Profit

3,709,407

21.68%

685,923

363.30%

(3.023,485)

(81.51%)

556,771

47.63%

(308)

231.88%

(557,079)

(100.06%)

OPERATING EXPENSES

Sales Expenses

1,117,731

6.53%

545,785

289.08%

(571,946)

(51.7%)

835,512

71.53%

37,945

28579.78%

(797,567)

(95.46%)

Administrative Expenses

3,305,834

19.32%

499,254

264.43%

(2,806,580)

(84.90%)

350,349

29.99%

56,129

42276.78%

(294.219)

(83.98%)

Operating Expenses

4,423,566

25.8%

1,045,040

553.51%

(3,378,526)

(76.38%)

1,185,860

101.52%

94,074

70856.13%

(1,091,787)

(92.07%)

Operating Income

(714,158)

4.17%

(359,117)

(190.21%)

355,041

(49.71%)

(629,089)

(53.86%)

(94,382)

71088.01%

534,707

(85.00%)

COMPREHENSIVE COST OF FINANCING

Interest Paid

449,053

2.62%

44,944

23.80%

-404,109

(89.99%)

102,758

8.80%

3,010

2266.98%

-99,748

97.07%

Interest (Earned)

(65,545)

(0.38%)

699

0.37

66,244

101.07%

(37,458)

(3.21%)

237

178.69%

37,696

(100.63%)

Exchange Loss (Gain)

24,874

(0.15%)

8,268

4.38%

33,142

133.24%

21,776

1.86%

4,336

3265.66%

(17,440)

(80.09%)

Monetary Position (gain)

0.00%

Comprehensive Cost of Financing

358,635

2.10%

53,912

28.55%

(304,723)

(84.97%)

87,076

7.45%

7,583

5711.34%

(-79,493)

(91.29%)

OTHER EXPENSES (INCOME), net

(1,731,705)

(10.12%)

(820,534)

(434.60%)

911,171

(52.62%)

(1,807,087)

(154.70%)

711,559

535944.97%

1,095,529

(60.62%)

NET INCOME BEFORE TAXES

658,912

3.85%

407,505

215.84%

(251,407)

(38.15%)

1,090,923

93.39%

609,594

459145.61%

(481,328)

44.12%

PROVISIONS FOR:

Income Tax

75,983

0.44%

42,690

22.61%

(33,293)

43.82%

0.0%

0.06%

(13)

(99.37%)

Asset Tax

0.00%

Deferred Income Tax

(128)

(0.00%)

0.07%

128

100.00%

(0.00%)

0.00%

Profit sharing due

0.00%

Deferred Profit sharing due

0.00%

Total taxes

75,855

0.44%

42,690

22.61%

(33,165)

(43.72%)

0.06%

(13)

(99.37%)

Net Income Before Extraordinary Items

583,057

3.41%

364,815

193.23%

(218,242)

(37.43%)

1,090,910

93.39%

609,594

459145.55%

(481,315)

(44.12%)

Extraordinary Items (Income)

0.00%

Net Income

583,057

3.41%

364,815

193.23%

(218,242)

(37.43%)

1,090,910

93.39%

609,594

459145.55

(481,315)

(44.12%)

Depreciation and Amortization

205,931

1.20%

62,295

32.99%

(143,636)

(69.75%)

23,554

2.02%

20,418

15378.49%

(3,137)

(13.32%)

Operating Income plus Depreciation and Amortization

(508,277)

2.9%

(296,822)

(157.21)%

211,495

(41.60%)

(605,535)

(51.84%)

(73,964)

55709.52%

(531,571)

(87.79%)

Net Income corresponding to Minority Interest

1,970

0.00%

1,970

100.00%

1,067

0.00%

(1,067)

(100.00%)

GRUPO CASA SABA, S.A.B. DE C.V.
BALANCE SHEET

Figures are expressed in Mexican pesos as of September 2012
ACCOUNT / SUBACCOUNT

QUARTER CURRENT YEAR

CLOSE PRIOR YEAR

AMOUNT

TOTAL ASSETS

2,894,349

5,981,324

CURRENT ASSETS

1,432,234

3,875,170

CASH AND CASH EQUIVALENTS

28,915

145,955

CLIENTS

202,301

1,080,975

CLIENTS (NET)

2,015,716

2,588,300

ALLOWANCE FOR DOUBTFUL ACCOUNTS

(-1,813,415)

(1,507,325)

OTHER ACCOUNTS RECEIVABLES (NET)

1,144,802

1,938,800

INVENTORIES

51,190

683,218

OTHER CURRENT ASSETS

5,026

8,222

LONG TERM

1,049,017

1,747,405

INVESTMENTS IN SHARES OF SUBSIDIARIES AND

ASSOCIATED COMPANIES

1,053,838

1,536,742

PROPERTY MACHINARY AND EQUIPMENT NET

185,249

488,292

PROPERTY

293,189

446,171

MACHINERY AND EQUIPMENT

(483,259)

(743,800)

OTHER EQUIPMENT

26,720

195,955

ACCUMULATED DEPRECIATION

156,263

CONSTRUCTION IN PROGRESS

22,486

29,863

DEFERRED ASSETS (NET)

4,234

9,829

GOODWILL

386,378

180,794

BRANDS

21,112

26,238

RIGHTS AND LICENSING

365,266

154,556

OTHER INTANGIBLE ASSETS

15,087

16,332

OTHER NON CURRENT ASSETS

1,312,878

1,201,624

ADVANCE PAYMENTS

43,895

23,881

DEFERRED CHARGES (NET)

OTHERS

1,268,983

1,177,743

TOTAL LIABILITIES

2,873,965

5,182,494

CURRENT LIABILITIES

344,949

3,754,604

BANK CREDITS

2,487,022

SUPPLIERS

344,949

11,311,565

TAXES PAYABLE

504,060

OTHER CURRENT LIABILITIES

2,529,016

3,358,890

EMPLOYEE BENEFITS

200,771

OTHER CURRENT LIABILITIES

2,529,016

3,158,119

NON CURRENT LIABILITIES

100,283

8,161,309

BANK CREDITS

2,428,733

8,161,309

OTHER LIABILITIES

SHAREHOLDERS' EQUITY

20,384

798,830

CONTRIBUTED CAPITAL

2,593,872

CAPITAL STOCK PAID (NOMINAL)

767,902

CAPITAL STOCK UPDATE

956,093

PREMIUM OM SOTCK SOLD)

859,877

869,877

CAPITAL INCREASE (DECREASE)

(2,573,488)

(1,795,042)

ACCUMULATED PROFIT AND LEGAL RESERV

(4,000,503)

(3,454,275)

RESERVE FOR STOCK REPURCHASE

1,062,200

PROFIT

364,815

597,033