We have
continued to make
decisive progress in the
strategic pillars that further
strengthen Grupo Palacio
de Hierro as a Sustainable
Palacio, in order to fulfill
our purpose of enriching
and meeting people’s
needs through unique
luxury experiences.
Alejandro Baillères
We have
continued to make
decisive progress in the
strategic pillars that further
strengthen Grupo Palacio
de Hierro as a Sustainable
Palacio, in order to fulfill
our purpose of enriching
and meeting people's
needs through unique
luxury experiences.
Alejandro Baillères
Esteemed shareholders,
As Chairman of the Board of Directors of Grupo Palacio de Hierro, SAB de CV, and on behalf of the company, it is my pleasure to present this report, which is based on data provided by the CEO in his Annual Report regarding the company’s performance, its results and the milestones reached during the 2023 fiscal year, in addition to a report detailing the activities of the Board of Directors.
Considering just some of the challenges we have witnessed over the past four years —a global pandemic, wars in Europe and the Middle East, extreme weather events, geopolitical uncertainty, and rapid technological change— 2023 was, without a doubt, a good year for the Mexican economy, which grew by 3.1%, aided by persistent inflation throughout the year, ending the year at 4.66%, and a bolstered exchange rate despite an extremely complex global panorama.
Based on data from the Asociación Nacional de Tiendas de Autoservicio y Departamentales (Mexican Association of Self-Service and Department Stores, ANTAD), within the department store segment, same-store sales grew by 4.4% and total store sales by 6.5%.
To the end of the 2023 fiscal year, Grupo Palacio de Hierro’s total revenue reached MXN $50.487 billion, a 10.6% increase compared to 2022. Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) increased by 14.8%, reaching MXN $6.773 billion. Accounting income for the year stood at MXN $2.436 billion, a 41.1% increase compared to 2022.
To
celebrate six decades
of commitment and loyalty
to our customers, El Palacio
de Hierro launched a special
edition of the Tarjeta Palacio,
designed by the talented
sculptor Sebastián.
During 2023, we celebrated the reopening of El Palacio de Hierro Satélite, which offers customers a differentiated value proposition and a wide range of experiences through its new spaces and the luxury brands that characterize us.
Furthermore, to commemorate six decades of commitment and loyalty to our Tarjeta Palacio customers, we organized an anniversary event and the launch of a special edition of our card, designed by the talented sculptor Enrique Carbajal González, better known as “Sebastián”, who is famous for his iconic urban sculptures, including the Torre del Caballito on Paseo de la Reforma (Mexico City).
Underpinned by our market position and our on-going focus on luxury, Grupo Palacio de Hierro is continuing its period of transformation based on further raising our standards and consolidating our organizational culture, processes and methodologies. These efforts will allow us to surpass the expectations of our customers, employees, partners and shareholders in the digital era.
To
celebrate six decades
of commitment and loyalty
to our customers, El Palacio
de Hierro launched a special
edition of the Tarjeta Palacio,
designed by the talented
sculptor Sebastián.
During 2023, we celebrated the reopening of El Palacio de Hierro Satélite, which offers customers a differentiated value proposition and a wide range of experiences through its new spaces and the luxury brands that characterize us.
Furthermore, to commemorate six decades of commitment and loyalty to our Tarjeta Palacio customers, we organized an anniversary event and the launch of a special edition of our card, designed by the talented sculptor Enrique Carbajal González, better known as “Sebastián”, who is famous for his iconic urban sculptures, including the Torre del Caballito on Paseo de la Reforma (Mexico City).
Underpinned by our market position and our on-going focus on luxury, Grupo Palacio de Hierro is continuing its period of transformation based on further raising our standards and consolidating our organizational culture, processes and methodologies. These efforts will allow us to surpass the expectations of our customers, employees, partners and shareholders in the digital era.
We have continued to make decisive progress in the strategic pillars that further strengthen Grupo Palacio de Hierro as a Sustainable Palacio, in order to fulfill our purpose of enriching and meeting people's needs through unique luxury experiences while ensuring we have a positive impact on our environment.
The Board of Directors presents this report for the consideration of the Shareholder's Meeting, in which it declares and explains the accounting policies and criteria used to prepare the Financial Statements, including, among others: the bases of presentation, the principles of consolidation, significant accounting policies and new accounting pronouncements, which were determined by external auditors and form an integral part of this Report.
In the opinion of the Board of Directors, the CEO's Report presented to the Shareholders Meeting appropriately and reasonably reflects the financial situation, results and milestones of the business during the 2023 fiscal year.
During 2023, we celebrated the reopening of the refurbished El Palacio de Hierro
Satélite, providing customers with a differentiated value proposition and wider range
of new experiences and the luxury brands that characterize us.
During 2023, we celebrated
the reopening of the refurbished
El Palacio de Hierro
Satélite,
providing customers with a
differentiated value proposition
and wider range
of new
experiences and the luxury brands
that characterize us.
The Board of Directors acts in full compliance with solid corporate governance practices. Its work is supported by committees, as recommended in the Code of Best Corporate Governance Practices and Principles. The Board met four times during the 2023 fiscal year. The most relevant issues discussed and approved by the Board of Directors include the bolstering of occupational and environmental safety programs; updates to the Strategic Plan; the reception and ratification of agreements of the Executive Committee; the corporate strategy; the monitoring of numerous strategic initiatives; the debt issuance program; and, the company’s investments and budgets. Furthermore, the Financial Statements presented during the fiscal year were reviewed and approved.
The most relevant activities of each Committee, whose members are detailed in the Corporate Governance section of the Annual Report, are outlined below.
The Executive Committee reviewed the budgets and operational and financial performance of each business, in addition to the digitalization strategy. Furthermore, it validated and monitored the foundations for the Strategic Plan.
The Audit and Corporate Practices Committee reviewed both operational and financial performance and the internal and external audit plans, as well as those of the Compliance Department, in addition to reviewing the state of internal controls. Furthermore, it assessed external audit services and validated compliance with regulatory requirements. It also reviewed accounting policies, transactions with related parties, and all relevant legal and fiscal affairs.
I
would like to express my gratitude
to our stakeholders for their strength
and support, which is how our
company continues to represent
who we are and what we will
continue to be: Totalmente Palacio.
The most relevant activities of each Committee, whose members are detailed in the Corporate Governance section of the Annual Report, are outlined below.
The Executive Committee reviewed the budgets and operational and financial performance of each business, in addition to the digitalization strategy. Furthermore, it validated and monitored the foundations for the Strategic Plan.
The Audit and Corporate Practices Committee reviewed both operational and financial performance and the internal and external audit plans, as well as those of the Compliance Department, in addition to reviewing the state of internal controls. Furthermore, it assessed external audit services and validated compliance with regulatory requirements. It also reviewed accounting policies, transactions with related parties, and all relevant legal and fiscal affairs.
I
would like to express my
gratitude
to our stakeholders
for their strength
and support,
which is how our
company continues to represent
who
we are and what we will
continue
to be: Totalmente Palacio.
The Finance and Planning Committee assessed financial projections, assessed the company’s investment projects, and oversaw the Company’s financial situation.
The Nomination, Evaluation and Compensation Committee evaluated the annual performance of high-level executives, and it authorized salary increases and bonuses based on the results of these evaluations.
The financial performance of Grupo Palacio de Hierro during 2023 evolved marvelously and at a rate higher than the department store sector as a whole. The robust financial position of the Company has remained throughout, enabling us to continue carrying out plans for growth and expansion.
Esteemed shareholders,
I would like to express my gratitude to all our employees for their dedication and hard work; to our Board of Directors, Executive Committee and all other Committees; and to you, our esteemed shareholders for all your strength and support that has enabled us to continue on this path of constant endeavor. It is through their loyalty, passion, professionalism, quality and invaluable trust that we continue steadfast towards a promising future, remaining true to our vision and work ethic. This is how our company continues to represent who we are and what we will continue to be: Totalmente Palacio.
Esteemed shareholders,
I would like to express my gratitude to all our employees for their dedication and hard work; to our Board of Directors, Executive Committee and all other Committees; and to you, our esteemed shareholders for all your strength and support that has enabled us to continue on this path of constant endeavor. It is through their loyalty, passion, professionalism, quality and invaluable trust that we continue steadfast towards a promising future, remaining true to our vision and work ethic. This is how our company continues to represent who we are and what we will continue to be: Totalmente Palacio.
