Investor Presentation

Transcription

1 Investor Presentation First Quarter 2018

2 Forward looking statements This presentation contains statements that constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of Forward-looking statements include statements regarding the current intent, belief or expectations of our officers or management with respect to future developments, including such important matters as (1) our asset growth and financing plans, (2) trends affecting our financial condition or results of operations, (3) the impact of competition and regulations, (4) projected capital expenditures and (5) liquidity. Forwardlooking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those described in forward-looking statements included in this presentation as a result of various factors. These factors, many of which are beyond our control, include the actions of competitors, future global economic conditions, market conditions, changes in interest rates and foreign exchange rates, changes in legislation or regulations applicable to our business, operating and financial risks, the outcome of legal proceedings and the factors discussed under Risk Factors in our annual report on Form 20-F for the year ended December 31, The results in this presentation appear as they were originally reported in our financial statements. 2

3 Overview 1Q 18 Results Underlying Drivers 3

4 Overview 4

5 Our Core Businesses Fully Integrated Media and Distribution Content Cable Sky** Advertising Four broadcast channels in Mexico City and affiliated stations Network Subscription 26 pay-tv networks and 69 feeds in Mexico and globally Licensing & Syndication Univision royalties, other licensing fees, and exports to +/- 80 countries Video: 4.2 million RGUs * Data: 4.0 million RGUs Voice: 2.2 million RGUs A leading cable operator in Mexico Video: 7.9 million subs A leading DTH system in Mexico, operating also in Central America and the Dominican Republic * Revenue generating units ** In partnership with AT&T which owns 41.3% of Sky. Univision*** *** Televisa has equity and warrants which upon their exercise, would represent approximately 36% on a fully diluted, as-converted basis of the equity capital in Univision Holdings Inc. Ownership of approximately 36% of equity and warrants on a fully diluted, as-converted basis 5

6 Revenue breakdown Consolidated net revenue US$5.18b (1) 9% LTM 1Q 18 US$mm (2) 1Q 18 YoY growth (3) LTM 2018 YoY growth (3) 35% Content 1, % -5.1% 35% 21% Advertising 1, % -8.8% 34% 4% Network Subsc % -3.9% 10% Licensing and Synd % -3.6% 34% Cable 1, % 3.9% 22% 22% Sky 1, % 0.0% 9% Other % -4.7% (1) LTM 1Q 18. Consolidated net sales include elimination of intersegment operations amounting to US$197.8 million. (2) Equivalent in US$ at the FX rate of Ps/US$. (3) 1Q 18 year over year and full year growth in peso terms. 6

7 Operating segment income (1) Net OSI (2) of US$2.07b Share of OSI LTM 1Q 18 US$mm (3) 1Q 2018 YoY growth (4) LTM Q1 18 YoY growth (4) 2% 34% Content % -11.5% 26% Sky % 1.3% 38% 34% 38% Cable % 6.1% 2% Other % -37.8% 26% (1) Operating Segment Income OSI is defined as operating income before depreciation and amortization, corporate expenses, and other expense net. (2) Net OSI is after corporate expenses. As of LTM 1Q 18 Net OSI includes Corporate Expenses of US$123.5 million. (3) Equivalent in US$ at the FX rate of Ps/US$. (4) 1Q 18 year over year and full year growth in peso terms. 7

8 Conservative balance sheet Capacity to continue supporting strategic initiatives In March 2018, the Company executed a revolving credit facility with a syndicate of banks, for an amount equivalent to U.S.$583 million. The funds may be used for the repayment of existing indebtedness and such other general corporate purposes, as may be authorized by the Board of Directors of the Company. Total debt* (1Q 18): Ps$124.6 billion Financial Assets**: Ps$51.3 billion Net debt: Ps$73.3 billion Average maturity: 15.2 years Net Debt / EBITDA Ratio 2.1x Moody s Baa1 S&P BBB+ Fitch BBB+ Debt composition Ps$, 43% US$, 57% Financial Assets Others 1% Ps$ 29% USD 70% *Includes capital lease obligations and other notes payable. ** Financial Assets: Cash, temporary investments and other long-term available for sale and held-to-maturity investments. Source: Grupo Televisa's public filings. 8

9 1Q 18 Results 9

10 First quarter Results Highlights Consolidated Net Sales and Operating Segment Income grew 3.9% and 6.6%, respectively Cable segment added 262 thousand Revenue Generating Units during the quarter, the highest pace of data net adds on record Advertising sales increased by 3.5%. Content sales increased by 8.3% Prime time ratings 1 of Channel 2 continued their positive trend, achieving 4% higher ratings than those reached during the fourth quarter of last year Capex reached U.S.$158.7 million in first quarter 2018, 27% lower than in first quarter of last year 1 Monday to Friday. Source: Nielsen 10

11 1Q 18 Results: Cable Financial Results Billions of Ps. Revenues OSI OSI margin $8.10 $8.67 Sales increased by 7.1% to Ps.8.7 billion OSI increased by 7.9% to Ps.3.7 billion and the margin reached 42.3%. Our MSO business posted revenue growth of 9.6%. 42.0% 42.3% $3.40 $3.66 1Q17 1Q18 Cable RGUs (millions) Video RGUs Data RGUs Voice RGUs Revenue and OSI growth driven by RGU net additions in video (53,000), Data (173,000) and voice (36,000), during the quarter. On a sequential basis, this is equivalent to a growth of 9% in net additions Q17 1Q18 This was the fourth consecutive quarter of improvement in net additions. 11

12 1Q 18 Results: Sky Financial Results Billions of Ps. Revenues OSI OSI margin $5.5 $5.5 Sales decreased marginally by 1.2% to Ps.5.5 billion. OSI decreased by 1.0% to Ps.2.4 billion. 44.5% 44.6% Sales decrease is mainly explained by a drop in sales in Central America and the Dominican Republic. Sales in Mexico increased by 0.6%. $2.5 $2.4 1Q17 1Q18 Sky Subscribers (millions) Subscribers During the quarter, Sky lost 92 thd subscribers. The number of net active subscribers as of March was 7.9 million 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 The loss in subs is specifically attributed to a change in payment options launched during May 2017 This quarter, SKY launched fixed wireless broadband service in partnership with AT&T 12

13 1Q 18 Results: Content Financial Results Billions of Ps. Revenues OSI OSI margin $7.90 $7.29 Content sales increased 8.3% to Ps.7.9 billion, explained by the growth in all three lines of business within our Content segment. OSI increased by 7.7% to Ps.2.8 billion, reaching a margin of 35.7%, in line with last year. 35.9% 35.7% $2.62 $2.82 1Q17 Content Revenue Mix Licensing and Syndication 31% 1Q18 Advertising Successful monetization of the broadcast and digital rights of the soccer World Cup are expected to generate an additional $50 million dollars in OSI during 2018 Network Subscription Revenues 15% 54% 13

14 1Q 18 Results: Content Financial Results Advertising Billions of Ps. $4.13 $4.27 Advertising sales increased by 3.5%. The increase in sales is mainly explained by the new sales mechanism that contributed to a better inventory use and a healthy level of advertising spending across our client base. Prime time ratings of Channel 2 continued their positive trend, achieving 4% higher ratings than those reached during the fourth quarter of last year. 1Q17 1Q18 Financial Results Network Subscription Revenues Billions of Ps. Network Subscription sales increased by 13.1%. $1.04 $1.18 The increase is explained by a repackaging of our networks which now includes additional rights that resulted in higher overall price. 1Q17 1Q18 14

15 1Q 18 Results: Content Financial Results Licensing and Syndication Billions of Ps. $2.12 $2.45 Licensing and Syndication sales increased by 15.4%. The increase is mainly explained by the step up in the royalty rate (16.13% since January). 1Q17 Univision Royalties US$ millions $72.6 1Q18 $95.5 Royalties from Univision increased by 31.6% to US$95.5 million in first-quarter 2018 from US$72.6 million in firstquarter Q17 1Q18 15

16 Underlying Drivers 16

17 Underlying Drivers Drivers that are shaping our business, long term I. SKY II. III. IV. Cable Video RGUs Cable Voice RGUs Cable Data RGUs V. Position as a Leading Cable Operator VI. VII. VIII. IX. Advertising Network Subscription Licensing and Syndication Ongoing diversification of top line and OSI 17

18 I SKY Sky ARPU and Revenues Sky will be the only pay TV platform in Mexico transmitting all 64 matches of the World Cup LTM Revenues (Ps. billions) ARPU (Ps.) 1Q' Subscribers have expanded at a CAGR of 16.8% since the launch of VeTV in 2009, its low-cost pre-paid offer. Sky prices remain low when compared to other markets in the region. Going forward, this is one of the main opportunities of Sky. Sky launched Blue Telecomm using Local Loop Unbundling and in March started offering internet services through fixed wireless, partnering with AT&T. Sky has the chance to become a relevant triple play provider even in the most remote areas of the country. Source: Grupo Televisa s public filings. 18

19 millions II Cable Video RGUs Video RGUs Organic growth has been complemented by the acquisition of four cable operators starting in As of 1Q 18 Cable segment achieved a total of 4.2 million video RGUs and close to 14 million homes passed. Broadband RGUs reached almost 3.9 million, still the main driver of growth Mexico s penetration of pay TV remains relatively low at 59.9%*, when compared with other Latin-American countries Q'18 CAGR in video RGUs of 9.9% since 2009, including acquisitions * As of 4Q 17. Source: Grupo Televisa and other companies' public filings, IFT & OECD public information. 19

20 millions III Cable Voice RGUs Voice RGUs Overall number of fixed lines is expanding slightly as a result of attractive offers Televisa Cable has become the second largest provider of voice services in Mexico in terms of number of customers Q'18 With a share of fixed-line voice customers in Mexico of 11.0%*, the opportunity is still significant * As of 4Q 17. Source: Grupo Televisa and other companies' public filings, IFT & OECD public information. 20

21 millions IV Cable Data RGUs Data services are the main driver of growth Data RGUs Q'18 Mexico has 52.9%* penetration of data services (based on % of households with internet services). Organic growth in data services was the fastest on record Current Televisa Cable segment offer includes multiple high-speed data plans: Residential: 10, 20, 50 & 100 mbps Business: 25, 50, & 100 mbps The adoption rate for the 50Mbps service we began offering in March has been very promising. Televisa Cable bussiness captures 22.2%* of data customers in Mexico. * As of 4Q 17. Source: Grupo Televisa and other companies s public filings, IFT & OECD public information. 21

22 V Position as a Leading Cable Operator Posting solid results in highly competitive markets RGUs Televisa Cable (million) Q'18 Telephony RGUs Video RGUs Data RGUs Growth driven by: The ongoing reduction in churn, which now stands at its lowest level in more than three years The quality of our network and the consistency in the speeds that we offer, which are some of the highest in the country; and Very attractive single, double and triple play services. In March, the pace of adoption of our triple play services was twice as high as each of the previous 13 months. Televisa Cable RGUs have grown at a CAGR of 15.7% since 2009 Source: Grupo Televisa's public filings 22

23 V Position as a Leading Cable Operator (Cont d) Resulting in Mexico s 2nd largest telecom network 23

24 US$ millions V Position as a Leading Cable Operator (Cont d) Most of the heavy capital expenditures are behind us Capex Cable segment Investments in our cable assets have been put to good work: 1,200 1, * Over 120 thousand km (MSOs); 36 thousand km are fiber Additional 31 thousand km in Bestel, Metrored and GTAC backbone More than 97% has bidirectional capabilities DOCSIS 3.0 has been implemented in the entire network and the national backbone is currently carrying up to 100 G Cable capex came down 30% in the first quarter of 2018 but Capex related to growth will no me limited Close to 14 million homes passed Source: Grupo Televisa's public filings *Guidance 24

25 (Ps. billions) VI Advertising Restructuring ad business to drive long-term growth First quarter of 2018 posted a growth of 3.5% Advertising Revenue The migration to pricing based on ratings has proven to be successful $20.6 $20.5 $21.1 $21.5 $22.7 $23.2 $23.9 $24.9 $25.5 $23.0 $23.2 $20.7 $20.9 In this quarter we had a better inventory utilization and a better allocation of spots across the different dayparts During the first quarter, for example, nine of the top ten rated programs were produced and transmitted by Televisa LTM 1Q'18 New sales methodology is in place. First quarter of 2018 posted a growth of 3.5% Prime time ratings for our flagship network grew 4% compared with the fourth quarter of 2017 We appointed Patricio Wills, as President of Televisa Studios and Juan Carlos Rodríguez, as Vice President of Sports for Grupo Televisa Source: Grupo Televisa's public filings 25

26 (Ps. billions) VII I Network Subscription Still among the most watched networks in Mexico Network Subscription Revenues (1) (2) Network Subscription CAGR in sales of 9.7% for the period 2007 LTM 1Q 18. One of the most important providers of content for pay TV platforms in Mexico LTM 1Q'18 (1) Starting on September 10, 2013 we had to forego retransmission revenues as a result of the implementation of the must-offer rules that came into effect with the telecommunications reform. Prior to 2011, network subscription revenues were classified under Pay Television Networks and included as additional revenues. (2) The decrease, when compared to previous year, is mainly explained by the loss of Megacable revenues starting September

27 VIII Licensing and Syndication Step-up in royalty rate already happening Univision Royalties (1) Univision royalties make up most of Licensing and Syndication revenue Step-up in the royalty rate by 36% started in (2) First-quarter royalties from Univision reached U.S.$95.5 million, 31.6% increase when compared to first quarter LTM 1Q'18 Royalties (US$mm) The Royalty agreement does not expire unless Televisa voluntarily sells two thirds of its investment, but in no event earlier than 2025 (1) In 2014, Univision transmitted the World Cup which contributed with US$174.2 million of incremental net advertising revenue. (2) Prior to 2011, Licensing and Syndication revenues were classified under Programming Exports and are not directly comparable Source: Grupo Televisa's and Univision s public filings 27

28 Ps. Billion Ps. Billion IX Ongoing diversification of top line and OSI* 120 Revenue by Business Segment 40.0 OSI by Business Segment LTM 1Q'18 Content Sky Cable Pub. Other & Other Businesses Sky and Cable revenues have expanded at a CAGR of 9.2% and 26.1%, respectively, since Content revenues have expanded at a CARG of 2.8%, since LTM 1Q'18 Content Sky Cable Pub. Other & Other Businesses Rapid OSI expansion driven by Sky and Cable, CAGR of 8.7% and 28.0%, respectively, since Potential for OSI to continue expanding as businesses grow and margins expand. Source: Grupo Televisa's public filings *OSI: Operating Segment Income 28

29 Investor Relations Website: Carlos Madrazo VP, Head of Investor Relations Santiago Casado Investor Relations Director + (52) Av. Vasco de Quiroga 2000, A4. Col. Santa Fe CP