Investor Presentation Fourth Quarter 2019 Televisa at a Glance - - PowerPoint PPT Presentation

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Investor Presentation Fourth Quarter 2019 Televisa at a Glance - - PowerPoint PPT Presentation

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Investor Presentation Fourth Quarter 2019 Televisa at a Glance 2019 Share of Revenue and OSI* CABLE CONTENT A leading cable Advertising operator Four broadcast channels in Mexico City and in Mexico affiliated stations throughout the

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SLIDE 1

Investor Presentation

Fourth Quarter 2019

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SLIDE 2

SKY

A leading DTH system in Mexico and broadband provider, also operating in Central America and the Dominican Republic Video: 7.4 millon RGUs Broadband: 386 thousand RGUs

CONTENT

Advertising

Four broadcast channels in Mexico City and affiliated stations throughout the country

Network Subscription

25 pay-tv networks

Licensing & Syndication

Univision royalties, other licensing fees, and exports to over 70 countries

*Operating segment income (OSI) is defined as operating income before corporate expenses, depreciation and amortization, and

  • ther

expense, net. For a reconciliation of total operating segment income with consolidated operating income, see Note 25 to our year-end consolidated financial statements.

CABLE

A leading cable

  • perator

in Mexico Video 4.3 millon RGUs Broadband 4.7 millon RGUs Voice 3.6 millon RGUs

39%

Cable

33%

Content

20%

Sky

2019 Share of Revenue and OSI*

31%

OSI*

22%

OSI*

43%

OSI*

2

Televisa at a Glance

RGUs: Revenue Generating Units. DTH: Direct to Home

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SLIDE 3

2019 Operating Highlights

  • Double digit growth in Revenue and Operating Segment Income
  • Reached 12.7 million Revenue Generating Units (RGUs)
  • Solid operating metrics with low churn
  • Positioned IZZI as the premier aggregator of OTT offers

SKY CABLE CONTENT

3

  • Resumed growth in video RGUs with positive net adds each of

the last three quarters

  • Continued building scale in the broadband business
  • Launched new, innovative formats with great success
  • Reassigned resources and increased production values
  • Achieved strong viewership levels
  • Launched TUDN, a sports JV with Univision

The transformation of Televisa continued in 2019 with many milestones

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SLIDE 4

2019 Consolidated Financial Results

Steady Revenue and OSI1 growth, declining capital intensity

1Operating segment income (OSI) is defined as operating income before corporate expenses, depreciation and amortization, and other expense.

*Excludes the non-recurring licensing of certain rights of the World Cup

  • Consolidated revenue growth of 3.0% and OSI1 growth of 5.4%*
  • Ongoing financial discipline with cost and expenses declining by Ps.579 million
  • Strong balance sheet: Net Debt to OSI1 of 2.3x and average maturity of 16.9 years

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32.3 35.7 38.9 37.5 40.3 41.0 2014 2015 2016 2017 2018 2019

OSI1

  • Ps. in billions

80.1 88.1 96.3 94.3 101.3 101.5 2014 2015 2016 2017 2018 2019

Revenue

  • Ps. in billions

non-recurring licensing of certain rights of the World Cup

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SLIDE 5

4Q’19 Consolidated Financial Results

Fastest pace of growth in Operating Segment Income (OSI1) in five quarters

24.0 25.0 27.3 26.0 26.7 28.0

4Q'14 4Q'15 4Q'16 4Q'17 4Q´18 4Q´19

Revenue

  • Ps. in billions

9.9 9.9 10.9 10.2 10.4 11.1

4Q'14 4Q'15 4Q'16 4Q'17 4Q´18 4Q´19

OSI1

  • Ps. in billions
  • Revenue and OSI1 growth of 4.7% and 6.6%, respectively
  • Stabilization of ad sales during the quarter, and US$101 million in Univision royalties
  • Cable added 115 thd. RGUs, a sequential improvement vs 3Q’19
  • Sky added 67 thd. broadband RGUs and 17 thd. video RGUs

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1Operating segment income (OSI) is defined as operating income before corporate expenses, depreciation and amortization, and other expense.

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SLIDE 6

Cable: 12.7 million customer relationships

Broadband and voice continue to be the main drivers of growth

  • Added 811 thd. RGUs
  • Broadband market share

reached 24.4%

  • By year-end, reached 15.3

million homes passed

  • A telecom network of 140
  • thd. kilometers, 32% is

fiber

2014 2015 2016 2017 2018 2019

Total RGUs

Millions Video Data Voice 49% 34% 33% 37% 18% 29% 2014 2015 2016 2017 2018 2019

RGU Mix

Video Data Voice

12.7 11.8 10.1 9.7 9.0 6.9

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SLIDE 7
  • In 2019, double digit growth in Revenue and in OSI1 of 15.1% and 16.3%, respectively
  • Organically, excluding Axtel acquisition in December 2018, OSI1 expanded by 11.4%
  • Operating Cash Flow (OCF2) reached Ps.5.3 billion, a y-o-y growth of 76.6%

Cable: Continues to grow at a steady pace

After heavy investments in infrastructure, Operating Cash Flow (OCF2) keeps expanding

7.9 11.4 13.2 14.0 15.3 17.8 2014 2015 2016 2017 2018 2019

OSI1

  • Ps. In billions

20.9 28.5 31.9 33.0 36.2 41.7 2014 2015 2016 2017 2018 2019

Revenue

  • Ps. in billions
  • 1.4
  • 4.8
  • 4.3

3.9 3.0 5.3 2014 2015 2016 2017 2018 2019

OCF2

  • Ps. in billions

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1Operating segment income (OSI) is defined as operating income before corporate expenses, depreciation and amortization, and other expense. 2Operating Cash Flow (OCF) is defined as Operating Segment Income minus capital expenditures in properties, plant and equipment

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SLIDE 8

Cable: 2020 Goals

  • Growing our share of broadband further
  • Resuming growth in video subscribers
  • Strengthening position as aggregator of OTT offers
  • Expanding Operating Cash Flow1

CABLE

1Operating Cash Flow is defined as Operating Segment Income minus capital expenditures in properties, plant and equipment.

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With our extensive infrastructure, we will continue to focus on:

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SLIDE 9

Sky: Over 7 million customers

Broadband has become an attractive ad-on to many pay TV households

  • By year-end 2019, over

7.8 million combined video and broadband RGUs

  • Added 294 thousand

broadband RGUs during the year

92 165 238 319 386

4Q´18 1Q´19 2Q´19 3Q´19 4Q´19

Broadband RGUs

Thousands

9

6.6 7.3 8.0 8.0 7.7 7.8

2014 2015 2016 2017 2018 2019

Total RGUs

Millions

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SLIDE 10

Sky: Transforming it into a telecom operator

Pressure in margins has been necessary to build scale in broadband

17.5 19.3 21.9 22.2 22.0 21.3 2014 2015 2016 2017 2018 2019

Revenue

  • Ps. in billions

8.2 9.0 9.9 10.1 9.8 9.1 2014 2015 2016 2017 2018 2019

OSI1

  • Ps. in billions

3.1 3.5 3.7 6.3 5.9 5.3 2014 2015 2016 2017 2018 2019

OCF2

  • Ps. in billions
  • Operating Cash Flow (OCF2) reached Ps.5.3 billion
  • Capital expenditures have been strong to support foray into broadband

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1Operating segment income (OSI) is defined as operating income before corporate expenses, depreciation and amortization, and other expense. 2Operating Cash Flow (OCF) is defined as Operating Segment Income minus capital expenditures in properties, plant and equipment

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SLIDE 11

Sky: 2020 Goals

  • Offering attractive bundles
  • Launching packages with faster speeds
  • Targeting new markets within its footprint
  • Launching new broadband services

SKY

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With its more than 7 million pay-tv customers, Sky will continue to build a telecom presence:

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SLIDE 12

Network Program Ratings (mm) % of Pop. Televisa ¿Quien es la mascara? 8,219 6.5% Televisa Silvia Pinal frente a ti 7,484 5.9% Televisa Mi marido tiene más familia 7,195 5.7% Televisa La Voz Kids 6,810 5.4% Televisa Amar a muerte 6,273 5.0% Televisa La Rosa de Guadalupe 6,253 4.9% Televisa La Usurpadora 6,225 4.9% Televisa Una Familia de Diez 3 6,085 4.8% Televisa Una Familia de Diez 2 6,055 4.8% Televisa Pequeños Gigantes 5,900 4.7%

Content Division: An unmatched audience reach

We produce the content that people choose to watch on broadcast TV

Source for Mexico: National projection based on Nielsen IBOPE’s audience measurement of the 28 largest cities of Mexico. Sports not included in ranking. *As a percentage of total population. Source for US: Nielsen US national sample.

  • Broadcast is a key form of entertainment in Mexico, above the U.S. as a % of population
  • In 2019, the top 10 programs in Mexico’s broadcast TV were produced and transmitted by us
  • These included three comedies, three game shows, three dramas, and one bio-epic
  • Our top production reached 60% more viewers* than the top production in the U.S. in 2019

Network Program Ratings (mm) % of Pop. CBS Big Bang Theory 13,381 4.1% CBS NCIS 12,663 3.8% NBC This Is Us 12,502 3.8% NBC Agt Champions 12,394 3.8% NBC America's Got Talent 11,666 3.5% NBC Chicago Fire 11,536 3.5% NBC Chicago Med 11,174 3.4% NBC Chicago Pd 11,061 3.4% NBC Manifest 10,913 3.3% FOX Masked Singer 10,676 3.2%

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SLIDE 13

Content: Multiple windows to choose from

Televisa is a relevant participant in every platform

Four Broadcast Networks in Mexico Exports (70+ countries) 25 Pay TV Networks OTT & Digital

  • We are in the unique position to choose how and where we monetize our content
  • Broadcast Television continues to be the most effective way to do so
  • We are expanding our expertise in Digital and OTT and gradually building scale

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SLIDE 14

1Operating segment income (OSI) is defined as operating income before corporate expenses, depreciation and amortization, and other expense. 2Operating Cash Flow (OCF) is defined as Operating Segment Income minus capital expenditures in properties, plant and equipment 3Includes the non-recurring licensing of certain rights of the World Cup in Latin America in 2018 4Excluding the 2018 World Cup licensing revenue and the 2019 drop in government advertising

  • In 2019, revenue was down 4.6% mainly due to drop in government advertising
  • Core private sector ad revenue was down 1.8% due to macro uncertainty in 1H’19
  • Strong performance of our content in Univision resulted in U.S.$389.1 million in Royalties
  • Operating Cash Flow (OCF2,4) was approximately in line with 2018

Content Division: A production powerhouse

After a multi-year restructuring phase, business is stabilizing

34.9 34.3 36.7 34.0 34.8 2014 2015 2016 2017 2018 2019

Revenue

  • Ps. in billions

39.23 15.5 14.6 14.7 12.8 12.6 2014 2015 2016 2017 2018 2019

OSI1

  • Ps. in billions

14.93 13.1 12.1 11.9 10.8 13.13 10.6 2014 2015 2016 2017 2018 2019

OCF2

  • Ps. in billions

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SLIDE 15

Content: 2020 Goals

  • Increasing the volume and quality of our original content
  • Ongoing innovation in our formats and storylines
  • Striving for strong ratings across all genres
  • Expanding the ways in which we monetize our content

CONTENT

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Televisa will continue to focus on strengthening its content business

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SLIDE 16

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Net debt to OSI ratio:

2.3 times

Closest USD maturity

US$600 million

in

2025

Closest peso maturity

Ps.10,000 million

in

2024

Weighted average maturity: USD is 20.6 years Ps is 8.9 years

66% of debt in USD 34% of debt in Ps

Strong Balance Sheet

dollar-denominated revenue

US$933 million* 66% of debt in USD 34% of debt in Ps

dollar-denominated costs and expenses

US$750 million*

*Full Year 2018 *Full Year 2018 As of FY 2019, except otherwise indicated

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SLIDE 17

17 2020 FTSE4Good Emerging Index 2020 FTSE4Good Emerging Latin America Index 2020 FTSE4Good BIVA Index 2020 Bloomberg Gender-Equality Index 1 2020 BMV/S&P IPC Sustentable (Sustainability Index) 2019 Dow Jones Sustainability Emerging Markets Index 2 2019 Dow Jones Sustainability MILA Pacific Alliance Index 2019 United Nations (UN) Global Compact3 2019 Environmental Quality Certificate 4 2019 Recertified with Norm ISO 14001:20155 2019 Socially Responsible Company Award6

Sustainability: A key component in our strategy

Our many sustainability efforts continue to be recognized around the world

  • 1. One of only five Mexican companies. 2. One of only three Mexican companies. 3. The world’s largest corporate sustainability initiative. 4. Issued by federal

environmental entity for certain of our facilities. 5. Issued by a third party verification unit. 6. Recognized for the second time for our social responsibility programs.

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SLIDE 18

Fully integrated media and telecommunications Unique market presence in its core businesses Diversified revenue base Growing cash flow Mexico’s second largest telecom network Largest producer of Spanish-language content Long standing commitment to sustainability Investment grade One of the most liquid Mexican companies Publicly traded in NYSE since ‘93 and in Mexico since ‘91 18

Televisa: A strong foundation

Focused on building shareholder value

Our priorities:

Innovation across all our

  • perations

Constant

transformation of our

business model Long term strategic

positioning

Focus on Cash Flow generation

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SLIDE 19

Disclaimer

This presentation contains forward-looking statements regarding the Company’s results and prospects. Actual results could differ materially from these statements. The forward- looking statements in this press release should be read in conjunction with the factors described in “Item 3. Key Information – Forward-Looking Statements” in the Company’s Annual Report on Form 20-F, which, among others, could cause actual results to differ materially from those contained In forward-looking statements made in this press release and in oral statements made by authorized officers of the Company. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. The Company undertakes no obligation to publicly update

  • r revise any forward-looking statements, whether as a result of new information, future

events or otherwise. This presentation may also contain non-IFRS financial measures. Please see description of these non-IFRS financial measures in this presentation and in the Company’s press release dated February 20, 2020, announcing the Company’s fourth quarter and full year 2019 results.

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Investor Relations

www.televisair.com

+ (52) 55 5261 2445

  • Av. Vasco de Quiroga 2000, A4.
  • Col. Santa Fe
  • CP. 01210

Mexico City