Grupo Televisa SAB Q1 FY2025 earnings call

• Strategic Priorities: Grupo Televisa focuses on attracting/retaining value customers, OpEx/CapEx efficiencies, and EC-Sky integration. TelevisaUnivision aims to unlock value via content and geography integration now ViX is scaled and profitable.
• Cable Operations: Ended March with 19.9 million homes, monthly churn 2%, broadband gross adds improved, video disconnections lower, mobile net adds 36,000. Residential net revenue down 3% y-o-y, enterprise down 4.5% y-o-y.
• Sky: Lost revenue-generating units, revenue down 13.2% y-o-y, segment revenue down 5.7% y-o-y, operating segment income margin up 100 bps y-o-y, CapEx MXN1.8 billion, down 13% y-o-y.
• TelevisaUnivision: ViX showed solid growth and profitability, adjusted EBITDA up 5% y-o-y, leverage ratio 5.8x EBITDA at end of Q1.

Cable Operations: Residential operations had net revenue of MXN10.5 billion, accounting for ~91% of total cable revenue, down 3% y-o-y. Enterprise operations had net revenue of MXN1 billion, ~9% of total cable revenue, down 4.5% y-o-y. Sky: Lost 331,000 revenue-generating units, first quarter revenue MXN2.5 billion down 13.2% y-o-y. Segment revenue was MXN15.1 billion, down 5.7% y-o-y, operating segment income MXN5.7 billion, down 3.1%, with operating segment income margin at 37.8% (up 100 bps y-o-y). TelevisaUnivision: Revenue $1 billion down 11% y-o-y, adjusted EBITDA $345 million up 5% y-o-y. Subscription and licensing revenue had specific changes in U.S. and Mexico, ViX showed growth and profitability.

• Grupo Televisa expects profitability improvement from OpEx reductions to remain over coming quarters. TelevisaUnivision confident in further value unlock via integration.
• Target of 1 million homes passed for fiber in 2025, with first quarter being slow, expecting to reach target by end of year.
• CapEx budget for the year is $665 million, not expecting significant deviation.

• Moody's downgraded TelevisaUnivision's credit ratings due to concerns over U.S. economic growth slowing, potential tariffs, and Mexico's weak economic environment.
• Proposed telecom reform in Mexico, with limitations on foreign advertising being analyzed, but currently no material impact foreseen for TelevisaUnivision in Mexico.

Q: Can you give color on margin expansions from ongoing efficiencies and guidance on 1 million homes passed for fiber in 2025 and CapEx budget?

A: Francisco Valim mentioned they are constantly working on margin improvement but not forecasting further increments immediately. Regarding 1 million homes passed, first quarter is slow but expects to reach target by end of year. CapEx budget is $665 million, not expecting significant deviation.

Q: Thoughts on cash allocation, especially buyback activity, and Moody’s downgrade?

A: Alfonso de Angoitia discussed Moody’s downgrade due to U.S. economic concerns and Mexico’s environment. Carlos Phillips mentioned focus on positive cash flow, paying down debt, with $219 million bond maturity paid in Q1, and leverage fell to 2.4x EBITDA.

Q: Thoughts on broadband competition, pricing, and Mexico's telecom regulation?

A: Francisco Valim said broadband market is mature with rational competition, expecting 350,000-400,000 gross adds per quarter. Alfonso de Angoitia stated proposed telecom reform is being analyzed, with no material impact foreseen on TelevisaUnivision in Mexico related to foreign advertising limitations