Grupo Televisa, S.A.B. (TV) 30 Jul 222022 Q2 Earnings call transcript

Good morning, everyone, and welcome to the Grupo Televisa's Second Quarter 2022 Conference Call.

Before we begin, I would like to draw your attention to the press release, which explains the use of forward-looking statements and applies to everything we discuss in today's call and in the earnings release.

As a reminder, this call is being recorded. And I would now like to turn the call over to Mr. Alfonso de Angoitia, Co-Chief Executive Officer of Grupo Televisa. sir. ahead, go Please

Phillips, Good me and Gonzalez, today Malvido, and Cable; Paul. Televisa. joining CEO you us. Luis Carlos Sky; of With are CEO of morning, you, Grupo thank everyone, for of CFO Thank Pepe Antonio

partially their Televisa's and quarter, GDP the in X%. the while billion, operating was growth a X.X%, revenue say The by gone reached have let segment and outlook growth year-on-year and equivalent Cable Revenue financial down. U.S. time economic of global our to economic should elaborate residential other last increased. is near slow income through at at reached decline of performance to During global in enterprise recession But that representing Grupo significant remarks. the declining MXN growth almost on year-on-year Mexico me expected the each operations in consolidated economy since and our our segment second of a spoke, segments billion our revenue Cable of the we and of remain in businesses the before, Sky. operating future, XX.X Luis has changes. consolidated the MXN challenged offset operations in global thoughts Pepe while Antonio will X core

a act event pull We of will the recession. our the the we in presented necessary taking important decisively, measures has offer to business deterioration It and already continue downturns. flow been that Board to economy levers hesitate in in identified as a yesterday's to event where single to is in we monitor free macroeconomic case in previous every not the it meeting, variables have evolution we of of will we'll highlight and the preserve to cash the macro further

to pending at resilient global projects ratios operating Grupo in loaded the back-ended spending recession, We income year, to deliver recession a probability we of factors you Grupo performance translated half them solid XXXX and expect year. the we strong of for Grupo second TelevisaUnivision Cup the of higher Grupo X or OpEx closing core other continue previous still an Televisa growth of because excluding billion revenue during net much Despite closed savings a than financial of significant rights, of year our were World capturing positioned economic segment, year-on-year, X.X% have monetization for Televisa by contracts fully growth landscape, Televisa of of following Cup fully respectively. we both media is this be a well Despite content the the we operations sheet which to at Mexico new segment RGU with for our recall, as quarter, achieved during enterprise production balance increased operations. as very such at operating revenue X.Xx, downturns global at the the MXN by reduction implementing stronger driven elections segment Cable adds economic and the the XXXX, into grew X.X% As as plan, the complete our our and portion during of and footing fourth the in U.S., TelevisaUnivision the the firmly at with in and in may assets cost to in COVID challenging by and mid-term resilient businesses remainder several than the due most aggressive and X% global of Univision and in our Televisa's X.X Qatar streaming a leverage equivalent both confident and believe in TelevisaUnivision opportunity. structure. advertising And ever have World our more we the massive a respectively. that merger operating that will Moreover, X.Xx streaming portfolio stronger and performance are

through the morning. considering as March July quarter solid the with ramp walk XX%, ViX The achievement as launch on of half combined assets the following increased second results the ViX service TelevisaUnivision's another of on on me by has AVOD investments $X.X the launched well ViX XX% ahead released discipline X%, declined outstanding a forma uniqueness of XX delivered by and of of yesterday as of focus basis, a and power by quarter company service TelevisaUnivision's let SVOD Plus, revenue growing million, billion, you $XXX while around streaming XX. pro EBITDA up, Now during and and year-on-year the revenue our the of EBITDA just the year, declined first launch Plus of illustrates execution. ViX remarkable while Moreover, has which X% our

revenue strong licensing from in increases XX%, volume XX% in pricing by history. During subscription, in In 'XX/'XX upfront, increased advertising the we benefit as U.S., growth revenue by to at and delivered and continue driven respectively. which growth and consolidated TelevisaUnivision highest quarter, advertising of XX% the the and revenue was the

pricing was year-on-year pay-television produced In subscriber by our Subscription history. upfront TV mid-September signed second was increased solutions XXXX increased record. XX% in with record-setting X In primarily revenue during Mexico. addition, demand as client and of advertising revenue the demand in spend growth and quarter. in the the growing their XX XX% strong U.S. Moreover, clients on of marketing new number quarter the for by highest XXXX TelevisaUnivision highest in strong driven in company YouTube This both the with advertising the prices the and higher categories experienced the and scattered the by Mexico, top U.S. for and contract the licensing our Mexico. growth advanced in

audiences XX.X% share from Moving from quarter. of language X.X% same primetime our on Mexico's were Moreover, quarter peers Also, of second television XX Mexico, In XX second combined. total from our those XX.X%. last our are networks second X and during went primetime top U.S., period In of audiences television networks basis the of X% Friday market on to of Monday most-watched on Spanish soccer and in the by primetime quarter, we top content. produced XX.X% broadcasted XX broadcast share, the rose audiences in performance viewing to us. to increased of quarter. the pay-television the of to of In XX free-to-air the the transmitted free-to-air higher points free-to-air the than during year. Moreover, our programs our the to our matches up our share the

deliver success and the months. about excited enormous we market, continues streaming that to the While not be XX we outperformed promise our could made business last great our over linear and more business have

service linear selling only has new for ViX ViX Our success our advertisers, its been full ad seeing first into substantial streamline quarter with our while AVOD ad live efforts, onboarding sales streaming buyers.

early goals very seen better in both expected. of excited about at terms have have are engagement We been results users set and performing some the we aggressive and ViX. We than

We too results. have is great on from momentum, conclusions but early trends draw it these to

so about we into this just what X are very excited are far. and quarter are we achieving journey, We

upfront. just ahead, incredibly we successful U.S. Looking 'XX/'XX closed another

the produced the digits we years. heels level volume grew of to comp highest last double have X On from a in year, strong

Univision sales follows it with ad in to held we For our done starts to levels our back years the the the reinvent possible made pricing market discount This the in to price the function content. single-digit by the value line where have momentum range. content of second of and consecutive year, the high strong pricing in of take our work and belongs,

for both in the on Demand bundle advertisers, companies, in came speed. linear an on as grew and advertisers. able to digital-first us, ViX secular is where our well existing new a in from other dollars approached media budgets huge leverage linear. XX% rates where outstanding and we growth executing we're were digital we Importantly, ad Capturing it. ways there from Unlike is growth linear as [indiscernible] opportunity from

Videocine original U.S. We're receiving already from Felix: taking distinct our and theatrical and X MXN Dona, first service La of with new We and series, July putting a of ViX live are of Plus hours slate more linear, of XXX ViX press. ad-free XX,XXX in the hours new the is year del on Mujer announced just we price milestone its these Maria of our algorithm entertainment studio, first X products exclusively completely launch another in than them Plus. completes in from $XXX audio. with digital and SVOD Mexico. with offering the marked in early platforms, also the our new of our the of made Our and solid success programming proof service X,XXX both own streaming La and and quality to great Diablo Plus, reviews brands. comprehensive our XXst including sports ViX monthly best also featuring premium up XXXX

streaming linear. truly is We are unique complementary in the industry that our service to and

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over me CEO call let the Now Cable. turn Antonio, Pepe to of

Alfonso. you, Thank

quarter the consecutive in our translate of a During started XXXX, segment quarter, Cable acceleration. into revenue the to of third growth which turnaround residential for metrics second operations operating continued residential solid its

the adds, quarter fixed net added generating revenue of terms second RGUs. unit, In XXX,XXX

increases fixed, XX.X quarter consecutive XXX,XXX XX,XXX closed XX These mobile RGUs, RGUs. top -- of million since these The and that, the excluding are the second XXXX, pandemic. highest with on over The million quarter results mobile. XXX,XXX total

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from tough QX. XX.X%. QX the X.X% very to case Our X.X% in a residential EBITDA X.X% headline EBITDA of growth improved our coupled accounts for projects, allowed of have been have from with in this that accelerated results the project. revenue. had to efficiency to which we segment the than Jalisco X.X% In which grown in show Cable X.X% enterprise grow we QX. growth faster in the of days Red revenue a QX XX% has versus in cost This last If decline would the of comparative year around shows a revenue revenue, effect exclude number effect, which operation,

the we that we digits close of to half a will government Jalisco growth Red developed network in project owned as for the during half we with a second first was to the build a a our the As Jalisco recovery Despite experience projects. the fiber challenges the state confident strong to are low year-on-year new the the revenue of state. in reminder, year, of grow enterprise mid-single by

through at into quarters, residential of ones improving revenue acceleration projects Over go quarters, the we ongoing expect stronger similar keeps adds revenue. the remain segment solid gradually. RGU translate levels last new to while to of cycle segment coming net to growth enterprise incorporation And the residential and few

that so remainder allowed the and selected Alfonso, say call me to the of year. expansion year do the continue to us to to solid back confident should last operating the Before we has turning deliver let that are locations results in

Thank Antonio. you, Pepe

me call to Luis turn of let Now Malvido, Sky. the over CEO

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plan. take us your Luis please So through

in Alfonso. Today, share will program of the with some this, as the I of highlights overview results. that our and progress. the strategic an provide Thank you initiatives well much, of examples already as are After key you second operating quarter very I financial will

Moving strategic into our program.

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longer it's in last or As third prepaid the a discontinued and will covering its generate cost. cancellations in result, content but we decision XXX,XXX July, promotion coming on reactivation because up we lost no EBITDA. second to Furthermore, XXX,XXX the no This call called impact with revenues quarters, operating RGUs our quarter. in

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your questions. the Paul, could to Now questions you we're please ready Q&A. for instructions provide take

first BBVA. Alejandro Instructions] today will from Gallostra [Operator come with And our question

questions. of couple a have I

in MSO We're the first with Cable. The growth is operations good good one seeing net along regarding rates, additions.

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Let me of give a you color few a -- this. on bit

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last and very in encouraging our simplified the results month. and medium it small offering very have only seen enterprise micro simple, to product We make have and we

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And Sky trends as question, has to the the it this of do half to year. Luis second and with second

sure. Yes,

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next is Adding as you, this Thank a it I see a year. say, of for initiatives Luis results year be the the will the described mean Luis all Luis. to and we’ll in turnaround would what mentioned, Sky, I has weak of that year the

[Lucas from Base] come And question our with will UBS. next

what largest line? income level? the So contribution can is And contributor level corporate assume the from we JVs and normalized from about that we And TelevisaUnivision associates. going noticed a follow-up will the be large to here. How one forward? And What normalized expenses? is

I'll ask your for Phillips Thank it. you, question. answer to Carlos Lucas,

correct. you're Lucas,

In from And as the the comes majority and terms there the TelevisaUnivision, line. effects. of after that transaction, increase, you ventures, largest joint pretty associates share know, much X from large income the the were share of of that's

share The approximately from is, XX% one first the grew XX%. to

after company we a transaction, in of larger do it Univision. We have also the because XX%

earnings. XX% company larger is which Now with larger we have TelevisaUnivision, a

that's of the So part effect.

of component had from MXN overhead. million. corporate And corporate The approximately largest in second obviously year's you one the line normalized of are -- of The approximately part line corporate last XX.X our item. the in see, you expenses, from quarter million the in don’t would large is we pay is earnings your one PTU, a which compensation. size per going shares this And could dividend mind in on $XX.XX we be be expect we terms that a of question which year. to going these and the -- also that employee of of terms company the have non-cash in TelevisaUnivision, sharing expenses from we The employee reduction what item. keep other kind as guess, and be is a profit [indiscernible] as share-based are one know, be that thing That's is, to the that predictable, share only any movements a I a get preferred that at is the would preferred the it's obviously, those. line dividend. in in And received And we Mexico just is as equity, to compensation share-based The the item. recurring dependent

will And come with Barclays. David question Joyce our next from

here the the subscribers more Where hear about the as near these where will how Mexico wondering to I in detailed the of well. changes -- you've global had also, over to for that so a from these developing then MVNO plan Glad Sky. changes level stagnant or America, Central larger given opportunity expect term? with side in of so And the be on Cable you more these long operation, with Altan there the -- all was be do with

you, David. Thank

opportunity, Sky's it's Central America, would to to that. Mexico both in Luis As say and can add I and

Central a As is opportunity. huge mentioned, America I

we believe very we company. Now in years, relevant size the Mexico, in to for that entire there which X is to double small our is business revenue of the very can compared X but

to do core line we doubling However, our on a the long-term value. Central in a here Mexico impact top America X% I have is is Having will said, so still as And the business. that, impact will on small, said business. represent, up anything even tremendous

line, -- flow. from also I Mexico in said, in come -- top come as EBITDA from but and from cash opportunities So

program the EBITDA, grow. because during and there massive. important attention decade the starting In been processes terms decades. successful didn't come thing simplification very has for to of and company from much this be that was Sky will a opportunities to fast are we pay are savings And we to

review will process of we savings, out digitalize same that, it's to processes -- and we way the we size, confident can CapEx CapEx. bring below are the million that this are significant not from sales At in $XXX the are even efficiency the all OpEx reduce million. Now only spent year and in do company. we cash will also to but moment figure things the $XXX the processes, to bring pushing year, order significant to in last protect in grow to next even very Currently, And down year, that we the we flow. savings

generally has cash recognition has asset. It's Mexico. huge of the It great offering that Sky company generates a in brand by It's that a sports It sports in a content is content. a content, Mexico has more free flow. fantastic platform far. relevant

and the As the to the rights tournaments Rey, teams Copa La Spanish now Mexico. UEFA it Luis and which is All Liga exclusive mentioned, has national in huge Bundesliga. del

terms of course, installation #X far. by sports has a team. a footprint, it's national It in has offering, So of national

start it's of shared and the EBITDA have the World and we're So we'll believe amazing stabilize of we to Cup, next of I with an asset, it, next additional pass, we we and to, EBITDA. turnaround mean, course, And start amortizing cost revenue and year will we year, you plans. all course, the generating that stabilize as

when it very let to relevant add Alfonso, next which particularly comes me year. something is

an bundle. offering TV is said, struggled this have streams, know new many protect next customer we've want by as year, this And in not as We we And mostly that base. protect If launch, broadband but challenged and only to we also new for operators our a new are our times platform, will you customers. cable revenue aggregator. door the to OTT I we service, don't every day a

the very our a related us, still all our has DTH expensive, to For protect OpEx customers and portion of also company be spend protect as and this allow nobody these has first, because us customers in due installations and CapEx kit and our a will Android to amount the CapEx The significant customers saving of -- and a customers, to in we DTH services save very the to than box the explained, we recognize customers. new that CapEx. significant better of to did box that now Alfonso initially, But offering, but this is offer this to reason will box able existing of to market. context are we OpEx I installation kids said,

confident the significant saving During we and in because of need to of quantify new this this, a this quantifying process and -- it we the still OpEx in the spend a service, CapEx, opportunity, still with of to the we're CapEx very project. we new size will impact is need amount and but are

to your offerings, to Antonio ask do second that. as and had to David, with like the I'd And question Pepe to MVNO answer

much. very you Thank

it restricts we invested Right the an the stages will infrastructure. tests, MVNO final now, see it know may in this of phones. you And with provide literally weeks the believe us platform us service MD&A As final of in we we choice in most that This in -- amount of a tests. tremendous cell ways, notably flexibility. have many Altan the with of

I next months, our platform next be MVNE relaunching think this through call. in services have of giving details more a So will and the couple in that we the of will we'll mobile be one promising

on some that about more think expenses there. sheet, how we we balance -- could, I on since the one quickly think if And movement your and revenues impact just about been How Great. should forward? should FX going there's

answer. Carlos Thank you, I'll David. ask to

be little denominated is investment which can press balance as our Univision, in as as million to sheet. position large as as well transaction, of well a we pretty during David, XXX have the different. release, This dollar a used a a cash result But dollar-denominated exchange see bit asset know, is you have we to foreign and dollar we on as the large. the you that’s gain. in quarter, that due our This had MXN balance net

So the Mexican again. a peso, had quarter, we position asset position, had we against dollar this of net this depreciation asset net

balance the on side. sheet that’s So

after can In inflows imagine, most peso-denominated. of terms the as and of transaction, the operations inflows our you are outflows, our from

mostly to try exposure sense, And significant base. most we the some shares, flexibility But some flows use to and helps I get would contracts is that line dollar-denominated. on peso-denominated. – We large but preferred outflow from item important our that in percentage TelevisaUnivision dollar-denominated certain with have manage again, have hedging side CapEx, balance side, dividend from in And operating it’s risk. and it’s the to be also is mostly our expense guess, that which dollar-denominated on our we the us a

And Marcelo JPMorgan. next our Santos question come will from with

cable How pricing ask performance your the increases, dealing plan new if tough is in you -- tough I in that environment is, developing with with comment entered on the in could especially Cable. business there? the new were environment second you how the question is wanted to this environment? you How And about price areas economic the cities.

invested homes million. where have penetration. to This XXX,XXX addition continue And We're pass, year, results. your I'll What million. we'll you, we both questions. X happy $XXX that, as what on grew the we Pepe expand to and of in new million can Antonio Thank answer say as ask of I course, say with last in the can is year, homes we homes terms Pepe $X question, I been second to with terms Marcelo. growing Antonio know, in of you

right things You some and right have looking But going taken we're the in trends now we direction. in than places, I think the are at have longer expected.

expand -- I mean, ask question and expand to to Pepe Antonio answer on second. first I'll your on So

much, Alfonso. very you Thank

think – price opposing I the is interesting sector in environment because the there forces. price the X are

rest the are competitive more increases seeing downwards On the steady. increasingly also hand, and city But pushes one in seeing other environment, in inflation the Mexico prices an hand, of we on the world. of which are we the

this our year, for their price. So competitors increased

increases keep first spot we’re products our prices. have speed should mentioned intervention, realigned. to of resisted our we prices. increase believe And our where We the the be, quality, I wanted products as and We sweet finding to in our my

to paid, And now will are reacted I and I competitive and is forward, and package inflationary we What on part is prices. long have the say by competition success, by tended have have on how period adjust. move we believe. to accordingly monitoring can depend we we with natural this region, As swiftly. the it reacting We that may

penetration we to than think in. last are where forward the not it. that’s next expected ramp-up the some areas in that that last those And better areas, coming Whereas said, I In think we the months, we come the were the we seen as I environment in expected. approaching in the the to months. areas, results notably the areas, last want lower we variant. even price definitely in in new than were Alfonso The have few process few success. the But we way the acceleration was where the in an we one, So and been ones have have tremendous

and We in on future, we’re increase our maintain with So we we to I this very our will passed home a happy, and homes the state. we moving that can will towards expand that’s forward. laser our opportunistically XXX,XXX pass steady we expansion where this I last – growth have and from will One year. think – focus thing And to healthy this will have is to want Well, a about we XXX,XXX path continue. from that is a continue we mention competitive from budget advantage. hope

next And come Suisse. will our with from Chavelas question Alejandro Credit

been questions my answered. of have Most

helpful. what will For on example, the Cable. the and on be front user cost ViX? recognized Just of you distribution that one more lease very the can on exclusive your is the Anything Can when wholesale agreements with base? terms be share for

Thank you, I'll to ask what I say. Antonio Alejandro. Pepe expand on

on other I XX/X will products other with things. Mexican as that with is distribution special ViX news tremendous Soccer content program, library. the the have of from sports has And premium that, that a specifically of games exclusive platform. It has our have it together amount League producing content we're for among bundle with will Plus great a platform. Plus aggregators, I as have able emphasis offering, DC is that one. think to it's this we'll have, ViX be with but done a we It fantastic other mentioned,

of So it of content in platform in will the be and Spanish, in in world, terms Mexico. the course, #X

with be So DC that it's it able bundle its to will offerings. own great

on that. ask to expand Antonio I'll So Pepe

Thank you. very much, Thank you Alfonso.

about a excited very of very, are TelevisaUnivision ViX. the with we said, distributor Alfonso opportunity of as As partnering

of but help a our slogan help it them. campaign I I deal fact, it details ViX can of has will that our say Mexico. in can't house them, provide us the advertising numerical will In and that easy the with is

have X date will ViX million that We customers. huge help a distribute

X over platform, same So million potential And us, because a customers us potential it expand. will said, choose competitors ViX tremendous that will a us for people use platform to people time, and great Alfonso differentiator for at help a it's this. our as the will is be

also we we the of that we promote had stated inauguration advantage have promote exclusive One and deal in of Mexico, the our of to and to business. an things taking ViX this that are for

are Yes. -- On I'm that, you I of there? think Alejandro, top sorry.

No, sorry. Go ahead. sorry. Yes,

are is which ViX. top bundled, the Yes. be that On transferred that, going that easy the which of we previous platform subscribers had, into we paying there of to all have course, Blim, almost

So were those subscribers Blim Plus that and are subscribers. that become ViX XXX,XXX will subscribers immediately

So add to Plus’ that will base. ViX

GBM. And with our next question will come from Carlos Legarreta

questions type. have Cable I X on the

First last markets excluding Cable secondly, market, of enterprise, And quarter? where Jalisco the all, what Red competitor have the dynamics on in been the mentioned X% is mass your in the in the was line entering? particularly cable growth with

you, Antonio ask Thank Carlos. questions. answer to both Pepe I'll

of act investments to question. part of mean, historical in made Well, investments and network, made increased the last areas basic we A our that has we only swiftly competition. have the quickly our network for where able XX% I meant all EC Carlos fiber to deep. have you, have significant years over network the that been in is its Thank

network So increase we now where plan the competition. we act to increased very to quickly it have keeping us allows where fees HFC have can a and our

were in in have entered, notably fully done have areas we So fiber so City competitors Mexico our is -- the we deep. City. where Mexico

to that's fees. for increase that's us -- very So ready

we I base. have think So our customer kept

churn very all while the churn significantly increase fact, I we with stable are level, actions happy the to other think Our with that we stable, at that of done have with sales nationally, has a signs managed fact a remained maintaining in coupled we decrease. have and

say. that's I to what have So

The second part of was? your question

part What would growth the have been without... in price

the it segment. enterprise Red main for the – and was the a large Yes. projects And Jalisco The project. very took

for because growth have revenues enterprise This been the would instead XX.X%. And the EBITDA of the X.X%, project in cycles the the the segment XX%. negative quarter would of we for negative the with we we should quarter, a next efforts have one include have been we of instead Red in in the very EBITDA What the and the foresee next growth of if quarter-on-quarter But mid-single-digit was projects, important contribution. large few made expect new things that is an XX.X%, Jalisco quarters. project revenues to say

the going So EBITDA contribution to challenge the is still of remain year. a for rest the

over back session. And the like this team remarks. I'd closing to conclude will the turn any our to for question-and-answer conference management

I us thank today. joining Well, for to like everyone would

As contact the And may well, that always, any very with summer. to free feel you I of you have. happy wish a questions us additional end

Thank The conference today's you concluded. attending has for now presentation.

lines time. at You disconnect this may your now