Grupo Televisa, S.A.B. (TV) Earnings

Management highlights

• At Grupo Televisa, focus on attracting and retaining value customers to grow internet subscriber base, extract synergies from ETH and SKY integration, implement OPEX and CAPEX efficiencies, and upgrade 6 million homes to FTTH technology, aiming for 75% of total footprint passed with FTTH by end - 2026. • Efficiency measures led to consolidated operating segment income margin expansion by around 330 basis points in Q1 with 8% OPEX reduction year - on - year, expecting profitability above 40% in coming quarters. • At Televisa Univision, VIX represents over 20% of consolidated revenue in EBITDA, confident to unlock more value through content business integration and optimization. • In US, preserved audience ratings and managed yields despite sports event cyclical headwinds, expanded political sales infrastructure. In Mexico, upfront results position well to monetize FIFA World Cup momentum. • Cable operations upgraded over 1.5 million homes to FTTH, mobile net adds 95,000 subscribers in Q1. • Televisa Univision's Q1 results driven by VIX growth, solid linear distribution and content licensing revenue, but operating expenses increased due to strategic marketing and sports - related costs.

Guidance

• Expect to sustain profitability above 40% over coming quarters. • Televisa Univision's DTC business VIX to continue as key growth engine. • Grupo Televisa to upgrade 6 million homes to FTTH technology and end 2026 with 75% of total footprint passed with FTTH. • Televisa Univision to continue further integration and operational optimization of content business.

Segment performance

Cable operations: Ended March with a network of 20 million homes. Residential operations net revenue was 10.6 billion pesos, accounting for around 89% of total cable revenue, up 0.9% year - on - year. Enterprise operations net revenue was 1.3 billion pesos, accounting for around 11% of total cable revenue, up 30% year - on - year (15.6% after adjusting for a contract). Sky: Lost 325,000 revenue - generating units in Q1. Sky's Q1 revenue was 2.6 billion pesos, down 24.6% year - on - year. Segment revenue was 14.5 billion pesos, down 3.1% year - on - year. Operating segment income was 6 billion pesos, up 5.2% year - on - year. Operating segment income margin was 41.4%, extended by 330 basis points year - on - year. Televisa Univision: Q1 revenue was $1.1 billion, up 5% year - on - year. Adjusted EBITDA was $323 million, down 6% year - on - year.

Risks & headwinds

• Anticipated headwinds in US from cyclical timing of events like Winter Olympics and FIFA World Cup. • Sky lost 325,000 revenue - generating units in Q1 mainly from prepaid subscribers not recharging. • Sky's video gross additions slowed down due to starting to charge installation fees for new satellite KTV subscribers from Q2 last year.

Analyst Q&A

• Q: We're reaching a crossover now on the English market on streaming versus linear. I know Spanish is a little more resilient on the linear side. But what are you seeing on AVOD, you know, pricing premiums, you know, CPMs, and – I know you've done some interesting things with the technology stack. Could you talk about that? And I guess that's my primary question. I had a follow - up.

  A: Well, we feel great about our service, our technology, and if you saw the growth of VIX, it was spectacular. So we feel really comfortable with what we're offering, both technologically. We need some things that have to do with further personalization and recommendations. So we're moving in the right direction, but that needs a little improvement. But in general, I think the service technologically is great. And as a result of that and our content that you saw, our numbers, I think, in terms of We have grown engagement. We have grown the total stream hours. So we're happy with that. Of course, as a result of that, we're selling more advertising on the platform. So we're happy with the development of PIX. And then you're one of the leading global Spanish news providers, and obviously you're doing a lot in the mini novellas and all that in the short form. you know, content, what do you think the prospects are for ancillary, you know, monetization on TikTok and other, you know, digital forums? Because there's a plethora of content that's mostly on ABOD, your linear channels right now. A: Yeah, as to the micro novellas, we have been successful. Last year, we produced around 30. This year we will produce more than 100, so we're developing that market. We're selling advertising on those, so monetization is working. We have the micros on VIX primarily, but they're also on other platforms. Monetization on TikTok is difficult. We're talking to them because it's difficult, but we are talking to them. We're generating a lot of engagement and, of course, on YouTube, on TikTok, et cetera. So our content works. Our content has huge engagement, huge interest in general. So we're working with those platforms in terms of monetization. Today we're monetizing that primarily on VIX.

• Q: Can you talk a little bit about the strong margins you delivered and how sustainable these are going forward, especially considering some of the top - line pressures you have from Sky? And the second one is, can you talk a little bit about competition in the fixed market?

  A: The market will fluctuate around the 40% range. In terms of the top - line competition, this is a very competitive market where we all play a role. We tend to play a role more in the more sophisticated, more... long - term clients that stay with us. So our churn is, like we said, between this 1.92% range and has been like that. We don't think that going after huge volumes of new acquisitions will drive any value moving forward. So I think this is more or less how we see the market. Very clear.

• Q: How is your appetite evolving, and do you have any updates in your capital allocation strategy? And the second one, it would be interesting to have an updated outlook for your capex this year and for the need to long - term, considering the home space that you already did in this quarter and your prospects for the next one.

  A: As you know, we're always exploring M&A opportunities in our sector. And, of course, we will continue to use our free cash flow, the free cash flow that we have generated to keep strengthening our balance sheet. And as I mentioned, we're prepared for potential M&A opportunities in the Mexican telecommunications sector. As you might remember, on January 30th this year, we used part of our free cash flow generated last year at Grupo Televisa to pay the remaining $207 million of our senior notes maturing this year. So at the end of the first quarter, Grupo Televisa's leverage ratio of two times EBITDA compared to 2.4 times by the end of the first quarter of 2024. And this is a result of our free cash flow generation of 4.3 billion pesos over the last 12 months and our accumulated year - on - year EBITDA growth of 1.5%. And regarding our FCTH upgrade, it will be, why we are upgrading the network in the low - range percentage of revenue. As we finish that next year, obviously it should go down to the 15% range, but that will be only the second half of next year.

• Q: Can you please comment more about the share of income from associates and drive - in trip line for Grupo Televisa. It had a pretty relevant increase this quarter. You mentioned in the report that the main drivers were higher earnings at Univision and your increase taking the company, right? So if you could please comment more about that and comment how should we think about this line going forward. And a quick follow - up on CapEx. If we look at 2025 levels, it was concentrated more in the second half of the year. So looking at this year, should we expect also CAPEX to be back - end loaded?

  A: Rafael, as you mentioned, we have an increase of around 1.2 billion pesos during the quarter in this line. As you may recall, we account for our investment in the Univision using the equity method. So on this line, we include things, for example, as our share of net income in Televisa Univision. We also include the income from our preferred shares in Televisa Univision. And as you mentioned, during the quarter, we had an increase due to the fact that our share in Televisa, our ownership stake increased from 43.2 to 44.3. Every quarter, this is normal in TU, there are increases and decreases depending on things like, for example, listing of stock options and other items like that. The main driver of the increase during this quarter was that we used data of certain preferred stock, which increased our share. So that's basically the driver on that, which is the share of the increase we saw in that line. Okay, super clear. Just a quick follow - up on CapEx. If we look at 2025 levels, it was concentrated more in the second half of the year. So looking at this year, should we expect also CAPEX to be back - end loaded? No, this year it should be more level because we already ramped up the build - up of the network last year. So we are on track and at the current speed, stable speed. So we would see a more flat - ish throughout the year. Okay. Super clear. Thanks.

• Q: If you could talk about if you have plans for price increases on broadband this year. And the second question, I was wondering the 25 network that will not be fiber to the home, do you have plans in the longer term to upgrade these homes as well or will they stay non - fiber?

  A: It's not that it will be – by the end of this year, it will be set at 75. By mid - 2027, it will be 100% cycle. So, it's just a function of time. Regarding price increases, we actually did a price increase of 30 pesos now in March on broadband. Okay. Very clear. Thank you.

• Q: You had a very strong performance on enterprise this quarter, and I wanted to understand how much of that is recurring and will continue to the next quarters. You mentioned that part of it was due to the timing, the recognition timing for an important project. So, Does that only affect this quarter, or will it also affect other quarters?

  A: In terms of revenue, it is a recurring contract, so it will be impacting other quarters as well. As far as growth is concerned, obviously the contract has spiked in growth, so it should not be repeated as much as we did, but we are anticipating still high growth from our enterprise businesses. Very clear. Thank you.