Grupo Televisa, S.A.B. Q2 FY2025 earnings call

• Grupo Televisa Milestones: Stabilized Internet subscriber base, OpEx efficiencies led to operating segment income margin 38.1% (+80bps), CapEx cut to $600M from $665M, generated MXN 3.6 billion free cash flow, prepaid bank loan. Leverage ratio 2.2x EBITDA (improved from 2.4x).
• TelevisaUnivision Milestones: ViX subscribers over 10M, operating expenses down 13% y/y (savings $226M), leverage improved to 5.5x EBITDA (from 5.8x), refinanced $1.5 billion to address near-term debt maturity.
• Cable and Sky Execution: Focus on value customers, ongoing integration between Izzi and Sky driving efficiencies, CapEx investment MXN 2.1 billion (14.3% of sales), operating cash flow MXN 3.6 billion (24.1% of sales).

Cable Operations:

• Residential net revenue: MXN 10.5 billion (91% of cable revenue), decreased 3.1% year-on-year. Enterprise net revenue: MXN 1.1 billion (9% of cable revenue), increased 3% year-on-year.
• Network: Almost 20 million homes passed, monthly churn rate below historical average 2%. Broadband had net adds of over 6,000 in Q2. Video lost 53,000 subscribers. Mobile had net adds of 83,000, nearly 2x first quarter.

Sky:

• Lost 347,000 revenue-generating units. Revenue MXN 3.2 billion, decreased 16.3% year-on-year. Segment revenue MXN 14.8 billion, decreased 5.9% year-on-year. Operating segment income MXN 5.7 billion, decreased 4.2% year-on-year. Operating segment income margin 38.4%, expanded 70 basis points year-on-year.

TelevisaUnivision:

• Revenue $1.2 billion, decreased 4% year-on-year. Adjusted EBITDA $398 million, increased 10% year-on-year. ViX subscribers surpassed 10 million, showing double-digit growth.

• CapEx guidance revised from $665M to $600M for 2025, mainly due to favorable supplier negotiations. Expect CapEx deployment to accelerate in second half.
• ViX growth momentum continues with subscribers surpassing 10 million, showing double-digit year-on-year growth.
• Efficiency plan at TelevisaUnivision to reduce operating expenses by over $400M in 2025 remains on track.

• Industry transformation with ongoing changes in distribution and content consumption. Secular decline in DTH (direct-to-home) business for Sky. Potential impacts from U.S. tariff policy, though digital content is exempt from tariffs under current U.S. MCA.

Q: Regarding TelevisaUnivision's business in light of separation between content streaming and Cable TV in the U.S. and Sky's connections being a cost burden.

A: Alfonso de Angoitia Noriega stated they see value in keeping bundles for now as their channel packages are strong, and will analyze alternatives. Francisco Valim mentioned Sky integration is near completion, with no cost burden as it's a revenue stream with variable costs.

Q: Comment on CapEx expectations, downside revision, and broadband adds trend.

A: Alfonso de Angoitia Noriega mentioned CapEx guidance revised to $600M. Francisco Valim stated focus on high-end customers keeps churn low, expecting upward trend in cable revenues.

Q: Commercial strategy and competition evolution.

A: Francisco Valim stated competition in Mexico is rational, with no significant price discounting, indicating a stable market.

Q: Digital revenues efficiency and U.S. tariff policy.

A: Francisco Valim mentioned TelevisaUnivision is enhancing digital sales with new sales head from Tiktok, unified content officer to improve monetization. Alfonso de Angoitia Noriega stated digital content is exempt from U.S. tariffs under current MCA.