Equity Research M exico

Quarterly Report July 13, 2020 TLEVISA www..com Efficiencies limit pressure on margins @analisis_fundam

▪ confirmed a weak report, reflecting the impact of the Consumer and Telecom pandemic on Content and Other Businesses, yet highlighting a solid growth in pay TV segment (mainly Cable) Valentín Mendoza Senior Strategist, Equity [email protected] ▪ Despite a sharp drop in Advertising, pressure on profitability was less than estimated, owing to cost and expense savings in the division, Juan Barbier coupled with a decrease in corporate spending Analyst [email protected] ▪ We establish a PT2020 of $30.00, which implies a FV/EBITDA 2021E multiple of 5.8x, similar to last year's average of 5.7x. Given the Buy Current Price $23.52 attractive valuation, our rating is BUY. PT 2020 $30.00 Dividend 2020e Pay TV proved its resilience. Televisa's revenues fell 7.8% y/y to $22.407 Dividend Yield (%) Upside Potential 27.6% billion, due to a 16.3% decrease in Content (Advertising -33.1%), and a 67.0% ADR current price US$5.18 slump in Other Business; both divisions being strongly impacted by the PT2020 ADR US$6.80 # Shares per ADR 5 pandemic. However, Pay TV even accelerated its growth rate, with Cable Max – Mín LTM ($) 47.14 – 22.70 advancing 10.7% and Sky 3.1%, due to a higher demand for broad-band Market Cap (US$m)) 2,988.5 Shares Outstanding (m) 2,820.0 accesses. EBITDA fell 13.2% y/y to $8.221 billion though the respective Float 80% margin eroded 230bp to 36.7%, yet being better than expected thanks to Daily Turnover US$m 94.7 Valuation metrics LTM efficiencies in Content and Corporate expenses, which partially cushioned the FV/EBITDA 5.4x impact of lower operating leverage coming from the sharp drop in Advertising P/E .A. revenue, pressures in Izzi from a less favorable mix and a $452 million loss in Relative performance to Mexbol Other Businesses. income grew 89.3% y/y to $1.739 billion, driven by LTM 50% foreign exchange gains and a lower effective tax rate. On valuation, our rating 40% is BUY. We consider that the 2020 conjuncture is already discounted in current 30% 20% valuation (-23% vs. 3Y average), representing an attractive entry point towards 10% 0% 2021. That said, in our PT Tlevisa would trade at 5.8x FV/EBITDA 2021E (vs -10% -20% 5.7x LTM average). -30% -40% Jul.-19 Oct.-19 Jan.-20 Apr.-20 Jul.-20 jul.-19 oct.-19 ene.-20 abr.-20 jul.-20 MEXBOL TLEVICPO

Financial Statements Valuation and Financial metrics

2018 2019 2020E 2021E 2018 2019 2020E 2021E Rev enue 101,282 101,492 96,565 96,822 EV/EBITDA 4.7x 4.8x 5.6x 5.3x

Operating Income 20,253 17,209 13,990 15,889 P/E 11.3x 14.4x -10.8x 30.8x

EBITDA 38,524 39,313 35,102 37,393 P/BV 0.8x 0.7x 1.0x 1.0x EBITDA Margin 38.0% 38.7% 36.4% 38.6%

ROE 5.9% 4.5% -6.5% 2.5% Net Income 6,009 4,722 -6,116 2,156 Net Margin 5.9% 4.7% -6.3% 2.2% ROA 2.0% 1.6% -2.0% 0.7% EBITDA/ interest 4.0x 3.8x 3.1x 3.0x

Total Assets 297,842 290,422 301,691 299,649 Net Debt/EBITDA 2.6x 2.7x 3.3x 3.1x Cash 32,068 27,452 45,762 40,243 Debt/Equity 1.3x 1.3x 1.9x 1.8x This document is provided for the reader’s convenience Total Liabilities 193,061 184,922 218,091 213,994 only. The translation from the original Spanish version was Debt 131,135 133,568 161,372 156,491 made by Banorte’s staff. Discrepancies may possibly arise Common Equity 104,781 105,500 83,600 85,655 between the original document in Spanish and its English translation. For this reason, the original research paper in Source: Banorte Spanish is the only official document. The Spanish version was released before the English translation. The original document entitled “Eficiencias limitan presión en 1 márgenes” was released on July 7, 2020. Document for distribution among public

TLEVISA – Results 2Q20 Revenue & EBITDA Margin MXN, million MXN, million Diff% vs Concept 1Q19 1Q20 Var % 1Q20e Estim. Revenue 24,308 22,407 -7.8% 22,015 1.8% 30,000 40.0% 41% Operating Income 4,110 2,693 -34.5% 2,531 6.4% Ebitda 9,472 8,221 -13.2% 7,780 5.7% 39.0% 40% 25,000 38.1% Net Income 919 1,739 89.3% 343 406.6% 39% 20,000 Margins 38% 36.7% Operating Margin 16.9% 12.0% -4.9pp 11.5% 0.5pp 15,000 37% Ebitda Margin 39.0% 36.7% -2.3pp 35.3% 1.4pp 35.7% 36% Net Margin 3.8% 7.8% 4.0pp 1.6% 6.2pp 10,000 EPS $0.32 $0.62 94.0% $0.12 406.8% 35% 5,000 34%

0 33% Income Statement (Million pesos) 2Q19 3Q19 4Q19 1Q20 2Q20 Year 2019 2020 2020 Change Change Revenue EBITDA Margin Quarter 2 1 2 % y/y % q/q

Net Revenue 24,308 23,229 22,407 -7.8% -3.5% Costs of goods sold 13,815 13,738 13,942 0.9% 1.5% Gross profit 10,492 9,491 8,465 -19.3% -10.8% General expenses 6,099 6,349 5,479 -10.2% -13.7% Net Income & ROE Operating Income 4,110 3,427 2,693 -34.5% -21.4% MXN, million Operating Margin 16.9% 14.8% 12.0% (4.9pp) (2.7pp) Depreciation 5,079 5,152 5,234 3.0% 1.6% EBITDA 9,472 8,293 8,221 -13.2% -0.9% 5.2% 4,000 6.0% EBITDA Margin 39.0% 35.7% 36.7% (2.3pp) 1.0pp 2.8% 2,000 2.6% 4.0% Interest Income (Expense) net (2,268) (8,708) (89) -96.1% -99.0% Interest expense 2,576 2,528 2,885 12.0% 14.1% 0 2.0% Interest income 349 224 452 29.5% 101.9% (2,000) 0.0% Other income (expense) (366) 2,198 (7) -98.1% N.A. (4,000) -2.0% Foreign exchange gain (loss) 325 (8,601) 2,351 >500% N.A. (6,000) -8.3% -4.0% Unconsolidated subsidiaries 164 (5,349) 138 -16.1% N.A. -7.0% (8,000) -6.0% Income before taxes 2,005 (10,629) 2,742 36.7% N.A. Income taxes 742 (1,726) 752 1.4% N.A. (10,000) -8.0% Discontinued operations N.A. N.A. (12,000) -10.0% Consolidated Net Income 1,263 (8,904) 1,989 57.5% N.A. 2Q19 3Q19 4Q19 1Q20 2Q20 Non-controlling interest 344 748 250 -27.4% -66.6% Net Income 919 (9,652) 1,739 89.3% N.A. Net Income ROE Net Margin 3.8% -41.6% 7.8% 4.0pp 49.3pp EPS 0.318 (3.421) 0.617 94.0% N.A.

Balance Sheet (Million pesos) Total Current Assets 84,003 96,147 97,725 16.3% 1.6% Net Debt & Net Debt to EBITDA ratio Cash & Short Term Investments 37,918 44,940 45,482 19.9% 1.2% MXN, million Long Term Assets 227,497 213,316 211,917 -6.8% -0.7% Property, Plant & Equipment (Net) 82,754 83,329 82,897 0.2% -0.5% Intangible Assets (Net) 28,891 28,919 28,836 -0.2% -0.3% 200,000 3.2x 3.2x 3.5x Total Assets 311,500 309,463 309,641 -0.6% 0.1% 2.9x 2.8x Current Liabilities 52,678 51,257 55,313 5.0% 7.9% 2.7x 3.0x Short Term Debt 5,219 4,171 4,419 -15.3% 6.0% Accounts Payable 44,859 44,735 48,798 8.8% 9.1% 2.5x Long Term Liabilities 156,359 176,276 171,605 9.8% -2.6% Long Term Debt 141,718 166,448 161,798 14.2% -2.8% 2.0x Total Liabilities 209,037 227,533 226,918 8.6% -0.3% Stockholders’ Equity 102,463 81,930 82,724 -19.3% 1.0% 1.5x Non-controlling interest 14,100 15,871 16,035 13.7% 1.0% Total Equity 88,363 66,059 66,689 -24.5% 1.0% 0 1.0x Liabilities & Equity 311,500 309,463 309,641 -0.6% 0.1% 2Q19 3Q19 4Q19 1Q20 2Q20 Net Debt 109,019 125,678 120,735 10.7% -3.9% Net Debt Net Debt to EBITDA

Cash Flow CF from Operating Activities 9,446.2 10,476.2 7,692.8 CF from Investing Activities (3,810.2) (4,118.8) (4,529.9) CF from Financing Activities 8,737.4 10,752.2 (2,475.5) FX effect on cash (18.3) 378.6 (146.2) Change in Cash Balance 14,355.1 17,488.3 541.3

Source: Banorte, MSE.

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2020 Estimates

According to our projection model, in light of a challenging economic scenario in 2020, Televisa's consolidated revenues would fall 4.9% year-over-year to $96.565 billion. This decline would be mainly explained by a 7.9% fall in Content sales, given the impact of the COVID-19 pandemic on Advertising sales (-22.3%e), since companies have reduced their investments in this front as an expense containment measure. We believe that this would offset a 9.0% advance in Network subscriptions, reflecting a higher demand for home entertainment due to mobility restrictions, and 10.8% in Univision's royalties (Licensing & Syndication). With respect to the latter, it is worth noting that this would be driven only by the average depreciation of the peso against the U.S. dollar of 18.1%, as Univision would reflect a similar effect on its results for the same reasons. Meanwhile, in Other Businesses’ sales we expect a sharp drop of 35.7% y/y, also attributed to the effect of the coronavirus, mainly in Sporting & Events, as well as in Casinos, due to the temporary closures of the Azteca Stadium and casinos, as well as to the capacity restrictions that are being implemented during the gradual reopening of the economy, to avoid an increase in the number of infections. On the contrary, we project that pay TV would remain resilient in this environment, mainly due to ramping connectivity needs that have been exacerbated by the epidemic, regardless in 2H20 we foresee a slowdown in this segment, as a result of the lower economic activity. That said, we estimate that Sky will end the year with 7,504 million subscribers (-4.0%), mainly due to disconnections of the prepaid satellite TV service during the second half of the year, which should be partially offset by a solid performance in Blue (broad-band internet), which would keep the division's ARPU relatively stable. Thus, Sky's sales would remain virtually unchanged (-0.5%e). At Cable, we project the net addition of 603,500 RGU (+4.8%e), mainly in Internet and Telephony, due to the growing needs of connectivity at home for remote work. In addition, the demand for higher value packages and speeds would boost ARPU. With this in mind, we project that the division's revenues will grow 5.8% y/y.

In terms of EBITDA, we expect a double-digit contraction in operating cash flow (-10.7%e) to $35.102 billion. With this, the respective margin would be pressured down 230bp to 36.4%, as a result of the operating deleveraging inf Content, the impact of the peso depreciation on the dollarized programming costs at Izzi and Sky, and a deterioration in Cable's sales mix due to higher sales of lower-margin packages that include OTT (Over-the-Top) platforms such as Netflix. This would be partially offset by cost and expense reduction strategies, mainly in Content, as well as additional efficiencies in corporate expenses.

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As for the net income, we estimate a net loss of $6.116 billion, comparing very unfavorably against the $4.722 billion profit reported in 2019. The latter would be explained by the operating weakness already described, but especially by a 44.3% increase in the CFR -due to strong FX losses from the depreciation of the exchange rate and a 7.2% increase in interest expenses due to the higher leverage (ND/EBITDA 2020E 3.3x vs 2.7x in 2019)- and the strong loss recognized from the adjustment in the fair value on Univision, following the acquisition of a majority stake on it by Searchlight Capital Partners and ForgeLight. Finally, we estimate that the company will exercise a Capex of $18.602 billion, being 2.7% lower than the previous year mainly due to the exchange rate conversion effect, since in dollars the reduction would amount 15.6% to US$837 million, as a measure to favor the company's liquidity amid the challenging in the environment.

Valuation and PT2020 of $30.00

Through a sum-of-the-parts (STOP) valuation model, we establish a PT2020 of $30.00 per CPO. To calculate this, we assumed a target FV/EBITDA multiple of 4.0x for Content and Sky, in line with global media and satellite TV company medians in 2021 of 4.1x and 4.3x, respectively. In Cable, we determined a multiple of 7.0x, very similar to the cable operators' multiple of 7.1x, while in Other Business we set a target of 3.0x, almost equal to the median of a sample of several companies operating similar businesses to Tlevisa’s at 3.1x. Additionally, we deducted corporate expenses from the calculated value for the business segments. Thus, the implied FV/EBITDA multiple is 5.8x, in line with the average at which the stock has traded over the last year. Finally, to determine the value of its minority investments -including of course Univision- we assumed a multiple of 0.6x P/BV. It is important to highlight that this already contemplates the downward adjustment, made last 1Q20, in the value of Grupo Televisa's position in the North American broadcaster.

Our PT represents a FV/EBITDA 2020E multiple of 6.2x. This certainly reflects the conjuncture that the Content and Other Business divisions are going through, because of the COVID-19 pandemic. In that sense, we consider that the FV/EBITDA 2021E multiple could be a better valuation parameter. In our PT2020, Tlevisa would trade at 5.8x FV/EBITDA 2021E, above current’s valuation of 5.4x but in line with last year's average of 5.7x. We believe that the current discount of 23% vs. the 3Y average of 7.0x, already incorporates the 2020 backdrop; thus we find current valuation attractive when looking towards 2021. Additionally, the potential return of 27.6% against our PT is relevant, and highlights the fundamental value of the stock, which we believe the market should recognize sooner or later. Consequently, our rating is BUY; although with a long-term perspective, as the coming quarters will still e complex.

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Sum of The Parts (SOTP) Valuation MXN, million

Segment EBITDA 2020E $m FV/EBITDA Firm Value $m $/share

Content 9,620 4.0x 38,479 $ 13.65 Segment EBITDA 2020E $m FV/EBITDA Firm Value $m $/share SKYContent 8,693 9,620 4.0x4.0x 34,772 38,479 $$ 12.33 13.65 CableSKY 18,627 8,693 7.0x4.0x 130,389 34,772 $$ 46.24 12.33 OthersCable 18,627 181 3.0x7.0x 130,389 544 $$ 46.24 0.19 CorporateOthers (2,019) 181 3.0x (2,019) 544 -$$ 0.72 0.19 SOTPCorporate Value 35,102 (2,019) 5.8x 202,166 (2,019) -$$ 71.69 0.72 SOTP Value 35,102 5.8x 202,166 $ 71.69 (-) Net Debt (115,610) -$ 41.00 (-) Net Debt (115,610) -$ 41.00 (-) Minority Interest (16,205) -$ 5.75 (-) Minority Interest (16,205) -$ 5.75 (=) TELEVISA Total 70,351 $ 24.95 (=) TELEVISA Total 70,351 $ 24.95 (+) Investments (includes Univision) 15,460 $ 5.48 (+) Investments (includes Univision) 15,460 $ 5.48 85,811 (=)(=) EquityEquity ValueValue TELEVISATELEVISA 85,811 CPOsCPOs outstandingon circulation 2,820 2,820

PT2020PT2020 $$ 30.43 30.43

CurrentCurrent PricePrice $$ 23.52 23.52 Upside Potential 29.4% Upside Potential 29.4% Source: Banorte

P/E FV/EBITDA Dividend Company P/BV LTM 2020E 2021E LTM 2020E 2021E Yield

MEDIASET SPA 0.8x 11.1x 26.3x 12.8x 3.9x 5.2x 4.5x NIPPON TELEVISION HOLDINGS 0.4x 9.8x 14.0x 10.9x 3.4x 4.5x 3.7x RTL GROUP 1.4x 6.0x 10.8x 8.3x 4.2x 7.2x 5.6x ITV PLC 3.3x 5.9x 1.7x 6.6x 5.6x 7.1x 5.9x 3.7% NOS SGPS 1.8x 21.1x 16.8x 11.7x 5.5x 5.2x 5.0x 7.8% DIGI COMMUNICATIONS NV 5.0x 24.1x 7.2x 4.0x 3.9x 3.6x 1.9% NIPPON TELEVISION HOLDINGS 0.4x 9.8x 14.0x 10.9x 3.4x 4.5x 3.7x PRIME MEDIA GROUP LTD 0.6x 21.1x 9.0x 3.0x 2.6x 1.7x 2.7x

PromedioAverage Media Empresas Companies de Medios 1.7x 12.1x 14.6x 8.9x 4.1x 4.9x 4.3x 4.5x MedianaMedian Media Empresas Companies de Medios 1.1x 9.8x 14.0x 9.6x 4.0x 4.8x 4.1x 3.7x

GRUPO TELEVISA SAB-SER CPO 1.0x N.A. N.A. 30.9x 5.4x 5.6x 5.4x Premium/Discount vs Medium -6.9% N.A. N.A. 220.9% 35.8% 16.1% 31.4% Source: Banorte, Bloomberg #¡VALOR! #¡VALOR! 221.9% 35.0% 16.0% 32.1%

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P/E FV/EBITDA Dividend Company P/BV LTM 2020E 2021E LTM 2020E 2021E Yield

MNC SKY VISION TBK PT 3.7x 2.9x DISH TV INDIA LTD 0.3x 5.3x 1.4x 1.3x 1.3x SA 1.2x 17.2x 14.1x 11.6x 7.2x 7.2x 7.0x SKY NETWORK TELEVISION LTD 0.3x 6.4x 13.4x 3.4x 4.3x

Average Satellite TV Companies 1.4x 17.2x 10.3x 10.1x 3.8x 4.0x 4.2x Median Satellite TV Companies 0.8x 17.2x 10.3x 11.6x 2.9x 3.4x 4.3x

GRUPO TELEVISA SAB-SER CPO 1.0x N.A. N.A. 30.9x 5.4x 5.6x 5.4x Premium/Discount vs Median 29.4% N.A. N.A. 165.9% 83.8% 65.9% 25.2% Source: Banorte, Bloomberg 166.4% 86.2% 64.7% 25.6%

P/E FV/EBITDA Dividend Company P/BV LTM 2020E 2021E LTM 2020E 2021E Yield

MEGACABLE HOLDINGS-CPO 2.0x 15.9x 14.5x 14.1x 6.4x 6.3x 5.9x 2.4% CHARTER COMMUNICATIONS INC-A 3.7x 51.6x 45.1x 28.7x 12.0x 11.4x 10.7x ALTICE USA INC- A 8.6x 55.5x 44.0x 21.8x 8.9x 8.6x 8.3x COMCAST CORP-CLASS A 2.2x 14.7x 17.1x 13.8x 8.3x 9.6x 8.6x 2.3% SHAW COMMUNICATIONS INC-B 1.9x 16.1x 17.6x 17.0x 7.6x 7.3x 7.2x 5.3% PLC-A 1.1x 69.8x 7.5x 7.4x 7.6x CABLE ONE INC 12.6x 46.9x 43.0x 41.3x 21.7x 19.3x 17.9x 0.5% KABEL DEUTSCHLAND HOLDING AG 28.7x 10.9x 3.0%

TELENET GROUP HOLDING NV 10.5x 10.6x 10.1x 7.0x 7.0x 6.9x 3.7% WIDEOPENWEST INC 7.4x 11.6x 8.5x 7.2x 6.5x 6.3x MNC SKY VISION TBK PT 3.7x 2.9x HYUNDAI HY COMMUNICATIONS & 0.7x 13.9x 14.9x 14.8x 1.7x 1.8x 1.8x 1.3% TOKYO BROADCASTING SYSTEM 0.5x 9.6x 26.9x 19.0x 7.4x 7.8x 6.5x CABLE AND DATACOM 1.5x 53.8x 10.0x EMPRESAS CABLEVISION SA-CPO 5.9x 42.0x 6.4x DEN NETWORKS LTD 1.4x 50.9x 7.3x WASU MEDIA HOLDING CO LTD-A 1.5x 30.2x 24.3x 22.6x 7.3x 5.9x 5.3% GTPL HATHWAY LTD 1.1x 10.3x 5.4x 2.0x 1.9x 4.2% COGECO COMMUNICATIONS INC 2.2x 13.4x 13.5x 13.5x 7.4x 7.3x 7.1x 2.3% DIGI COMMUNICATIONS NV 5.0x 24.1x 7.2x 4.0x 3.9x 3.6x 1.9% COGECO INC 1.8x 16.2x 10.9x 11.0x 5.6x 5.5x 5.3x 2.3%

TV DIRECT PCL 1.0x 2.9x AG 1.3x 121.0x 20.9x 8.7x 8.5x 8.1x

ASIAN TRUST 0.2x 10.3x 10.6x 10.6x 9.8x 10.1x 10.5x 9.4%

Average Cable operators 2.8x 26.2x 29.2x 17.2x 7.6x 7.6x 7.5x 3.4% Median Cable operators 1.8x 16.1x 17.3x 14.4x 7.4x 7.3x 7.1x 2.4%

GRUPO TELEVISA SAB-SER CPO 1.0x N.A. N.A. 30.9x 5.4x 5.6x 5.4x Premium/Discount vs Median - 43.6% N.A. N.A. 114.4% -27.3% -23.3% -23.6% Source: Banorte, Bloomberg #¡VALOR! #¡VALOR! 114.2% -26.7% -23.3% -23.9%

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P/E FV/EBITDA Dividend Company P/BV LTM 2020E 2021E LTM 2020E 2021E Yield

CORP INTERAMERICANA ENTRET-B 1.1x 1.9x GRAND KOREA LEISURE CO LTD 1.4x 10.0x 3.1x 5.1x 2.5x 5.2% SKYCITY ENTERTAINMENT GROUP 1.2x 4.0x 27.3x 30.6x 4.4x 12.2x 11.8x 11.1% SAMSUNG PUBLISHING CO LTD 2.4x 135.0x 9.1x 0.5% STARTS PUBLISHING CORP 0.9x 10.8x 1.5x AMARIN PRINTING & PUBLISHING 0.8x 17.5x 4.8x CHUOKEIZAI-SHA HOLDINGS INC 0.4x 141.8x 1.2x 2.2%

Average Other Business 1.2x 53.2x 27.3x 30.6x 3.7x 8.6x 7.1x 4.7% Median Other Business 1.1x 14.1x 27.3x 30.6x 3.1x 8.6x 7.1x 3.7%

GRUPO TELEVISA SAB-SER CPO 1.0x N.A. N.A. 30.9x 5.4x 5.6x 5.4x

Premium/Discount vs Median -7.3% N.A. N.A. 0.9% -100.0% -35.1% -24.3% Source: Banorte, Bloomberg #¡VALOR! #¡VALOR! 0.9% -100.0% -34.9% -23.9%

Tlevisa- FV/EBITDA LTM Tlevisa- FV/EBITDA L3Y Times Times 7.0x FV/EBITDA PromedioLTM Average U12M 12.0x

6.5x 10.0x

6.0x 5.7x 8.0x 7.0x 5.5x 6.0x 5.0x 4.0x 4.5x jul.-17Jul.-17 dic.-17Dec.-17 may.-18 May.-18 oct.-18 Oct.-18 mar.-19Mar.-19 ago.-19Aug.-19 feb.-20 Feb.-20 Jul.jul.-20-20 4.0x jul.-19 sep.-19 nov.-19 ene.-20 mar.-20 may.-20 jul.-20 FV/EBITDA PromedioL3Y Average 3A Jul.-19 Sep.-19 Nov.-19 Jan.-20 Mar.-20 May.-20 Jul.-20 Source: Bloomberg, Banorte

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Certification of Analysts. We, Gabriel Casillas Olvera, Alejandro Padilla Santana, Delia María Paredes Mier, Juan Carlos Alderete Macal, Manuel Jiménez Zaldívar, Marissa Garza Ostos, Tania Abdul Massih Jacobo, Francisco José Flores Serrano, Katia Celina Goya Ostos, Santiago Leal Singer, José Itzamna Espitia Hernández, Valentín III Mendoza Balderas, Víctor Hugo Cortes Castro, Hugo Armando Gómez Solís, Miguel Alejandro Calvo Domínguez, Luis Leopoldo López Salinas, Leslie Thalía Orozco Vélez, Gerardo Daniel Valle Trujillo, Eridani Ruibal Ortega and Juan Barbier Arizmendi, certify that the points of view expressed in this document are a faithful reflection of our personal opinion on the company (s) or firm (s) within this report, along with its affiliates and/or securities issued. Moreover, we also state that we have not received, nor receive, or will receive compensation other than that of Grupo Financiero Banorte S.A.B. of C.V for the provision of our services.

Relevant statements. In accordance with current laws and internal procedures manuals, analysts are allowed to hold long or short positions in shares or securities issued by companies that are listed on the and may be the subject of this report; nonetheless, equity analysts have to adhere to certain rules that regulate their participation in the market in order to prevent, among other things, the use of private information for their benefit and to avoid conflicts of interest. Analysts shall refrain from investing and holding transactions with securities or derivative instruments directly or through an intermediary person, with Securities subject to research reports, from 30 calendar days prior to the issuance date of the report in question, and up to 10 calendar days after its distribution date.

Compensation of Analysts.

Analysts’ compensation is based on activities and services that are aimed at benefiting the investment clients of Casa de Bolsa Banorte and its subsidiaries. Such compensation is determined based on the general profitability of the Brokerage House and the Financial Group and on the individual performance of each analyst. However, investors should note that analysts do not receive direct payment or compensation for any specific transaction in investment banking or in other business areas.

Last-twelve-month activities of the business areas. Grupo Financiero Banorte S.A.B. de C.V., through its business areas, provides services that include, among others, those corresponding to investment banking and corporate banking, to a large number of companies in and abroad. It may have provided, is providing or, in the future, will provide a service such as those mentioned to the companies or firms that are the subject of this report. Casa de Bolsa Banorte or its affiliates receive compensation from such corporations in consideration of the aforementioned services.

Over the course of the last twelve months, Grupo Financiero Banorte S.A.B. C.V., has not obtained compensation for services rendered by the investment bank or by any of its other business areas of the following companies or their subsidiaries, some of which could be analyzed within this report.

Activities of the business areas during the next three months.

Casa de Bolsa Banorte, Grupo Financiero Banorte or its subsidiaries expect to receive or intend to obtain revenue from the services provided by investment banking or any other of its business areas, by issuers or their subsidiaries, some of which could be analyzed in this report.

Securities holdings and other disclosures.

As of the end of last quarter, Grupo Financiero Banorte S.A.B. of C.V. has not held investments, directly or indirectly, in securities or derivative financial instruments, whose underlying securities are the subject of recommendations, representing 1% or more of its investment portfolio of outstanding securities or 1 % of the issuance or underlying of the securities issued.

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The Analysts of Grupo Financiero Banorte S.A.B. of C.V. do not maintain direct investments or through an intermediary person, in the securities or derivative instruments object of this analysis report.

Guide for investment recommendations.

Reference

BUY When the share expected performance is greater than the MEXBOL estimated performance. HOLD When the share expected performance is similar to the MEXBOL estimated performance. SELL When the share expected performance is lower than the MEXBOL estimated performance. Even though this document offers a general criterion of investment, we urge readers to seek advice from their own Consultants or Financial Advisors, in order to consider whether any of the values mentioned in this report are in line with their investment goals, risk and financial position.

Determination of Target Prices

For the calculation of estimated target prices for securities, analysts use a combination of methodologies generally accepted among financial analysts, including, but not limited to, multiples analysis, discounted cash flows, sum-of-the-parts or any other method that could be applicable in each specific case according to the current regulation. No guarantee can be given that the target prices calculated for the securities will be achieved by the analysts of Grupo Financiero Banorte S.A.B. C.V, since this depends on a large number of various endogenous and exogenous factors that affect the performance of the issuing company, the environment in which it performs, along with the influence of trends of the stock market, in which it is listed. Moreover, the investor must consider that the price of the securities or instruments can fluctuate against their interest and cause the partial and even total loss of the invested capital.

The information contained hereby has been obtained from sources that we consider to be reliable, but we make no representation as to its accuracy or completeness. The information, estimations and recommendations included in this document are valid as of the issue date, but are subject to modifications and changes without prior notice; Grupo Financiero Banorte S.A.B. of C.V. does not commit to communicate the changes and also to keep the content of this document updated. Grupo Financiero Banorte S.A.B. of C.V. takes no responsibility for any loss arising from the use of this report or its content. This document may not be photocopied, quoted, disclosed, used, or reproduced in whole or in part without prior written authorization from Grupo Financiero Banorte S.A.B. of C.V. History of PT and ratings Stock Date Recommendation PT Tlevisa CPO 07/07/2020 Buy $30.00 Tlevisa CPO 22/01/2019 Hold $57.00 Tlevisa CPO 26/04/2018 Buy $81.00 Tlevisa CPO 20/02/2018 Hold $88.00

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GRUPO FINANCIERO BANORTE S.A.B. de C.V.

Research and Strategy Gabriel Casillas Olvera IRO and Chief Economist [email protected] (55) 4433 - 4695 Raquel Vázquez Godinez Assistant [email protected] (55) 1670 - 2967 Lourdes Calvo Fernández Analyst (Edition) [email protected] (55) 1103 - 4000 x 2611

Economic Research and Financial Market Strategy Executive Director of Economic Research and Financial Alejandro Padilla Santana [email protected] (55) 1103 - 4043 Markets Strategy Itzel Martínez Rojas Analyst [email protected] (55) 1670 - 2251

Economic Research Juan Carlos Alderete Macal, CFA Director of Economic Research [email protected] (55) 1103 - 4046 Francisco José Flores Serrano Senior Economist, Mexico [email protected] (55) 1670 - 2957 Katia Celina Goya Ostos Senior Economist, Global [email protected] (55) 1670 - 1821 Luis Leopoldo López Salinas Economist, Global [email protected] (55) 1103 - 4000 x 2707

Market Strategy Manuel Jiménez Zaldívar Director of Market Strategy [email protected] (55) 5268 - 1671

Fixed income and FX Strategy Santiago Leal Singer Senior Strategist, Fixed Income and FX [email protected] (55) 1670 - 2144 Leslie Thalía Orozco Vélez Strategist, Fixed Income and FX [email protected] (55) 5268 - 1698

Equity Strategy Marissa Garza Ostos Director of Equity Strategy [email protected] (55) 1670 - 1719 José Itzamna Espitia Hernández Senior Strategist, Equity [email protected] (55) 1670 - 2249 Valentín III Mendoza Balderas Senior Strategist, Equity [email protected] (55) 1670 - 2250 Víctor Hugo Cortes Castro Senior Strategist, Technical [email protected] (55) 1670 - 1800 Eridani Ruibal Ortega Analyst [email protected] (55) 1103 - 4000 x 2755 Juan Barbier Arizmendi Analyst [email protected] (55) 1670 - 1746

Corporate Debt Tania Abdul Massih Jacobo Director of Corporate Debt [email protected] (55) 5268 - 1672 Hugo Armando Gómez Solís Senior Analyst, Corporate Debt [email protected] (55) 1670 - 2247 Gerardo Daniel Valle Trujillo Analyst, Corporate Debt [email protected] (55) 1670 - 2248

Economic Studies Delia María Paredes Mier Executive Director of Economic Studies [email protected] (55) 5268 - 1694 Miguel Alejandro Calvo Domínguez Senior Analyst, Economic Studies [email protected] (55) 1670 - 2220

Wholesale Banking Armando Rodal Espinosa Head of Wholesale Banking [email protected] (81) 8319 - 6895 Alejandro Aguilar Ceballos Head of Asset Management [email protected] (55) 5268 - 9996 Alejandro Eric Faesi Puente Head of Global Markets and Institutional Sales [email protected] (55) 5268 - 1640 Alejandro Frigolet Vázquez Vela Head of Sólida Banorte [email protected] (55) 5268 - 1656 Arturo Monroy Ballesteros Head of Investment Banking and Structured Finance [email protected] (55) 5004 - 1002 Carlos Alberto Arciniega Navarro Head of Treasury Services [email protected] (81) 1103 - 4091 Gerardo Zamora Nanez Head of Transactional Banking, Leasing and Factoring [email protected] (81) 8318 - 5071 Jorge de la Vega Grajales Head of Government Banking [email protected] (55) 5004 - 5121 Luis Pietrini Sheridan Head of Private Banking [email protected] (55) 5004 - 1453 Lizza Velarde Torres Executive Director of Wholesale Banking [email protected] (55) 4433 - 4676 Osvaldo Brondo Menchaca Head of Specialized Banking Services [email protected] (55) 5004 - 1423 Raúl Alejandro Arauzo Romero Head of Transactional Banking [email protected] (55) 5261 - 4910 René Gerardo Pimentel Ibarrola Head of Corporate Banking [email protected] (55) 5268 - 9004 Ricardo Velázquez Rodríguez Head of International Banking [email protected] (55) 5004 - 5279 Víctor Antonio Roldan Ferrer Head of Commercial Banking [email protected] (55) 5004 - 1454

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