Connectin≈>>> 2020 Annual Report Contents 02 This is Televisa 04 Letter to Shareholders 08 Financial highlights 10 Cable 12 Sky 14 Content 16 Other businesses 18 Univision 20 Commitment to sustainability 22 Fundación Televisa 24 Board of Directors >>>people II Televisa is a leading media company in the Spanish- representing approximately 36% on a fully-diluted speaking world, an important cable operator in Mexico basis of the equity capital in Univision Holdings, Inc., and an operator of a leading direct-to-home satellite pay the controlling company of Univision. television system in Mexico. Televisa’s cable business offers integrated services, Televisa distributes the content it produces through including video, high-speed data, voice and mobile several broadcast channels in Mexico and in over 70 services to residential and commercial customers as countries through 27 pay-TV brands, television networks, well as managed services to domestic and international cable operators and over-the-top or “OTT” services. carriers. Televisa owns a majority interest in Sky, a leading direct-to-home satellite pay television system In the United States, Televisa’s audiovisual content is and broadband provider in Mexico, operating also in the distributed through Univision Communications Inc. Dominican Republic and Central America. (“Univision”) the leading media company serving the Hispanic market. Univision broadcasts Televisa’s audio- Televisa also has interests in magazine publishing and visual content through multiple platforms in exchange distribution, professional sports and live entertainment, for a royalty payment. In addition, Televisa has equity feature film production and distribution, and gaming. >>>people 1 Televisa is one of the most important participants in Mexico’s telecom industry DIVISIONS Multiple System Operators Enterprise Revenue Generating Units (“MSOs”) division which offers Provides telecommunications Video 4,284,682 video, high-speed data, voice and services, including voice, data, mobile services to residential and managed services, as well as Broadband 5,430,859 commercial customers, including integration and cloud services to Voice 4,296,530 small and medium sized businesses. domestic and international carriers CABLE and to enterprise, corporate, and Mobile 75,515 government customers in Mexico Total RGUs 14,087,586 and the United States. A leading direct-to-home satellite television system and broadband provider Operates in Mexico, Central America Sky offers pay-TV packages, Revenue Generating Units and the Dominican Republic. including exclusive content that Video 7,477,294 ranges from sports to concerts and 58.7% interest owned by Televisa. special events, as well as fixed- Broadband 665,907 wireless broadband services with Voice 892 speeds ranging from 5 to 20 Mbps. SKY Total RGUs 8,144,093 In 2020, Televisa produced more than 86,000 hours of content for free to air and pay-TV Advertising Network Subscription Licensing & Syndication Televisa operates four broadcast Televisa produces and distributes Televisa exports its programs and channels –2, 4, 5, and 9– in Mexico 27 pay-TV brands. In 2020, Televisa formats to television networks City and complements its geographic produced more than 18,500 hours of around the world. In the United coverage through affiliated stations content for pay-TV networks. States, Televisa distributes its throughout the country. Televisa content through Univision under a also sells advertising on its pay-TV Program License Agreement (“PLA”). networks and online properties. This year, the PLA resulted in royal- CONTENT ties to Televisa of U.S.$379.6 million. >>> This is Gaming Publishing Distribution Soccer Other Casino sites and online lottery Distributes publications in First division soccer team of business. Mexico and Latin America. the Mexican league and owner businesses of Azteca stadium, located in Feature Film Distribution Publishing Mexico City. Distributes movies in Mexico A leading Spanish-language and Latin America. magazine publisher. 2 4.1% Other Businesses Sales 31.2% 43.5% Contribution > Content Cable 21.2% Sky 0.3% Other Businesses OSI* 30.5% 46.6% Contribution > Content Cable 22.6% Sky * Operating segment income (OSI) is defined as operating income before corporate expenses depreciation, and amortization, and other expense, net. For a reconciliation of operating segment income with consolidated operating income, see Note 26 to our year-end consolidated financial statements. Televisa Univision Spanish-language media Unconsolidated Televisa holds a direct equity company in the United States interest of approximately 36% and the number five network businesses on a fully-diluted, as-converted regardless of language. basis in Univision, the leading 3 January 2020 >>>Dear Shareholders Bernardo Gómez Co-Chief Executive Officer At Televisa, our strong integrated po- sition in the media and telecommuni- cation sectors allowed us to steer the macro-economic and industry chal- Alfonso de Angoitia lenges. We experienced operational Co-Chief Executive Officer resilience, took broader and sustain- able decisions, and improved our fu- ture-readiness, despite the strain of the pandemic. Our decisive actions underscored our abilities in times of As we prepare this annual letter, such crisis. Notwithstanding the fore- the world keeps facing a challeng- going, we continued operating our es- ing environment, with the pandem- sential businesses uninterrupted to ic (COVID-19) having a far-reaching provide our customers with connec- socio-economic impact. At Televisa, tivity, entertainment, and information. our thoughts are with the frontline health and essential service workers As we focused on our business re- who have been most at risk during the silience, our main priority was to en- pandemic. In this tough landscape, hance our employees’ safety, health, we remained focused on protecting and well-being. We worked fast to our people, while delivering solid re- adopt all safety measures and proto- sults. Together, we will emerge stron- cols, and we developed all the neces- ger from this crisis. sary tools to support our workforce and their ability to remain capable We remained KEY HIGHLIGHTS OF 2020 of working with physical distancing, 2020 was a challenging and unique irrespective of their location. In this year that saw one of the deepest eco- sense, we take pride in sharing that focused on nomic shocks that the world has ex- our field personnel worked non-stop perienced in decades. As the health under strict sanitary conditions to protecting our crisis unfolded and lockdowns were satiate our customers’ need for con- imposed to tighten movement restric- nectivity. Likewise, our newscasts people, while tions, it brought global economic ac- remained committed to keeping our tivity to a near standstill. In this con- population informed and updated text, COVID-19 highlighted the need with the latest news. delivering for urgent actions to avoid economic headwinds and to set the stage for solid results lasting recovery. 4 Our focus was to keep our businesses performing well while maintaining a strong emphasis on Shareholders our three core operations: Cable, Sky, and Content BUSINESS PERFORMANCE ences, while we were able to substan- average monthly traffic per user and an The Company’s progress during the tially compensate for the decline in additional 16% in the number of users. year proved to be gratifying, regard- advertising revenues with a dramatic The investments that we made over the less of the pandemic. Our focus was reduction in costs and expenses. At previous years are paying off and have al- to keep our businesses performing Sky, we continued with a very healthy lowed us to keep up with the increase in well while maintaining a strong em- pace of net adds and closed the year demand for high-speed broadband. Also, phasis on our three core operations: with the highest number of Revenue we extended our network by 513 thousand Cable, Sky, and Content. Excluding Generating Units or RGUs on record. homes, closing the year with approximate- the results of our Other Business- ly 15.8 million homes passed, of which es segment, revenue for these three Our Other Businesses segment was more than 60% are connected either with combined core businesses expanded severely impacted by the closing of fiber-to-the-node or fiber-to-the-home. by 2.0% and operating segment in- the economy and posted a drop in Op- come grew by 2.1%. We kept sight of erating Segment Income of 92% year- We set a record in broadband, adding our strategic initiatives and continued over-year. Unfortunately, due to the 735 thousand RGUs in 2020, leading to to focus on execution, from our enter- social distancing measures mandated strong sales and operating segment in- tainment content to our newscasts, by the authorities, we had to close our come growth of 8.8% and 6.2%, respec- broadband and pay-tv services. gaming sites and the Azteca stadium. tively. We remain excited about future Also, most of the points of sale for our opportunities in the business; we believe Our reliable network allowed us to magazines were not operating, and there is still a long way to go. Our Enter- support strong demand for connec- our movie distribution business was prise business also keeps on building tivity services due to social distanc- put on hold due to the closure of mov- scale, growing 15.5% and 16.4% in sales ing policies, leading us to record a ie theaters, all of these being circum- and operating segment income, respec- solid financial and operational per- stances outside of our control. tively, during the year. formance. Our content business con- tinued operating without interruption, CABLE – ROBUST ORGANIC GROWTH Propelled by a strong innovation pipeline, entertaining, and informing our audi- Our Cable business had a great year in 2020 we launched izzi móvil, a dis- as we recorded the highest pace of ruptive mobile service that by the end of organic growth in RGUs on record, the year reached 76 thousand RGUs. We with broadband driving most of the continued to strengthen our over-the-top increase.