Investor Investor Presentation Presentation First quarter 2019
As of Second Quarter 2019 Disclaimer
This press release contains forward-looking statements regarding the Company’s results and prospects. Actual results could differ materially from these statements. The forward-looking statements in this press release should be read in conjunction with the factors described in “Item 3. Key Information – Forward-Looking Statements” in the Company’s Annual Report on Form 20-F, which, among others, could cause actual results to differ materially from those contained in forward-looking statements made in this press release and in oral statements made by authorized officers of the Company. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
2 SNAPSHOT: Our Core Businesses
Share of Consolidated Revenue LTM 2Q19 CONTENT CABLE A leading cable operator in Mexico Advertising Four broadcast channels Video: 4.4 million RGUs * Video in Mexico City and Broadband: 4.6 million RGUs affiliated stations Voice: 3.4 million RGUs throughout the country * Revenue generating units Voz Network Subscription 37% 26 pay-tv networks and 34% 74 feeds in Mexico and CABLE globally CONTENT Licensing & Syndication WiFi SKY Univision royalties, other licensing fees, and exports to over 75 21% CONTENT countries
SKY
SKY A leading DTH system in Mexico and broadband provider, also operating in Central America and the Dominican Republic Video: 7.4 million RGUs Broadband: 0.2 million RGUs
Source: Grupo Televisa's public filings 3 SNAPSHOT: Highlights
o Close to Ps.100 billion in consolidated revenue
o Consolidated Operating Segment Income (“OSI”) of Ps.40 billion
o Investment grade. Average debt maturity over 16 years. Net-debt-to-OSI of 2.3x
o Declining Capital Expenditures-to-Sales ratio from 27.6% in 2016 to 20.0% in LTM 2Q19
o 20 mm revenue generating units contributing with 65.0% of Consolidated OSI in LTM 2Q19
o Fastest growing broadband provider in the country in terms of new customers
o Content production powerhouse. During the second quarter the top 10 watched programs were produced and transmitted by Televisa
o Two thirds of Televisa’s equity is in the hands of institutional investors, mostly U.S. based
o Publicly traded in the NYSE since 1993 and in the Mexican Stock Exchange since 1991
*Compound Annual Growth Rate 4 DEFINING TRENDS
I. Highlights 2Q’19
II. Diversified revenue streams
III. Growing operating cash flow
IV. Untapped opportunities in growth markets
V. Strong balance sheet
5 Highlights 2Q’19
Consolidated o Consolidated Sales and Consolidated Operating Segment Income, excluding the non-recurring licensing of certain rights of the World Cup in Latin America in 2018 (the “non-recurring licensing revenue”) , dropped 2.7% and 0.1%, respectively.
Cable o Continued its double-digit pace of growth in Sales and in Operating Segment Income of 15.7% and 20.1%, respectively, reaching a record margin of 43.8%. o Reached a total of 12.4 million Revenue Generating Units, after the addition of 286 thousand RGUs in all three services during the quarter.
Sky o Sky resumed growth in video RGUs, gaining seven thousand during the quarter. o Broadband RGUs reached 238 thousand after the addition of 73 thousand during the quarter. o Revenue and Operating Segment Income were negatively impacted by the difficult year-over-year comparison given Sky benefited from the transmission of all 64 matches of the World Cup.
Content o Ongoing leadership with our content offer airing the top 10 programs in Mexican Television. o Content results were impacted primarily by a difficult comparison to last year as a result of the 2018 World Cup, by lower government advertising revenue, and by a decline of approximately 5% in private sector core advertising revenue.
Source: Grupo Televisa's public filings 6 Highlights 2Q’19
Consolidated Revenue Consolidated OSI Non-recurring Ps. in billions Ps. in billions licensing effect
0.8 1.7 9.9 9.9 25.0 9.7 24.3 9.4 23.5 23.0 8.5 21.0 8.0 19.3 7.7 18.1 7.1 17.0
2Q'12 2Q'13 2Q'14 2Q'15 2Q'16 2Q'17 2Q'18 2Q'19 2Q'12 2Q'13 2Q'14 2Q'15 2Q'16 2Q'17 2Q'18 2Q'19
Consolidated Sales, excluding non- Consolidated Operating Segment recurring licensing revenue, dropped Income, excluding non-recurring licensing 2.7%. revenue, decreased 0.1%.
Source: Grupo Televisa's public filings 7 Highlights 2Q’19
Ps. in billions Cable Revenue o Strong top line growth: 14.6% CAGR from 2013
10.2 o OSI margins have expanded rapidly, reaching 42.9% 8.8 in LTM 2Q’19, up from 35.8% in 2013 7.8 8.0 6.9 o During 2Q’19 total net adds were 286 thousand, 4.8 3.9 4.2 Year-over-year growth in RGUs was 16.1%
Net Adds ('000) 3Q18 4Q18 1Q19 2Q19 Video -35 6 -9 11 2Q'12 2Q'13 2Q'14 2Q'15 2Q'16 2Q'17 2Q'18 2Q´19 Broadband 62 81 89 73 Telephony 247 229 205 202 RGU Net Adds 274 316 285 286 Cable O.S.I. Ps. in billions o After an important decline in capex, the Cable 4.5 segment is now free cash flow positive 3.7 3.4 3.3 o 2.8 Over 14.8 million homes passed, of which more than 90% can receive broadband speeds of 100 1.8 Mbps 1.5 1.6
o Our Enterprise business has posted four consecutive quarters of growth, with Revenues 2Q'12 2Q'13 2Q'14 2Q'15 2Q'16 2Q'17 2Q'18 2Q´19 expanding at a rate of 8.7% in 2Q’19.
Source: Grupo Televisa's public filings 8 Highlights 2Q’19
o As of 2Q’19, more than 7.6 million RGUs in Mexico Sky Revenue and Central America Ps. in billions 5.6 5.6 5.7 5.3 o Resuming growth in video subscribers, adding 4.7 4.3 more than 7 thousand RGUs 4.0 3.5 o Revenue reached Ps.21.5 billion in LTM 2Q´19, contributing with 20.5% of consolidated revenue
o OSI Margins have remained solid for more than 10 years, in spite of strong competition 2Q'12 2Q'13 2Q'14 2Q'15 2Q'16 2Q'17 2Q'18 2Q´19 o In 2018 we launched broadband services under the Blue Telecomm brand. In 2Q’19 we added 73 thousand broadband RGUs, reaching a total of 238 Ps. in billions Sky O.S.I. thousand 2.7 • Fixed broadband through incumbent’s network 2.5 2.5 2.3 2.3 (3 to 200 Mbps – subject to incumbent’s 2.1 1.9 technical capability in a given location) 1.7 • Fixed wireless broadband through Red Compartida and AT&T’s wireless network (5 and 10 Mbps)
2Q'12 2Q'13 2Q'14 2Q'15 2Q'16 2Q'17 2Q'18 2Q´19 Source: Grupo Televisa's public filings 9 Highlights 2Q’19
Content Revenue o We are the leading producer of Spanish language Ps. in billions content in the world Non-recurring licensing effect 8.6 8.8 1.7 o As of 2Q19, excluding the non-recurring licensing 7.8 8.2 7.9 8.1 8.1 9.3 revenue, Content Revenue and OSI decreased 13.0% and 15.8%, respectively
o Advertising sales decreased by 17.0%. Content results were impacted primarily by a difficult comparisson to last year as a result of the 2018 2Q'12 2Q'13 2Q'14 2Q'15 2Q'16 2Q'17 2Q'18 2Q'19 World Cup, by lower government advertising revenue, and by a decline of approximately 5% in private sector core advertising revenue Ps. in billions Content O.S.I Non-recurring licensing o effect We continue updating our content offering: 4.1 4.0 3.8 3.7 3.7 3.4 0.8 o We are remaking some of Televisa’s most iconic 3.5 2.9 dramas with updated formats o We will launch The Masked Singer, one of the most popular entertainment shows o We signed a co-production agreement with Netflix
2Q'12 2Q'13 2Q'14 2Q'15 2Q'16 2Q'17 2Q'18 2Q'19
Source: Grupo Televisa's public filings 10 Highlights 2Q’19
o #1 Morning, afternoon and prime time channel in Mexico o Most watched shows (Mo-Fri): La Rosa de Guadalupe, Ringo La Pelea de su Vida y Por (Ch.2)Las Amar sin Ley 2 Estrellas o #1 Comedy Shows: Nosotros los Guapos o #1 Magazine show: Hoy
oTelevisa’s Channel 2 and Channel 5 have as much audience as all competing pay TV Kids channels combined oMost successful animated content vs Air and Pay TV Channels
o#1 morning newscasts with Despierta con Loret and Al aire con Paola News o#1 night newscast with En punto con Denise Maerker
o8 out of 10 most watched soccer matches in local league. Sports oMost watched night soccer show: Noticiero Televisa Deportes. Exclusive sports events
Movies oMost watched movies in FTA TV: Chiquito pero peligroso, El regreso de la nana mágica, and Miss Peregrine y los niños peculiares.
oMost watched channel among women: Tlnovelas Televisa o#1 most watched movie network: De Película Networks o#1 most watched comedy channel: Distrito Comedia 11 DEFINING TRENDS
I. Highlights 2Q’19
II. Diversified revenue streams
III. Growing operating cash flow
IV. Untapped opportunities in growth markets
V. Strong balance sheet
12 DIVERSIFIED REVENUE STREAMS
A strong position in our three core businesses
Cable Revenue Sky Revenue Content Revenue Ps. in billions Ps. in billions Ps. in billions 38.9 39.2* 36.2 36.7 35.6 34.9 34.3 31.9 33.0 34.0 28.5
20.9 21.9 22.2 22.0 21.5 19.3 17.5
2014 2015 2016 2017 2018 LTM 2014 2015 2016 2017 2018 LTM 2014 2015 2016 2017 2018 LTM 2Q´19 2Q´19 2Q´19 *Includes the non-recurring licensing revenue
Strong organic growth as a result Leveraging off its customer base Stable level of revenues in the of attractive 3-play offers and a of 7.4 million video RGUs to sell context of a highly competitive focus on customer service broadband services environment
Source: Grupo Televisa's public filings 13 DIVERSIFIED REVENUE STREAMS
Distribution (Cable & Sky) overtook Content in terms of OSI since 2014
Consolidated Revenue Contribution to OSI Ps. in billions OSI Margin
120.0 100.0%
101.3* 99.5 90.0% Others 100.0 96.3 94.3 80.0% 88.1 24%
80.1 70.0% 32% 80.0 34% 37% 38% 60.0% Cable 42%
60.0 50.0% 25% 25% 40.0% 25% 24% 40.0 27% 23% Sky 39.6% 39.6% 39.2% 38.4% 38.3% 38.3% 30.0%
20.0%
20.0
10.0% Content
0.0 0.0% 48% 41% 38% 34% 37% 32% 2014 2015 2016 2017 2018 LTM 2Q´19 2014 2015 2016 2017 2018 LTM *Includes the non-recurring licensing revenue 2Q´19
Our multiple revenue sources have Cable has overtaken Content as the allowed us to post a CAGR of 5.1% most important contributor to since 2013 Consolidated OSI
Source: Grupo Televisa's public filings 14 DIVERSIFIED REVENUE STREAMS: Content
Within Content, the revenue mix has also changed with advertising declining in importance
Content Revenue Content Revenue Mix o Televisa’s content revenue mix has changed over the years Ps. in billions All Other Content Revenue Worldcup Sublicensing Advertising Revenue o During 2Q’19, advertising Licensing & Syndication revenues represented 54.3% of Network Subscription Advertising 1.7 Content revenues 29% 28% 27% 34% 39% 40% 43% 2.8 46% o On a consolidated basis, 1.4 1.7 2.3 1.5 advertising revenues 1.8 2.3 2.5 0.9 0.7 0.8 represented 18.0% of 0.9 1.2 1.2 0.9 consolidated revenues in 2Q’19 1.2
71% 72% 73% 6.3 66% o Televisa continues to explore 5.6 5.9 61% 60% 5.2 5.4 4.8 5.3 57% 54% and develop other ways to 4.4 monetize the content produced
Source: Grupo Televisa's public filings 15 DIVERSIFIED REVENUE STREAMS: Content
The majority of our Licensing and Syndication revenue originates in the Univision Royalties
o We monetize our content in U.S. Univision Royalties through our licensing agreement USD Millions USD Millions with Univision. 384 o Total Revenue Adjusted OIBDA 373 The royalty rate is 16.45% of substantially all of Univision’s Interest Expense 750 audiovisual revenue. 689 666 628 325 o A step up in the royalty rate of 612 311 314 Univision came into effect in January and again in July 2018.
o In addition to our stream of royalties, we hold equity and 304 254 warrants of Univision which upon 231 229 204 their exercise would represent 36%. 97 98 98 98 97
2015 2016 2017 2018 LTM 1Q'18 2Q'18 3Q´18 4Q´18 1Q´19 2Q´19
Source: Grupo Televisa’s and Univision’s public filings 16 DIVERSIFIED REVENUE STREAMS: Content
We are developing our digital platforms to turn them into a new, solid revenue stream
KPI Q2 2018 Q2 2019 % o As of June 2019, Grupo Televisa Some of our key online Chg. continues to reach more users destinations: Televisa 16m 17m 4% than any other company in Sites’s Mexico. www.televisa.com Users* Televisa 420m 312m -26% o In 2Q19, we solidified our #1 www.lasestrellas.tv Pageviews position in terms of social views in Mexico. The number of views of tudn.com YouTube 1.3b 2.5b 84% views our content in YouTube, Facebook and Instagram reached more than noticieros.televisa.com Facebook 1.4b 1.8b 28% 4.4 billion, up 55% vs. 2Q18. views o Instagram 52m 62m 19% The News Vertical (the only views vertical unaffected by the World Cup) continues its trajectory of growth and is up 32% in pageviews vs. 2Q18.
* Only includes Entertainment, News and Sports content Users: comScore (Desktop 6+ and Total Mobile 15+) Pageviews: comScore (Desktop 6+ and Total Mobile 15+) Youtube, Facebook and Instagram views: Tubular (Televisa total property data) 17 DIVERSIFIED REVENUE STREAMS: Cable
Within Cable, broadband and voice account for 65% of revenue generating units
Cable RGU Mix o Strong gross additions Cable RGU in millions o Voice and Broadband are the Video Voice Broadband main sources of growth Voice RGUs Broadband RGUs
o Many Broadband customers Video RGUs 35% are upgrading to faster speeds 41% 37% 45% 43% 3.4 49% 3.0 o Growing in high-speed Fiber- 2.1 2.1 to-the-Home users 1.9 25% 27% 22% 21% 4.5 4.6 21% 1.2 3.8 18% o We keep on strengthening our 3.1 3.4 OTT offer, providing all the 2.3 relevant content in one place. 34% 35% 38% 38% 38% 33% 4.1 4.2 4.2 4.4 4.4 3.4
2014 2015 2016 2017 2018 2Q´19 2014 2015 2016 2017 2018 2Q´19
Source: Grupo Televisa's public filings 18 DIVERSIFIED REVENUE STREAMS: Cable
Our izzi go app further positions our cable operation for evolving viewing habits
o 68 live channels from Mexico and from global content distributors
o Over 30 thousand on-demand assets from Televisa’s extensive library, FOX Premium, HBO MAX, and other international content partners
o Since March, Netflix is included in our izzi TV interface.
o With izzi Kids, six live TV channels and hundreds of hours on video on demand
o izzi go app is available for all video subscribers since April 2019.
19 DEFINING TRENDS
I. Highlights 2Q’19
II. Diversified revenue streams
III. Growing operating cash flow
IV. Untapped opportunities in growth markets
V. Strong balance sheet
20 GROWING OPERATING CASH FLOW
The free cash flow profile of Televisa has improved dramatically
Capital Expenditures o Expanding operating cash flow O.S.I minus Capex Ps. in billions in Cable and Sky has increased Ps. in billions Cable our ability to generate strong Sky free cash flow Content 22.2 20.9 o The contribution to consolidated 20.7 OSI, net of capital expenditures, 17.6 has almost doubled since 2016 15.3 16.2 o During 1H´19, we invested 14.6 10.2 11.0 9.2 12.3 10.1 U.S.$357.0 million in Cable Capex, which represents 54.9% of the U.S.$650.0 million we
5.1 5.4 6.2 gave as guidance for full year 3.8 3.9 3.8 2.4 2.5 2.9 2.1 1.7 1.4 2019.
2014 2015 2016 2017 2018 LTM 2014 2015 2016 2017 2018 LTM 2Q´19 2Q´19
Source: Grupo Televisa's public filings 21 GROWING OPERATING CASH FLOW: Cable
We are entering the harvesting phase after heavy investments in infrastructure Cable net adds RGUs in millions 1.7 o During 2015 and 2016, Televisa accelerated its 1.5 capital investments in Cable segment 1.2
0.7 0.7 0.6 0.6 o 0.5 0.5 It embarked on a heavy-capex phase to upgrade 0.4 0.4 its network and support growth in RGUs
o Cable capex reached Ps.17.6 billion in 2016 making Televisa one of the most important investors in Mexico’s telecom infrastructure that It includes RGUs acquired from Axtel year Cable OSI net of CAPEX o As a percentage of revenues, Cable capex came Ps. in billions down from 55% in 2016 to 38% in LTM 2Q19 3.9 3.0 2.1
2011 2012 2013 2014 2015 2016 2017 2018 LTM -0.4 -0.2 -1.5 -1.4 2Q´19
-4.3 -4.8
Source: Grupo Televisa's public filings. * Organic growth only. Excludes RGU growth from acquisitions 22 GROWING OPERATING CASH FLOW: Sky
Cash flow has increased substantially after Sky net adds 2016 due to lower capital needs RGUs in millions 1.1 1.1 1.0 0.9 o Sky launched VeTV is 2010, a pre-paid basic pay TV 0.7 0.6 0.6 package and launched an aggressive campaign to add new subscribers 0.2 0.0 -0.3 -0.3 o Its net adds reached a peak in 2012 installing over 40,000 new services every week, on average
o In 2016, growth further accelerated with the shut- down of the FTA analog signals
Sky OSI net of CAPEX o Majority of LTM subscriber losses are attributed to
Ps. in billions 6.3 the post-World Cup effect 5.9 5.6 o Slower net adds starting in 2017 meant lower 3.5 3.7 3.1 2.8 2.7 CAPEX requirement and more cash flow 2.3 o In 2018 Sky launched broadband services through the brand Blue Telecomm, reaching 238 thousand RGUs in 2Q 2019
Source: Grupo Televisa's public filings 23 DEFINING TRENDS
I. Highlights 2Q’19
II. Diversified revenue streams
III. Growing operating cash flow
IV. Untapped opportunities in growth markets
V. Strong balance sheet
24 UNTAPPED OPPORTUNITIES: Broadband Market
Composition of Broadband Subs in Broadband Net Adds Mexico Thousand RGUs 3.1% 249 Incumbent 20.1% DSL Televisa Cable Coaxial 38.8%
Fiber 110 36 Other 311 62 157 173 38 38.0% 136 4 62 89 73 -8 4Q'17 1Q'18 2Q'18 3Q´18 4Q´18 1Q´19 2Q´19
o According to the Mexican regulator, as of the end o Over the last seven quarters our Cable Segment of the fourth quarter 2018, 7.2 million customers has added more than twice the number of were still on copper (DSL: Digital Subscriber Line) Broadband RGUs added by the incumbent
o This is a fertile pool for Cable as it takes advantage of its superior coaxial and fiber infrastructure
Source: Internal analysis based on IFT and other companies ’ public information 25 UNTAPPED OPPORTUNITIES: Broadband Market
Televisa Cable Market Share - Telecom Market Share Bradband services AMX 6.6% 5.8% 24.1% 24.2% Telefónica 21.3% 22.2% 4.0% 20.8% AT&T 16.4% 4.4% Megacable 13.1% Sky 10.5% 53.7% Televisa Cable Otros 15.0%
As of 1Q19 2013 2014 2015 2016 2017 2018 1Q'19
o Our cable operation, izzi, has been gaining o In spite of Televisa’s strong growth in the market share for more than 6 years telecom market, it is still a small participant in the industry
Source: Internal analysis based on IFT and other companies’ public information 26 UNTAPPED OPPORTUNITIES: Broadband Market
Fixed broadband penetration % per 100 inhabitants 50.0 subscribers per 100 inhabitants 40.0
30.0
20.0
10.0
0.0
Italy
Chile
Israel
Japan
Korea
Latvia
Spain
France
Turkey
Poland
Ireland
Austria
Greece
Iceland
Finland
Estonia
Canada
Norway
Mexico
Sweden
Belgium
Slovenia
Hungary
Portugal
Australia
Denmark
Germany
Lithuania
Colombia
Switzerland
Netherlands
Luxembourg
NewZealand
UnitedStates
CzechRepublic
SlovakRepublic UnitedKingdom
o Mexico’s broadband market is just developing. Broadband customers in Mexico still have among the lowest speeds in the OECD.
o Mexico has the second lowest penetration of broadband services of all OECD countries, and the lowest speed.
o We are positioned like to no other operator in Mexico to benefit from increased demand for broadband.
Source: OECD, Broadband Portal (December 2018) 27 UNTAPPED OPPORTUNITIES: Broadband Market
There are 33mm homes in the country
of which more than 14.8mm homes are passed by Televisa Cable
Of those, more than 90% are capable of getting 100Mbps from Televisa Cable
but only 4.6mm homes are currently customers of our broadband offering
There is plenty of room for further growth under existing homes passed
In the large majority of the markets we reach, Televisa is the provider capable of delivering the fastest speeds
Source: Internal analysis based on IFT and other companies’ public information 28 DEFINING TRENDS
I. Highlights 2Q’19
II. Diversified revenue streams
III. Growing operating cash flow
IV. Untapped opportunities in growth markets
V. Strong balance sheet
29 STRONG BALANCE SHEET
Limited FX exposure, comfortable debt profile, long maturities
An operating hedge with a similar amount in dollar-denominated revenue and in dollar-denominated costs and expenses • dollar-denominated revenue US$933 million (2018) • dollar-denominated costs and expenses US$750 million (2018)
A balance sheet hedge with a similar amount in dollar-denominated assets and liabilities (2Q19) • US$4.4b in total debt includes (1) USD debt, (2) capital lease obligations, (3) other notes payable • US$4.2b in total assets includes (1) our stake in Univision, (2) cash and temporary investments
We have a very comfortable debt profile with very long maturities
• Net debt to OSI ratio: around 2.3x as of 2Q19 (LTM OSI) • Closest USD-denominated maturity: US$600 million in 2025. Closes MXN-denominated maturity: MXN$10 billion in 2020 • Weighted average maturity: USD is 19.5 years, MXN is 7.2 years • 2Q19: 61% of debt was in USD, 39% of debt in MXN. Weighted average interest rates: in USD 5.92%, in MXN 7.55% • US$211 million in interest expense (2019), all of which is hedged • On July 8, 2019, we executed a credit agreement for a five year term loan in an amount of MXN$10,000 million with a syndicate of banks.
Source: Grupo Televisa's public filings. 30 OTHER RELEVANT INFORMATION
31 SUSTAINABILITY: Many recent milestones
o Included as a constituent of the 2019 FTSE4Good Emerging Index, for the fourth consecutive year.
o Included in the 2019 Bloomberg Gender-Equality Index.
o Member of the Dow Jones Sustainability MILA Pacific Alliance Index.
o One of only three Mexican companies to be included in the Dow Jones Sustainability Emerging Markets Index.
o Part of the United Nations (UN) Global Compact, the world’s largest corporate sustainability initiative.
o Televisa has submitted our Report for Climate Change and Water through CDP (formerly the Carbon Disclosure Project).
o Members of the IPC Sustentable (Sustainability Index), of the Bolsa Mexicana de Valores (Mexican Stock Exchange).
o Televisa’s social responsibility programs were recognized for the second time with the “Empresa Socialmente Responsable” award.
o Our facilities Santa Fe, San Ángel and Collection Center received the Environmental Quality Certificate issued by federal environmental entities.
o Televisa was recertified with the new version of the norm ISO 14001:2015 in three of our facilities: Santa Fe, San Ángel and Collection Center. Source: Grupo Televisa's public filings 32 Investor Relations www.televisair.com
+ (52) 55 5261 2438 Av. Vasco de Quiroga 2000, A4. Col. Santa Fe CP. 01210 Mexico City
Carlos Madrazo VP, Head of Investor Relations [email protected]
Santiago Casado Investor Relations Director [email protected]
Pablo Necoechea Sustainability and Analysis Coordinator [email protected]
Ana Paola Montiel Investor Relations Analyst 33 [email protected]