Televisa Is Here, There, and Everywhere

1 Televisa is here, there, and everywhere When people gather friends and neighbors to watch the weekend soccer match, to see the next episode of their favorite show, or read about their favorite character in a magazine, Televisa is there. Televisa is there to bring the news at the end of your day, music to your ears, or your favorite performers to you live. Televisa is there to keep us all in touch, engaged and inspired. Like the families and communities we serve, Televisa is always connected. Jacqueline Bracamontes Lead actress in Las Tontas No Van Al Cielo 2 My fellow shareholders: We continue to leverage our high-quality program formats around the world, Televisa is well positioned to capitalize content in all of our business segments assisting local production companies on the market’s adoption of triple-play to connect with, engage, and excite au- in bringing them to life. We also moved services. We own a controlling stake in diences throughout Mexico and around forward with our strategy to enter into Cablevisión, Mexico City’s cable com- the world. coproduction agreements with third pany. In 2007, Cablevisión revenue-gen- parties. In 2007 we entered into a co- erating units increased 19 percent, and In our television broadcasting business— production in France, and we initiated we closed the year with 539 thousand the cornerstone of our company—our negotiations to colaborate in the pro- television and 145 thousand broadband well-balanced mix of programming en- duction of a telenovela in China, which subscribers. In addition, Cablevisión abled us to continue to achieve excep- will begin shooting in 2008. launched its telephony service in the tional audience shares and ratings. In second half of the year, with very en- 2007 we celebrated, with huge hits, the In the United States, Televisa’s pro- couraging results. fiftieth anniversary of the telenovela—a gramming constitutes 36 percent format that Televisa invented and has of Univision’s nonrepeat broadcast Televisa also owns an equity stake continued to update and innovate, with hours, including the majority of the in Televisión Internacional, the lead- outstanding results, over the years. In network’s prime-time hours. Our con- ing cable company in Monterrey, and a 2007 our broadcast television channels tent—in particular our telenovelas— long-term note that, subject to approval aired 78 percent of the top 100, and 45 brought Univision some of its best from COFECO, the antitrust authority of the top 50, programs in Mexico. In ad- ratings during the year. For example, in Mexico, is convertible into an equity dition, our average sign-on to sign-off the finale of our telenovela Destilando stake of Cablemás, the second-largest audience share was 70.9 percent. Amor reached an audience of 12.7 mil- cable company in Mexico. In addition, lion people and powered the network Cablestar, 70 percent of which is owned Our pay-television networks segment to the nation’s number-one ranking by Cablevisión, acquired the majority of delivered outstanding results during the among all adults in the coveted 18–34 the assets of Bestel, which owns one of year. We produce 14 pay-TV channels and 18–49 demographics. the largest fiber-optic networks in Mexi- that, in 2007, reached more than 18 mil- co. This acquisition will enable our cable lion subscribers throughout the Ameri- Sky, our direct-to-home satellite tele- companies to offer reliable, high-quality cas, Europe, and Asia Pacific. Over the vision service, enjoyed another out- telephony and broadband services. We past four years, sales in this segment standing year. With the addition of 155 continue to see tremendous opportunity have grown at a compounded annual rate thousand new subscribers in 2007, for our company in this industry. of 22 percent, and operating income has Sky’s total subscriber base at year increased by more than 58 percent per end was nearly 1.6 million. Our initial In 2007, we strengthened our position as year in the same period. Pay-TV pen- efforts to expand our reach to Central the world’s leading Spanish-language etration is still low in many of the mar- America have proven successful: in publishing company with our acquisition kets that we serve; therefore, we expect the third quarter Sky launched opera- of Editorial Atlántida, S.A., the leading this segment to continue to enjoy strong tions in Costa Rica and the Domini- magazine publishing company in Ar- growth over the next several years. can Republic, ending the year with 33 gentina. As a result of this acquisition, thousand subscribers in the region. Televisa now publishes 156 titles in 20 In 2007 we exported more than 60 thou- We will continue to expand our of- countries with a total circulation of 165 sand hours of programming to more fering to subscribers and to seek ad- million magazines. Sales in our pub- than 60 countries. In addition, we ex- ditional opportunities to extend our lishing segment increased 10.6 percent ported some of our most successful geographic reach. during the year, to Ps.3.3 billion, and we 3 realized an operating segment income for more than 50 percent of our con- margin of 18.9 percent. solidated sales, helped to compensate We see excellent for our television broadcasting results. Our digital businesses have made Tele- On a consolidated basis, our net sales opportunities for visa a leader in online entertainment. increased 5.6 percent to Ps.41.6 bil- Through platforms such as Esmas, the lion, consolidated operating income growth in all areas leading digital entertainment web por- increased 1.5 percent to Ps.14.5 billion, tal in Latin America, we distribute our and our net income was Ps.8.1 billion. of our business programs, music, and other content through Televisa-branded and vertical Our strong cash generation and sound and will continue channel sites. In addition, we distribute balance sheet and capital structure en- our content through video-on-demand, abled us to continue returning cash to to pursue ways live television, and video-streaming our shareholders. In 2007 we paid a div- services. And through our online music idend of Ps.4.4 billion, and we invested to enhance our store we distribute music, video clips, Ps.4.0 billion in share repurchases. and other audio content. We see the In- performance by ternet as an ever-evolving vehicle for le- I am highly confident in the strength of veraging our content and cross-promot- our business model. We see excellent maximizing the ing our businesses, and we will continue opportunities for growth in all areas of to seek fresh ways to extend the reach of our business and will continue to pur- synergies among our content in this space. sue ways to enhance our performance by maximizing the synergies among our our business Since entering the gaming business in business segments. 2006, we have opened 13 bingo parlors, segments which now operate approximately 4,000 I want to express my gratitude to our electronic bingo machines. In addition, employees and our board of directors; we operate a nationwide lottery with our success is a testament to their tal- more than 5,500 online lottery termi- ent and commitment. We are grateful nals installed in convenience stores as well for the patronage of our diverse throughout Mexico. We continue to see and loyal audiences and our customers. gaming as an attractive opportunity and We pledge to continue to bring them are working to accelerate the growth of excitement and innovative offerings and this business. to earn, and repay, their trust and sup- port for years to come. As we had expected, in 2007 our television broadcasting business faced an un- favorable comparison due to the record sales generated by our broadcast of the FIFA World Cup soccer tournament and the presidential elections in 2006. Emilio Azcárraga Jean Strong performance in most of our other Chairman of the Board business segments, which now account and Chief Executive Officer 4 Financial highlights 2006 2007 % Consolidated net sales Ps. 39,358 Ps. 41,562 5.6 Operating segment income1 17,513 18,072 3.2 Segment margin 43.3% 42.3% Consolidated operating income 14,266 14,481 1.5 Margin 36.2% 34.8% Majority interest net income 8,909 8,082 (9.3) Earnings per CPO 3.07 2.84 Shares outstanding at year-end (in millions) 337,782 329,960 Cash and temporary investments at year-end 16,405 27,305 66.4 Long-term investments at year-end 940 2,525 168.6 Total debt at year-end 19,488 24,922 27.9 Net (debt) cash position at year-end (2,143) 4,908 (329.0) In millions of Mexican pesos in purchasing power as of December 31, 2007, except per-CPO amounts and shares outstanding. 1 Operating segment income is defined as operating income before corporate expenses, depreciation and amortization. For reconciliation of operating segment income with operating income, see Note 22 to our year-end consolidated financial statements. 5 Segment Net Sales 42,693 40,488 Television Broadcasting 49.7% Sky 19.7% Publishing 7.8% Cable and Telecom 6.1% Other Businesses 6.0% Programming Exports 5.3% Pay-Television Networks 4.3% Publishing Distribution 1.1% (Millions of pesos as of December 06 31, 2007) 07 Operating Segment Income 18,072 17,513 Television Broadcasting 58.2% Sky 22.3% Publishing 3.5% Cable and Telecom 5.2% Margin Other Businesses -1.5% 43.3 42.3 (%) Programming Exports 5.7% Pay-Television Networks 6.4% Publishing Distribution 0.2% (Millions of pesos as of December 06 31, 2007) 07 6 Televisa at a glance Business Television Pay-Television Programming Publishing Segment Broadcasting Networks Exports Description Televisa operates We produce 31 We export The world’s largest four broadcast television channels our programs Spanish-language channels in under 14 different and formats magazine Mexico—channels brands for pay- to television publisher; we 2, 4, 5, and TV systems.

Load more