2008 ANNUAL REPORT [email protected]
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Grupo Televisa, S.A.B TELEVISA Av. Vasco de Quiroga 2000 C.P. 01210 México, D.F. (5255) 5261-2445 2008 ANNUAL REPORT [email protected] www.televisa.com www.televisair.com 2008 ANNUAL REPORT 2008 ANNUAL About Televisa Grupo Televisa, S.A.B., is the largest media company in Investor Information the Spanish-speaking world and a major participant in the international entertainment business. It has interests in television production and broadcasting, production of pay-television networks, international distribution of television programming, direct-to-home Corporate headquarters Common stock data satellite services, cable television and telecommunication services, Grupo Televisa, S.A.B. CPOs (Certificados de Participación Ordinarios) covering the Grupo Televisa, magazine publishing and distribution, radio production and broadcasting, Av. Vasco de Quiroga 2000 S.A.B., comprise 117 shares (25 A Shares, 22 B Shares, 35 D Shares and 35 L C.P. 01210 México, D.F. Shares), and are listed and admitted for trading on the Bolsa Mexicana de professional sports and live entertainment, feature-film production and (5255) 5261-2000 Valores, S.A. de C.V. (the Mexican stock exchange), under the ticker symbol distribution, the operation of a horizontal internet portal, and gaming. TLEVISA CPO. The GDSs (Global Depositary Shares), each representing five Legal counsel CPOs, are listed on the New York Stock Exchange and trade under the ticker Mijares, Angoitia, Cortés y Fuentes, S.C. symbol TV. Montes Urales 505, 3er piso C.P. 11000 México, D.F. Dividend policy (5255) 5201-7400 Decisions regarding the payment and amount of dividends are subject to approval by a majority of the A Shares and B Shares voting together generally, Fried, Frank, Harris, Shriver but not necessarily, on the recommendation of the board of directors, as well as a & Jacobson LLP majority of the A Shares voting separately. On March 25, 2004, the company’s board One New York Plaza of directors approved a dividend policy under which Televisa intends to pay an New York, New York 10004 U.S.A. annual regular dividend of Ps.0.35 per CPO. (212) 859-8000 SEC filings Independent auditors Televisa files and submits annual reports to the US Securities and Exchange PricewaterhouseCoopers, S.C. Commission. This annual report contains both historical information and forward- Mariano Escobedo 573 looking statements. These forward-looking statements, as well as other C.P. 11580 México, D.F. forward-looking statements made by the company, or its representatives from (5255) 5263-6000 time to time, whether orally or in writing, involve risks and uncertainties relating to the company’s businesses, operations, and financial condition. A summary of Depositary these risks is included in the company’s filings with the US Securities and Exchange The Bank of New York Commission, and this summary as well as the other filings with and submissions to BNY Mellon Shareowner Services the US Securities and Exchange Commission, are and will be available through the PO Box 358516 office of investor relations upon written request. Pittsburgh, PA 15252-8516 (201) 680-6825 Investor relations Table of Contents We ask that investors and analysts direct all inquiries to: Grupo Televisa, S.A.B. Av. Vasco de Quiroga 2000 Letter to shareholders 2 C.P. 01210 México, D.F. Financial highlights 4 (5255) 5261-2445 Televisa at a glance 6 [email protected] Television broadcasting 8 www.televisa.com Pay-television networks 10 www.televisair.com Programming exports 11 Sky 12 Cable and telecom 14 Televisa interactive media 16 Publishing 18 Radio 19 Live entertainment 20 Gaming 21 Fundación Televisa 22 Management discussion and analysis of results of operations 24 Board of directors, management, investor information 35 Consolidated financial statements 36 This annual report is available in both English and Spanish. April 2009. Este informe anual está disponible tanto en español como en inglés. Abril 2009. 1 in evolution At Televisa, we have developed a diverse portfolio of leading media assets that inspire and excite audiences throughout—and now beyond— the Spanish-speaking world. Over the past several years, Televisa has fueled its growth by continually developing new content and formats and expanding into new markets. It has also adopted advanced technologies to support and extend the reach of its content over a variety of platforms. As the world’s most successful producer of Spanish-language content, Televisa has positioned itself to lead the evolution of its industry by capitalizing on cultural diversity in countries throughout the world. We have reached beyond Spanish-language audiences through collaborations in China, Brazil, France, and other high-potential countries. These alliances not only broaden our audience; they raise our global profile and bring us important new streams of revenue. We have also gone beyond traditional acquisitions and alliances to broaden our offerings. In 2008, we entered into strategic alliances with key players in our industry, most notably BBC Worldwide and Telemundo, to bring their content to our viewers. Through Sky, Televisa has built an extensive infrastructure to deliver its content to audiences throughout Mexico and Central America. And through its entrance into the triple-play market, Televisa is positioning itself as not only a leading media enterprise but also a leading provider of telecommunications and online services. We will continue to seek out new ways to in- tegrate our high-quality content—a key dif- ferentiator in an increasingly consolidated industry—across all of our business seg- ments. In doing so, we strengthen our port- folio and satisfy audiences, customers, and shareholders alike. 2 My fellow shareholders: n 2008, Televisa again delivered growth in sales and profitabil- ity, while advancing its strategy to diversify into new markets, Idevelop new formats, access new media platforms, and offer high-quality services to its customers. On a consolidated basis, net During 2008, our operation sales increased 18.6 percent to Ps.48 billion, and operating income generated strong cash flows, which increased 8.7 percent to Ps.15.1 billion. allowed us to build an enviable Televisa has long been the world’s leading broadcaster of Spanish- language television content. Television broadcasting continues to capital structure. At year-end, be our core business, and one that is constantly evolving. Our lead- ership in this business and in a broad variety of media segments our cash position stood at demonstrates our commitment to constantly evolve into a more Ps.42.7 billion, our net cash position diversified media and telecommunications company. In 2008, for example, our direct-to-home (DTH), cable, and telecom businesses, at Ps.3.8 billion, and our average together, accounted for over 30 percent of our combined operating segment income—that’s compared with less than 5 percent just debt maturity at close to 13 years. eight years ago. Televisa is the leader in broadcast television in Mexico. During 2008 we aired 74 of the top-100-rated programs. Our average sign-on to sign-off audience share was an extraordinary 72.3 percent, and our prime-time audience share for Channel 2 was 34.1 percent. Our telenovela, Fuego en la Sangre, which aired during our most im- portant time slot, exceeded our ratings goals and achieved eight- year record-high ratings. Our broadcast of the Summer Olympic Games in Beijing achieved an audience share of 68 percent and exceeded our targets for both viewers and revenue generation. In addition, in order to complement our offerings, during 2008 we en- tered into strategic alliances with key players in our industry, most notably BBC Worldwide and Telemundo. The strength and variety of our programming have been of paramount importance to our successful start in 2009. Sky, our DTH satellite business, is the leading DTH platform in Mexi- co, Central America and the Caribbean. Sky continues to distinguish itself through its high-quality content, exclusive programming, and superior customer service. During 2008, Sky grew its subscriber base by 175 thousand, or 11 percent, to 1.76 million subscribers. We have been successful with the deployment of our services in Central America and the Dominican Republic, which, by year-end 2008, contributed 109 thousand subscribers. We plan to continue expanding our presence in this region. TELEVISA 2008 ANNUAL REPORT 3 We are advancing our strategy to become an important participant nologies such as live-television streaming and time-shifting video- in Mexico’s cable and telecommunications industry through our on-demand. Finally, we are developing greater expertise in our ownership interests in three of Mexico’s leading platforms, Cablevi- gaming segment. By year-end we were operating 21 bingo parlors sion, Cablemás and TVI. Our competitive pricing and attractive with nearly 7,000 electronic bingo machines, and we are currently triple-play offerings, together with the low penetration of cable exploring options to more profitably exploit our lottery license. We and broadband, will drive growth in this segment. We see a solid continue to see a solid opportunity in this business segment. opportunity in this business and are pursuing strategies to extract maximum value from our participation in the sector. During 2008, our operation generated strong cash flows, which allowed us to build an enviable capital structure. At year-end, our With Televisa Networks, our pay-television programming business, cash position stood at Ps.42.7 billion, our net cash position at Ps.3.8 we continue to expand our brands worldwide. Collectively, our 30 billion, and our average debt maturity at close to 13 years. We will pay-television channels reached in 2008 more than 21 million sub- remain selective in the use of the cash generated by our operation scribers in the United States, Canada, Latin America, Europe, and Asia and will seek out opportunities that make sense for our business Pacific.