Investor Relations PRESS RELEASE
Televisa Reports Second Quarter 2020 Results
Consolidated
• | Revenues reached Ps.22.4 billion |
• | Operating Segment Income ("OSI") margin reached 35.8% |
• | Standard & Poor´s and Fitch Ratings ratified Televisa's BBB+ ratings |
• | Strong demand for connectivity services due to social distancing policies |
• | Other Businesses segment significantly impacted by the shut down of the economy |
Cable | |
• | Record growth of 494 thousand Revenue Generating Units ("RGUs") |
• | New record in broadband RGUs net adds of 252 thousand for a single quarter |
• | Strong top line growth of 10.7% and OSI growth of 4.1% |
• | Launched izzi Móvil, a MVNO (Mobile Virtual Network Operator) |
Sky | |
• | 72 thousand new broadband RGUs reaching over 500 thousand |
• | 5th consecutive quarter of growth in video RGUs after adding 20 thousand |
• | Revenues grew 3.1%, the fastest pace of growth in 13 quarters |
• | OSI resumed growth, reaching Ps.2.3 billion |
Content
• Audience growth y-o-y of 18%1 in our flagship network
• Advertising revenue drop of 33.1% due to shut down of economy
• Revenues were down 16.3% and OSI margin reached 30.9%
• Savings from cost and expenses reduction program of Ps.462 million
Earnings Call Date and Time: Wednesday, July 8, 2020, at 10:00 A.M. ET.
Conference ID # is 8059865
From the U.S.: +1 (877) 850 2115
From Mexico: 800 926 9157
International callers: +1 (478) 219 0648
Rebroadcast: +1 (404) 537-3406
The teleconference will be rebroadcast starting at 13:00 ET on July 8 through midnight on July 22.
1 Source: Nielsen. P4+, Monday to Sunday, 16:30 to 23:00
1
Consolidated Results
Mexico City, July 7, 2020 - Grupo Televisa, S.A.B. (NYSE:TV; BMV: TLEVISA CPO; "Televisa" or "the Company"), today announced results for second-quarter 2020. The results have been prepared in accordance with International Financial Reporting Standards ("IFRS").
The following table sets forth condensed consolidated statements of income for the quarters ended June 30, 2020 and 2019, in millions of Mexican pesos:
Margin | Margin | Change | |||
2Q'20 | 2Q'19 | ||||
% | % | % | |||
Net sales | 22,407.2 | 100.0 | 24,307.6 | 100.0 | (7.8) |
Net income | 1,989.4 | 8.9 | 1,263.4 | 5.2 | 57.5 |
Net income attributable to stockholders of the Company | 1,739.5 | 7.8 | 919.1 | 3.8 | 89.3 |
Segment net sales | 24,131.2 | 100.0 | 25,339.5 | 100.0 | (4.8) |
Operating segment income (1) | 8,636.3 | 35.8 | 9,856.4 | 38.9 | (12.4) |
(1) The operating segment income margin is calculated as a percentage of segment net sales.
Net sales decreased by 7.8% to Ps.22,407.2 million in second-quarter 2020 compared with Ps.24,307.6 million in second-quarter 2019. This decrease was mainly attributable to a decline in Advertising sales and in Other Businesses. Operating segment income decreased by 12.4% to Ps.8,636.3 million with a margin of 35.8%, due to the decline in operating segment income of Content and Other Businesses segments.
Net income attributable to stockholders of the Company increased to Ps.1,739.5 million in second-quarter 2020 compared to Ps.919.1 million in second-quarter 2019.
The net increase of Ps.820.4 million reflected:
i. a Ps.2,179.6 million decrease in finance expense, net; and
ii. a Ps.94.4 million decrease in net income attributable to non-controlling interests.
These favorable variances were partially offset by:
i. a Ps.1,251.4 million decrease in operating income before depreciation and amortization and other expense, net;
ii. a Ps.154.9 million increase in depreciation and amortization;
iii. a Ps.10.5 million increase in other expense, net;
iv. a Ps.26.2 million decrease in share of income of associates and joint ventures, net; and
v. a Ps.10.6 million increase in income taxes.
Second-quarter Results by Business Segment
The following table presents second-quarter consolidated results ended June 30, 2020 and 2019, for each of our business segments. Consolidated results for second-quarter 2020 and 2019 are presented in millions of Mexican pesos.
Net Sales | 2Q'20 | % | 2Q'19 | % | Change |
% | |||||
Cable | 11,308.8 | 46.9 | 10,215.7 | 40.3 | 10.7 |
Sky | 5,514.7 | 22.9 | 5,348.1 | 21.1 | 3.1 |
Content | 6,740.6 | 27.9 | 8,050.0 | 31.8 | (16.3) |
Other Businesses | 567.1 | 2.3 | 1,725.7 | 6.8 | (67.1) |
Segment Net Sales | 24,131.2 | 100.0 | 25,339.5 | 100.0 | (4.8) |
Intersegment Operations1 | (1,799.8) | (1,252.7) | |||
Net Sales | 22,331.4 | 24,086.8 | (7.3) | ||
Held-for-sale Operations 2 | 75.8 | n/a | 220.8 | n/a | (65.7) |
Net Sales | 22,407.2 | 24,307.6 | (7.8) | ||
Operating Segment Income3 | 2Q'20 | Margin | 2Q'19 | Margin | Change |
% | % | % | |||
Cable | 4,656.5 | 41.2 | 4,473.7 | 43.8 | 4.1 |
Sky | 2,321.4 | 42.1 | 2,305.6 | 43.1 | 0.7 |
Content | 2,080.8 | 30.9 | 2,928.3 | 36.4 | (28.9) |
Other Businesses | (422.4) | (74.5) | 148.8 | 8.6 | n/a |
Operating Segment Income | 8,636.3 | 35.8 | 9,856.4 | 38.9 | (12.4) |
Corporate Expenses | (366.0) | (1.5) | (439.2) | (1.7) | 16.7 |
Depreciation and Amortization | (5,234.1) | (23.4) | (5,079.2) | (20.9) | (3.0) |
Other Expense, net | (293.5) | (1.3) | (283.0) | (1.2) | (3.7) |
Intersegment Operations | (19.9) | (0.1) | (16.7) | (0.1) | (19.2) |
Held-for-sale Operations 2 | (29.6) | n/a | 71.7 | n/a | n/a |
Operating Income | 2,693.2 | 12.0 | 4,110.0 | 16.9 | (34.5) |
1 For segment reporting purposes, intersegment operations are included in each of the segment operations.
2 The assets and related liabilities of the Radio business are classified as held for sale in the Company's consolidated statement of financial position as of June 30 , 2020 and December 31, 2019. Accordingly, the net sales and the operating segment income associated with the Radio business, which was part of the Company's Other Businesses segment, are presented separately as held-for-sale operations for the
quarters ended June 30, 2020 and 2019. The sale of the Radio business was concluded on July 2nd, 2020.
3 Operating segment income is defined as operating income before depreciation and amortization, corporate expenses, and other expense, net.
Cable
Total net additions for the quarter were approximately 494.1 thousand RGUs. Quarterly growth was mainly driven by record broadband net additions of 252.2 thousand and voice net additions of 214.5 thousand. Video net additions increased by 27.4 thousand. The following table sets forth the breakdown of RGUs per service type for our Cable segment as of June 30, 2020 and 2019.
2Q'20 NetRGUs
2Q'20
2Q'19
Adds
Video Broadband Voice
Total RGUs
27,420 252,174 214,528 494,122
4,335,478 4,387,007
5,069,277 4,640,275
3,998,047 3,385,387
13,402,802 12,412,669
Second-quarter sales increased by 10.7% to Ps.11,308.8 million compared with Ps.10,215.7 million in second-quarter 2019 driven by solid net additions in broadband and voice.
Second-quarter operating segment income increased by 4.1% to Ps.4,656.5 million compared with Ps.4,473.7 million in second-quarter 2019. Margin decreased by 260 basis points to 41.2% due to a number of reasons, such as strong growth in our lower-margin packages that are bundled with OTT services, promotions around fixed line portability, and promotions to drive a higher adoption of automatic recurring payments.
The following tables set forth the breakdown of revenues and operating segment income, excluding consolidation adjustments, for our MSO and enterprise operations for second-quarter 2020 and 2019.
MSO Operations (1)
2Q'20
2Q'19 Change %
Millions of Mexican pesosRevenue
9,928.9
9,216.8 7.7
Operating Segment Income | 4,174.3 | 4,059.8 | 2.8 |
Margin (%) | 42.0 | 44.0 |
Enterprise Operations (1)
2Q'20
2Q'19
Change %
Millions of Mexican pesosRevenue
1,789.0
1,412.8
26.6
Operating Segment Income | 625.9 | 521.9 | 19.9 |
Margin (%) | 35.0 | 36.9 |
(1)
These results do not include consolidation adjustments of Ps.409.1 million in revenues nor Ps.143.7 million in operating segment income for second quarter 2020, neither the consolidation adjustments of Ps.413.9 million in revenues nor Ps.108.0 million in operating segment income for second quarter 2019. Consolidation adjustments are considered in the consolidated results of the Cable segment.
Second-quarter sales and operating segment income in our MSO operations increased by 7.7% and 2.8%, respectively. Second-quarter sales and operating segment income in our Enterprise operations increased by 26.6% and 19.9%, respectively.
On June 20th we launched izzi Móvil, an MVNO (Mobile Virtual Network Operation) that will use the network of Altan (Red Compartida project).
Sky
During the quarter, Sky continued growing its broadband business after adding 72.0 thousand broadband RGUs reaching a total of 502.4 thousand broadband RGUs. In addition, Sky added 19.7 thousand video RGUs. This is the 5th consecutive quarter of video RGU net additions.
The following table sets forth the breakdown of RGUs per service type for Sky as of June 30, 2020 and 2019.
2Q'20 NetRGUs
2Q'20
2Q'19
Adds
Video Broadband Voice
19,693 72,017
7,457,162
7,393,726
502,429 238,361
Total RGUs
(107) 91,603
945 1,329
7,960,536
7,633,416
Second-quarter sales increased by 3.1% to Ps.5,514.7 million compared with Ps.5,348.1 million in second-quarter 2019, mainly explained by the growth in broadband RGUs.
Second-quarter operating segment income increased by 0.7%, reaching Ps.2,321.4 million compared with Ps.2,305.6 million in second-quarter 2019. The margin was 42.1%.
Content
Second-quarter sales decreased by 16.3% to Ps. 6,740.6 million compared with Ps.8,050.0 million in second-quarter 2019.
Millions of Mexican pesos | 2Q'20 | % | 2Q'19 | % | Change |
% | |||||
Advertising | 2,922.2 | 43.3 | 4,370.3 | 54.3 | (33.1) |
Network Subscription | 1,400.7 | 20.8 | 1,206.0 | 15.0 | 16.1 |
Licensing and Syndication | 2,417.7 | 35.9 | 2,473.7 | 30.7 | (2.3) |
Net Sales | 6,740.6 | 8,050.0 | (16.3) | ||
Advertising |
Second-quarter Advertising sales decreased by 33.1% to Ps.2,922.2 million compared with Ps.4,370.3 million in second-quarter 2019. The decrease in sales is explained by a significant deterioration in the Mexican economy due to COVID-19 that resulted in a reduction of advertising budgets in many categories, such as Food and Beverage, Retail, Telecom, Travel, and Out-of-Home Entertainment.
Network Subscription
Second-quarter Network Subscription sales increased by 16.1% to Ps.1,400.7 million compared with Ps.1,206.0 million in second-quarter 2019. This growth is mainly related to the increase in the price we charge our affiliate distributors for our pay TV networks and to the favorable impact of the depreciation of the Mexican peso on our dollar-denominated revenues.
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Disclaimer
Grupo Televisa SAB published this content on 07 July 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 July 2020 22:53:04 UTC