Grupo Televisa : Televisa Reports First Quarter 2019 Results

Investor Relations

PRESS RELEASE

Televisa Reports First Quarter 2019 Results

Consolidated

•Consolidated Sales and Consolidated Operating Segment Income grew 2.6% and 3.0%, respectively.

•During the quarter, our Cable, Sky and Content segments contributed with 46%, 25% and 24%, respectively, of Consolidated Operating Segment Income.

Cable

•Continued strong momentum in the Cable segment, adding 285 thousand Revenue Generating Units ("RGUs") during the quarter, and reaching a total of 12.1 million RGUs.

•Double-digitgrowth in Segment Sales and Operating Segment Income of 14.2% and 17.3%, respectively.

•Operating Segment Income growth of 14.5% in Enterprise Operations, the third consecutive quarter of growth after its restructuring in 2018.

Sky

•Sky closed the quarter with 7.6 million RGUs, of which 165 thousand were broadband RGUs.

•Sky maintained a strong Operating Segment Income margin, reaching 43.7%.

Content

•Ongoing leadership with our content offer airing nine of the top 10 programs in Mexican Television. Prime time viewership in our flagship channel grew year-over-year by 4.6%1.

•Segment Sales dropped by 9.0% mostly due to a significant drop in advertising sales to government entities.

•During the first quarter, Advertising Sales represented 15.7% of Consolidated Net Sales.

Earnings Call Date and Time: Tuesday, April 30, 2019, at 11:00 A.M. ET.

Conference ID # is 3076919.

From the U.S.: [phone]

From Mexico: 01 800 926 9157

International callers: [phone]

Rebroadcast: [phone]

The teleconference will be rebroadcast starting at 14:00 ET

on April 30 and will end at midnight on May 14.

1Source: Nielsen IBOPE, 28 Cities, Monday to Sunday, 1Q'19, 19 to 23 hrs., P4+.

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Consolidated Results

Mexico City, April 29, 2019 - Grupo Televisa, S.A.B. (NYSE:TV; BMV: TLEVISA CPO; "Televisa" or "the Company"), today announced results for first-quarter 2019. 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 March 31, 2019 and 2018, in millions of Mexican pesos:

	1Q'19	Margin	1Q'18	Margin	Change
	%	%	%
Net sales	23,395.2	100.0	22,812.0	100.0	2.6
Net income	858.1	3.7	994.9	4.4	(13.8)
Net income attributable to stockholders of the Company	541.7	2.3	677.6	3.0	(20.1)
Segment net sales	24,624.9	100.0	23,821.7	100.0	3.4
Operating segment income (1)	9,406.4	38.2	9,130.8	38.3	3.0

(1) The operating segment income margin is calculated as a percentage of segment net sales.

Net sales increased by 2.6% to Ps.23,395.2 million in first-quarter 2019 compared with Ps.22,812.0 million in first-quarter 2018. This increase was mainly attributable to revenue growth in the Cable segment. Operating segment income increased by 3.0%, reaching Ps.9,406.4 million with a margin of 38.2%, in line with previous year.

Net income attributable to stockholders of the Company decreased to Ps.541.7 million in first- quarter 2019 compared to Ps.677.6 million in first-quarter 2018. The net decrease of Ps.135.9 million, or 20.1%, reflected primarily (i) a Ps.415.2 increase in depreciation and amortization; and

(ii)a Ps.73.4 million increase in finance expense, net. These unfavorable variances were partially offset by a Ps.296.2 million increase in operating income before depreciation and amortization and other expense, net.

Dividend

Today, the Company's annual stockholders meeting approved the payment of a dividend of Ps.0.35 per CPO and Ps.0.002991452991 per share of Series "A", "B", "D" and "L" Shares not in the form of a CPO. The dividend will be paid in cash, in May 2019 in the aggregate amount of approximately Ps.1,068.9 million.

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First-quarter Results by Business Segment

The following table presents first-quarter consolidated results ended March 31, 2019 and 2018, for each of our business segments. Consolidated results for first-quarter 2019 and 2018 are presented in millions of Mexican pesos.

Net Sales	1Q'19	%	1Q'18	%	Change
					%
Cable	9,898.1	40.2	8,669.7	36.4	14.2
Sky	5,281.6	21.4	5,474.2	23.0	(3.5)
Content	7,184.9	29.2	7,899.4	33.2	(9.0)
Other Businesses	2,260.3	9.2	1,778.4	7.4	27.1
Segment Net Sales	24,624.9	100.0	23,821.7	100.0	3.4
Intersegment Operations1	(1,229.7)		(1,009.7)		(21.8)
Net Sales	23,395.2		22,812.0		2.6
Operating Segment Income2	1Q'19	Margin	1Q'18	Margin	Change
		%		%	%
Cable	4,297.1	43.4	3,664.9	42.3	17.3
Sky	2,306.9	43.7	2,441.9	44.6	(5.5)
Content	2,267.3	31.6	2,820.1	35.7	(19.6)
Other Businesses	535.1	23.7	203.9	11.5	162.4
Operating Segment Income	9,406.4	38.2	9,130.8	38.3	3.0
Corporate Expenses	(516.1)	(2.1)	(551.7)	(2.3)	6.5
Depreciation and Amortization	(5,216.0)	(22.3)	(4,800.8)	(21.0)	(8.6)
Other Expense, net	(188.9)	(0.8)	(154.1)	(0.7)	(22.6)
Intersegment Operations3	(15.0)	-	-		n/a
Operating Income	3,470.4	14.8	3,624.2	15.9	(4.2)

1 For segment reporting purposes, intersegment operations are included in each of the segment operations.

2 Operating segment income is defined as operating income before depreciation and amortization, corporate expenses, and other expense, net.

3As a result of IFRS 16 adoption, intersegment operations related to intercompany leases were not eliminated on the Operating Segment Income level as in prior years.

Cable

First-quartersales increased by 14.2% to Ps.9,898.1 million compared with Ps.8,669.7 million in first-quarter 2018 driven by solid net additions in voice and broadband.

Total revenue generating units, or RGUs, reached 12.1 million. Quarterly growth was driven by strong growth in broadband and voice net additions. Video RGUs were lower marginally by 9 thousand. Total net additions for the quarter were approximately 285 thousand.

The following table sets forth the breakdown of RGUs per service type for our Cable segment as of March 31, 2019 and 2018.

RGUs	1Q'19	1Q'18
Video	4,375,626	4,237,862
Broadband	4,567,517	3,970,473
Voice	3,183,248	2,158,238
Total RGUs	12,126,391	10,366,573

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First-quarteroperating segment income increased by 17.3% to Ps.4,297.1 million compared with Ps.3,664.9 million in first-quarter 2018. Margin increased 110 basis points to 43.4%.

The following tables set forth the breakdown of revenues and operating segment income, excluding consolidation adjustments, for our MSO and enterprise operations for first-quarter 2019 and 2018.

MSO Operations (1)	1Q'19	1Q'18	Change %
Millions of Mexican pesos
Revenue	8,874.2	7,691.4	15.4
Operating Segment Income	3,917.6	3,338.0	17.4
Margin (%)	44.1%	43.4%
Enterprise Operations (1)	1Q'19	1Q'18	Change %
Millions of Mexican pesos
Revenue	1,393.1	1,273.8	9.4
Operating Segment Income	497.0	433.9	14.5
Margin (%)	35.7%	34.1%	-

(1)These results do not include consolidation adjustments of Ps.369.2 million in revenues nor Ps.117.5 million in Operating Segment Income for first quarter 2019, neither the consolidation adjustments of Ps.295.5 million in revenues nor Ps.107.0 million in Operating Segment Income for first quarter 2018. Consolidation adjustments are considered in the consolidated results of the Cable segment.

First-quarter operating segment income in our MSO operations increased by 17.4%, to Ps.3,917.6 million and operating segment income margin reached 44.1%. In our Enterprise Operations, operating segment income increased by 14.5%, the third consecutive quarter of growth after the restructuring of this division in 2018.

Sky

First-quartersales decreased by 3.5% to Ps.5,281.6 million compared with Ps.5,474.2 million in first-quarter 2018, mainly explained by a lower number video RGUs.

The number of net active video RGUs declined by 251 thousand. This resulted mostly from prepaid customers that stopped recharging their Sky service soon after the completion of the World Cup last year and, based on Sky's disconnection policies, were dropped during the first quarter. Sky ended the quarter with 7.6 million RGUs, of which 164,568 were video RGUs in Central America and the Dominican Republic.

During the quarter, Sky continued growing its broadband business after adding 73 thousand broadband RGUs. It reached a total of 165 thousand broadband RGUs.

The following table sets forth the breakdown of RGUs per service type for Sky as of March 31, 2019 and 2018.

RGUs	1Q'19	1Q'18
Video	7,386,347	7,910,225
Broadband	165,262	n/a
Voice	1,493	n/a
Total RGUs	7,553,102	7,910,225

First-quarteroperating segment income decreased by 5.5% to Ps.2,306.9 million compared with Ps.2,441.9 million in first-quarter 2018. The margin was 43.7%. The 90 basis points decline was due to the costs related to the launch and promotion of Sky's broadband service.

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Content

First-quartersales decreased by 9.0% to Ps.7,184.9 million compared with Ps.7,899.4 million in first-quarter 2018.

Millions of Mexican pesos	1Q'19	%	1Q'18	%	Change
					%
Advertising	3,681.9	51.2	4,272.7	54.1	(13.8)
Network Subscription	1,218.3	17.0	1,179.1	14.9	3.3
Licensing and Syndication	2,284.7	31.8	2,447.6	31.0	(6.7)
Net Sales	7,184.9	100.0	7,899.4	100.0	(9.0)

Advertising

First-quarter advertising sales decreased by 13.8% to Ps.3,681.9 million compared with Ps.4,272.7 million in first-quarter 2018. The decrease in sales is substantially explained by a significant drop in government advertising. Advertising sales to the private sector were down approximately 2%.

The new government is implementing a number of public policy measures to release funds for other initiatives. One of these measures is the reduction of its overall investment in advertising which they have publicly indicated would come down by approximately 50%, when compared to 2018. This measure will apply to all media, including radio, print, digital, and television. As a reminder, government advertising represented approximately 11% of our total advertising revenue last year, or about 2% of consolidated revenue.

Accordingly, we continue to anticipate that government advertising this year will drop by about 50%. During the first quarter, however, the reduction in our sales of advertising to the government was steeper than 50% probably as the campaigns of the various government entities have yet to start.

Network Subscription

First-quarter Network Subscription sales increased by 3.3% to Ps.1,218.3 million compared with Ps.1,179.1 million in first-quarter 2018.

Licensing and Syndication

First-quarter Licensing and Syndication sales decreased by 6.7% to Ps.2,284.7 million from Ps.2,447.6 million in first-quarter 2018. The decrease is mainly explained by carriage dispute between Univision and Dish beginning on July 1, 2018. Royalties from Univision reached U.S.$88.0 million in first-quarter 2019 compared to U.S.$95.5 million in first-quarter 2018.

In March 26, 2019, Univision announced that it reached a new long-term agreement with Dish for carriage of Univision networks and stations, effective immediately.

First-quarteroperating segment income decreased by 19.6% to Ps.2,267.3 million compared with Ps.2,820.1 million in first-quarter 2018. This decrease is mainly explained by the drop in government advertising sales. The margin was 31.6%.

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