Release Date: February 21, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Grupo Televisa SAB (TV, Financial) achieved a significant improvement in profitability, with the Cable segment's EBITDA margin increasing by over 300 basis points to 39% in 2024.
- The company successfully integrated Sky with its Cable segment, leading to a 10% reduction in OpEx and a 44% decline in CapEx deployment for Sky.
- Grupo Televisa SAB (TV) generated over MXN10.1 billion in free cash flow, representing a free cash flow yield of around 43% for its consolidated operations.
- The spin-off of Ollamani and its listing on the Mexican Stock Exchange unlocked value for shareholders, with the new company having a market cap of around $270 million.
- ViX, the streaming platform, became a $1 billion direct-to-consumer business and turned profitable in the third quarter of 2024, outperforming peers in terms of time to profitability.
Negative Points
- Grupo Televisa SAB (TV) experienced a 6% year-on-year decline in consolidated revenue, primarily driven by lower revenue at Sky.
- The company lost 85,900 broadband subscribers and 95,000 video subscribers in the fourth quarter, attributed to intense promotional activity by competitors.
- Sky's fourth-quarter revenue fell by 12.4% year-on-year due to a lower subscriber base, impacting overall financial performance.
- Despite improvements, the Cable segment faced challenges with lower-than-expected gross additions and a decline in net revenue from enterprise operations.
- The company's full-year adjusted EBITDA for TelevisaUnivision declined by 3% year-on-year, affected by investments in third-party advertising sales and higher sports-related costs.
Q & A Highlights
Q: Can you provide color on the lower than expected CapEx allocation? Should we expect a similar level going forward?
A: Alfonso De Angoitia Noriega, Co-CEO, explained that the 2024 CapEx was significantly below initial guidance due to efficient deployment, inventory management, and a stronger Mexican peso. For 2025, the CapEx budget is set at $665 million, with plans to pass close to 1 million homes with fiber. Francisco Valim, CEO of Cable & Sky, added that the reduction was also due to synergies with Sky and a focus on higher return clients.
Q: Can you share your thoughts on M&A within the Cable space at this point in time?
A: Alfonso De Angoitia Noriega, Co-CEO, stated that while they have tried to consolidate the industry, they have not been successful. The focus is now on operating and improving their companies rather than pursuing M&A.
Q: How do you balance the user base between quality clients with lower churn and those more sensitive to price?
A: Francisco Valim, CEO of Cable & Sky, emphasized focusing on higher value customers with low churn. They aim to improve gross adds and maintain a loyal subscriber base. The integration with Sky and internal optimizations have helped increase cash flow despite revenue declines.
Q: What are your plans for the large cash position, particularly with bond maturities in 2025 and 2026?
A: Carlos Phillips, CFO, mentioned that the company intends to use part of its cash to reduce gross leverage, maintaining a strong liquidity position. They have hedged dollar debt into peso exposure and plan to use pesos from their cash balance to address upcoming maturities.
Q: How do you see growth versus profitability for the DTC business now that it has achieved profitability?
A: Alfonso De Angoitia Noriega, Co-CEO, expressed satisfaction with the development of ViX, their streaming service, which became a $1 billion business in its second year and is now EBITDA positive. They anticipate further profitability in 2025, leveraging their extensive Spanish content library and efficient production capabilities.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
