Televisa Reports Second Quarter 2020 Results
Grupo Televisa reported consolidated revenues of Ps.22.4 billion for Q2 2020, reflecting a 7.8% decrease year-over-year. The Operating Segment Income (OSI) margin was 35.8%, down from 38.9%. Advertising revenues plummeted by 33.1%, severely impacting the Content segment, which saw a revenue drop of 16.3%. Despite these challenges, net income attributable to stockholders rose by 89.3% to Ps.1.74 billion, aided by reduced finance expenses. Key highlights include record broadband RGUs added (252,000) and the launch of izzi Móvil, a Mobile Virtual Network Operator.
- Net income attributable to stockholders increased by 89.3% to Ps.1.74 billion.
- Achieved record growth of 494,000 Revenue Generating Units (RGUs) in the Cable segment.
- Launched izzi Móvil, enhancing service offerings and potential revenue streams.
- Consolidated revenues decreased by 7.8% year-over-year to Ps.22.4 billion.
- Advertising revenues dropped by 33.1%, impacting overall financial performance.
- Content segment revenues fell 16.3%, indicating ongoing difficulties in the sector.
MEXICO CITY, July 7, 2020 /PRNewswire/ --
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 of4.1% - 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 reached30.9% - 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
Consolidated Results
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:
2Q'20 | Margin | 2Q'19 | Margin | Change | |
% | % | % | |||
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
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.
RGUs | 2Q'20 Net Adds | 2Q'20 | 2Q'19 |
Video | 27,420 | 4,335,478 | 4,387,007 |
Broadband | 252,174 | 5,069,277 | 4,640,275 |
Voice | 214,528 | 3,998,047 | 3,385,387 |
Total RGUs | 494,122 | 13,402,802 | 12,412,669 |
Second-quarter sales increased by
Second-quarter operating segment income increased by
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) Millions of Mexican pesos | 2Q'20 | 2Q'19 | Change % |
Revenue | 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) Millions of Mexican pesos | 2Q'20 | 2Q'19 | Change % |
Revenue | 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
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.
RGUs | 2Q'20 Net Adds | 2Q'20 | 2Q'19 |
Video | 19,693 | 7,457,162 | 7,393,726 |
Broadband | 72,017 | 502,429 | 238,361 |
Voice | (107) | 945 | 1,329 |
Total RGUs | 91,603 | 7,960,536 | 7,633,416 |
Second-quarter sales increased by
Second-quarter operating segment income increased by
Content
Second-quarter sales decreased by
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
Network Subscription
Second-quarter Network Subscription sales increased by
Licensing and Syndication
Second-quarter Licensing and Syndication sales decreased by
Second-quarter operating segment income decreased by
Other Businesses
Second-quarter sales decreased by
Second-quarter operating segment loss was Ps.422.4 million compared with an income of Ps.148.8 million in second-quarter 2019.
Corporate Expense
Corporate expense decreased by Ps.73.2 million, or
Share-based compensation expense in second-quarter 2020 and 2019 amounted to Ps.193.9 million and Ps.251.8 million, respectively, and was accounted for as corporate expense. Share-based compensation expense is measured at fair value at the time the equity benefits are conditionally sold to officers and employees, and is recognized over the vesting period.
Other Expense, Net
Other expense, net, increased by Ps.10.5 million, or
The increase in non-cash Other expense, net, reflected primarily a higher loss on disposition of property and equipment.
The following table sets forth the breakdown of cash and non-cash other income (expense), net, stated in millions of Mexican pesos, for the three months ended June 30, 2020 and 2019.
Other income (expense), net | 2Q'20 | 2Q'19 |
Cash | 3.2 | (257.6) |
Non-cash | (296.7) | (25.4) |
Total | (293.5) | (283.0) |
Finance Expense, Net
The following table sets forth finance (expense) income, net, stated in millions of Mexican pesos for the quarters ended June 30, 2020 and 2019.
2Q'20 | 2Q'19 | (Increase) decrease | |
Interest expense | (2,885.1) | (2,576.3) | (308.8) |
Interest income | 451.8 | 349.0 | 102.8 |
Foreign exchange gain, net | 2,351.2 | 325.0 | 2,026.2 |
Other finance expense, net | (6.8) | (366.2) | 359.4 |
Finance expense, net | (88.9) | (2,268.5) | 2,179.6 |
Finance expense, net, decreased by Ps.2,179.6 million, to Ps.88.9 million in second-quarter 2020 from Ps.2,268.5 million in second-quarter 2019.
This favorable change reflected primarily:
(i) a Ps.2,026.2 million increase in foreign exchange gain, net, resulting primarily from the favorable effect of a
(ii) a Ps.359.4 million decrease in other finance expense, net, resulting from a lower loss in fair value of our derivative contracts in second-quarter 2020; and
(iii) a Ps.102.8 million increase in interest income explained primarily by a higher average amount of cash and cash equivalents in second-quarter 2020.
These favorable variances were partially offset by a Ps.308.8 million increase in interest expense, primarily due to a higher average principal amount of debt in second-quarter 2020.
Share of Income of Associates and Joint Ventures, Net
Share of income of associates and joint ventures, net, decreased by Ps.26.2 million, or
Share of income of associates and joint ventures, net, for the second-quarter 2020, includes primarily our share of income of UHI and OCEN.
Income Taxes
Income taxes increased by Ps.10.6 million, or
Net Income Attributable to Non-controlling Interests
Net income attributable to non-controlling interests decreased by Ps.94.4 million, or
Capital Expenditures
During second-quarter 2020, we invested approximately U.S.
Capital Expenditures Millions of U.S.$ | 2Q'20 | 2Q'19 |
Cable | 135.9 | 187.3 |
Sky | 53.8 | 38.0 |
Content and Other Businesses | 6.7 | 14.3 |
Total | 196.4 | 239.6 |
For the full year 2020, we maintain our guidance in capital expenditures is in the range of U.S.
Debt, Lease Liabilities and Other Notes Payable
The following table sets forth our total consolidated debt, lease liabilities and other notes payable as of June 30, 2020 and December 31, 2019. Amounts are stated in millions of Mexican pesos.
June 30, 2020 | December 31, 2019 | Increase (decrease)
| |
Current portion of long-term debt | 617.0 | 491.9 | 125.1 |
Long-term debt, net of current portion | 153,204.7 | 120,444.7 | 32,760.0 |
Total debt 1 | 153,821.7 | 120,936.6 | 32,885.1 |
Current portion of lease liabilities | 1,486.3 | 1,257.8 | 228.5 |
Long-term lease liabilities, net of current portion | 8,593.0 | 8,105.8 | 487.2 |
Total lease liabilities | 10,079.3 | 9,363.6 | 715.7 |
Current portion of other notes payable | - | 1,324.1 | (1,324.1) |
Total other notes payable | - | 1,324.1 | (1,324.1) |
Total debt, lease liabilities and other notes payable |
FAQ
What were Televisa's consolidated revenues for Q2 2020?
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