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01/11 03:09
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Despite some challenges, such as declining revenues in Sky and TelevisaUnivision, the company has shown strong financial metrics, including a reduction in leverage ratio, increased adjusted EBITDA, and successful CapEx negotiation. Additionally, the positive momentum in ViX subscriber growth and strategic cost-cutting measures support a positive sentiment. The management's optimism in the U.S.-Mexico economic relationship and their strategic focus on high-end customers further reinforce a positive outlook. Given the market cap, the stock price is likely to react positively, with a predicted increase of 2% to 8%.
Consolidated Operating Segment Income Margin Expanded by 100 basis points year-on-year to 38.2%, driven by a year-on-year OpEx reduction of around 7%.
CapEx Investment Invested MXN 7.5 billion in CapEx, equivalent to 16.8% of sales. Achieved through successful negotiations with suppliers for more favorable terms.
Free Cash Flow Generated around MXN 4.2 billion in free cash flow during the first 9 months of the year, enabling prepayment of a bank loan of MXN 2.7 billion and $220 million in senior notes.
Leverage Ratio Reduced to 2.1x EBITDA from 2.5x at the end of last year, mainly driven by free cash flow generation.
Cable Residential Operations Revenue Net revenues of MXN 10.6 billion decreased by 0.7% year-on-year, marking the best quarter in the last 2 years for revenue growth performance.
Cable Enterprise Operations Revenue Revenue of MXN 1.1 billion increased by 7.7% year-on-year, marking the best quarter in the last 3 years for revenue growth performance.
Sky Revenue Revenue of MXN 3.1 billion declined by 18.2% year-on-year, mainly due to a lower subscriber base.
Segment Revenue Revenue of MXN 14.7 billion fell by 4.4% year-on-year, while operating segment income of MXN 5.7 billion declined by 0.7%. Operating segment income margin extended by 140 basis points year-on-year to 38.5%, driven by efficiency measures and synergies from integration between Izzi and Sky.
CapEx Deployment for Cable and Sky Total investment of MXN 3.6 billion accounted for 24.3% of sales during the third quarter, showing a material sequential increase but aligning with the updated CapEx budget for 2025.
Operating Cash Flow for Cable and Sky Operating cash flow was MXN 2.1 billion in the third quarter, representing 14.2% of sales.
TelevisaUnivision Revenue Third quarter revenue of $1.3 billion declined by 3% year-on-year. Excluding political advertising, revenue fell by 1% year-on-year.
TelevisaUnivision Adjusted EBITDA Adjusted EBITDA of $460 million increased by 9% year-on-year. Excluding political advertising, adjusted EBITDA increased by 13% year-on-year.
Consolidated Advertising Revenue Decreased by 6% year-on-year or 3% excluding political advertising expenditure. In the U.S., advertising revenue was 11% lower, while in Mexico, it increased by 3% year-on-year.
Consolidated Subscription and Licensing Revenue Increased by 3% year-on-year, driven by ViX's premium tier and higher content licensing revenue. In the U.S., it grew by 11%, while in Mexico, it fell by 17%.
ViX Engagement and Growth: Strong momentum across free and premium tiers, driven by events like the Gold Cup and Liga MX, leading to a high single-digit increase in MAUs and robust advertiser demand.
Formula 1 Partnership: Multi-year partnership with Formula 1 to provide live coverage of all Grand Prix via Sky Sports channels, enhancing competitive advantage.
Broadband Subscriber Growth: 22,000 net adds in Q3, showing sequential improvement and focus on value customers.
Mobile Subscriber Growth: 94,000 net adds in Q3, doubling from Q1, driven by innovative MVNO service.
OpEx Efficiencies: Integration between Izzi and Sky led to a 7% year-on-year OpEx reduction, expanding operating segment income margin by 100 basis points to 38.2%.
Cost Savings at TelevisaUnivision: $300 million saved in the first 9 months of 2025, with a target of $400 million for the year, achieved through reduced content, technology, and marketing costs.
Debt Refinancing and Reduction: Grupo Televisa prepaid MXN 2.7 billion bank loan and $220 million senior notes, reducing leverage ratio to 2.1x EBITDA. TelevisaUnivision refinanced $2.3 billion of debt, improving its leverage to 5.5x EBITDA.
CapEx Discipline: Grupo Televisa invested MXN 7.5 billion in CapEx, maintaining a budget of $600 million for 2025, focusing on free cash flow generation.
Market Conditions: Decline in advertising revenue in the U.S. by 11% year-on-year, partially offset by growth in ViX, indicating challenges in traditional linear advertising.
Competitive Pressures: Loss of 329,000 revenue-generating units in Sky, mostly from prepaid subscribers, and the introduction of an installation fee slowing down video gross additions.
Regulatory Hurdles: No explicit regulatory challenges mentioned in the transcript.
Supply Chain Disruptions: No explicit mention of supply chain disruptions, but successful negotiations with suppliers for favorable terms were highlighted.
Economic Uncertainties: Decline in consolidated advertising revenue by 6% year-on-year, reflecting potential economic pressures on advertising budgets.
Strategic Execution Risks: Challenges in stabilizing revenue and subscriber base for Sky, with a year-on-year revenue decline of 18.2% and ongoing churn issues in video subscribers.
CapEx Deployment: CapEx deployment for the fourth quarter is expected to remain at similar levels to the third quarter. The CapEx budget for 2025 is set at $600 million, implying a CapEx to sales ratio of less than 20% for the full year.
Free Cash Flow Generation: Grupo Televisa has generated MXN 4.2 billion in free cash flow in the first 9 months of 2025 and expects to continue focusing on free cash flow generation.
Leverage Ratio: Grupo Televisa's leverage ratio improved to 2.1x EBITDA at the end of the third quarter, down from 2.5x at the end of 2024. TelevisaUnivision's leverage ratio improved to 5.5x EBITDA, down from 5.9x at the end of 2024. Deleveraging remains a core strategic priority.
ViX Growth: ViX continues to show strong momentum with a high single-digit increase in MAUs and robust advertiser demand. Growth is supported by sports events like the Gold Cup and NFL broadcasts.
Cost Efficiency at TelevisaUnivision: TelevisaUnivision's efficiency plan aims to reduce operating expenses by over $400 million in 2025. Total operating expenses have already declined by 12% year-on-year in the first 9 months of 2025, achieving $300 million in savings.
Cable and Sky Revenue Trends: Cable and Sky segment revenue of MXN 14.7 billion fell by 4.4% year-on-year, but operating segment income declined by only 0.7%. Operating segment income margin improved by 140 basis points year-on-year to 38.5%. The company expects improving trends in broadband and video subscriber metrics going forward.
Formula 1 Partnership: A multiyear partnership with Formula 1 will provide live coverage of all Grand Prix events via Sky Sports channels through Izzi and Sky, starting in the fourth quarter of 2025 and continuing until the 2028 season. This is expected to enhance competitiveness.
TelevisaUnivision Revenue and EBITDA: TelevisaUnivision's third-quarter revenue declined by 3% year-on-year to $1.3 billion, while adjusted EBITDA increased by 9%. Excluding political advertising, revenue fell by 1%, and adjusted EBITDA increased by 13% year-on-year.
The selected topic was not discussed during the call.
Despite some challenges, such as declining revenues in Sky and TelevisaUnivision, the company has shown strong financial metrics, including a reduction in leverage ratio, increased adjusted EBITDA, and successful CapEx negotiation. Additionally, the positive momentum in ViX subscriber growth and strategic cost-cutting measures support a positive sentiment. The management's optimism in the U.S.-Mexico economic relationship and their strategic focus on high-end customers further reinforce a positive outlook. Given the market cap, the stock price is likely to react positively, with a predicted increase of 2% to 8%.
The earnings call reveals mixed signals: revenue declines in key areas offset by improved EBITDA and cost efficiencies. The Q&A highlights strategic focus on high-margin customers and digital expansion, but lacks strong catalysts. The market cap suggests moderate volatility. Overall, the sentiment is neutral, with no strong positive or negative factors to drive significant stock price movement in the short term.
The earnings call highlights significant challenges: declining revenues across segments, high leverage ratios, and a CapEx reduction. While there is some optimism in EBITDA growth and cash flow, these are overshadowed by concerns like currency depreciation, revenue declines, and Moody's downgrade. The Q&A reveals uncertainty in expansion plans and unclear responses from management. Given the company's small market cap, these negatives are likely to lead to a stock price decline in the coming weeks, placing the sentiment in the 'Negative' category.
The earnings call summary shows strong financial performance, with significant cash flow generation and margin expansion. Despite a slight decline in TelevisaUnivision's EBITDA, the focus on deleveraging and efficient CapEx deployment is positive. The Q&A section reveals some concerns about competitive pressures and churn but highlights management's focus on improving operations and strategic investments. Given the company's market cap of $1.5 billion, these factors suggest a positive stock price reaction over the next two weeks, likely in the 2% to 8% range.
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