Grupo Televisa(TV) - 2023 Q4 - Earnings Call Transcript

Financial Performance - In 2023, consolidated revenue reached Ps.73.8 billion, representing a year-on-year decline of 2.3% [19] - For Q4 2023, consolidated revenue was Ps.18.4 billion, a year-on-year decrease of 3.8%, while operating segment income was Ps.6.3 billion, reflecting a contraction of 6% [20] - TelevisaUnivision's full-year revenue increased by 5% year-on-year to $4.9 billion, with adjusted EBITDA of$ 1.6 billion declining by 4% year-on-year [23][24] - In Q4 2023, TelevisaUnivision's revenue was $1.4 billion, growing by 6% year-on-year, while adjusted EBITDA increased by 16% [25] Business Segment Performance - The cable segment's revenue was MXN 12.2 billion, down 1.8% year-on-year, with operating income declining by 7.1% [39] - Sky's Q4 revenues decreased by 15.3% to MXN 4.2 billion, with EBITDA down by less than 1% [54] - The direct-to-consumer business closed 2023 with over$ 700 million in revenue, aiming for profitability in the second half of 2024 [14][30] Market Performance - In the U.S., TelevisaUnivision outperformed the broader advertising market growth by around 850 basis points in 2023 [11] - In Mexico, advertising revenue increased by 10% year-on-year, driven by growth in both linear and direct-to-consumer sectors [27] - The direct-to-consumer service saw MAUs exceed 40 million on the free tier and over 7 million on the premium tier [99] Company Strategy and Industry Competition - Grupo Televisa is focusing on free cash flow generation and optimizing CapEx deployment, prioritizing profitability over aggressive expansion [6][7] - The company is implementing a digital transformation strategy to stabilize revenue at Sky and enhance competitiveness [8] - The competitive landscape in Mexican broadband is described as rational, with fewer price promotions and an emphasis on service quality [63] Management Commentary on Operating Environment and Future Outlook - Management noted a challenging global macro backdrop in 2023 but expressed confidence in improving free cash flow generation in 2024 [4] - The company anticipates a record political year for ad sales and a profitable streaming business in the second half of 2024 [30][58] - Management highlighted the importance of innovation in partnerships, particularly with Charter, to enhance value propositions in the pay TV ecosystem [120] Other Important Information - The company achieved savings in corporate expenses of almost Ps.280 million for the full year, contributing to an 18% decline in corporate expenses year-on-year [10] - Total leverage was decreased by around $340 million, resulting in savings related to net interest expenses [10][21] Q&A Session Summary Question: Expectations on competitive landscape in Mexican Broadband and ARPU evolution - Management noted a rational competitive landscape with fewer price promotions and an increase in prices by competitors, indicating a stable market [63][64] Question: Integration of Televisa and Univision cultures - Management reported significant progress in integrating the two cultures, with coordinated efforts across production, audiences, and revenue teams [71][72] Question: Expected pace of margin improvement for MSO - Management anticipates sequential margin improvement due to cost optimization and renegotiation of contracts [81] Question: Trends in first quarter for Enterprise Cable and Sky - Management highlighted the launch of Sky Más and Sky Internet, expecting positive revenue trends from these new offerings [106] Question: Breakdown of ViX's$ 700 million revenue - Management did not provide a breakdown of subscription and advertising revenue but emphasized the growth in MAUs and engagement [98][99]