The following table sets forth condensed consolidated statements of income for the quarters ended September 30, 2021 and 2020, in millions of Mexican pesos:
Net sales increased by 9.1% to Ps.26,127.9 million in the third quarter of 2021 compared with Ps.23,943.0 million in the third quarter of 2020. Operating segment income increased by 4.2% to
Ps.10,969.0 million with a margin of 39.1%.
Net income attributable to stockholders of the Company decreased by 77.3% to Ps.760.6 million in the third quarter of 2021 compared with Ps.3,349.7 million in the third quarter of 2020. The net
decrease of Ps.2,589.1 million reflected (i) a Ps.5,202.0 million unfavorable change in finance income or expense, net; (ii) a Ps.959.7 million unfavorable change in other income or expense, net; (iii) a Ps.111.9 million increase in depreciation
and amortization; and (iv) a Ps.17.2 million increase in net income attributable to non-controlling interests.
These unfavorable variances were partially offset by (i) a Ps.2,007.8 million decrease in income taxes; (ii) a Ps.1,360.2 million favorable change in share of income or loss of associates and
joint ventures, net; and (iii) a Ps.333.7 million increase in operating income before depreciation and amortization and other income or expense, net.
Sky
During the third-quarter, Sky continued growing its broadband business after adding 15.4 thousand broadband RGUs reaching a total of 722.5 thousand broadband RGUs. Sky lost 1.6 thousand video RGUs.
The following table sets forth the breakdown of RGUs per service type for Sky as of September 30, 2021 and 2020.
|
RGUs
|
3Q’21 Net
Adds
|
3Q’21
|
3Q’20
|
|
Video
|
(1,598)
|
7,488,278
|
7,472,350
|
|
Broadband
|
15,366
|
722,481
|
594,011
|
|
Voice
|
(36)
|
649
|
837
|
|
Mobile
|
13,023
|
27,555
|
-
|
|
Total RGUs
|
26,755
|
8,238,963
|
8,067,198
|
Third-quarter sales decreased by 2.5% to Ps.5,459.4 million compared with Ps.5,597.9 million in the third-quarter of 2020, mainly explained by lower recharges of Sky’s prepaid packages as children are returning to school to in-person classes and workers
are gradually going back to the office.
Third-quarter operating segment income decreased by 7.2%, reaching Ps.2,261.7 million compared with Ps.2,436.7 million in the third-quarter of 2020. The decline was driven by the amortization of certain sporting events,
such as the UEFA Euro 2020 and the CONMEBOL America Cup, which were cancelled last year due to the COVID-19 social distancing measures.
Content
Third-quarter sales increased by 13.4% to Ps.9,109.8 million compared with Ps.8,033.4 million in the third-quarter of 2020.
|
Millions of Mexican pesos
|
3Q’21
|
%
|
3Q’20
|
%
|
Change
%
|
|
Advertising
|
4,823.8
|
53.0
|
4,164.4
|
51.8
|
15.8
|
|
Network Subscription
|
1,323.9
|
14.5
|
1,331.7
|
16.6
|
(0.6)
|
|
Licensing and Syndication
|
2,962.1
|
32.5
|
2,537.3
|
31.6
|
16.7
|
|
Net Sales
|
9,109.8
|
|
8,033.4
|
|
13.4
|
Advertising
Third-quarter Advertising sales increased by 15.8% to Ps.4,823.8 million compared with Ps.4,164.4 million in the third-quarter of 2020. This represents a strong recovery across most categories among our private sector clients with respect to the
third-quarter of 2020 driven by the economic recovery and the success of free-to-air television to build and improve brand recognition, and sell products and services in Mexico.
Third-quarter sales increased by 80.1% to Ps.1,409.1
million compared with Ps.782.5 million in the third-quarter of 2020.
Third-quarter operating segment income was Ps.253.2
million compared with an income of Ps.3.3 million in the third-quarter of 2020.
Corporate Expense
Corporate expense increased by Ps.105.8 million, or 28.2%, to Ps.480.7 million in the third quarter of 2021, from Ps.374.9 million in the third-quarter of 2020. Corporate expense reflected primarily a share-based compensation expense.
Share-based compensation expense in the third quarter of 2021 and 2020 amounted to Ps.282.1 million and Ps.193.9 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 Income or Expense, Net
Other income or expense, net, changed by Ps.959.7 million, to Ps.293.7 million other expense, net, in the third-quarter of 2021, from Ps.666.0 million other income, net, in the third quarter of 2020. This change reflected primarily the absence
of a Ps.933.5 million net pre-tax gain on disposition of the 50% equity stake in our former Radio business, which was concluded in July 2020. We also had a higher loss on disposition of property and equipment, surcharges for payment of taxes from
prior years, and an increase in other expense related to legal and financial advisory professional services.
These unfavorable changes were partially offset by Ps.207.6 million other cash income received by one of our companies in our Cable segment as a result of a favorable outcome in connection with a claim made on tariff differences for
interconnection services provided in prior years by a third-party vendor.
The following table sets forth the breakdown of cash and non-cash other (expense) income, net, stated in millions of Mexican pesos, for the third quarter ended September 30, 2021 and 2020.
|
Other (Expense) Income, net
|
3Q’21
|
3Q’20
|
|
Cash
|
(379.1)
|
786.2
|
|
Non-cash
|
85.4
|
(120.2)
|
|
Total
|
(293.7)
|
666.0
|
Finance Income or Expense, Net
The following table sets forth the finance (expense) income, net, stated in millions of Mexican pesos for the third quarter ended September 30, 2021 and 2020.
|
|
3Q’21
|
3Q’20
|
Favorable
(Unfavorable)
Change
|
|
Interest expense
|
(2,274.1)
|
(2,788.9)
|
514.8
|
|
Interest income
|
186.0
|
275.3
|
(89.3)
|
|
Foreign exchange (loss) gain, net
|
(2,560.0)
|
3,077.8
|
(5,637.8)
|
|
Other finance expense, net
|
(244.3)
|
(254.6)
|
10.3
|
|
Finance (expense) income, net
|
(4,892.4)
|
309.6
|
(5,202.0)
|
Finance income or expense, net, changed by Ps.5,202.0 million, to a finance expense, net, of Ps.4,892.4 in the third quarter of 2021, from a finance income, net, of Ps.309.6 million in the third
quarter of 2020.
This change reflected:
|
I.
|
a Ps.5,637.8 million unfavorable change in foreign exchange gain or loss, net, resulting primarily from a 3.7% depreciation of the Mexican peso against the U.S. dollar on a higher average net U.S. dollar
liability position in the third quarter of 2021, in comparison to a 4.0% appreciation in the third quarter of 2020; and
|
II.
|
a Ps.89.3 million decrease in interest income, explained primarily by a lower average of cash and cash equivalents in the third quarter of 2021.
|
These unfavorable variances were partially offset by:
I.
|
a Ps.514.8 million decrease in interest expense, primarily by a lower average of principal amount of debt in the third quarter of 2021; and
|
II.
|
a Ps.10.3 million decrease in other finance expense, net, resulting primarily from a lower loss in fair value of our derivative contracts in the third quarter of 2021.
|
Share of Income or Loss of Associates and Joint Ventures, Net
Share of income or loss of associates and joint ventures, net, changed by Ps.1,360.2 million, to a share of income of Ps.1,240.3 million in the third quarter of 2021, from a share of loss of
Ps.119.9 million in the third quarter of 2020. This favorable change reflected mainly (i) a higher share of income of Univision Holdings II, Inc. (“UHI II”), the controlling company of Univision Holdings, Inc. (“UHI”) and Univision
Communications Inc. (“Univision”); and (ii) a favorable change in share of income or loss of OCESA Entretenimiento, S.A. de C.V., a live entertainment company with operations primarily in Mexico, where we maintain a 40% stake.
Share of loss of associates and joint ventures, net, for the third quarter of 2021, includes primarily our share of income of UHI II.
Income Taxes
Income taxes decreased by Ps.2,007.8 million, to Ps.111.4 million in the third quarter of 2021 compared with Ps.2,119.2 million in the third quarter of 2020. This decrease reflected primarily
a lower income tax base.
Net Income Attributable to Non-controlling Interests
Net income attributable to non-controlling interests increased by Ps.17.2 million, or 5.9%, to Ps.307.1 million in the third quarter of 2021, compared with Ps.289.9 million in the third
quarter of 2020. This increase reflected primarily a higher portion of net income attributable to non-controlling interests in our Cable segment, which was partially offset by a lower portion of net income attributable to non-controlling
interests in our Sky segment.
Net income attributable to non-controlling interests for the third quarter of 2021, includes primarily net income attributable to non-controlling interests in our Cable and Sky segments.
Capital Expenditures
During the third quarter of 2021, we invested approximately U.S.$362.6 million in property, plant and equipment as capital expenditures. The following table sets forth the breakdown by segment
of capital expenditures for the third quarter of 2021 and 2020, in millions of U.S. dollars. Our plan to pass two million homes with fiber-to-the home (FTTH) is on track, explaining the capital expenditures increase in our Cable segment.
|
Capital Expenditures
Millions of U.S. Dollars
|
3Q’21
|
3Q’20
|
|
Cable
|
274.0
|
172.6
|
|
Sky
|
63.3
|
64.9
|
|
Content and Other Businesses
|
25.3
|
13.8
|
|
Total
|
362.6
|
251.3
|
Transaction Agreement with UHI
On April 13, 2021, we and UHI announced a transaction agreement (the “Transaction Agreement”) in which our content and media assets will be combined with UHI II (the successor company of UHI),
and we will continue to participate in UHI II, with an equity stake of approximately 45% following the closing of the transaction. We will retain ownership of our Cable, Sky and Other Businesses segments, as well as the main real estate
associated with the production facilities, the broadcasting concessions and transmission infrastructure in Mexico.
In connection with this transaction, our Board of Directors, our Stockholders, and the Board of Directors of UHI have each approved the combination. The transaction is expected to close as
early as in the fourth quarter of 2021, subject to customary closing conditions, including receipt of regulatory approvals primarily in the United States and Mexico.
On May 18, 2021, UHI concluded a reorganization pursuant to which, among other things, UHI II became a holding company owning 100% of the issued and outstanding capital stock of UHI. In
connection with this reorganization, which was effectuated by UHI in connection with the transaction with us referred to above, we exchanged all of our shares of the capital stock of UHI for the same number and class of newly issued shares of
UHI II. As a result, beginning on that date, we own an equity interest in the capital stock of UHI II, the controlling company of UHI and Univision, of approximately 36% on a fully-diluted basis.
We will continue to consolidate the results of our Content business until we cease to have control of this business segment. Also, we will continue to present our Content business as a
reportable segment of continuing operations until the assets and liabilities to be combined become available for immediate disposal following certain reorganization activities contemplated by the Transaction Agreement, and all of the regulatory
approvals have been obtained by the parties.
Debt and Lease Liabilities
The following table sets forth our total debt and lease liabilities as of September 30, 2021 and December 31, 2020. Amounts are stated in millions of Mexican pesos.
|
|
September
30, 2021
|
December 31,
2020
|
Increase
(decrease)
|
|
Current portion of long-term debt
|
2,045.6
|
617.0
|
1,428.6
|
|
Long-term debt, net of current portion
|
123,389.1
|
121,936.0
|
1,453.1
|
|
Total debt 1
|
125,434.7
|
122,553.0
|
2,881.7
|
|
Current portion of long-term lease liabilities
|
1,341.5
|
1,277.7
|
63.8
|
|
Long-term lease liabilities, net of current portion
|
7,867.0
|
8,014.6
|
(147.6)
|
|
Total lease liabilities
|
9,208.5
|
9,292.3
|
(83.8)
|
|
Total debt and lease liabilities
|
134,643.2
|
131,845.3
|
2,797.9
|
(1) As of September 30, 2021 and December 31,
2020, total debt is presented net of finance costs in the amount of Ps.1,236.4 million and Ps.1,324.3 million, respectively.
|
As of September 30, 2021, our consolidated net debt position (total debt and lease liabilities, less cash and cash equivalents, temporary investments, and certain non-current
investments in financial instruments) was Ps.108,781.9 million. The aggregate amount of non-current investments in financial instruments included in our consolidated net debt position as of September 30, 2021, amounted to Ps.4,146.8 million.
Shares Outstanding
As of September 30, 2021 and December 31, 2020, our shares outstanding amounted to 327,624.9 million and 325,992.5 million shares, respectively, and our CPO equivalents outstanding amounted
to 2,800.2 million and 2,786.3 million CPO equivalents, respectively. Not all of our shares are in the form of CPOs. The number of CPO equivalents is calculated by dividing the number of shares outstanding by 117.
As of September 30, 2021 and December 31, 2020, the GDS (Global Depositary Shares) equivalents outstanding amounted to 560.0 million and 557.3 million GDS equivalents, respectively. The number
of GDS equivalents is calculated by dividing the number of CPO equivalents by five.
Sustainability
Televisa remains in the FTSE4Good Index Series for the fifth consecutive year. The Company is included in three FTSE4Good Index Series: FTSE4Good Emerging Markets, FTSE4Good Emerging Latin
America, and FTSE4Good BIVA. The FTSE4Good Index Series is a market-leading tool for investors seeking to invest in companies that demonstrate good sustainability practices.
COVID-19 Impact
For the quarter ended September 30, 2021, the financial crisis caused by the COVID-19 pandemic still had a negative effect on our business, financial
position and results of operations, and it is currently difficult to predict the degree of the impact in the future.
We cannot guarantee that conditions in the bank lending, capital and other financial markets will not continue to deteriorate as a result of the
pandemic, or that our access to capital and other sources of funding will not become constrained, which could adversely affect the availability and terms of future borrowings, renewals or refinancings. In addition, the deterioration of global
economic conditions as a result of the pandemic may ultimately reduce the demand for our products across our segments as our clients and customers reduce or defer their spending.
Although vaccination efforts have continued, the Mexican Government is
still implementing its plan to reactivate economic activities in accordance with color-based phases determined on a weekly basis in every state of the country. Most non-essential economic activities are open, and the authorities have
continued to lift limitations on capacity and hours of operation. Notwithstanding the foregoing, during the quarter ended September 30, 2021, this has affected, and is still affecting the ability of our employees, suppliers and customers to
conduct their functions and businesses in their typical manner.
As of this date, given that they are considered essential economic activities, we have continued operating our media and telecommunications
businesses uninterrupted to continue benefiting the country with connectivity, entertainment and information, and during the quarter ended September 30, 2021, we continued with the production of new content in accordance with the requirements
and health guidelines imposed by the Mexican Government. Our Content business continued to recover as a result of the easing in lockdown restrictions in most jurisdictions in which our customers are located. Notwithstanding the foregoing, we
are partially dependent on the demand for advertising from consumer-focused companies, and even though most of our customers have increased their advertising investments as compared to the third quarter of 2020, the COVID-19 pandemic could
cause advertisers to again reduce or postpone their advertisement spending on our platforms.
In our Other Businesses segment, sporting and other entertainment events for which we have broadcast rights, or which we produce, organize, promote
and/or are located in venues we own, are operating with some restrictions and taking the corresponding sanitary measures, and to date all of our casinos have resumed operations with reduced capacity and hours of operation. When local
authorities approve the re-opening of the venues that are still not operating, additional rules may be enacted, including capacity and operating hours restrictions; these may affect the results of our Other Businesses segment in the following
months.
Notwithstanding the foregoing, the authorities may impose restrictions on non-essential activities, including but not limited to temporary shutdowns
or additional guidelines, which could be expensive or burdensome to implement, and which may affect our operations.
The magnitude of the impact on our business will depend on the duration and extent of the COVID-19 pandemic and the impact of federal, state, local
and foreign governmental actions, including continued or future social distancing, and consumer behavior in response to the COVID-19 pandemic and such governmental actions. Due to the evolving and uncertain nature of this situation, we are not
able to estimate the full extent of the impact of the COVID-19 pandemic, but it may continue affecting our business, financial position and results of operations over the near, medium or long-term.
Additional Information Available on Website
The information in this press release should be read in conjunction with the financial statements and footnotes contained in the Company's Annual Report and on Form 20-F for the year ended
December 31, 2020, which are available on the “Reports and Filings” section of our investor relations website at televisair.com.
About Televisa
Televisa is a leading media company in the Spanish-speaking world, an important cable operator in Mexico and an operator of a leading direct-to-home satellite pay television
system in Mexico. Televisa distributes the content it produces through several broadcast channels in Mexico and in over 70 countries through 27 pay-tv brands, television networks, cable operators and over-the-top or “OTT” services. In the United
States, Televisa’s audiovisual content is distributed through Univision Communications Inc. (“Univision”), a leading media company serving the Hispanic market. Univision broadcasts Televisa’s audiovisual content through multiple platforms in
exchange for a royalty payment. In addition, Televisa has equity representing approximately 36% on a fully-diluted basis of the equity capital in Univision Holdings II, Inc., the controlling company of Univision. Televisa’s cable business offers
integrated services, including video, high-speed data and voice services to residential and commercial customers as well as managed services to domestic and international carriers. Televisa owns a majority interest in Sky, a leading
direct-to-home satellite pay television system and broadband provider in Mexico, operating also in the Dominican Republic and Central America. Televisa also has interests in magazine publishing and distribution, professional sports and live
entertainment, feature-film production and distribution, and gaming.
Disclaimer
This press release contains forward-looking statements regarding the Company’s results and prospects. Actual results could differ materially from these statements. The
forward-looking statements in this press release should be read in conjunction with the factors described in “Item 3. Key Information – Forward Looking Statements” in the Company’s Annual Report on Form 20 - F, which, among others, could cause
actual results to differ materially from those contained in forward-looking statements made in this press release and in oral statements made by authorized officers of the Company. Statements contained in this release relating to the COVID-19
outbreak, the impact of which on our business performance and financial results remains inherently uncertain, are forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak
only as of their dates. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
(Please see attached tables for financial information)
###
Contact Information
Investor Relations
www.televisair.com.mx
Tel: (52 55) 5261 2445
Rodrigo Villanueva. VP, Head of Investor Relations rvillanuevab@televisa.com.mx
Santiago Casado. Investor Relations Director. scasado@televisa.com.mx
Media Relations:
Rubén Acosta / Tel: (52 55) 5224 6420 / racostamo@televisa.com.mx
Teresa Villa / Tel: (52 55) 4438 1205 / atvillas@televisa.com.mx