Highlights

Mexico City, July 5, 2016 — Grupo Televisa, S.A.B. (NYSE:TV; BMV: TLEVISA CPO; “Televisa” or “the Company”), today announced results for second-quarter 2016. 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, 2016 and 2015, in millions of Mexican pesos:

 

	2Q’16	Margin %	2Q’15	Margin %	Change %
Net sales	23,523.5	100.0	20,985.7	100.0	12.1
Net income	1,765.8	7.5	1,749.4	8.3	0.9
Net income attributable to stockholders of the Company	1,415.9	6.0	1,328.7	6.3	6.6
Segment net sales	24,220.5	100.0	21,453.7	100.0	12.9
Operating segment income (1)	9,680.0	40.0	8,545.6	39.8	13.3

 

⁽¹⁾ The operating segment income margin is calculated as a percentage of segment net sales.

Net sales increased by 12.1% to Ps.23,523.5 million in second-quarter 2016 compared with Ps.20,985.7 million in second-quarter 2015. This increase was mainly attributable to revenue growth in all of our business segments. Operating segment income increased by 13.3%, reaching Ps.9,680.0 million with a margin of 40.0%.

Net income attributable to stockholders of the Company increased to Ps.1,415.9 million, or 6.6%, in second-quarter 2016 compared to Ps.1,328.7 million in second-quarter 2015. The net increase of Ps.87.2 million reflected (i) a Ps.1,096.7 million increase in operating income before depreciation and amortization; (ii) a Ps.290.0 million increase in share of income of associates and joint ventures, net; and (iii) a Ps.70.8 million decrease in net income attributable to non-controlling interests. These favorable variances were partially offset by (i) a Ps.662.2 million increase in depreciation and amortization; (ii) a Ps.501.5 million increase in other expense, net; (iii) a Ps.112.4 million increase in finance expense, net; and (iv) a Ps.94.2 million increase in income taxes.

Second-quarter Results by Business Segment

The following table presents second-quarter consolidated results ended June 30, 2016 and 2015, for each of our business segments. Consolidated results for 2016 and 2015 are presented in millions of Mexican pesos.

⁽¹⁾ For segment reporting purposes, intersegment operations are included in each of the segment operations.

⁽²⁾ Operating segment income is defined as operating income before depreciation and amortization, corporate expenses, and other expense, net.

Corporate Expense

Corporate expense increased by Ps.37.7 million, or 7.3%, to Ps.551.9 million in second-quarter 2016, from Ps.514.2 million in second-quarter 2015. The increase reflected primarily a higher share-based compensation expense.

Share-based compensation expense in second-quarter 2016 and 2015 amounted to Ps.361.6 million and Ps.325.0 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.501.5 million to Ps.699.3 million in second-quarter 2016, from Ps.197.8 million in second-quarter 2015. This increase reflected primarily a non-recurrent severance expense in connection with dismissals of personnel in our Content, Cable and Other Businesses segments, as part of a cost reduction plan, the disposition of assets in our Cable segment as the result of the upgrade of the infrastructure, and higher expense related to financial advisory and professional services.

Non-operating Results

Finance Expense, net

The following table sets forth the finance (expense) income, net, stated in millions of Mexican pesos for the quarters ended June 30, 2016 and 2015.

The finance expense, net, increased by Ps.112.4 million, or 6.4%, to Ps.1,873.1 million in second-quarter 2016 from Ps.1,760.7 million in second-quarter 2015. This increase reflected primarily (i) a Ps.470.3 million increase in interest expense, due primarily to a higher average principal amount of debt, finance lease obligations and other finance liabilities in second-quarter 2016; and (ii) a Ps.169.8 million unfavorable change in other finance income or expense, net, resulting primarily from the absence this quarter of a gain in fair value of an embedded derivative in our former investment in Convertible Debentures issued by Univision Holdings, Inc. (“UHI”), which we recognized in second-quarter 2015. These unfavorable variances were partially offset by (i) a Ps.259.2 million increase in interest income explained primarily by a higher average amount of cash and cash equivalents and temporary investments in second-quarter 2016; and (ii) a Ps.268.5 million decrease in foreign exchange loss resulting primarily from a depreciation of the Mexican peso against the US dollar on a lower average net US dollar liability position in second-quarter 2016.

Share of Income of Associates and Joint Ventures, net

Share of income of associates and joint ventures, net, increased by Ps.290.0 million, to Ps.340.4 million in second-quarter 2016 from Ps.50.4 million in second-quarter 2015. This increase reflected mainly our share of income of Imagina Media Audiovisual, S.L., a communications company in Spain, which investment we began to account for under the equity method in third-quarter 2015, as well as higher share of income of UHI, the controlling company of Univision, and Ocesa Entretenimiento, S.A. de C.V., a live-entertainment venture in Mexico.

 

Income Taxes

Income taxes increased by Ps.94.2 million, or 12.4%, to Ps.855.4 million in second-quarter 2016 compared with Ps.761.2 million in second-quarter 2015. This increase reflected primarily a higher effective income tax rate.

Net Income Attributable to Non-controlling Interests

Net income attributable to non-controlling interests decreased by Ps.70.8 million, or 16.8%, to Ps.349.9 million in second-quarter 2016, compared with Ps.420.7 million in second-quarter 2015. This decrease reflected primarily a lower portion of net income attributable to non-controlling interests in our Sky segment, which was partially offset by a higher portion of net income attributable to non-controlling interests in our Cable segment.

Other Relevant Information

Independent Investigation

As consequence of an anonymous letter, dated April 20th, 2016 (the “Letter”), which contains certain accusations of wrongdoing against certain executive officers of the Company, the Board of Directors, through the Audit Committee, commenced an investigation of the content of the Letter.

In this respect, the Company hired the law firm Wachtell, Lipton, Rosen & Katz (“Wachtell”) as its external legal advisors and the Audit Committee hired the law firm Kramer, Levin, Naftalis & Frankel (“Kramer”) as its independent external legal advisors (jointly Wachtell and Kramer, the “Lawyers”) in order to conduct the aforementioned investigation, being assisted by Alix Partners (a forensic accounting firm) and Nardello & Company (an independent investigation company).

The investigation has concluded, and the Lawyers submitted their findings and conclusions to the Audit Committee and to the Board of Directors of the Company, finding the falsity of each and every of such allegations. As a result of the findings of the investigation and conclusions resulting therefrom, the Audit Committee and the Board of Directors of the Company, unanimously, approved the conclusions that found, among others, that there is significant evidence that refutes each and every allegation of wrongdoing.

The Company has been informed by PricewaterhouseCoopers, S.C. that it is in the process of completing its integrated audit procedures of our consolidated Financial Statements for the year ended December 31, 2015 and the Company expects that such pending procedures will be completed shortly.

Capital Expenditures

During second-quarter 2016, we invested approximately US$358.2 million in property, plant and equipment as capital expenditures. These capital expenditures include approximately US$230.7 million for our Cable segment, US$101.2 million for our Sky segment, and US$26.3 million for our Content and Other Businesses segments.

 

Debt, Finance Lease Obligations and Other Finance Liabilities

The following table sets forth our total debt finance lease obligations and other finance liabilities as of June 30, 2016 and December 31, 2015. Amounts are stated in millions of Mexican pesos.

 

	June 30, 2016	Dec 31, 2015	Increase (decrease)
Current portion of long-term debt	115.0	2,979.8	(2,864.8)
Long-term debt, net of current portion	116,658.5	107,430.8	9,227.7
Total debt (1)	116,773.5	110,410.6	6,362.9
Current portion of long-term finance lease obligations	547.9	511.6	36.3
Long-term finance lease obligations, net of current portion	5,406.1	5,293.6	112.5
Total finance lease obligations	5,954.0	5,805.2	148.8
Current portion of other finance liabilities	-	-	-
Long-term other finance liabilities	3,526.9	-	3,526.9
Total other finance liabilities (2)	3,526.9	-	3,526.9

 

⁽¹⁾ As of June 30, 2016 and December 31, 2015, total debt is presented net of finance costs in the amount of Ps.1,338.5 million and Ps.1,387.9 million, respectively, and does not include related accrued interest payable in the amount of Ps.1,888.6 million and Ps.1,184.2 million, respectively.

⁽²⁾ In connection with the acquisition of a non-controlling interest in our Cable segment subsidiary, Televisión Internacional, S.A. de C.V.

As of June 30, 2016, our consolidated net debt position (total debt as stated in the table above less cash and cash equivalents, temporary investments, and non-current held-to-maturity and available-for-sale investments) was Ps.56,360.2 million. The aggregate amount of non-current held-to-maturity and available-for-sale investments as of June 30, 2016, amounted to Ps.7,193.1 million.

Dividend

In April 2016, our stockholders approved the payment of a dividend of Ps.0.35 per CPO and Ps.0.002991452991 per share of Series “A”, “B”, “D” and “L” Shares, not in the form of a CPO, which was paid in cash in May 2016 in the aggregate amount of Ps.1,084.2 million.

Shares Outstanding

As of June 30, 2016 and December 31, 2015, our shares outstanding amounted to 342,203.8 million and 338,468.3 million shares, respectively, and our CPO equivalents outstanding amounted to 2,924.8 million and 2,892.9 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 June 30, 2016 and December 31, 2015, the GDS (Global Depositary Shares) equivalents outstanding amounted to 585.0 million and 578.6 million GDS equivalents, respectively. The number of GDS equivalents is calculated by dividing the number of CPO equivalents by five.

 

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 50 countries through 26 pay-tv brands, and 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") the 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 and warrants which upon their exercise and subject to any necessary approval from the Federal Communications Commission of the United States would represent approximately 36% on a fully-diluted, as-converted basis of the equity capital in Univision Holdings 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 through five cable Multiple System Operators in Mexico. Televisa owns a majority interest in Sky, a leading direct-to-home satellite pay television system in Mexico, operating also in the Dominican Republic and Central America. Televisa also has interests in magazine publishing and distribution, radio production and broadcasting, 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. 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 data)

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Investor Relations:

Carlos Madrazo / Tel: (52 55) 5261 2445 / cmadrazov@televisa.com.mx

Media Relations:

Alejandro Olmos / Tel: (52 55) 4438 1205 / aolmosc@televisa.com.mx

Regina Moctezuma / Tel: (52 55) 5224 5456 / rmoctezumag@televisa.com.mx

www.televisair.com

 

 

GRUPO TELEVISA, S.A.B.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AS OF JUNE 30, 2016 AND DECEMBER 31, 2015

(Millions of Mexican Pesos)

GRUPO TELEVISA, S.A.B.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AS OF JUNE 30, 2016 AND DECEMBER 31, 2015

(Millions of Mexican Pesos) 

 

 

GRUPO TELEVISA, S.A.B.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE AND

SIX MONTHS ENDED JUNE 30, 2016 AND 2015

(Millions of Mexican Pesos)