Grupo Televisa S.A.B.

Thank you and welcome everyone to Televisa Univision's third quarter 2024 earnings call. I'm joined today by Wade Davis, Vice Chairman of the Board, Daniel Allegre, CEO, and Juan Pablo Newman, Interim CFO. This morning we issued an earnings release which can be found at investors.televisaunivision.com. Some of the information discussed today will contain forward-looking statements. These statements involve risks and uncertainties, including those highlighted in our press release, and may cause actual results to differ materially from these statements. We are not obligated to update forward-looking information discussed on this call, except as may be required by law. Our press release and reporting package contain definitions and reconciliations of our non-GAAP measures to the most directly comparable GAAP measures. I will now turn the call over to Wade.

Good morning, everyone. It's great to be here this morning to discuss our third quarter results and to take a broader look at our progress and the company's ongoing evolution. And of course, to hand the torch to Danielle for the next phase of our journey. We've now completed the turnaround and transformation phase for Televisa Univision. The last critical milestone for this phase was the achievement of profitability for our D2C business, which we accomplished this quarter. This, combined with the foundation we've laid in other parts of the organization, has set the stage for us to shift our focus to further integration and operational optimization, which will be the core of our next phase of value creation. Four years ago, my partners and I invested in an opportunity to turn around and transform the Univision business, which at the time was principally a US broadcaster. that had been in decline for four years, but of course had enormous potential. Within the first year, we redesigned the organization, reinvented the ad sales business, expanded distribution, and launched a library streaming service in the U.S. This progress was the foundation for a strategic transformation of the business by merging Univision and Televisa's content business, creating Televisa Univision, an extraordinary vertically integrated content company at a global scale and enabling the pursuit of an expanded and differentiated streaming opportunity. The Televisa Univision we have today is nothing like the Univision of four years ago. From the Univision starting point, we have doubled the company's overall revenue. We have consistently delivered market-leading revenue growth, including bringing the U.S. revenue to historic highs despite general market headlines. We made massive investments in launching the global leader in Spanish-language streaming and managed these investments with limited EBITDA compression, which is extraordinary in comparison with the billions of dollars of losses the industry has seen in general market streaming. In addition, we strengthened our balance sheet through the merger with a meaningful reduction in leverage and an overall extension of our maturities. Much of our transformation was a function of executing our merger, which has created a generationally unique company. Our vertically integrated business, built around our library and content engine, has enabled strategic and financial advantages that we believe no other media company has. We have leveraged this into a modern, multi-platform global business with industry-leading margins. We have reinvented the advertising business with entirely new functions and capabilities, moved into growth segments of the market, and pushed the U.S. market to recognize the value of the Hispanic consumer. We've captured consistent pricing growth in our upfronts. eliminating the pricing discount in the U.S. altogether for new clients. And we made meaningful progress on the elusive opportunity of bringing U.S. television advertisers to Spanish-language platforms. We've extended our distribution and successfully launched our networks and our streaming services on entirely new platforms. We have retooled and expanded our traditional distributor relationships to include products such as Bix and new Spanish language bundles. And finally, the best example of how all of this has come together is what we accomplished with our D2C business. The merger and unification of our rights, our library and content engine, our modernized ad sales capabilities, to our ability to launch and scale a unique streaming offer. The differentiation of our offering and the efficiency of our model have now proven out in the most recent and significant milestone of profitability, a milestone we've hit just over two years from the full launch of the service, an unprecedented time frame by a wide margin, reflecting all the distinctive elements of TU's business model. And achieving this milestone was essentially the final step in completing our multi-year turnaround and transformation phase. And with the wheels in motion, the next big opportunity for value creation is to build on this foundation through further integration and operational optimization of the business. The US and Mexico are different markets that leverage our core content advantages. During the turnaround phase, key divisions maintain certain separations necessary to enable the agility required during startup and transformation. Our business has grown and matured and is at a point where additional value can be unlocked through further integration and unification, both from the standpoint of our lines of business and our geographies. There's huge value to be unlocked in this next phase, but this opportunity comes with unique challenges. It was with this in mind that we initiated our succession planning process earlier this year. We were looking for a leader that had a unique combination of skills and experiences that's difficult to find in one executive. Someone who's a Spanish speaker, someone has extensive experience across the US, Latin America, and Mexico in particular, had experience managing large-scale global enterprises and media and technology expertise. We're thrilled that Danielle, who is truly unique in delivering across all of these categories, has joined us as our new CEO. There is no better executive to drive this next phase of our journey. And with that, and with great pleasure, I'll hand it over to Danielle.

It is a pleasure to be able to speak to you in my first earnings call since becoming CEO of Televisa Univision a little over three weeks ago. This is a company that is deeply ingrained in me since my childhood. I grew up in Mexico City with Televisa content, and I am proud to be continuing to build on the legacy of Televisa Univision going forward. Wade Davis and I have known each other for more than a decade, dating back to the time when I ran all partnerships at Google. When we started talking about the future of the company and the evolution of the business almost six months ago, it was apparent that there was a strong meeting of the minds that brought me here to TVU. I know that Wade is an investor in the company, and the board in general were looking to bring the two companies, Elisa in Mexico and Univision in the United States, more closely together culturally and operationally. They also emphasize the continued commitment to the digital and direct-to-consumer evolution of the company, something that is happening across the entire media industry in general. This is my forte and particular passion, building a sustainable business through the evolution and confluence of media and technology. This just so happens to be also in the most vibrant of markets, the growing Hispanic population of the US and the increased importance of Mexico in the global economy. There is a tremendous opportunity ahead, and I am excited to be here sharing with you some of my early observations, which underscore just how powerful our assets and brand really are. From our content factory to the library it has produced, the scope of our distribution platforms, and the power of the audience we serve, the company's mission to inform and entertain the global Spanish-speaking consumer is an incredibly important one. our content factory has produced some of the most powerful and iconic content in the Spanish-speaking world. We also have the ability to maximize the value associated with that content on a global scale through a large volume of owned and operated linear and digital assets. We are uniquely positioned to continue serving a vital and growing target audience. Our two core geographic markets represent both the number one and the number two most economically valuable and popular Spanish language markets in the world. The significance of the U.S. Hispanic audience has never been more evident than in the presidential election cycle, where our audience will play a decisive role in the outcome of this election in the United States. After all, 91% of US population growth since the last presidential election comes from the growth in Hispanics in this country. Whether it is advertising on our platforms or appearing on our networks, we're helping the candidates reach this valuable voter. Our recent town halls with both presidential candidates demonstrated how pivotal our networks can be in driving engagement both on and off the platform. At either point, the two town halls generated an astounding 100 million impressions across the internet. In the case of Vice President Harris, we saw a 5% favorable move in the perception of the candidate after the town hall. We're still awaiting the results for President Trump. What this tells us and what all campaigns should be aware of is that if you engage with their audience in their own language, the results can be game changing. This is an even stronger case in the contested states where it is common knowledge that the Hispanic vote will be the determining factor in who will win the election in November. In Mexico, we serve a finely attracted economy and consumer as well. The strategic location of the country from both a North American and a global trade perspective is underscored by the fact that in 2023, Mexico surpassed China to become the largest supplier of imports to the United States for the first time ever. From a consumer standpoint, as the world's most popular Spanish-speaking market with a median age of just 29 years old, Mexico offers an ideal environment for digital platform adoption. Overall, we believe the tailwinds associated with the growth in our addressable market will propel our opportunities well into the future. With that as a backdrop, we have to consider the evolving media landscape, which is in the midst of a profound transformation in the way content is distributed and consumed, having become increasingly fragmented across a multitude of disparate platforms. The linear ecosystem is contending with core cutting trends that have started to be felt in Mexico, but have been prevalent for more than a decade in the United States. Meanwhile, the value proposition of the streaming alternative has shifted as companies manage structurally higher churn and subscriber acquisition costs that naturally pressure profitability in the near term and margins in the long term. As a result, we've seen prices of competitive services increase dramatically, with the average price of a basic plan across major streamers having grown on average by about 40% since we launched VIX. This point really underscores Vic's differentiation in that we drove our VTC business to profitability after just two years, as Wade just mentioned, with zero price increases for a product that was already priced well below market. We're able to do this because of our content and marketing cost advantages, as well as our unique product design that naturally lowers SAG and manages churn. Now taking a step back. Televisa Univision is also at a pivotal point in its evolution. Our next phase will center around further integration and operational optimization. So let me give you some insight into what that means. First, we need to drive further integration of our two legacy companies. Each of these has been around for more than 60 years. And while that creates a rich history, catalog, and branding recognition, it also brings with it very established ways of operating. we have a real opportunity to shift from two regional companies into one global company. Second, we need to evolve from a company with siloed linear and streaming businesses into a content-first company that is platform-agnostic. We need to be prepared to connect with our audiences wherever they choose to engage, particularly as cord cutting structurally changes the value proposition of linear. This means more efficient content windowing strategies and involving our sales and marketing organizations to be more solutions and platform-oriented. Our recent experiences with the reality show La Casa de los Famosos in Mexico is a sign of where this company is going with a cross-platform strategy that engaged users in both our linear and digital channels. In linear, we broadcast marquee events in the show during specific programming, and online, on VIX, we had always-on 24-7 content that continued to engage our audiences in unique ways and formats. From a commercial perspective, we were also able to provide cross-platform advertising solutions and integrations for our sponsors. Expect for us to push the boundaries of cross-platform content development further going forward. Third, given our differentiated audience, we offer a truly unique access point to the Hispanic consumer. We possess rich data and insights on this consumer that are not found elsewhere, and we need to evolve into more of a data-driven company that monetizes this unique position. As an example of the power of our data, our U.S. Hispanic household data graph consists of 400 million unique identifiers and covers nearly 100% of U.S. Hispanic households, providing unparalleled access to confirm and engage audiences. By the end of this year, this graph will have been leveraged by over 1,000 advertising campaigns, as well as by both presidential candidates that target Hispanic voter activation. All of this will require a significant amount of work but it will also open up substantial opportunities for growth and improved efficiencies. With this in mind, we are conducting a thorough review of our investments and operations, identifying areas where we can streamline and optimize resources. As a more integrated, multi-platform company, we believe there are considerable efficiencies to be unlocked, allowing us to enhance profitability while maintaining our competitive edge. This focused approach will position us to invest in key growth areas further innovate, and deliver even greater value to our stakeholders. In closing, I look forward to working with our global teams and partners to build on Benelisa Univision's great history and take the company to new heights. And now I'll turn it over to Juan Pablo to walk through the financials.