Grupo Televisa S.A.B.

Good morning everyone and welcome to the Grupo Televisa's first quarter 2026 earnings conference call. Before we begin, I would like to draw your attention to the press release which explains the use of forward-looking statements and applies to everything we discuss in today's call and in the earnings release. I will now turn the call over to Mr. Alfonso Diagnostia, Co-Chief Executive Officer of Grupo Televisa. Thank you and over to you.

Thank you, Elsa. Good morning, everyone, and thank you for joining us. With me today are Francisco Balin, CEO of Cable and Sky, and Carlos Phillips, CFO of Grupo Televisa. Before discussing our first quarter operating and financial performance, let me remind you of the strategic priorities approved by the Board of Directors of Grupo Televisa and Televisa Univision that we will pursue this year. At Grupo Televisa, we will continue to focus on attracting and retaining value customers to keep growing our internet subscriber base throughout this year, extract further synergies from the integration between ETH and SKY, execute on the implementation of OPEX and CAPEX efficiencies, and upgrade 6 million homes to FTTH technology, ending 2026 with 75% of our total footprint passed with FTTH. Efficiency measures implemented over the last couple of years have already contributed to expanding our consolidated operating segment income margin by around 330 basis points in the first quarter, driven by a year-on-year OPEX reduction of around 8%, and we would expect to sustain profitability above 40% over the coming quarters. And at Televisa Univision, now that our direct-to-consumer business, VIX, represents over 20% of consolidated revenue in EBITDA, we are confident that additional value can be unlocked through further integration and operational optimization of our content business. Despite anticipated headwinds in the US from the cyclical timing of events such as the Winter Olympics and FIFA World Cup, we preserved our audience ratings and managed yields to drive pricing growth. We also expanded our political sales infrastructure to ensure that we are well positioned to capitalize on record political advertising spent ahead of the November midterm elections. In Mexico, the great results of our upfront position us well to continue monetizing the FIFA World Cup momentum with sales to date exceeding the prior 2022 World Cup cycle. Having said that, let me turn the call over to Valine as he will discuss the operating and financial performance of our consolidated assets.

Thank you, Alfonso. Good morning, everyone. First, let me walk you through the operating and financial performance of our cable operations. We ended March with a network of 20 million homes after passing around 12,000 new homes during the quarter. In addition, we upgraded over 1.5 million homes to fiber-to-the-home technology. ending the first quarter with over 52% of our total footprint passed with FTTH. Moreover, we are on track to upgrade another 4.5 million homes to FTTH technology in the remainder of the year. In the first quarter, our monthly churn rate remained below a historical average of 2% for fourth consecutive quarter as we keep executing our strategy to focus on value customers rather than volume. while working on customer retention and satisfaction. Our broadband gross ads remained solid, allowing us to deliver 35,000 net ads during the first quarter, in line with our fourth quarter of last year. In video, we experienced less cancellations than in the fourth quarter of last year. Therefore, we lost about 34,000 video subscribers in the first quarter, compared to 31,000 disconnections in the fourth quarter, and 43,000 cancellations in the third quarter, 53,000 disconnections in the second quarter, and the loss of 73,000 video subscribers in the first quarter of 2025. Furthermore, as we mentioned in our previous earnings conference call, we expect lower video cancellation numbers to continue going forward, influenced by our multi-year partnership with Formula One to provide live coverage of all Grand Prixs by Sky Sports channels available through Easy on Sky, beginning in the fourth quarter of last year and through the 2028 season. Moving on, our mobile net ads of 95,000 subscribers during the first quarter maintain the strong momentum of the last couple of quarters. Our MVNO service has been making our bundles more competitive, allowing us to increase share of wallets from our existing customers and helping us maintain low churn. During the quarter, net revenue from our residential operations of 10.6 billion pesos, which account for around 89% of total cable revenue, increased by 0.9% year in year. This marks the best quarter of the last two years of our residential operations from a revenue growth performance standpoint and compares well to a full year revenue declines of 1.8% and 2.5% in 2025 and 2024 respectively. On a sequential basis, Net revenue from our residential operations grew by 0.5%, signaling a gradual sequential recovery as well. Net revenue from our enterprise operations of 1.3 billion pesos, which accounted for around 11% of total cable revenue, increased by 30% year-on-year, partially due to the timing of revenue recognition of an important contract signed in the fourth quarter of 2025, and because of easy comps. Adjusting this contract, net revenue from our enterprise operations grew by 15.6% as we have been signaling new deals with public and private customers. Moving on to Sky's operating and financial performance. During the first quarter, we lost 325,000 revenue-generating units, mostly coming from prepaid subscribers that have not been recharging their services. In addition, As we have discussed in the past, beginning the second quarter of last year, we started charging installation fee of 1,250 pesos to all new satellite KTV subscribers to increase their return on investment for this service. This translates in a slow-down in video gross addictions for Sky that has been steady over the last four quarters. Sky's first quarter revenue of 2.6 billion pesos fell by 24.6% year-on-year, mainly driven by a lower subscriber base. To sum up, segment revenue of 14.5 billion pesos fell by 3.1% year-on-year, while operating segment income of 6 billion pesos increased by 5.2%, showing sustained momentum of the growth rebound experience in the fourth quarter of last year. Our operating segment income margin of 41.4% extended by 330 basis points year-on-year. making it the best quarter over the last three years in terms of profitability, driven by the efficiency measures that we have implemented and the synergies from the ongoing integrations between Easy and Sky. On a sequential basis, operating segment income increased by 0.9%, while profitability expanded by 50 basis points. Regarding CapEx deployment, our first quarter's total investments of 2.5 billion pesos accounted for 17.2% of sales. The main reason behind having higher total investments relative to the first quarter of the last year was the FCTH upgrade of 1.5 billion homes previously discussed. Finally, operating cash flow of Cable on Sky, which is equivalent to the Domino's CapEx, was 3.5 billion pesos in the first quarter, accounting for 34.2% of sales.