Cablevision Holding S.A.

Good morning, and welcome to Cable Vision Holdings conference call. Today, the team will discuss first quarter 2025 results as per the earnings release distributed Monday, May 12, 2025. My name is Nick, and I will be your conference operator for today. This call is for investors and analysts only. Therefore, questions from the media will not be taken at this time. However, if you are a member of the media and have questions, please contact FIG Corporate Communications. Comments made by the company may contain forward-looking statements about Cablevision Holdings' future performance, plans, strategies, and targets. Such statements are subject to uncertainties that could cause Cablevision Holdings' actual results and operations to differ materially. Such uncertainties include but are not limited to the effects of the impact of new or ongoing industry and economic regulations, possible changes in demand for Cablevision Holdings' products and services, and the effect of more general factors, such as changes in general market, economic, or in regulatory conditions, please refer to the disclaimer in the earnings report or presentation for additional information regarding forward-looking statements. If you have not received the report or need assistance during today's call, please contact FIG Corporate Communications in New York at 917-691-4047 or the company in Buenos Aires at 5411 4309-3417. CVH has also posted the webcast presentation that can be found at www.cablevisionholdings.com forward slash investors. Following the presentation, there will be a question and answer session. You may submit your questions throughout the event by clicking in the submit a question box on your screen. I will now introduce our speakers, Ms. Samantha Olivieri, Head of Investor Relations, and Mr. Julian Brescia, Senior Analyst. For the Q&A session, they will be joined by Mr. Ignacio Drellet, CVH's Executive Director and Chairman. It is now my pleasure to turn the call over to Mrs. Samantha Olivieri. Please go ahead, ma'am.

Thank you, Nick. Good morning, everyone, and thank you for joining us. Today's call will begin with a brief macro overview and continue with a review of the company's income statements and operating results, followed by a review of the financial position. Having gone through the agenda for today's webcast, I will now pass the call to Julián for the macro overview.

Thank you, Samantha. When the current administration took office 18 months ago, it entered into an economy marked by deep macroeconomic imbalances that had deteriorated over 2023. After more than a decade of stagnation, with average annual GDP growth of only 0.2%, the country was running persistent in deficits, triple digit inflation, its central banks held negative net reserves, and markets were heavily intervened with massive exchange rate controls and utility tariffs well below cost recovery levels, all contributing to growing distortions and fiscal pressures. In this context, the new administration implemented a stabilization program based on three key anchors. A fiscal anchor in 2024, Argentina recorded a fiscal surplus of 0.3% of GDP. The first in over a decade. As part of its ongoing fiscal treasury, the government has set a target of 1.6% premium surplus for 2025 aligned with fiscal sustainability. A monetary anchor. Monetary issues resulting from central bank financing of the treasury was fully eliminated. Inflation showed a consistent descending trend from 211% in 2023 to 118% in 2024 and continued at 56% year-on-year as of March. An exchange rate anchor. For the first 70 months, under a framework of currency controls, a cruel impact policy was adopted to set an exchange rate expectation and contain inflation in a B monetary economy. It led to an appreciation of the peso against the dollar of 70% since 2024, contributing to a correction in relative prices, including those of regulated services. In this macroeconomic rebalancing, economic activity has shown V-shaped recovery. According to the monthly economic activity index, the economy bottomed out in April 2024 with a 3% year-on-year decline, then Gradually improved, averaging 1.7% decline in 2024. And data from the first semester index of 2025 suggests that if current levels continue, GDP could grow by around 5% this year, mainly due to the carryover effect from the rebound that began in the second semester of 2024. It is worth mentioning that this recovery has been highly irregular across sectors. the best performing agriculture and energy, while construction, industry, and mass consumption remain relatively lagging. Following the initial phase of economy rebalancing, April 2025 marked a turning point. In a context of rising global volatility driven by trade tensions and tariff-related uncertainty that affected export commodity prices and amplified risk spreads for emerging markets, the government reached a new agreement with the AMF. The agreement involved a loan of over $20 billion. of which more than 12 billion have already been disbursed. The treasury used debt funds to repay interest state debt with the central bank, which in turn increased the central bank's gross reserves from 24 to 38 billion dollars. The agreement also involved a partial lifting of foreign exchange controls. Individuals now face no restriction on access to the FX market. while most of the restrictions on corporations remain in place. The lifting of foreign exchange controls was followed by the implementation of a new exchange rate regime based on a banded flow system. As long as the exchange rate remains within the defined advance, the government is not required to intervene. This framework provides flexibility to absorb external shocks and enables price discovery, an issue that has raised concerns among market participants under the previous exchange regime. given the challenging dynamics of the central bank's reserve accumulation. The liberalization of the exchange rate in the middle of April led to a convergence between the official and financial exchange rates, resulting in a 4.45% depreciation of the official rate as of this date. Regarding perspectives, the dynamics of the exchange rate in the coming months will be a key variable to monitor. In a big currency economy, excessive volatility could challenge inflation expectations, especially considering that the external sector is showing signs of stress. The commercial balance has deteriorated, with the 2.2 billion deficit recorded as of March compared to the 9 billion surplus in the same period of last year, excluding the effect of the exporters' plain exchange rate scheme. And country risk remains unlimited, with a spread of 678 points, indicating that access to international markets is still distant. an issue of concern given Argentina's need to rule over maturity in debt. Additionally, political uncertainty ahead of the middle elections will be critical tests of public support for the government's economic program. On top of these domestic challenges, the global environment remains unpredictable. Having gone through the macro overview, now I will pass the call back to Samantha. Thank you.

Thank you, Julián. We will now continue with CBH's key financials. Slide six shows the highlights for the first quarter of 2025. On February 24th, 2025, our subsidiary Telecom Argentina announced the acquisition of shares representative of 99.999625% of Telefónica Móviles de Argentina S.A., TMA, a company incorporated in Argentina which provides mobile and fixed telephony, fixed broadband and video services nationwide in Argentina. The total amount involved in the operation reached $1,245 million and was financed by two loans for the total amount of $1,170,000 million. As of this date, our subsidiary, the DECOM, has made the regulatory findings and necessary procedures were initiated with the regulatory authorities in order to obtain the conformity of the Secretary of Industry and Commerce or such other authority that succeeds as the enforcement authority of law number 27442, to the economic concentration produced as a result of the acquisition of TMA, and the conformity of PENACOM to the change of control occurred in TMA as a consequence of the acquisition of TMA by the company. Both administrative proceedings are currently pending. Excluding fixed telephony services, all telecom articles represent significant increases. EBITDA, excluding TMA effect, increased compared to the first quarter of 2024, resulting in a higher EBITDA margin of 33.6% in the first quarter of 25, up from 30.2% in first quarter 24. Even considering the indebtedness for the acquisition of TMA, net debt over EBITDA ratio remains healthy. Slide seven shows the key financials for the first quarter. The company has reflected the effects of the inflation adjustment adopted by Resolution 777-18 of the Comisión Nacional de Valores, CMV, which establishes the re-expression of figures must be applied to the annual financial statements for intermediate and special periods ended as of and including December 31, 2018. Accordingly, the reported figures corresponding to the first quarter of 2025 includes the effects of the adoption of inflationary accounting in accordance with International Accounting Standard 29. For comparative purposes, the results restated by inflation corresponding to March 2024 contained the effect of year-over-year inflation as of March 2025, which amounted to 55.9%. In this presentation, we included some figures and historical values for the sake of clarity. In addition, the reported figures corresponding to the first quarter of 2025 include the effect of the incorporation of results from TMA from March 1st, 2025. Hence, the results for the first quarter 25 aren't comparable to the results of first quarter 24. We included some figures excluding the effect of TMA acquisition for comparison. CBH owns 39.08 stake in TIO, and as controlling shareholder of Telecom Argentina, it consolidates 100% of its operations. Revenues in nominal terms increased 115%. In constant currency, revenues for the first quarter of 2025 grew 27.8%, from 1,066.4 to 1,363.4 billion pesos. mostly driven by the incorporation of revenue from TMA and by higher output in real terms in all of the services in Argentina, in part the effect of price increases carried out in 2024 and the decrease in inflation rate, partially offset by a decrease in fixed telephony copper accesses and the effect of the lower effects rate versus inflation rate for the same period on data services agreed in dollars, and by lower mobile revenues in the operation in Paraguay. EBITDA reached approximately 448.6 billion pesos in constant currency, a 39.2% increase compared to first quarter 24, mainly driven by the incorporation of TMAs EBITDA and by higher revenues excluding TMA, resulting in a higher EBITDA margin of 32.9% in first quarter 25 compared to 30.2% in first quarter 24. EBITDA nominal pesos amounted to 446.7 billion pesos, 122% higher than nominal EBITDA for the first quarter of 24, while average inflation for the same period was approximately 68%, and the end of period year-over-year inflation amounted to 55.9%. Net income resulted in a net positive figure of 86.8 billion pesos from 1,050.7 billion reported during first quarter of 24. This decrease in net income is mainly explained by financial net results, mainly due to lower positive effects differences. The first quarter of 2024 had registered highly positive effects differences as inflation was high following the steep devaluation of the peso in December 23. While the effect of a lower appreciation of the United States dollars relative to the Argentine peso when compared to inflation is still present this quarter, the gap is significantly smaller, hence the lower positive effects results. These lower positive financial results were partially offset by lower income tax, higher EBITDA, and lower depreciation and amortizations. Equity shareholders net income for the period amounted to $28.4 billion and is mainly the result of CVH stake in Telecom, partially offset by the personal asset tax. Following the change in criteria established by the Fiscal Authority in December 2024 regarding the basis for its calculations, and by negative financial results from the holding of bonds collected from Telecom in kind dividend payment, which had had an overshooting in their valuation before the end of the fiscal year 2024. Now let's continue on slide eight for a discussion of the operating results for the first quarter 25, excluding the effect of incorporating TMA results. Revenues in first quarter 25 increased by 6.1%. Price increases for our services in Argentina, management of commercial discounts granted according to customer retention policy for some of the services, and lower inflation have had positive results in terms of revenues. Revenues from equipment sales increased 24.5%, mainly as a result of an increase in quantity sold. However, fixed telephony and data services revenues registered a decrease of 20.3%, explained by a decrease in legacy copper accesses, and the effect of lower effects rate versus inflation rate for the same period on data services agreed in US dollars. The main source of our revenues is our fixed infrastructure. Broadband, pay TV, and fixed telephony and data services amounted to 50.6% total. Mobile service participation increased slightly, reaching 42.6% from 40.7% in first quarter 24, driven by the decrease in share of pay TV revenues over total revenues. The EBITDA in real terms increased 17.9% and margin increased to 33.6%, higher than the 30.2% margin of first quarter 24, mainly as a result of the increase in revenues and cost efficiencies obtained by the company. On slide nine, we reviewed some of the effects of the incorporation of TMA. The consolidation from the moment of the acquisition by Telecom of TMA operation includes results from the standalone month of March 2025. Telecom and Telefonica's networks have a great degree of complementarity. Telecom leads in the north of the country while Telefonica is stronger in the south, and most of the overlapping occurs in the center. This strategic acquisition enhances Telecom's capabilities and positions and will allow it to expand coverage and service quality across the entire country. Telecom has the fastest mobile network and it's the first operator to deploy 5G. Telefonica has the fastest fixed network in the country with a large fiber-to-the-home customer base with approximately 7,000 mobile sites and more than 3.5 million fiber-to-the-home home specs. As of March 2025, TMA had 18.9 million mobile subscribers, including machine-to-machine subs, 1.6 million broadband subs, 2.1 million fixed telephony subs, including IP lines, and 14 million Revenues of TMA included in the first quarter 25 consolidated figures amounted to 231 million pesos, and EBITDA resulted in 68.4 million, with a 29.6% EBITDA margin. Now let's move on to slide 10. Mobile revenues include the TMA represented approximately 45.5% of our revenues and increased 42.9% in real terms when comparing first quarter 25 versus first quarter 24. Mainly explained by the incorporation of TMA and higher output in real terms in the quarter in Argentina, excluding this effect thanks to the decrease in year-over-year inflation and the carry-on effect of price increases during 2024 and an increase in year-over-year subs. partially upset by a decrease in mobile revenues in the Paraguay operation due to a decrease in ARPU related to greater discounts granted to its clients, according to customer retention policies, and a migration to less expensive plans. Mobile prepaid subs, which generate less revenue, decreased quarter-over-quarter in first quarter 25, following price increases at the end of 2024, but show a positive year-over-year performance. Including the effects of TMA in mobile revenues, Mobile service revenues reached $481,754 million in cost and pesos and increased 11% in real terms. Post on Argentina clients increased 0.9% to 21.3 million, of which postpaid clients amounted to 39%. As of March 2025, QMA has 18.9 million mobile subscribers, of which 49% are postpaid. In Argentina, in a highly competitive environment, restated in constant currency increased by 13.2% to 6,837.1 pesos in first quarter 25 and monthly churn increased to 2% from 1.5% in first quarter 24. Please turn to slide 11. Revenues for fixed services, including broadband cable TV and fixed telephone and data services, increased by 14% in real terms, mainly driven by the incorporation of TMA. Excluding the effect of TMA, revenues for fixed services remained relatively stable, increasing 0.4%, mainly the result of higher internet service revenues and, to a lesser extent, higher cable TV revenues, partially upset by lower fixed telephone and data services related to a reduction in fixed telephone and client services. and the effect of the lower effects rate versus inflation rate for the same period on data services agreed on dollars. Legacy Copper fixed voice service continues experiencing a reduction in accesses, partially upset by an increase in IT telephony lines. On the B2B services, Telecom's strategy is to position itself as an integrated service provider for large customers by offering convergent ITT solutions included fixed and mobile voice data, internet multimedia data center, and application services through sales, consulting, management, and specialized and targeted post-sales customer services. Internet services revenues increased 22.7% year-over-year in real terms, mainly driven by the incorporation of TMA. Excluding the effect of TMA, internet services revenues increased 10.1%. Broadband subscribers remained stable at 4.1 million, but monthly churn dropped to 1.2% in the first quarter of 25 from 1.3% in first quarter 24. Nonetheless, there is growth in the fiber to the home segment, resulting in an increase in average speed. ARCO in real terms increased to approximately 22,538.5 pesos. The effective pricing policy implemented Lower promotional discounts and higher internet speeds sold to our clients space allows Telecom to increase broadband ARPU in real terms for the fourth quarter in a row. As of March 2025, QMA has 1.6 million broadband subscribers, of which 93% are fiber-tuned homes. 90% of our customers have accesses with speeds of 100 megabytes or higher versus 85% in first quarter 24. Moving to the cable TV subscribers, the customer Base increased slightly to 3.4 million, mainly explained by the success of Flow Flex, which is 100% digital with no decoder or installation needed. Flow unique customers achieved 1.6 million, a 6.5% increase from figures observed over a year ago. Through its proposal as content aggregator, Flow includes not only linear TV, series, on-demand movies, documentaries, and co-productions, but also music, gaming, and exclusive events. ARCO in real terms increased by 7.1% to 15,094.1 basis during first quarter 25, mainly due to the decrease in year-over-year inflation and the carry-on effect of price increases done during 2024 and lower discounts granted according to customer retention policy. Monthly churn decreased to 1.5%. As of March 2025, TMA contributed 417.4 thousand pay TV subs. Please turn to slide 12. The company has been trying to offset the impact of inflation on revenues and costs, but with the high inflation dynamic of the last three years and the stress price increases generated on the subscriber base, recovering terrain has been a challenge for the management in the past years. Nonetheless, the deceleration of inflation in 2024, the effective pricing policy the company has implemented, and the management of discounts granted has allowed it to increase prices above inflation over the past month, resulting in higher revenues in real terms quarter over quarter. Year-over-year inflation as of March 31, 2025, amounted to 55.9%, while average inflation for the same period was 68%. During 2023, given the increasing inflation, our subsidiary Telecom started increasing prices of its services with greater frequency, which has allowed it to close the gap between inflation and output. In parallel, it has undertaken retention actions, mainly granting discounts to its clients. These price increases, net of discounts have resulted in higher articles in nominal terms across all services as shown in exhibits 21 to 24. The nominal price increases, management of customer retention discounts and promotions adjustments, and the positive trend in inflation during the past months in a strong competitive environment allow the company to offset the inter-annual inflation in all of its services in Argentina, thus resulting in higher revenues when measured in constant basis versus the year before first quarter 24, while the output for broadband services increased interannually for the fourth quarter in a row. The company will continue to monitor its cost structure, competitive environment, client behavior, and household income in order to decide on future price increases to help compensate for inflation and maintain margins. Let's move to slide 13 for a review of cost structure before we discuss quarter-over-quarter EBITDA performance. Among the most significant operating costs and expenses are salaries, fees for service, maintenance, materials and supplies costs, and taxes and fees with the regulatory authority. On slide 14, we show the performance of Elista and the behavior of different components of revenues and costs. The company continues with its cost management efforts and has shown positive results despite a challenging economic context. Before the effect of TMA, operating costs, excluding cost of equipment, enhances, decreased in real terms 0.2%. This is a result of efficiencies obtained by the company, mainly lower interconnection and transmission costs, lower fees for services, maintenance, materials, and supplies, lower bad debt, and lower salaries, partially upset by higher expenses related to an increase in revenue, such as taxes and fees for the regulatory authority and programming and content costs. Commissions and advertising include higher advertising expenses related to advertising campaigns for our products. Other operating expenses includes charges for lawsuits and other contingencies, energy and other public services, insurance, rent, and internet capacity, among others, at telecom level, and the effect of the change in criteria established by the fiscal authority regarding the basis for the calculation of the personal assets tax at CVH level, which was reflected in this quarter and partially explained year-over-year increase. In addition, it should be noted that this quarter registers a positive performance of bad debt charges as the percentage of revenues was 1.9% below the 2024 level of 2.5%. Cost of equipment and handsets before the effect of CMA increased 25.2% as a result of higher quantity sold and total operating costs including cost of equipment and handsets before the effect of the incorporation of CMA increased 1% Below the increase in revenues, thus EBITDA margin before the effect of the incorporation of TMA increased to 33.2%, higher than the 30.2% margin of first quarter 24. EBITDA for the incorporation of TMA for the month of March 2025 resulted in 68.4%, was at 29.6% EBITDA margin, lower than the margin before this effect, therefore consolidated margin decreased slightly. Total operating cost increased 29.9% in real terms, lower than the increase in revenues, thus margin reached 32.9% higher than the margin for the first quarter of 24. Slide 15 please. In the first quarter of 2025, investments as a percentage of revenues was 16.2% or 13% before rights of use from leases, lower than the same period as the previous year, mainly from the effect of lower rights of use from leases. The CapEx plan is flexible, and the company has been investing above global average ratio of CapEx to revenues during the previous years in order to achieve its goals in terms of network performance and coverage, which is currently strong. Secondary CapEx was mainly allocated to network and technology and to customer premise equipment, or CPA. The balance was allocated for international operations in Paraguay and Uruguay. During the last quarter, the company continued with the deployment and upgrade of existing sites and the expansion of the fiber-to-home network, including an overlay over the HFC network and adding 5G sites. program will continue evolving according to Argentina's economic condition, network performance and goals, and the customer's requirements. Going to the debt financial position as per slide 17, as of March 2025, we have reported a total financial debt of 4,120.7 billion pesos and a debt of 3,589.7 billion pesos equivalent to 3.3 billion in U.S. dollars, mainly as a result of the debt financed to the acquisition of TMA, partially assessed by the effect of lower effects variation versus inflation during the period. Of the total debt, 68.8% is mostly cross-border dollar denominated, but includes the hard dollar local issuance of 2024. 27% is in Argentine pesos, including dollar-linked local emissions, and the rest is in Guaranias and Remembe. During the past year, Telecom has been accessing the local and international debt market for its financing needs and will do so for future potential needs. From 2025 to 2028, debt maturities remain manageable. Net debt to adjusted EBITDA cover ratio as of the end of March 2025 was 2.6 times a significant achievement considering the new debt must for the acquisition of TMA and that the adjusted EBITDA included in this calculation only includes one month of TMA Evita, a testament of the company's resilience to changing macroeconomic conditions. That concludes our comments. We are now ready to take your questions. Operator?

Thank you. At this time, we will open the floor for your questions. If you would like to ask a question, please type it in the box and click send. We will now pause for a few seconds in order to allow participants to write their questions. Please stand by. Once again, if you have a question, please type it in the box and click Send. And it appears that we have no questions at this time. I would like to turn the program back over to Samantha Olivieri for any closing remarks.

Thank you, Nick. I want to thank you all for your attendance today and your interest in CVH. Should you have any questions in the future, do not hesitate to contact our IR team. We look forward to speaking with you again for the second quarter 2025 results. Have a great day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.