Grupo Televisa, S.A.B. (NYSE:TV) Q2 2024 Earnings Conference Call July 24, 2024 11:00 AM ET

Company Participants

Alfonso de Angoitia - Co-Chief Executive Officer
Francisco Valim - Chief Executive Officer, Cable and Sky
Carlos Phillips - Chief Financial Officer

Conference Call Participants

Vitor Tomita - Goldman Sachs
Marcelo Santos - JPMorgan
Carlos de Legarreta - Itau

Operator

Good morning, everyone, and welcome to Grupo Televisa's Second Quarter 2024 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 that we discuss in today's call and in the earnings release.

I will now turn the call over to Mr. Alfonso de Angoitia, Co-Chief Executive Officer of Grupo Televisa. Please go ahead, sir.

Alfonso de Angoitia

Thank you, Elsa. Good morning, everyone, and thank you for joining us.

With me today are Francisco Valim, CEO of Cable and Sky; and Carlos Phillips, CFO of Grupo Televisa.

Before discussing our second quarter operating and financial performance, let me remind you the key corporate goals and strategic pillars Bernardo and I outlined for Grupo Televisa and TelevisaUnivision since the beginning of the year and the progress we have achieved so far.

First, the corporate restructuring process at our Cable segment, led by Francisco Valim, intended to improve profitability, optimize CapEx, increase free cash flow generation, and positioning us well to achieve sustainable revenue growth over the coming years. The key measures implemented so far have already allowed us to improve profitability by almost 400 basis points relative to the third quarter of 2023, and we are confident that our EBITDA margin will continue to expand gradually over the coming quarters due to ongoing efficiencies.

Moreover, during the first half of the year, operating cash flow for our Cable segment, which is equivalent to EBITDA minus CapEx, was over MXN6.4 billion, growing by almost 50% year-on-year and accounting for around 27% of sales. This implies that the operating cash flow margin of our Cable segment has increased by close to 1,000 basis points so far this year.

The second half of the year is expected to be heavier in terms of CapEx deployment, but we are cutting our 2024 CapEx budget for our Cable segment to $590 million, including $30 million for the reconstruction of our network in Acapulco, which we expect to be reimbursed by the insurance company. Therefore, we estimate that the organic operating cash flow for our Cable segment will increase by around 16% year-on-year in 2024.