Investor Presentation Second Quarter 2016
Forward looking statements This presentation contains statements that constitute forward looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward looking statements include statements regarding the current intent, belief or expectations of our officers or management with respect to future developments, including such important matters as (1) our asset growth and financing plans, (2) trends affecting our financial condition or results of operations, (3) the impact of competition and regulations, (4) projected capital expenditures and (5) liquidity. Forwardlooking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those described in forward looking statements included in this presentation as a result of various factors. These factors, many of which are beyond our control, include the actions of competitors, future global economic conditions, market conditions, changes in interest rates and foreign exchange rates, changes in legislation or regulations applicable to our business, operating and financial risks, the outcome of legal proceedings and the factors discussed under Risk Factors in our annual report on Form 20 F for the year ended December 31, 2015. The results in this presentation appear as they were originally reported in our financial statements. 2
Overview 2Q 16 Results Underlying Drivers 3
Overview 4
Outlook Ad pricing restructuring initiatives well under way Growing share of non cyclical, recurring revenue Attractive market: low adoption of video and data Favorable free cash flow outlook in cable operation Local loop unbundling opportunity Approaching 2018 step up in Univision royalty payments 5
Our Core Businesses Fully Integrated Media and Distribution Content Cable Sky** Advertising Four broadcast channels in Mexico City and affiliated stations Network Subscription 26 pay tv networks and 51 feeds in Mexico and globally Licensing & Syndication Univision royalties, other licensing fees, and exports to 70+ countries Video: 4.2 million RGUs * Data: 3.3 million RGUs Voice: 2.1 million RGUs A leading cable operator in Mexico Video: 7.8 million subs A leading DTH system in Mexico, Central America and the Dominican Rep. * Revenue generating units ** In partnership with AT&T which owns 41.3% of Sky. Univision*** *** Televisa has equity and warrants which upon their exercise and subject to any necessary approval from the Federal Communications Commission ( FCC ) in the United States, would represent approximately 36% on a fully diluted, as converted basis of the equity capital in Univision Holdings Inc. Ownership of approximately 36% of the equity on a fully diluted, as converted basis 6
Revenue breakdown Consolidated net revenue US$5.3b (1) LTM 2Q'16 US$mm (2) 2Q'16 YoY growth (3) LTM YoY growth (3) 8% 38% Content 2,060 11.0% 3.3% 22% 38% 25% Advertising 1,327 2.1% 6.2% 4% Network Subsc. 239 34.7% 30.8% 9% Licensing and Synd. 494 25.2% 24.4% 32% Cable 1,747 12.9% 20.4% 32% 22% Sky 1,202 18.1% 13.8% 8% Other 469 7.8% 1.9% (1) As of LTM 2Q'16. Consolidated net sales include elimination of intersegment operations amounting to US$143.7 million. (2) Equivalent in US$ at the FX rate of 17.3334 Ps/US$. The average of rates published by Mexico s Central Bank for LTM ending June 30, 2016. (3) 2Q'16 year over year and LTM growth in peso terms. 7 7
Operating segment income (1) Net OSI (2) of US$2.0b LTM 2Q'16 US$mm (3) LTM YoY growth (4) Margin LTM 2Q'16 2% 40% Content 860 1.6% 41.8% 25% Sky 547 10.3% 45.5% 33% 40% 33% Cable 717 25.6% 41.0% 2% Other 41 2.5% 8.8% 25% (1) Operating Segment Income OSI is defined as operating income before depreciation and amortization, corporate expenses, and other expense net. (2) Net OSI is after corporate expenses. As of LTM ending June 30, 2016 Net OSI includes Corporate Expenses of US$123.0 million. (3) Equivalent in US$ at the FX rate of 17.3334 Ps/US$. The average of rates published by Mexico s Central Bank for LTM ending June 30, 2016. (4) LTM year year over year growth in peso terms. 8 8
Market Highlights A diverse shareholder base Europe, 6.2% Other, 5.2% Ownership by Geographic Region Unidentified, 7.8% Azcárraga Trust, 14.7% Public Market Highlights Publicly traded in Mexico since 1991 and in the NYSE since 1993 One of the 10 largest companies in Mexico based on market capitalization Average daily traded value of approximately US$65 million (2Q 16) Float of 85% of its total capital Coverage by 16 sell side analysts and research houses Average turnover for top 30 institutional shareholders is 40% (as of 2Q 16) North America, 66.2% 85% of institutional shareholdings are in the form of ADRs and 15% are in the form of CPOs (as of 2Q 16) Source: Ipreo and internal estimates. 9
2Q 16 Results 10
2Q 16 Results: Highlights Strong 2Q with growth in revenue and profitability Sales and OSI increased by 12.1% and 13.3%, respectively Content revenues expanded 11.0% to a 2Q record of Ps.8.8 billion Royalties from Univision reached US$83.3 million, a growth of 11.1% Growth in Sky revenues of 18.1%, fastest pace of growth since 2012 Cable OSI growth of 19.2% with a margin of 42.2%, the highest since 2006 Consolidated Net Sales $21.0 $23.5 Operating Segment Income OSI margin $9.7 $8.5 39.8 % 40.0 % 2Q15 2Q16 2Q15 2Q16 Billions of Ps. 11
2Q 16 Results: Content Financial Results Billions of Ps. Revenues OSI OSI margin $7.9 $8.8 All three business lines of our content segment grew during the quarter Content segment growth of 11% to a second quarter record of 8.8 billion pesos 42.6% 41.9% $3.4 $3.7 2Q15 2Q16 Fastest pace of growth in 16 quarters OSI expanded 9% during the quarter, and the margin reached 41.9%. Content Revenue Mix Licensing and Syndication Network Subscription Revenues 13% 26% 61% Advertising Advertising growth driven by new pricing strategy Network subscription revenue growth driven by increase in pay tv penetration and peso depreciation Licensing and syndication revenues driven by growth in Univision royalty payments 12
2Q'16 Results: Content Financial Results Advertising Billions of Ps. $5.2 $5.4 Advertising revenues increased by 2.1%, posting growth for first time in 4 quarters Customers are buying advertising at the new prices Customers are consuming their upfront deposits faster than a year ago 2Q15 2Q16 Financial Results Network Subscription Revenues Billions of Ps. Revenues RGUs (millions) $1.2 Revenues increased 34.7% year over year in 2Q 16 $0.9 256 2Q15 280 2Q16 Strong organic growth of mid teens due to increase in pay tv penetration Peso depreciation has benefited this revenue line as most contracts are dollar linked 13
2Q'16 Results: Content Financial Results Licensing and Syndication Billions of Ps. $2.3 $1.8 Licensing and Syndication revenues increased 25.2% year over year in 2Q 16 Growth driven by Univision royalties and peso depreciation 2Q15 2Q16 Univision Royalties US$ millions $75.0 $83.3 Univision royalties reached $83 million A growth of 11.1% year over year in dollar terms 2Q15 2Q16 14
2Q'16 Results: Cable Financial Results Billions of Ps. Revenues OSI OSI margin Sales increased by approximately 13% $6.9 $7.8 OSI increased by 19% and the margin reached north of 42%; the highest since 3Q 06 Cable RGUs (millions) 42.2% 40.0% $2.8 $3.3 2Q15 2Q16 Video RGUs Data RGUs Voice RGUs 9.5 8.3 2.1 1.6 2.8 3.3 3.9 4.2 2Q15 2Q16 Strong revenue and OSI growth driven by RGU net additions, notably data and voice OSI margin expansion driven by economies of scale and aggressive cost reduction plan 1.3 million RGUs added in the last twelve months and 260 thousand RGUs added in 2Q 16 Solid year over year growth in all services: Video up 7.7% Data up 18.5% Telephony up 28.6% 15
2Q'16 Results: Sky Financial Results Billions of Ps. $4.7 48.1% $5.6 $2.3 $2.5 2Q15 Revenues OSI 45.4% 2Q16 Reached 7.8 million customers, an increase of 13.3% year over year Revenue growth of 18%; the fastest pace in four years OSI grew 11.3% and the margin reached 45.4% Compression in the margin explained by some key sports rights denominated in US dollars Sky Subscribers (millions) Net additions of 121 thousand subscribers Subscribers Net Additions 7.3 7.7 0.398 7.8 Similar pace to that in first half of last year, before transition from analog to digital transmission of broadcast signals 7.1 0.166 0.230 0.121 Growth in subscribers of over 500 thousand in the first six months of the year 3Q15 4Q14 1Q16 2Q16 Low cost offering continues to drive growth 16
Underlying Drivers 17
Underlying Drivers Drivers that are shaping our business, long term I. Advertising Revenue II. III. IV. Network Subscription Revenue Licensing and Syndication Revenue Sky Pay TV Revenue V. Cable Video RGUs VI. VII. VIII. IX. Cable Voice RGUs Cable Data RGUs Position as a Leading Cable Operator Diversification 18
I Advertising Revenue Restructuring ad business to drive long term growth 30.0 Advertising Revenues Regulatory and competitive challenges have overshadowed underlying growth 25.0 20.6 20.5 21.1 21.5 22.7 23.2 23.9 24.9 25.5 23.0 23.0 06 Electoral reform and resulting loss of political ad revenue MX$ billions 20.0 15.0 10.0 5.0 09 Mexico s GDP drops by 5%; Televisa s broadcast revenues grow 0.5% 11 Loss of AMX/Carso as customer; represented 4% of broadcast revenues in 2010 0.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 LTM 2Q16 Repricing of ad inventory starting in 2015 required a sacrifice in top line growth due to customer resistance 14 Ban on TV advertising of food/beverage with high caloric content during certain times of day (starting Q3 14) Ban on most government advertising during election time (Q2 09, Q2 12, Q2 15) Source: Grupo Televisa's public filings 19
I Advertising Revenue (Cont d) A multi year process that has required pricing discipline 3Q 14 Ban on advertising of food and beverage with high caloric content during certain times of day YoY % change in Advertising Revenues Dec 14 Closing of 2015 upfront negotiations resulting in 11.2% drop 8.2% 6.0% 3.8% 1.6% 2.1% 1Q 15 Replacement of leadership and mandate in ad sales organization 3.1% 2Q 15 Introduction of new rate card; customers minimize scatter market buys 6.4% 16.4% 8.9% 11.0% 2H 15 Customers stay away from scatter market for the balance of 2015 Dec 15 Closing of 2016 upfront negotiations under new pricing structure 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 Reversal of trend is under way, but growth will continue to be irregular for the time being Source: Grupo Televisa's public filings 20
I Advertising Revenue (Cont d) Even under new pricing, broadcast is the most effective platform The relevance of online advertising continues to grow, while free to air advertising remains the largest and most important platform Broadcast* and Online Advertising $29.4 $29.2 $30.3 $30.6 $33.0 $33.6 $35.4 $35.9 $37.0 $33.7 12.0% 1.0% 2.0% 3.5% 4.8% 5.9% 7.5% 9.6% 13.4% 14.5% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Broadcast Advertising Online as % of Total Advert. Our top 30 customers are non durable CPG companies, retailers, and service providers in need for scale and efficiency * Broadcast advertising is the sum of Televisa s and Azteca s reported Mexico advertising revenues. 2015 drop reflects reaction to repricing of inventory. Source: Grupo Televisa's and Azteca s public filings and Mexican Association of Media Agencies 21
II I Network Subscription Revenue Strong underlying growth and expanding ratings 4 3 2 1.5 Network Subscription Revenues 3.2 3.3 2.9 2.6 2.4 2.1 1.8 3.6 4.1 One of the most important providers of content for pay TV platforms in Mexico CAGR in Revenue Generating Units of 13.9% since 2005 (1) CAGR of 11.3% in average ratings per channel among its top networks since 2005 1 Networks are distributed internationally 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 LTM 2Q16 Revenues Ps. billions Already recuperated from loss, starting Q3 13, of substantially all its retransmission revenue in Mexico (2) (1) Refers to the number of channels times the number of households reached. (2) Starting on September 10, 2013 we had to forego retransmission revenues as a result of the implementation of the must offer rules that came into effect with the telecommunications reform. Prior to 2011, network subscription revenues were classified under Pay Television Networks and included as additional revenues. 22
II I Network Subscription Revenue (Cont d) Many top rated channels among key categories Televisa produces and distributes many of the highest rated networks in various key categories: Two of the top five sports networks Two of the top five movie networks The top three music and lifestyle networks Three of the top five general entertainment networks (and five of top eight) General Music & Entert. Lifestyle Movies Sports Televisa produces many of the top 5 five ranked networks in key categories 2013 2014 2015 2016 Colored circles indicate the rank that a Televisa network held in each category of content, and in each case with the #1 network at the top 23
III Licensing and Syndication Revenue Approaching 2018 s step up by 39% in royalty rate 350 Univision Royalties (1) 314 311 325 Univision royalties make up most of Licensing and Syndication revenue 300 250 200 150 138 147 143 156 225 248 273 Step up in 2018 from 11.84% to 16.13%, and then to 16.45% in June 2018. An additional royalty of 2% on revenues above $1.66 billion 100 50 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 LTM 2Q16 Royalties (US$mm) The Royalty agreement does not expire unless Televisa voluntarily sells two thirds of its investment, but in no event earlier than 2025 (3) In addition to Univision, during 2015 we licensed over 80 thousand hours of content 70+ countries Non Univision licensing revenue has remained stable at approximately US$170mm since 2011 (1) In 2014, Univision transmitted the World Cup which contributed with US$174.2 million of incremental net advertising revenue. (2) Prior to 2011, Licensing and Syndication revenues were classified under Programming Exports and are not directly comparable. (3) Upon a Univision IPO the agreement is extended to the latter of 2030 (or 2025 if there is a change of control in the parent of Univision) and 90 months after Televisa voluntarily sells two thirds of its equity interest in Univision. Source: Grupo Televisa's and Univision s public filings 24
IV Sky Pay TV Revenue Continued growth in customers, and in revenue per customer 600 Sky ARPU and Revenues 25 Sky revenues have doubled in size in just seven years 500 400 300 200 481 7.7 464 457 448 8.4 9.2 10.0 375 11.2 295 12.5 14.5 263 16.1 240 17.5 19.3 230 230 20.8 240 20 15 10 Subscribers have expanded at a CAGR of 23.7% since the launch of VeTV in 2009, its low cost pre paid offer Average revenue per subscriber is starting to increase 100 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 LTM 2Q16* Revenues (Ps. billions) ARPU (Ps.) ARPU opportunity: Majority of Sky customers subscribe to its lowestcost pay TV offering 5 0 Subscriber growth accelerated temporarily (3Q 15 1Q 16) due to conversion of analog to digital transmission of broadcast signals Excluding this phase, quarterly growth has averaged 120 thousand since 4Q 14 The recharge rate on Sky s pre paid customers has increased slightly * ARPU for 2Q'16 Source: Grupo Televisa public filings. 25
V Cable Video RGUs Adding video customers despite strong competition 4.5 Video RGUs 4.1 4.2 Average organic growth of 6% in the last four years millions 4.0 3.5 3.0 2.5 2.0 1.5 1.4 1.8 2.0 2.2 2.3 2.5 3.4 Solid organic growth has been complemented by the acquisition of four cable operators As of 2Q 16, a total of 4.2 million video RGUs, on 12.5 million homes passed 1.0 0.5 0.5 0.5 Mexico s penetration of pay TV is still low at 58% and growing 0.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q16 CAGR in video RGUs of 25.5% since 2006, including acquisitions Cord cutting seems non existent in Mexico Source: Grupo Televisa's public filings 26
VI Cable Voice RGUs Adding fixed line voice customers at a fast pace millions 2.5 2.0 1.5 1.0 0.5 0.4 Voice RGUs 0.8 0.6 0.5 0.9 1.2 1.9 2.1 Overall number of fixed lines is expanding slightly as a result of attractive offers Televisa Cable added the most voice customers among all companies in Mexico during 2Q 16 Televisa Cable has become the second largest provider of voice services in terms of number of customers 0.0 0.0 0.0 0.1 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q16 With a share of fixed line voice customers in Mexico of less than 10%*, the opportunity is still significant Its share of voice customers in Mexico is still only 9.6% as of 2Q 16 Most new customers added by Televisa Cable walked away from incumbent voice operator * As of 2Q 16. Source: Grupo Televisa's public filings 27
VI Cable Voice RGUs (Cont d) Leading the competition with a smaller footprint In 2Q 16, for the 10 th consecutive quarter Televisa added more voice RGUs than the telecom providers* Izzi s superior voice plan: 350 300 250 Telephony Net Additions (in thousands) Unlimited calls to fixed and mobile numbers in Mexico, the US, Canada, Latin America, and Europe 200 150 100 50 The incumbent s unlimited plan places limits on length of calls or number of calls 0 50 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 Telecom Providers Televisa Cable * Telecom providers refers to Telmex, Axtel, Maxcom and Telefónica. Source: Grupo Televisa's and other telecom providers public filings 28
VII Cable Data RGUs Data services are the main driver of growth 3.5 3.0 Data RGUs 3.1 3.3 Mexico s penetration of data services is 12/100 inhabitants vs an average of 32/100 among the OECD (35 countries) millions 2.5 2.0 1.5 1.0 0.5 0.0 0.1 0.1 0.4 0.7 0.8 1.1 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q16 Televisa Cable captures 21%* of data customers in Mexico, compared to 16% at the end of 2014 1.3 1.7 2.3 Televisa Cable has a 21% market share of data customers, and 37% as many customers as the incumbent Most customers subscribe to Televisa Cable s least expensive data plan Current Televisa Cable offer includes multiple high speed data plans: Residential: 10, 20, 50 & 100 mbps Business: 25, 50, & 100 mbps As adoption of computers and tablets increases, so will the subscription of high speed data services * As of 2Q 16. Source: Grupo Televisa's public filings 29
VII Cable Data RGUs (Cont d) Strengthening position as provider of high speed data Televisa has added more data subscribers than the telecom providers in 7 of the last 10 quarters 250 200 Data Net Additions (in thousands) Its coaxial (DOCSIS 3.0) plus fiber technology is superior to telephony company s copper cable infrastructure Most customers subscribe to the double play voice+data service 150 100 50 0 50 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 Telecom Providers Televisa Cable Telecom providers refers to Telmex, Axtel, Maxcom and Telefónica. Source: Grupo Televisa's and other telecom providers public filings 30
VIII Position as a Leading Cable Operator Multiple strategic and operational milestones 12.0 10.0 8.0 6.0 4.0 2.0 0.0 1.5 2.0 RGUs Televisa Cable (million) 2.3 2.8 3.3 3.9 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q16 4.4 5.1 Video Data Telephony Televisa Cable RGUs have grown at a CAGR of 21.8% since 2006 6.9 9.0 9.5 06 Cablevision completes digitalization of its network 06 Acquisition of 50% of TVI 07 Cablevision launches voice services 09 Televisa Cable launches YOO 09 Cablevision begins conversion to fiberto the curve 11 Acquisition of 100% of Cablemás 14 Acquisition of 100% of Cablecom 14 Televisa Cable launches IZZI 15 Acquisition of 100% of Telecable 16 Acquisition of the remaining 50% of TVI Source: Grupo Televisa's public filings 31
VIII Position as a Leading Cable Operator (Cont d) Resulting in Mexico s 2nd largest telecom network 32
VIII Position as a Leading Cable Operator (Cont d) Overcoming the side effects of rapid growth Pre Integration Multiple brands and value propositions 2013 2017 Single Brand & Positioning Diverse and complex product set Unified and simplified offer Multiple companies and work cultures Heterogeneous, fragmented and scattered IT Platforms Networks with different technologies & capabilities Single company & work culture Single IT Platform & architecture Aligned Technologies and Network capabilities And dealing with the temporary but inevitable disruption that results from the integration of assets 33
VIII Position as a Leading Cable Operator (Cont d) Most of the heavy capital expenditures are behind us US$ millions 1,200 1,000 800 600 400 200 0 Capex 2007 2008 2009 2010 2011 2012 2013 2014 2015 LTM 2Q16 With capex soon reaching a peak, the trajectory of free cash flow is very favorable Investments in our cable assets have been put to good work: Over 110 thousand km (MSOs); 31 thousand km are fiber Additional 30 thousand km in Bestel, Metrored and GTAC backbone More than 94% has bidirectional capabilities More than 58% operates with 1 GHz; approximately 26% with 870 MHz Cablevisión, Cablemás, and TVI operate using DOCSIS 3.0; close to 80% of their customers have DOCSIS 3.0 equipment 12.5 million homes passed Source: Grupo Televisa's public filings 34
VIII Position as a Leading Cable Operator (Cont d) The opportunity is significant Total Revenues: Ps.388.9 billion 2015 Total Subscribers: 160.0 million 2015 6.2% 1.2% 3.0% 4.9% 3.4% 1.6% 3.5% 4.3% 7.0% 5.7% AMX 5.4% 5.6% 7.9% TEF 16.4% AT&T Otros Other Dish 63.9% Mega TV Sky 59.6% TV Cable Source: with information from Grupo Televisa's public filings, companies filings, and internal estimates. 35
IX Ongoing diversification of top line and OSI A CAGR of 10% and 9%, respectively, since 2007 Revenue by Business Segment OSI by Business Segment 100 40.0 80 30.0 Ps. Billion 60 40 Ps. Billion 20.0 20 10.0 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 LTM 2Q16 0.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 LTM 2Q16 Content Sky Cable Pub. & Other Content Sky Cable Pub. & Other Sky and Cable revenues have expanded at a CAGR of 11.3% and 33.4%, respectively, since 2007 Content revenues have remained resilient in spite of many regulatory and competitive challenges over the years Rapid OSI expansion driven by Sky and Cable Potential for OSI to continue expanding as businesses grow and margins expand Diversified portfolio of assets provide additional sources of growth Source: Grupo Televisa's public filings 36
Investor Relations Website: www.televisair.com Carlos Madrazo Investor Relations Officer + (52) 55 5261 2446 Av. Vasco de Quiroga 2000, A4 Col. Santa Fe CP. 01210 cmadrazov@televisa.com.mx Eduardo Nestel Investor Relations Director + (52) 55 5261 2438 Av. Vasco de Quiroga 2000, A4 Col. Santa Fe CP. 01210 enestel@televisa.com.mx 37