TV Azteca en Grupo Salinas

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Transcription:

October 2017

The following information contains or may be deemed to contain, forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The future results of the issuer may vary from the results expressed in, or implied by, the following forward-looking statements, possibly to a material degree. TV Azteca, S.A.B. de C.V. ( Azteca or the Company ) undertakes no obligation to update or revise any forward-looking statements. The Notes (as defined herein) may not be publicly offered or traded in Mexico unless the same are offered or traded pursuant to the provisions of Article 8 of the Mexican Securities Market Law (Ley del Mercado de Valores) and regulations issued thereunder. The information contained herein is solely the responsibility of the Company and has not been reviewed or authorized by the Mexican National Banking and Securities Commission (ComisiónNacional Bancariay de Valores) (the CNBV ). The terms of the offering will be notified to the CNBV for information purposes only which will not constitute a certification as to the investment quality of the Notes or the solvency of the Company. 2

TV Azteca en Grupo Salinas Consumer Finance and Retail Media Telecommunications Social Responsability Transferencias de dinero internacionales More than 70,000 employees Presence in Mexico, USA, Colombia, Guatemala, Honduras, El Salvador, Panama and Peru 3

TV Azteca Mexico s second largest TV broadcaster Over 88 million viewers per month in Mexico One of the largest two producers of Spanish language television content in the world ~60 long-term contracts with major content providers (including Fox, Sony, Disney and the Mexican Soccer Federation) TV Azteca s content has been sold in over 100 countries Broadcasts in Mexico, US, Guatemala, Honduras Fiber optic network operations in Peru Listed in the Mexican Stock Exchange (BMV) and in Spain (Latibex) and has issued listed debt internationally since 1997 ~93% 54 studios Top 20 most producing digital, HD, 4K and multi-platform content Almost 25 years households broadcasting in Mexico TV 36% OTA market share valuable brands in Mexico +30,000 hours of content produced in 2016 2 HD national channels + 2 new OTA signals 4

TV Azteca Channels (2) (1) Content mainly targeted for women with different responsibilities Productions, co-productions and entertainment programs that are realistic and speak the language of their audience Privileged channel lineup position: In 2017, Azteca Trece s broadcasting channel was changed from 13.1 HD to 1.1 HD Generate greater local business opportunities through regionalization Have a differentiated offer to compete with local media (1) Focused on contemporary families to make them think, have fun and act One-of-a-kind Transmission Technology Content such as newscasts, series, sports, community social service, among others 458 Transmission Sites 35 Local Stations (2) The only 24/7 news and opinion channel in Mexican broadcast television Dynamic visual style, interaction and conversation with audiences Using the latest technology in studios TV Azteca s Antennas Notas 1. Canales nacionales de HD 2. Señales de televisión abierta 5

Strong Market Position with Strategies for Improved Momentum Solid Underlying Business OTA television is the most efficient media to tap mass market Improved Market Share (36% share in the Mexican OTA television market Refocus on TV Azteca s Core Business Focus on TV Azteca s core capabilities to continue growing profitability in Mexico innovative, high-quality content closer to the viewer New forms of production including internal, co-productions, partnerships and independent production Well positioned to benefit from Internet growth through diverse platform offerings Improved Cash Generation Capacity Strong financial results in domestic operations Focus on increased profitability and minimum capex in international operations Reduced capex requirements from post non-recurring investments of HD infrastructure in Mexico and fiber optic investments in Peru and Colombia Strengthening Capital Structure US$156 million cash proceeds from sale of spectrum in the US Prepayment of US$300 million 2018 senior notes in March, July and August 2017 Issuance of US$400 million due 2024 on August 9, 2017 Prepayment of US$335 million of US$500 million 2020 Senior Notes on September 21, 2017 On September 21, Ps.4,000 million in CEBURES due un 2022 were issued On September 27, a prepayment of US$165 million of the 2020 Senior Notes was announced Divestiture from Non- Core Assets Steering away from stake in Colombia operations Analyzing strategy of Peru fiber optic operations 6

A Leading Producer of Spanish-Language TV Content in the World Gaining Market Share From its Main Competito OTA Television Market Share in Mexico Top-2 Global Producer of Spanish-Language Television Content 50% 48% TV Azteca 29% 2007 2012 TV Azteca 32% UDM 2T17 TV Azteca 36% +25,000 +30,000 Televisa 71% Televisa 68% Televisa 64% 2015 2016 Internally Produced Hours of Content Source TV Azteca & TelevisaCompany Reports Complementing its Programming with Co-productions, Alliances and Globally Recognized Brands & TV Shows. Creating High-Quality and Inspirational Formats Closer to the Audience 7

Strong Industry Fundamentals in Core Domestic Market Capturing the Highest Expenditure in Advertising 2016 Total Media Advertising in Mexico and the US Print The OTA Television Advertising Market Has Kept Growing for Almost a Decade Ps$ millions Other(2) Radio Internet 9% 9% 16% 8% Mexican Market 10% Pay TV 49% OTA Advertising spend in Mexico is ~Ps$ 79 Bn or 0.33% of Mexican GDP In the US it represents 1.03% of US GDP 29,765 34,872 2007 LTM 2Q17 OTA Television Has the Highest Household Penetration % Household penetration per Media Sector 93.3 88.8 94.9 93.1 79.3 24.7 12.0 32.2 26.0 61.5 52.1 47.0 2007 2012 2016 OTA Radio Pay TV Internet Low high speed internet and Pay TV penetration compared to developed countries Source: Company Data, The Competitive Intelligence Unit, Zenith the ROI Agency (sept 2016) and Nielsen IBOPE (July 2017) Notes 1.Sum exceeds 100% due to rounding 2.Movies, exterior, and public, among others 8

Strong Industry Fundamentals in Core Domestic Market OTA Television is a Highly Efficient Way to Reach Millions of People Barriers to Entry Key Mexican Market Stats 2 TV s per household on average across the country Significant capital investments The average household leader (men or women) watches TV for 5:47 hours per day Established and Extensive Infrastructure Limited land to Build New Transmission Sites 61% of the population (~ 70 Million People) watches TV between 1-4 hours daily 6 out of 10 people with a Pay TV service watch OTA Channels Limited Risk From New Players Only 4.5% of households have access to high speed internet, required for online video content (1) Only 7.4 million viewers subscribed to an OTT Service (6.2% of total population) (1) ~60 Content Licensing Contracts 180 Concessions Granted by Federal Government Notes 1.Mexican population 119,938,473. INEGI (2015) 9

Broad Programming with Premium Innovative Content Program Offering Designed to Attract All Viewers News ~ 53% of total content produced ~36% National ~64% Local Opportunity with 2018 elections 24/7 programming Renewed Focus on Creating Innovative Content Through Partnerships with World-Class Production Companies Recent Content Co-producers Entertainment ~ 31% of total content produced Realities viewership of ~45MM per season Avg. viewers per episode: 10 millions Allows the Creation of Successful TV Franchises by Accessing New Top Talent while Sharing Costs Sports ~ 13% total content produced Opportunity with 2018 Soccer World Cup Original content with Box Azteca Telenovelas and Series ~ 3% of total content produced Content has been sold to 100+ countries Five productions in 2016 Opportunity to increase internally produced content of segment s primetime Audience of Recent TV Azteca s Successful Co-Productions Rosario Tijeras (60*60) (1) Co-Producers: Sony Pictures, Teleset Last Episode: 8.4 millions All Episodes: 47.6 millions Episode Average: 6.5 millions MasterChef (1) Co-Producer: Sony Pictures Last Episode: 15.0 millions All Episodes: 48.1 millions Episode Average: 11.1 millions Notes 1. Data as of 2Q17 10

Driving Diverse, High-Quality Client Base Diversified Client Base Share of Sales by Client (1H 2017) Share of Sales by Client Industry (1H 2017) Top 10 clients accounted for ~18% of TV Azteca s total revenues in 1H17 Total 100% Top 10 18% Top 20 26% Top 30 32% Top 40 37% Top 50 41% Pharmaceutical 9% Food 8% Telecom 10% Other 10% Beverages 12% Retail 37% Goverment 14% Well diversified client base by economic sector Over 450 national clients and more than 3,500 local advertisers Blue Chip Customers 11

Incremental Revenue Growth Opportunities Azteca Internet Strategy to increase internet revenues by shifting focus from online pop-up ad displays to online video advertising, leveraging TV Azteca s core capabilities Early initiator of online video advertising vs competitors New sources of revenue by expanding internet presence through: Enhancement of own online platform Availability on established third-party online platforms Renewed online platform expected to launch in 3Q17 that consolidates its various webs adn40 The only 24/7 news and opinion signal in Mexican broadcast television. Reaches 84.5 million people in Mexico and will reach the entire country in the near future The most talented and qualified news presenters. Promising and experienced talent for Sports adn40 expects to obtain increased resources from high-income oriented advertisers, with national reach, and the federal government and state administrations, which tap upscale educated viewers www.tvazteca.com + a+ Regional TV WGC Mexico Recently launched (March 2017) network of local signals focused on increasing TV Azteca s presence in regional markets Flexibility to insert different content and advertising simultaneously across the 35 local stations network Additional revenue from targeted local advertising that captures regional clients not currently served Aims to double its 8% local share of total revenue over the next five years License to organize the WGC Mexico for 6 more years 1 of the only 4 World Golf Championships Top 10 PGA Tournaments 2017 WCG Mexico - First Edition +45,000 attendees Ps. 556 million Revenue 76 of the best Golfers in the World 17,800 international press notes 12

Financial Overview Ps. millions Net Sales Sales Breakdown $14,197 $14,336 National: 73% Azteca America: 10% $12,570 $12,058 $12,921 $12,859 Local: 7% Peru: 4% Golf: 3% Barter: 2% Exports: 1% Honduras & Guatemala: 1% 2012 2013 2014 2015 2016 LTM17 13

Financial Overview Ps. millions Costs& Breakdown SG&A Expenses & Breakdown -2% $6,577 $6,368 $7,508 $8,720 $8,989 $8,789 $1,510 $1,556 $1,641 $1,605 $1,520-1% $1,503 2012 2013 2014 2015 2016 LTM17 2012 2013 2014 2015 2016 LTM17 Production & Telecommunications 76% Content Purchases 23% Broadcasting 1% Operating 22% Services 1% Personnel 77% Ps. 8,789 millions Ps. 1,503 millions 14

Financial Overview EBITDA 1 Ps. millions -2% $3,893 $4,122 $4,723 $4,677 $4,483 $4,134 $3,771 $4,108 $4,044 $2,534 2008 2009 2010 2011 2012 2013 2014 2015 2016 LTM17 CAPEX Cash Flow 2 +12% $1,093 $1,159 $1,803 $1,381 $1,007 $813 $3,390 $2,975 $1,968 $1,153 $2,681 $3,231 2012 2013 2014 2015 2016 LTM17 2012 2013 2014 2015 2016 LTM17 1. 2016 EBITDA excludes Colombia 2. Cash Flow = EBITDA CAPEX 15

Outlook Positive expectations for the Mexican broadcast television market Innovative, inspirational and high quality formats, closer to the audience Productions, co-productions and strategic alliances to improve the offer and the cost structure Use of new processes that make a more efficient use of resources in each production Focus on free cash flow Creating long-term value 16

October 2017