Good day, everyone. Thank you for dialing in for Grupo Televisa's third quarter 2026 conference call. The call will begin momentarily. We do ask that you please stay on the line. The call will begin momentarily. Thank you. In the name of the Father, the Son, and the Holy Spirit. Amen. © transcript Emily Beynon © transcript Emily Beynon

In the name of the Father, the Son, and the Holy Spirit. Amen. THE END

Good morning, everyone, and welcome to Grupo Televisa's third quarter 2026 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 would now like to turn the floor over to Mr. Alfonso de Angoitia, Co-Chief Executive Officer, Grupo Televisa. Please go ahead, sir.

Thank you, Elsa. Good morning, everyone, and thank you for joining us. With me today are Francisco Balim, CEO of Artelco Operations, and Carlos Phillips, CFO of Grupo Televisa. Before discussing our third quarter operating and financial performance, I want to share with you our excitement regarding the agreement reached with AT&T to acquire its wireless telco business in Mexico for a purchase price of $2 billion. This transaction will materially strengthen our competitive position and offer significant value creation opportunities as we will have a unique platform for fixed mobile conversions, Bundled offerings, cross-selling opportunities, and operational optimization Leveraging Televisa's existing content and broadband subscribers footprint After closing, our combined assets would include over 24 million wireless, 5.7 million broadband, and 6.3 million video subscribers From a revenue standpoint, we would have around $8 billion per year, equivalent to around 23% of the total telecommunications market in Mexico. As previously disclosed, we are pursuing this acquisition through a 50-50 partnership with FinTech Holdings. At closing, each of us will contribute $400 million in equity, and the remaining $1.2 billion will be funded through a five-year non-recourse loan. Following the acquisition of AT&T Mexico, Grupo Televisa's balance sheet will continue to be strong as our net debt to EBITDA will only increase to 1.9 times from 1.6 times at the end of the third quarter. We expect the transaction to be concluded in the first quarter of 2027 after receiving regulatory approvals and we will account for it as an investment in a joint venture by using the equity method. Having said that, let me turn the call over to Valim as he will discuss the operating and financial performance of our consolidated assets.

Thank you, Alfonso. Good morning, everyone. Let me start by saying that I'm very encouraged by the opportunity that we have ahead of us. Full-service telcos have been a reality in Latin America for over a decade, providing very successful, due to maximum economies of scale, and fixed wireless conversions of both services and networks. Now, let me walk you through the operating and financial performance of our cable operations. We ended September with a network of over 20 million homes after passing around 8,000 new homes during the quarter. In addition, year to date, we have upgraded over 4.3 million homes to Fiber to the Home technology, ending the third quarter with around 67% of our total footprint passed with Fiber to the Home. In the third quarter, our monthly churn rate remained below our historical average of 2% for six consecutive quarters due to our focus on value customers and the continued implementation of customer retention and satisfaction strategies. Still, our broadband gross ads were similar to those of the second quarter, leading us to deliver another quarter of around 9,000 broadband net ads. In video, we lost about 48,000 subscribers in the third quarter, The acceleration compared to an average of around 34,000 disconnections over the last four quarters may have been partially driven by the end of the FIFA World Cup in July. Moving on, our mobile net ads of 68,000 subscribers during the third quarter remained solid, but slowed some compared to an average of about 83,000 net ads over the last four quarters. The new law requires all mobile users to register their phone lines with photo IDs and their official identification may be causing a generalized temporary slowdown in the Mexican mobile market. However, we are well positioned to face this new environment as well as our mobile users are postpaid, making their registration automatic. During the quarter, net revenue from our residential operations of 10.6 billion pesos was essentially flat year on year. Partially driven by phase-out of the extra revenue coming from the World Cup subscription. Net revenue from our enterprise operations of 1.1 billion pesos increased by 6.8% year-on-year as we have been signing new deals with public and private customers. Moving on to Sky's operating and financial performance, during the third quarter, we lost 250,000 revenue-generating units. mostly coming from prepaid subscribers that have not been recharging their service. While these connections at Sky continue to be robust, we saw an improvement compared to the average disconnection of 290,000 revenue generating units over the last four quarters. Sky's third quarter revenue of 2.4 billion pesos declined by 25.5% year on year, mainly driven by a lower subscriber base. However, the pace of decline slowed some relative to an year-on-year contraction of 22.6% in the first half of the year. To sum up, segment revenue of 14.1 billion pesos fell by 3.8% year-on-year, while operating segment income of 6 billion pesos increased by 5.6%. Showing sustained momentum of the growth rebound experienced over the last three quarters, driven by an OPEX decline of 9.7%. Our operating segment income margin of 42.6%, expanded by 380 basis points year on year, making it the best quarter of the last three years in terms of profitability, driven by the efficiency measures that we have been implementing and the synergies from the ongoing integration between East and Sky. On a sequential basis, profitability expanded by 80 basis points. Regarding CAPEX deployment, our third quarter total investments of 3 billion pesos accounted for 21.3% of sales, mostly in line with CAPEX, intensity of the first half of the year, despite a fiber-to-the-home upgrade of 4.3 million homes previously discussed. Finally, Operating cash flow for K1 Sky, which is equivalent to EBITDA minus CAPEX, was 3 billion pesos in the third quarter, accounting for 21.3% of sales.

Thank you, Balim. Now let me walk you through Televisa Univision's third quarter results. The company's revenue of $1.4 billion increased by 9% year-on-year. Excluding the impact from the appreciation of the Mexican peso, Televisa Univision's third quarter revenue grew by 6%, driven by our exceptional results in Mexico, especially associated to the World Cup. During the quarter, Mexico's revenue surged by 51% year-on-year to $665 million, driven by a strong conclusion of the FIFA World Cup, While in the U.S., revenue of $715 million fell by 14%, reflecting anticipated domestic advertising softness. While revenue growth was strong during the quarter, total operating expenses increased by 14%, or 11%, excluding the appreciation of the Mexican pesos. This planned increase reflected the anticipated sports-related costs associated with the World Cup transmission in Mexico and Latin America. As a result, adjusted EBITDA of $461 million was essentially flat year on year. Moving on to the details of our revenue performance, during the quarter, consolidated advertising revenue decreased by 5% year on year. In the U.S., Advertising revenue was 24% lower reflecting broader linear market softness in our business and lower VIX advertising revenue, both of which were impacted by competitive sports programming on peer networks that had the World Cup. Still, our core linear commercial fundamentals remain stable as our market share reflected a 200 basis point sequential improvement. As we enter the fourth quarter, We are well positioned, supported by a strong lineup that includes the Latin Grammys and the final of Liga MX's Apertura tournament, among others. Moreover, our upfront revenue commitments for the upcoming cycle remained steady year over year, and we are seeing revenue growth from our recurring sports late and strong demand for our premium network inventory driving mid-single-digit increase in price. In Mexico, advertising revenue increased by 19% year-on-year, driven by the strength of both our linear and direct-to-consumer platforms. Following a record-breaking World Cup, we effectively monetized our residual advertising inventory and impressions through the conclusion of the tournament, extending this momentum through our free-to-air coverage of the Mexican national team. Our results were supported also by a compelling entertainment and sports lineup, notably the fourth season of La Casa de los Famosos Mexico and our broadcast of Liga MX, the NFL, and Formula One. During the quarter, consolidated subscription and licensing revenue increased by 30% year-on-year, driven by approximately $90 million in World Cup sublicensing revenue in Latin America, and a continued growth in VIX's premium tiers. In the U.S., subscription and licensing revenue declined by 4%, reflecting lower third-party content licensing revenue that was partially offset by pricing growth on VIX. In Mexico, subscription and licensing revenue increased by 156%, driven by the World Cup's of licensing revenue and growth within VIX's premium tier. VIX significantly exceeded acquisition and engagement targets for the World Cup, with cohorts retaining above-modeled expectations. Performance was anchored by La Casa de los Famosos, which continues to be our most successful franchise, consistently generating significant revenue over the investment. Moving on to the balance sheet, Televisa Univision ended the quarter with $753 million in cash, driven by the timing of advertising upfront collections in Mexico. In addition, we have around $690 million of available capacity under our credit facilities. CAPEX for the quarter was $28 million compared to $25 million last year, but we continue to expect full-year 2026 CAPEX to be consistent with that of 2025. Looking at our leverage, we ended the quarter with a net debt to EBITDA of 5.5 times in line with the prior quarter. Our third quarter performance demonstrated our continued commitment to delivering solid operational results. We achieved sequential quarter-over-quarter improvements in both revenue and EBITDA as the momentum granted From the FIFA World Cup across Mexico and Latin America was able to offset the softness that we experienced in our U.S. advertising business. Going forward, we remain prudent on the U.S. advertising market. Still, we're focusing on three operational priorities to face these headwinds. First, accelerating new client activations at scale. Second, driving monetization across VIX and social, Through revamped digital go-to-market strategy and third, most importantly, deepening client and agency relationships to ensure that the team delivers against their fourth quarter targets. To wrap up, Bernardo and I are confident that Grupo Televisa's strong telco competitive position particularly after the agreement reached with AT&T to acquire its wireless business in Mexico positioned us very well to consolidate our undisputable position as the second largest telco operator in our country and to create greater value for our shareholders. Now we're ready to take your questions. Elsa, could you please provide instructions for the Q&A?

At this time, we'll begin the question and answer session. To ask a question, you may press star and then 1. To withdraw your questions, you may press star and 2. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the keys to ensure the best sound quality. Again, to ask a question, please press star and 1. Our first question today comes from Marcelo Santos from JP Morgan. Please go ahead with your question.

Hi, good morning. Thanks for taking my questions. I have two questions. Daniel Badia, Ruben Acosta, Patricio Wills They also decelerated. And you were in a trend of kind of improving those revenue trends. So I just wanted to... Maybe the two things have the same reason. So I just want to get your take on this. Thank you.

Thank you, Marcelo, for your question. I can say... And Balim can take over and basically talk about the rest of your questions. But I would say... From the competitive dynamics, it's a very competitive market in our country. And we're seeing this every day, both in terms of speeds, in terms of prices. So, I mean, it's very dynamic and very competitive. And that's what you're seeing if you look at the results of our competitors and our own results. So, Balim, can you touch on this, please?

Sure. So, Marcelo, like we have seen in many mature markets, the broadband market, as penetrations tend to increase, which is the Mexican case, you see a lower pace of growth because there are not that many new subscribers that they don't have the service and then become a user of the service. So to have low single digits, Thank you very much. and but we still grow our revenue. The decline when you compare to the first and second half is because we started the World Cup campaign in January 2026. So yes, we had the first half that was basically loaded with World Cup packages that we are selling to our customers because they were in addition to the existing packages. So we had the first half that was a little more loaded than the second. For the World Cup reason. But as far as the dynamic is concerned, we see a convergence of growth towards low single digits, you know, just very, very quickly. You have seen that already with Telmex, with Total Play, with us, and Megacable also declined their growth. So very quickly, we'll all grow to very similar growth rates.

Okay, very clear. Thank you very much.

Our next question comes from Emilio Fuentes from GBM. Please go ahead with your question.

Thank you for taking my question. I have two, if I may. First, given that AT&T will be accounted under the equity method, how should we think about the recognition of potential synergies? Could some benefits flow directly into EC Cevita? And how do you plan to provide visibility into their contribution? And second, and related to my first question, How do you plan to disclose AT&T's standalone financials, including EBITDA, CAPEX, and free cash flow? And could we expect pro forma financial metrics or synergy targets to help us assess the contribution over time? Thank you.

Hi, Emilio. Well, as to the synergies, we are planning on implementing those synergies from the get-go as soon as we close the deal. which will happen most probably in January of next year. And we're planning to do that through services agreements and Balin can expand on that. And as to your second question, today AT&T Mexico reports using US GAAP so we have a lot of work to do to convert that into IFRS. So let's close the deal and of course we will start to operate the company. So we're not planning on making public the financial information of AT&T Mexico for the time being, not in an initial phase. And then we'll evaluate as we start operating the company. And Balim, can you expand on this please?

Sure, Alfonso. So the idea here is you will see lots of synergies flowing both ways, and by that I mean on the revenue side, obviously more bundled packages will be implemented, and that will be reflected on both sides. Together, we go from around 24 million subs that has AT&T, around 10 million subs that Easy has, with very complementary services. There will be easy subscribers that will have AT&T services and there will be AT&T subscribers that will have easy services. So you'll see that synergy materializing on the revenue side on both companies right from the get-go. On the cost side, like Alfonso mentioned, we have a very robust agreement with our 50% shareholder in AT&T that allows us to implement All of the cost synergies that you would see. And so that, again, materializes on both ends. So the relationship will be basically arm's length, but obviously, because of the bigger size, you need less people to do the work for both companies. So they will also materialize on both P&Ls because of what I just described. So we are sure we'll reduce the price at AT&T level, but we also are sure that... will benefit from some of that reduction in terms of having more scale at the easiest level. You have to think about the back office synergies as if you were a shared services kind of an agreement. So that is the kind of a synergy that reflects on both sides. So we easily see revenues on the revenue side, which are more easily explained and understood. And also on the cost side, Thinking as if we were a service center providing service for both, and then you would see the reflect of that scale materialized on both sides.

Thank you. Very clear.

Our next question comes from Fani Kanumari from HSBC. Please go ahead with your question.

Hi, thanks everyone for taking my question. The first one is on your cost control. This quarter you have a very strong margin of 42.6%. Can you tell us what are the drivers for these cost controls that you are doing and where do you expect the margin to trend over the next few quarters? Thank you.

Thank you for your question. As to your first one, yeah, we're very excited about the 42.6% margin. And this has to do with all the efficiency measures that Balim has been able to put in place in Easy and Sky, which have been really great, if you see the numbers and the trends. and also, I mean, he has implemented the integration of Sky and has been able to execute on the synergies involved in merging those two companies and Valim can expand on those and how he sees the trend. As to the 400 million that we're investing in equity in the AT&T deal, I would say that we don't expect to make additional Contributions of Equity for the time being.

And on the margin, I think that the 42.6% is considering that we have sky embedded into those numbers and by definition, a pure video player has lower margins given the cost of content. It's a very high margin for this business. So we're not expecting to increase The plan is for HNT to be on a standalone capital structure that will be able to finance itself moving forward.

Thanks. So just to follow up there, so even if you put like $400 million in cash, you still have a lot of cash on hand. Any plans to use the cash?

Yeah, as we have done in the past, I mean, we're ready to take advantage of... opportunities in our sector, and also we have been reducing our leverage. So those are two things that we will focus on going forward.

Excellent. Thank you, everyone, for clarifying the questions. Thank you.

And our next question comes from Luca Brendi from BOA. Please go ahead with your question.

Good morning, everyone. Thank you for taking my questions. I have two from my side here. The first one, can you give us some color on the other expenses that were higher in this quarter? You mentioned the impairment that was a one-off, but you also mentioned the legal and financial advisory costs. Are those also one-offs, or could we see more of that in the coming quarters? And then the second one, can you give us some color on the CAPEX? It was lower. Thank you, Luca, for your question. I'll ask Carlos Phillips to answer the one that has to do with other expenses and the non-cash impairment of this quarter.

and I'll ask Balin to answer as to the CAPEX trends.

To your first question, that is correct. The other expenses, most of it is a non-cash, non-recurring expense. It has to do with the carrying value of technical equipment. We have to do the impairment. So that's just an accounting adjustment. It's a one-off. And the other expenses, I mean, as you can see, most of the increase was non-cash in other expenses. And the increase in the legal and others are also non-recurring, as you've We've had a lot of recent transactions with the convertible and with the M&A and all these things. We don't do them every day, so we expect them not to be recurring as well.

In terms of the level of capex, it's basically due to a fluctuation between quarters regarding how much imports comes or goes. So basically, we are expecting it to end the year in the low 20s. So it shouldn't change that trend. The difference between the second and third quarter is basically just a function of imports and when material comes into the country for us to deploy the fiber network. So we don't see nor a trend. Thank you for the answers. Our next question comes from Matthew Harrigan from StoneX. Please go ahead with your question. Thank you. Congratulations again on the AT&T deal and what you've done with the margins internally really attests to the

The potential there as well. You answered pretty much my questions on AT&T, so actually I'll just pivot to Televisa Univision. You know, on the political side, I mean, clearly, you know, Hispanics are a swing vote and, you know, they seem to have more volatility maybe than some other demographics, which are pretty hard set. You know, the MAGA people and conversely on the Democratic side, It feels like it's going to be pretty much a biannual annuity. You've got all the Musk spending, the $200 million this time around. Obviously, not all that is going to you. But when you look at your tech stack and your capabilities with VIX and social and all that, are you finding that you can add a lot of value to candidates and the various markets by virtue of targeting and just a lot of sophistication and understanding the Fairly diverse Hispanic demographic in the U.S. There's just kind of old-fashioned, massive on-air tonnage. I know it's kind of indiscriminate because in the U.S. you're getting – I live in Denver. I'm getting advertisements for Florida. I'm kind of rambling, so I'll just look forward to your answer. Thanks.

Hi, Matthew. We have a very good offering in terms of our stations and our network in the United States. As you know, we're the number one Hispanic company. And so throughout all the station groups... You're cutting out or I'm cutting out. Yeah, I don't... Can you hear me? Hello?

Yeah, can you hear me, Matthew? Hello? Hello?

Matthew, you're the one cutting out.

This is the operator, Matthew. I do believe that line is... your line is cutting out.

Matthew? Oh, well. Are you still with us?

And Matthew, if you're on...

And Matthew's line has been muted.

So I'll answer the question and then we can go to the next question. Maybe Matthew can connect with us later. We have a very good offering in what has to do with political in the United States. In some areas, the elections are Thank you very much. So we're very happy with our offering. As the elections are competitive, I think we're going to be having very good results. Daniel Alegre, our CEO, is very focused on this, and he's directly in charge of all the elections process. So we're very happy with the prospects, and hopefully we'll have good results

And with that, ladies and gentlemen, we'll be turning the floor back over to management for any closing remarks.

Well, thank you very much for participating in this call, and please call us if you have any additional questions. Have a great weekend.

And with that, ladies and gentlemen, we'll be concluding today's conference call and presentation. We thank you for joining. You may now disconnect your lines.