Grupo Televisa, S.A.B. — 2022 Form 20-F Summary
Business context and reporting period
Annual report for the fiscal year ended December 31, 2022, prepared under IFRS as issued by the IASB and audited by KPMG, which gave an unqualified opinion. Grupo Televisa’s continuing operations comprise Cable, Sky and Other Businesses. On January 31, 2022, the company contributed its former Content business to TelevisaUnivision; its results are presented as discontinued operations. Televisa retained broadcast concessions and a substantial, non-controlling investment in TelevisaUnivision.
Financial and operating performance
| Metric | 2022 | 2021 |
|---|---|---|
| Consolidated revenue | Ps.75,527 million | Ps.73,915 million |
| Operating income | Ps.4,419 million; 5.9% margin | Ps.10,689 million; 14.5% margin |
| Finance expense, net | Ps.9,206 million | Ps.11,918 million |
| Share of associates’ and joint ventures’ income (loss), net | Ps.(7,378) million | Ps.3,671 million |
| Net income (loss) from continuing operations | Ps.(10,938) million | Ps.769 million |
| Income from discontinued operations, net | Ps.56,222 million | Ps.6,586 million |
| Net income attributable to Televisa shareholders | Ps.44,712 million | Ps.6,056 million |
| Cash from operating activities | Ps.12,468 million | Ps.29,324 million |
| Cash and cash equivalents at year-end | Ps.51,131 million | Ps.25,828 million |
| Capital expenditures | Ps.17,315 million | Ps.23,268 million |
Debt and liquidity: Year-end debt was Ps.105,241 million, net of finance costs (Ps.1,000 million current and Ps.104,241 million long-term); interest payable was Ps.1,761 million. Lease liabilities added Ps.8,369 million. Cash less reported debt was approximately Ps.54,110 million, before leases. The 2022 increase in cash was Ps.25,303 million; investing cash flow included Ps.66,095 million of proceeds from the TelevisaUnivision disposition, making the cash increase substantially transaction-driven.
Continuing segments: Cable revenue rose 0.8% to Ps.48,412 million and segment income fell 1.9% to Ps.19,903 million; its margin was 41.1%. Cable ended the year with 15.9 million RGUs, up from 14.6 million. Sky revenue fell 7.7% to Ps.20,339 million and segment income fell 24.6% to Ps.6,416 million; its margin was 31.5%. Sky lost about 1.3 million RGUs, including 1.2 million video RGUs. Other Businesses revenue increased 67.2% to Ps.7,339 million, principally reflecting reopening-related recovery in gaming, sports and events; segment income was Ps.1,691 million.
Material changes, outlook and risks
- Revenue increased 2.2%, but operating income declined sharply as costs and expenses rose and 2021 included a Ps.4,547 million pre-tax gain on the sale of OCEN. 2022 also included Ps.425.8 million of net expense for a securities class-action settlement provision.
- Reported 2022 net income was dominated by the TelevisaUnivision transaction gain. The company recognized Ps.56,222 million of discontinued-operations income, including a net disposition gain; continuing operations instead recorded a Ps.10,938 million loss. Televisa reported a Ps.7,378 million net share of losses from associates and joint ventures, mainly reflecting TelevisaUnivision’s goodwill impairment.
- For 2023, management expected capital expenditures of approximately U.S.$820 million (about U.S.$620 million for Cable and U.S.$160 million for Sky) and financing to GTAC of approximately U.S.$11.6 million. Management said it expected cash generation to meet long-term liquidity needs. These are expectations, not guarantees.
- The board approved a proposed spin-off of certain Other Businesses—including soccer, Azteca Stadium, gaming, and magazine publishing and distribution—targeted for the first half of 2023. Shareholders approved it on April 26, 2023, but required regulatory and other conditions remained.
- Principal risks include Mexican economic, inflation, interest-rate and peso movements; U.S.-dollar costs and debt against predominantly peso revenues; competition and subscriber attrition, particularly at Sky; regulatory restrictions and concession renewal; satellite interruption; cybersecurity and privacy; and reliance on TelevisaUnivision for content under contractual arrangements. The filing says COVID-19 continued to negatively affect the business, with future effects uncertain.
- The securities class action settlement was agreed at U.S.$95 million, with Televisa’s stated share approximately U.S.$21.5 million and the remainder expected from insurance. At year-end, the company recorded a Ps.1,850 million provision and Ps.1,431 million insurance receivable; it reported receiving insurance funds in March 2023. Final court approval and settlement effectiveness were still pending at filing.
- Management reported effective disclosure controls and internal control over financial reporting; KPMG also issued an unqualified opinion on internal control. Goodwill valuation for Cable was a critical audit matter: the auditor highlighted sensitivity to revenue growth, long-term growth and discount-rate assumptions.
Important facts for investors to verify
- Separate recurring continuing-operations results from the transaction-related discontinued-operations gain when assessing earnings and valuation.
- Review the TelevisaUnivision investment’s carrying value, underlying performance, impairment assumptions and the company’s ability to realize value from unlisted shares.
- Track Cable and Sky subscriber trends, segment margins, capital intensity and whether Sky’s customer losses stabilize.
- Reconcile cash generation and liquidity excluding the one-time TelevisaUnivision proceeds; review debt maturities, covenants, interest costs and U.S.-dollar exposure.
- Confirm final court approval, insurance recovery and cash settlement of the securities class action; assess the status and terms of the Other Businesses spin-off.
- Monitor the Cable goodwill impairment headroom, concession and regulatory proceedings, and content-supply arrangements with TelevisaUnivision.