Grupo Televisa, S.A.B. — FY2020 Form 20-F
Reporting period: Fiscal year ended December 31, 2020. This is an annual report, not a standalone fourth-quarter filing; the filing does not provide a clear set of Q4-only financial results. Financial statements are prepared under IFRS as issued by the IASB, with amounts principally in Mexican pesos (Ps.).
Business context and financial performance
Televisa operates Cable, Sky, Content and Other Businesses, including Mexican cable and broadband, satellite pay-TV, media and programming, publishing, sports and gaming. The COVID-19 pandemic pressured advertising and event-related activity, while connectivity demand supported growth in Cable and Sky.
| Metric | FY2020 | FY2019 | Change or context |
|---|---|---|---|
| Net sales | Ps.97,362 million | Ps.101,757 million | Down 4.3% |
| Operating income | Ps.17,525 million | Ps.17,005 million | Up 3.1%; operating margin 18.0%, versus 16.7% |
| Net income | Ps.303 million | Ps.6,107 million | Down substantially |
| Net income attributable to Televisa stockholders | Loss of Ps.1,250 million | Income of Ps.4,626 million | Basic loss per CPO Ps.0.44 |
| Net finance expense | Ps.6,255 million | Ps.8,811 million | Expense declined |
| Net cash from operating activities | Ps.33,161 million | Ps.27,269 million | Increased |
| Net cash used in investing activities | Ps.15,920 million | Ps.17,005 million | Primarily capital investment |
| Net cash used in financing activities | Ps.16,195 million | Ps.14,302 million | Included interest and debt repayments |
| Cash and cash equivalents at year-end | Ps.29,058 million | Ps.27,452 million | Net cash increased Ps.1,034 million during 2020 |
| Total assets / total equity | Ps.271,246 million / Ps.87,939 million | Ps.290,344 million / Ps.105,625 million | Equity fell, notably reflecting comprehensive losses |
Year-end current assets were Ps.69,061 million and current liabilities Ps.43,710 million. Debt at amortized cost included Ps.121,936 million of long-term debt, Ps.617 million of current debt and Ps.1,935 million of interest payable. Debt principal was Ps.123,877 million before finance costs; cash was Ps.29,058 million. Lease liabilities totaled Ps.9,292 million. Debt figures should be read alongside the company’s foreign-exchange hedges and maturity schedule.
Segment results
| Segment | FY2020 sales | FY2020 segment income | Year-over-year highlights |
|---|---|---|---|
| Cable | Ps.45,367 million | Ps.18,898 million; 41.7% margin | Sales up 8.8%; RGUs reached 14.1 million |
| Sky | Ps.22,135 million | Ps.9,135 million; 41.3% margin | Sales up 3.7%; broadband RGUs rose to 666,000 |
| Content | Ps.32,613 million | Ps.12,361 million; 37.9% margin | Sales down 7.0%; advertising revenue fell 16.0% |
| Other Businesses | Ps.4,276 million | Ps.116 million | Sales down 47.9%; event and gaming activity affected by pandemic restrictions |
Cash capital expenditures were Ps.20,132 million in 2020. The company expected 2021 capital expenditures of approximately U.S.$1,170 million, mainly for Cable and Sky. Cable added more than 1.4 million RGUs; Sky added approximately 327,500 RGUs, largely broadband.
Material changes and unusual items
- Net sales declined as Content advertising and Other Businesses were hit by COVID-19; lower costs helped support operating income. Fourth-quarter seasonality is significant: the company reported 28.5% of consolidated 2020 sales in Q4, but the filing does not provide standalone Q4 profit or cash-flow figures.
- Share of losses from associates and joint ventures was Ps.5,740 million, versus income of Ps.581 million in 2019. This included a Ps.5,455 million impairment of the carrying value of UHI shares. A separate decline in the estimated fair value of UHI warrants reduced 2020 comprehensive income through other comprehensive loss.
- Total comprehensive loss was Ps.16,559 million, including substantial valuation and hedge-related other comprehensive losses. The company reported a Ps.932 million pretax gain on the July 2020 sale of its 50% interest in Radiópolis and Ps.691 million of income from cancellation of a related-party provision.
- Income tax expense rose to Ps.5,228 million. The reported effective tax rate was unusually high, primarily due to deferred-tax asset cancellations, prior-year tax adjustments and an inflationary tax gain; the filing reports a 95% effective rate.
- Televisa drew Ps.14,771 million under its revolving facility in March 2020 as a precaution and repaid it in full in October; the facility remained available through March 2022. Sky prepaid Ps.2,750 million of debt. No 2020 dividend was proposed, citing liquidity preservation. Stockholders approved a Ps.0.35-per-CPO dividend in April 2021.
Outlook, risks and contingencies
Management said the pandemic’s full effect remained uncertain and could continue to affect advertising, customer spending, event operations, funding access and results. Media and telecommunications operations continued as essential activities; casinos and live events operated subject to local restrictions. The filing does not provide formal revenue or earnings guidance. The stated 2021 capital expenditure expectation is approximately U.S.$1,170 million.
On April 13, 2021, after year-end, Televisa agreed to contribute most of its Content business to UHI for U.S.$4.5 billion: U.S.$3.0 billion cash and U.S.$1.5 billion in UHI common and preferred shares, plus commercial arrangements valued at approximately U.S.$300 million. The transaction was expected to close in 2021, subject to regulatory, shareholder and other conditions. Televisa expected its UHI stake to rise from approximately 36% to approximately 45%; the transaction was not completed as of the filing date. Management anticipated higher cash and associate income, partly offset by lower consolidated operating income after the Content business transfer.
- Currency and funding: Revenues are primarily peso-denominated, while significant debt and costs are U.S.-dollar-denominated. The reported net U.S.-dollar monetary liability position was approximately U.S.$3.99 billion at year-end 2020. Peso depreciation, interest rates or restricted currency conversion could affect earnings and debt service.
- Regulatory and competitive: The IFT found Televisa had substantial power in 35 restricted-TV and audio markets in November 2020; Televisa challenged the ruling. Broadcast preponderance obligations, competition, concession renewals and possible fines could affect operations and pricing.
- Legal and tax matters: A U.S. securities class action alleging misleading disclosures, including allegations related to FIFA and internal controls, remained pending; the company said it would defend itself and denied the allegations. Tax audits and assessments, including matters involving Ps.682 million, Ps.1,334 million and Ps.290 million, remained subject to proceedings. Management said these matters did not require provisions at year-end and could not predict outcomes.
- Other exposures: Satellite interruption, cyber incidents, UHI’s results and private-share valuation, and the disputed Live Nation termination of the proposed OCEN sale are identified as risks. The independent auditor issued unqualified opinions on the IFRS financial statements and the effectiveness of internal control over financial reporting.
Most important facts for investors to verify
- Track the 2021 Televisa–UHI transaction’s approvals, closing, final consideration, retained ownership and post-transaction earnings effects.
- Assess the UHI investment’s valuation and the drivers of the Ps.5,455 million share impairment and large warrant-related comprehensive loss.
- Monitor advertising recovery, segment trends and the durability of Cable and Sky subscriber growth against continued pandemic and competitive pressures.
- Review debt maturities, interest costs, available revolving liquidity, capital expenditure funding and sensitivity to peso depreciation.
- Follow the IFT substantial-power challenge, tax proceedings, securities litigation and the Live Nation–OCEN dispute for potential financial or operational consequences.