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Grupo Televisa SAB (TV) Q2 2021 Earnings Call Transcript | The Motley Fool

Grupo Televisa SAB (NYSE:TV)
Q2 2021 Earnings Call
Jul 12, 2021, 9:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning everyone and welcome to Grupo Televisa’s Second Quarter 2021 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 will now turn the call over to Mr. Alfonso de Angoitia, Co-Chief Executive Officer of Grupo Televisa. Please go ahead, sir.

Alfonso de Angoitia NoriegaCo-Chief Executive Officer

Thank you, Carmencita. Good morning, everyone, and thank you for joining us. With me today are Antonio Gonzalez, CEO of Cable; Alex Penna, CEO of Sky; Patricio Wills, Head of Televisa Studios; and Carlos Ferreiro and Antonio Lara, Corporate Vice Presidents of Finance and Administration respectively.

Let me start by saying that Mexico’s economic activity recovered strongly in the months of April and May, expanding by more than 20% year-on-year, largely due to robust growth in manufacturing and the services sectors. Apparently, the better-than-expected momentum experienced at the end of Q1 was carried over into the second quarter, aided by declining COVID-19 cases, rebounding activity in the US and improved sentiment.

The economic recovery is expected to continue, supported by further easing of social distancing measures with vaccination of the population gradually growing over the next few quarters. Mexico will also benefit from positive spillovers related to robust US GDP and income growth, potentially contributing to accelerate activities related to tourism, exports and flow of remittances, stronger terms of trades and the lag effect of monetary easing.

The Mexican economy was hit hard by the COVID-19 pandemic last year, reducing GDP by 8.5%. However, in 2021, GDP is expected to grow at around 6% after the latest upward revisions, recouping most of what the Mexican economy lost in 2020.

Our Content business, which has operated with limited interruptions throughout the pandemic, has been the main beneficiary of the robust economic rebound. The private sector has remained quite active advertising their products and services, as has been the case over the last couple of quarters.

While the reopening has had a positive impact in economic activity, the unemployment rate deteriorated in April to 4.7% compared to 3.9% in March. So we have been cautious with promotions both at Cable and Sky. Still, with GDP recovering, job creation will accelerate relatively quickly, making the recent increase in unemployment to be short-lived, evidenced by the unemployment rate in May released a few days ago, which already declined to 4%.

Moving on to our financial results for the quarter. Consolidated revenue reached MXN24.8 billion, representing a year-on-year growth of 10.5%, while operating segment income reached MXN10.1 billion, equivalent to a year-on-year growth of 17%. Bernardo and I are pleased that our portfolio of assets delivered remarkable growth in the second quarter. This gives us confidence that our operating performance will remain solid for the remainder of 2021 as the Mexican economy keeps strengthening.

Now, turning to the second quarter financial results. In our Content division, advertising revenue increased by 32.1%, due both easy comps and a strong rebound in volumes from the private sector where businesses are looking to position their products and services in front of consumers to take advantage of the robust economic recovery.

Televisa’s high audiences and wide reach on free-to-air television position us very well to help our clients achieve their goals. Some social distancing measures remained in place during most of the second quarter, but our advertising clients are better prepared to operate in this environment than they were a year ago. And they have been more active since the end of 2020.

Private sector advertising revenues were very strong growing more than 35% year-on-year. On the other hand, government advertising revenues were weak, driven by ongoing austerity initiatives and as political advertising is not allowed ahead of the midterm elections. As you know, government advertising has been shrinking over the last couple of years, so today its share of total is already very low and will continue to be very low.

Royalties from Univision of $100.6 million were 26.2% higher year-on-year, supported by easy comps, the strong economic recovery in the United States and the transmission of major soccer tournaments. Univision’s strong operating performance was also driven by several initiatives implemented by management, including a revamp of the sales team and the optimization of advertising inventory. We expect Univision’s solid economic and solid revenue growth to continue, given the historically strong preliminary results of this year’s upfront.

All-in, during the quarter, Content revenue increased by 16.6%, while operating segment income grew by 23.5%. Content margin expanded by 180 basis points to 32.7% due to the strong revenue growth, despite additional opex associated with the coverage of the mid-term elections, more production of content, including sporting rights related to the Mexican Soccer League, the CONCACAF Nations League and the Pre-Olympics Sub-23.

In 2020, the COVID-19 lockdowns led us to have less content production costs as we broadcasted several reruns and many sporting events were canceled. With advertising revenue up 30.2% year-on-year during the first half of 2021, stronger GDP growth outlook for the year and robust advertising consumption from the private sector, we feel confident that advertising revenue is likely to grow low double-digits for the full year — that’s low double-digits for the full year.

I will now turn it over to Patricio to discuss our progress in Content during the quarter.

Patricio WillsPresident, Televisa Studios

Thank you, Alfonso. During the second quarter, 16 of the top 20 programs of Mexico’s broadcast television were produced and transmitted by Televisa. This includes telenovelas, dramas, newscasts and comics. Televisa’s top three programs during the second quarter included Que le pasa a mi familia, La rosa de Guadalupe and Pequenos Gigantes, with audiences between 59% and 70% higher than the top-rated programs of our closest competitor.

Through the whole week, Televisa’s audience were 89% higher than those of the second largest broadcaster, while audiences at our flagship network Las Estrellas were 151% higher than those of our closest competitor. This shows that the audience gap with our closest competitor continues to increase compared to 74% and 112% higher audiences respectively during the first quarter, given the solid ratings of our programming.

During the second quarter, our main newscast has seen 5% higher audiences than the two newscasts on free-to-air TV combined. In addition, the best program of our second network, Channel 5, was among the top 20 with similar audiences than the average of the top four programs in the flagship channel of our main competitor. This demonstrates the strength of our content across all our channels.

During the second quarter, Univision’s audience share remained well above that our main Spanish language competitor. We believe this will keep helping us to benefit from the economic recovery in the US.

Alfonso de Angoitia NoriegaCo-Chief Executive Officer

Thank you, Patricio. Now, let me turn the call over to Antonio of Cable.

Jose Antonio Gonzalez AnayaChief Executive Officer, Cable

Thank you, Alfonso. For the second quarter of 2020, the Cable division posted year-on-year revenue growth of 5.9%, while operating segment income increased 7.8%. Our Residential segment revenue grew 6.4%. Our Enterprise segment, which accounts for around 15% of total Cable revenue, grew 4.3%, in part due to the timing of revenue recognition. The accumulated year-to-date revenue grew 9% year-on-year.

Our Cable business keeps growing with higher average revenue per user in new sales and a strong improvement in the product mix. We added almost 60,000 revenue generating units for a total of 14.3 million RGUs during the quarter. As anticipated, net additions have slowed returning to pre-pandemic levels.

Last year, demand for our services accelerated significantly because of the social distancing measures to prevent the spread of COVID-19. During 2019, we added 812,000 RGUs, while the same number for 2020 was 1.36 million. This basically means that RGU net adds in 2020 were an outlier.

Broadband continues to be the highest margin service. So we will continue to enhance the product offerings for this. We added 31,000 broadband RGUs during the quarter for a total of 5.6 million. For the ninth consecutive month, we have been number one in the Netflix ISP Speed Index, confirming our trustworthy and competitive service.

We continued to observe good results in voice RGUs. They surpassed the number of video RGUs since the fourth quarter of 2020. We have been very successful at upselling this service to our customers. We had 31,000 net video disconnections during the quarter, largely due to customers prioritizing broadband services and looking to reduce their monthly bills. We are strengthening our customer retention programs with particular attention to video. The fact that many subscribers kept our broadband services should help in retaining video subscribers in the future.

Mobile customers continue to grow. At the end of the quarter, we have 121,000 RGUs, an increase of 27,000 from last quarter. The trend continues to be strong.

Looking forward, on the one hand, as the economy bounces back, we expect demand for our services to grow with potential opportunities in our small and medium business segments. On the other hand, we don’t foresee the extraordinary surge in demand we experienced in 2020 because of the pandemic. Therefore, we are strengthening our sales promotion strategies and our customer retention programs to take advantage of these simultaneous effects.

Before turning the call back to Alfonso, let me say that our plan to grow 2 million homes-passed this year is on track. This will help us to gradually accelerate RGU net adds over the coming quarters and more evidently in 2022. As announced, levering on the Red Jalisco project with the state government, we successfully launched the Furukawa Play fiber-to-the-home service in the City of Guadalajara, the third largest city in Mexico. We are convinced that the expansion to selective location makes a lot of sense or easy. We have nationally recognized brands, exclusive content and high quality service with competitive offers.

Alfonso de Angoitia NoriegaCo-Chief Executive Officer

Thank you, PPT [Phonetic]. Now, let me turn the call over to Alex Penna, CEO of Sky.

Alexandre PennaChief Executive Officer, Sky

Thank you, Alfonso. At Sky, revenue increased by 1% year-on-year during the quarter, but the operating segment income fell by 3.4%, driven primarily by the amortization of certain sports events such as the UEFA Euro 2020 and the America’s Cup 2021.

Sky added 19,000 RGUs with 3,000 video subs during the quarter, mostly driven by bundles with our Blue Telecomm Broadband Service. On the broadband side, we added 9,000 RGUs during the quarter, reaching a total of 707,000 broadband RGUs. In the aggregate, including our MVNO service, which added 8,000 RGUs during the quarter, we closed with approximately a total of 8.2 million RGUs.

Our Sky Sports package is gaining traction but at a softer pace than initially expected. As the economy keeps strengthening and unemployment rate declines, we would expect the pace of adoption of this package to accelerate. As a reminder, this is a prepaid package, including exclusive sports content such as the Spanish League, the English Premier League and many other key sports properties as well as all free-to-air channels and Televisa’s suite of payTV channels.

Alfonso de Angoitia NoriegaCo-Chief Executive Officer

Thank you, Alex. Regarding capex, year-to-date, we have invested $555 million, of which $406 million have been invested in Cable. As discussed during the call of the first quarter, our capex target for 2021 includes $850 million in Cable or $200 million more than what we invested in 2020, given that we will pass 2 million homes with fiber, $250 million in Sky and $75 million in Content and other businesses.

Before we close, I want to share with you that on June 21st, we unveiled at Univision our plans for a comprehensive global streaming service, which includes both free ad supported and premium subscription-based options to launch in the United States and Latin America in 2022. The two-tier streaming service will offer a differentiated product proposition, vast content scope, expansive library and more Spanish language originals than any other streaming service.

Our streaming platform will be fueled by full access to Televisa’s deep content library and iconic IP as well as an ambitious slate of new originals produced by the leading creators in the Spanish speaking world. The best of the existing PrendeTV, VIX, Univision NOW and Blim services will be transitioned and unified into one global service and brand. Brand, pricing and specific launch date for the service will be announced following the close of the Televisa-Univision merger later this year.

The ad supported tier will be anchored by Univision’s current free Spanish language streaming service, PrendeTV, and Televisa’s Blim AVOD platform. This free-to-air will feature an upgraded broadcast quality content proposition, including select originals, major studio films, premium Spanish language titles and expanded live sports offering and a unique 24×7 news service. In total, the free-to-air will have over 100 linear channels and over 40,000 hours of wholly owned and acquired content that will also be offered in video-on-demand form.

The new premium subscription tier will feature more than 6,000 hours of Spanish language content with more than 30 original productions throughout 2022, featuring globally recognized and award-winning producers, creators and writers. We also announced that Univision already launched projects with Maria Duenas, Santiago Limon and Nobel Prize winner in literature, Mario Vargas Llosa, with many more to be announced

In the near future.

The vision for the premium SVOD offering is to bring audiences more originally produced Spanish language content than any other streaming service globally. To execute on this vision, Rodrigo Mazon has joined as EVP and General Manager of SVOD. With more than 10 years of experience in streaming, Mazon joins Univision from Netflix, where he most recently served as VP of Content. Rodrigo Mazon, a pioneer in premium Spanish language streaming and content, will be responsible for all elements of the SVOD service.

Mazon’s appointment follows the recent addition of Michael Cerda as Univision’s new EVP, Product, Engineering, Streaming. Cerda joined the company from Disney+, where he was Global Head of Product and oversees the product and engineering strategy for Univision’s streaming portfolio. Michael Cerda has built, scaled and globalized one of the most successful streaming products in the world. Additionally, Rafael Urbina, Univision’s EVP and GM, AVOD Streaming, who has extensive experience scaling large ad-supported video audiences, continues to lead PrendeTV and will lead the future free ad supported both in the United States and internationally.

Our global streaming platform will be home to the most renowned and celebrated creators in Spanish language media. As the first premium service significantly designed to serve the global Spanish language audience, Univision will provide the resources and creative freedom to develop in-language authentic world-class content. With the acquisition and integration of VIX, the launch of the current early version of PrendeTV and Blim, we now have an audience that is more than 8 million users worldwide and growing rapidly.

To wrap up, with consolidated revenue and operating segment income growing by 6.5% and 12.3% year-on-year respectively during the first half of 2021, Bernard and I feel confident that our operating performance for the full year will be quite solid. Moreover, the strong recovery that we expect to achieve in 2021 and the strategic initiatives implemented this year will position us well to achieve sustainable growth over the coming years.

Now, we are ready to take your questions. Carmencita, could you please provide with instructions for the Q&A?

Questions and Answers:

Operator

Certainly. [Operator Instructions] We have a question from the line of Marcelo Santos with JPMorgan. Please go ahead.

Marcelo SantosJPMorgan — Analyst

Hi. Good morning. Thanks for taking my question. I have two. The first is, if you could comment a bit on the new Blim that you launched, I think, in the end of May, if I’m not mistaken, is there any preliminary information that you could provide on how that’s going? I think it already follows the two-tiered system.

And the second one is regarding Sky’s broadband adds. There was a deceleration versus previous quarters. Is this mostly related to the reopening? Could you please comment on what to expect on the broadband of Sky? Thank you.

Alfonso de Angoitia NoriegaCo-Chief Executive Officer

Hi, Marcelo. Yes, I can comment on Blim. We did launch an AVOD tier within the platform. We did a soft launching of that platform during the quarter. And we’re seeing that the traction is excellent in terms of usage, in terms of stickiness. Just in this soft launch, we got to 300,000 users and we believe that we can achieve quite easily more than 2 million users by year’s end. We will be launching this officially in the next three weeks. And this will be a complement of our SVOD platform. Basically that SVOD platform is based on Televisa content. And there, we have gotten to 1.3 million subscribers. So, as I was saying, the stickiness, the usage is there. There are a lot of users that want to watch the Televisa content. And we’re happy using our library to be able to get to those usage levels and to those — and on the SVOD platform to get to those subscriber levels. As we mentioned, we will integrate that into a single platform within the Univision and Televisa merger to be launched in 2022.

And I’ll ask Alex to answer the second question.

Alexandre PennaChief Executive Officer, Sky

Hi, Marcelo. Yes. As you know, our broadband service, it’s being offered over the Altan network. And Altan has already defined what portion of the network is going to be dedicated to broadband and what part is going to go for the cellular service. And having said that, yes, in the second quarter, there has been a combination of lower sales of broadband service combined with slightly higher cancellation that resulted in the net adds that were lower than the first quarter of this year and much lower than the second quarter of last year. Therefore, what we — having said that, what we could expect going forward in terms of growth of broadband services, it’s going to be more in line with what we saw in the current quarter.

Marcelo SantosJPMorgan — Analyst

Thank you. Just a follow-up to understand the Altan. So, is Altan — do you mean that the capacity they have available for you is more limited because they want to give more capacity to mobile? Did I understand that correctly?

Alexandre PennaChief Executive Officer, Sky

That’s correct. They want to dedicate the bulk of their existing capacity over their network to the cellular service.

Marcelo SantosJPMorgan — Analyst

Okay. Understood. Thank you very much. Thank you both for the answers.

Alfonso de Angoitia NoriegaCo-Chief Executive Officer

Thank you, Marcelo.

Operator

Thank you. Our next question is from Luis Yance with Compass. Your line is open.

Luis YanceCompass Group — Analyst

Hi. Good morning. And thanks for taking the questions and congratulations on the quarter. Two questions on my side. Noticing the slowdown in subscriber growth on the Cable side, especially in video, how much of it has to do with the economy still kind of slowly recovering? How much it has to do with your cautiousness in terms of adding subs and avoiding new churn? And how much it has to do with waiting to get the homes passed in some of those new markets and I guess the lag between that and added subscriber growth? And how do we think about — in terms of timing, when do we expect an acceleration? What would be the biggest driver? So that will be my first question.

Then the second question, if you could give us an update in terms of the timing for the Univision merger, whether all the approvals are going kind of in line as expected and whether you expect to close kind of around the same time you were announcing before? And I guess, a related question to that would be, you’re going to have a much healthier balance sheet. And I guess, a lot of it based on what you’ve said, means that you’re probably going to be investing more. I mean, we saw it with the capex organically. But I wonder if buybacks come back into the question, M&A comes back into the question. So just thinking forward, as you streamline your operations, what’s next for Televisa once you have that stronger balance sheet? Thanks.

Alfonso de Angoitia NoriegaCo-Chief Executive Officer

Thank you, Luis. To your first question, of course, 2020, because of COVID and the effects of the pandemic and also because of the needs of connectivity, was an outlier. So, if you compare 2021 second quarter results to the second quarter of last year, of course, you see a slowdown. But I will ask Antonio to go into further details as to the results and what he’s seeing and then I’ll take your second question.

Jose Antonio Gonzalez AnayaChief Executive Officer, Cable

Thank you, Luis. I think there’s a couple of reflections. First, the first thing to keep in mind is that in the long run, the in-home connectivity demand is still huge in Mexico. Broadband penetration is still very low at around 60% of the homes. So, I think in the long run, we should expect the acceleration to resume positive [Phonetic] net adds in the medium-term.

Now as Alfonso said, in the short-term, there are two opposing effects. On the one hand, the demand for connectivity, video entertainment and broadband services are returning to the pre-pandemic levels. And this is stabilizing as people are returning to work and children are returning to school, etc. To give you an idea of how big this effect is, during 2019, there were 812,000 RGUs added, while the same number in 2020 was 1.36 million, the equivalent of 1.7 times.

The second effect, the second opposing effect, as you correctly mentioned in your question, is the economy is bouncing back vigorously. So we — GDP is expected to grow 6% in 2021and with it employment, disposable income and the demand for our services. We think this growth will be [uneven], so we expect stronger growth on our Enterprise segment, but we also expect demand on our Home segment to increase.

But as such, we are strengthening our sales promotion and customer retention programs to take advantage of these two simultaneous effects that are going on. We think that as growth accelerates and with the increase of 2 million home passes in the rest of the year, this should put us in a strong position to see net adds gradually stabilize in a sustainable path.

Alfonso de Angoitia NoriegaCo-Chief Executive Officer

And Luis, as to your second question, that has to do with the approval process of Televisa Content and Univision merger, we have made all the filings both in Mexico and in the United States. The approval is ongoing and is in due course. We expect it to conclude before year end, so we can close the merger before year-end. As you were saying, Televisa will continue to have a very solid balance sheet. And at this point, our capital allocation priorities are mainly focused on leverage reduction. And of course, we’ll always see growth opportunities at our core businesses.

Luis YanceCompass Group — Analyst

Great. Thanks a lot, guys, for the question — for the answers.

Alfonso de Angoitia NoriegaCo-Chief Executive Officer

Thank you.

Operator

Thank you. And our next question comes from Carlos Legarreta with GBM. Your line is open.

Carlos de LegarretaGBM — Analyst

Hi. Thank you. Good morning. It’s actually two questions on Cable, please. The first one is, if you could report on the advance on the cable expansion footprint by 2 million, are we seeing growth from this expansion already or will it be skewed toward the end of the year as you finish with the rollout? And the follow-up is, we understand the economics in the fiber connected household are more favorable. This is through higher ARPU, lower churn, lower maintenance capex, etc. But it would be really helpful to have your comments. And also, if you could disclose what percentage of your current homes passed is enabled with fiber and what is your target? Thank you.

Alfonso de Angoitia NoriegaCo-Chief Executive Officer

Thank you, Carlos, for your question. I’ll ask Antonio to take it.

Jose Antonio Gonzalez AnayaChief Executive Officer, Cable

Thank you, Carlos, for the question. As I said in the remarks, the construction is going on track. We have roughly just over 500,000 homes passed already. And this will continue for the rest of the year. So, we’ve already actually begun the sale process in Guadalajara, which is our initial city, just recently, just a couple of weeks ago.

As you rightly said, we think that by the end of the year, we will have around 25% of fiber-to-the-home and the rest of our network will remain cable. But as you know, we have made substantial investments in the last few years. The HFC network is very competitive. Most of it is 3.0 and it’s ready to be upgraded to DOCSIS 3.1, which allows us to increase the speed from 100 meg to 1 giga with the 3.1. So we’re very confident that we have a very competitive network, but all the new expansions we’re doing in fiber optics for the reasons you mentioned.

Alfonso de Angoitia NoriegaCo-Chief Executive Officer

In each area, we are expanding. And as Antonio had reported, of course, I mean, we look into different criteria and we’re very disciplined about it. So, it depends on a variety of factors going into these areas. It has to do with penetration in those areas with ARPUs and very specifically with profitability. So, we believe that where we are growing, we’ll be successful in achieving high penetration levels within a short period of time. So we’re very excited about that expansion.

Carlos de LegarretaGBM — Analyst

Thank you for your comment.

Operator

Thank you. [Operator Instructions] Our next question is from Matthew Harrigan with Benchmark. Your line is open.

Matthew HarriganBenchmark — Analyst

Thank you. I was curious, would you look at the share of connected TV advertising relative to traditional linear TV in the US? I think it’s about 15% to 18%, including Roku, Hulu, etc. I mean, clearly if you get that type of ratio in Mexico and in the Spanish market, in the US over time, you’re going to be in a great place given your linear TV advertising numbers. Can you talk about where that percentage would be in the Spanish market, in the US and Mexico right now? I assume it’s quite small because you’re addressing a neglected AVOD market with your product. Congratulations on your numbers. Thank you.

Alfonso de Angoitia NoriegaCo-Chief Executive Officer

Yeah. So, are you talking, Matthew, about share of advertising or — did I get that right?

Matthew HarriganBenchmark — Analyst

Yeah, I’m looking at the ratio of advertising dollars that say, Roku or Hulu and various other companies get in the US relative to the size of a linear traditional broadcast market is about 15%, I mean clearly growing very, very quickly. I assume it’s much lower than that in the Spanish language market both in the US and Mexico. But I think it highlights just what a huge opportunity you have on the AVOD side given that it’s neglected. So, I assume that, that percentage must be in the mid- to high single-digits right now. Can you comment on that subjectively even if you don’t have a lot of consultancy numbers or such? Thank you.

Alfonso de Angoitia NoriegaCo-Chief Executive Officer

Yeah. Yeah, you’re absolutely right, Matthew. And those numbers are even lower than the ones that you’re mentioning. Basically, the SVOD — I mean, the AVOD market doesn’t exist, so we are creating it as we speak. And you see the traction even with no advertising and with a soft launch, you can see that it’s — I mean, the appetite for the Televisa content on platforms like the one we are launching is huge.

If you look at the numbers of usage and people going to YouTube, for example, just to watch episodes of the Televisa programming, those audiences are going to be huge. So, we believe that there is a huge opportunity in the Spanish language from $3 billion to $4 billion by 2024. So it’s a huge market. It’s an untapped market. We’ll be able, of course, to offer targeted advertising and advertising in general to specific audiences. So, we believe that it is a huge untapped opportunity that will grow substantially.

As I mentioned, considering the stickiness of the content and the usage that we’re seeing in the Blim AVOD platform, we’re very excited about that. Also, what — we’re looking at PrendeTV in the United States, in terms of usage, in terms of stickiness. So we’re very excited about putting all these together and launching a single platform in 2022. We believe and we’re determined to make this a big success.

Matthew HarriganBenchmark — Analyst

Fantastic. Thank you so much for taking my question.

Operator

Thank you. Our next question is from Alejandro Gallostra with BBVA. Your line is open.

Alejandro GallostraBBVA — Analyst

Hi. Good morning, everyone. I have a couple of questions. First is regarding dividends. I believe that Televisa-Univision will not be paying dividends in the near-term. So, I’d like to know if this deal will change your dividend policy that has been in place for so many years of distributing MXN0.35 per share or you will finish it or cancel it altogether? That’s my first question.

The second question is related to the Televisa-Univision strategy. You’ve been saying that you expect the Televisa-Univision deal to close by the end of this year. And you also plan to launch your premium video streaming service early next year. But I believe that you are not budgeting for additional content expenses in 2021. So, I was wondering if it will have enough time to create a full catalog of exclusive premium content by the time you launch the new streaming platform or if you don’t increasingly include that exclusive premium content over time? So, any additional color on this will be appreciated. Thank you.

Alfonso de Angoitia NoriegaCo-Chief Executive Officer

Yeah. Thank you, Alejandro. As for our dividend policy, we will continue with the same one that we have had for many, many years. You have to take into consideration that we have high-growth and high capex business, which is easy, our cable platform. And we expect to continue investing in that platform as we go along and we grow the number of subscribers. So we are going to keep our dividend policy.

As to your second question, as I mentioned, we do expect to close the merger between Televisa Content and Univision by year end. And as to the premium content, what we have done is, we hit the road running. So that means that we are already producing the premium content that we will use for the launching of the platform in 2022. So, we are already doing that. And we want — of course, you will see a lot of those productions in year 2022. And of course, more to come. So we are already working on all of those.

Alejandro GallostraBBVA — Analyst

Okay, great. Thank you very much.

Operator

Thank you. And I’m not showing any further questions in the queue, sir.

Alfonso de Angoitia NoriegaCo-Chief Executive Officer

Well, thank you very much for participating in our call. If you have any additional questions, please call us. Thanks.

Operator

[Operator Closing Remarks]

Duration: 41 minutes

Call participants:

Alfonso de Angoitia NoriegaCo-Chief Executive Officer

Patricio WillsPresident, Televisa Studios

Jose Antonio Gonzalez AnayaChief Executive Officer, Cable

Alexandre PennaChief Executive Officer, Sky

Marcelo SantosJPMorgan — Analyst

Luis YanceCompass Group — Analyst

Carlos de LegarretaGBM — Analyst

Matthew HarriganBenchmark — Analyst

Alejandro GallostraBBVA — Analyst

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