Grupo Televisa SAB (TV) 2022 Q1 法說會逐字稿

Good morning, everyone, and welcome to Grupo Televisa's First 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.

Thank you, Raul. Good morning, everyone, and thank you for joining us. With me today are Pepe Antonio Gonzalez, CEO of Cable; Luis Malvido, CEO of Sky; and Carlos Phillips, our CFO at Grupo Televisa.

While the macroeconomic environment remains volatile, we are confident that we will deliver solid operating performance at both Grupo Televisa and TelevisaUnivision throughout the year. Mexico's GDP growth is expected to slow to around 2% in 2022 from 4.8% last year. In addition, high inflation has proved more persistent than initially expected as headline inflation remains above 7%. This, coupled with the expected monetary positive tightening effect, will keep pushing Bank of Mexico towards further policy rate increases throughout the year.

On a more positive note, consumption has been recovering since last year due to record high remittances of around $52 billion, an increase of approximately 27% year-on-year, and that has remained strong in January and February growing by about 20%. Also, after more than 2 years, social distancing measures related to COVID-19 continue to decline, allowing us to operate under normal circumstances. Despite the expected economic slowdown, we are confident that we will deliver strong revenue growth at TelevisaUnivision and improving operating performance at Grupo Televisa throughout the year.

Still, it is important to highlight that we expect growth in 2022 to be back-end loaded, both at TelevisaUnivision and Grupo Televisa, driven by several factors, such as the midterm elections in the United States, increased advertising spending in Mexico due to the Qatar World Cup in the fourth quarter, the monetization of the World Cup rights, solid RGU net adds in the remainder of the year at Cable and price increases at Sky.

Before reviewing Grupo Televisa's operating and financial performance, let me walk you through TelevisaUnivision's strong first quarter results released yesterday morning after having successfully closed a transformative merger by the end of January. Building on our 2021 success and incredible momentum going into 2022, TelevisaUnivision delivered an outstanding inaugural quarter. Assuming the merger was effective for the full year -- for the full quarter, I'm sorry, TelevisaUnivision's performance revenue reached $1 billion, representing year-on-year growth of 12%, while EBITDA reached almost $400 million, equivalent to a year-on-year increase of 7%.

Revenue growth at TelevisaUnivision was mostly driven by strong increases in consolidated advertising subscription and licensing revenue of 12% and 14%, respectively. Advertising revenue in Mexico increased at a solid pace during the first quarter, and we expect growth to accelerate by the end of the year due to the World Cup transmission. EBITDA growth was softer than that of revenue, mostly due to our investments in our streaming business that were fully funded by the strong growth in sales.

Moving on to the performance of our content. In the U.S., Univision's primetime audiences increased by 9% year-on-year during the first quarter of 2022, outperforming all other U.S. networks, regardless of language. This contributed to take our share of primetime audiences in the United States up to 6.5% during the first quarter from 5.5% during the same period of last year. Moreover, our share of Spanish language primetime viewing rose 430 basis points to 63.6%.

In Mexico, our free-to-air television primetime audiences increased by 13% year-on-year, beating our closest competitor in Mexico by 115%. In the first quarter, primetime audiences at our flagship channel, Las Estrellas, increased by 25% year-on-year, and the Top 20 programs on Mexico broadcast television were produced and transmitted by us. Also, we broadcast the Top 10 most watched soccer matches for the quarter in Mexico.

While our linear business continues to deliver great success and outperformed the market, we could not be more excited about our streaming business and the enormous progress we have made over the last 12 months. April 1st marked another milestone for our streaming business with the launch of our completely redesigned and enhanced AVOD service, ViX, featuring the world's most extensive Spanish language visual offering with over 100 channels, video-on-demand and over 40,000 hours of content in first year, including our classic novela, Megacable, news content, soccer and new and exclusive original products.

We've always been viewed as a streaming product, a natural complement to our linear business and an opportunity to broaden our reach across the Spanish language entertainment space. Streaming allows us to optimize across the entire audience spectrum and provide multiple entry points for viewing beyond that of our traditional linear business.

Our underlying economic model is materially different than the English language segment, particularly as it pertains to customer acquisition and content investments. Across the U.S. and Mexico, we have an unrivaled reach of more than 100 million Spanish speakers every day. This provides an enormous marketing platform for our streaming business that is efficient, cost-effective and can't be replicated. Our content model is equally differentiated. Beyond having the largest Spanish library in the world, we have the content production engine in-house to drive our streaming business, which we can scale across at most 600 million Spanish speakers. We are consistently recalibrating our content model to strike the optimal balance between appointment-viewing such as our industry-leading soccer offering and our demand-driven content. Combined, these economic linchpins provide a clear and accelerated path to value creation.

While ViX is new for us, streaming is not. TelevisaUnivision launched its legacy streaming services, Prende and Blim (inaudible) last year. This was essentially a great beta test for ViX. We learned a lot from it. We learned how to sell ads on streaming and how to program, all of which have been incorporated into ViX launch. We also learned a lot about the underlying technology infrastructure. Our new platform built with our strategic partner on Google Cloud launched successfully. Moreover, we were able to migrate our legacy users into ViX, making the beta test worthwhile in many ways.

On the Cable side, we are seeing substantial success with our streaming ad sales efforts on onboarding new strategies, only advertising, while selling ViX into our linear ad buyers. Total advertisers on the platform increased by 38% to 130, while 50% of linear advertisers is making buys along with strong participation from upfront buyers last year. Pricing trends remained equally impressive with ViX generating significant premiums to the linear market and sellout rates above 90%. The month of March delivered our best ad sales performance yet, up almost 30%, against the next highest month as we continue to gain traction in the marketplace and look to further accelerate with the launch of ViX. We look forward to continuing to capture the momentum throughout the rest of 2022 and as our upfront approaches in May.

Our learnings through Prende and ViX has served us well, and we gear up to launch our AVOD service, ViX Plus, in the second half of this year. We've been investing in the breadth of new content that is incredibly compelling, and we are really excited about the prospects of ViX Plus. We have long-standing relationships with the distributors across the United States and Mexico that will allow us to bundle ViX Plus across cable and wireless providers. So our streaming portfolio will be fully complete and very well positioned to capture this massive global streaming opportunity.

Overall, it's been a terrific quarter to kick off the year, and we are just getting started. We couldn't be more excited from the coming quarters with the combined team at TelevisaUnivision, who have been working together and tirelessly from day 1 of our merger to deliver this level of outstanding performance and positioning us for further success going forward.

As we said before, we are uniquely prepared to maximize the opportunity we have ahead of us, and we have already started to deliver on it. It's an opportunity that comes from tapping into a big, growing audience that's hitting its stride and driving progress. Our initiatives -- our initial results look like nothing else in media. We've become the fastest-growing large media company, and there is no better evidence of the power of our combined team and assets than our newly largest global streaming platform, ViX.

First quarter results at TelevisaUnivision put us on track to achieve similar pro forma revenue growth to that of 2021 with 15% year-over-year growth and delivered flat EBITDA of around $1.65 billion, given the investments required to launch and promote our global streaming platform, again, ViX.

Moving on to Grupo Televisa's pro forma consolidated financial results for the quarter. Consolidated revenue reached MXN18.6 billion, representing year-on-year growth of 3.3%, while operating segment income reached MXN7.2 billion, equivalent to a year-on-year increase of 3.4%. Revenue growth at our MSO, multiple service operators -- operations in Cable and our Other Businesses segment was partially offset by declining revenue on our enterprise operations in Cable and Sky. But now -- and I feel confident that consolidated revenue growth will accelerate throughout the year.

At Cable, RGU net adds accelerated for the second quarter in a row, and we expect that to remain solid over the coming quarters. This should continue to gradually improve revenue growth at our MSO operations. Furthermore, over the coming quarters, we expect to sign new contracts on our enterprise operations, allowing us to keep this revenue flat to slightly up for the full year.

At Sky, price increases implemented in the month of March and the phaseout of relatively strong recharge rates on our prepaid packages over the first 8 months of 2021 should allow us to gradually reduce the pace of revenue decline, potentially stabilizing this revenue by the end of the year.

Now let me turn the call over to Pepe Antonio, our CEO at Cable.

Thank you very much, Alfonso. During the first quarter of 2022, our Cable segment saw a continuation of important turnaround in operating metrics experienced in the fourth quarter of 2021. We obtained a strong performance foothold for 2 quarters in a row now. In terms of net adds, the first quarter added 319,006 revenue-generating units and 17,000 mobile RGUs. This was the strongest quarter since the peak of the pandemic in the second and third quarters of 2020, and the highest since 2018, excluding the 2 quarters of the pandemic. The quarter closed was 14.9 million total RGUs, 14.76, and 170,000 mobile RGUs. The result was largely driven by the realignment of some of our flagship products, the resumption of our customer retention programs as well as the home pass expansion plan we implemented last year. And the financial segments keep growing due to higher level of sales, stable churn and improved product mix.

In video, we confirm the turnaround experienced in the fourth quarter of 2021. We added 89,000 video RGU units during the quarter because of our improved product mix from the products we aligned. Today, 77% of sales are triple-play. In broadband, we added 83,000 RGUs for a total of 5.7 million RGUs. Broadband continues to be the highest margin service through our continuously attractive product offering.

Now to the financial metrics. During the first quarter, our residential segment grew 3.4%, while our enterprise segment, which accounts for 13% of total Cable revenue, declined by 10.1%, mainly due to tough comps and because in 2021, we concluded the development of a sizable project called Red Jalisco. As a reminder, Red Jalisco was a project developed for the Government of the State of Jalisco to build a fiber network owned by the state. Excluding Red Jalisco, our enterprise segment revenue grew by 17.4%. Nevertheless, we are looking for new projects to engage.

Overall, our Cable segment delivered year-on-year revenue growth of 1.1%, while operating segment income increased 3%. Again, and I want to emphasize this part, if we were to exclude Red Jalisco, revenue increased 3.5% and operating segment would have increased 6%. Moreover, we expect the strong operating metrics result to translate into stronger financial results later in the year.

Before turning the call back to Alfonso, let me say that we are confident that the expansion to selected locations last year should allow us to keep delivering solid RGU net adds over the coming quarters.

Thank you, Pepe Antonio, great results. Now let me turn the call over to Luis Malvido, who has been at the job as CEO of Sky for 108 days.

Okay. Thank you very much, Alfonso. Well, as Alfonso said, I've been in the job for a few tens of days now. And it is my first quarter as CEO of Sky and also my sixth role as CEO in 5 countries throughout 25 years in Latin America and in Europe. I landed in Mexico on the [30th] of January and I was pleasantly surprised to discover a company with many strengths. The strong brand, we all know around the globe, the largest probably, scattered throughout the vast territory of Mexico and Central America, a great portfolio of products, including the most affordable and leading prepay entertainment platform and an extensive library of exclusive content. Also a massive and very professional sales force and a highly motivated and committed team. Happy with my findings, during this first quarter, we started to build on our strength.

We refreshed the leading team to be ready to face any challenges ahead. We are in the process of restructuring our sales channels compensations to better align their incentives with our incentives. We are also launching a new entry-level postpaid package with which we expect to improve the quality of our sales. In addition, during the first quarter, we secured the exclusive rights of several relevant soccer properties, including exclusive rights for the Spanish La Liga and Copa del Rey, exclusive rights for all UEFA national team's tournaments and exclusive rights for the Bundesliga. Sky also have the most comprehensive coverage of the FIFA World Cup Qatar 2022 at the end of the year, including a large number of exclusive games and features. These rights will further enhance Sky's position as the ultimate sports provider in Mexico.

During the first quarter, we also launched several promotions and commercial initiatives for both prepaid and postpaid products that allow us to revert the negative trend in video gross adds. On the prepaid side, the initiative with the biggest impact was the elimination of the subscription fee in January. On postpaid, also in January, we launched an attractive promotion and we are developing a new entry-level single and double-play [8P] product, Sky Silver that will be launched later this quarter.

In addition, on March 1st, we launched a 14-day recharge package and shifted all our advertising strategy towards increasing recharges and enhancing customers' retention. On the other hand, we increased prices in prepaid to keep up with inflation. So far, customers' adoption of this price increase has been positive. As a result, we reversed the negative trend in prepaid top line, and we expect prepaid revenues to increase in the following quarters.

In broadband, we've seen a deceleration in additions due to several factors. First, a delay in coverage expansion of Altan. Second, signals of network saturation in certain areas, both factors due to Altan's financial struggles. And third, a price increase in broadband that we implemented in February, pass-through of a wholesale price increase imposed by Altan. As a result, we lost 8,000 broadband RGUs during the quarter, reaching a total rate of 719,000.

Regarding our mobile service, we are working on improving our products and plans to relaunch the service later in the year with valuable exclusive benefits for our video customers will increase stickiness and also lower acquisition costs. On the cancellation side, we experienced an increase in the third quarter as a result of pandemic activation and low-quality acquisitions during the last year's second half. Altogether we lost 135,000 RGUs during the quarter.

In terms of our financial performance compared to the same quarter last year, revenue declined 6.2%, driven primarily by lower prepaid recharge due to the steep decline in promotion primarily related to the pandemic. As a direct result, operating segment income fell by 13.6% year-on-year due to the referred lower revenues.

Looking ahead, we expect second quarter revenues to increase on a sequential basis, driven primarily by -- I mentioned earlier, by higher revenues in our prepaid products.

And before turning back to Alfonso, I would like to add that we are developing a long-term plan to improve our product portfolio, customer experience and selling capabilities that will allow Sky to better protect its customer base and compete in the new highly-competitive telecom and media landscape. We look forward to sharing these plans with you over the coming quarters.

Thank you, Luis. To wrap up, Bernardo and I are very optimistic about our growth prospects for 2022. At TelevisaUnivision, the very strong upfront already announced both in Mexico and in the United States, new licensing contracts with virtual MVPDs in the United States, also the Qatar World Cup and the successful launch of our global streaming platform, should allow us to deliver double-digit revenue growth for the second consecutive year.

And at Grupo Televisa, the ongoing strong RGU net adds momentum should contribute to gradually accelerate revenue growth over the coming quarters.

Now, we are ready to take your questions. Raul, could you please provide the instructions?

(Operator Instructions) Your first question is from the line of David Joyce from Barclays.

Two questions, please. First for Luis. I appreciate all the actions that you've made so far in adjusting packages and pricing and that you've got more plans that are going to be available in the future. But for now, could you help us understand where the loss of subscribers is coming from? Is it more from something seasonal? Or are they going to other satellite? Or are they going to the cable in particular to other Televisa entities? Just I was wondering where -- what the trends are on the subscribers there?

And then secondly, on Cable, for Pepe, where you've been building out into new areas and upgrading, what has the ARPU experience been like versus your legacy subscriber set?

Thank you, David, for your questions. So I'll ask Luis to answer the first one and Pepe Antonio can take the second one.

Yes. Thank you for the question. Our gross loss are coming both from prepaid and postpaid. Of course, prepaid represents over 85% of our gross adds in video. And this is typically the biggest figure in our growth. We are declining in acquisition -- in broadband acquisitions because of the reason I already explained. Of course, not having new areas where to sell our service in broadband has been a challenge for us. And this is, as I already explained, coming from the lack of investment in Altan. And we are positive on Altan to solve their financial troubles and start investing again in the second half of the year. This is something we need to prove to be true. I said, most of our gross adds are coming from prepaid, and we're working heavily in improving the quality of their sales in order to stop the revolving door that is implying for us -- big acquisition costs are implied around 22% of our revenues every year. And this is a huge opportunity for us to save money in acquisition and put that money into shareholders' value or different kind of transformation in the company.

Thanks, Luis and I would add that as to the traditional subscribers that Sky has, of course, those are challenged by triple-play offerings that are mainly, in essence, by cable and telco providers. And as to the lower-tier package, which is measured basically in terms of recharges every month or half a month, that depends highly on the economy. So that is -- I mean the larger package, the day to day offering is the most cost-efficient entertainment offering that exists in Mexico for the Mexican family. So that is being challenged basically in terms of the recharges by the economy itself.

And to your second question, Pepe Antonio can take it.

Thank you. Thank you very much for your question, David. The ARPU is about the same to slightly higher than in the rest of the country. And let me try to explain why. In the new areas where we have expanded, we're expanding with fiber to the home. So the service we are providing, it requires quality. So we are able to slightly increase it. At the same time, these are very competitive markets we're entering. So our pricing and our products have to remain very competitive so we can increase our presence there. So the answer to your question is, it's very similar to the rest of the country with the margin upwards.

Your next question is from the line of Marcelo Santos from J.P. Morgan.

The first question is, if you could please comment on the competitive environment in Mexican broadband and if that is putting pressure on your ARPUs. And the second question, would -- if you could -- does the weak results on the Netflix, do they impact management thinking on the SVOD opportunity?

Thank you, Marcelo, for your question. Of course, there is a competitive environment in cable in Mexico, and I'll ask Pepe Antonio to expand on this. But what we can say is that the capital investments that we made in the previous years have us -- putting us in a very competitive position in terms of having a great network, a reliable network, very good service and good products, good packages. Pepe Antonio and the teams have been working on the packages and the pricing. So we believe that, of course, it is competitive, but we're seeing the different products and different pricing depending on the region, depending on competitiveness in each of those places. We believe that we're gaining traction. The net adds that we experienced in this quarter were great. We feel comfortable in saying that this phase will continue. So even though there's, I mean, of course, a lot of competition, we feel comfortable in saying that. And I'll ask Pepe Antonio to expand on that.

Thank you, Alfonso. Well, I think as Alfonso said, I mean, we feel very comfortable that [GTH] has invested heavily in the last few years. So today, we have a reliable -- very reliable network. Our customer experience is very well rated. And the realignment of our products in the last few months have been very competitive. The market seems, as had been said, relatively gaining competitiveness, but we're not seeing any impact on our ARPUs. We are well placed, and we have 2 good results in a row, 2 good quarter's results in a row, and we expect this level to be sustainable, somewhere in between the last quarter and this one, closer to this one. So I think things are looking good, and we feel comfortable with the position we are in.

And Marcelo, as to your second question about Netflix and what has happened in that sector, I guess what has happened to Netflix in the quarter only validates what we're doing at ViX at TelevisaUnivision. What we can say and as we have announced, we're going to have hybrid products, which is basically going to include an AVOD product, ViX, and a subscription product ViX Plus. This hybrid product is going to include media channels and it's going to include sports, basically soccer and more specifically, Mexican soccer, targeting the U.S. Hispanic market in Mexico. So what we can see transferring to ViX that we only launched and ViX Plus, which is the subscription service, which we will launch in the second half of the year.

We think Netflix with 222 million subscribers worldwide is in a more mature phase. So the markets that we're starting ViX still have low penetration of OTT services. And we're talking about our niche, the Spanish-speaking world. The addressable market that we have been mentioning is 600 million people around the world with a combined GDP of $7 trillion. But more importantly, half of that GDP, $3.5 trillion is the U.S. Hispanic market and Mexico. So we're going to focus exclusively on the Spanish-speaking world, which, as I mentioned, is not penetrated with these type of services. And we have many advantages in doing that.

Talking about Cable selling basically advertising on that platform, I can say that we have the largest advertising sales force targeting the Spanish language speaking content market, both in Mexico and the United States, which accounts for over 50% of our total addressable market. So that is to say that we have been selling advertising for 60 years. So -- and we have the best teams, both in Mexico and in the U.S. Moreover, we have the largest Spanish language content factory in the world, which is based in Mexico City and where we can produce premium content in a cost-effective way. So -- and I have mentioned, we have the largest library of Spanish-speaking content in the world with 300,000 hours. We have assembled the greatest IT experience in the world. We have major sporting events for -- to target our core market.

So we have put together all that and we believe that our target is going to be that niche, the Spanish-speaking world. Netflix is driving in all the markets in 180 countries, all languages, et cetera. If Netflix launches and a product is going to distract them, and it will take some time to put together the sales forces, et cetera. So I think we have an advantage here, and we're going to focus 100% of our attention, laser-focused on the Spanish language market.

So I think this validates what we're doing, as I mentioned, having a hybrid platform with an AVOD and SVOD type of distribution system. And we feel confident in selling advertising for the AVOD platform and selling subscriptions in all our markets on ViX Plus.

Your next question is from the line of Leonardo Olmos from UBS.

My question is, if you could support us to understand TelevisaUnivision margins. If you could prefer to talk only about the Mexican side, but how do you expect margins, how these margins performed like in 1Q '22 (inaudible) bit slowed. And how do you expect it to perform in the remaining 2022? And moreover, what will be normalized levels of margins for both Mexican and U.S. operations of TelevisaUnivision?

Yes. Thank you, Leonardo, for your question. We're not talking anymore about margins of each market. What I can tell you is that margins at TelevisaUnivision as a whole should be in line with 2021. So the margin should be around 40%. Of course, we have EBITDA losses because of our investments in the streaming business. But the building of this combination of TelevisaUnivision is that our traditional business continues to grow double-digits and continues to basically generate this EBITDA and this margins, and that allows us to finance our investments in streaming, basically with that EBITDA that we're generating. So we expect double-digit revenue growth because of what the upfront sales in Mexico and in the United States.

Just keep in mind, and I can mention again, that we had a historic upfront in both the United States and Mexico. In Mexico, we grew our upfront by 14% versus 2021, which is a historical number, also in terms of the number of clients that joined the upfront plan. So we can expect double-digit revenue growth. However, for TelevisaUnivision as a whole, and because of our investments in the streaming platforms, we expect EBITDA to be flat to slightly higher than 2021. In the medium term, our streaming platforms have achieved low-to-mid-30s margin.

So, just a quick follow up. You mentioned around 40% margins in TelevisaUnivision kind of flattish versus '21. But now in the end, you said mid-30s. I'm not sure how to look at your EBITDA.

No. I mean that is for traditional media and I mean -- and the other one's for streaming. But basically we expect TelevisaUnivision as a whole to have a consolidated margin of around 40%.

Your next question is from the line of Soomit Datta from New Street Research.

Two or three quick questions. Sorry, just to go back to the content profitability, just got a bit lost on some of those numbers. Can you -- do you mind confirming just what the pro forma full year '21 EBITDA was for TelevisaUnivision, please? And then again, I was a little bit confused. I'm not sure whether the EBITDA is projected to be flat in full year '22 or whether indeed the margin is expected to be flat. And obviously, given the growth you talked about double-digit, they're not quite consistent. Sorry, do you mind just qualifying and clarifying that, please?

Thanks so much. Yes, the consolidated pro forma EBITDA for TelevisaUnivision in 2021 was $1.65 billion and we believe that this EBITDA at TelevisaUnivision will be flat in 2022 even after all the investments that we're making in our streaming platform, both on developing the technology and the product itself and the investments in content for those platforms.

Okay. That's great. Secondly, just on the ViX launch, which I realized hasn't been for very long -- has been in the market for almost a month. Can you give any sense as to the number of users that, that business was born with? And what sort of trends are you seeing in the brief period of time it's been in the market? Again, any sort of interesting developments in the U.S. versus Mexico versus the rest of Latin America, which you've seen so far would be super interesting. I don't suppose we'll get any steer on where that kind of usage number could go, but anything you could give in terms of outlook would be super helpful as well.

Yes. Well, let me give you some color. We're not disclosing yet the specific numbers. However, I can tell you that we're very happy with the progress we're seeing. Of course, these are early stages. But in terms of unique users of the platform, both daily and monthly, we're very happy with the progress in the U.S., in Mexico and the Latin American rollout. So it is working. The content is working. The platform is working. We're very happy with what we're seeing. Basically, that's what I can tell you, Soomit. Also in terms of because of the content that we have, the channels that we have included and all the video and content offering that we're having, the engagement continues to grow day after day. So basically, a little color. We had the draw of the Qatar World Cup, a special event on ViX and it was extremely successful and that helped us grow the user base.

Your last question is from the line of Matthew Harrigan from Benchmark.

I'm sure you noticed a few hours ago that Comcast and Charter formed a streaming initiative in the U.S., really violating the tenet of not going outside your service territory. It feels like it's more of a Roku 4K alternative than anything else. But are you likely to provide programming for that notwithstanding Comcast's ownership of Telemundo? And then secondly, with all the dislocations in the equity markets right now, you're one of the Top 5 DC companies in Mexico. Does that really present opportunities for you or do you think that, given everything, you're likely to be pretty constrained in some of the -- in trying to replicate some of the past successful investments you've made on the venture side in Mexico?

Thank you, Matthew. As to your first question, of course, I mean, we will expand our distribution of the ViX service with anyone that is interested in distributing ViX. As you have seen, of course, the cable companies in the United States have become aggregators of streaming services and of content. So anybody that is interested in reaching a distribution deal with us in terms of distributing ViX is welcome. And can you repeat your second question, please? I didn't hear it that clearly.

Sure. Clearly, the capital markets are very out of whack right now and you've been very active in the DC market in Mexico and even in the U.S., I guess, to a certain extent. How do you feel about the possibilities now that everyone is so confused in the economy and maybe capital is not as readily available from partners that you've worked with in the past, whether it be Winblad or someone else?

Thank you, Matthew. I guess you're referring to the venture capital line that we started in late 2019. That has been really successful for us and basically that model implies exchanging the available advertising time slots to an equity stake and basically this is with high growth startups or B2C companies that have not had the opportunity to advertise on free-to-air television and our other distribution platforms and advertising platforms. So, in essence, what we're doing is, select companies based on their potential, all these have been in early stages of development, and usually companies that need campaigns to position their brands and to position their products. So there we're taking advantage of our inventory -- unsold inventory in terms of free-to-air television and other advertising platforms. So that has allowed these companies to position their brands as top of mind. And basically we had great success stories using this mechanism.

So we made investments in Kavak, in Rappi, in Clip, in Uala among others, and we did this hand-in-hand with SoftBank and General Atlantic as partners. So in essence, we have closed 8 investments in 7 companies and 4 of those have become unicorns. So we're very happy with what we're seeing. I have talked to each and every one of the founders of the companies and they're extremely happy and excited about advertising on over-the-air television. To tell you the truth, when they started, most of them did not foresee the effect that advertising and over-the-air television was going to cause in terms of their brand, brand positioning and sale of their products. But they have come back -- these companies have come back to expand their advertising with us. So we have developed new clients and in the meantime we have also invested in the equity of these companies that have become great companies. So we're planning to continue to do this as part of our venture capital line and this will continue to grow. I think it's a great opportunity for us both in Mexico and in the United States now through Univision.

That concludes our Q&A for today. Presenters, please go ahead.

Thank you very much for participating in our call and we'll be ready to take any additional questions by phone. Please give any of us a call if you want to have more information about anything that you're interested in. So thank you very much.

This concludes today's conference call. Thank you for attending. You may now disconnect.