Grupo Televisa, S.A.B. (TV) Q2 2019 Earnings Report, Transcript and Summary

Good morning, everyone, and welcome to Grupo Televisa's Second Quarter 2019 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, Elsa. Good morning, everyone, and thanks for joining us today. With me are the heads of our 2 key business segments: Salvi Folch, CEO of Cable; Patricio Wills, Head of Televisa Estudios. We will talk - I'll walk you through the highlights of our 2019 second quarter results. And following our opening remarks, we will answer all your questions. I will start by addressing the many factors that impacted our second quarter results, particularly as it relates to advertising sales. First, the economy continued to soften. For example, according to INEGI, Mexico's National Institute of Statistics, during April, industrial production contracted by 2.9% year-over-year. According to the Mexican Institute of Social Security, in May, formal job creation declined year-over-year by 88%. In June, also according to INEGI, sales of automobiles posted a year-over-year drop of 11.4%, following a similar drop in the prior month. Finally, according to Mexico's Central Bank, expectations for GDP growth this year have come down to 1% from twice that level just 1 year ago. Second, as we have said in the last 2 quarters, the new administration is implementing a number of public policy measures to make funds available for other initiatives. One of these measures is the reduction of its overall investment in advertising spending, which the government has said it will cut by about 50%. So far, the reduction during the first half of the year has been much steeper than 50%. As a reminder, sales to government entities represented 11% of total advertising sales last year. Third, during the second and third quarters last year, we transmitted the World Cup with the majority of the matches taking place in the second quarter. This benefited our Content business in 2 ways. First, during the second quarter, we have nonrecurring revenue of approximately MXN 1.7 billion that resulted from the licensing of the broadcast and digital rights of the World Cup in Latin America. Second, also, advertising sales were particularly strong with budgets concentrating heavily in the second quarter. These 2 effects made the comparison to second quarter last year very challenging. Also, during the second quarter last year, the transmission of the World Cup fueled strong growth in revenue-generating units, or RGUs, both Cable and Sky. In the particular case of Sky, it benefited from the gross additions and from advertising and special event sales. This fact makes the comparison to last year more difficult. Finally, this year, the Easter week holiday took place during the second quarter instead of the first quarter, like it did last year. That meant that fewer people watched television during this time and also meant that our clients reduced their advertising spend. As a result of all these factors, Content and Sky had a very difficult comparison to last year. On the other hand, and in spite of the difficult macroeconomic environment, Cable posted another strong quarter growing double digits in both revenue and operating segment income. Also, both Cable and Sky were able to resume growth in media customers, while growth in broadband customers remained strong. Because of all of the above, consolidated sales and operating segment income as reported fell by 9% and 7.7%, respectively. However, if you were to only exclude the licensing of the broadcast and digital rights of the World Cup in Latin America, operating segment income was relatively flat when compared to last year. And here, we're not talking about all other factors, such as any World Cup incremental advertising revenue last year or the decline in government advertising or the effect of Easter week. Now we will address each of our core businesses in detail. I will turn it over to Salvi for a discussion of our Cable business.

Thank you, Alfonso. During the second quarter, our Cable division continued to grow at a double-digit pace. Revenue expanded by close to 16% and operating segment income by 20%. As a result, the operating segment income margin reached 43.8%, the highest on record. We added 286,000 revenue-generating units, posting growth in video, voice and broadband services. We closed the quarter with 12.4 million RGUs, of which 4.6 million were broadband, 4.4 million were video and 3.4 million were voice RGUs. Our enterprise business, which accounted for 13% of Cable revenues this quarter, has now posted 4 consecutive quarters of growth, with revenues expanding at a rate of 8.7%. We continue to be optimistic about the fundamentals of the business. Penetration of broadband is low compared to other markets, and we have a very competitive offering. We remain very encouraged by the consistent expansion of our market share, which shows that there is still plenty of upside for additional growth. Our triple-play offer has great acceptance in the market, which has resulted in a growing loading factor. We continue to innovate and to strengthen our product. Some of the actions that we have recently taken include giving all our video subscribers access to our OTT application. Our progress is very strong, with 68 linear channels and thousands of on-demand assets. We are also offering our customers access to exclusive sports content. Our dedicated sports network aficionados will have 12 exclusive matches during the next season, and we will offer the Real Madrid channel on an exclusive basis. Last week, we announced that we now offer bundles that include both Netflix and Blim. This will allow us to strengthen our OTT offer, providing all the relevant content in one place. We continue to leverage off our expansive network, which has reached 140,000 kilometers. With this network, we have the ability to provide our services to nearly 15 million homes. But currently, we only give services to 40% of them. So the opportunity to grow within our existing networks continue to be very compelling. Finally, the majority of our CapEx expenses continue to support our double-digit pace of growth, and our full year CapEx should be similar to that of last year. So notwithstanding this lower economic environment, we remain optimistic about the remainder of the year.

Thank you, Salvi. Great results. Now let me turn it over to Alex Penna, CEO of Sky.

Thank you, Alfonso. During the second quarter, Sky was able to resume growth in video subscribers, adding more than 7,000 RGUs. As we have indicated in prior calls, the loss in video customers during the last three quarters resulted mainly from the conclusion of the World Cup. In addition, growth in broadband RGUs continued at a solid pace. We added 73,000 RGUs during the quarter and reached a total of 238,000 broadband RGUs. Revenue was down by 5.5%. This is explained by 2 factors. First, following the post-World Cup disconnections, the subscriber base is 7% lower when compared to last year. Second, Sky benefited last year from extraordinary revenues associated to the World Cup. As Alfonso mentioned, it benefited from strong gross additions and from advertising and special event sales. This effect to us is offset by revenue from the sale of our broadband service. Finally, operating segment income margin remained strong, reaching 43.1%. For the second half of the year, we anticipate that Sky will keep on growing its video subscriber base and continue to add broadband RGUs at a solid pace.

Thank you, Alex. Moving on to Content. Excluding the licensing of broadcast and digital rights of the World Cup in Latin America last year, revenue was down by 13%, and operating segment income was down by 15.8%. I will address each of the 3 main revenue lines within Content. Again, these pro forma figures do not take into account all other factors that made the comparison to last year difficult, such as any World Cup incremental advertising revenue last year or the decline in government advertising or the effect of Easter week. Advertising sales declined year-over-year by 17%. First, on the private sector side, as I mentioned earlier, advertising sales fell for three main reasons: the tough comparison to last year due to strong growth of advertising sales; the Easter week effect; and that our customers are being cautious, especially as a result of uncertainty and the slowing economy. We estimate that core private sector advertising revenue declined approximately 5% in the second quarter when excluding the World Cup and Easter week effects. Second, on the government side, advertising was dramatically lower when compared to last year, even considering the advertising ban during the second quarter in 2018 that had to do with the presidential elections. As explained earlier, total government advertising spend will drop this year as part of one of many public policies of the new administration. Moving on to our other two sources of Content revenue. Network Subscription revenue was relatively flat, and Licensing and Syndication revenue declined by 11%. The decline is primarily explained by nonrecurring income from a coproduction deal last year and also as a result of lower content sales to the rest of the world. Now talking about Univision. Just last week, we were notified by our partners of their decision to initiate a process to sell the company. We believe that Univision is a very unique asset. It is the leading Hispanic media company in the United States and the last major independent broadcaster. For the most recent quarter, Univision royalties reached $99.6 million, marginally lower year-over-year. For the full year, however, we expect royalties to grow when compared to 2018. In addition, we are encouraged by the result of Univision's recent upfront, which grew by mid-single digits. This is the first time in 4 years that the Univision upfront grows. It shows that the closer collaboration with Televisa and the many steps taken by the new management are paying off. Also, we're happy to report that just recently, Univision renewed its affiliation agreement with one of the most important paid television distributors in the United States. This is in addition to the long-term affiliation agreement signed between Univision and Dish this past March and shows the importance of Univision as a must-have network for any pay television distributor. Finally, together with Univision, yesterday, we announced the launch on July 20 of TUDN, a sports joint venture. This new network will carry premium sports rights, higher-quality programming and leading commentators. We'll have a single production team and will be sharing a single cost structure that will translate into important savings for both companies. This initiative demonstrates the close relationship we have with our partners and our focus on delivering the better content, both for Mexico and for the U.S. Hispanic market. By the way, this past Sunday, Univision transmitted the final of the soccer Gold Cup between Mexico and the United States and delivered about 30% higher ratings than Telemundo's transmission of the soccer World Cup final last year. In terms of costs and expenses in our Content division, spending declined by MXN 650 million or 11% year-over-year. As we said, at the beginning of the year, we anticipate a reduction in this line item by at least $50 million in 2019. This results from the fact that last year, costs and expenses went up because of the transmission of the World Cup and the coverage of the elections. In addition, we're implementing a number of cost-saving initiatives. For example, we restructured the compensation package for close to 2,700 unionized employees in this division. I will now turn it over to Patricio for a discussion of the progress we made during the quarter in our Content offering.

Thank you, Alfonso. In terms of our Content offer, we continue to deliver the most watched programs in Mexican television. During the second quarter, we aired the 10 - the top 10 shows in the country. And in any given day, we made 12 of the 15 most watched hours of the day. In terms of ratings, our audiences were slightly lower to those in the second quarter last year. It is a very competitive industry, and our ratings will go up and down. But we continue strengthening our Content offer, and our ratings have already been on an upward trend the last few weeks for example. We signed a coproduction agreement with Netflix. This project will be called El Dragón. El Dragón will be filming in 3 different continents with world-class production values. In August, we will launch the Masked Singer, one of the most popular entertainment shows with great rating success internationally. And finally, we will soon start showcasing our new productions. Among many initiatives, we are remaking some of the Televisa's most iconic dramas with a great cast and updating the story in less than 25 episode each instead of the more than 150 when they were originally transmitted. We continue to make a better allocation of resources within our Content division. This means that the total investment of our production has gone up substantially without impacting cost and expenses in the division.

Thank you, Patricio. Moving on to other topics. During the quarter, we issued $750 million in 30-year bonds with a spread of 250 basis points over treasuries. Moody's, S&P and Fitch confirmed our investment-grade ratings after the issuance. We followed this issuance with a 5-year loan facility with a syndicate of banks for MXN 10 billion. This loan was funded on Friday last week. The purpose of both is to improve the maturity profile of our debt. We closed the quarter with a leverage ratio of 2.46x and an average life of over 16 years. In terms of our share repurchase program, we were active in the market on a daily basis, all the way to the blackout period, repurchasing a total of 31 million CPOs during the quarter. This is equivalent to approximately $57 million. We will remain active with our buyback. In closing, as we said in our prior 2 earnings calls, we knew that the first half of the year would prove challenging with so many factors that are affecting our business and are outside of our control. Having said that, Bernardo and I are optimistic about the second half of the year. Cable should continue its pace of double-digit growth. Its service offerings keep getting more attractive every day. Prices are very competitive, and service quality is unmatched. Cable will continue to grow in importance as the largest contributor to Televisa's consolidated operating segment income, and the outlook for this business is like no other cable company in the region. In the case of Sky, it has resumed video RGU growth, while at the same time, it continues to build a critical mass in its broadband customer base. The launch of double-play video and broadband offers is helping with customer retention and should soon also help with resuming top line growth. Sky generates close to MXN 5.5 billion in operating cash flow. In the case of Content, the third quarter will continue to face some difficult comparisons given that the World Cup also had a positive impact in the third quarter last year. However, we will benefit from a number of factors during the second half. First, we understand that the government is working on a number of campaigns, which will be launched in the third quarter and should be ongoing during the fourth quarter. This will compare favorably to last year given the government advertising was practically absent in the fourth quarter of 2018. Second, Univision royalties will benefit from the renewal of the Dish agreement, which impacted the royalty payment in the third and fourth quarters last year. The macroeconomic environment will remain an area of uncertainty for the balance of the year and may continue to impact our business, particularly advertising, but we believe that the fundamentals of our business should help compensate a slower economy. For example, we closed the quarter with 20 million video, voice and broadband RGUs, already contributing with 2/3 of consolidated revenue. This is up by more than 8 million RGUs in just 5 years. In the meantime, Bernardo and I remain fully committed to delivering stronger results. With that, we'll turn the call back to the operator and open the line for your questions.

[Operator Instructions] Our first question comes from Rodrigo Villanueva with Merrill Lynch. Please proceed.

My first question is related to advertising with revenue down by 16% year-on-year in the first half of the year. What will be reasonable to assume for the full year? And also could you please share with us the amount of upfront sales that is still available in your balance sheet? And does this amount make you feel more comfortable about the ad revenue performance in the second half of the year? That will be my first question.

Yes, Rodrigo, in terms of advertising revenue in the second half of this year, considering the level of uncertainty at the macro level, we don't feel comfortable giving any type of guidance at this moment. Having said that, advertising sales to both the private and public sectors should pick up in the second half of the year. As I mentioned, in my remarks, we have been informed that the government is working on several campaigns. And hopefully, we'll be able to accelerate their spending. As to your second question, of course, I mean as you know, we don't disclose specific figures, but the consumption of the upfront year-to-date is in line with last year.

Another question, if I may, particularly related to enterprise operations within Cable. We saw a very strong performance, as Salvi mentioned, with revenue growth of 9% and EBITDA margin expansion of 500 basis points to 37%. I was wondering if you expect this to be sustainable and if it's possible to expand EBITDA margin even further at these segments.

Thank you, Rodrigo. I'll ask Salvi to answer the question.

Yes. Rodrigo, yes, the expansion of the margin is related to the ability that we have had to bring additional sales. There are economies of scale in the business, and if we are able to leverage the network that we have, I think that there is room for growing EBITDA and expanding the margin. It depends on where the business is coming from because there are businesses like the wholesale business that have a lower margin than the value-added services that we offer to private and government clients. We are confident that we will continue increasing both sales and margin in the business, and we are focusing a lot on the service because we believe that we have a great opportunity on the enterprise segment.

[Operator Instructions] Our next question comes from Gordon Lee with BTG. Please proceed.

Two questions. The first on Univision, just following up on the news of the potential sale. I was wondering what Televisa's position is with regards to that. Are you looking to divest from your equity stake in Univision? Or alternatively, would you be looking to purchase more equity perhaps as part of a new control group? And the second question, this is more of a general question really, has to do with the stock price and the performance of the stock that we've seen for some time now. As you know, it's underperformed. Global media peers underperformed. Mexico as well. And I was wondering just what management's take on that, what you think is the sort of primary driver behind that and what can management do at this stage to try to buck that trend.

The first one about Univision and the sale of that company, I think what I can tell you is that the process has just started, and therefore, I mean, we have limited information. But in terms of the deal we have with the private equity firms that are our partners, we have tag-along rights, which means that we have the option to sell if we believe that it's in the best interest of Televisa and its shareholders. But the selling move does not have a drag along, which means that they cannot sell our stock. So that gives us a lot of optionality. So it's too early to say in the process. Let's see basically what happens. As to your second question, thank you very much for that question. I think that there are many aspects to consider in terms of the underperformance of our stock. As Bernardo and I see it, and we have discussed this at length, there are 3 basic concerns. I would say that they're industry-related concerns, also Mexico concerns, and I would mention Televisa-specific concerns. As to industry-specific issues, there has been a repricing of most media assets globally and industry-wide. And of course, this has affected Televisa. The industry concerns are wide, and they go from changing in the viewing habits of audiences, newer distribution platforms, cord-cutting and cord-shaving and what has to do with the cable and DTH migration of audiences, migration of advertising budgets to pay television and especially, digital. So there are many concerns industry-wide. It is very important to keep in mind that the changes that happen in the U.S. do not happen in Mexico at the same time and very specifically with the same speed. And I believe that, that gives us here in Mexico at Televisa an advantage because we're watching all those developments closely and we can make changes and we can review and change our strategy, which we have done in all our businesses. Then moving on to Mexico, what we call Mexico-specific concerns, of course, the FX depreciation and the slowdown in economic activity in Mexico have had a negative impact in our valuation as it does in most Mexican companies. Now going to the Televisa-specific aspects and the concerns that the market has expressed to us about Televisa's operations, as we - as I mentioned before, if you focus on the very short term this quarter, we had a very difficult comparison to last year because of the three effects that we discussed, basically the World Cup effect, the Easter week holiday effect and the government effect. These factors are specific to the first quarter of this year, and they will transcend to the third quarter also in what has to do with the World Cup and the government effect. But leaving the short term aside, there are more strategic concerns. Our Content business is the one that has been challenged the most. Since we took over a little more than a year ago, Bernardo and I have been dedicating a lot of time to reengineer and turn this business around. It has been really tough, but I believe that we have taken very important steps. First, in what has to do with the sale of advertising, basically, we updated our obsolete sales model, which was widely used by us and by the Mexican industry for more than 30 years. Instead, we're now selling audiences for the first time in our history, which might surprise a lot of people that we were now selling audiences. However, I mean it takes a lot of effort to change old habits. I think that one of the challenges here is that it involves changing the whole industry. We're the leaders in the industry, and I think we're the only ones that can accomplish that, but it means changing our sales teams. It involves changing the relationship with agencies. It involves changing the manner in which clients buy and interrelate with us. So as I've mentioned, it has not been easy, but this is working. And also the positive thing here is that nobody can deliver the audiences and very specifically the reach that Televisa does with its productions. So we have the product, and it is working. So we feel that it's a work in progress. But we're moving in the right direction. And on top of that, in these 18 months since we took over, we changed the manner in which we produce content for many decades. There was a resistance before we took over in terms of changing the manner in which Televisa had been producing its telenovelas, its main products. However, since we took over, we have increased the production values significantly. We have modernized our formats. And as a result, the ratings are up, and we're maintaining very healthy margins. So basically, Televisa remains by far the largest producer of Spanish language content in the world. And as Patricio mentioned, now we're doing coproductions with Netflix, Amazon, et cetera. So we're a very attractive producer of content with all these changes that we have made. Now in terms of other specific concerns that the market has had with respect to Televisa and going to cable, basically the concern there has been CapEx and the level of CapEx. What I can say is that the high CapEx to sales ratio resulted from our double-digit compounded growth of the last years and the rebuilding and upgrading of our networks. We have passed the high CapEx intensity phase, and the ratio of CapEx to sales will continue to come down starting next year. Also of concern to the market is Sky, and there's a question around DTH future. It is obvious that Sky will not grow at the same pace as in the past, but we're transforming this company into a broadband provider. We will end the year with hundreds of thousands of new double-play subscribers. Sky is today, I would say, and will continue to be in the next years, a very profitable company, which generates a very strong operating cash flow. And finally, I would say questions relating to - specifically to Televisa and its investments, in the case of Univision, the results in the recent past have not been as expected, but we believe that the new management team is doing a great job in repositioning the company. They have reduced the company's debt, which was a specific concern of ours, and our royalty payment has increased substantially. We're working closely with them in order to produce content that works in both markets. We work with them every single day through Patricio's team. And what I can say is that Univision is a great asset. It remains the number one entertainment, sports and news media company for Hispanics in the United States. So I mean - and this has been a very long answer, but in summary, what I can tell you, Gordon, is that there are many industry-related and Mexico-specific aspects that impacts our valuation. And many of those, specifically the ones related to Mexico, we cannot control. As to the ones we can control, each of our businesses has a different set of challenges and opportunities, the ones I have been referring to, and both Bernardo and I are taking action and have a plan in place. In the meantime, what I can tell you is that we will continue to be disciplined in our costs and expenses. And of course, our goal is to protect our margins, and we will take advantage of our, what I would characterize as, frustrating valuation by buying back stock. So I'm sorry for such a long answer, but it gave me an opportunity to share with you how Bernardo and I are looking at things.

And our next question comes from David Joyce with Evercore ISI. Please proceed.

Three questions, please. First on advertising. Given that the upfront deposits were basically flat for this year and the usage or allocation has been flat, how does that position you for scatter inventory for the back half of the year given that's probably where some of the private sector pullback has taken place? Secondly, related to your recent financings and your step-up of stock buyback activity, do you have a target leverage range we should think about and your ability to take advantage of the low valuation of the stock? And third, on Univision, if you could please help us think about when some future retransmission carriage negotiations might be taking place.

Yes, as to Univision, basically, there are two pending negotiations towards the end of this year. I think that the one that Univision was able to close with one of the largest distributors was great news for Univision. It was closed according to plan, which was fantastic news for us. In terms of advertising revenue in the second half of this year, David, as I mentioned before, considering the level of uncertainty at the macro level, it's very difficult, or we don't feel really comfortable in giving guidance at this moment as to scatter purchases. But I repeat what I said before that we feel much better about public and private sectors' investments in the second half of the year. As to the buybacks, we believe that the best investment that we can make is in our own stock, which is undervalued. As I mentioned, we have fantastic assets, and we will continue to buy back stock on a very disciplined manner starting - I mean once the blackout ends.

And do you have a target leverage range?

Yes, I think we have, I mean, basically the cash on hand to be able to make substantial repurchases of stock.

And our next question comes from Andre Baggio with JPMorgan. Please proceed.

So I have two questions. The first one is on the point that you made on the Cable CapEx. Could you - can you give an estimate of what would have been the Cable CapEx if it was - if there was no growth, let's say, if you compare it to, let's say, U.S. cable, which is hardly growing? If you were, let's say, in a more mature situation, do you have any estimate how much you'll be saving in CapEx?

Yes, Andre, I'll ask Salvi to answer your question.

Yes. I mean just a rough estimate, I would say that it would have been like half of the CapEx that we need. But you need to consider that part of the CapEx that we are doing is on upgrading our networks, right? So they're based and be ready for the faster speed and for the future. So I don't think that it's that simple just to say that we were not going to grow what would be the CapEx. It would be very easy really to reduce a lot of the growth CapEx if we were charging our new users an entry fee so that they would pay that - for that CapEx. However, we believe that time is of the essence. We are in a great position to gain market share. As you know, there are asymmetric measures today that one day, they will probably go away. So that's why we are putting more CapEx to take - to gain market share as the industry expands. I think that it's very relevant to mention that many of the acquisitions that we made had underinvested over time, and part of the CapEx that we invested was to take those networks to a higher quality to be able to offer better products and faster speed. The ratio of our CapEx to sale and CapEx to EBITDA will decline as we grow the business, as we have been doing in the past.

So can I have a second question? More related to advertisement in the World Cup. I have been hearing in the past that the World Cup does not really change materially the advertising revenue for the year. In fact, it just anticipates revenues from the - probably the second half or the first quarter into the second quarter and third quarter. So if that's the case, is it reasonable to assume that there's a material positive impact of the World Cup in the first half - sorry, in the first quarter?

Yes, Andre, I think both things happen. First, you saw a shifting of advertising dollars going to the second and third quarters very specifically to the second quarter of last year, where Mexico played its matches. However, we also believe that some advertising clients were basically buying campaigns, buying - advertising in the games or advertising in the programs that we produce around the games. So they were both.

And our next question comes from Soomit Datta with New Street Research. Please proceed.

Two questions, please. Just firstly on the pay TV license in Mexico, which América Móvil or Telmex is sort of keen to pick up. There've been persistent rumors around that happening. Could you give us a quick update on where we are in that please, but also maybe just outline what you think the media impact would be to your business if that competitor was to get a license? And then secondly, and apologies for going kind of round and round in this, but on the advertising business, just one thing you said on the private sector, you indicated you are confident of better momentum in the second half of 2019. Just to be clear, are we sort of now stripping out the World Cup when thinking about that? And you're saying the down 5% in the private sector advertising, you think that should improve. And if that is the case, I'm just not clear what is the driver of that. Is that just your sense from speaking to advertisers or that's related to the upfronts? Just why will that be improving?

Soomit, yes, I was talking about the rest of the year. As to your second question in what has to do with seasonality, basically, I believe that - and in conversations that we have had with advertising clients, they will speed up their campaigns throughout the rest of the year. So we believe that if you look at core private sector advertising, it was around 5% lower than last year in the second quarter. And of course, now they have the money to spend throughout the rest of the year. As to the paid television license to Teléfonos de México, as you mentioned, there has been a lot of speculation around that subject. What I can tell you is that Telmex and I would say the whole group of América Móvil, the economic group including América Móvil being the preponderant operator, "preponderant operator", in telecommunications as defined by our Mexican constitution, can only get a new concession or provide additional services to the ones that are set forth in the concession if they first comply with a number of conditions. One of those conditions is, for example, that for 18 consecutive months, they have been in compliance with all the obligations established by their current concession titles and with the effective unbundling of its network and asymmetric regulations. Our understanding is that only if and after it then certifies that there is "effective competition" in the telecommunication sector, América Móvil has the option to obtain that license. And we believe that there is no effective competition under the law in the telecommunication sector yet, so I do not believe that this is going to happen.

And I'd like to turn the call back over to Alfonso de Angoitia for closing remarks.

Well, thank you very much for participating in today's call. As always, feel free to contact us at any time for any additional questions.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may now disconnect. Everyone, have a great day.