Cablevisión Holding S.A. ($CVH)

Good morning, and welcome to Cablevision Holdings conference call. Today, the team will discuss Cablevision's results for the full year last quarter of 2025 as detailed in the earnings release distributed on March 10. My name is Chuck, and I'll be your conference operator today. This call is intended for investors and analysts only. Questions from the media will not be taken at this time. Members of the media with inquiries may contact FIG Corporate Communications. Comments made today during today's call may contain forward-looking statements regarding Cablevision's future performance, plans, strategies and targets. Such statements involve risks and uncertainties that could cause actual results or operations to differ materially. These uncertainties include, but are not limited to, the impact of industry and economic regulations, changes in demand for Cablevision Holdings products and services and broader market, economic and regulatory conditions. Please refer to the disclaimer in the earnings report or presentation for additional information regarding forward-looking statements. If you have not received the report or require assistance during today's call, please contact FIG Corporate Communications in New York at 1 (917) 691-4047 or Cablevision Holdings in Buenos Ares at 54 (11) 4309-3417. The webcast presentation is available at www.cablevisionholding.com/investors. I would now like to introduce today's speakers, Ms. Samantha Olivieri, Head of Investor Relations; Mr. [ Ignacio Salari, ] Senior Analyst. For the Q&A session, they will be joined by Mr. Ignacio Driollet, Executive Director and Chairman. It is now my pleasure to turn the call over to Ms. Olivieri. Please go ahead.

Thank you, Chuck. Good morning, everyone, and thank you for joining us. Today's call will begin with a brief macro overview and continue with a review of the company's income statements and operating results, followed by a review of the financial position. I would now like to welcome Ignacio, who has joined the team as senior analyst during the last quarter for the macro overview.

Thank you, Samantha. Good morning, everyone. Please move to Slide 4 for the macro overview. In 2025, Argentina's economic performance was shaped by the midterm electoral cycle and the government goal of consolidating disinflation while maintaining macroeconomic stability. Two key developments supported this process. First, the agreement reached with the International Monetary Fund in April, securing USD 15.5 billion disbursement, which increased IMF debt to nearly USD 55 billion and raised Central Bank's gross international reserves to around USD 39 billion. At the same time, a new banded floating exchange rate regime was introduced, while FX restrictions were removed for individuals and for corporations. Second, the FX stabilization arrangement reached with the U.S. Treasury in October, which included a USD 20 billion currency swap facility. The use of USD 2.5 billion from this line was key to sustaining the exchange rate regime amid strong FX demand ahead of the elections. Two aspects of the economy's performance stand out. The first was the preservation of fiscal discipline despite the electoral cycle with the primary fiscal balance estimated at around 1.4% of GBV and the overall fiscal balance posting a surplus of approximately 0.2% of GDP. The second was the continuation of the disinflation process. Consumer price inflation declined significantly during the year, falling from 118% at the end of 2024 to approximately 32% by the end of '25. However, the adjustment process was not without cost. Uncertainties surrounding the sustainability of the rate regime and the electoral outcome triggered a sharp increase in portfolio dollarization ahead of the elections. This pushed the exchange rate towards the upper limit of the band and led to higher country risk, which climbed to about 1,000 basis points and more volatile peso interest rates, slowing activity and private consumption. Despite this episode, real GDP expanded by approximately 4.4% in 2025, largely reflecting the statistical carryover from the recovery that began in the second half of 2024. This growth was mainly driven by financial intermediation, agriculture, energy and mining. While [indiscernible] performance remains solid, developments in the external sector continue to represent a key source of macroeconomic inability. Although Argentina recorded an energy trade surplus close to USD 8 billion, supported by the expansion of oil and gas production in Vaca Muerta, the overall goods trade surplus measured on an equal basis according to index methodology declined by 40% during the year, narrowing from USD 18.9 billion in 2024 to USD 11.3 billion in 2025. At the same time, demand for foreign currency and FX hedging reached record levels following the removal of FX restriction for individuals. Gross purchases of foreign currency for savings approached USD 42 billion. Looking ahead, the favorable outcome of the midterm elections and the financial support provided by the U.S. Treasury creates a window of opportunity for Argentina in a nonelection year. The main challenge for the government will be to consolidate macroeconomic stabilization while advancing structural reforms to support sustained economic growth. The recent approval of the national budget, the first of the current administration, reinforces fiscal balance and the forbiddance of monetary financing of the treasury as key pillars of the economic program. Private sector expectations remain more cautious than official projections. According to the latest REM survey based on the projections of the top 10 participants, real GDP is expected to grow by around 3% in 2026 compared with the government's forecast of 5% Inflation is projected to reach approximately 27.8% by year-end, above the 10.1% estimated in the national budget. Regarding the external sector, financing needs are expected to remain significant, although revenues from agriculture, energy and mining are projected to increase by USD 9 billion. The trade balance could face premium pressure due to stronger import growth, a widening tourism deficit and the normalization of corporate profit and dividend payments abroad. Under this scenario, external financing through capital markets will remain important. In recent months, foreign currency debt issuance by private companies and provincial governments has become an important source of funding, although the sustainability of this channel will depend on global financial market conditions. Restoring sovereign access to debt markets remains a critical factor for sustainability of the stabilization program. Although Argentina's country risk has declined significantly following the elections and currently stands at around 500 basis points, it remains above that of regional peers. The Central Bank's recently announced reserve accumulation program already in progress is expected to contribute to gradual normalization of sovereign risk conditions. Finally, it will be important to monitor how changes in Argentina's productive structure affect household income and employment, particularly since sectors such as industry and construction, which have been recovering at a slower pace, remain major sources of employment in the economy. Having gone through the macro overview, I will now pass back the call back to Samantha.

Thank you, Ignacio. Slide 6 shows some highlights for 2025. On February 24, 2025, our subsidiary, Telecom Argentina announced the acquisition of shares representative of 99.999625 of Telefonica Moviles Argentina S.A. or TMA, a company incorporated in Argentina, which provides mobile and fixed telephony fixed broadband and video services nationwide in Argentina. The total amount involved in the operation reached USD 1,245 million and was financed by 2 loans for a total amount of USD 1,170 million. As of this date, our subsidiary, Telecom has made their regulatory filings and necessary procedures were initiated with the regulatory authorities in order to obtain the conformity of the Secretary of Industry and Commerce or such as our authority that succeeded as Enforcement Authority of Law #27,442 to the economic concentration produced as a result of the acquisition of TMA and the conformity of ENACOM to the change of control occurred in TMA as a consequence of the acquisition of it by the company. Both administrative proceedings are currently pending. Excluding fixed telephony services, all Telecom's ARPUs present significant increases. EBITDA, excluding TMA increased compared to 2024, resulting in a higher EBITDA margin of 32.7% in 2025, up from 27.9% in 2024. Even considering the indebtedness for the acquisition of TMA, net debt-to-EBITDA ratios remain healthy. During the fourth quarter 2025, our subsidiary, Telecom paid dividends in kind and in cash for a total market value of ARS 220.5 billion or approximately $153 million. CVH received a combination of 2030 global bonds in Argentine pesos for a total equivalent to approximately $58 million. Slide 7 shows the key financials for 2025. The company has reflected the effects of the inflation adjustment adopted by Resolution 777/18 of the Comision Nacional de Valores, CNV, which establishes the re-expression of figures must be applied to the annual financial statements for intermediate and special periods ended as of and including December 31, 2018. Accordingly, the reported figures corresponding to 2025 include the effects of the adoption of inflationary accounting in accordance with International Accounting Standard 29. For comparative purposes, the results restated by inflation corresponding to December 2024 contain the effect of year-over-year inflation as of December 2025, which amounted to 31.5%. In this presentation, we included some figures in historical values for the sake of clarity. In addition, the reported figures corresponding to 2025 include the effect of the incorporation of results from TMA from March 1, 2025. Hence, the results for the 2025 period aren't comparable to the results of 2024. We included some figures excluding the effect of the TMA acquisition for comparison. CVH owns 39.08% stake in TEO and as controlling shareholder of Telecom Argentina, it consolidates 100% of its operations. Revenues in nominal terms increased 114%. In constant currency, revenues for 2025 grew 53% from ARS 5,443 billion to ARS 8,328.8 billion, mostly driven by the incorporation of revenue from TMA and by higher ARPUs in real terms in most of the services in Argentina, thanks to the effective pricing policy and the decrease in inflation rates, partially offset by a decrease in fixed telephony copper accesses and the effect of lower ARPU on fixed telephony and data services in real terms and lower mobile revenues in the operation in Paraguay. EBITDA reached approximately ARS 2,503.4 billion in constant currency, a 64.7% increase compared to 2024, mainly driven by the incorporation of TMA's EBITDA and by higher revenues, excluding TMA, resulting in a higher EBITDA margin of 30.1% in 2025 compared to 27.9% in 2024. EBITDA in nominal pesos amounted to ARS 2,338.2 billion, 133% higher than the nominal EBITDA for 2024, while average inflation for the same period was approximately 41.9% and end of period year-over-year inflation amounted to 31.5%. Net income resulted in a loss of ARS 159.9 billion from a profit of ARS 1,348 billion reported during 2024. The decrease in net income is mainly explained by financial net results, mainly due to negative FX difference as the exchange rate increased above inflation for this period following the partial liberation of the exchange restrictions in April, while in 2024 and especially during the first quarter of that year, financial results were highly positive as inflation was high following the steep devaluation of the Argentine peso in December 2023. In addition, and to a lesser extent, 2025 includes higher amortization from the operation of TMA. These variations were partially offset by higher EBITDA and lower income tax. The equity shareholders' net loss for the period amounted to ARS 81.1 billion and is mainly the result of CVH stake in Telecom, the personal assets tax at CVH level following the change in criteria established by the financial -- the fiscal authority in December 2024 regarding the basis for its calculation, partially offset by positive financial results from the holding of bonds collected from Telecom's in kind dividend payment during 2025, net of the loss for the holding of bonds collected from dividend in kind collected in 2024, a positive inflation adjustment given the net passive monetary position in local currency generated by the accrual of the personal assets tax and the revaluation of a foreign currency assets at CVH level. Now let's continue on Slide 8 for a discussion of the operating results of the first -- the fourth quarter 2025, excluding the effect of the incorporation of TMA results. Revenues in fourth quarter '25 increased by 4.5%. Price increases for our services in Argentina, management of commercial discounts granted according to customer retention policy for some of the services and lower inflation have had positive results in terms of revenues. Revenues from equipment sales decreased 31.1%, mainly as a result of prices of equipment sold increasing below inflation. Fixed telephony and data services revenues registered an increase of 3.3%, explained by a decrease in fixed telephony copper accesses and lower ARPU for these services, which cannot match inflation. The main source of our revenues is our fixed infrastructure. Broadband, pay TV and fixed telephony and data services amounted to 49.7% of the total. Mobile service participation has been increasing, reaching 44.8% from 40.9% in fourth quarter '24, driven by the decrease in share of equipment sold over the total revenues and higher ARPU increases for mobile services versus the rest of the fixed services. EBITDA in real terms increased 34.1% and margin increased to 32.7% higher than the 25.5% margin of fourth quarter '24, mainly as a result of the increase in revenues and cost efficiencies obtained by the company. On Slide 9, we review some of the effects of the incorporation of TMA. The consolidation from the moment of the acquisition by Telecom TMA operation includes results for months from March through December 2025. As of December 2025, TMA had 19.1 million mobile subscribers, including machine-to-machine subs, 1.6 million broadband subs, 2.1 million fixed telephony subs, including IP lines and 391,100 pay TV subs. Revenues of TMA included in 2025 consolidated figures amounted to ARS 2,712.7 billion and EBITDA resulted in ARS 664.8 billion with a 24.5% EBITDA margin. Revenues of TMA included in the fourth quarter '25 consolidated figures amounted to ARS 812 billion and EBITDA resulted in ARS 188.5 billion with a 23.2% EBITDA margin. It should be noted that these results include the effect of new employment termination agreements and severance payments. Excluding this effect, the margins would have been significantly higher. Now let's move on to Slide 10. Mobile revenues included TMA represented approximately 50.4% of our quarterly revenues and increased 101% in real terms when comparing fourth quarter '25 versus fourth quarter '24, mainly explained by the incorporation of TMA and higher ARPU in real terms in the quarter in Argentina. Excluding this effect, thanks to a decrease in year-over-year inflation and the carry-on effect of price increases done during 2024 and 2025, partially offset by a decrease in mobile revenues in Paraguay operation due to a decrease in ARPU related to the widespread use of Wi-Fi networks, which affects data consumption. Mobile prepaid subs, which generate less revenue and had decreased quarter-over-quarter in the first quarter '25 following price increases at the end of 2024 were subsequently adjusted as a result of the full effect of the change in criteria regarding how many days can elapse without a client recharging his credit before it is disconnected with no effect on revenues for this service. Excluding the effect of TMA, mobile services revenues reached ARS 650,131 million in constant pesos and increased 14.6% in real terms. Personal Argentina clients decreased 7.8% to 19.9 million, of which postpaid clients amounted to 40%, mostly the effect of the before mentioned change in criteria. As of December 2025, TMA has 19.1 million mobile subscribers, including machine-to-machine subs, 49.3% of clients are postpaid. In Argentina, in a highly competitive environment, Personal ARPU restated in constant currency increased by 15.8% to ARS 9,081.9 in 2025. Monthly churn increased to 2.1% from 1.4% in 2024. Please turn to Slide 11. Revenues for fixed services, including broadband, cable TV and fixed telephony and data services increased by 39.2% in real terms, mainly driven by the incorporation of TMA. Excluding the effect of TMA, revenues for fixed services remained relatively stable, increasing 1.4%, mainly due to higher ARPUs across most of the services. Legacy copper fixed voice service continues experiencing a reduction in accesses, partially offset by an increase in IT telephony lines. On the B2B services, Telecom's strategy is to position itself as an integrated service provider for larger customers by offering convergent ICT solutions, including fixed and mobile voice, data, Internet, multimedia, data center and application services through sales consulting management and specialized and targeted post-sale customer services. Internet services revenues increased 32.5% year-over-year in real terms, mainly driven by the incorporation of TMA. Excluding the effect of TMA, Internet service revenues remained at similar levels in the previous year. Broadband subscribers increased 3.2% to 4.2 million, while monthly churn dropped to 1.2% in 2025 from 1.5% in 2024. There is growth in the fiber-to-the-home segment, resulting in an increase in average speeds. ARPU in real terms for the full year of 2025 increased to approximately ARS 27,062.6. The effective pricing policy implemented, lower promotional discounts and higher Internet speeds sold to our customer base allows Telecom to increase broadband ARPU in real terms on a yearly basis. As of December 2025, TMA has 1.6 million broadband subscribers, of which more than 95% are fiber-to-the-home. 98% of customers have accesses with speeds of 100 megabytes or higher versus 89% in 2024. Moving on to the cable TV subscribers. The customer base increased slightly to 3.5 million, mainly explained by the success of Flow Flex, which is a 100% digital service with no decoder or installation needed. Flow unique customers achieved 2 million, a 32.7% increase from figures observed over a year ago. For its proposal as content aggregator, Flow includes not only linear TV, but streaming services, series, on-demand movies, documentaries and coproduction and also music, gaming and exclusive events. ARPU in real terms increased by 2.8% to ARS 18,643.2 during 2025, mainly due to the decrease in year-over-year inflation and the carry-on effect of price increases done during 2024 and lower discounts granted according to customer retention policy. Monthly churn decreased to 1.5%. As of December 2025, TMA contributed with 391,100 pay TV subs. Let's move to Slide 12 for a review of the cost structure before we discuss quarter-over-quarter EBITDA performance. Amongst the most significant operating costs and expenses are salaries, fee-for-services, maintenance, materials and supplies costs and taxes and fees with the regulatory authorities. On Slide 13, we show the performance of EBITDA and the behavior of the different components of revenues and costs. The company continues with its cost management efforts and has shown positive results in gaining productivity. Before the effect of TMA, operating costs, excluding cost of equipment enhancements, decreased in real terms 3.7%. This is the result of efficiencies obtained by the company, mainly lower salaries and severance payments, lower bad debt expenses, lower interconnection and transmission costs, lower commissions and advertising and lower fees for services, maintenance, materials and supplies, partially offset by higher expenses related to the increase in revenues, such as taxes and fees with the regulatory authority and programming and content costs by higher other operating expenses, including contingencies and charges for losses and the change in criteria for the personnel assets tax at CVH level. Cost of equipment and handsets before the effect of TMA decreased 31.2% as a result of lower cost of the handsets sold with higher quantities and total operating costs, including cost of equipment and handsets before the effect of the incorporation of TMA decreased 5.6% with an increase in revenues. Thus, EBITDA margin before the effect of the incorporation of TMA reached 32.7% higher than the 25.5% margin of fourth quarter '24. EBITDA from the incorporation of TMA for the fourth quarter '25 resulted in ARS 188.5 million with a 23.2% EBITDA margin, lower than the margin before this effect. Therefore, consolidated margin resulted in 29.3%. It should be noted that these results include the effect of new employment termination agreements and severance payments. Excluding this effect, the margins would have been higher, while EBITDA margin for TMA stand-alone has increased versus 2024 as a result of cost optimization efforts. Turn to Slide 14, please. In fourth quarter '25, investment as a percentage of revenues was 27.1% or 25.1% before considering rights of use from leases, significantly higher than the same period of the previous year, highlighting the commitment of the company with the expansion of both fixed and mobile networks, particularly fiber-to-the-home and 5G infrastructure. Technical CapEx was mainly allocated to network and technology and customer premises equipment, or CPE. The balance was allocated to our international operations in Paraguay and Uruguay. During the last quarter, the company continued with the deployment and upgrading of existing sites and the expansion of the fiber-to-the-home network, including the overlay over the HFC network and adding 5G sites. The CapEx program will continue evolving according to Argentina's economic condition, network performance, expansion objectives and customers' requirements. Going to the debt financial position as per Slide 16. As of December 2025, we have reported a total financial debt of ARS 5,436.6 billion and net debt of ARS 4,549.3 billion, equivalent to USD 3.1 billion, mainly as a result of the debt to finance the acquisition of TMA and the effect of the higher FX variations versus inflation year-over-year. Of the total debt, 64.3% is mostly cross-border dollar denominated, but includes the hard dollar local issuance of 2024. 24.7% is in Argentine pesos, including dollar-linked local emissions and the rest is in Guaranies and renminbi. During the past year, Telecom has been accessing the local and international debt markets for its financing needs and will do so for future potential needs. Exhibit 24 reflects the pro forma debt profile after giving effect to the issuance of the Class 27 international note for USD 600 million in the first quarter of 2026 and its use of proceeds. the prepayment of $163 million of the 2026 notes, the cancellation of $181 million of loans incurred for the acquisition of TMA, the cancellation of $109 million equivalent of local bonds -- local loans, sorry, and the payment and maturity of $121 million equivalent of local dollar-linked notes and the use of $14 million of available cash to reduce bank overdrafts. This transaction has allowed the company to extend the average life of its debt and lower 2026 maturities, significantly improving its debt profile. Consolidated net debt over adjusted EBITDA ratio as of the end of December 2025 was 1.8x, a significant achievement considering the new indebtedness for the acquisition of TMA and that the adjusted EBITDA used in this calculation includes only 10 months of TMA EBITDA, a testament of the company's resilience to changing macroeconomic conditions. Next slide, please. Finally, it is worth mentioning that thanks to the efforts to increase productivity and efficiency and the ability to increase prices as macroeconomic variables improve with disinflation process resulted in the first year with positive year-over-year trend in both revenues and EBITDA, even before considering the acquisition of TMA, a turning point for the company. That concludes our comments. We are now ready to take your questions. Chuck?

[Operator Instructions] It appears we have no questions at this time. I would like to turn the program back to Ms. Olivieri for any closing remarks.

Thank you, Chuck. Thank you all for your interest in CVH and attending this conference. Should you have any questions in the future, do not hesitate to contact our IR team. Have a great day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.