Liberty Global Ltd. · NASDAQ:LBTYA
Liberty Global — Q2 2022 Earnings Presentation
39 slides from Liberty Global's earnings presentation, Jul 29, 2022
Slide 1: Investor Call Q2 2022
Updated Cover on new template LIBERTY GLOBAL PLC INVESTOR CALL Q2 2022 July 29, 2022
Slide 2: Q2 2022 Key Highlights
Q2 2022 KEY HIGHLIGHTS Well positioned to execute through current macro conditions, 1 underpinned by strong demand for connectivity Price adjustments, merger synergies and continued innovation 2 supporting operational and financial momentum Implementing prudent and accretive network strategies to be
Slide 3: Q2'22 Connectivity Trends
Q2’22 CONNECTIVITY TRENDS Postpaid Mobile Net Adds Broadband Net Adds VMO2 VMO2 (1) (2) BROADBAND SUNRISE BROADBAND AND POSTPAID MOBILE AND POSTPAID MOBILE Broadband: Return to broadband growth (+16k) driven by more commercial NET ADDS NET ADDS activity after Q1 price adjustment. Increased estimated
Slide 4: Driving Innovation Through Leading Customer Propositions
DRIVING INNOVATION THROUGH LEADING CUSTOMER PROPOSITIONS (1) (1) FMC BUNDLES • VOLT • Sunrise Up • ONE(up) • Non Stop Benefit ENTERTAINMENT • VM TV Stream • ONEPlus (OTT) • Streamz • Ziggo Go & Sport CUSTOMER LOYALTY • O2 rewards • Sunrise moments • Giganet campaign • VZ Priority BRAND BUILDING • O2
Slide 5: UK: Greenfield Fiber JV Announced
UK: GREENFIELD FIBER JV ANNOUNCED STRUCTURE OVERVIEW HIGHLIGHTS • Targeting 5M greenfield FTTH homes by 2026 (option for ∼7M 50% HoldCo by 2027) 50% 50% 50% • Committed financing through equity funding of c.£1.4B and £3.3B of debt financing (including £3.1bn capex facility) Wholesale Customers NETCO
Slide 6: Belgium: NetCo Established to Upgrade Flanders
BELGIUM: NETCO ESTABLISHED TO UPGRADE FLANDERS STRUCTURE OVERVIEW HIGHLIGHTS • Plans to upgrade to 78% of current footprint to FTTH by 2038 • Attractive build costs (€650 CPP) for 50%+ and flexibility to optimize 100% 67% 33% capex spend (DOCSIS 4.0, wholesale, etc.) to deliver returns • Estimated i
Slide 7: Increasing Buyback Commitment for 2022
INCREASING BUYBACK COMMITMENT FOR 2022 UNDERPINNED BY ROBUST LIQUIDITY POSITION STRONG BALANCE SHEET INCREASING BUYBACK(1) CASH OPTIONALITY VMO2 cash generation and arranged Increasing shareholder remuneration financings together with VZ guidance, for 2022 supports $1.7B Distributable CF generation
Slide 8: Financial Results
INVESTOR CALL Q2 2022 FINANCIAL RESULTS
Slide 9: Q2'22 Revenue Trends: Stable Growth Across Core Markets
Q2’22 REVENUE TRENDS: STABLE GROWTH ACROSS CORE MARKETS IN TOUGH MACROECONOMIC CLIMATE(1) VMO2(2) TRANSACTION ADJ. SUNRISE VMO2(2): REVENUE GROWTH (%) REVENUE GROWTH (%) Stable revenue growth in Q2, with mobile revenue (ex handsets) growing for first time since JV inception 0.7% 1.3% 1.0% 1.0% Conti
Slide 10: Q2'22 EBITDA: Acceleration at VMO2 the Highlight
Q2’22 EBITDA: ACCELERATION AT VMO2 THE HIGHLIGHT (1) VMO2(2) TRANSACTION ADJ. SUNRISE VMO2(2): EBITDA GROWTH (%) EBITDA GROWTH (%) VMO2 EBITDA growth accelerated in Q2 driven by price adjustments and synergy realization 4.9% 9.6% EBITDA growth expected to continue to improve in H2 in line with guida
Slide 11: Macro Deep Dive: Effectively Managing External Headwinds
MACRO DEEP DIVE : EFFECTIVELY MANAGING EXTERNAL HEADWINDS 2022 Price Adjustments Overall energy Opex(1) low single digit %, 90% hedged for 2022 exposure Increased hedging now in place for 2023 MARCH UK Fixed +6.5% ENERGY Wage increases largely in place in line with budget for 2022 APRIL UK Mobile +c
Slide 12: Full Company Distributable CF: $564M Generated YTD
FULL COMPANY DISTRIBUTABLE CF: $564M GENERATED YTD(1) $M FY 2021 H1 2022 ADJ EBITDA LESS P&E ADDITIONS $1,921 $642 NET INTEREST (821) (251) CASH TAX (190) (155) DIVIDENDS & INTEREST FROM JV’s (2) 583 322 WORKING CAPITAL (3) (7) 35 DIRECT ACQUISITION COSTS & DEFINITIONAL (97) (29) CHANGES FULL COMPAN
Slide 13: Capital Allocation: Investing in Network While Maintaining Strong Balance Sheet
CAPITAL ALLOCATION: INVESTING IN NETWORK WHILE MAINTAINING STRONG BALANCE SHEET H1 CAPITAL INTENSITY IN LINE WITH GUIDANCE (1) LONG-TERM MATURITIES AND FIXED COST 25.0% Includes ROU Additions 20.0% UPC (incl. 15.0% Q2’22 TELENET VZ(1) VMO2(1) Sunrise) 10.0% Leverage(2) 4.36x 5.49x 5.11x 4.56x 5.0% W
Slide 14: Conclusions
CONCLUSIONS 2022 OUTLOOK (2) $1.7B (1,2) LG Distributable Cash Flow GUIDANCE (IFRS basis)(3) • Improved revenue growth • Mid-single-digit Transaction Adjusted EBITDA growth Reiterating all guidance including $1.7B Full Company (before CTC) distributable CF for 2022 (5) • Opex and Capex CTC of over £
Slide 15: Appendix
INVESTOR CALL Q2 2022 APPENDIX
Slide 16: YTD Adj Attributed FCF & Distributable CF
YTD ADJ ATTRIBUTED FCF & DISTRIBUTABLE CF LIBERTY 50-50 50-50 TOTAL VMO2 JV GLOBAL VODAFONEZIGGO $millions IRELAND BELGIUM SWITZERLAND CENTRAL (1) POLAND LIBERTY JV CONTINUING IFRS BASIS GLOBAL OPERATIONS (2,3) (2,3,4) ADJUSTED EBITDA $103 $671 $578 $(18) $1,334 $46 $1,380 $1,029 $2,437 PRE-LIGHTNIN
Slide 17: Q2 2022 YTD Adj EBITDA & Adj EBITDAaL
Q2 2022 YTD ADJ EBITDA & ADJ EBITDAAL(1) 50-50 50-50 LIBERTY GLOBAL VMO2 JV VODAFONE ZIGGO $m IRELAND BELGIUM SWITZERLAND CENTRAL (2) CONTINUING JV IFRS BASIS OPERATIONS (3,4) (3,4,5) ADJUSTED EBITDA $103 $671 $578 $(18) $1,334 $1,029 $2,437 DEPRECIATION & AMORTIZATION ON ASSETS UNDER FINANCE LEASE
Slide 18: Ventures Portfolio FMV $3.2B
VENTURES PORTFOLIO FMV $3.2B VENTURES FAIR MARKET VALUE ($M) VENTURES PORTFOLIO DECLINED SLIGHTLY IN Q2’22, $3.4B ending with $3.2B FMV $3.2B (-$0.3B vs Dec-2021)1 • CONTENT – Impacted by fall in ITV share price during the quarter • TECH – Small decline due to disposal and small decreases in FMV’s •
Slide 19: Rebase Information
REBASE INFORMATION Rebase growth percentages, which are non-GAAP measures, are presented as a basis for assessing growth rates on a comparable basis. For purposes of calculating rebased growth rates on a comparable basis for all businesses that we owned during 2022, we have adjusted our historical r
Slide 20: Glossary
GLOSSARY 10-Q or 10-K: As used herein, the terms 10-Q and 10-K refer to our most recent quarterly or annual report as filed with the Securities and Exchange Commission on Form 10-Q or Form 10-K, as applicable. Adjusted EBITDA, Adjusted EBITDA less P&E Additions and Property and Equipment Additions (
Slide 21: Glossary
GLOSSARY • Distributable Cash Flow: We define Distributable Cash Flow as Adjusted FCF, as re-defined during the fourth quarter of 2021, plus any dividends received from our equity affiliates that are funded by activities outside of their normal course of operations, including, for example, those fun
Slide 22: Glossary
GLOSSARY Fixed-Line Customer Relationships: The number of customers who receive at least one of our internet, video or telephony services that we count as RGUs, without regard to which or to how many services they subscribe. Fixed-Line Customer Relationships generally are counted on a unique premise
Slide 23: Reconciliations
RECONCILIATIONS REBASE ADJUSTMENTS Rebase growth percentages, which are non-GAAP measures, are presented as a basis for assessing growth rates on a comparable basis. For further details on adjustments made to arrive at our rebase growth rates for the periods below, refer to our previously issued ear
Slide 24: Reconciliations – Rebase Adjustments (Continued)
RECONCILIATIONS REBASE ADJUSTMENTS (CONTINUED) 25
Slide 25: Reconciliations – Adjusted EBITDA & Adjusted EBITDA less P&E Additions
RECONCILIATIONS ADJUSTED EBITDA & ADJUSTED EBITDA LESS P&E ADDITIONS The following table provides a reconciliation of our net earnings to Adjusted EBITDA and Adjusted EBITDA less P&E Additions for the six months June 30, 2022 (in millions): 26
Slide 26: Reconciliations – Adjusted EBITDA & Adjusted EBITDAaL
RECONCILIATIONS ADJUSTED EBITDA & ADJUSTED EBITDAAL The following table provides a reconciliation of Adjusted EBITDA attributable to our continuing operations to Adjusted EBITDAaL for the six months June 30, 2022 (in millions): 27
Slide 27: Reconciliations – Full Company Adjusted FCF & Distributable CF
RECONCILIATIONS LIBERTY GLOBAL FULL COMPANY ADJUSTED FCF& DISTRIBUTABLE CF 28
Slide 28: Reconciliations – Full Company Adjusted FCF & Distributable CF (Continued)
RECONCILIATIONS LIBERTY GLOBAL FULL COMPANY ADJUSTED FCF& DISTRIBUTABLE CF(CONTINUED) 29
Slide 29: Supplemental Adjusted Attributed Free Cash Flow & Distributable Cash Flow
RECONCILIATIONS SUPPLEMENTAL ADJUSTED ATTRIBUTED FREE CASH FLOW & DISTRIBUTABLE CASH FLOW We define Adjusted FCF as net cash provided by the operating activities of our continuing operations, plus operating-related vendor financed expenses (which represents an increase in the period to our actual ca
Slide 30: Supplemental Adjusted Attributed FCF & Distributable Cash Flow (Continued)
RECONCILIATIONS SUPPLEMENTAL ADJUSTED ATTRIBUTED FREE CASH FLOW & DISTRIBUTABLE CASH FLOW (CONTINUED) 31
Slide 31: Reconciliations – VodafoneZiggo JV
RECONCILIATIONS – VODAFONEZIGGO JV VODAFONEZIGGO JV ADJUSTED FREE CASH FLOW (VODAFONEZIGGOJV ADJ FCF) VodafoneZiggo JV Adjusted FCF is defined as net cash provided by operating activities, plus (i) operating-related vendor financed expenses (which represents an increase in the period to actual cash
Slide 32: Reconciliations – Centrally-Held P&E Attributions
RECONCILIATIONS CENTRALLY-HELD P&EATTRIBUTIONS / ATTRIBUTED ADJUSTED EBITDALESS P&EADDITIONS Property and equipment additions presented for Central and Other include certain capital costs incurred for the benefit of our operating segments. Generally, for purposes of the consolidated financial statem
Slide 33: Reconciliations – Centrally-Held P&E Attributions (Continued)
RECONCILIATIONS CENTRALLY-HELD P&EATTRIBUTIONS / ATTRIBUTED ADJEBITDALESS P&E ADDITIONS - CONTINUED A reconciliation of our Adjusted EBITDA to attributed Adjusted EBITDA less P&E Additions, including Centrally-held Property and Equipment Attributions, consistent with our internal management reportin
Slide 34: VMO2 JV Reconciliations – Revenue
VMO2 JV RECONCILIATIONS – REVENUE The following table provides reconciliations from VMO2 JV Transaction Adjusted IFRS revenue to US GAAP revenue for the indicated periods: 35
Slide 35: VMO2 JV Reconciliations – Revenue
VMO2 JV RECONCILIATIONS – REVENUE The following tables provide reconciliations from VMO2 JV Transaction Adjusted IFRS revenue to US GAAP revenue for the indicated periods: 36
Slide 36: VMO2 JV Reconciliations – Revenue (Continued)
VMO2 JV RECONCILIATIONS – REVENUE (CONTINUED) The following tables provide reconciliations from VMO2 JV Transaction Adjusted IFRS revenue to US GAAP revenue for the indicated periods: 37
Slide 37: VMO2 JV Reconciliations – Adj EBITDA
VMO2 JV RECONCILIATIONS – ADJ EBITDA The following tables provide reconciliations from VMO2 JV Transaction Adjusted IFRS Adjusted EBITDA to US GAAP Adjusted EBITDA for the indicated periods: 38
Slide 38: VMO2 JV Reconciliations – Adj EBITDA less P&E Additions
VMO2 JV RECONCILIATIONS – ADJ EBITDA LESS P&E ADDITIONS The following table provides reconciliations from VMO2 JV Transaction Adjusted IFRS Adjusted EBITDA to US GAAP Adjusted EBITDA and Adjusted EBITDA less P&E Additions for the indicated period: 39
Slide 39: VMO2 JV Reconciliations – Adjusted FCF
VMO2 JV RECONCILIATIONS – ADJUSTED FCF VMO2 JV ADJUSTED FREE CASH FLOW (VMO2 JV ADJ FCF) VMO2 JV Adjusted FCF is defined as net cash provided by operating activities, plus operating-related vendor financed expenses (which represents an increase in the period to actual cash available as a result of e