Slide 1: Liberty Global plc Investor Call | Full Year 2018
LIBERTY GLOBAL PLC INVESTOR CALL | FULL YEAR 2018 February 27, 2019
Slide 2: Safe Harbor: Forward-Looking Statements + Disclaimer
“SAFE HARBOR” 2017. In addition, on January 1, 2018, we adopted ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Forward-Looking Statements + Disclaimer Periodic Postretirement Benefit Cost (“ASU 2017-07”) on a retrospective basis. Accordingly, unless otherwise indica
Slide 3: Executive Summary, Financial Results, Appendix
EXECUTIVE SUMMARY FINANCIAL RESULTS APPENDIX 3
Slide 4: 2018 Highlights
2018 HIGHLIGHTS CONTINUING OPERATIONS FY 2018 Includes Switzerland due to timing of sale agreement Rebalanced portfolio resulting in $16 billion of cash Net Adds 30k • UPC Switzerland sale announced at 10x 2019 OCF (1) • Vodafone deal remains on-track at 11.5x 2017 OCF Revenue Growth 2.2% (1) • Comp
Slide 5: Swiss Transaction Overview
SWISS TRANSACTION OVERVIEW SUMMARY Sunrise to acquire Liberty Global’s operations in Switzerland RATIONALE Deal creates leading national FMC challenger (1) (2) PRICE CHF 6.3 billion ($6.3 billion ) total enterprise value (TEV) (3) Represents 10x TEV/ 2019 OCF multiple VALUATION (1) (2) CHF 2.6 billi
Slide 6: Another Example of Value Creation
ANOTHER EXAMPLE OF VALUE CREATION Strong operating growth and financial returns over 13 years UPC SWITZERLAND | OPERATING RESULTS RETURN ON INVESTMENT 2005(1) 2018 % Growth USD BILLIONS | PRE-TAX Net Cash Total Gross Proceeds Cash Flows RGUS (MM) 2.0 2.3 13% ~4x RETURN CUSTOMER ARPU (CHF) 44.6 70.3
Slide 7: Liberty Post Disposals
LIBERTY POST DISPOSALS $15 billion of cash proceeds, strong remaining operations and $4 billion of investments and tax assets LIBERTY GLOBAL PLC 100% 100% 60% 50% VIRGIN MEDIA POLAND/SLOVAKIA TELENET VODAFONEZIGGO(1) CASH/OTHER Homes 15.3m Homes 4.1m Homes 3.4m Homes 7.2m Cash Customers 5.9m Custome
Slide 8: Virgin Media
VIRGIN MEDIA Accelerating cable ARPU growth and reinvigorating consumer propositions while further reducing capital intensity BALANCING PRICE AND VOLUME BASE MANAGEMENT & PRODUCTS DRIVE FUTURE GROWTH RGU NET ADDS CUSTOMER ARPU • Connectivity: launch of 500 Mbps product (000s) 112 REBASED GROWTH YOY
Slide 9: Benelux Operations
BENELUX OPERATIONS (1, 2) Highly cash-generative businesses, but navigating competitive & regulatory headwinds BELGIUM DUTCH JV (50%) SYNERGIES DROVE 2018 GUIDANCE 2018 OCF GROWTH ACHIEVED (154k) • H2 disconnects impacted by SFR migrations (33k) • Over 1 million converged households FIXED NET • Comp
Slide 10: Key Priorities 2019
KEY PRIORITIES 2019 • Complete pending M&A transactions • Reset operating model and cost structure • Drive operating free cash flow with ~20% reduction in P&E • Develop value creation plans for capital allocation 10
Slide 11: Executive Summary, Financial Results, Appendix
EXECUTIVE SUMMARY FINANCIAL RESULTS APPENDIX 11
Slide 12: Revenue & OCF Growth: Continuing Operations
REVENUE & OCF GROWTH: CONTINUING OPERATIONS (1) Belgian synergies partly offset by weakness in Switzerland LIBERTY GLOBAL U.K. & IRELAND BELGIUM (CONTINUING OPERATIONS) 5.2% 4.1% 4.1% 3.9% REVENUE REVENUE REVENUE 2.7% 2.8% 2.2% 2.4% 1.9% 1.2% (0.7%) (1.3%) (1.0%) (1.5%) (1.1%) 12.1% 9.0% 8.4% 7.9% 5
Slide 13: P&E Additions
P&E ADDITIONS Declining Capital Intensity Year over Year $m % Revenue 2018 2017 2018 Highlights Total P&E Additions $3,706m 32.9% 31.0% • Declining capital intensity as U.K. & IRELAND $1,989m 33.8% 28.9% significant project spend rolls BY BELGIUM $791m 23.8% 26.4% off in U.K. & Belgium SEGMENT SWITZ
Slide 14: Cash, Leverage and Liquidity
CASH, LEVERAGE AND LIQUIDITY Ample liquidity; higher end of 4-5x leverage framework ADJUSTED FCF LIQUIDITY (3) FULL COMPANY CONTINUING OPERATIONS AT ORIGINAL REPORTED GUIDANCE FX (1) REPORTED INTEREST (2) TSA(2) PROFORMA (2) Cash Revolving TOTAL $1.5B $1.6B $1.6B $189M $389M $1.4B $92M Credit LIQUID
Slide 15: Understanding Lightning
UNDERSTANDING LIGHTNING Healthy OFCF margin before continued Lightning investments HIGHLIGHTS As of and for year ended Dec 31, 2018 • Consistent build pace of 400k-500k homes per annum VIRGIN MEDIA KPI’s LIGHTNING REST OF TOTAL • MDUs represent a significant opportunity & FINANCIALS BUSINESS (1) • E
Slide 16: Changes to the Operating Model
CHANGES TO THE OPERATING MODEL Announced reorganization plan in January 2019 RATIONALE CENTRAL COSTS PRIMARILY IN TWO AREAS Opex/Capex split based on 2018 Actuals • Centralized model adopted during 1 TECHNOLOGY & INNOVATION (1) (including Continuing Ops and TSA consolidation phase arrangements) ~$90
Slide 17: Understanding Pro Forma FCF
UNDERSTANDING PRO FORMA FCF (CONTINUING OPERATIONS) Presented as if disposals of the as reported Discontinued European Operations had occurred on Jan 1st, 2018(1) (amounts in millions) 2018 OCF $5,341 (Pro forma for TSA, +$189m) P&E ADDITIONS (3,706) OFCF (Pro forma) 1,635 • Includes $420m negative
Slide 18: 2019 Outlook
(1) 2019 OUTLOOK Continuing Operations 2019(2) Guidance Comments Inorganic headwinds in the UK and tough Rebased OCF Flat to down comparisons in Belgium (3) P&E Additions ~$2.7 billion Targeting ~20% reduction in P&E spend vs. 2018 Excludes FCF from Discontinued Operations prior to closing (3, 4) ~$
Slide 19: Executive Summary, Financial Results, Appendix
EXECUTIVE SUMMARY FINANCIAL RESULTS APPENDIX 19
Slide 20: Rebase Information
REBASE INFORMATION For purposes of calculating rebased growth rates on a comparable basis for all businesses that The following table provides adjustments made to the 2017 amounts to derive our rebased we owned during 2018, we have adjusted our historical revenue and OCF for the three months growth
Slide 21: 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 Free Cash Flow (FCF): net cash provided by our operating activities, plus (i) cas
Slide 22: Glossary
GLOSSARY (iv) Represents our preliminary estimate of the net cash flows that we applicable, to reflect acquisitions, dispositions, FX and the January 1, services in two premises (e.g., a primary home and a vacation home), would have received from transition services agreements if the sale of the 201
Slide 23: Glossary
GLOSSARY Internet Subscriber: a home, residential multiple dwelling unit or commercial unit that receives internet to significant litigation and impairment, restructuring and other operating items. Other operating items include services over our networks, or that we service through a partner network
Slide 24: Glossary
GLOSSARY RGU: A Revenue Generating Unit is separately a Basic Video Subscriber, Enhanced Video Subscriber, DTH Subscriber, Internet Subscriber or Telephony Subscriber. A home, residential multiple dwelling unit, or commercial unit may contain one or more RGUs. For example, if a residential customer
Slide 25: Appendix - Lightning
APPENDIX - LIGHTNING The presentation of revenue and OCF for Virgin Media’s Lightning represents “Incremental Revenue” and “Incremental OCF”, respectively, which is supplemental non-GAAP information that has a different meaning than the revenue and OCF we report for our operating segments that are u
Slide 26: Appendix - Belgium
APPENDIX - BELGIUM For purposes of its standalone reporting obligations, Telenet prepares its consolidated financial statements in accordance with International Financial Reporting Standards as adopted by the European Union (EU IFRS). Adjusted Free Cash Flow: Adjusted Free Cash Flow is defined as ne