Liberty Global Ltd. · NASDAQ:LBTYA
Liberty Global — Q2 2020 Earnings Presentation
33 slides from Liberty Global's earnings presentation, Aug 4, 2020
Slide 1: Liberty Global plc Investor Call | Q2 2020
LIBERTY GLOBAL PLC INVESTOR CALL | Q2 2020 August 4th, 2020
Slide 2: Safe Harbor
“SAFE HARBOR” subsidiaries; the impact of our operating companies' and affiliates’ future financial performance, or market conditions Forward-Looking Statements + Disclaimer generally, on the availability, terms and deployment of capital; fluctuations in currency exchange and interest rates; the Thi
Slide 3: Executive Summary
EXECUTIVE SUMMARY FINANCIAL RESULTS APPENDIX 3
Slide 4: Q2 2020 Highlights
Q2 2020 HIGHLIGHTS Q2 2020 (1) 1 Navigating COVID-19 OPERATIONS ACTUAL YOY Employee safety and well-being remains top priority Customer Net Adds 8k 36k Keeping customers connected; strong network performance Fixed Customer Modest business impact to date; monitoring medium-term outlook Rebased ARPU $
Slide 5: FMC Strategy: Working Across Europe
FMC STRATEGY: WORKING ACROSS EUROPE FMC CREATES NATIONAL CHAMPIONS(1) FMC DRIVES GROWTH AND FCF MARKET SHARE FMC REBASED EBITDA GROWTH CUMULATIVE MOBILE BB TV RATIO PRIOR TO DEAL YEAR 3 FCF BE (TNET) #3 #1 #1 46% BE (2015) 5.6% 7.9% € 1.8bn (3) NL (VFZ) #2 #1 #1 42% (2) (4) UK (VM/O2) #1 #3 #2 NL (2
Slide 6: Virgin Media: Q2 2020 Operating Update
VIRGIN MEDIA: Q2 2020 OPERATING UPDATE Solid underlying performance; Negative ARPU growth largely due to pause on low-margin sports HIGHLIGHTS BALANCING PRICE AND VOLUME GROWING POSTPAID MOBILE Total Postpaid subscribers: 3.2m • Improved NPS drove customer Fixed Line Customers SPEED LEADERSHIP (3) r
Slide 7: UPC Switzerland: Q2 2020 Operating Update
UPC SWITZERLAND: Q2 2020 OPERATING UPDATE Turnaround initiatives delivering benefits; market continues to reprice HIGHLIGHTS GROWING ARPU WHILE HOLDING CUSTOMERS STABLE GROWING POSTPAID MOBILE Total Postpaid subscribers: 223k • Building commercial Fixed Line Customers SPEED LEADERSHIP momentum: (000
Slide 8: Telenet: Q2 2020 Operating Update
TELENET: Q2 2020 OPERATING UPDATE Successfully balancing price and volume HIGHLIGHTS GROWING ARPU WHILE HOLDING CUSTOMERS STABLE GROWING POSTPAID MOBILE Total Postpaid subscribers: 2.4m • Commercial momentum Fixed Line Customers SPEED LEADERSHIP accelerated: (000s) Postpaid Net Adds (Consumer) Avera
Slide 9: VodafoneZiggo: Q2 2020 Operating Update
VODAFONE ZIGGO: Q2 2020 OPERATING UPDATE (1) Strong operating momentum continues HIGHLIGHTS GROWING ARPU WHILE HOLDING CUSTOMERS STABLE GROWING POSTPAID MOBILE Total Postpaid subscribers: 2.8m • Maintaining network Fixed Line Customers SPEED LEADERSHIP superiority: (000s) Postpaid Net Adds (Consumer
Slide 10: Financial Results
EXECUTIVE SUMMARY FINANCIAL RESULTS APPENDIX 10
Slide 11: Q2 Impact of COVID-19
Q2 IMPACT OF COVID-19 U.K. & Ireland Belgium >$100m COVID impacts to revenue; most of which are low margin Switzerland RESIDENTIAL B2B MOBILE OTHER ESTIMATED COVID REVENUE IMPACTS PREMIUM LATE CHARGES/ FIXED & MOBILE ROAMING HANDSETS BROADCASTER SPORTS NON-PAY IMPACTS REVENUES ~$34m ~$8m ~$19m ~$17m
Slide 12: Group Overview
GROUP OVERVIEW Revenue decline largely attributable to low margin COVID-19 impacts; over $9bn of total liquidity REVENUE GROWTH (1) ADJUSTED EBITDA GROWTH (1) OFCF ($m) Pre-Lightning (as a % of revenue) construction capex 21% 23% 18% 21% 25% 678 649 607 595 601 553 544 (0.6%) (0.5%) (0.3%) COVID 508
Slide 13: P&E Additions
P&E ADDITIONS Capital spend continues to decline; H1 2020 intensity down to ~19% ex. Lightning H1 SPEND DECLINE CHANGE VS SPEND BY CATEGORY PRIOR YEAR ($m) NEW BUILD Lightning build volumes down CAPITAL INTENSITY 28.5% 32.8% 31.0% 25.0% 22.2% modestly, partly as lockdown -4% measures slow new build
Slide 14: H1 Divisional Overview
H1 DIVISIONAL OVERVIEW Improving OFCF conversion across most operations except CH investing in turnaround 50-50 $m U.K. & IRELAND BELGIUM SWITZERLAND DUTCH JV (3,4) H1' 19 H1' 20 H1' 19 H1' 20 H1' 19 H1' 20 H1' 19 H1' 20 REVENUE $3,305 $3,153 $1,425 $1,401 $631 $616 $2,178 $2,179 Rebased growth (2.1
Slide 15: Adjusted FCF
ADJUSTED FCF H1 phasing remains consistent with prior years, full year target on track $m Q1 2020 Q2 2020 H1 2020 Comments ADJUSTED EBITDA $1,150 $1,189 $2,339 P&E pre-Lightning P&E (555) (511) (1,066) OFCF pre-Lightning P&E $595 $678 $1,273 NET INTEREST (579) (21) (600) • Payments in Q1 and Q3 CASH
Slide 16: Conclusions
CONCLUSIONS U.K. JV with Telefonica on track Navigating through COVID-19, impacts have been manageable Achieved record high NPS in Q2 & positive customer additions H1 in line; optimistic on H2 but maintaining caution Reconfirming all 2020 guidance metrics FY 2020 (1) Guidance Assumptions Rebased Adj
Slide 17: Appendix
EXECUTIVE SUMMARY FINANCIAL RESULTS APPENDIX 17
Slide 18: 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 2020, we have adjusted our historical r
Slide 19: 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 is the primary measure used by our chief operating decisi
Slide 20: Glossary
GLOSSARY B2B: Business-to-Business. Customer Churn: the rate at which customers relinquish their subscriptions. The annual rolling average basis is calculated by dividing the number of disconnects during the preceding 12 months by the average number of customer relationships. For the purpose of comp
Slide 21: Glossary
GLOSSARY MVNO: Mobile Virtual Network Operator. NPS: Net Promoter Score. OFCF: As used herein, Operating Free Cash Flow or "OFCF", which is a non-GAAP measure, represents Adjusted EBITDA less property and equipment additions. OFCF is an additional metric that we use to measure the performance of our
Slide 22: Reconciliations: Rebase Adjustments
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 23: Reconciliations: Adjusted EBITDA
RECONCILIATIONS ADJUSTED EBITDA The following table provides a reconciliation of our earnings (loss) from continuing operations to Adjusted EBITDA for the indicated periods: 23
Slide 24: Reconciliations: Adjusted FCF
RECONCILIATIONS ADJUSTED FCF The following table provides a reconciliation of our net cash provided by operating activities to Adjusted Free Cash Flow for the indicated periods: 24
Slide 25: Reconciliations: OFCF
RECONCILIATIONS OFCF A reconciliation of our Adjusted EBITDA to (i) OFCF and (ii) OFCF pre-Lightning P&E additions for our continuing operations is presented in the following table: 25
Slide 26: Reconciliations: Centrally-Held Operating Cost Allocations
RECONCILIATIONS CENTRALLY-HELD OPERATING COST ALLOCATIONS During the fourth quarter of 2019, we changed the presentation of certain operating costs related to our centrally-managed technology and innovation function. These costs, which were previously included in Central and Corporate, are now alloc
Slide 27: Reconciliations: Centrally-Held P&E Attributions / Attributed OFCF
RECONCILIATIONS CENTRALLY-HELD P&E ATTRIBUTIONS / ATTRIBUTED OFCF Property and equipment additions presented for Central and Corporate include certain capital costs incurred for the benefit of our operating segments. Generally, for purposes of the consolidated financial statements of our borrowing g
Slide 28: Reconciliations: Centrally-Held P&E Attributions (Cont.)
RECONCILIATIONS CENTRALLY-HELD P&E ATTRIBUTIONS / ATTRIBUTED OFCF (CONT.) 28
Slide 29: Reconciliations: Supplemental Adjusted Attributed Free Cash Flow
RECONCILIATIONS SUPPLEMENTAL ADJUSTED ATTRIBUTED FREE CASH FLOW We define adjusted free cash flow as net cash provided by our operating activities, plus (i) cash payments for third-party costs directly associated with successful and unsuccessful acquisitions and dispositions and (ii) expenses financ
Slide 30: Reconciliations: Supplemental Adjusted Attributed FCF (Cont.)
RECONCILIATIONS SUPPLEMENTAL ADJUSTED ATTRIBUTED FREE CASH FLOW (CONT.) c. Represents the third-party interest and related derivative payments made by UPC Holding (a parent entity included in Central and Corporate) in relation during the applicable period. This interest is allocated to each of the r
Slide 31: Reconciliations: VodafoneZiggo JV Adjusted Free Cash Flow
RECONCILIATIONS VODAFONEZIGGO JV ADJUSTED FREE CASH FLOW (JV FCF) JV Adjusted FCF is defined as net cash provided by the operating activities, plus (i) expenses financed by an intermediary and (ii) interest payments on shareholder loans, less (a) capital expenditures, (b) principal payments on amoun
Slide 32: Reconciliations: Supplemental Adjusted Free Cash Flow
RECONCILIATIONS SUPPLEMENTAL ADJUSTED FREE CASH FLOW The following table provides a reconciliation of the cumulative Adjusted Free Cash Flow for Belgium since the date of FMC formation (March 31, 2016 – June 30, 2020) The following table provides a reconciliation of the cumulative Adjusted Free Cash
Slide 33: H1 Adjusted Attributed FCF – Alternative View
H1 ADJUSTED ATTRIBUTED FCF – ALTERNATIVE VIEW All OpCos remain substantially FCF positive despite COVID-19 U.K. & Poland / Liberty 50-50 $m Belgium Switzerland Central (2) Ireland Slovakia Global Dutch JV (3,4) ADJUSTED EBITDA (1) $1,310 $686m $285m $107m ($49m) $2,339 $1,034 P&E pre-lightning P&E (