Liberty Global Ltd. · NASDAQ:LBTYA
Liberty Global — Q4 2023 Earnings Presentation
48 slides from Liberty Global's earnings presentation, Feb 16, 2024
Slide 1: Q4 Results and Strategy Update 2024
Q4 RESULTS AND STRATEGY UPDATE 2024
Slide 2: Safe Harbor
“SAFE HARBOR” Forward-Looking Statements + Disclaimer This presentation contains forward-looking any distributions or dividends to be received from our operating companies; the strength of our, our affiliates' and our joint ventures’ respective balance sheets (including cash and liquidity position);
Slide 3: Additional Disclaimers
ADDITIONAL DISCLAIMERS No Offer to Sell or Solicit This communication is not an offer to sell or a solicitation of offers to purchase or subscribe for shares or a solicitation of any vote or approval. This document is not a prospectus within the meaning of the Swiss Financial Services Act and not a
Slide 4: Three Key Takeaways From Our Q4 and FY 2023 Results
THERE ARE THREE KEY TAKEAWAYS FROM OUR Q4 AND FY 2023 RESULTS 1 STRONG PERFORMANCE SUPPORTED BY COMMERCIAL INITIATIVES § Continued postpaid and broadband momentum in Q4 § Price adjustments support stable to growing revenues in FY 2023 2 ACHIEVED GUIDANCE METRICS IN 2023 § Including Distributable Cas
Slide 5: Strong Commercial Initiatives Drove Subscriber Growth in Q4
STRONG COMMERCIAL INITIATIVES DROVE SUBSCRIBER GROWTH IN Q4 Broadband Net Adds (k) Postpaid Net Adds (k) (1) Market Commentary 94 91 53 v Positive broadband adds despite a flat market overall and 23 9 43 intense competition 41 7 v Speed remains the differentiator with VMO2 broadband subs 22 25 getti
Slide 6: Mobile and B2B Growth Continues to Offset Pressure in Fixed Revenue
MOBILE AND B2B GROWTH CONTINUES TO OFFSET (1) PRESSURE IN FIXED REVENUE (2)(3) (3) Growth (%) FY 22 FY 23 FY 22 FY 23 FY 22 FY 23 FY 22 FY 23 FY 22 FY 23 Total Revenue 0.0% 0.0% 0.0% (0.2%) (0.3%) +1.2% +1.5% +1.3% +1.0% (0.4%) Consumer (2.1%)(4) (3.7%)(4) (4.1%) (2.6%) (3.0%) (1.3%) (0.9%) 0.0% (0.
Slide 7: Commercial Plans in Place to Support Mobile & Fixed B2C Growth in 2024
COMMERCIAL PLANS IN PLACE TO SUPPORT MOBILE & FIXED B2C GROWTH IN 2024 B2C Mobile Priorities B2C Fixed Priorities § MSR growth underpinned by price rises embedded § Manage headwinds from low-margin B2C video into contracts migration and fixed voice decline § Sponsorships and loyalty initiatives will
Slide 8: Our FMC Champions Are Investing in Fixed Networks but Also Expanding Reach
OUR FMC CHAMPIONS ARE INVESTING IN FIXED NETWORKS BUT ALSO EXPANDING REACH Clear Fixed Network Strategy HOMES PASSED(1) 38m 31m 32m 1 1 Gig speeds available across 100% of IE footprint today (with easy path to 2.5 Gig) CH BE 2 FTTH and DOCSIS 4 provide clear route to 10 Gig speeds and beyond NL UK §
Slide 9: Stable Revenue Trends in Q4
STABLE REVENUE TRENDS IN Q4 Reported growth Rebased growth VMO2 (1)(2) VODAFONEZIGGO (1)(3) TELENET (3) SUNRISE (3) REVENUE GROWTH (%) REVENUE GROWTH (%) REVENUE GROWTH (%) REVENUE GROWTH (%) Incl. construct. revenue 4.5% 2.9% 2.5% 7.1% 6.2% 3.7% 5.2% 1.8% 1.7% 1.5% 3.9% 1.3% 1.2% 1.0% 0.3% 0.0% (0.
Slide 10: Capital Allocation: Free Cash Flow Drivers
CAPITAL ALLOCATION: FREE CASH FLOW DRIVERS DISTRIBUTABLE CF FY 2023 Central Update $ millions SUNRISE ADJ FCF $360 Central net spend for FY23 inline with $200-250m TELENET ADJ FCF 260 1 guidance VMIE ADJ FCF (68) One off LG tech movements resulting from Infosys 2 transaction and $28m of DAC CENTRAL
Slide 11: 2024 Guidance Calls for Continued Strong FCF Generation Despite Elevated Capex
2024 GUIDANCE CALLS FOR CONTINUED STRONG FCF GENERATION DESPITE ELEVATED CAPEX (1) (2) (3) (3) (4) (5) § Revenue growth: Stable to § Revenue growth: Broadly stable § Revenue growth: Continued § Revenue growth: Broadly stable decline (excl. nexfibre) growth § Adj EBITDA growth: Stable to § Adj EBITDA
Slide 12: Investments at VMO2 Underpin Future Growth Story
INVESTMENTS AT VMO2 UNDERPIN FUTURE GROWTH STORY (1) VMO2 Financials 2021(2) – 2024E(3) 2024 Sets the Stage for Return to Growth in 2025 VMO2 (£m) -1.2% 0.0% -0.2% 2024 2023 Revenue guidance: § Stable revenue despite handset pressures, driven by (Excl. nexfibre Stable to construction revs) 10,383 10
Slide 13: Liberty Global Q4 2023
LIBERTY ~ GLOBAL Q4 2023 LIBERTY GLOBAL | FEBRUARY 16, 2024 @2O © © of
Slide 14: Delivering Value to Our Shareholders
DELIVERING VALUE TO OUR SHAREHOLDERS Moving forward our strategy will be focused on maximizing the inherent value of our core assets and delivering that value to shareholders over time Why Now? Five Announcements Today Agenda for Call ü Repositioned our portfolio to FMC #1 We intend to list Sunrise
Slide 15: We Have the Strategic Tools in Place to Execute This Plan
WE HAVE THE STRATEGIC TOOLS IN PLACE TO EXECUTE THIS PLAN Strong track record Siloed & portable Optimized tax of capital allocation debt structures planning Greater flexibility Commitment to Pipeline of scaled with Bermuda shareholder assets and domicile remuneration strategic platforms 15
Slide 16: Our FMC Champions Are Well Positioned to Deliver Value to Shareholders
OUR FMC CHAMPIONS ARE WELL POSITIONED TO DELIVER VALUE TO SHAREHOLDERS Market FMC Synergy Network Infra ECM Structure Complete Execution Investment Opportunity Optionality Value Creation Levers ü 5G rollout complete ü Clear hybrid strategy for fixed/fiber ü Synergy execution ahead of plan ü Strong F
Slide 17: Our Stock Currently Trades at a Significant Discount to Public Market Values
OUR STOCK CURRENTLY TRADES AT A SIGNIFICANT DISCOUNT TO PUBLIC MARKET VALUES Public Market Value Assumptions: Liberty Global $48 v Based on 2023 actual financial Sum-of-the-Parts Valuation(1) results for Liberty OpCos v Valued using current OFCF multiples for Telco incumbents in UK, NL and CH $30 v
Slide 18: We Intend to List & Spin Sunrise in H2 2024
WE INTEND TO LIST & SPIN SUNRISE IN H2 2024 Transaction Rationale Further Considerations v Summary: Intention to list Sunrise on v Shrink LBTY Valuation Gap: v Funding: $1.7 billion for debt the Swiss exchange and spin-off Establishes fully-distributed local reduction funded from the sale of All3 10
Slide 19: Liberty Global Benelux Consolidates Our Interests in Belgium & the Netherlands
LIBERTY GLOBAL BENELUX CONSOLIDATES OUR INTERESTS IN BELGIUM & THE NETHERLANDS Transaction Rationale Further Considerations v Creation of Liberty Global Benelux: v Regional Champion: Natural pairing of v Strategic Growth Plans: Include To consolidate our interests in The two national FMC Champions F
Slide 20: A New Fixed NetCo in the U.K. Will Underpin Our Fiber Initiatives
A NEW ‘FIXED NETCO’ IN THE U.K. WILL UNDERPIN OUR FIBER INITIATIVES IN OUR LARGEST MARKET Planned U.K. Structure Rationale v Underpins Fiber Strategy: Greater focus on FTTH upgrade and wholesale revenue through dedicated team, strategy and balance sheet 100% v New Financing Options: Would be one of
Slide 21: We Have Agreed to Sell All3Media for £1.15 Billion
WE HAVE AGREED TO SELL ALL3MEDIA FOR £1.15 BILLION OR c. 12.0X 2023E EBITDA Transaction Highlights v Summary: Liberty Global and Warner Bros. Discovery v Premium Exit Valuation: Attractive valuation multiple have agreed to sell their 50/50 JV All3Media to Redbird at 12.0x EBITDA IMI v Source of Liqu
Slide 22: We Remain Squarely Focused on Shareholder Remuneration in 2024
WE REMAIN SQUARELY FOCUSED ON SHAREHOLDER REMUNERATION IN 2024 Repurchased ~60% 2024 Guidance Includes of Shares Since 2017 Buyback and Dividend 900m $1.7bn 378m Up to 10% Up to $800m of Shares(2) Buyback +$1.7bn LIBERTY SHAREHOLDERS Pre-Spin Equity Value Jan 1 Jan 31 2017 2024 Total Investment(1) $
Slide 23: We Have a Strong Track Record Allocating Capital
WE HAVE A STRONG TRACK RECORD ALLOCATING CAPITAL AND WILL CONTINUE ON THAT PATH Historical Capital Allocation Sources of Cash Uses of Cash 2017 - 2023 Upstreamed FCF from OpCos Sunrise Spin Transaction Net After-Tax v Big four FMC Champions are FCF v Committed to deleveraging Sunrise by ~$14.4B Proc
Slide 24: We Are Comfortable with Current Leverage but May Delever into Accretive Transactions
WE ARE COMFORTABLE WITH CURRENT LEVERAGE BUT MAY DELEVER INTO ACCRETIVE TRANSACTIONS 14.0B Rate 5.2% 4.0% 3.0% 3.5% 3.9% 11.9B Tenor 6yrs 6yrs 5yrs 5yrs 6yrs 5.9x 6.0x 5.4x 7.9B Net Debt 5.1x $4.6B(1) 6.9B 3.9x CASH & LIQUID STAKES 3.2B 2.4B VMO2 VodafoneZiggo SunriseUPC Telenet VMIE 2023 2024 2025
Slide 25: Our Ventures Portfolio Is Highly Valuable and a Source of Cash and Value Creation
OUR VENTURES PORTFOLIO IS HIGHLY VALUABLE (1) AND A SOURCE OF CASH AND VALUE CREATION TECH CONTENT INFRA FINANCIAL STRATEGIC Provides benefits to core Includes legacy and new Focused on creating new Opportunistic positions in RATIONALE FMC Champions including investments in the media, “unicorns” in
Slide 26: 5 Key Takeaways From Today's Strategy Update
5 KEY TAKEAWAYS FROM TODAY’S STRATEGY UPDATE 1 2 3 Clear pivot in strategy Continued and opportunistic Plans in place to enhance which will see us distribute commitment to shareholder core FMC Champions’ value to shareholders when remuneration, including market position, growth possible, in order to
Slide 27: Appendix
APPENDIX
Slide 28: Adjusted Free Cash Flow & Distributable Cash Flow for YTD
ADJUSTED FREE CASH FLOW & DISTRIBUTABLE CASH FLOW FOR YTD 50-50 50-50 LIBERTY VODAFONEZIGGO VMO2 JV $M VM IRELAND TELENET SUNRISE CENTRAL (1) JV GLOBAL IFRS BASIS (2,3) (2,3,4) ADJUSTED EBITDA $181 $1,315 $1,149 $(275) $2,370 $1,973 $4,998 P&E ADDITIONS (177) (747) (586) (68) (1,578) (990) (2,751) A
Slide 29: YTD Q4 2023 Adj EBITDA & Adj EBITDAaL
YTD Q4 2023 ADJ EBITDA & ADJ EBITDAAL(1) 50-50 50-50 LIBERTY VODAFONEZIGGO VMO2 JV $M VM IRELAND TELENET SUNRISE CENTRAL (2) GLOBAL JV IFRS BASIS (3,4) (3,4,5) ADJUSTED EBITDA $181 $1,315 $1,149 $(275) $2,370 $1,973 $4,998 FINANCE LEASE ADJUSTMENTS - (24) (5) (7) (36) (10) (281) ADJUSTED EBITDAaL $1
Slide 30: Central Update: Within $200-$250M of Net Central Spend Target
(1) CENTRAL UPDATE : WITHIN $200-$250M OF NET CENTRAL SPEND TARGET $ millions Q1 2023 Q2 2023 Q3 2023 Q4 2023 Revenue decline effective Q2 primarily the result of our agreement with Infosys and our determination to market, and sell, certain of our internally-developed software to third parties, wher
Slide 31: 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 rebase growth rates on a comparable basis for all businesses that we owned during 2023, we have adjusted our historical re
Slide 32: 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 33: Glossary
GLOSSARY • Distributable Cash Flow: We define Distributable Cash Flow as Adjusted FCF plus any dividends received from our equity affiliates that are funded by activities outside of their normal course of operations, including, for example, those funded by recapitalizations (referred to as “Other Af
Slide 34: Glossary
GLOSSARY Debt and Net Debt Ratios: Our debt and net debt ratios, which are non-GAAP metrics, are defined as total debt and net debt, respectively, divided by reported net loss for the last twelve months (reported LTM net loss) and Adjusted EBITDA for the last twelve months (LTM Adjusted EBITDA). Net
Slide 35: Glossary
GLOSSARY SIM: Subscriber Identification Module. SOHO: Small or Home Office Subscribers. Telephony Subscriber: A home, residential multiple dwelling unit or commercial unit that receives voice services over our networks, or that we service through a partner network. Telephony Subscribers exclude mobi
Slide 36: 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 37: Reconciliations: Rebase Adjustments (Continued)
RECONCILIATIONS REBASE ADJUSTMENTS (CONTINUED) 37
Slide 38: Reconciliations: Rebase Adjustments (Continued)
RECONCILIATIONS REBASE ADJUSTMENTS (CONTINUED) 38
Slide 39: 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 year ended December 31, 2023 (in millions): 39
Slide 40: Reconciliations: Full Company Adjusted FCF & Distributable CF
RECONCILIATIONS LIBERTY GLOBAL FULL COMPANY ADJUSTED FCF & DISTRIBUTABLE CF 40
Slide 41: Reconciliations: Full Company Adjusted FCF & Distributable CF (Continued)
RECONCILIATIONS LIBERTY GLOBAL FULL COMPANY ADJUSTED FCF & DISTRIBUTABLE CF (CONTINUED) 41
Slide 42: Reconciliations: Supplemental Adjusted Attributed FCF
RECONCILIATIONS SUPPLEMENTAL ADJUSTED ATTRIBUTED FREE CASH FLOW & ATTRIBUTED 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 ou
Slide 43: Reconciliations – VodafoneZiggo JV
RECONCILIATIONS – VODAFONEZIGGO JV VODAFONEZIGGO JV ADJUSTED FREE CASH FLOW (VODAFONEZIGGO JV 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 44: VMO2 JV Reconciliations – Revenue
VMO2 JV RECONCILIATIONS – REVENUE The following tables provide reconciliations from VMO2 JV US GAAP revenue to Rebased IFRS revenue for the indicated periods: 44
Slide 45: VMO2 JV Reconciliations – Revenue (Continued)
VMO2 JV RECONCILIATIONS – REVENUE (CONTINUED) The following tables provide reconciliations from VMO2 JV US GAAP revenue to Rebased IFRS revenue for the indicated periods: 45
Slide 46: VMO2 JV Reconciliations – Adj EBITDA
VMO2 JV RECONCILIATIONS – ADJ EBITDA The following tables provide reconciliations from VMO2 JV US GAAP Adj EBITDA to Rebased IFRS Adj EBITDA for the indicated periods: 46
Slide 47: 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 US GAAP Adj EBITDA to IFRS rebased Adj EBITDA and Adj EBITDA less P&E Additions for the indicated periods: 47
Slide 48: 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