Liberty Global Ltd. · NASDAQ:LBTYA
Liberty Global — Q1 2020 Earnings Presentation
32 slides from Liberty Global's earnings presentation, May 7, 2020
Slide 1: Liberty Global plc Investor Call Q1 2020
LIBERTY GLOBAL PLC INVESTOR CALL | Q1 2020 May 7th, 2020
Slide 2: Safe Harbor: Forward-Looking Statements + Disclaimer
“SAFE HARBOR” consummation of the Proposed Transaction; expected financing and recapitalization transactions undertaken in Forward-Looking Statements + Disclaimer connection with the Proposed Transaction and risks associated such transactions; any negative effects of the This presentation contains f
Slide 3: Executive Summary
EXECUTIVE SUMMARY FINANCIAL RESULTS APPENDIX 3
Slide 4: Response to COVID-19
RESPONSE TO COVID-19 OUR FOCUS OPERATIONS OUTLOOK Protect Employees Solid Network Performance Not changing or • Enabled home working • Absorbed increased bandwidth: suspending guidance today • Following all local safety guidelines • >20% downstream increase • Still assessing medium-term • $4m Employ
Slide 5: Q1 2020 Highlights
Q1 2020 HIGHLIGHTS Q1 2020 (1) 1 Tackling COVID-19 head on OPERATIONS ACTUAL YOY GROWTH Focused on employee safety and well-being Customer Net Adds (19k) (17k) Keeping our customers connected and entertained Fixed Customer Anticipating modest operational and financial impact Rebased ARPU $59.59 +0.6
Slide 6: Virgin Media + O2: Transaction Summary
VIRGIN MEDIA + O2: TRANSACTION SUMMARY (1) DEAL SUMMARY LIBERTY GLOBAL BENEFITS • 50:50 joint venture with Telefonica; equal governance; • Clear convergence champion with the best fixed & rotating Chairman; management agreed by closing mobile networks, strong brands and significant scale (46 • Virgi
Slide 7: Virgin Media + O2: Combined Group at a Glance
VIRGIN MEDIA + O2: COMBINED GROUP AT A GLANCE #1 Competitive BEST IN-CLASS Spectrum INFRASTRUCTURE Position 15mm fixed homes passed UK’s largest Significant high speed of which 95% are gigabit ready and mobile network 13% are launched coverage with 1Gbps across the UK by 2021 STRONGER, 32.6 Million
Slide 8: Liberty Global: Pro Forma Group
LIBERTY GLOBAL: PRO FORMA GROUP 50% 60% 50% 100% 100% Other (Ventures, UK BE NL CH PL/SK Content, etc.) EUROPEAN FMC SCALE VALUE CREATION STRATEGY • Best converged assets in the best markets • Creation of national FMC champions • 80mm combined fixed and mobile subscribers (RGUs) (1) • Focus on FCF g
Slide 9: Liberty Global: Sum-of-the-Parts
LIBERTY GLOBAL: SUM-OF-THE-PARTS (1) 50% 60% 50% 100% Other UK BE NL CH Cash(3) Assets Per Share Deal Value ~$14 Ireland 2019 (4) 2019 (5) Market Poland OCF: $2.0 billion OCF: $628 million $7.4 billion Synergies ~$6 Value of Slovakia OFCF: $1.1 billion OFCF: $298 million at Q1 Stock Ventures, FCF: $
Slide 10: Virgin Media: Q1 2020 Operating Update
VIRGIN MEDIA: Q1 2020 OPERATING UPDATE HIGHLIGHTS GROWING ARPU WHILE HOLDING CUSTOMERS STABLE GROWING POSTPAID MOBILE Total Postpaid subscribers: 3.1m WINNING AND RETAINING Fixed Line Customers SPEED LEADERSHIP (3) CUSTOMERS (000s) Postpaid Net Adds (Consumer) 5,972 5,966 5,963 5,954 5,952 Average U
Slide 11: Financial Results
EXECUTIVE SUMMARY FINANCIAL RESULTS APPENDIX 11
Slide 12: Divisional Overview
DIVISIONAL OVERVIEW Strong OFCF conversion post Centrally-held P&E attributions 50-50 In millions, except %s U.K. & IRELAND BELGIUM SWITZERLAND DUTCH JV (3,4) Q1' 19 Q1' 20 Q1' 19 Q1' 20 Q1' 19 Q1' 20 Q1' 19 Q1' 20 REVENUE $1,661 $1,621 $712 $718 $316 $317 $1,094 $1,097 Rebased revenue growth (0.6%)
Slide 13: Group Overview
GROUP OVERVIEW Stable top line; OCF growth impacted by COVID-19; ~$10bn of total liquidity REVENUE GROWTH(1) OCF GROWTH(1) OFCF(1) ($m and % of Revenue) % exclude Lightning capex Pre-Lightning construction capex 649 607 593 569 553 508 536 485 496 433 (0.3%) (0.5%) (0.6%) (0.6%) (0.5%) 20% 21% 23% 1
Slide 14: Adjusted FCF
ADJUSTED FCF Q1 outflow driven by interest payments; consistent with prior years $m FY 2019 Q1 2020 Comments OCF $4,949 $1,150 P&E pre-Lightning Capex (2,490) (555) OFCF pre-Lightning Capex $2,459 $595 NET INTEREST (1,118) (579) • Payments in Q1 and Q3 CASH TAX (358) 5 • FY20 expected to be lower th
Slide 15: Outlook
OUTLOOK Maintaining 2020 Guidance; revisiting at Q2 • Still assessing medium-term impact from COVID-19 • Expect to update investors on our Q2 earnings call • Encouraged by operating prospects • No current need to change or suspend full-year guidance FY 2020 (1) Original Comments Guidance Rebased Rev
Slide 16: Appendix
EXECUTIVE SUMMARY FINANCIAL RESULTS APPENDIX 16
Slide 17: Virgin Media: Project Lightning Update
VIRGIN MEDIA: PROJECT LIGHTNING UPDATE HIGHLIGHTS CONSTRUCTION ACTIVITY KPIs • Government allowing PREMISES CONSTRUCTED (000s) ARPU £ construction to continue however some COVID-19 Lightning to date: 2,182k 46.48 46.15 delays 45.39 45.39 45.75 • Driving attractive returns: 154 130 119 102 93 • ARPU
Slide 18: UPC Switzerland: Q1 2020 Operating Update
UPC SWITZERLAND: Q1 2020 OPERATING UPDATE Operating trends encouraging but pricing pressure continues HIGHLIGHTS GROWING ARPU WHILE HOLDING CUSTOMERS STABLE GROWING POSTPAID MOBILE Total Postpaid subscribers: 213k • Turnaround initiatives Fixed Line Customers SPEED LEADERSHIP progressing well, (000s
Slide 19: Telenet: Q1 2020 Operating Update
TELENET: Q1 2020 OPERATING UPDATE Executing against all key strategic drivers HIGHLIGHTS GROWING ARPU WHILE HOLDING CUSTOMERS STABLE GROWING POSTPAID MOBILE Total Postpaid subscribers: 2.1m • Draft wholesale pricing Fixed Line Customers SPEED LEADERSHIP (000s) Postpaid Net Adds (Consumer) notified t
Slide 20: VodafoneZiggo: Q1 2020 Operating Update
VODAFONE ZIGGO: Q1 2020 OPERATING UPDATE (1) Operating momentum continues in Q1 2020 HIGHLIGHTS GROWING ARPU WHILE HOLDING CUSTOMERS STABLE GROWING POSTPAID MOBILE Total Postpaid subscribers: 2.8m • Regulated access Fixed Line Customers SPEED LEADERSHIP requirement annulled (000s) Postpaid Net Adds
Slide 21: 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 2019 amounts to derive our rebased we owned during 2020, we have adjusted our historical revenue, OCF and OFCF for the three growth r
Slide 22: 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 i. For purposes of our condensed consolidated statements of cash flows, expenses financed by an intermediary filed with the Securities and Exchange Commission on Form 10-Q or Form 10
Slide 23: Glossary
GLOSSARY ARPU: Average Revenue Per Unit is the average monthly subscription revenue per average cable customer calculations. Customers who move within our cable footprint and upgrades and downgrades between relationship or mobile subscriber, as applicable. ARPU per average fixed-line customer relati
Slide 24: Glossary
GLOSSARY Mobile Subscriber Count: the number of active SIM cards in service rather than services provided. For OCF margin: calculated by dividing OCF by total revenue for the applicable period. example, if a mobile subscriber has both a data and voice plan on a smartphone this would equate to one mo
Slide 25: 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 mobile
Slide 26: Appendix: Q1 Highlights
APPENDIX Q1 HIGHLIGHTS Liberty Global (continuing operations) Financial (in millions, except percentages) Revenue Operating income OCF P&E additions OFCF PAHPHHH Q1 2020 2,875.8 280.6 1,150.3 654.4 495.9 Q1 2019 $ 2,868.0 $ 105.5 $ 1,183.3 $ 698.6 $ 4847 YoY Growth (reported) 0.3% 166.0% (2.8%) (6.3
Slide 27: Centrally-Held Operating Cost Allocations
APPENDIX 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 allocated to
Slide 28: Centrally-Held P&E Attributions / Attributed OFCF
APPENDIX 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 groups,
Slide 29: Adjusted Attributed Free Cash Flow
APPENDIX 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 financed by an intermediar
Slide 30: Adjusted Attributed Free Cash Flow
APPENDIX ADJUSTED ATTRIBUTED FREE CASH FLOW (a) Includes intersegment eliminations. (b) Represents interest on an intercompany loan that we eliminate for purposes of this presentation as intercompany interest income/expense does not impact our leverage calculations in our consolidated results or our
Slide 31: Adjusted Attributed Free Cash Flow – Alternate View
APPENDIX ADJUSTED ATTRIBUTED FREE CASH FLOW – ALTERNATE VIEW U.K. & Poland / Liberty 50-50 $m Belgium Switzerland Central (2) Ireland Slovakia Global Dutch JV (3,4) OCF (1) $2,801 $1,386m $628m $215m ($81m) $4,949 $1,988 P&E pre-lightning capex (5) (1,325) (548) (330) (134) (153) (2,490) (888) OFCF
Slide 32: VodafoneZiggo JV Free Cash Flow (JV FCF)
APPENDIX VODAFONEZIGGO JV FREE CASH FLOW (JV FCF) JV 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 amounts financed by vendors an