Liberty Global Ltd. · NASDAQ:LBTYA
Liberty Global — Q2 2019 Earnings Presentation
24 slides from Liberty Global's earnings presentation, Aug 8, 2019
Slide 1: Liberty Global plc Investor Call Q2 2019
LIBERTY GLOBAL PLC INVESTOR CALL | Q2 2019 August 8, 2019
Slide 2: Safe Harbor Forward-Looking Statements + Disclaimer
“SAFE HARBOR” yet commenced, and there can be no assurances that the Company will commence the tender offers on the terms described in this Forward-Looking Statements + Disclaimer presentation or at all. The tender offers will be made only pursuant to the Offer to Purchase, the Letters of Transmitta
Slide 3: Delivering 2019 Priorities
DELIVERING 2019 PRIORITIES GUIDANCE BASIS Q2’19 H1’19 1 Complete announced M&A transactions Continuing Operations excluding Switzerland – Vodafone deal closed July 31 Revenue Growth (rebased) (0.6%) (0.4%) – Sale of UPC Switzerland on track for Q4’19 – Total expected PF cash balance of $14.4 billion
Slide 4: Capital Allocation Approach
CAPITAL ALLOCATION APPROACH Intended $2.5 bn tender offer announced BUYBACKS Expected price ranges of $25.25-$29.00 per $27.6B A share and $24.75-$28.50 per C share SUNRISE $6.3B Continue to target 4-5x leverage VODAFONE CAPITAL STRUCTURE All credit pools at/below 5x by year-end LG CORE UK
Slide 5: Fixed & Mobile Subscribers
FIXED & MOBILE SUBSCRIBERS FIXED SUBSCRIBERS (Excluding Switzerland) MARKET PERFORMANCE • Virgin Media broadband and video net adds slow in Q2 TOTAL RGUs (M’s) 22.89 22.95 22.96 23.03 23.03 amid competitive market dynamics, yet market share stable with U.K. churn flat on prior year 68 NET ADDS (000’
Slide 6: Virgin Media Returns to ARPU Growth
VIRGIN MEDIA RETURNS TO ARPU GROWTH Softer volumes due to market dynamics but underlying demand for high speed broadband remains PRICE VOLUME CUSTOMER ARPU CUSTOMER NET ADDS RGU NET ADDS REBASED GROWTH YOY (000s) (000s) 112 105 1.9% 2.0% VOICE 37 59 1.6% 27 25 54 17 30 24 46 BB 0.5% 9 30 (5) 39 VIDE
Slide 7: Project Lightning Leads the Market
PROJECT LIGHTNING LEADS THE MARKET Compelling returns, consistent build rate and improving efficiency UK/IE CUSTOMER UK/IE OCF UK/IE OFCF UK PENETRATION ARPU 35% H1 £45.39 £90m 31% 30% £44.66 H2 (£121m) 28% 29% 28% 27% 27% 28% 28% (£115m) 25% 26% £42.58 H2 23% 24% £60m 21% £41.63 £41.34 £29m (£313m)
Slide 8: Swiss Growth Drivers Working
SWISS GROWTH DRIVERS WORKING 1 TRANSFORMING TV 2 DRIVING FMC 3 TAKING SPEED TO 4 INVESTING IN PROPOSITION INTO THE BASE THE NEXT LEVEL DIGITIZATION CUMULATIVE BOXES % OF SUBSCRIBERS THAT TOP HEADLINE SPEED DEPLOYED TAKE A BROADBAND & MBPs (000s) 190 MOBILE SUBSCRIPTION 16% 1,000 • Multi-year initiat
Slide 9: Swiss Results Right on Plan
SWISS RESULTS RIGHT ON PLAN IMPROVE FIXED-LINE GROW THE STABILIZE THE TRACKING OCF TO RESULTS MOBILE BASE TOP LINE INVESTMENT PLAN NET RGU ADDS MOBILE POSTPAID ADDS REVENUE OCF 000s 000s CHFm (1) CHFm (1) (3.7%) (3.6%) (8.7%) (7.4%) 14 316 170 315 163 13 (28) (43) Q1'19 Q2'19 Q3'19 Q4'19 Q1'19 Q2'19
Slide 10: Executive Summary / Financial Results / Appendix
EXECUTIVE SUMMARY FINANCIAL RESULTS APPENDIX 10
Slide 11: Revenue & OCF Growth: Continuing Operations
REVENUE & OCF GROWTH: CONTINUING OPERATIONS (1) Softer Q2 OCF performance as known headwinds in UK and Belgium emerge LIBERTY GLOBAL U.K. & IRELAND BELGIUM (Continuing Operations) 2.8% 4.1% 4.1% REVENUE REVENUE REVENUE 1.9% 1.2% (0.6%) 2.4% ex-Switzerland 0.4% (1.0%) (1.5%) (0.7%) (0.6%) (1.5%) (0.6
Slide 12: Descaling Central
DESCALING CENTRAL Two distinct areas; cost reductions progressing in line with plan 2018 Target Status Baseline CORPORATE ~20% • On track to achieve targeted reductions 1 ~$260m Typical head office functions: opex reduction • Key workstreams include: • Finance by 2020 • Reducing layers • Legal • Rat
Slide 13: Q2 P&E Additions
Q2 P&E ADDITIONS Significant YoY capex reductions across all Continuing Operations P&E Additions Q2 2019 % Revenue vs 2018 • Targeting ~20% reduction in U.K. & IRELAND $371m 22.6% (23%) capital intensity for full-year BY 2019 BELGIUM $138m 19.3% (19%) SEGMENT CEE $20m 16.5% (34%) • YoY reduction in
Slide 14: H1'19 Financial Overview
H1’19 FINANCIAL OVERVIEW $1 billion of OFCF in H1, growing at almost 40% YoY including Switzerland (74% ex-Switzerland) U.K. & IRELAND POLAND AND LG Continuing 50-50 PROJECT REST OF BELGIUM SWITZERLAND TOTAL SLOVAKIA Operations (4 ) DUTCH JV (5) LIGHTNING (1 ) BUSINESS (2 ) As of and for six months
Slide 15: Pro Forma Adjusted FCF
PRO FORMA ADJUSTED FCF (1) Guidance Basis (Continuing Operations excluding Switzerland) Q1 2019 Q2 2019 Q2 comments OCF (Pro forma) $1,078m $1,078m • Pro forma for TSAs including VOD $38m, Sunrise $22m P&E ADDITIONS (640) (605) OFCF (Pro forma) 438 473 • Includes ~$83m negative incremental OFCF cont
Slide 16: Balance Sheet
BALANCE SHEET LEVERAGE FRAMEWORK • Committed to 4-5x range Committed to 4-5x target leverage • De-risked capital structure: GROSS (1,2) – Average tenor ~7 years, no material 5.4 5.4 5.2 5.0 5.1 5.0 near-term maturities – Fully hedged FX & interest rate exposure, swapped WACD: 4.1% RECENT ACTIVITY &
Slide 17: Conclusions
CONCLUSIONS Major strategic and operational milestones being achieved • Sale of UPC Switzerland remains on track, business fundamentals improving • U.K. price rise announced and Sky content renegotiation completed • Strong underlying OFCF & FCF generation • Reconfirming all 2019 guidance targets: Co
Slide 18: Executive Summary / Financial Results / Appendix
EXECUTIVE SUMMARY FINANCIAL RESULTS APPENDIX 18
Slide 19: 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 2018 amounts to derive our rebased we owned during 2019, we have adjusted our historical revenue and OCF for the three and six growth
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 Free Cash Flow (FCF): net cash provided by our operating activities, plus (i) cas
Slide 21: Glossary
GLOSSARY v. Represents our preliminary estimate of the net cash flows that we Cable customer relationships, mobile subscribers and RGUs of entities Cable Customer Relationships: the number of customers who would have received from transitional services agreements if the sale acquired during the peri
Slide 22: Glossary
GLOSSARY Homes Passed: homes, residential multiple dwelling units or commercial units that can be connected to our networks without materially extending the distribution plant, except for DTH homes. Certain of our Homes OCF: As used herein, OCF has the same meaning as the term "Adjusted OIBDA" that
Slide 23: Glossary
GLOSSARY Property and equipment additions (P&E Additions): includes capital expenditures on an accrual basis, amounts financed under vendor financing or finance lease arrangements and other non-cash additions. RGU: A Revenue Generating Unit is separately a Basic Video Subscriber, Enhanced Video Subs
Slide 24: Appendix - Lightning
APPENDIX - LIGHTNING Revenue and OCF of UKIE’s Project Lighting are presented on and incremental basis. For example, OCF growth and OCF margins (and therefore OFCF growth and margins) for UKIE’s Project Lightning represents “Incremental OCF”, which is supplemental non-GAAP information that has a dif