Liberty Global Ltd. · NASDAQ:LBTYA
Liberty Global — Q4 2022 Earnings Presentation
45 slides from Liberty Global's earnings presentation, Feb 23, 2023
Slide 1: Investor Call Q4 2022
Updated Cover on new template LIBERTY GLOBAL PLC INVESTOR CALL Q4 2022 February 23, 2023
Slide 2: Safe Harbor
“SAFE HARBOR” Forward-Looking Statements + Disclaimer outside of our control, such as the continued use by subscribers and potential subscribers of our and our affiliates’ services and their willingness to upgrade to our more advanced offerings; our and our affiliates’ This presentation contains for
Slide 3: Q4 & 2022 Operating Highlights
Q4 & 2022 OPERATING HIGHLIGHTS 1 All 2022 guidance achieved across FMC group(1); full company Distributable Cash Flow guidance exceeded (using original FX) Strong Q4 finish to 2022 with broadband and postpaid adds in 2 every market, and over 10% Adj. EBITDA growth at VMO2(2) 3 B2B, mobile and broadb
Slide 4: Q4 Connectivity Trends: Solid Across the Group Despite Competitive Pressure
Q4 CONNECTIVITY TRENDS: SOLID ACROSS THE GROUP DESPITE COMPETITIVE PRESSURE Postpaid Mobile Net Adds Broadband Net Adds VMO2 (1) BROADBAND SUNRISE BROADBAND VMO2 AND POSTPAID MOBILE AND POSTPAID MOBILE NET ADDS (000’S) NET ADDS (000’S) Broadband: Strongest net adds of the year despite competitive ma
Slide 5: Revenue Growth: Stable, Supported by Strong Mobile & B2B
REVENUE GROWTH: STABLE, SUPPORTED BY STRONG (1) MOBILE & B2B (2) (2) Revenue growth stable for 8th Growth (YoY %) FY22 FY22 FY22 FY22 consecutive quarter in our consolidated operations and 7th Total Revenue 0.0% 0.0% +1.5% (0.3%) in our JVs (3) Fixed consumer pressure Consumer Fixed (2.1%) (4.1%) (0
Slide 6: Fixed B2C: Addressing Headwinds with Price and Product Innovation
FIXED B2C: ADDRESSING HEADWINDS WITH PRICE AND PRODUCT INNOVATION FIXED ARPU TRENDS (1,2) FIXED COMMERCIAL INITIATIVES CAGR -3% -3% 1% 1% FIXED MOBILE CONVERGENCE Improves churn, NPS and cross-sell 69 67 65 59 59 60 50 49 47 51 52 52 New bundles with customer rewards/loyalty schemes VMO2 (£) Sunrise
Slide 7: Fixed Networks: Strategies Are Ramping Up
FIXED NETWORKS: STRATEGIES ARE RAMPING UP KEY MILESTONES DELIVERED IN ’22; CLEAR FIXED CONNECTIVITY ROADMAP NETWORK PIPELINE FOR ‘23 1GB upgrade completed across all markets • Over 1m FTTH homes added in 2022 (Lightning and 1 Fiber upgrades) (largest 1GB footprint in Europe with >31m homes(1)) UK •
Slide 8: Sum-of-the-Parts: Drivers in Place to Shrink Today's Valuation Gap
SUM-OF-THE-PARTS: DRIVERS IN PLACE TO SHRINK TODAY’S VALUATION GAP PREMIUM PRECEDENT VALUATIONS: • 8-10x EBITDA MARKET • 18-20x OFCF VALUATIONS VALUE DRIVERS: $30 • Sector tailwinds • Convergence • Synergies • Free cash flow IMPLIED VALUATION: AVERAGE • ~6.5x Adj. EBITDA(1) + ANALYST • ~14.5x OFCF(1
Slide 9: Capital Allocation: Committed to Shareholder Remuneration
CAPITAL ALLOCATION: COMMITTED TO SHAREHOLDER REMUNERATION ANNUAL SHARE BUYBACKS TYPICALLY >10% SHARES O/S CAPITAL ALLOCATION FRAMEWORK SOURCES OF CASH $3.4 billion at corporate today 900 Average per annum 50% 11% reduction in $1.6b Distributable Cash Flow to parent 10% red u ctio share count since L
Slide 10: Ventures Update: Valued at $3.1B Today
VENTURES UPDATE: VALUED AT $3.1B TODAY (1) VENTURES Tech Tech Update Infra Update Vodafone ($0.9B) Top 5 Investments Top 3 Investments Opportunistic PORTFOLIO (1) • Plume, Lacework, Pax • AtlasEdge ($200m) • Stock undervalued 8, Aviatrix, Bitsight • Edgeconnex ($185m) • Near-term catalysts • Smart h
Slide 11: Financial Results
INVESTOR CALL Q4 2022 FINANCIAL RESULTS 11
Slide 12: FY22 Revenue: Stable Revenue Trends in 2022
FY22 REVENUE: STABLE REVENUE TRENDS IN 2022 (1) (1) YoY growth rates presented on a rebased basis for VodafoneZiggo, Telenet and Sunrise. Q3 & Q4 2022 VMO2 IFRS growth rates presented on a rebased basis. YTD Q4 2022 growth rate and YoY growth rates prior to Q3 2022 for VMO2 based on FX neutral IFRS
Slide 13: FY22 Adj. EBITDA: +6% VMO2 Growth Highlight
FY22 ADJ. EBITDA: +6% VMO2 GROWTH HIGHLIGHT (1) VMO2(2) TRANSACTION ADJ. SUNRISE VMO2(2) EBITDA GROWTH (%) ADJ. EBITDA GROWTH (%) Strong acceleration in Adj. EBITDA in Q4 supported by synergy delivery and Includes continued price rise benefit $40M CTC 10.1% Expect Q1’23 to be impacted by phasing inc
Slide 14: Hot Topic #1: Energy Exposure Update
HOT TOPIC #1: ENERGY EXPOSURE UPDATE ENERGY COSTS(1) Typical Hedging policy Energy Costs 2021 2022 2023 12 months ahead £129m £211m ~£290m €28m €55m ~€120m Energy consumption €30m €51m ~€60m stable CHF30m CHF35m ~CHF40m New, longer-term Overall >90% hedged for 2023 energy costs across group, energy
Slide 15: Hot Topic #2: Synergies on Track in UK and CH
HOT TOPIC #2: SYNERGIES ON TRACK IN UK AND CH VMO2(1) NPV of synergies £6.2bn (annualized £540m). Two thirds of synergies opex related. Overall CTC spend envelope Delivered approximately £700m Achieved well over 30% of synergies run-rate through 2022, 2023E CTC stepping down to aiming for over 50% a
Slide 16: Full Company Distributable CF: FY Guidance of $1.7B Exceeded
FULL COMPANY DISTRIBUTABLE CF : FY GUIDANCE OF (1) $1.7B EXCEEDED(AT GUIDANCE FX) (2) FY’22 CAPITAL INTENSITY IN LINE WITH GUIDANCE (6) FY FY $FULL COMPANY DISTRIBUTABLE CF 2021 2022 Includes ROU Additions 25.0% 20.0% ADJ EBITDA LESS P&E ADDITIONS $1,921 $1,032 15.0% NET INTEREST (821) (415) 10.0% C
Slide 17: 2023 Guidance: Broadly Stable Distributable FCF
2023 GUIDANCE: BROADLY STABLE DISTRIBUTABLE FCF (1) (1) (1,2,4) [IFRS Guidance] • Revenue growth • Low-single digit revenue decline • Mid-single digit Adj. EBITDA growth (excl. CTC) • Low to Mid-single digit Adj. EBITDA decline (inc. • Opex and Capex CTC ~£150m CTC) • P+E additions of around £2.0B •
Slide 18: Appendix
INVESTOR CALL Q4 2022 APPENDIX 18
Slide 19: Ventures: Portfolio FMV $3.1B
VENTURES: PORTFOLIO FMV $3.1B (1) VENTURES FAIR MARKET VALUE ($M) VENTURES PORTFOLIO GREW SLIGHTLY IN Q4’22, ending with $3.0B $3.1B $3.1B FMV (-~$0.4B vs Dec-2021)(1) CONTENT ITV share price recovery in Q4 TECH / INFRASTRUCTURE Tech valuations impacted by updated fair market valuations which reflec
Slide 20: FY2022: Adj Attributed FCF & Distributable CF
FY2022: ADJ ATTRIBUTED FCF & DISTRIBUTABLE CF LIBERTY 50-50 50-50 TOTAL VMO2 JV GLOBAL VODAFONEZIGGO $M IRELAND BELGIUM SWITZERLAND CENTRAL (1) POLAND LIBERTY JV CONTINUING IFRS BASIS GLOBAL OPERATIONS (2,3) (2,3,4) ADJUSTED EBITDA $198 $1,308 $1,138 $(49) $2,595 $46 $2,641 $2,018 $4,740 PRE-LIGHTNI
Slide 21: Central Update
CENTRAL UPDATE $M 2021 2022 Total Operating Costs(1) $(719) $(772) • Initiatives in place to help flex cost base with TSA expiration Central Revenue(2) $597 $673 • 2022 central revenue uplift reflects VMO2 TSA’s • T&I Opex allocations already reflected within OpCo Segment Adj EBITDA Opex allocation
Slide 22: FY 2022: Adj EBITDA & Adj EBITDAaL
FY 2022: ADJ EBITDA & ADJ EBITDAAL (1) LIBERTY 50-50 50-50 GLOBAL VODAFONEZIGG VMO2 JV $M IRELAND BELGIUM SWITZERLAND CENTRAL (2) CONTINUING O JV IFRS BASIS OPERATIONS (3,4) (3,4,5) ADJUSTED EBITDA $198 $1,308 $1,138 $(49) $2,595 $2,018 $4,740 DEPRECIATION & AMORTIZATION ON ASSETS UNDER FINANCE LEAS
Slide 23: 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 2022, we have adjusted our historical r
Slide 24: 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 25: 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 26: Glossary
GLOSSARY Fixed-Line Customer Relationships: The number of customers who receive at least one of our internet, video or telephony services that we count as RGUs, without regard to which or to how many services they subscribe. Fixed-Line Customer Relationships generally are counted on a unique premise
Slide 27: 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 28: Reconciliations: Rebase Adjustments (Continued)
RECONCILIATIONS REBASE ADJUSTMENTS (CONTINUED) 28
Slide 29: Reconciliations: Rebase Adjustments (Continued)
RECONCILIATIONS REBASE ADJUSTMENTS (CONTINUED) 29
Slide 30: 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, 2022 (in millions): 30
Slide 31: Reconciliations: Adjusted EBITDA & Adjusted EBITDA less P&E Additions (Continued)
RECONCILIATIONS ADJUSTED EBITDA & ADJUSTED EBITDA LESS P&E ADDITIONS (CONTINUED) 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, 2021 (in millions): 31
Slide 32: Reconciliations: Adjusted EBITDA & Adjusted EBITDAaL
RECONCILIATIONS ADJUSTED EBITDA & ADJUSTED EBITDAAL The following table provides a reconciliation of Adjusted EBITDA attributable to our continuing operations to Adjusted EBITDAaL for the year ended December 31, 2022 (in millions): 32
Slide 33: Reconciliations: Full Company Adjusted FCF & Distributable CF
RECONCILIATIONS LIBERTY GLOBAL FULL COMPANY ADJUSTED FCF & DISTRIBUTABLE CF 33
Slide 34: Reconciliations: Full Company Adjusted FCF & Distributable CF (Continued)
RECONCILIATIONS LIBERTY GLOBAL FULL COMPANY ADJUSTED FCF & DISTRIBUTABLE CF (CONTINUED) 34
Slide 35: Reconciliations: Supplemental Adjusted Attributed FCF & Distributable Cash Flow
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 36: Reconciliations: Supplemental Adjusted Attributed FCF (Continued)
RECONCILIATIONS SUPPLEMENTAL ADJUSTED ATTRIBUTED FREE CASH FLOW & ATTRIBUTED DISTRIBUTABLE CASH FLOW (CONTINUED) a. Includes our operations in Slovakia and intersegment eliminations. b. Represents the third-party interest, fees and related derivative payments made by UPC Holding (a parent entity inc
Slide 37: 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 38: Reconciliations: Centrally-Held P&E Attributions
RECONCILIATIONS CENTRALLY-HELD P&E ATTRIBUTIONS / ATTRIBUTED ADJUSTED EBITDA LESS P&E ADDITIONS Property and equipment additions presented for Central and Other include certain capital costs incurred for the benefit of our operating segments. Generally, for purposes of the consolidated financial sta
Slide 39: Reconciliations: Centrally-Held P&E Attributions (Continued)
RECONCILIATIONS CENTRALLY-HELD P&E ATTRIBUTIONS / ATTRIBUTED ADJ EBITDA LESS P&E ADDITIONS – (CONTINUED) A reconciliation of our Adjusted EBITDA to attributed Adjusted EBITDA less P&E Additions, including Centrally-held Property and Equipment Attributions, consistent with our internal management rep
Slide 40: VMO2 JV Reconciliations – Revenue
VMO2 JV RECONCILIATIONS – REVENUE The following tables provide reconciliations from VMO2 JV Transaction Adjusted IFRS revenue to US GAAP revenue for the indicated periods: 40
Slide 41: VMO2 JV Reconciliations – Revenue (Continued)
VMO2 JV RECONCILIATIONS – REVENUE (CONTINUED) The following tables provide reconciliations from VMO2 JV Transaction Adjusted IFRS revenue to US GAAP revenue for the indicated periods: 41
Slide 42: VMO2 JV Reconciliations – Revenue (Continued)
VMO2 JV RECONCILIATIONS – REVENUE (CONTINUED) The following tables provide reconciliations from VMO2 JV Transaction Adjusted IFRS revenue to US GAAP revenue for the indicated periods: 42
Slide 43: VMO2 JV Reconciliations – Adj EBITDA
VMO2 JV RECONCILIATIONS – ADJ EBITDA The following tables provide reconciliations from VMO2 JV Transaction Adjusted IFRS Adj EBITDA to US GAAP Adj EBITDA for the indicated periods: 43
Slide 44: 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 Transaction Adjusted IFRS Adj EBITDA to US GAAP Adj EBITDA and Adj EBITDA less P&E Additions for the indicated period: 44
Slide 45: 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