Liberty Global Ltd. · NASDAQ:LBTYA
Liberty Global — Q2 2021 Earnings Presentation
34 slides from Liberty Global's earnings presentation, Jul 30, 2021
Slide 1: Liberty Global plc Investor Call Q2 2021
LIBERTY GLOBAL PLC INVESTOR CALL | Q2 2021 July 30, 2021
Slide 2: Safe Harbor Forward-Looking Statements + Disclaimer
“SAFE HARBOR” access cash of their respective subsidiaries; the impact of our operating companies' and affiliates’ future financial and access; our and Forward-Looking Statements + Disclaimer our affiliates’ ability to adequately forecast and plan future network requirements including the costs and
Slide 3: Executive Summary
FINANCIAL RESULTS APPENDIX © (#0) & . Sunrise & upc OG
Slide 4: Q2 Key Headlines
Q2 KEY HEADLINES FMC CHAMPIONS DRIVING SCALE & GROWTH 1 Integrations and synergy plans on track; NPV of $12.6b validated CONNECTIVITY ANCHORS COMMERCIAL MOMENTUM 2 Revenue & subscriber growth remains strong across markets KEY NETWORK STRATEGIES PROGRESSING 3 VMO2 to upgrade HFC network to FTTP; cost
Slide 5: FMC Transformation Driving Scale
FMC TRANSFORMATION DRIVING SCALE 2016 > 2020 +40% +40% • Exited sub-scale -40% markets at attractive multiples • Acquired or merged with mobile ops in 4 core countries • Increased aggregate(3) revenue by 40% on a more concentrated footprint • Created balanced FMC subscriber base with 40%+ convergenc
Slide 6: Q2 Operating Update
Q2 OPERATING UPDATE STRONG COMMERCIAL MOMENTUM CONNECTIVITY UNDERPINS CORE OPCO GROWTH CH BE NL(2) UK VMO2 SET TO SUPERCHARGE CONVERGENCE REVENUE GROWTH(1) +1.3% +3.7% +3.0% +4.4% • 5th consecutive quarter of fixed customer growth VMUK Apr+May • Integration underway w/ B2B cross-sell new consumer pr
Slide 7: VMO2 Fiber Upgrade Plans
VMO2 FIBER UPGRADE PLANS ECONOMIC BENEFITS Strategic Partnerships • Upgrade 93% of 15.5m homes to FTTP • Preserve and extend speed leadership Access to New Capital • Marginal cost difference to DOCSIS 4 Footprint Expansion • Meaningful revenue/economic benefits Wholesale Revenue Improved B2B GROSS C
Slide 8: We Are Evaluating Several Network Upgrade Options
DECISION WE ARE MATRIX EVALUATING SEVERAL Competitive environment FIXED Build & upgrade NETWORK costs B2C & B2B UPGRADE demand OPTIONS Wholesale market conditions Strategic or financial partners FCF impact; NPV+ 8
Slide 9: Three Pillars of Value Creation
THREE PILLARS OF VALUE CREATION FCF per Share 9
Slide 10: Financial Results
>FINANCIAL RESULTS
Slide 11: Revenue Growth in All Markets
REVENUE GROWTH IN ALL MARKETS (1) 3.4% LG REBASED 4.4% VMUK REBASED 3.7% BE REBASED REVENUE REVENUE GROWTH (1) REVENUE GROWTH ($M) GROWTH ($M) 3.4% 1,101 1,055 775 0.2% (0.5%) (1.3%) 747 (4.3%) Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Apr'20 - May'20 Apr'21 - May'21 Q2'20 Q2'21 • Strong revenue growth across a
Slide 12: Costs to Capture Weigh on EBITDA
COSTS TO CAPTURE WEIGH ON EBITDA (1) (0.3%) LG REBASED Adj 0.0% VMUK REBASED Adj 0.6% BE REBASED Adj EBITDA GROWTH ($M) EBITDA GROWTH ($M) EBITDA GROWTH ($M) Inc. 8 Costs to Capture Inc. 17 Costs to Capture 387 390 1,256 1,253 445 445 Q2'20 Q2'21 Apr'20 - May'20 Apr'21 - May'21 Q2'20 Q2'21 (3.1%) CH
Slide 13: Significant OFCF Generation Across Operations
SIGNIFICANT OFCF GENERATION ACROSS OPERATIONS(1) 2.1% LG REBASED OFCF 2.3% VMUK REBASED OFCF (1.2%) BE REBASED OFCF GROWTH ($M) GROWTH ($M) GROWTH ($M) Inc. 58 Costs to Capture Inc. 15 Costs to Capture 1,266 484 468 473 462 1,241 H1'20 H2'20 Jan'20 - May'20 Jan'21 - May'21 H1'20 H1'21 (2.5%) CH REBA
Slide 14: On Track for $1.35B FY '21 FCF Guidance
ON TRACK FOR $1.35B FY ’21 FCF GUIDANCE (1) $m H1 2020 H1 2021 $m 2019 2020 2021 CONSOLIDATED OFCF $1,096 $1,266 ADJUSTED FREE $770 $1,070 $1,350 NET INTEREST (600) (593) CASH FLOW (2) CASH TAX (57) (161) VODAFONE ZIGGO Dist. 22 163 YOY GROWTH - 39% 26% WORKING CAPITAL (3) (322) 42 SHARES 633M 580M
Slide 15: Capital Allocation
CAPITAL ALLOCATION Q2 LIQUIDITY (1) FMC CHAMPIONS $5.7B $1.6B TOTAL Revolving LIQUIDITY Credit UPC (incl. Q2’21 BE VZ Sunrise) VM/O2 Facilities Leverage(2) 4.36x 5.40x 4.73x 4.41x $4.1B WACD 3.33% 4.20% 3.74% 4.20% Cash/SMAs Av. Life ~7.0 years ~7.2 years ~8.0 years ~7.4 years $765 MILLION BUYBACK C
Slide 16: Conclusions
CONCLUSIONS (1,2) Executing FMC playbook across all markets LG ADJUSTED FCF OF $1.35B Cost effective fiber upgrade announced in the UK GUIDANCE GUIDANCE GUIDANCE(3) GUIDANCE IFRS BASIS Committed to multi-year Budget Sprint Returning to Revenue growth Adj EBITDA Concluding Revenue growth of up to 1%
Slide 17: Appendix
Slide 18: H1 2021 Adjusted Attributed FCF
H1 2021 ADJUSTED ATTRIBUTED FCF All OpCos remain substantially FCF positive despite COVID-19 50-50 Poland / Liberty $m U.K IE Belgium Switzerland Central (1) Dutch JV Slovakia Global (2,3) ADJUSTED EBITDA $1,085 $102 $761 $580 $117 ($25) $2,620 $1,135 P&E pre-lightning P&E (4) (499) (53) (299) (304)
Slide 19: Central Update
CENTRAL UPDATE Cost base managed in line with service agreements $m Q2 2020 Q2 2021 Total Operating Costs(1) ($138) ($159) • Includes both T&I (core & partner markets) and Corporate spend Central Revenue(2) $98 $144 • TSA revenue from partner markets offset 100% of related costs • Structures in plac
Slide 20: 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 2021, we have adjusted our historical r
Slide 21: 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 22: Glossary
GLOSSARY B2B: Business-to-Business. Costs to capture (CTC): Costs to capture generally include incremental, third-party operating and capital related costs that are directly associated with integration activities, restructuring activities, and certain other costs associated with aligning an acquiree
Slide 23: Glossary
GLOSSARY Mobile Subscriber Count: The number of active SIM cards in service rather than services provided. For example, if a mobile subscriber has both a data and voice plan on a smartphone this would equate to one mobile subscriber. Alternatively, a subscriber who has a voice and data plan for a mo
Slide 24: 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 25: Reconciliations: Rebase Adjustments (Continued)
RECONCILIATIONS REBASE ADJUSTMENTS (CONTINUED) 25
Slide 26: Reconciliations: Adjusted EBITDA
RECONCILIATIONS ADJUSTED EBITDA The following tables provide a reconciliation of our net earnings to Adjusted EBITDA for the indicated periods: 26
Slide 27: 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: 27
Slide 28: Reconciliations: Adjusted FCF - Continued
RECONCILIATIONS ADJUSTED FCF - CONTINUED 28
Slide 29: 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 30: Centrally-Held P&E Attributions - Continued
RECONCILIATIONS CENTRALLY-HELD P&E ATTRIBUTIONS / ATTRIBUTED OFCF - CONTINUED 30
Slide 31: Centrally-Held P&E Attributions - Continued
RECONCILIATIONS CENTRALLY-HELD P&E ATTRIBUTIONS / ATTRIBUTED OFCF - CONTINUED 31
Slide 32: 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 33: Supplemental Adjusted Attributed Free Cash Flow (Cont.)
RECONCILIATIONS SUPPLEMENTAL ADJUSTED ATTRIBUTED FREE CASH FLOW (CONT.) 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 c
Slide 34: 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 operating activities, plus (i) expenses financed by an intermediary and (ii) interest payments on certain Shareholder loans, less (a) capital expenditures, (b) principal payments on a