Release Date: October 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Liberty Global Ltd (LBTYA, Financial) announced the pending spinoff of its Swiss subsidiary, Sunrise, which received 99% approval and is expected to significantly enhance shareholder value.
- The company has made substantial progress in creating and financing the UK's second-largest fixed network company, NetCo, with a footprint of 17.8 million 1-gig homes.
- Liberty Global Ltd (LBTYA) has successfully executed asset sales totaling $900 million in the last 12 months, demonstrating its ability to generate and capture value.
- The company is on track to repurchase 10% of its shares this year, with 8% already acquired year-to-date, marking a record year for shareholder remuneration.
- Liberty Global Ltd (LBTYA) maintains a strong cash position with a substantial cash balance of around $3.5 billion at the end of Q3 2024, supporting its capital allocation model.
Negative Points
- Virgin Media-O2 experienced a decline in both revenue and EBITDA, driven by continued headwinds in low-margin hardware and B2B fixed revenues.
- Sunrise reported a revenue decline of 1.3%, largely due to the annualization of last year's price rise and lower-priced flanker brand growth.
- The company faces challenges in the competitive UK market, with AltNets aggressively promoting and impacting market dynamics.
- Liberty Global Ltd (LBTYA) has not disclosed specific numbers for its UK fiber upgrade speed, raising concerns about meeting targets.
- The European telecom sector's rational behavior and regulatory support are still evolving, posing uncertainties for Liberty Global Ltd (LBTYA)'s strategic plans.
Q & A Highlights
Q: Is there a change in momentum for UK fiber builds, and how does it relate to VMO2's fiber upgrade speed?
A: Michael Fries, CEO: We built close to 300,000 nexfibre premises last quarter, which is not a slowdown. The overall Fibre Up number is higher than last year, and we are on track to meet our internal budget. The integration of Upp customers will impact figures from Q4 onwards.
Q: Can you clarify the central cash position for 2024 and the components of the CHF8.2 billion Sunrise EV?
A: Charles Bracken, CFO: Our cash liquidity will be in excess of $2 billion, excluding liquid stakes like ITV and Vodafone. The CHF8.2 billion Sunrise EV is based on analyst valuations, which include factors like the CHF30 million TSA and LTIPs.
Q: What are the plans for VodafoneZiggo to stabilize or grow its subscriber base amid competition?
A: Stephen van Rooyen, CEO VodafoneZiggo: We focus on managing churn and leveraging our strong propositions, including UEFA rights and a robust TV platform. We aim to enhance our FMC offerings and use our flanker brand, Hollandsnieuwe, to compete on price.
Q: What is the outlook for shareholder distributions post-Sunrise spin-off, and how does it relate to market consolidation in the UK?
A: Michael Fries, CEO: We aim to drive commercial momentum and strategic transactions similar to the Sunrise strategy. The buyback remains important, and as the company becomes smaller, it may require less cash. Market consolidation in the UK is expected, with many AltNets lacking sustainable models.
Q: How do you plan to address the negative revenue trends across your businesses, particularly in consumer mobile for Virgin Media?
A: Michael Fries, CEO: Price rises this year are lower, impacting year-over-year comparisons. We focus on maintaining ARPU and driving volume in broadband. Lutz Schüler, CEO Virgin Media O2, noted improvements in fixed service revenue and plans to optimize mobile revenue through personalized pricing.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
