Liberty Global plc Q4 FY2024 earnings call

• Strategic pivot in 2024 included spinning off Sunrise, progress on UK NetCo (operational and financial perimeters established, receiving proposals from infrastructure investors), focus on Benelux region (hiring new CEO for VodafoneZiggo, progress in Belgium with network sharing agreement and €500M facility for fiber rollout).
• Q4 operating results: Steady broadband results with fixed ARPU uplifts in most markets, small pickup in postpaid mobile in UK. VMO2 had strong broadband quarter, fixed ARPU growth in UK. Telenet returned to positive broadband net adds, fixed ARPU growth supported by price rise. Netherlands saw intense competition, VodafoneZiggo focused on value over volume.
• Liberty Growth: Intention to sell $500M-$750M non-core assets in 2025, $2.2 billion cash balance for buybacks, deleveraging, and investments. Formula E acquisition with growth in fans, faster cars, and expansion to more cities.
• Liberty Services and Corporate: Plans to secure management fees from companies, reduce negative EBITDA through operating efficiencies, and invest in AI initiatives for Liberty Telecom.

Liberty Telecom: Consists of four European telcos (UK, Ireland, Belgium, Netherlands) serving 80 million fixed and mobile connections, generating $22 billion aggregate revenue and ~$8 billion aggregate EBITDA. Liberty Growth: $3.1 billion portfolio of investments. Over 5 years, invested an additional $2.4 billion in tech, media, infrastructure, etc., and exited investments returning $1.2 billion with a weighted average IRR of 25%. Net invested capital in Liberty Growth at end of 2024 was $2.1 billion vs. fair market value of $3.1 billion. Liberty Services: Over two-thirds of central employee base in profitable revenue-generating activities in tech and financial services, ~$600 million annual revenue, with long-term contracts and third-party partnerships.

• 2025 guidance: Buy back up to 10% of shares outstanding. Sell $500M-$750M non-core assets in Liberty Growth. VMO2 expects growing revenues (excluding handsets and nexfibre), adjusted free cash flow £350M-£400M. VodafoneZiggo expects broadly stable revenue growth, adjusted EBITDA decline impacted by strategic initiatives, adjusted free cash flow ~€300M. Telenet expects broadly stable revenues, negative adjusted free cash flow €150M-€180M due to heavy network CapEx. Corporate targeting EBITDA for Liberty Services and Corporate to be no more than negative $200M.

• Market risks: Fluctuations in telecom market conditions. Competition risks: Intense competition in markets like the Netherlands. Regulatory risks: Uncertainties in regulatory environment affecting operations. CapEx risks: Impact of heavy CapEx on free cash flow in the short term. Uncertainties in asset sales and spin-offs: Risks associated with successfully executing asset disposals and spin-off transactions.

Q: General free cash flow question beyond 2025 A: Mike Fries stated market by market, they believe free cash flow trajectory of businesses looks good, with reduced CapEx over time expected to generate free cash flow.

Q: Balance on central services business MSA fees and impact on OpCos A: Charlie Bracken said they consider services provided and whether they are expensive to replicate at OpCos, with examples like treasury services, and Mike Fries added it's a value creation exercise not extraction.

Q: Buyback on A vs C shares A: Mike Fries said they haven't bought stock through Feb 19, anticipate doing buybacks but no specific disclosure on which line.

Q: Handset replacement cycle impact on mobile operations A: Lutz Schüler said they are cautious on factoring in AI-driven handset replacement cycle impact as not seen yet.

Q: UK spectrum position and Sky contract A: Lutz Schüler said deal with Vodafone-Three not closed, can't disclose spectrum or price, but spectrum investment puts them in healthy position and supports long-term with Sky