Liberty Global plc Q1 FY2025 earnings call

Mike Fries mentioned the strategic plan progress, including driving commercial momentum and network upgrades in telecom markets, optimizing corporate structure and services platforms. Liberty Telecom has goals like finance and monetize network infrastructure, organize plans for long-term free cash flow growth and deleveraging. In markets like Belgium, Netherlands, UK, Ireland, specific actions are taken. Liberty Growth has a strategy to sell $500 million to $750 million of assets this year, with portfolio updates including Formula E consolidation. Liberty Services' Ritec and Liberty Bloom generate revenue and pursue growth initiatives, and corporate costs are being reduced.

VMO2 reported a return to revenue growth of 0.4% excluding next fiber-related construction revenues and handset revenues in Q1, with adjusted EBITDA growing 0.8% excluding the impact of nexfibre. VodafoneZiggo reported a revenue decline of 2.6% mainly driven by a decline in fixed revenues and lower handset sales, with adjusted EBITDA declining 8% in the quarter. Telenet reported a revenue increase of 2.7% supported by higher programming revenues and the continued benefit of the June 2024 price adjustment, with adjusted EBITDA growing 0.8% supported by lower network costs and other cost control measures. The fair market value of Liberty Growth portfolio increased by around $150 million during the quarter, with the portfolio highly concentrated with seven investments accounting for nearly 75% of the $3.3 billion fair market value.

VodafoneZiggo's 2025 revenue guidance is lowered from broadly stable to low single-digit decline, adjusted EBITDA expected to be down mid to high single digits, capital intensity remains at 20% to 22% of sales, adjusted free cash flow and shareholder distributions at €200 million to €250 million. Midterm, the plan is to position the business to return to growth around 2027 while maintaining a broadly stable free cash flow profile. Leverage is expected to peak in 2026 and reduce thereafter, with asset sales like VodafoneZiggo's tower assets planned to pay down debt.

Market competition is intense, which could impact subscriber and revenue growth. Asset sales progress may be uncertain. The impact of strategic changes in partner companies like Telefonica on Liberty Global's plans in the UK is a risk.

Q: On the U.K. net adds, could provide more color on factors like One Touch Switch and market competition?

A: Lutz Schüler said One Touch Switch is used more, market is more competitive with competitors offering large benefits to get customers, and they are using machine learning and AI for retention and prevention with some improvements from April.

Q: On The Netherlands, assumption about CPE costs and take-up of higher speeds within CapEx envelope, and why tower sale now?

A: Mike Fries said on towers, it takes time to set up, and they aim to use proceeds to pay down debt. On DOCSIS, committed to strategy with good alignment with other companies, and CPE costs and take-up are being managed within the CapEx envelope.

Q: On VodafoneZiggo, commentary from Stephen van Rooyen on what's different since taking over, customer response to €5 price cut, and deleveraging via dividend cut?

A: Stephen van Rooyen said he's fixing organization, operating, cost savings, realigning pricing, embracing brands, investing in loyalty and FMC. Customer response to price cut is being felt, and deleveraging is being considered via tower sales and other asset sales rather than immediate dividend cut.

Q: On VodafoneZiggo, CapEx savings to fund DOCSIS 4 rollout, time frame of network upgrade, and OpEx savings on UEFA rights?

A: Stephen van Rooyen said money frees up from mobile network upgrade and IT infrastructure to fund DOCSIS 4, with network upgrade expected in 18 months, and it's too early to call on UEFA rights but sees opportunity to monetize better.

Q: On VMO2, conversations with Telefonica, network strategy in Netherlands on partnering with AltNets?

A: Mike Fries said DOCSIS 4 strategy is core but remains opportunistic on other network strategies. On Telefonica, it's a good dialogue with respect for their strategic review.

Q: On Netherlands, operating costs of cable option vs fiber, time scale of pause in U.K. NetCo plans?

A: Mike Fries said cost per premise in Netherlands is much lower for DOCSIS than fiber, so operating cost issue is not significant. On U.K. NetCo pause, Telefonica's strategic plan review in H2 is a time frame.

Q: On Formula E and 5G monetization?

A: Mike Fries said 5G SA will bring benefits in enterprise side first, and Formula E is early days with exciting racing and potential for growth, not trying to be Formula 1 but aiming to attract younger audience.

Q: On NetCo in U.K. and Formula E team changes?

A: Mike Fries said market is evolving and they are still opportunistic, and Formula E is working on replacing McLaren with compelling owners.

Q: On U.K. broadband losses and need for pricing shift?

A: Mike Fries said it's premature to address, but they are monitoring losses and have nexfibre growth, and the Dutch market move was long overdue with a new strategy.