Liberty Global Reports Q2 2024 Results

Sunrise spin-off on track for Q4’24 and Capital Markets Day to be held in Zurich on September 9

Significant progress on our fixed and mobile network strategies including fiber deployments in the U.K., Belgium and Ireland, as well as strategic network sharing agreements with Vodafone in the U.K. and Proximus in Belgium

$3.5 billion⁽ⁱ⁾ consolidated cash balance supported by ~$420 million of proceeds¹ from All3Media sale

Strong financial performance in the Netherlands, building commercial momentum in Switzerland, and fixed ARPU recovery in the U.K.

Updating full-year revenue guidance at VMO2 to ‘low to mid-single-digit decline’ reflecting lower handset sales; on track for all remaining OpCo guidance targets

DENVER, Colorado–(BUSINESS WIRE)–Liberty Global Ltd. today announced its Q2 2024 financial results.

CEO Mike Fries stated, “Q2 has been another active quarter as we’ve continued to drive our strategic priorities; maximizing the value of our FMCs, leveraging our Ventures portfolio, and taking steps to deliver that value directly to shareholders over time.

• Our plan to spin-off Sunrise remains on track for Q4 this year and the Sunrise management team will host a Capital Markets Day in Zurich on September 9. We have also confirmed our intention to pay a CHF 240 million dividend in 2025.
• In the U.K. we announced a new, long-term mobile network sharing and spectrum acquisition agreement with Vodafone, and our fiber reach is now over 5 million² homes and ramping. Preparations for the formation of our fixed NetCo are progressing well.
• We’ve reached a fixed network sharing MOU with Proximus in Belgium, secured 5G spectrum in the Netherlands at an attractive price, and excited to welcome Stephen van Rooyen, formerly of Sky, as CEO at VodafoneZiggo.
• We continue to rotate capital in our Ventures portfolio, independently valued at $3.0 billion³, following the ~$420 million in proceeds we received from the sale of our stake in All3Media. We also announced our intention to take a controlling position in the world’s fastest growing motorsport, Formula E.

Our value creation strategy is supported by our robust balance sheet and disciplined capital allocation model. We have $3.5 billion⁽ⁱ⁾ of cash and a long-term, fixed-rate debt profile with no material maturities until 2028. As part of our ongoing commitment to shareholder remuneration, we’ve repurchased ~5% of our shares outstanding through July 19th against our target of up to 10% of shares by year-end.

Against a highly competitive backdrop in the U.K. our strategy of focusing on value over volume, as well as successful implementation of the price rise, supported a recovery in fixed ARPU. In Switzerland, we’re continuing to build operating momentum in both the main brand and flanker brands, supporting continued growth in broadband net adds and strong growth in mobile postpaid. We delivered a standout performance in the Netherlands during the quarter, supported by the fixed price rise and solid growth in mobile and B2B. In Belgium, as anticipated, a tough comp from the prior year did impact financial performance, but we continue to drive strong fixed ARPU growth, and we’re seeing good trading performance following the launch of our BASE FMC offering nationwide. We are confirming today all 2024 guidance metrics, with the exception of VMO2 revenue, which moves from ‘stable to decline’ to ‘low to mid-single-digit decline’, reflecting the continued pressure on low-margin mobile hardware revenues.”

Q2 Operating Company Highlights

Sunrise (Consolidated)

Sunrise delivered strong broadband net adds and a solid financial performance in Q2

Operating highlights: During Q2, Sunrise delivered a second consecutive quarter of broadband growth, achieving 5,000 net adds, primarily driven by reduced churn on the main brand. In mobile, growth in postpaid accelerated, as Sunrise delivered 32,900 postpaid net adds, supported by an improved main brand performance and reduced churn. FMC penetration across the Sunrise broadband base continues to grow steadily, reaching 59% in Q2, an increase of 0.9% YoY. The spin-off remains on track for Q4’24.

Financial highlights: Revenue of $815.8 million in Q2 2024 was flat YoY on a reported basis and increased 0.5% on a rebased⁴ basis. The rebased increase was mainly due to (i) the positive impact of last year’s July price rise and (ii) continued momentum in mobile subscription and B2B revenue. Adjusted EBITDA increased 0.3% YoY on a reported basis and 0.9% on a rebased basis to $288.0 million in Q2 2024, including $2 million of costs to capture⁵. The rebased increase was mainly due to (a) the aforementioned revenue increase, (b) a decrease in labor costs and (c) lower marketing spend, partially offset by higher wholesale costs. Adjusted EBITDA less P&E Additions of $148.0 million in Q2 decreased 10.1% YoY on a reported basis and 9.5% on a rebased basis, including $5 million of opex and capex costs to capture.

Telenet (Consolidated)

Telenet performance impacted by tough comparison base against Q2 last year, on track to deliver on full-year guidance

Operating highlights: During Q2, Telenet’s postpaid mobile base declined by 500 while its broadband base declined by 4,800. Despite the intensely competitive market environment, the sequential improvement was driven by successful marketing campaigns and the launch of BASE Internet and BASE TV in early June. Following the launch of the fixed BASE product in Wallonia as well as in the Flemish and Brussels footprint, BASE is now a nationwide FMC brand. Earlier today, Telenet announced the signing of a MOU for collaboration on the further deployment of fiber networks in Flanders.

Financial highlights: Revenue of $755.1 million in Q2 2024 decreased 1.6% YoY on a reported basis and 0.9% on a rebased basis. The rebased decrease was primarily driven by (i) a decrease in B2B wholesale revenue following the loss of the VOO MVNO contract and (ii) a decrease in mobile revenue driven by lower interconnect revenue and handset sales, partially offset by the benefit of the June 2023 price rise. Adjusted EBITDA decreased 9.9% YoY on a reported basis and 9.2% on a rebased basis to $311.9 million in Q2, primarily due to (a) the adverse impact of a $11.2 million decrease in costs in the prior year period associated with the one-time benefit from expected settlements of certain operational contingencies, (b) higher staff-related expenses and (c) an increase in sales and marketing expenses, partially offset by lower interconnect and energy costs. Reported and rebased Adjusted EBITDA less P&E Additions decreased 39.8% and 39.5%, respectively, to $110.7 million in Q2.

VMO2 (Non-consolidated Joint Venture)

VMO2 advances network evolution as targeted investments in future growth drivers continue

Operating highlights: VMO2’s fixed customer base declined by 13,600 in Q2. Customer growth in the nexfibre footprint continues to build steadily and is expected to rise as marketing increases, however, this was offset by a moderate loss on the VMO2 footprint during the quarter when price rises were implemented. Having stabilized in recent quarters, fixed ARPU returned to growth in Q2, growing by 3.1% YoY. In mobile, the postpaid base declined by 118,400 in Q2. Reflective of wider market trends, activity in the premium end of the market remained lower than the prior year, impacting gross additions, while churn remained stable. VMO2’s full fiber footprint reached the milestone of 5 million premises² at the end of Q2. Fiber build pace increased by 68% YoY, as the total serviceable footprint grew by 295,300 homes in Q2, principally through build on behalf of nexfibre. On the mobile side, almost two thirds of the U.K. population is now covered by VMO2’s 5G connectivity and in July, VMO2 and Vodafone announced a new, long-term network sharing agreement.

Financial highlights (in U.S. GAAP)⁶: Revenue¹¹ of $3,375.4 million in Q2 2024 decreased 0.5% YoY on a reported basis and 1.4% YoY on a rebased basis. The rebased decrease was primarily due to the net effect of (i) a decrease in mobile revenue due to lower handset sales, (ii) an increase in other revenue due to low-margin construction revenue from the nexfibre JV, (iii) an increase in residential fixed revenue due to the implementation of contractual price rises and (iv) a decrease in B2B fixed revenue, with each revenue category as defined and reported by the VMO2 JV. Q2 Adjusted EBITDA¹¹ decreased 0.6% YoY on a reported basis and 1.5% YoY on a rebased basis to $1,132.4 million, including $13 million of opex costs to capture. The YoY decrease in Adjusted EBITDA was primarily due to the net effect of (a) a benefit of approximately $13 million during Q2 2024 related to higher capitalized costs by the VMO2 JV due to a change in the terms of a related-party contract and (b) investment in IT and digital efficiency programs. Q2 Adjusted EBITDA less P&E Additions¹¹ increased 16.8% YoY on a reported basis and 15.7% YoY on a rebased basis to $546.4 million, including $39 million of opex and capex costs to capture.

Financial highlights (in IFRS): Revenue of £2,673.7 million ($3,375.4 million) in Q2 2024 decreased 1.4% YoY on a rebased basis. Q2 Adjusted EBITDA of £987.8 million ($1,247.1 million), including costs to capture, decreased 1.0% YoY on a rebased basis. Q2 Adjusted EBITDA less P&E Additions of £424.8 million ($536.7 million), including costs to capture, increased 1.6% YoY on a rebased basis. The drivers of these IFRS changes are largely consistent with those under U.S. GAAP detailed above.

For more information regarding the VMO2 JV, including full IFRS disclosures, please visit its investor relations page to access the Q2 earnings release.

VodafoneZiggo (Non-consolidated Joint Venture)

VodafoneZiggo sustains solid financial performance, confirming 2024 guidance

Operating highlights: During Q2, mobile postpaid net adds declined by 18,400, driven by B2B government contract losses. The broadband base contracted by 22,600 in the quarter, as a 27,400 decline in Consumer was only partially offset by a 4,800 increase in B2B. Both mobile and fixed ARPU continued to grow in the quarter, supported by the benefit of the price indexation implemented in October. The FMC⁷ broadband households penetration remained stable at 48%. In July, VodafoneZiggo successfully acquired 100 MHz spectrum license in the 3.5 GHz band.

Financial highlights: Revenue increased 0.3% YoY on a reported basis and 1.5% YoY on a rebased basis to $1,091.6 million in Q2. The rebased increase was primarily due to continued growth in mobile and B2B fixed revenue, partially offset by a decline in the B2C fixed customer base. Adjusted EBITDA increased 7.0% YoY on a reported basis and 8.2% on a rebased basis to $518.7 million in Q2. The rebased increase was primarily driven by (i) the aforementioned revenue increase and (ii) lower energy and consulting costs. Adjusted EBITDA less P&E Additions increased 15.5% YoY on a reported basis and 16.9% on a rebased basis to $263.8 million in Q2.

Liberty Global Consolidated Q2 Highlights

• Q2 revenue increased 1.4% YoY on a reported basis and 2.2% on a rebased basis to $1,873.7 million
• Q2 net earnings (loss) increased 153.8% YoY on a reported basis to $275.2 million
• Q2 Adjusted EBITDA increased 0.5% YoY on a reported basis and 1.0% on a rebased basis to $604.7 million
• Q2 property & equipment additions were 20.0% of revenue, as compared to 19.1% in Q2 2023
• Balance sheet with $5.0 billion of total liquidity⁸
  • Comprised of nearly $2.0 billion of cash, $1.5 billion of investments held under SMAs and $1.5 billion of unused borrowing capacity⁹
• Blended, fully-swapped borrowing cost of 3.45% on a debt balance of $15.6 billion

Customer Growth

Net earnings (loss)

Net earnings (loss) was $275.2 million and ($511.3 million) for the three months ended June 30, 2024 and 2023, respectively, and $802.2 million and ($1,224.8 million) for the six months ended June 30, 2024 and 2023, respectively.

Financial Highlights

The following tables present (i) Revenue, Adjusted EBITDA and Adjusted EBITDA less P&E Additions for each of our reportable segments, including the non-consolidated VMO2 JV and VodafoneZiggo JV, for the comparative periods and (ii) the percentage change from period to period on both a reported and rebased basis. Consolidated Adjusted EBITDA and Consolidated Adjusted EBITDA less P&E Additions are non-GAAP measures. For additional information on how these measures are defined and why we believe they are meaningful, see the Glossary.

Leverage and Liquidity

• Total principal amount of debt and finance leases: $15.6 billion
• Average debt tenor¹⁰: 4.4 years, with ~10% not due until 2030 or thereafter
• Borrowing costs: Blended, fully-swapped cost of debt was 3.45%
• Liquidity: $5.0 billion, including (i) $2.0 billion of cash at June 30, 2024, (ii) $1.5 billion of investments held under SMAs and (iii) $1.5 billion of aggregate unused borrowing capacity under our credit facilities

Forward-Looking Statements and Disclaimer

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements with respect to our strategies, future growth prospects and opportunities; expectations regarding our and our businesses’ financial performance, including Revenue and Rebased Revenue, Adjusted EBITDA, Adjusted EBITDA less P&E Additions, operating and capital expenses, property and equipment additions, Adjusted Free Cash Flow and Distributable Cash Flow, as well as the 2024 financial guidance, including revisions, provided by us and our operating companies and joint ventures, which includes expected capital intensity; our future strategies for maximizing and creating value for our shareholders; the anticipated spin-off of our Swiss operating company, Sunrise, including the timing and location of the anticipated closing and the hosting of a capital markets day, as well as any anticipated dividends to be paid from Sunrise and the timing thereof; the pricing strategies at our operating companies and our joint ventures; the expected drivers of future financial performance at our operating companies and our joint ventures; expectations with respect to a new memorandum of understanding by our subsidiaries in Belgium, including the timing, costs and benefits to be received therefrom; expectations with respect to the benefits to be derived from a spectrum auction in the Netherlands, our, our affiliates’ and our joint ventures’ plans with respect to networks, products and services and the investments in such networks, products and services, including VMO2’s new long-term network sharing agreement with Vodafone, as well as the planned division of VMO2 into a network company and a service company, and the timing, costs and benefits to be derived from both such endeavors; our strategic plans for our ventures portfolio, including expected capital rotation and the intention to become a controlling shareholder in Formula E; our share repurchase program, including the percentage amount of shares we intend to repurchase during the year; the strength of our and our affiliates’ respective balance sheets (including cash and liquidity position); the tenor and cost of our third-party debt and anticipated borrowing capacity; and other information and statements that are not historical fact. These forward-looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these statements. These risks and uncertainties include events that are outside of our control, such as the continued use by subscribers and potential subscribers of our and our affiliates’ and joint ventures’ services and their willingness to upgrade to our more advanced offerings; our, our affiliates’ and our joint ventures’ ability to meet challenges from competition, to manage rapid technological change or to maintain or increase rates to subscribers or to pass through increased costs to subscribers; the potential impact of pandemics and epidemics on us and our businesses as well as our customers; the effects of changes in laws or regulations; the effects of the U.K.’s exit from the E.U.; general economic factors; our, our affiliates’ and our joint ventures’ ability to obtain regulatory approval and satisfy regulatory conditions associated with acquisitions and dispositions; our, our affiliates’ and our joint ventures’ ability to successfully acquire and integrate new businesses and realize anticipated efficiencies from acquired businesses; the availability of attractive programming for our, our affiliates’ and our joint ventures’ video services and the costs associated with such programming; our, our affiliates’ and our joint ventures’ ability to achieve forecasted financial and operating targets; the outcome of any pending or threatened litigation; the ability of our operating companies and affiliates and joint ventures to access the cash of their respective subsidiaries; the impact of our operating companies’, affiliates’ and joint ventures’ future financial performance, or market conditions generally, on the availability, terms and deployment of capital; fluctuations in currency exchange and interest rates; the ability of suppliers, vendors and contractors to timely deliver quality products, equipment, software, services and access; our, our affiliates’ and our joint ventures’ ability to adequately forecast and plan future network requirements including the costs and benefits associated with network expansions; and other factors detailed from time to time in our filings with the Securities and Exchange Commission (the “SEC”), including our most recently filed Form 10-K, Form 10-K/A and Form 10-Qs, each, as amended.

Contacts

For more information, please visit www.libertyglobal.com or contact:

Investor Relations
Michael Bishop +44 20 8483 6246

Corporate Communications
Bill Myers +1 303 220 6686

Matt Beake +44 20 8483 6428

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