Liberty Global Ltd.

Good morning, ladies and gentlemen, and thank you for saying goodbye. Welcome to Liberty Global's first quarter 2025 investor call. This call and the associated webcast are the property of Liberty Global, and any redistribution, retransmission, or rebroadcast of this call or webcast in any form without the express written consent of Liberty Global is strictly prohibited. At this time, all participants are in a listen-only mode. Today's formal presentation materials can be found under the investor relations section of Liberty Global's website at libertyglobal.com. After today's formal presentation, instructions will be given for a question and answer session. Page two of the slides details the company's safe harbor statement regarding forward-looking statements. Today's presentation may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including the company's expectations with respect to its outlook and future growth prospects and other information in statements that are not historical fact. These forward-looking statements involve certain risks that could cause actual results to differ materially from those expressed or implied by these statements. These risks include those detailed in Liberty Global's filings, with the Securities and Exchange Commission, including its most recently filed forms 10Q and 10K, as amended. Liberty Global disclaims any obligation to update any of these forward-looking statements to reflect any change in its expectations or in the conditions on which any such statement is based. I would now like to turn the call over to Mr. Mike Freese.

Great. And welcome, everyone. Thanks for joining our first quarter investor call. We've got a lot of ground to cover, so we'll jump right into prepared remarks. Of course, after that, we look forward to your questions, where I'll get members of our management team engaged as needed. Just a reminder that we'll be working off of slides today, which those of you on the webcast should be able to see now, at least we hope so. If not, they're always available on our website. So I'll kick off on slide three with a few broad observations. As you'll remember, 15 months ago on this call, we outlined a strategic plan that was focused on creating value And just as importantly, finding ways to deliver that value to our shareholders. The tax-free spinoff of Sunrise this past November, which continues to trade well in the Swiss market, was the first big dividend from that plan. But not our only achievement. Just a few months ago on our year-end call, we reviewed progress across the balance of those strategic initiatives and presented the tactical steps we're taking now to create value on our three core platforms, Liberty Telecom, Liberty Growth, and Liberty Services. Now, the first takeaway from this call is that the team and I remain fully committed to those goals, and we're making solid progress across the board. That includes driving commercial momentum and network upgrades in our increasingly competitive telecom markets, optimizing our corporate structure and services platforms, and with $2.1 billion of cash on hand and a further $500 to $750 million of asset sales planned this year, continuing to be smart about capital allocation. So let's go through it one by one, beginning with Liberty Telecom on slide four, where the value creation opportunity is substantial and the strategy is clear. Wherever and whenever possible, we intend to pursue transactions or opportunities that crystallize and deliver value to shareholders in the medium term. Remember, Sunrise as part of Liberty Global was valued at around 5.5 times EBITDA. As a standalone Swiss company, it's now trading at over eight times EBITDA or the equivalent of of $11 per Liberty share, so basically equal to our current market cap. And Sunrise is only 10% of our aggregate EBITDA. Now, we're not saying we can do that in every case, but there are multiple opportunities for value creation at the level of our operating companies, which still comprise four markets, 80 million connections, 22 billion of aggregate revenue, and 8 billion of aggregate EBITDA. So we have a lot to work with, and we're focused on three near-term tactical goals for Liberty Telecom. The first is the finance and monetize network infrastructure where we can do that. And as we've discussed, the rationale for this varies by market. But we know fixed infrastructure in Europe is a highly sought after and valuable asset class. So where possible, we're seeking to raise capital at higher multiples, accelerate or strengthen network upgrades and rollouts, and create strategic platforms for market rationalization. That's exactly what we believe we're achieving in Belgium. The creation of our netco, which we call Wire, has allowed us to develop an exclusive wholesale relationship with Orange. It's allowed us to secure attractive CapEx financing for our fiber upgrade. And it's allowed us to enter into strategic discussions with the incumbent proxies around network sharing, which are progressing quite well, actually. And then ultimately, it's going to allow us to facilitate bringing equity partners into the platform on highly accretive terms. In Ireland, our fiber upgrade will reach 80% of our footprint by the end of this year, and it's already improved our competitiveness. It's allowed us to enter into wholesale arrangements with both Sky and Vodafone, generating new revenue streams, and it's reshaped the market in our favor. In the UK, we are confirming today that we have paused our NETCO plans at the VMO2 level in order to align with Telefonica's announced strategic review. At the same time, Nextfiber has updated its plans and will now target 2.5 million fiber homes by year end on a cumulative basis. Let me say first that we pride ourselves on being good partners and we appreciate and understand Telefonica's position. Undoubtedly, we have more to say about all of this as the year unfolds. In the meantime, there are multiple ways to continue to strengthen VMO2's competitive position in the UK. Our services already reach 7 million fiber homes. And for reference, VMO2 achieved record sales and net ads last month on the next fiber footprint. So stay tuned here. In the Netherlands, Steven van Rooyen has made significant progress on a new strategic plan. You'll hear about that just in a moment. One element of that plan is a double down on DOCSIS IV and the evolution of our broadband network, which resolves the outstanding question on some of your minds as to whether we need to build fiber in the Netherlands, and the answer is no. The second tactical goal on this slide is to organize our strategic and operating plans in a way that delivers long-term free cash flow growth and allows us to begin the leveraging over time. The sunrise spin reaffirmed the fact that stable free cash flow and more modest leverage are catalysts for value creation. Now, Charlie will have more to say about this in a moment, but we are constantly focused on the balance sheet of our operating companies. Having refinanced all 2027 maturities in the last 12 months, And we just in this past quarter extended a further 500 million euros of Telenet's debt at rates in line with historical spreads. Now, we're sensitive to the fact that our leverage in some cases is above our targets. That is why we've announced, for example, the sale of our Dutch towers. And then we intend to use those proceeds to pay down debt. Finally, and perhaps most importantly, it's imperative that we continue to drive commercial momentum across our businesses. Every market is different, of course. but competitive intensity is increasing wherever we operate. This is the nature of our sector today. In addition to stabilizing our network strategies, we're finding across the footprint that three core things are working well. Wherever we operate, we are supporting customer acquisition with flanker brands that target different segments of the market. GIFGAF is a strong complement to the O2 brand in the UK, and we've just launched a broadband proposition to this growing customer segment. Illinois and the Netherlands was just awarded the best mobile provider. And base in Belgium allows us to compete at the lower end of the market, as well as expand into the south, where we see great opportunity for mobile and broadband growth. In every market, we are hyper-focused on base management and retention. This includes things like strengthening the value of our loyalty programs to drive stickiness and support cross-sell and up-sell. In markets like the UK, we're growing ARPU with AI tools that dynamically and proactively address customer contracts insurance. And we're hardening our base with things like a 25% speed increase in Holland and Check and Smile service programs in Belgium. And then lastly, we're sharpening our competitive positioning with new packaging and pricing. VMO2 just refreshed its mobile portfolio with better airtime rates and multi-SIM offerings. And as we'll discuss in a moment, Vodafone Ziggo has just lowered its front book to match KPN. Now, many of these steps are laying the groundwork for greater reach, stronger sales, better retention, more ARPU, and higher quality of service, primarily over the medium term. And while we do see green shoots in many markets today, competition for broadband and mobile customers remains intense. Generally, our Q1 subscriber and operating results on slide five reflect that. We saw stable broadband losses with a downtick in the UK. and we experienced weakness in post-paid mobile across all of our markets, with the exception of Holland. These headwinds were offset by strong, fixed ARPU growth nearly everywhere, reflecting price increases and the impact of the commercial initiatives I just referenced. Turning to each market briefly, in the UK, broadband net edge declined, did a higher churn and higher overall market flux. That was driven in part by one-touch switch, the new policy and aggressive alt net offers. Lutz and the team are adapting the approach they're using to retention, while continue to focus on value with another quarter, as I said, of solid fixed ARPU growth. And with over 2 million greenfield homes, there's significant growth opportunity remaining in the next fiber footprint. Overall, the UK post-pay market remained relatively soft, with the M02 impacted by B2B contract port outs, which are typically lower value, of course. Consumer net ads, on the other hand, improved year on year. And encouragingly, we saw stable O2 churn dynamics and we continue to see gift gap growth despite a competitive overall market with lots of MVNO activity. It's worth noting that mobile service revenue, as reported by Virgin Media O2, was up in the quarter year-over-year. It was supported in part by a 2.6% uptick in mobile postpaid ARPU. Now, turning to Vodafone Zigo, we continue to see an intensely competitive environment driven by promo offers from pretty much all the providers. We'll discuss in more detail in the next slide what we intend to do, but in response to this, Vodafone Ziggo launched new front book offers with simplified tiers and between a three to five euro price reduction. And that helps them better align to KPM pricing. And we've already seen some benefits to churn as customers migrate. Postpaid mobile net ads in Holland were 29,000. That was driven by growth in B2B. And while the mobile market is generally more rational than fixed, we still see lots of price competition in the no-freel segment. In Belgium, we had a steady quarter compared to prior periods. where we continue to see traction with our base flanker brand in the south. On the Telnet brand, we saw a successful Wi-Fi campaign during the quarter. We announced a price adjustment of around 3%, which took effect from April. The Belgian mobile market remains highly competitive, and that's characterized by prolonged promotional activity and repriced offers from the main flanker brands. In response to this, we've successfully repositioned base as a counter to the launch of Digi, and that's driven improved performance in our flanker brand. And then finally, the Irish broadband market is heating up around fiber, but we've seen churn improve as Virgin Media Ireland optimizes the customer retention process. During the quarter, we've also seen our wholesale growth through Sky and Vodafone starting to offset retail losses. Now, I'd like to spend a few moments on Vodafone Ziggo. As you know, Stephen has been leading the charge for about six months. One of the main reasons that we and Vodafone hired Stephen was that we felt he could give us a clear-eyed assessment of the market, help us figure out Vodafone Ziggo's true strengths and weaknesses, and then develop a plan to win again. And that's exactly what he's done. On slide six, you'll see a very brief summary of the four key drivers he and the management team will use to regain commercial momentum in what is essentially a healthy three-player market. That's beginning with how they work. Specifically, that means simplifying processes, accelerating decision-making, and optimizing costs and efficiencies. This was long overdue and will also generate significant OPEC savings. Second, I think he has correctly concluded that the Dutch market is driven by speed and price, not necessarily technology. We have the highest ARPUs in the market, so this is the right time to reposition pricing, which you've already started doing on the front book, as I just mentioned. And then third, as I mentioned a moment ago, Dutch consumers value speed, price, and quality of service. And on the fixed network, we're going to go all in on DOCSIS 4, which will take us to 8 gig speeds by the end of 2026 at a fraction of the cost to build fiber in this market. In the meantime, our current network configuration can get us to 2 gigs, which will accelerate. And then finally, the team will reinvest in Vodafone Ziggo's core strengths. And that includes strong brands, popular loyalty programs. and a large FMC base, as well as unique sports platform. Charlie will walk through some of the financial implications of this plan, but Margarita and I are 100% supportive of Steven and the team. It's time to reset in order to get back to growth. Now turning to slide seven, over the last year or so, we've provided greater disclosure on our Liberty Growth portfolio. I think that's helped investors and analysts understand the nature and quality of our investments in tech, media and content, and infrastructure. This is especially important given the size of our portfolio at $3.3 billion and its relative contribution to our share price today, roughly $10 per share on an $11 stock. The strategy with Liberty Growth is simple. We want to be in a position to rotate capital out of non-core and subscale assets and into higher return businesses or strategic Liberty Telecom opportunities. Tactically, we have committed to sell between $500 million to $750 million of assets this year. We have line of sight on certain deals, and I'd remind you that our publicly listed stakes alone total $550 million. Now, it's premature to disclose any potential investments into Liberty Telecom with those proceeds, but we have been quite busy at the Liberty growth level. As a reminder, our portfolio is highly concentrated, with seven investments accounting for nearly 75%. of the $3.3 billion fair market value today. Now, you can see those $2.5 billion of investments listed on the bottom left of slide eight, along with the sequential change in fair market value this quarter. Now, the changes quarter over quarter relate to increased investment, favorable FX movements, and increases in valuations, and they total about $200 million for the entire portfolio just in the last three months. Now, given our controlling interest in Formula E, we do now consolidate this investment and we're excited about showing more regular updates. It's been a fantastic start to Season 11 with record viewership, particularly in the U.S., where our Mexico City race, for example, drew an audience 80% higher than F1's Las Vegas Grand Prix. Now, we're headed to Monaco this weekend, and I'm telling you, it's sold out for the doubleheader on Saturday and Sunday. And interestingly, to tap into this growing popularity, we launched a pretty interesting and unique sort of first in motorsports program where we brought 11 well-known personalities from sport, technology, and entertainment and gave them the unprecedented chance to prepare like a Formula E racer and actually drive the Gen 3 Evo car during a two-day track event at the Miami Circuit. Now, you'll see that content, which has already generated 300 million views across social media and in a feature-length documentary later this year. Also, last week, we launched a brand-new Formula E documentary on Amazon Prime, which goes behind the scenes, with four drivers over the 2024 season. I encourage you to check it out just to get a feel for the racing and the personalities in the championship. And then finally, we're a short 18 months away from the new Gen 4 car, which is now testing and delivering incredible power, speed, and performance. So exciting things happening there. One more slide for me on Liberty Services and our evolving corporate structure. As a reminder, Liberty Tech and Liberty Bloom generate $600 million of annual revenue and positive operating free cash flow. Far from being a burden, each of these platforms continues to pursue growth and efficiency initiatives that will create real equity value for shareholders. Liberty Broom, as you remember, provides a host of financial and back office services. It just went public with its first marketing campaign and has already added, according to Charlie, 10 new non-Liberty clients to their roster. The balance of our corporate costs amount to about $200 million annually after management fees, and this is the number that analysts are valuing at approximately 14 times, resulting in a $10 reduction in our sum of the parts. Not only does the reduction in value not recognize the inherent equity value of Liberty Bloom and Liberty Tech, it penalizes us in relation to other sectors like media and private equity, even compared to some of our telco peers. Now, we'll continue to make the case with analysts, but in the meantime, we are working on reducing these corporate costs through a combination of efficiencies and additional revenue, generated from Liberty Telecom, Liberty Growth, and Liberty Services. So, you know, stay tuned for more details about this in the second half of the year. And then finally, just a reminder that our corporate cash, which totaled 2.1 billion at the end of the quarter, sits 60% in euros and is dedicated to supporting the strategic plans I just outlined. This includes, of course, opportunistic share buybacks, which we have targeted at up to 10% of our shares in 2025. As always, I look forward to digging into greater detail during the Q&A. But with that, Charlie, over to you.

Thanks, Mike. The next slide sets out a summary of the quarterly revenue and EBITDA performance in our key markets. VM02 reported a return to revenue growth of 0.4%, excluding next fiber-related construction revenues and handset revenues in Q1. This was driven by a strong performance in consumer fixed revenues and improving momentum in the mobile service revenue segment. Vodafone Ziggo reported a revenue decline of 2.6%, mainly driven by a decline in fixed revenues and lower handset sales, which was partially offset by continued growth in Zygo Sport and B2B fixed revenues. Telenet reported a revenue increase of 2.7%, supported by higher programming revenues in the quarter and the continued benefit of the June 2024 price adjustment. In terms of Q1 adjusted EBITDA performance, BMO2's adjusted EBITDA grew 0.8%, excluding the impact of Next Fiber, supported by core service revenue growth and cost efficiencies. Vodafone Zigo's adjusted EBITDA declined 8% in the quarter, impacted by the decline in the fixed business, increased UEFA programming costs, and higher labour costs related to the collective labour agreement. And Telenet's adjusted EBITDA grew 0.8%, supported by lower network costs and other cost control measures, which were partially offset by higher programming costs and wage inflation. The next slide provides an update on the key metrics of our capital allocation model. Starting on the top left of the slide, in Q1, we saw cash flow generation in line with our expectations. As has been the case in previous years, Q1 is typically a modest cash outflow quarter, given the timing of interest payments on our debt stack and with limited cash distribution to the JVs, which tends to come in Q4. Turning to our cash walk, our consolidated cash balance sits at $2.1 billion at the end of Q1. From our closing Q4 balance, we saw modest outflows in the quarter related to investments in the Liberty Growth portfolio and the execution of our share buyback program. Moving to Liberty Growth, the fair market value of our Liberty Growth portfolio increased by around $150 million during the quarter. This was primarily driven by the increase in dollar terms of our largely Euro-denominated investments, as well as new investments in Atlas Edge and NextFiber. Finally, looking at our CapEx trends, we continue to invest in our fixed and mobile networks, and the elevated CapEx in Belgium and Ireland reflects the continued commitment to roll out fibre networks in those markets. Now, as a reminder, at Telnet, the step-up in CapEx will support an additional 375,000 homes passed by year-end at 25 at WIRE, and will also support 5G and digital CapEx at the Servco. We expect CapEx Intensity at Servco to decline in 2026 as we compete the major investments in the mobile network in 2025. Wire CapEx will also be fully debt financed through its own CapEx facility, which means there's no equity requirement from either Liberty Global or Tarnet. Overall, we remain confident in our ability to remain in line with our capital intensity targets across the opcos as we set out in the guidance we announced at Q4 results. Turning to our treasury update, We maintain a strong balance sheet position, with our debt split equally between bank debt and bonds. Our variable bank debt is fixed using swaps, which are independent of the debt, allowing us to refinance the credit spreads on our near-term maturities, but also benefit from the full term of the swaps. We maintain a cost of debt of around 4% to 5%, with an average life on our debt of approximately five years. Now, in general, we look to manage our debt maturities so that there are no material refinancing commitments in the next three years. Following the successful refinancing of VMO2, we have now turned out all 2027 maturities, and this means we're able to remain opportunistic and flexible in our financing approach. And we intend to remain proactive in terms of pushing out the existing maturities and extending the average life of our debt. Our activity at Telenet demonstrates our ability to remain agile, with a new eight-year, €500 million term loan facility deployed and an attractive spread of around 300 basis points, which was completed during the quarter. And as a reminder, we also secure commitments for a 500 million euro CapEx facility for wire, beginning as a standalone capital structure to support the fibre rollout. Now, Mike has already discussed the new strategic plan at Betafen Ziggo. But in the following slide, I'm going to walk through both the near-term financial implications of the plan on the 2025 guidance and also give some colour on the mid-term financial implications and actions that we are taking to help return the business to our four to five times long-term leverage target. Now, beginning with the impact on 2025 guidance, we're lowering revenue guidance from broadly stable to low single digit decline for 2025. Now, as Mike laid out in his remarks, this is principally driven by more aggressive retention activity across the market and the flow through of lower front book pricing and the right pricing of the Zygo base. Adjusted EBITDA is now expected to be down mid to high single digits in 2025, impacted by this migration process. Capital intensity will remain at 20% to 22% of sales in line with the guidance given in February. And adjusted free cash flow and shareholder distributions will be lower at a range of 200 to 250 million euros versus the 300 million we previously guided to, reflecting the impact of this lower adjusted WDA guidance. Now, turning to the midterm, we expect that the flow through from the front book pricing will continue to impact revenue and adjusted WDA trends through to 2026. but with a moderating impact versus that in 2025. We believe that the series of commercial and network actions that we are taking will stabilize and then reduce the declines that we've been seeing in fixed subscriber customers. And as Mike discussed, we're accelerating our DOCSIS 4 strategy in the Netherlands, not only to 8 gig speeds from 2026, but also strong interim steps, including 4 gig. We aim to do this largely within the historic CapEx envelope of Budapest and Zygo of around 900 million a year. Now, whilst there'll be an impact of the new strategic plan in 2025 and 2026, we're aiming to position the business to deliver a return to growth in the midterm, probably around 2027, whilst maintaining a broadly stable free cash flow profile through this transition period. Now, lastly, on leverage, given the short-term pressure on adjusted EBITDA, we anticipate leverage will peak in 2026 and reduce thereafter. And given this increase in short-term leverage, we're accelerating non-core asset sales, starting with Vodafone Zigo's tower assets, and we will use the proceeds from these sales towards paying down debt. Turning to our guidance for all our assets, I mean, just talk through the updates of Vodafone Zigo. We are reconfirming all the remaining guidance metrics of BMO2, Telenet, Liberty Services, and Corporate. And that concludes our prepared remarks for Q1, and I would like to hand over to the operator for Q&A.

The question and answer session will be conducted electronically. If you would like to ask a question, please do so by pressing the star or asterisk key followed by the digit one on your phone. In order to accommodate everyone, we request that you ask only one question. If you're using a speaker phone, please make sure your mute function is turned off to allow your signal to reach our equipment. We'll pause for just a moment to give everyone an opportunity to join the queue. Our first question will come from the line of Carl Murdock Smith with Citigroup. Your line is open.

That's brilliant. Thank you very much. I wanted to ask on the UK net ads and specifically the kind of commentary around the broadband editions and tough market conditions. I was wondering if you could provide a bit more color on that topic. I mean you talked about one-touch switching. You talked about market competition. and also, I guess, price rise impact as well. Could you provide some more color in terms of how much you assign to each one? And I suppose you're talking about one-touch switching is interesting, given that it was also in place last quarter, but we didn't seem to see the same impact last quarter. So what are you seeing through the quarter as well? Thank you. Yeah.

Thanks, Carl. We're not going to get into much more detail in breaking it down between one-touch switch and other

um other other factors but lutz why don't you try to address what you're comfortable sharing and we'll go from there so i mean quarter you go can you hear me can you hear me can you hear me yeah oh sorry sorry um so carl thank you for your question So what is actually happening is that, of course, quarter to quarter, DPLS is used more by customers. Yeah, so that's number one. Number two is that the market is more competitive and you might have seen it, right? So operators, some competitors put up to 300 pounds benefit on the table to get the customers. So that means customers within minimum contract So that is number two. And this is also driven by Altnet, as you can expect, because they are in a pretty challenging situation. And the only thing they have is their networks and price. That's it. And so we are impacted by that. Now, the good news is, right, we built this machine that we can target down to 60 households and a retention offer with product and price. And now this machine is learning the same thing for prevention. And we are running 100,000 campaigns with machine learning and AI at the same time. And so it takes time to optimize the machine from retention to prevention because the market clearly shifts because of GPLS to prevention. Two things are making me more comfortable. One is that we were able to generate six service revenue growth of 1.9% before price rise. Price rise impact is kicking in in Q2. And second, we see now some slight improvements from April onwards. So we don't expect that to stay because our machine will deal differently with it. Yeah, I hope that gives some background.

That's fantastic. Thank you very much.

Thank you. Our next question will go to the line of Robert Grindle with Deutsche Bank. Your line is open.

Hi there. Thanks so much. That was an exciting hour or so. The question is on the Netherlands, actually. I think it's impressive that you can do the DOCSIS upgrades within the existing CapEx envelope. Just to be clear, is there an assumption about CPE costs and take-up of the highest speeds within that CapEx envelope? And you've said you're going to sell towers in the Netherlands to reduce debt a bit. You've said that before, a few years ago, if I'm not mistaken. So is there something that's changed now between yourselves and VOD that you've got a bigger plan for the business that's unlocked this new ambition? Thank you.

On the towers, it takes time to get a TowerCo set up, lots of documentation, and various things have to be put in place. And we have a partner. So I think we're now aligned as partners that this is a good time to go ahead and take that step, which, as you know, I mean, review many of them, is complicated and takes time. So I think we're fortunately very aligned on that. And you can figure out the value and proceeds it will create. But I think our purpose and intention is to use those proceeds to absolutely pay down debt, which seems like the right thing to do, especially in light of this revised guidance. On DOCSIS, we're committed to the strategy and the technology. The good news is we're not alone. I think there's 120 million homes currently being prepped and or rolling out DOCSIS in the U.S., and We're very closely aligned with Charter and Comcast on every element of the network rollout, the technology, the speed. So I think our numbers, while they will continue to be refined and improved, are pretty good. And, you know, Stephen can talk about the impact that we'll have from a marketing point of view to have these types of speeds. But, you know, it's time to put a line in the sand or draw a line in the sand, and it's clear to us that this is the right technology for this market, then that, in my opinion, should take a little bit of a CapEx overhang off the story because I have received this question almost everywhere I go. Won't you have to build fiber? Won't you be building fiber? And we're just waiting for that shoe to drop. We will not be building fiber in this market. DOCSIS 4 is the answer, and we think it's the right one. I don't know, Stephen or Enrique, if you want to add anything to that.

No, Mike, I think that's pretty clear.

Sorry, go ahead. Go ahead, Stephen.

Go ahead. I think that's, as you say, that's pretty clear. We're committed to that roadmap, and the question was specifically about the CapEx envelope. We feel pretty comfortable that we've got enough room in that to do what we need to do to upgrade the network.

Great to hear. Thanks, Chance. Thanks, Robert.

Thank you. Our next question will go to the line of Paulo Tang with UBS. Your line is open.

Thanks for taking the question. It's really just to focus a bit more in terms of Vodafone Zigo. So I'd just be interested in terms of any commentary from Steven Van Royen in terms of what he's doing differently since he's taken over and then also any first impressions. but also be specifically interested in terms of the customer response to the five euro price cut in terms of broadband. Has this resulted in any improvement in terms of net ads for Q2? And then just given the weakening EBITDA trends and with leverage of Vodafone ZigO at six times, Does it make sense to continue upstreaming a dividend to shareholders? Is cutting the dividend not the faster way to deliver? Thanks.

Well, multi-level question there. I think we feel like on the last one first, and I'll hand it over to Stephen, on the dividend to shareholders, that's our current guidance. We'll obviously evaluate that as the year goes on. We think that the tower proceeds well as other non-core asset sales which we have uh you are working on should be sufficient to uh you know deliver the business to where it needs to be at this stage especially given you know the the strategy we're undertaking and the midterm growth prospects that we see so we'll evaluate that polo as the year goes on but that's that's our current position steven

Yeah, thanks for the question, Paolo. I think your cheat sheet is on page six. So if you want to know what I've been doing with my time in the office, it's pretty much outlined on the page. Four big blocks, fixing the organization, fixing where the organization operates, looking at the cost savings that I think are overdue, which we plan to deliver this year through 27. I think necessarily we've moved to realign our pricing. Our pricing was out of kilter with the marketplace. One of the biggest purchase reasons is price. Biggest reason for leaving is price. So you need to sort that out. You just need to grasp that and you need to do it. We've done that now. We did that actually earlier in Q1. And as we've said in the financials, you'll feel that effect of that now and you'll feel it through the rest of the year. But it's the right thing to do because at the heart Of what two and three are all about is arresting the decline about stopping the descaling. That's what the strategy is is designed to do Embracing three different brands that operate in three different market segments the value end and then you've got premium mobile and premium broadband and making sure their position pretty well investing behind them to make sure the pretty position well to take share in those markets and As Mike said, taking the risk off the table, the overhang on what the right thing to do with the network is. I'm highly convinced, we have got conviction that pursuing the DOCSIS upgrade path and giving us the speeds we need in that marketplace is the right thing for us to do. And then we've got some differentiators. We've got a loyalty plan, which I'm very excited about. I think we've only seen the tip of what we can do with that. helping offset some of the risks that we have in long-tenure backboard customers by investing more in there. And then as I see FMC, I see a lot of opportunity and a lot of upside to push that harder and further into the base than where we are today. And the plan now is to commit to that, is to just roll up the sleeves, align the team, the new operating model behind doing that, and deliver it. Thanks.

Thank you. Our next question will go to the line of Steve Malcolm with Redburn. Steve, your line is open.

Yeah, thanks, guys. And I'll take a couple if I can related on Vodafone Zego again. So, Stephen, I guess you're going to have to step up the plate again. Just on the CapEx, can you give us an idea where the savings are to fund the doctors for? You're saying a sort of stable $900 million savings. So what's coming out to fund that? And also, you know, how long until you get the whole network upgraded? A rough sort of idea of the timeframe. Maybe you said it and I missed it, but it'd be great to hear that. And just sort of on the OPEX savings, I'm curious that, you know, clearly part of the EBITDA downdraft is Champions League. Stephen, you clearly, you know, come from a rich content environment. I can't think of a single telco that's really made money out of Champions League rights. Is there something that you need to own or something that you would give up fairly easily to try to improve the EBITDA in a couple of years' time? Thanks a lot.

Three questions in there. Thanks for the questions. So let me deal with the last one first. I think it's sort of too early to call what our plan with UEFA is. You'll notice I made an intervention upon joining about monetizing it more and better. And I think we made a statement that that started flowing through. I expect that there's more opportunity for me there. In the mix for the moment and for Zygo Sport, it's a discrete and distinctive and valuable part of the brand and the proposition. So I'm pretty happy with that. On the CapEx, we're getting through the bulk of the mobile network upgrade plan. So money should free up from that part of the network. envelope to move across to this. We're also through and going through a part of our IT and IT infrastructure, so that should start paying us some dividends, which allows us to reinvest money in the network upgrade and stay within the envelope that we've guided. In terms of rolling out the network, I'm not going to give you specifics about that other than, as we've said in this presentation, we see our way through to getting 2 gig, 4 gig, and 8 gig in parts of the country through the next 18 months, which considering where we were and what the overhang was on us building fiber is a pretty rapid deployment and an important deployment in specifically areas of the country where we think it's going to make a difference. So between that fixing the network within the envelope that we've got and getting our front book pricing right and getting our brands in the right place and well positioned and marketing correctly, I think I feel pretty good about the popular one. Thanks for the question.

By the way, there was always a little bit of DOCSIS in the original CapEx envelope to begin with. It was always our base case. We weren't talking about it as much because we didn't have the same conviction as we have right now. But there's always some DOCSIS capex in there, so that's helping too.

Okay. Thanks a lot.

Thank you. Yep. The next question will go to the line of Joshua Mills with BNP Paribas. Your line is open.

Hi, guys. Thanks for the questions. I understand you probably can't give too much detail on this one, but maybe if you'd be able to give us some color on the kind of conversations you're talking to Telefonica about on VM02, that would be helpful. How do they see the asset? How do you see the asset? Is it still a priority longer term that you can reduce leverage at this entity, be that through asset sales or or perhaps lowering the dividend payment, just any broad-brush commentary there you could give would be very helpful. It's obviously a bit of a surprise to see the NETCO deal paused. And then secondly, on the network strategy in the Netherlands, I think it's very clear that you're not going to build fiber. But I think there were some comments at a conference from yourself, Mike, recently that you may be open to partnering with or doing deals with the OPNets longer term. Is that still something you'd be considering under the right conditions, or do you think the DOCSIS IV strategy you're putting in place today will be enough to provide the speeds you need across the whole footprint long term? Thanks.

Yes, thanks, Josh. On the network question, the answer is we do feel that DOCSIS IV will give us what we need long term to be competitive. Having said that, we will always remain opportunistic about other network strategies or opportunities to either accelerate our access to high-speed or higher-speed broadband or create value. So we rarely say never, but I think the core plan today is as we've described it, and we're pretty bullish about that plan. On Telefonica, I mean, we really do and are good partners. We've had a very long and successful partnership with Telefonica. I respect the fact that the new leadership needs time to figure out where their priorities are and where they want to put their capital and effort and where they see the biggest benefits and upside for their shareholders. I'm respectful of that. If I were to reverse the tables and if we were coming in with a fresh perspective or developing a fresh perspective, we would also see some kind of understanding. So that's point one. There's lots of options remaining in this market. As Lucinda and I mentioned, there's 7 million fiber homes already in our ecosystem that we control. We're the second largest network in this country, 18 million homes. And the engine is churning in a positive way. So there's lots to be really, I think, excited about in the UK. And, you know, we're going to keep figuring out how we create value for shareholders, and they'll be doing the same thing. So I would say it's a very good dialogue. I think very highly of Mark. You know, he's come into this as a new sector, and he's very quickly, I think, grasped the core aspects of our industry, and we're going to give them the time they need to figure it out. That's really all I would add to that. Thanks. Operator? You got it.

Thank you. Our next question will go to the line of Ulrich Reiss with Bernstein Society General Group. Your line is open.

Thanks very much. So on the Netherlands, I wanted to ask one of the sort of arguments that is floating around on the difference between staying with HFC and going to full fiber is that the operating costs on the Cable option, even with the higher speeds that DOCSIS 4 offers, will be structurally higher in the long term and that this is a competitive issue. How do you think about that element of it, the higher operating costs and potential margin impact relative to competitors? If I may just put in one clarification on the UK net core sale, please. is there a time scale to this pause? Is this something that you would expect to be talking to us again in six months or the next two years, or is there any sense of when this pause might end? Thank you.

I think the leadership of Telefonica has, I believe, suggested that they will have views on their strategic plan in the second half of this year. So to the extent that this will have an impact on our own strategies and opportunities in the UK, that's probably a pretty good timeframe, H2. On the OPEX question, as I think we've mentioned many times before, there are a handful of things that drive the decision between, let's say, fiber and DOCSIS. And the number one issue is the cost per premise. And what we know is that the cost per premise in the Netherlands, will be a very small fraction of the build cost for fiber. And so it almost dwarfs any potential, and I would use the word potential, long-term OPEX efficiencies from consolidating networks and consuming less power and the things that fiber can provide. The cost to build, in our opinion, in the Dutch market is prohibitive, whereas we can get where we need to be with a very small fraction of that expense with DOCSIS. So we really don't even get ourselves to the OPEX efficiency question because it's relatively small in the scheme of the overall capital decision and capital allocation decisions we're looking at. I don't know if, Enrique, you want to add anything to that?

Mike, I think that's pretty accurate. The other thing I would just add is that we maintain our networks, our HSE networks in Netherlands and in all our operating companies at a pretty high level, pretty current technology. As probably all of you know, the HSE technology today is really highly, highly, highly connected to software applications. cloud, all modern technology, so we feel pretty confident about the operating expenses on DOCSIS, not only DOCSIS 4, but in the continuation and expansion of DOCSIS 3.1, as Stephen mentioned before.

The other point I'll make in support of DOCSIS in this case, the other point I'll make in support of DOCSIS on this case is that connection costs and CPE and these types of issues are really equally important in any fiber decision. And so I think the ability to stay with a single network here and execute against a single technology and to do so with less disruption to customers is another benefit.

Very clear. Thank you. Sorry for butting in there. Thank you.

Thank you. Our next question will go to the line of Matthew Harrigan with The Benchmark Company. Your line is open.

Thank you. Two questions, one on Formula E and then on 5G, both consumer and business services. When that other Liberty bought Formula One, it was pretty apparent that some of the practices under Ecclestone weren't optimal on social media, you know, promotion, sponsorship, etc., and balances with Ferrari and between the structure of the teams. What do you think the missteps in the past have been and what do you think you can do to elicit more interest and enhance the team values as well? Because that was clearly one of the things that Liberty did right on Formula One. And how do you assess kind of the competitive position? I know it's very different, but... kind of Formula E relative to Formula One in terms of the very long-term potential. And then secondly, you know, Mike, you've been very vocal about, you know, 5G has kind of been table stakes on the consumer side, very difficult to monetize, you know, disappointing in the U.S. as well, whereas, you know, network slicing, you've got a lot of opportunities on the business services side. But is there anything happening, you know, with better integration of AI and the handsets, say, perplexity or... even like 8K or whatever makes people want to stream more on 5G mobile that would finally enable you and others to kind of benefit from the rising tide on better monetization for the European consumer. Thank you.

Thanks, Matt. On the 5G point, I would say there are two versions of 5G, and pretty much everybody, with the exception of a handful of operators, maybe one in the US and a handful of operators in Europe, are operating under the less robust version of that. So the second and more robust version, 5G SA, is in our sites. We're all anxious and working towards getting our networks to 5G SA, standalone 5G, which has many benefits, operating benefits, even some cost benefits, but also could lead to the kind of things you're describing on the consumer side. But I'll also tell you that almost every operator will agree, I think, that the main revenue generating benefits of 5G will be in the enterprise area. The ability to slice networks, the ability to have mobile private networks, the ability to provide solutions on the edge. These are all things that 5G facilitates in the B2B side of the equation, and that is real. Those applications are real. So, yeah, we're optimistic that over time, as we all get the 5G standalone, which is the true 5G, that that will open up opportunities in the consumer space, and it's kind of table stakes long-term. But I think the real benefits will be in the enterprise side of the business, and that's really where I think long-term the opportunity resides. On the 4G question, look, Formula 1, It's juggernaut. It is an incredible business. And I think the team on the other side of the house, if you will, has done a fantastic job. And to tell you that we're going to be Formula One someday would, of course, be ludicrous. We're relatively small. It took Formula One 75 years to get to where it is. On the other hand, what I know is this, and that is there are only a handful of global racing championships around the world. We are lucky to own one. Secondly, we own one. that, no pun intended, is a rocket ship. Every car we bring out goes faster and faster. It won't be long before we're as fast as a Formula One car around Monaco. I can promise you that. And we're doing it without slicks and without the aero packages and things like that. So just focus on the racing because that's really where I get excited, watching the cars go faster, watching dozens of overtakes on the Monaco track. I mean, this is really the exciting bit for me is it is really compelling racing. And that is the core reason anybody watches it and that we're invested in it. Yes, it has a sustainability component that is fantastic. Yes, we have lots of sponsors who are excited to be part of this and we're excited to have them. Yes, we have great manufacturers and really strong team ownership, but it's early days. And the nice thing is we're in these early days at relatively low cost. So I think there's nowhere to go but up. But we're not trying to be Formula One per se. I mean, many things we do better, many things they do better. We're trying to attract a younger, more diverse, more audience. We're trying to change the nature of racing. And I think we're well on our way. So it's really exciting, you know, really exciting where we're heading. And I think rising tides here float all boats. So it's not a mutually exclusive, you know, zero-sum game with F1. I think we both can thrive here. in this global racing marketplace.

Thanks, Mike. Congratulations on Sunrise. It really worked out well. Thanks, Matt.

Thank you. Our next question will go to the line of David Wright with Bank of America. Your line is open.

Yeah, hi, guys. I think we've covered Holland now. So just, I guess, a question on the NETCO and just a super quick aside on Formula E, but the NETCO, I mean, you know, Tef's chairman has obviously indicated an H2 strategic review to be communicated, and then there could obviously be some moves alongside that. But that means you kind of have to wait a little, and I'm just wondering how comfortable you guys are waiting, because one of the objectives of NETCO was always to provide a vehicle to potentially consolidate the U.K., UK competition is hitting you guys very hard now. It's hitting everyone very hard. So I think the general view is the sooner that consolidation comes, the better. And, of course, it speeds up your time to market, and you've obviously just brought back the next fibre targets a little bit. So I'm just wondering how comfortable you are kind of sitting on the sidelines when arguably you guys are running behind target and need to move a little quicker. And just on Formula E, I did notice the fairly... fairly huge departure of mclaren who prioritized formula one um you know that is obviously a marquee brand um i'm just wondering you know do you guys have any opportunity to sort of um was there any opportunity to keep them involved or even bring them back um that seemed like quite a big loss um for the sort of uh for the branding of the sport or maybe i'm wrong on that thanks

Well, I think you're touching on the nature of the sport, which is, you know, there's flux and it's fluid. McLaren has been a great, you know, race owner, race team owner for quite some time, but they're not a manufacturer. So there's no McLaren engines. It's not like Porsche or Jaguar. McLaren is really a brand that owns a racing team. And so we think, well, that's a loss, no question. And we love Zach and I think Zach loves us. that we will be able to fill that slot with compelling owners. And, you know, I can't speak about it here, but we're well underway to making that happen. So yeah, it's certainly a loss, but he had to manage his own business and, you know, he's got the sponsors and financial, you know, questions he has to answer. So I don't think it was, he doesn't like Formula E. I think he had to choose, if you will, where he was going to allocate capital. And I think some of that capital might have gotten a little smaller than he thought, and he made some moves. Anyway, on the bigger issue around net cope, I would say the following. Yes, the market is evolving, and certainly it would be potentially better to be front and center with our original plans. However, nothing prevents us from entering into strategic dialogue with operators around things like consolidation. I'll remind you that the Up acquisition we did earlier in the year was done by Nextfiber and VMO2. So we didn't have a Netco in that instance. And, uh, you know, we still have a very large broadband base. We have an 18 million home network or 16 wholly owned. There are unlikely to be significant developments in the rationalization of Altnet or fiber in this market that we aren't part of in some way. And I do believe that Telefonica would answer that question similarly, which is we will stay opportunistic and we will take action if things are presented to us that require immediate action, which will evaluate those. So that's where we sit. And I'm still optimistic and alluded to it's an active and vibrant market and we're a major player in it. And I think While we're pausing the specific NIPCO stake sale, we are by no means shutting down, you know, our strategic brains here and closing doors.

Okay, thanks for taking the question, Mike.

Thank you. Our last question will go to the line of James Ratzer with New Street Research. Your line is open.

Yes, thank you very much indeed, and good afternoon, Mike. I just had one question, please. If I look at Vodafone Zigo, you've obviously been facing some broadband customer losses there for a few quarters now, and you've now decided to kind of react with a new strategy to reprice on the front book. And if I look at the UK, you've now just had 44,000 broadband losses this quarter. I mean, if that were to continue as well, and it seemed like some of the one touch switching effect is going to continue at least into Q2, you know, at some point, you need to consider a similar type of strategic shift on pricing in the UK as well. Thank you.

I think it's premature to address that, and I think Lutz would say, and I think our partners would agree, that we'll be agile as the year unfolds. We're still adding customers in our next fiber marketplace. We think that accelerates. So that's a consistent quarterly net add in the two-plus million homes where we are now penetrating greenfield markets, if you will. And so we think that is a significant driver of growth for us, and we'll have to monitor losses and in relation to the uh the sort of plans and techniques that luce was referencing here are now that we understand one touch switch we are preparing to address that in a much more effective and proactive way so let's see how things unfold um and i think the move in the in the dutch market was also probably long overdue in the sense that we do have the highest arpu there that we um you know we didn't have a We didn't have conviction around how to retain customers or grow the customer base for quite some time. We were sort of floating an easy target. And I think what Stevens brought is a much more pointed and fierce strategy about winning again. So that's always a good posture to have. And I think I and Margarita, I believe, are comfortable with the posture that they're putting forward. And let's see how those results unfold. So we're optimistic.

Got it. Thank you. So does that mean you feel that you can probably get back to a kind of customer stability in the UK without having to make major changes to the front book pricing?

At this point, yes. That's what we're anticipating for the course of the year. That's correct. We've been growing fixed ARPU every quarter. I think, I mean, eight, ten quarters in a row we've had a nice uptick in fixed ARPU. So Certainly, that's our budget for the rest of the year is to continue doing that.

Got it. Thank you very much.

I think that's time. You got it, James. I think that's time. Listen, as always, we appreciate you engaging with us, taking the time to be on the call with us. Lots of data, lots of information. So we're always here to support you, answer any questions you have. It's important to us that you get to what you need to understand the story and the stock and the valuation. I'll just simply say we as a team are completely aligned, completely focused on our strategy here, and you can hold us accountable to all the things on those slides because we're working on them 24-7, and we look forward to keeping you posted on that. So we'll speak to you soon. Thanks very much.

Ladies and gentlemen, this concludes Liberty Global's first quarter 2025 investor call. As a reminder, a replay of the call will be available in the investor relations section of Liberty Global's website. There you can also find a copy of today's presentation materials.