Liberty Global Ltd.

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Liberty Global's second quarter 2025 investor call. This call and the associated webcast are property of Liberty Global and any redistribution, retransmission, or rebroadcast of this call or webcast in any form without 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 respects to its outlook and future growth prospects and other information and 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 Fries.

Thank you, Operator. Hello, everyone. We appreciate you joining us today for our second quarter results call. I hope your summer is off to a great start, wherever you may be. As you know by now, we try to keep these calls fairly consistent, which means I've got my key leadership team on here with me, and as soon as Charlie and I finish with the prepared remarks, we'll get right to your questions. Now, we do speak from slides, and I'm going to get us started on slide three with some highlights, really I think the key messages from the quarter. And the first point should not be a surprise to anyone on this call. When you cut through it all, this management team, this board, remain 100% focused on creating and delivering value for shareholders. We do that through three core platforms, Liberty Telecom, Liberty Growth, and Liberty Services. Beginning with Liberty Telecom, where our goal is to drive commercial momentum and unlock value for you, as we did with our Swiss subsidiary, Sunrise. I'll come back to how we might do this at the end of my remarks, but let me first make some operational comments. I think the main takeaway here is that our markets remain highly competitive. With new entrants like Altnets in the UK and low-cost providers, typically MVNOs, impacting both gross ads and churn. In the face of these headwinds, our subscriber results are mixed, with some markets seeing improved churn and green shoots, and others facing continued pressure in both sales and net ads. Despite these challenges, we're performing regionally well financially, delivering revenue and EBITDA in line with guidance expectations, and that's helped in part by price increases and strong ARPU results. Not surprisingly, every market is employing similar strategies to drive commercial momentum using fixed mobile convergence or FMC and flanker brands to support mobile sales, AI-based retention and marketing tools to improve churn, and speed upgrades and loyalty programs to bolster NPS and harden the base. We're also committed to having the highest quality networks everywhere we operate. To that end, our fiber and 5G upgrade plans are on track. We've acquired Spectrum in the UK, which will be very beneficial, and we recently expanded our footprint in the Netherlands. We're also focused on monetizing these networks where and when we can. And we have both tower and fiber transactions planned for the second half of the year to support growth and deleveraging. I'll talk about those. Now, moving to Liberty Growth, our strategy here also remains the same. Today, our portfolio is worth $3.4 billion, representing a small increase from Q1, primarily driven by additional investments and favorable FX movements. And this is a highly concentrated group of assets. I know we keep telling you that. I think it's important to remind folks. The top six investments comprise over 80% of the value here. Three investments in media, two in infrastructure, and that's along with our tech portfolio. The goal moving forward is simple. We want to rotate capital into higher return investments. and sectors that have tailwinds and, where appropriate, use some of that capital for accretive transactions at Liberty Telecom like we did with Sunrise. Now, our guidance for the year is to sell assets totaling $500 to $750 million. We believe this is achievable, but, of course, we won't sacrifice price just to get to an end date. In other words, if it takes us into Q1, for example, that should be fine. Along those lines, we've exited our position in Vodafone, which netted around 10% to 15% of the goal. Happy to take questions about that. Now, jumping into a couple of updates, I could not be more excited about Formula E's progress this season. Our London race last weekend capped off an extraordinary year. And you may have seen that we just announced an extension to our exclusive license with the FIA covering all-electric single-seater racing through 2053. 30 years is a lifetime in this sport, especially with the step changes we're seeing every two years in the speed and performance of these cars, as well as the growth in fans around the world, which now total 400 million. Finishing up on Liberty Growth, our commitment to digital infrastructure continues to expand, both through investments in businesses like Atlas Edge, and the value attributable to existing assets like Edge Connects, a data center platform and one of our largest and most successful investments to date. And I'll finish up on this slide with a few comments on our service platforms and corporate operating model. Trust me, when analysts deduct $8 to $10 per share off your stock price for this stuff, it's worth a minute or two. I'll start with Liberty Bloom, which delivers a multitude of business solutions for 36 enterprise customers, over a third of which are external to the Liberty family. This new division is on track to exceed $100 million of revenue and generate positive EBITDA this year. I'm excited about the organic and inorganic growth plans at Bloom, which is a great example of how we're taking corporate capabilities and turning them into valuable enterprises. I can tell you Charlie's goal is to build a billion-dollar company here, to which I say, go get it. Similarly, our Liberty Tech platform generates $475 million in revenue and has been driving ever-increasing profitability over the last few years with sophisticated outsourcing arrangements. I think we've been updating you on these, but you may or may not have paid attention. These arrangements keep our team in control of IP and product development, but they reduce our cost to serve. And there could be more of these types of deals down the road. Perhaps most importantly, we've been acutely focused on our own net corporate costs. Our guidance for the year was to spend a bit less than $200 million when you'd add it all together, and we are today improving that guidance by at least $25 million as we begin to reshape our operating model. Now, this is really a good news story, and you should stay tuned for more information throughout the rest of the year. We're confident we can continue to optimize this number through both revenue generation and strategic reshaping. Finally, at the end of the quarter, our cash balance was $1.9 billion. We bought back about 3% of our shares, and Depending on asset sales, we expect that cash figure to be higher at the end of the year. So with that as background, I'm going to spend a few minutes double-clicking on our telecom business before handing it over to Charlie for the numbers. Now, I'm on slide four, which presents some key headlines for each operation, starting with Virgin Media 02. where we're really excited to be nearing the completion of our merger with Daisy, which will create a B2B powerhouse in the UK and the second largest solutions provider to small and medium enterprises, with £1.4 billion of revenue and even to have £150 million. As with most of our deals, synergies are substantial, with an NPV of £600 million, including integration costs, and that's based on an annual... Run rate savings estimate of around 70 million pounds by 2030. So this is a great deal. On the mobile front, VMO2 recently closed on the purchase of 80 MHz of Spectrum from Vodafone 3. That was following the completion of their merger and part of that deal. And this brings our share of Spectrum in the market to 30%, which is really significant. It secures our competitive position in the mobile market for a very long time. And then finally, Lutz and the team are hard at work driving commercial momentum. including a customer service transformation plan that has more than halved Virgin Media complaints year over year. That's an incredible achievement. Also, he's been working on product enhancements like data rollover on O2 premium plans and multi-SIM capabilities for the Volt proposition. There's a lot of work going on here. I'm sure there'll be plenty of questions on the UK. So let me move to Vodafone's Ziggo, where, as I mentioned, we're starting to see some green shoots as a result of management's strategic pivot in the markets. We'll come back to this on the next slide. On the M&A front, the sale of our Dutch towers is progressing well, and we anticipate completion in the second half, with proceeds likely to be used to leverage the business. And then finally, we announced a great deal with Delta in the market. That gives us access to another 600,000 homes, Greenfield homes, really, off-net in the South. That makes us a true nationwide operator. In Belgium, we continue to make good progress with Proximus on a fixed network sharing deal. I'll touch on this in a moment. But it's really shaping up to be a great example of regulators seeing the bigger picture on the need for infrastructure investment. Two more quick headlines here. In the south of Belgium, our launch of BASE over a year ago continues to perform well and unlock 2 million greenfield homes in that part of the country. And after a material investment in 5G over the last three years, I'm sure you've been following that, it was great to see Telenet recognized by the government as providing the best 5G coverage in Belgium, both indoor and outdoor. So well done, John and the team. And then in Ireland, we're racing towards completion of our full fiber rollout with 80% coverage expected by year end with the balance built in the first half of next year. Both with DOCSIS and with fiber, we are the speed leader throughout the country. We recently launched Ireland's first 5 gigabit fiber broadband service. And importantly, we also just added our third wholesale fiber customer in this market. So after Sky and Vodafone, that helps to bring our utilization on the Fiverr network to 16%, which is great, as we've just gotten started. And then finally, we're picking up momentum in mobile in Ireland with the launch of our 15 for Life offer in May, an opportunity for us to be disruptive. Now, okay, just three more slides before I hand it to Charlie. I want to be sure that we provide a bit more detail on two significant strategic developments in the Benelux region. Beginning in the Netherlands, where our last call, I think we outlined Stephen and the management team's new strategic and operating plan for the Dutch market. The plans organized here on slide five into four core initiatives. And I'll touch on each briefly. Suffice it to say, things are coming together well. beginning with the recent implementation of a more agile operating model, and that's been characterized by exactly what you'd think you'd see. Simplified processes, accelerated decision-making, optimized costs, and all that will result in significant OpEx savings, but more importantly, a more competitive posture vis-a-vis KPN. Mostly, Stephen has instilled a culture of winning and pride across the organization. That's exactly what we needed here. I love that. Second major initiative revolves around repositioning broadband pricing, which happened in April, and after one month, really a one-month lag, May and June saw a 50% improvement in churn intent compared to April. That's supported by moving to a 24-month contract, but so far so good. Those are green shoots. Above all else, it was particularly important to finalize a clear network strategy in this market. Analysts have penalized us forever based on what I think is a false belief that we need to build fiber here. Let me be clear. In the HFC network in Holland... is incredibly robust today and capable of lightening fast broadband speeds tomorrow. So perhaps to put a pin in it, we will maximize the one gig speeds we have today across the HFC footprint. We will aggressively roll out two gig speeds using the current DOCSIS 3.1 technology, and we will accelerate our upgrade of DOCSIS 4 with eight gig speeds expected in 2026. It might also be worth reminding everyone that the cost of doctors for in the Netherlands including the 1.8 gig network upgrade is ninety percent cheaper than building fiber ninety percent so pretty clear decision there and lastly the team is reinvesting in Vodafone Ziggo's core strengths in particular our brands our loyalty programs our FMC propositions this is come to life with things like a new Wi-Fi guarantee the relaunch of the Vodafone brand and a renewed investment in our Flanker brand so hopefully That gives you a slightly deeper understanding of the organic plans the team are busy rolling out, all of which have given us more optimism about 2026 and beyond in Holland. And next, just a quick update on Belgium, and in particular our discussions with Proximus to rationalize fixed networks. As a reminder, Proximus and FiberClar on one side and Telenet and our netco called Wire on the other side have made significant progress on an agreement to collaborate with on the acceleration of fiber across Flanders. I know this has taken quite a while, but the teams have been working very closely with local regulators, the BCA and BIPT, really from the beginning, and we expect that they will launch a market test of our arrangement in September, which is really good news. In fairness, this is a complicated deal, so the right-hand side of this slide attempts to clarify for everyone what's going on here. To simplify, there are 4.1 million homes in Flanders and Brussels, About 1.4 million of those homes, or roughly 35%, are in areas that we would consider dense and urban. And in those territories, they're denoted in gray on the pie chart, both Proximus and Wire will continue to build fiber on their own and compete, as we currently do. But in the balance of the market, represented here in different shades of green, we will collaborate, really for the benefit of consumers in the end. In the medium-dense territories, representing 2 million homes, or the lighter green on this chart, Wire and Proximus will split the market up with Wire building 60% or 1.2 million of those homes and Proximus building the remaining 40% or 800,000 fiber homes. But regardless of who builds where and regardless of which territories, all parties will use the same network for distribution of their services, which means that Wire, for example, in those light green areas, will have 85% utilization of its fiber network and 100% market share of the wholesale business, again, on those 1.2 million fiber homes. In addition, and this was a bonus, in the 700,000 homes that are considered rural, Proximus will use and migrate their customers to our existing HFC network. So we're really excited about this transaction, which improves on what is already a great story in Belgium. By the way, there's some additional value creation steps for us to take here, including creating unique capital structures for Wire and Telenet, bringing new equity investors into wire, and driving free cash flow. I'm telling that at the Servco from 2026 as CapEx starts to decline. So a lot of positive things in Belgium. Let me move to my last slide then. It's number seven, I believe, which is really the main message I want to leave you with today. I started my remarks by repeating our mission, so to speak, and that's to create and deliver value to shareholders. Before we spun off Sunrise eight months ago, it was valued at around five and a half times EBITDA as part of Liberty Global. Today, as a Swiss public company, Sunrise trades at 8 times EBITDA with an 8% dividend yield. Now, look at it in a different way. Prior to the spinoff, Sunrise represented about 20% of our proportionate EBITDA. Today, the market cap of Sunrise exceeds the market cap of Liberty Global. where the remaining 80% of that proportion of EBITDA resides, along with over $15 of cash and growth investments. Clearly, there is a big disconnect here, and we intend to bridge that gap. Now, you're probably asking the question, how do we do that? How do we continue to unlock value? Well, the simple answer is to continue separating out the parts. So, we're sharing with you today that we are currently working together Very hard on how and when we might be able to separate out the remaining operating assets from Liberty Global. The rationale here is straightforward. It shouldn't be surprising to anyone. As I just said, the opportunity to eliminate that conglomerate discount in our stock is substantial. We've shown we can do it. And we have built-in advantages to achieve that that others don't. Whether it's our silo debt structure, or our tax position, or our Bermuda domicile, or our NASDAQ listing, we have a wide menu of options available to us, including spinoffs, tracking stocks, IPOs, etc. On the right-hand side of this slide, you'll see our portfolio of businesses and assets today, including Sunrise, which is now owned by all of us, Liberty shareholders. We believe that over time, each one of these businesses can be tracked, spun off, or listed, by the way, in multiple combinations. Now, what's the timing here? And this is where I need to be careful and not to be too vague, but we believe we can complete one or more of these transactions in the next 12 to 24 months. But rest assured, as we get closer to definitive plans, we will surely let you know what those are. It's also important to say that these transactions... are not dependent on any M&A, and that includes our joint venture markets. You can read into what I'm saying there. We don't need to consolidate to get these things done. The key takeaway is that the strategy illustrated here will not change. Our goal is to use all means available to reduce and essentially eliminate the discount in our stock, and I'm confident that we can do that. Charlie, over to you.

Thanks, Mike. Moving on to our operating highlights slide and starting with Virgin Meteor 02. In broadband, despite delivering our highest market share of gross ads during the quarter, net ads saw a similar decline to Q1, and this was driven by a continuation of higher churn due to the competitive pressures in the UK market, largely from the alt-nets, as well as the impact of one-touch switching. Fixed ARPU was stable after four consecutive quarters of growth. In postpaid, the decline in net ads was primarily driven by lower-value B2B disconnects in the quarter, but encouraging the O2 post-paid churn fell year over year, and we continue to drive initiatives to improve performance going forward and see growing momentum on the GIFGAF brand. We continued recent growth in mobile post-paid ARPU, supported by price adjustments, which were implemented from April. Moving to Vodafone Zikr, In broadband, despite the continued competitive fixed market dynamics, we saw encouraging early signs of the new strategy, with a modest improvement in broadband net ads supported by lower churn through the quarter. On fixed ARPU, despite the front book repricing impact starting to flow through, ARPU continues to have some support from the prior year price adjustments. Postpaid net ads were again impacted by B2B port ads, though it's worth noting that consumer net ads did grow modestly in the quarter. And mobile churn also improved, including the impact of our B brand, Holland's Noya. Turning to Telanet, we returned to broadband net ad growth, supported by improving churn and some easing on the competitive front. We continued to gain momentum with BASE's fixed mobile convergent offering, including expansion in the south of Belgium. And we delivered strong fixed ARPU growth, driven by the earlier implementation of the price adjustment across Telanet from April, which was compared to June in the prior year. Encouragingly, we saw positive postpaid net ads during the quarter, leveraging BASE to defend against the impact of Digi's launch in the market late last year. However, Belgian mobile postpaid ARPU remains under pressure from the competitive environment, especially B brand price points in the market. And then lastly, turning to Virgin Media Ireland, Broadband performance was impacted by an intensified competitive environment, resulting in higher churn during the quarter. Now, despite this, our growing wholesale traffic is acting as an offset and supporting strong fiber uptake. Fixed ARPU also remains under pressure due to the pricing environment. An Irish postpaid mobile saw an improvement performance following the launch of new mobile offers in May. The next slide sets out a summary of the quarterly revenue and EBITDA performance in our key markets. VM02 reported a modest revenue decline of 0.4% on a guidance basis in Q2, which was primarily driven by lower B2B fixed revenue, whilst overall fixed and mobile service revenue remained stable. Vodafone Zygo reported a revenue decline of 2.4% during the quarter, mainly driven by a decline in the fixed base and the impact of the front book repricing, which was partially offset by improved monetization of Zygo Sport and the UEFA Content. Telenet reported a revenue increase of 0.6%, supported by growth in both cable subscriptions off the back of an earlier price adjustment and continued strong programming revenues. Moving to our Q2 adjusted EBITDA performance, BMO2's adjusted EBITDA grew 1.1% on a guidance basis, supported by lower year-on-year operating expenses. And Vodafone Zigo's adjusted EBITDA declined 0.1% in the quarter, driven by the fixed base decline and the impact of its new strategy and, in particular, the repricing of its front book. Telanet's adjusted EBITDA grew 2.8%, supported by price adjustments and lower direct costs. The next slide provides an update on our key capital allocation metrics. Now, starting from the top left, in the first half of the year, we saw cash flow generation in line with our expectations and with our four-year guidance. As has been the case in previous years, we have limited cash distribution from the JVs in the first half, which tend to come in Q4. Moving to the bottom left, I wanted to reinforce a number of midterm free cash flow drivers. Firstly, there's no expected material U.S. tax expenses at Liberty Corporate from 2026, with the U.S. transition tax now behind us, and that's been around $100 million a year annual headwind. As we noted earlier in the year, Telenet's Servco free cash flow is expected to turn positive from 2026 as 5G and digital capex spend falls away. Similarly, with significant progress made on the Irish fibre-to-the-home rollout, capex is expected to fall from 2026, driving free cash flow back into positive territory at Virgin Media Ireland. Turning to our cash walk in the top right, our consolidated cash balance sits at $1.9 billion at the end of Q2, down modestly from our Q1 closing balance of $2.1 billion. We saw outflows in the quarter related to continued investments in the Liberty Growth portfolio and the execution of our share buyback program. Moving to the Liberty Growth walk in the bottom right, the fair market value of our Liberty Growth portfolio increased by around $100 million during Q2 to reach $3.4 billion. This was primarily driven by the increase in dollar terms of our largely European currency-denominated investments, as well as additional investments in EdgeConnex and Formula E. Additionally, the exit of our Vodafone collar position generated around $82 million in proceeds. Turning to our Treasury update, we maintain a strong balance sheet position, with our debt split equally between bank debt and bonds. We maintain a siloed and portable debt capital structure at our operating businesses, where the variable bank debt is fixed using independent swaps, allowing us to refinance the credit spreads on our near-term maturities, whilst also benefiting from the full term of the swaps. Across the Opcos, the cost of debt is around 4-5%, with an average tenor of approximately five years. Now, in general, we look to manage our debt maturities so there are no material refinancing commitments over the next two to three years. During the quarter, we remained very active, completing an $850 million private tap to extend the 2028 maturities of BMO2. And we also successfully completed just over $1.3 billion of debt financing for the Daisy acquisition by BMO2, which closed today. In aggregate, we've completed $5.5 billion of refinancings during 2025 at attractive spreads. We remain opportunistic and flexible in our financing approach, and we intend to continue to proactively push out existing maturities to maintain tenor. Turning to our guidance slide, we are improving guidance on two metrics. At Telenet, we're tightening our adjusted EBITDA guidance, which we now expect to be low single-digit decline, which is an improvement and at the top end of our previous guidance range. And this has really been supported by a strong first-half performance by the company. The revised guidance continues to include the tough comparator coming up at Q3 due to the prior year having a €17 million one-off deferred revenue benefit in Q3 of 2024. And at Liberty Services Incorporated, we're upgrading our adjusted EBITDA guidance to be around negative $175 million as opposed to $200 million. We are reconfirming all the remaining guidance metrics of BMO2, Butterfan, Ziggo and Telnet. Now, that concludes our prepared remarks for Q2, and I'd like to hand over to the operator for the questions and answers.

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 , followed by digit 1 on your phone. In order to accommodate everyone, we request that you ask only one question. If you are using a speakerphone, 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 in the queue. The first question comes from the line of Robert J. Grendel with Deutsche Bank. Please proceed.

Hi there. I'd like to ask about Telefonica's comments on the UK NETCO. So is this just not a good idea for one of the parties and that's it? Or is it an idea to be debated further? Why do you think the idea has not landed in Madrid?

Thanks, Robert. Look, I think our partner has been pretty clear, and you can read into their remarks, they did their call the other day, around their position on the ownership of networks, the financing of networks. So I'm not going to go back through that. But I would make this point, which is there are other ways to achieve some of the very same goals that they seem to be supported of. So we have a great joint venture called Next Fiber together with Infravia. Next Fiber is in the midst of building, has already built over 2 million fiber homes, is well capitalized, and represents a terrific vehicle for exploring alt-net consolidation, for example. There's a lot of strategic and fiscal cooperation that BMO2 can do with NextFiber. So I do see us playing a role in outlet consolidation, which was one of the main benefits of the NETCO project that we were exploring together. I think there is an open mind to playing a significant role in consolidation, just perhaps doing it through different vehicles and in a different manner. So as we get closer to having specific projects either transactions or structures to communicate, we will. But we have a very good dialogue on this front. I think there are many things about the NetCo strategy that Telefonica would agree with and other aspects they don't. And so as good partners, we'll work to find the areas of agreement and head forward.

So that's the answer.

I got it, Mike. Is the HFC upgrade piece to the strategy still moving ahead?

Sure, we are upgrading HFC homes to fiber at a relatively strong clip with economics on those upgrades looking very similar. Remember today, VMO2 has about access to about 18 and a half million homes if you include the next fiber homes in that number. And of those 18 and a half million, 7 million are already over 7 million are fiber. So there's an 18 and a half million footprint that VMO2 markets to today, of which 7 million are already fiber. It's a combination of NextFiber and our own upgrades at VMO2. So we're already a very large player in the fiber business in the UK, and I expect that we will continue to get larger.

Indeed. Thanks, Mike.

Thank you. The next question comes from the line of Joshua Mules with BNP Paribas. Please proceed.

Hi, guys. Thanks for taking the question. Going back to slide number seven, which is a helpful outline of the rationale you're putting forward for taking more corporate action. Firstly, if you could maybe just clarify, when you talk about timing in the next 12 to 24 months, Is that focused on the Liberty Telecom assets, or could we see Liberty Growth and Liberty Services assets monetized in some way first before coming to the Telecom assets? And then secondly, if I look at the Telco businesses, and you correctly point out that Sunrise created a lot of value, I guess that asset has a relatively stable revenue and EBITDA growth profile, visibility on the network upgrades, and subsequent to your cash injection brought leverage down to four and a half times. Given that the leverage for VMO2 goes somewhere above that and Telenet is in the midst of a big network upgrade at the moment, how many steps do we have to go through for each of these assets before they're in a position where they could be spun off in IPOs? And do you think that leverage or operational performance is the key thing you need to get in place before you take corporate activity on the

Excellent questions, all of them. And I'm glad we've got a chance to talk about it further. The timing, and there are a lot of, a few issues we're trying to dance around here. Our lawyers and our tax people want us to be very thoughtful about what we're committing to, what we're talking about, because there are a lot of moving parts here. So without, I'm not trying to be vague, I'm just trying to be careful. That's point one, um, 12 to 24 months seems like a window in which one or more of these ideas can come to fruition. As you rightly point out, it could be one or more assets in the growth portfolio. Uh, it could be one or more assets in the telecom portfolio in multiple combinations, depending on what makes sense. The main message here is that we do have the quote unquote technology to be flexible in terms of figuring out which of these businesses and which of these assets presents the most realistic opportunity and the most value-creating opportunity. So that's the main point. In terms of your question about growth versus leverage, I think they're both important. Sunrise, as you well know, is not a high-growth business but a very profitable business and committed to a dividend strategy that is quite popular and should be, especially among Swiss institutions, an 8%. tax-free dividend yield in a market with 0% interest rates is pretty appealing. And in that particular case, you know, it's worked well. I think the number one thing on the operational side isn't so much growth at the EBITDA revenue line, but can you deliver free cash? Is there a dividend strategy with the telecom asset that can support long-term investor interest from that perspective? And I think all of these assets is You well know the bigger ones in particular do generate free cash. Your leverage point is also a good one. In the case of Sunrise, we did delever that business relatively materially down to four and a half times. But it doesn't appear that investors need further delevering for that business to be attractive. So if we think that four and a half times is a good spot, then I think we have to be creative and aggressive in how we might get there. And I'm not going to be specific on this call about ideas, but we have plenty of them. The last point I'll make is we can spin an entire business or track an entire business as we did with Sunrise. We can also track or spin an interest in a business. And that's what I meant with my M&A comment. I'm not suggesting we would do it, but if we decided to simply track or spin our interest in VMO2, for example, we could do that and give investors an opportunity to own directly the shares that we own or an interest in the shares that we own in that business. Now, I'm not suggesting we will do that. I'm just simply pointing out that there are a multitude of options here, which, in my opinion, is exciting because, you know, we know that there is a path to shrinking that value gap, and it's nice to have a lot of opportunities to do it in different ways.

Thank you.

Operator?

I need to give you some information.

Go ahead, Jo.

Thank you. The next question comes from the land of with EBS. Please proceed.

Hi. Thanks for taking the question. I have a question on the UK for Lutz. So if you look at Virgin Media O2, it posted a second successive quarter of heavy broadband declines. But can you comment in terms of your view in terms of what has driven the declines? And how optimistic are you that the level of broadband declines can reduce going forward? So do you need to accelerate the upgrade of a cable network to fiber? Do you need to accelerate footprint expansion with NextFiber? And what have you seen in terms of broadband net ads in July? Thanks.

Lutz, go ahead.

Yeah, sure. So, I mean, so your observation's right, right? Second quarter, we lost as much fixed customers as we did in Q1 and the only driver for that is churn so our share on gross sets are pretty strong and this is across next fiber and our existing coverage so we absolutely don't have a sales problem with a churn challenge the churn challenge comes from predominantly one-time switch in combination with a very aggressive competitive market. As you might know, competitors are paying 300 pounds to really buy a customer out of the existing contract length. And therefore, customers join less retention. They are leaving us before even talking to us. And the reason for leaving is only one. That is the only reason. So we are not losing a single customer because of technology. So what are we doing? We have put together a very sophisticated retention machine, which lets us to the fact that we have been growing ARPU over the course of the last 18 months in this market, sitting on the highest ARPU in this market. And now we have to create a similar successful prevention machine because we simply have to extend customer lifetime value into new contracts. And this is what we are doing. So a significant number of customers now are sitting in a minimum contract length and also a minimum contract length exceeding six months. Your last question, How was July? A bit better. Yeah, but it is still tough and we are not giving a guidance, as you know, right, on fixed net ads on a quarterly basis. But what I can say is we're getting our arms around in the prevention machine. We have more customers within the minimum contract length and we are confident that we will stabilize the situation. Hope that helps.

Great, thanks.

Thank you. The next question comes from Delano from Matthew Harrigan with the Benchmark Company. Please proceed. Thank you.

I was just curious what you see on the broadband consumption front that is driving consumer utility and pricing power, maybe as AI agents, live sports, streaming, gaming, low-lag apps. But do you see the consumers being more facile in the use of broadband or is it fairly plain vanilla? And then secondly, as you're well aware, I mean, Charter has had some postponements on DOCSIS 4, really talking about some of the expensive network requirements. Clearly, I guess your network topology in the Netherlands is very favorable. As people know, it's very dense population and flat topology, but it's still pretty striking that it's 90%. less expensive than doing fiber all the way. It seems like a bit of an anomaly. Could you just clarify that? Thanks.

Sure, Matt. On the broadband consumption side, it's interesting. I know we don't have the chart here on the deck or in the appendix, but I would say consumption both on mobile and on fixed is not growing as fast as it did historically. I'm not suggesting consumers have stopped or in any way don't have a lot of things they want to do or continue to do or do more of. It's just that whereas before we might see a 20% to 30% increase in consumption, particularly on mobile, I think the consumption patterns are leveling off a little bit. Now, they might spike again for all the reasons that you indicated, whether it's streaming or streaming. AI apps or things of that nature, it's very possible. But that's a good news story for us because it's giving us the ability to provide greater quality, perhaps a tiny bit less in capacity, and we'll see how it transpires. But we're at a moment now where that rapid appreciation or increase in consumption is starting to level off just a little bit. Our pricing power really comes from the quality of the network we provide and the speeds And the apps that people want to use, they want it to be quick, fast, lightning fast. And so that's really what they're paying for versus massive consumption or knowing even how much they're consuming. On the DOCSIS 4 side, I'd happy to let Enrique chime in here. There are quite a few differences between the U.S. and the Netherlands. I mean, we already start, for example, with an 862 megahertz network. and getting to 1.2 megahertz is not as complicated, and we will get our way to 1.8 megahertz. So the network upgrade piece of it is not in any way complicated for us. And we believe we're getting access to the right equipment and the right, you know, technology on a timely basis to start trialing and rolling out sometime next year, speeds up to 8, you know, megagigs. Now, the other benefit we have, which I think charter and Comcast take advantage of as well, is the ability to squeeze more capacity out of the DOCSIS 3.1 network and perhaps get all the way to, you know, two to three gig. And that's a pretty good number for most consumers. So we're not, you know, we feel pretty good about the time frame and the cost envelope, which is essentially happening within our existing CapEx allocations. We don't see a massive spike in the CapEx costs here. And, you know, I don't know if Enrique, you want to add anything to that in particular, or Steven, the relative cost of fiber versus DOCSIS 4 in the market.

Yeah, nothing really to add. I mean, we've been together with the other Kibble Labs members developing the technology over the last few years. We're pretty confident. We've done live demonstrations of DOCSIS 4 in the Vodafone Zigo network. As Mike pointed out, we're not going all the way from where we are today to OCSIS 4. We're also doing upgrades on 3.1. So we're pretty confident these numbers are accurate. And as you pointed out in the question, the Vodafone CIGO network is quite friendly to the upgrade. So we're certainly taking advantage of that.

And if you don't mind, one follow-on actually prompted by Liz. Sorry. Lissa's earlier answer. I mean, you can see in the U.S. on Postpaid, I mean, T-Mobile is just ripping away share, you know, for various reasons, and you dominate the switching share and kind of the matrix, and it's kind of like a very happy, you know, fluid dynamics problem. But I don't understand with all the stresses in the U.K. on the economy and the financial condition of the alt-nets and CitiFiber doing what it just did, how can people possibly be willing to pay $300 million, not $300 million, $300 of a customer's contract. I mean, this just doesn't seem like economically rational behavior. It's not like people haven't had a lot of time to figure this out. It feels like some people are pretty slow learners here. Sorry.

Yeah, well. Yeah, I mean, go ahead. Yeah, sorry, sorry. Especially Altnet. are under pressure right i mean cost of capital is high they have to refinance and investors are desperate to see higher usage of the network they have built which is nothing else than penetration and they don't have anything other than price right and so what they do is they come up with very aggressive pricing and they are buying customers out of existing contracts and If you are on your back foot, this is what you do. It's absolutely, I agree with you, it is not a long-term sustainable position for the market. Absolutely not.

Great. Thanks, Mike. Thanks, Lutz. Yep.

Thank you. The next question comes from Delano James Reza with New Street Research. Please proceed.

Yes, good, good morning, Mike. Thank you. Good afternoon for taking the question. So the question I've been asking, you've given some hints around kind of cash flow generation for 2026, where you're kind of calling out changes in capex at Telenet and in Ireland. So I was wondering if we could just dig into that in a bit more detail to understand the magnitude there. I think, you know, Irish capex currently running around 180 million dollars. A year pre the fiber upgrade, it was at about 80. So do we kind of fall back to that kind of level? And then in Telenet, because we, I mean, you're saying that's going to go to free cash positive in the serve code, but we don't have guidance on the net code. So I think, you know, total capex this year for Telenet is going to be around 1.1 billion. Where do you see that going to next year?

Well, I appreciate the question. Dan, those are good ones. I'm pretty sure we're not going to be able to give you guidance for 2026 on this call. But, Charlie, do you want to manage that?

Yeah, I mean, to be honest, I'm afraid it's almost like saying give us guidance for 2026. It's just too early. I do understand why you'd want to know that. But, you know, we have to be allowed to go through our planning process. But what we can say is that it's only the case of the telnet circuit, which I agree we haven't clearly shown the separation. That's one of the things I might reference in these slides. We have seen the peak level of CapEx, particularly on 5G and also on digital. So there should be a positive free cash flow profile from next year onwards.

Same with Ireland.

So then maybe another way is like with... Sorry, I was just going to say, could I have another way to say 5G digital capex fall? I mean, how much should that fall by if you're willing to make the comment in the presentation? We're not going to get those...

We're not going to give you the specifics. I mean, these are directional statements. We clearly understand why you'd want them, and we're not trying to duck it, but you have to understand we've established a principle of not giving forward guidance in the middle of the summer for the following year. We have to be allowed to go through our processes and make some strategic decisions as well. Got it. Okay.

Thank you. Thank you. The next question comes from the line of David Wright with Bank of America. Please proceed.

Yeah, hi guys. So I guess just following on from Josh's question, I believe it was, and your answer, Mike, I'm just trying to think about these opportunities for tracking, spinning, IPO, or evolutions of that. You did mention, I think, Mike, that maybe analysts were not recognizing or penalizing you guys on the sort of cable side of network versus fiber. I'm just thinking, It was clear, and you alluded to this, that the Sunrise asset always had a real fighting chance because of the interest rate environment in Switzerland. But that is quite unique. Why do you think analysts would value any of the other assets any differently from where Liberty Global is currently? I appreciate that the market's a lot smarter than analysts. I'm not going to argue that one. But what do you think... creates value when these assets come out of the Liberty Global Group? Is it maybe just that a lot more European PMs can buy them within their mandate? Is it just a technical kind of opportunity there instead of buying the U.S. list? But what gives you confidence that the markets would value these assets any higher than they currently are in the Liberty Global Group?

I think it's a few things, David. I think it's a few things. Number one, you pointed this out. There is a demand among European institutions to own either pure play or local telecom assets. You see that across the board. As a NASDAQ listed company, we're able to attract some of those investors, but many don't look at it either because it's perceived to be offshore, not onshore, or perhaps has a layer of complexity that makes it challenging for them to assess value. But when you can create a pure play telecom asset, as we did in Switzerland, I think, number one, you start to look at peers in a different light. While Swisscom is an excellent peer, KPN might be even better, traded nine times even top. And when you line Vodafone Ziggo up to KPN on almost any operating metric when it comes to physicals or financials, it looks pretty good. What are the differences? The difference are the balance sheet, of course. You've already raised that point, leveraged. and squeezing free cash flow out of the operations. And I think, you know, if those would be only two hurdles to a higher multiple on Vodafone, Ziggo, for example, as a pure play standalone business, I'm pretty sure we can find a way to improve that. Second big difference is investors in Europe and investors of European telecom assets like dividends, clearly. And that's most of our peers, if not all of our peers. They have large dividends. Sunrise is demonstrating that an 8% dividend yield, even with that higher yield, it's trading at a great multiple. I think the dividend yield at APN is maybe 5%. So can you generate enough free cash in these businesses to adopt a capital markets strategy or a balance sheet strategy that delivers dividends to investors on a reasonable, predictable, long-term basis? Those are not hard equations to solve when you have stable businesses as we do. I understand it's not immediately obvious how we do those things, but trust me when I say that to put a slide like this up on the screen implies we believe we have a path in each of these instances to create a story that should be appealing to investors.

And that's how I'd leave it.

It's interesting, Mike. Thanks.

You got it.

Thank you. The next question comes from the line of Carl McDart Smith, City Group. Please proceed.

That's great. Thank you very much. I was just wondering if you could expand a little bit more and talk about your turnaround in Vodzigo and early evidence, both competitively and operationally, in terms of how that's going. Wondering if you could talk a bit more. Thank you.

Sure, I'll let Stephen do that. I don't know if you were on for the remarks, but there's a whole slide in the deck on this. But Stephen, why don't you add some more to that?

I think this slide that you published, Mike, earlier in the slide deck is probably the best summary of it. So we've got four specific areas that we've looked at as I came into the organization. We've tucked in behind each of those four. We've reset our organizational model. It gave us an opportunity to take some costs out as well, which we needed to do. Specifically pointed at being more aggressive in the marketplace. I think over the last couple of years, we've taken a step back from that. Secondly, as part of that, getting broadband pricing right for the market. I think we're at a kilter with the marketplace, and getting that as a first step right was important. Like Lutz, tackling the churn problem. We don't have a gross ads problem either. We have a churn problem. Part of the solution set there was fixing our pricing, but also fixing our trading practices and our contracting. You are seeing the green shoots. May and June were pleasing to us, having implemented much of this in April and May. The overhang of, you know, are we a good enough broadband network? We've taken away. We've fully backed the plan to roll out HFC. We've got an aggressive plan, I think, over the next 18 months to land that. And then I think we were short on marketing. We were short on positioning the Ziggo brand where it needed to be back in the connectivity world. We were short on investing in FMC, which you'll see coming soon. And we think there's great opportunity for us to attack with Holland's Niva. We think there's a market space for us to go after that. So I think just tightening everything up, being more focused, and bringing organization behind a plan that puts us, as I said, on the front foot and in the attack. And that's where we are today. And you'll see more from us over the next 12 months.

That's great, thank you. And then just as a follow-up, just looking at the voluntary redundancy scheme that was announced the other day and then also the improvements in the services and corporates guidance today, should we be drawing a line between those two things or not? And given the timing within the year, could that potentially mean that next year could see further improvements within that kind of services and corporate EBITDA line?

Thanks. Yeah, I want to be really thoughtful on commenting on internal, you know, restructuring or employee matters. As they should be, that article was obviously not authorized by us. But suffice it to say, the trajectory we're trying to illustrate here is a good one. And there are lots of tools in the toolbox to ensure and deliver an operating structure that is more flexible, and more aligned and fit for purpose. All that really means is, yes, I think you can assume that over time we will be, through either new revenue sources or new operating models, we will be providing to you guidance for that number, which is lower and lower and lower. So I do think if you're one of those analysts that puts a big multiple on it, I would get the pencil out, start determining on your own what that number could be, might be, and hopefully that's a tailwind to your target price.

That's great.

Thanks, Mike. Do we have time for maybe one or two more? Yeah, go ahead.

The next question comes from Delana Steve Malcolm with Rust Trial and Company Redburn. Please proceed.

Yeah, I want to come back to the UK and maybe it's sort of slightly less your question, but, you know, clearly your, your turn is a problem. Part of that, I guess, you know, has always stemmed from the fact that you don't cover the entire UK. And it seems like, you know, your ambitions to do so have slowed a bit in the last 12 months. I mean, next fiber is being thoughtful, I guess, on whether to deploy fiber in areas where there are already two providers. You talked about all of that consolidation. I guess it's a kind of two-part question. One is, you know, is it something you give a lot of thought to is how you bridge that gap? Openreach covers 30 million lines. You cover 18. And then secondly, you know, how do you think about the opportunity of bridging that gap? And would you consider, you know, you haven't wholesaled from Openreach for a while, but it seems a pretty obvious step, you know, given the mismatch between your fixed and your mobile footprints to do so, just to sort of expand your addressable market and possibly deal with some of those churn, natural churn impediments you face. Just curious to know your thoughts on that.

Thanks, Steve. It's the right question, and it's a good one. As you point out, we do reach 18.5 million homes. It's not the entire marketplace. Obviously, we do look at other means of reaching another 10 million homes, let's say. And I'm not going to be specific on this call, except to say it is the right long-term strategic move for VMO2 to be a national player on fixed as it is in mobile. How we get there? whom we get there, those are technical questions which I'm not going to get into this morning, but you're right to ask us about it and we see it similarly.

Okay, so all options are on the table. Mike, in your consideration, is that fair?

Yes.

Thank you.

Thank you.

One more question, operator? Or are we

Of course. The last question comes from Delano Overtsvrat with Bernstein Futschit General Group. Please proceed.

Thank you. Most of my questions have been answered. So let me ask this. Mike, I think in your prepared remarks, you said you would actually frame the exit from Vodafone. But maybe I missed it. But could you just frame that for us a little bit, how you look at what happened there, why you exited at this point in time? Give us context. Thank you.

Sure, sure, sure. And I will say right up front, I don't necessarily want you to assume that the reason we've agitated the position is because we don't have faith in the stock or in Margarita. That's not the case. We just have to look at what's the best use of our capital. We had really limited exposure to the stock given the color structure of the position anyway. And there was not much strategic support value in yen to the position. So I think it's the right move for us to put our capital into the best possible use. And in this case, I don't think that long-term holding was achieving that. So that's really the only color I can give you on that.

All right. So is that a change compared to the thoughts when you actually bought it?

Not necessarily. I think we didn't know at the time what the future held. We were optimistic, perhaps, that there might be more tailwinds and a different result. But in the end, just like you, we have to make decisions about where we put our cash every day. And this is just a decision that we put more in that category than any sort of long-term strategic view of Vodafone as a company. Anyway, I appreciate everybody joining us. The call, we're at the hour here. The markets are challenging. You got that message, but we are not sitting still. And the management teams you're listening to here really are on their game, investing, innovating, winning. And lastly, just our value creation is, you know, value creation is our North Star, we like to say, right? So it's shareholders' turns here to try to see that value creation realized. We've got a lot of optionality, as we pointed out. We will look for the executable strategies and communicate those when they become executable and clear. And whether we succeed in those or not, they will lead to outcomes, which I think is exactly what we need to do here. So one way or the other, we're really confident about the opportunity to pay value to you. Hope you have a great summer, and thanks for joining everybody.

Ladies and gentlemen, this concludes Liberty Global's second 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.