Liberty Global Ltd.

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Liberty Global's third 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 2 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 gross 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.

All right. Welcome, everyone, and thanks for dialing in to our Q3 results call today. After Charlie and I run through our prepared remarks, we'll open it up for what we hope is a lively Q&A. And as usual, I've got my core leadership team on the call with me. And before I jump into the presentation, I just want to acknowledge and be sure that everybody has seen the press release we put out yesterday regarding John Malone, who has decided to step off the board and move to a chairman emeritus role at the end of the year. Of course, he's making a similar move at Liberty Media. I won't repeat all the key messages that we put in the public statement. You can read that, and I encourage you to do that. Except perhaps to emphasize how important, impactful, and enjoyable my relationship with John has been over the last 25 to 30 years. And how pleased I am that as he implies in the release, he intends to stay very engaged with me and the board as we execute our strategic plans. And knowing John as I do, he will surely do just that. Of course, I'm happy to take any questions on this as well at the end. Now getting back to our results, let me kick it off with some key highlights from the quarter. If you're going to breeze through these slides later, these first two are perhaps the most critical in my opinion. I believe everyone's familiar with how we're organized today. In order to create greater transparency around strategy, capital allocation, and value creation, everything we do falls into one of three core platforms at Liberty Global. These include, of course, Liberty Telecom, where we're focused on driving commercial momentum in our broadband and mobile businesses, and most importantly, finding ways to unlock the intrinsic value of these companies for the benefit of shareholders, and I'll get into that a bit more in the next slide. Of course, that starts with operating performance, and as you'll see, despite intense competition, We had a strong third quarter with sequential improvement in broadband net ads across all four markets, for example. Importantly, our networks are proving to be critical sources of both competitive differentiation, like our 5G expansion in the UK that's being fueled by the recent Spectrum purchases, and value creation, like our agreement with Proximus to rationalize fixed networks in Belgium, which I'll cover off in just a moment. A theme you will hear a few times today is lowering leverage and strengthening our balance sheet at Liberty Telecom. Charlie and his team have worked tirelessly this year to strengthen the balance sheet, beginning with refinancing over $9 billion of 2028 maturities, particularly in the UK and NL, at very reasonable credit speds. And that includes a debt financing we just announced that funds the fiber rollout in Belgium while leveraging Telenet, our Servco, in the market. Charlie will dig into that. Attorney Liberty Growth, which includes our investments in media, infrastructure, and tech, that today total $3.4 billion. And, by the way, provide a source of capital to drive future value creation. This is a highly concentrated portfolio where the top six investments comprise over 80% of the value. We're still targeting $500 to $750 million of non-core asset sales from the portfolio. And as I mentioned on our last call, we're not going to rush this and price bad deals in the process. But we have generated proceeds of $300 million year-to-date when you include the partial sale over ITV stake last week. So we are well on our way. Of course, one of the bigger portfolio companies is Formula E, which heads into Season 12 in December with significant tailwinds. including double-digit growth in revenue, fans, and viewers last year, a knockout calendar of 18 races, and the public reveal of the Gen 4 car, which debuts a year from now and doubles the max power of what is rapidly becoming the coolest car in racing. And we'll highlight in just a few slides our data center investments. With the boom in AI infrastructure, we believe we have a tiger by the tail, as they say, with over $1 billion in assets today and growing. And finally, the quarter brought some great progress at Liberty Services, where we manage large and profitable tech and financial platforms, and at our corporate level, where we are in the midst of reshaping the operating model. I think the big news here is that we are improving for the second time this year our guidance for net corporate costs in 2025. We started the year forecasting around $200 million of net corporate costs. In the second quarter, we improved that to $175 million. and now we're improving it further to $150 million for this year. Perhaps even more importantly, we see visibility in 2026 to just $100 million of net corporate costs. Now, this is a hot button for us, as most analysts reduce their target price for our stock by, I think, $8 to $10 per share, just related to that $200 million net corporate spend. These announcements today should dramatically improve our valuation narrative, and you can bet we'll be pounding the table on it starting right after this call. I think Charlie will also address it. Lastly, on this slide, we note that we're forecasting $2.2 billion of cash at the holding company at year-end, assuming just the $300 million of asset sales year-to-date. Now, the next slide provides an update on our strategic plan to unlock value for shareholders. And I guess this is the key takeaway today. First, let me reiterate what we laid out on our second quarter call back in August. Following the continued success of the Sunrise spinoff about a year ago, we remain committed to pursuing similar transactions that would further unlock value for shareholders. This may include the separation of one or a combination of core operating businesses you see on this slide, actually, through a spinoff, tracking stock, listing, or similar equity capital markets transaction. I imagine many of you still own or follow Sunrise. The stock has performed well and trades around eight times EBITDA, with an 8% dividend yield today. Looking back on that deal, I think four key factors laid the groundwork for its success. Number one, Switzerland is a largely rational telecom market. Number two, Sunrise had a less levered balance sheet, thanks to our capital contribution, at around 4.5 times on the date of the spinoff. Number three, summarize as a clear network strategy and CapEx profile. And number four, summarize as a solid free cash flow story that supports a progressive dividend policy. That was the formula. A strong balance sheet, a rational market, and a predictable path to stable or growing free cash flow. Now, it won't surprise you to learn that this looks a lot like the things we are working on in the Benelux. For example, at Beto Fonzigo, we've installed a new team with a winning plan that is built around generating long-term free cash flow in a largely three-player market. And we have now refinanced something like 80% of the 2028 maturities with the remainder targeted for this quarter or early next year. In Belgium, we are even farther along. Our recently announced agreement with Proximus, which is currently being market tested by the regulator, rationalizes the build-out and wholesale monetization of fiber in a large part of Flanders, with really only one network in 65% of the market. On the back of this, we just announced a 4.35 billion euro financing for our netco there, which we call WIRED. which fully funds the build-out of fiber and allows us to reduce leverage at the Telenet Servco, including all 2028 maturities. Even more exciting, we're in the early marketing stages of selling a significant stake in wire. This is an increasingly common value creation strategy in Europe, as you know, with the proceeds used to further deleverage our Telenet Servco to about 4.5 times. That's going to take a quarter or two to finalize all of these steps. But we're feeling more and more encouraged about the possibilities in this region for a value unlock in the timeframe that we articulated. Now, of course, we continue to work on other ideas, which we'll update you on in time. And as I said last quarter, all of the operating businesses or assets you see on this slide, and some that aren't even shown, can be singled out or combined with one another to achieve a value unlock transaction. So stay tuned. Now, as I said, a key enabler of that strategic roadmap is ensuring that our operating companies are driving commercial momentum in what are increasingly competitive markets, right? And the long-term goal here is generating meaningful free cash flow. Now, towards that end, eCHOPCO has been implementing a series of commercial initiatives and network improvements that are starting to impact results positively. This next slide summarizes a handful of those initiatives. which provide important context for the results that follow. Starting in the UK, where Lutz and the team have been busy across a number of fronts, including the recent rollout of our new pay TV and broadband bundles, which now include Netflix for free, that further differentiates us from the competition, in particular, Altnet. VMO2 is also redefining the Flanker brand segment with the introduction of GIFGAF broadband services that complement GIFGAF's mobile leadership. And we're rapidly transforming the O2 mobile network using the recently acquired Spectrum to launch our first 5G gigasite. Plus, we announced the UK's first direct-to-sell satellite service with Starlink for what we call Rule Not Spot. So a lot happening in the UK. Stephen and the Vodafone Ziggo team have completely reversed trends in the Dutch market, delivering the lowest broadband churn we've seen since early 2023 and positive mobile net ads in the quarter. Lots of things are working right here. including being the first to roll out 2 gigabit speeds nationwide, with upgrades underway for a DOCSIS 4 8 gig launch next year. We're also investing in the Vodafone brand on the back of the iPhone 17 launch. So the how we will win plan that Stevens developed is quickly becoming the why we are winning plan, which is exactly what we needed in this otherwise rational telecom market. John Porter and the Telenet team have gone from strength to It's a strength in Belgium in the last three quarters, supported by doubling of broadband speeds for nearly a million customers, their rollout in the south, and a multi-brand strategy in mobile. And the fiber upgrade in Ireland is proceeding at pace with over 650,000 premises built now. And Tony and the Virgin team are ramping up our wholesale business with Vodafone and Sky and expanding their own reach to new off-footprint territories with fiber. And just to put a marker out there, With CapEx set to fall by 50% in the coming two years, we're planning for significant free cash flow out of the Irish business as well. Now, the results on the following slide illustrate this improvement. Don't get me wrong. We are in a dogfight everywhere, but we are fighting right back and differentiating our products and services, attacking vulnerable competitors, and driving better results each quarter. In fact, three out of our four markets, we've demonstrated improved sequential fixed and mobile subscriber results throughout the year and in Holland over the last two quarters. Again, at BMO2, our fixed churn initiatives, things like proactive management of the base and one-touch switching activity are gaining traction and improving broadband performance in a very competitive market. Meanwhile, Postbay mobile subscriber performance has consistently improved quarter after quarter this year, including ARPU growth supported by pre- to post-pay migrations and our loyalty plans. Vodafone Ziggo reported its third straight quarterly improvement in broadband losses with another strong ARPU result, and Postbay mobile ads were positive again, driven by the initiative described just a moment ago. Calinet maintained positive broadband net ad momentum for the second quarter running, driven by successful cross-sell campaigns, including back-to-school, while fixed ARPU growth was supported by price adjustments that they implemented during the second quarter. Post-paid net ads in Belgium were negative, despite a strong performance on the base brand, while mobile post-paid ARPU continues to show pressure from the competitive environment. And in Ireland, Virgin Media's broadband base was largely flat, with aggressive fiber offers in the market driving higher churn and impacting fixed ARPU. Post-pay net ads, on the other hand, remain strong, and that's supported by a 15-euro-for-life offer launched in May boosting gross ads. So, Charlie, we'll walk through our financial results that are tied to these numbers in just a moment. Let me first turn to Liberty Growth, and by now you're hopefully more familiar with with the components of our portfolio, which, as I mentioned, increased in value to $3.4 billion at Q3. That's around $10 per share. As you can see here, 45% of the value, or about $1.5 billion, consists of premium media, sports, and live events businesses, which we and most everyone else these days see as great long-term investment strategies. Another 40% is in digital infrastructure, which I'll dig into a bit more in the next slide. And then most of the balance resides in our tech portfolio, which consists largely of venture capital investments and companies, many that are leading the way in AI, cloud, and cybersecurity. Now, while it might appear like a complicated and diversified mix of investments from the outside, as I said earlier, it's important to remember that six of these deals comprise over 80% of the portfolio's value today. You can see them listed at the bottom of the page. Things like controlling interest in Formula E, which I spoke about, and our remaining 5% of ITV, for example, and the two largest assets in our digital infrastructure vertical, which I'm going to highlight on the next slide. Now, both of these infrastructure investments are substantial, adding up to over $1 billion of value for us today. And they've performed extremely well, especially in the current environment where the development of AI infrastructure seems to have exploded. We're thrilled to own a minority interest in EdgeConnect. It's a global data center platform controlled by EQT and focused on hyperscalers. across over 60 Tier 1 markets in 20 countries around the world. And we first invested in this company back in 2015. It was much smaller. And we have a net $150 million invested today. And the good news is that we've already taken $50 million off the table. And our residual stake is conservatively valued at over $500 million. That equates to a 30% IRR over the last decade. On the right, you'll see our 50-50 JV called Atlas Edge, which is a regional data center provider focused on Tier 2 markets. The company has strong positions in Germany, Austria, and Iberia and is seeking to expand capacity to 180 megawatts. We have a net investment here of about $345 million, and we've had our interest valued by third parties at around $600 million today. Again, both of these companies find themselves in the middle of multiple markets. AI infrastructure and data sovereignty projects, and we are focused on driving continued growth right now in what is an increasingly hot space. So I look forward to your questions on all of this, but let me first turn it over to Charlie to walk through Liberty Services and our numbers. Charlie?

Thanks, Mike. Turning now to Liberty Services Incorporated. On the left-hand side of the slide is an overview of our central services, which focus on three core activities. Our corporate group provides strategic management and advisory services in operating and managing financial and human capital, as well as technology strategies and investment. Liberty Tech focuses on the delivery of scaled tech solutions, particularly in entertainment and connectivity platforms, as well as cybersecurity for our telecoms companies. And Liberty Bloom develops and provides tech-enabled back-office solutions, not just to companies within the Liberty Global family, but also increasingly to third parties. we are reinvesting these tech-enabled efficiencies within Liberty Bloom to drive 20% plus organic revenue growth in 2025. During the third quarter, we undertook a significant reshaping exercise around both Liberty Corporate and Liberty Tech to drive cost efficiencies going forward and make both organizations more agile and well-positioned for the future. Starting with Liberty Corporate, we undertook both voluntary and involuntary redundancy schemes, which have reduced headcount by around 40%. with 90% of those leaving by year-end. And in Liberty Tech, we can continue to leverage our successful Infosys partnership with four years of proven track record to help secure additional efficiencies and simplification savings. We expect both the corporate and Liberty Tech initiatives to drive around $100 million of annualized cost savings. Bringing all this together, you will recall that we began the year guiding to less than $200 million of negative adjusted EBITDA and we've already upgraded this to around $175 million of EBITDA at Q2. Now, we're pleased to reduce this further for 2025 to around $150 million of negative adjusted EBITDA, supported by the in-year benefits of our corporate reshaping programs. Now, perhaps more importantly, turning to the fully annualized impact, once we see the benefits of this reshaping annualized from 2026, we expect our corporate adjusted EBITDA to broadly halve to around $100 million. And from there, we still see scope for further improvement as we evolve our operating model through additional third-party revenues, advisory fees, and management services agreements alongside the scope for further cost optimization. So to put this in context, at the beginning of the year in the average analyst sum of the parts valuation, there was around $10 per share negative impact based on the capitalization of these corporate costs, which was typically at around 12 to 14 times enterprise value to operating free cash flow. we now expect the run rate of negative corporate cost to essentially halve versus the start of the year going forward, which would drive a significant reduction, around half, of this discount in our analyst valuation. And we would also argue that an EBITDA multiple more in line with the telco comparables, which is much lower, is the right way to value these costs, which would further reduce the impact. Moving to the Treasury slide, We've been extremely proactive year-to-date and through Q3 in dealing with our 2028 maturities in what has been a favorable overall high-yield market, in particular in the bond market. Overall, we've successfully refinanced close to $6 billion across our credit silos year-to-date, and this actually increases to $9 billion if you include the underwritten wire financing that Mike has already discussed. At Virgin Media O2, using existing benchmark financings, we were able to complete mainly private tap transactions amounting to $1.4 billion, bringing to total refinancing year-to-date at Virgin Media O2 to over $3 billion, which leaves us only with around $100 million of outstanding 2028 maturities. Vodafone Ziggo, we issued just under $1 billion of senior secured notes during Q3, leaving us with around $500 million of outstanding 2028 maturities. And at Telenet, we've already completed $600 million of financing year-to-date, and have recently secured a Euro 4.35 billion underwritten facility for wire. Now, this will allow us to significantly refinance Telenet overall and formally separate the wire and Telenet Servco capital structures. And in the process, we pay all the 2028 maturities. Now, all of this proactive refinancing activity has significantly reduced our 2028 maturities and has actually maintained our average life of our debt at close to five years and a broadly comparable credit spreads versus our historic levels. Turning to the next slide, we remain committed to our capital allocation model and strategy to both replenish our cash balance while also rotating capital into higher growth investments and strategic transactions. Starting with cash generation, we continue to see free cash flow in line with our expectations as set out for the year across our OPCOs and JBs. As has been the case in previous years, we expect the JB dividends to be largely paid in Q4, given the free cash flow phasing of Virgin Meteor 2 and Vodafone Ziggo. Across all the opcos, CapEx remains elevated, primarily driven by extensive 5G rollout in the UK, Belgium, and Holland. And also, fiber investment is ramping in Belgium, and we continue to invest in Virgin Media O2's FiberUp and Virgin Media Ireland's Fiber to the Home program. And this is along with our DOCSIS upgrade path in Holland. Turning to our cash walk in the bottom right, our consolidated cash balance was $1.8 billion at the end of Q3, with an additional $180 million received since then with a partial ITV stake disposal in October. During Q3, we saw modest investments into Liberty growth of $77 million, which was primarily Formula E and Addis Edge, and spent $56 million on our buyback program. We're currently tracking towards a buyback of around 5% of shares outstanding for 2025. Moving to the Liberty Growth Walk, the fair market value of our Liberty Growth Portfolio remains stable versus Q2 at $3.4 billion. This was primarily driven by the investments in Formula E and Atlas Edge, offset by the partial disposal of our ARLO stake and a small fair market value reduction in our Liberty Tech Portfolio. Turning to the key financials on the next slide. Virgin Media 02 delivered a modest revenue decline of 1%, excluding the impact of handset sales, next-fiber construction revenues, and two months of DAISY contribution. This was driven by declines in our B2B revenues, which were offset by growth in our consumer businesses. Adjusted EVDA at Virgin Media 02 continued to grow at 2.7%, supported by cost discipline and lower cost to capture year-on-year. Moving to Vodafone Ziggo, we saw revenue decline of 4%, largely driven by the decline and ongoing repricing of our fixed customer base. Adjusted EBITDA was impacted by the revenue declines and commercial initiatives supporting the new strategic plan. Telenet revenue and adjusted EBITDA growth were both impacted by a positive deferred revenue benefit in the prior year of $18 million. In addition, revenue growth was also impacted by the decision not to renew Belgian sports rights, which was more than offset by associated lower programming costs. Turning to our guidance slide, we're updating two items of guidance. Firstly, Virgin Media O2 revenue guidance, where we are confirming growth in the consumer and wholesale revenues, but given the DAISY transaction which completed during the third quarter and the creation of O2DAISY, we're currently reviewing the impact of DAISY on B2B reporting. but can confirm a previous guided M&A impact from DAISY of around £125 million of revenue in 2025. And secondly, as discussed previously, we're improving our Liberty Global Services and Corporate Adjusted EBITDA Guide to $150 million in 2025. All other opcode guidance remains unchanged. Now that concludes our prepared remarks for Q3, 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 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 are 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. The first question comes from the line of Maurice Patrick with Barclays. Please go ahead.

Yeah, thanks guys for taking the questions and the call today and congrats Mike on the new role. Just maybe a question given the topical FT article this morning around Netomnia in the UK. I wouldn't expect you to comment on that transaction, but maybe a good opportunity, Mike, ahead of Telefónica's CND next week to talk a little bit about your outlook and view on investments in the UK, specifically around the fibre side, whether the Netco sale plan could still be resurrected. Your view around buy versus build and the cost. You've always said you'd consider buying if the cost was comparable to your own build cost. How your thoughts are evolving there would be very helpful. Thank you.

Sure. And we're not sure what Telefonica will be addressing next week, obviously. We'll all find out. But I think we've been consistent on the fiber point, at least through the course of this year, which is that we'll continue to upgrade our own fiber, and we're now reaching, Lutz and his team have access to 8 million fiber homes through a combination of our own upgrade of the Virgin Media Network and, of course, the next fiber footprint. So we continue to, at least with our own homes and the Virgin Media side, continue to upgrade fiber and increase the footprint and the reach of that technology. That's point one. Point two is we've always stated, and we are actually now one deal ahead down with the up deal we did about a year or so ago, we've always stated that the market requires rationalization, that alt-mets, most of them will find it difficult to continue doing what they're doing in the manner in which they're doing it, and we're supportive of opportunities to consolidate and rationalize the fixed network environment period. So I'm not commenting, as you suggested, on any particular deal. I would simply say if you look at our history where we used NextFiber in the case of Up to begin the process of rationalizing, we're open-minded and open for business, if you will, for opportunities that would achieve just that. So I think it's still a bit of a moving target everywhere, but We're hopeful that in the next six months things will start to settle and we may or may not be part of those transactions that precipitate that settling.

Thank you. The next question is from the line of Polo Tang with UBS. Please go ahead.

Yeah, hi. Thanks for taking the question. I've got a question about the Dutch market and the improvement in terms of broadband that you're seeing there. So can you maybe just talk about competitive dynamics, both in the broadband market, but also in terms of mobile? And how confident are you that you can stabilize the broadband base in 2026? And will this come at the expense of further declines in terms of ARPU? And can you maybe also comment in terms of whether FWA...

is having any impact on the broadband market thanks sure that's a great question for you stephen yeah thank you mike um so i've got three questions yeah can you can you hear me hello got it mike yeah so i think uh three questions so first is stabilizing broadband uh ads um we see the market is pretty competitive um although rational um we've set out a plan which we've spoken to about at length over the last 12 months which is working uh the heart of the plan is to get us back to broadband growth that will take us i think the balance of next year but that's what we're pushing towards It's an uncertain journey because we can't predict what the competition will do but certainly we are pushing our plan forward. The heart of that plan is our bringing down churn. You'll have seen and we're pleased with how much we've been able to deal with the churn in our base and we'll continue to push on with that through the next year. In mobile, I think it's as she was. I think there's a lot of activity like most European markets in the value segment. We're well positioned there with Holland's Niva, which has done pretty well for us. We think that there's more we can do in that space and we'll continue to pursue that through 2026. And then on fixed wireless, look, I think it's a variable in the marketplace. It's probably a question more for Adidas than for us. We're focusing on our plan, reducing our broadband losses, getting our broadband back to growth, and we've accommodated for that within our plan. So I don't really have much to say about what's happening on fixed wireless there.

Thank you, Paolo.

Thank you. The next question is from the line of Joshua Mills with B&P Paribas. Please go ahead.

Thanks, guys. My question is on the UK market and the competitiveness we're seeing. So I wonder if you could give us a bit more color on what you're seeing on the grounds. I note that the ARPU development this quarter for fixed line was negative, which may be expected, but perhaps disappointing following the 7.5% price increase in April. And then on B2B, I understand that there's some moving parts with the DAISY acquisition, but could you just give us an idea of what the underlying B2B growth would have been this quarter and whether that's running ahead, below, in line with expectations? That would be great. Thanks.

Lewis, why don't you take the broadband and ARPU question, and Charlie, you can address the B2B question.

Yeah. I mean... The market is, the broadband market is very competitive as we speak. On one hand side, you see offers already around 20 pounds for one gig from Altnet in the market per month. And then Openreach came with two promotions. I don't know if you're aware, but for copper to fiber migrated customer, you are paying to open reach for the next 24 months, 16 pounds for one gig. So this one promotion, the other one is you don't pay anything when you migrate and fix wireless access customer onto the fiber network of open reach, which leads to the fact that you see a very price driven market. Um, You see in the affiliate market, which is the most price sensitive market prices from a sky also in Vodafone around 21 pounds for one gig. How are we doing in this? I think we are doing pretty well here because as you all know, we have the highest up here in the market. We have the customers who have the demand for the highest speed in the market. And yes, On one hand side, to now lower churn of our customers, we have offered prevention offers with some dip on ARPU. And also, obviously, we have to get our fair share acquisition, which leads to lower ARPU. But in the scheme of things, losing only 28,000 customers and having only a dip of 1% of our fuel, we personally think it's a pretty good outcome within a pretty competitive market. But let's wait for the announcements of our competitors.

Okay. Thank you. Charlie, you want to address the B2B?

Yeah, just, yes. So, look, as you know, we closed O2 Daisy in the quarter. We've got a lot of work to do to try and reconcile canning policies, the revised plans, because also, in fact, clean rooms. So, So what we've been trying to do is say, look, the businesses that remain outside that perimeter, we still expect to see growth and have had growth here to date. The business that we've actually contributed into O2 Daisy, which is our fixed and mobile B2B connectivity business, that has declined this year. You're right. We haven't actually broken that out and haven't taken that offline. But I think what we need to do is now we've got this, not joint venture, but a partnership. But in the Q4 results, we'll give you the separate financials and obviously explain how the impact of that business is and how we think it's going to grow in the future as we finalize the integration plans.

Thanks. Operator?

Thank you. Thank you. The next question is from the line of Robert Grindle with Deutsche Bank. Please go ahead.

Thanks very much and congratulations John as well as Mike for his new position. I'd like to pick up on the central costs and valuation point if I may. I suppose that's for Charlie. What would you say the costs are to drive the 100 million annualized savings at the center. Do you reckon it's like a one-year payback period or longer? Is there any stock impact at all from all these redundancies and any capex which, you know, goes to offset the savings or is effectively the 100 million a straight drop through? Thank you.

Sorry, it's a pretty good payback. I mean, it's de minimis capex. Yeah, sorry. It's a pretty good payback. It's de minimis. CapEx, which is one of the reasons why I think an EBITDA multiple is perhaps a more appropriate way to look at it. If you do take the view that these are costs necessary to run a telco, we just scale them across a portfolio and indeed across our growth assets. So I think whether it's the telco multiple, what that is, but it's certainly along those lines in my mind. In terms of the cost to achieve it, there is some degree of restructuring, but broadly speaking, it pays back within, I would say, less than 12 months. So very little frictional cost.

Thank you. The next question is from the line of Nick Lyle with Barenburg. Please go ahead.

Yeah, afternoon everybody. Just a very quick one please, Mike. On slide four, I'm just interested why you picked the Benelux markets first and maybe not BMO2 in the UK market. Is it simply just because of size or are there any one of those four criteria that you just don't think it ticks the box on yet and maybe others are far closer to. Could you just maybe describe why that might be, please? Thank you.

Sure. Yeah, I think we want to trend towards a sunrise-type framework everywhere we operate, and I think there is a pathway to do that everywhere we operate. We seem to be making and are making meaningful progress in the Benelux framework. for all kinds of reasons. Both Dutch market and the Belgian market are highly rational markets, closer to Switzerland than anything else, I would say. They have their own unique peculiarities around competition, but largely rational three-player markets. We've been able to attack the balance sheet, specifically in Belgium, where we've successfully created a net co and a serve co there, and are in the process of executing the classic move of putting more debt on the NETCO as it builds out. It's a higher quality credit. I'm not allowed to tell you what the credit reading is of this 4.35 billion euro financing, but it's the first time we've ever seen one. I can promise you that. And using the proceeds and the financing capabilities of a NETCO to de-lever the Servco, which is the remaining core commercial business. And those combination of steps have been in the works for quite some time and you know now we did and have attempted to do similar things in the uk as uh somebody mentioned just a moment ago and not suggesting we can't get to the same place in the uk at some point uh but it does appear like in particular in belgium we are on our way to executing on those four key measures um and so that to us is worthy of highlighting and letting you know we're busy very busy in this part of the of the platform and portfolio, and that if we, you know, made a commitment to make some decisions around these things, and I think more likely than not, we'll be making some decisions around this part of our business in the, you know, relatively near term, certainly within the timeframe that we've outlined. We hope in all of these markets, you know, Ireland, I mentioned, is going to have a massive reduction in CapEx. It's going to start generating free cash, but it's small. But certainly, Virgin Media Ireland looks small. and will tick the box on many of these particular metrics. The UK is, look, a trophy business for us, certainly something we are committed to for the long term and is an increasingly important investment. And we are by no means suggesting that we can't achieve similar results or benefits in the UK. We're simply saying, There, we have a partner, and we have to align with our partner on the best next move. We have a market that's a bit fragmented today, and as we discussed a moment ago, it's going to require some form of rationalization. And so these are things that we work on with our partner. So I'm not suggesting for a second we can't achieve similar things in the other assets or markets identified on that slide. I'm simply saying we're making good progress here. We'd like you to know about it.

That's great. Understood. Thanks.

Yep. You got it.

Thank you. The next question is from the line of David Wright with Bank of America. Please go ahead.

Yeah, hi guys. Thanks for taking the questions. Congratulations, Mike, on the new role. It's obviously quite a significant event to see John stepping away after such a significant impact on the industry. A couple of questions, please. And the first is just on the UK guidance. And maybe my colleagues are better at this than me. But I'm trying to understand whether there seems to be a change in perimeter here. And I'm looking at the numbers. I'm inclined to think that the same perimeter with the shift in B2B could have forced you to possibly push the revenue guidance lower. This is like for like without Daisy. It does feel like you could have had to push the revenue guidance lower. I'm just wondering if that's the case. I'm just struggling to reconcile that. And then the second question I had, it's just your language you used before, Mike, which I just found a little surprising, which was you sort of said, we'll have to see what Telefonica wants to do. Now, I might have expected you to sort of say, you know, we'll announce our plans jointly next week. Does Telefonica have any sort of strategic plans rights or priority around the UK business in the shareholder agreement. Maybe I've just read this incorrectly. That might be the case. I'd appreciate that.

Thank you. David, I'm glad you asked that question. I appreciate that second question because as I spoke those words, it occurred to me those probably didn't come out very clearly. First of all, no, this is a 50-50 joint venture. We make decisions jointly and I have a very good dialogue and working relationship with Mark, we are 100% aligned on everything that's happening in the UK. So that is not what I intended to say. There was a reference to their Capital Markets Day, and I'm just pointing out that we're not part of that. They have a lot of things to talk about to the market, and they will surely talk about those. But we don't expect any surprises, if you will, around the UK market. We're aligned and talk every week about what we're going to do together. So thank you for asking that. I'm glad I could clarify that. On the guidance, listen, I'll let Charlie dig into it. The way I see it is we're providing greater transparency at a time where it's probably needed for analysts to understand what's growing and what's not and what are we getting our arms around. So Charlie, do you want to address that?

Yes, so you know I'm sorry if it's confusing and you're right the difficulty is that we've now got this company called O2 Daisy and we own 70% of it the 30% of it we don't own and therefore at some point hopefully very soon at the end of Q4 we're going to give you the key financials of that and as we align that company it is tricky because there's different accounting policies as I'm sure you'd realize and blah blah blah so what we're trying to do is confirm what we can tell you so we can tell you that the businesses excluding the ones that went in there are growing and we expect to grow and And we have told you that to date, the B2B connectivity business, mobile and fixed, that we have put into O2 Daisy is in decline. Now, if that means you would interpret that as, you know, the combination of no O2 Daisy would have meant that the business would have not been growing, maybe that's right. But it's somewhat academic because we've got to work through what the O2 Daisy combination is going to develop. And the whole idea was, you know, two companies are very synergistic and not just in cost, there's a material cost saving there, but also, you know, there's some revenue growth. So, I mean, I apologize if that's not clear enough and how we take it offline, but certainly how we see it.

Super, Charlie. Could I just add a quick one? Are there any puts and calls around that 30% or is that just the ownership at Infinite and right now?

Charlie, do you want me to take that? It's Andrea.

Yeah, Andrea, sorry. Yes, you should answer.

Yeah, no, there are no puts and calls, David. Thank you.

Thank you. The next question is from the line of Ulrich Raeth with Bernstein Society General Group. Please go ahead.

Thanks very much. My question is about the refinancing. It was a very impressive question to Charlie. Are all of these financings, can you confirm, fully swapped in the usual policies that you used to have in terms of into the local currencies of the operating units and also in terms of fixed rate swaps? Because I do think, I do remember you did some refinancing where you actually didn't implement these older policies. So just wanted to confirm that the PFIs now are back to the old policies. Thank you.

Yeah, to be honest, I don't think we've changed our policies. The bonds, we've all swapped at our fixed rate at the rate we issued at, which in some cases is actually higher. Just to confirm the two questions. One is all currencies are matched. So everything in the UK is sterling. We're not taking dollar or euro risk. So that's a tick on all the policies. On the interest rates, all bonds are fixed by nature. And on any bank debt, we haven't done a ton of bank debt because the bond market has been so strong, to be honest. We have maintained the swaps. Remember, the swaps are independent of the original bank financings. So we are monetizing while riding those low interest rates until 28%, 29%, 30%. But thereafter, we would have to come in at higher rates, and we are gradually pushing out those hedges. So we are maintaining a pretty good three, four, five-year sort of fixed profile, depending on which market it is. I hope that sort of answers the question.

Very clear. Thank you very much.

Thanks. Thank you. The next question is from the line of James Radser with New Street Research. Please go ahead.

Yes, good morning, Mel, so good afternoon, my child. Thank you. I was just going to ask one question. I mean, tough to keep it to one, but on Virgin Media, in their release, they are saying they're planning to bring four to five times in the medium term. I was wondering if you can kind of talk us through the plans to get there. Does that require some inorganic steps like a kind of dividend removal, you in telephonic rejecting capital into VMO2, or do you expect to get there organically through EBITDA growth? Thank you.

James, that was a little hard to hear. I want to be sure we got the question right. I think you're asking about leverage expectations at VM02 staying within the four to five range. And I think that is our objective. And I think that is achieved in a number of ways. The one you didn't mention, which is organic EBITDA growth, which Lutz and the team have been able to deliver consistently. So organically, the business should deliver over time. I don't think we're in a position today to talk about dividends or asset sales or things of that nature, although we do have residual tower interests that could be used in that regard, and we're always open-minded about it. But getting within the range that we've maintained historically is always our underlying goal. Charlie, I don't think there's much to add to that, but go ahead if you think there is.

No, no, I think that's absolutely right. Look, you know, listen, we are a four to five times level. We're definitely through that in the UK. Some good synergies, you know, potentially from this O2 Daisy deal, which we've talked quite a bit about today. And as Mike said, you know, we expect some, you know, organic growth and let's see how we go.

Great. Thank you.

Thank you. The next question is from the line of Matthew Harrigan with the Benchmark Company. Please go ahead.

Thank you. I'll just ask one question right out of the box. I mean, I think when you look at the U.S. and the U.K., it's kind of competing dysfunction on the political side. But Lutz was recently quoted on Starmer's infrastructure tax, and I don't think there'd be any implications this year about what might be the longer-term implications. I was on the Comcast Q&A, so I apologize if you talked about this in the main discussion, but I rather suspect you didn't get to the topic. Thanks.

Matt, you're asking, it's a big question, you know, politics in Europe vis-a-vis our business. I mean, I'll step back a minute to say that I think we are approaching, hopefully approaching a bit of an inflection point here where Our industry, for example, the mobile industry, just put a letter out to von der Leyen, I think two days ago, three days ago, making it clear to her that change is critical, necessary, needed if Europe is to maintain any sort of path to leadership in digital, industrially, really any category, productivity. So we continue to make our case as an industry, as a sector, that we're not just critical infrastructure companies, we are, you know, necessary for pretty much every aspect of growth and productivity that regulators and politicians are searching for. So maybe get off our throats. And that is, I think, you know, being received positively. In the UK in particular, I think the government has had a growth initiative, a growth-minded approach to regulation. Recent changes at the CMA, for example, the competition commission there are positive in that they seem to be reflecting a much more growth-minded approach to M&A and to industry consolidation. So I think there's green shoots across the markets we operate in. There are still pain points, you know, broadband taxes and things of this nature that are unnecessary, and we continue to fight those on a regular basis. But I think more broadly I would say it's more of a tailwind these days than not. And whether it's sovereignty, where governments are realizing that the critical infrastructure of telco is part of the solution for broader sovereignty and independence, or whether it's just good economics, that you need healthy telecom infrastructure to compete in the global marketplace, all of those things I think are coming together a bit, and I'm more encouraged now than I've been in a long time. Excellent.

Thank you for your questions. This will conclude the question and answer portion of today's call, and I would like to hand back to Mr. Mike Friese for any additional remarks.

Great. Well, thanks, everybody. Appreciate you joining, as always, and we look forward to getting back on the phone for our year-end call, probably in the February timeframe, hopefully with updates on the strategic roadmap, on how we're driving commercial momentum, and more importantly, also how we're reshaping or continuing to reshape our corporate operating model. So appreciate your listening in today, and we'll speak to you all very soon. Take care.

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