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.