Liberty Global Ltd.

stand by. Good day, everyone. You are holding for Liberty Global's fourth quarter 2025 investor call. Thank you for your patience. The investor call will begin in approximately five minutes. Thank you. Thank you. Good morning, ladies and gentlemen, and thank you for sending by. Welcome to Liberty Global's fourth 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 our question-and-answer session. Page 2 of the slide details the company's safe harbor statement regarding forward-looking statements. Today's presentation may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including the company's expectations with respect to its outlook and future growth prospects, and other information 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 Freese.

Hello, everyone, and thanks for joining us today. As you would have seen by now, in addition to our results, we announced two significant transactions earlier today, which of course we'll address in our prepared remarks. As a result, I think this call may run over 60 minutes. I hope you can stick with us because there's quite a bit to talk about here. We've broken this down into our typical quarterly results presentation, which Charlie and I will breeze through as we usually do, perhaps a little faster than normal. And then we'll move into more of a strategic update like we did two years ago at this time. I also think it might be a good call to follow the slides that we're broadcasting, especially the second half. But let me jump right in on slide four. And certainly by now, you are all familiar with how we organize and manage our business today. As illustrated here, everything falls into one of three operating verticals. Liberty Telecom comprises our four national FMC champions that generate $22 billion of revenue and $8 billion of EBITDA on an aggregate basis. And where our primary goals are to drive commercial momentum and, importantly, unlock equity value for shareholders. Much more on that in a moment. Liberty Growth on the far right houses our portfolio of media, infra, and tech investments, totaling $3.4 billion today. And here we're focused on rotating capital, right, and investing in high-growth sectors with scale and tailwinds. And, of course, in the center sits Liberty Global itself with $2.2 billion of cash and a team with decades of experience operating and investing in these businesses. Now, I'll come back to this slide in the strategic update, but first let me provide some highlights on each of these for 2025. So it has clearly been a busy year for us on all three fronts. And as slide five points out, we feel like we've delivered on our core strategic priorities. There's a lot of detail here, so I'm just going to hit a few of the high points. We'll talk about our telecom operating results in the next couple of slides, but we're pleased with the momentum that our commercial and network strategies are delivering, especially in the second half of the year. Supported in parts by the benefits we realized from AI, All of our three large opcos hit their guidance targets last year. When it comes to unlocking value in telecom, a key goal for us, as you know, you've no doubt seen our announcements on the UK fiber transaction and our acquisition of Vodafone's interest in the Netherlands. We'll dig into both those deals shortly, but this is exactly what we said we would do on our call last year and the year before. At Liberty Global, we've totally reshaped our operating model, having reduced our net corporate spend by 75% in the last 12 months. Needless to say, I'm excited to see how this new guidance weaves its way into analysts' sum of the parts calculations. And we continue to allocate capital to the highest return. As you know, we did reduce the buyback last year from 10% to 5% of shares, partially, to be honest, in anticipation of some of these very transactions. And so far this year, we're not actively in the market, but we always remain opportunistic on our stock. And we'll keep you abreast of our plans throughout the course of the year versus guiding to them. With respect to our cash balance, pro forma for the transactions announced today and for what we expect to realize in further asset sales, we should end the year with $1.5 billion of cash. And Charlie will get into that in a bit more detail in a moment. And then finally, our growth portfolio remains highly concentrated with five assets comprising 70% of the $3.4 billion in value. We couldn't be more excited about Formula E. the progress we're making on the Gen 4 car, our racing calendar, and, of course, our sponsors. And we have renewed focus on the experience economy. I'm not going to get into much detail here, but by this we mean live events, sports, etc. We've probably looked at 100 deals in this space. We've done real work on about 40, and we've only closed a handful of very small transactions. So that did give you some comfort that while we're excited about this sector, we're staying very disciplined as we look to rotate capital. Now, the next two slides... Summarized Q4 operating performance for telecom businesses. In the UK, Lutz and the team have implemented a number of things that helped improve broadband performance throughout the year. Initiatives like bundling Netflix and being recognized as a top UK broadband provider. Those things drove a strong Q4 as well as stable ARPUs. Post-paid mobile results were impacted, however, by the increases in that they took in October. Hopefully, we'll see improved performance in 26, especially as 5G coverage continues to grow and pricing pressure settles. In Ireland, a combination of fiber wholesale activations, improved network performance. Actually, they're also ranked the best provider in the market. And off-net expansion, supported net growth in the fixed base with stable ARPUs. Mobile in Ireland continues to grow steadily. Remember, we're an MVNO there, helped in part by a 15-euro offer launched in June. In the Netherlands, Vodafone Ziggo's How We Win plan is driving substantial improvements in the broadband base. Becoming the largest provider of 2-gigabit broadband speeds in the market and recent recognition as the best TV provider helped make Q4 the single best result in fixed services in nearly three years, with steady improvement over the last six months carrying into 2026. Post-paid mobile growth in Holland continues to be supported by nearly universal 5G coverage and a strong flanker brand. And then finally, Telenet had its highest quarterly broadband result in three years, helped by fixed mobile convergence in the south and a strong Black Friday period. And similar to other markets we operate in, our poos were fixed and mobile are very stable. Now, if it wasn't enough information for you, we will be discussing three out of these four markets in our strategic update later in the call, including a lot more commentary on their performance and outlook. So in the meantime, Charlie, over to you.

Thanks, Mike. Now turning to our Q4 financial highlights. Our operating companies in the UK, the Netherlands and Belgium delivered on their four-year guidance metrics despite challenging market conditions. VM02 delivered a revenue decline of 5.9% on a reported basis, which was impacted by lower Next Fibre construction revenues due to a slowdown in the fibre build, and also sustained competitive pressure in both the fixed and mobile market in the UK. On a guidance basis, excluding Next Fibre construction and O2 Daisy, we delivered modest growth for the full year. Adjusted EVDA declined by 2.4% on a reported basis, primarily driven by lower next-fiber construction profitability. Excluding this, adjusted EVDA fell by 1% in Q4, but we still achieved growth overall for the full year of positive 1%. Moving to Vodafone Zygo, we saw a revenue decline of 2.3% in Q4, driven by fixed churn and reduced low-margin IoT revenues. This is partially offset by the annual price adjustment and higher Zygo Sport revenues. Adjusted EBITDA declined 3.4% in Q4, driven by this lower revenue, and higher costs related to commercial initiatives. The four-year figures were in line with the guidance in Q1 for the new How We Win strategy. At Telenet, we saw a revenue decline of 1.3%, driven by our strategic decision to not renew the Belgium football broadcasting rights and lower programming revenues. Adjusted EBITDA declined by 9.9%, driven by elevated labour and marketing costs. as well as hire professional services and outsource labor spend. Turning to our Treasury update, we've been extremely proactive through 2025 and the early part of 2026 in extending our 2028 and 2029 maturities, and we successfully refinanced close to $15 billion across our credit silos. At both VMO2 and Vodafone Zika, we have fully refinanced all 2028 maturities, following successful term loan refinancings, senior secured note issuances, and private taps within these credit silos. In Belgium, as we announced at Q3, we have €4.35 billion of committed financing at wire, which is contingent on BCA regulatory approval of our Fibre Sharing Agreement. A portion of the proceeds, around €2.34 billion, are allocated to repay the inter-company loan with Telenet and will be used to rebalance leverage at Telenet. We intend to further repay some of the 2028 debt at Telenet with the proceeds from our partial wire stake sale, which is expected to complete this year. All of this proactive refinancing activity has significantly reduced our 2028 maturities and maintained our average tenor of around five years at broadly comparable credit spreads to our historic levels. Turning to the next slide, we remain committed to our disciplined capital allocation model as you rotate capital into high growth investments and strategic transactions. Starting in the top left, we successfully delivered against all three cash flow guidance metrics for the year across our OPCOs and JBs. Additionally, following our corporate reshaping program, Liberty Services and Corporate closed 2025 ahead of guidance at negative $130 million of adjusted WDA, which is around $20 million better than our $150 million target. Moving to the Liberty Growth Walk in the bottom left, the fair market value of our growth portfolio remained broadly stable versus Q3 at $3.4 billion. This was driven by modest investments in NextFiber, Atlas Edge, and Edge Connects, offset by the partial disposal of our ITV stake and the full exit of our Infabrica stake, as well as positive fair market value adjustments at Formula E and UPC Slovakia, which has been held in the growth portfolio until the sale process completes later this year. Turning to our cash walk on the top right, we ended the year with a consolidated cash balance of $2.2 billion. During the quarter, we received $162 million of upstream cash and JV dividends and $140 million of net cash proceeds from disposals in our growth portfolio, including $180 million from the partial ITB stake sale. We spent $34 million on our buyback program during the quarter. We're purchasing a total of 5% of our outstanding shares during the year. Moving to the bottom right, we are aiming to end 2026 with around $1.5 billion of corporate cash. After deducting for the cash outflows related to the M&A transactions Mike will touch on in a minute, we intend to replenish our corporate cash with a combination of dividends and cash upstream from our operating businesses, as well as non-core asset disposals from our gross portfolio. So into liberty growth in media and sports, our strategy remains to invest in live sports and entertainment platforms with growing global fan bases, Formula E is our lead example of this, and Season 12 has started strongly ahead of the launch of the Gen 4 car. Our data centre assets, Edge Connects and Atlas Edge, continue to show strong top-line revenue growth, supporting a $1 billion-plus year-end valuation. And our energy transition assets also made big steps forward in 2025. Egg Power secured £400 million of senior debt to help fund over 400 megawatts equivalent of wind and solar power projects, And Believe, our destination charging business, has now built 2,500 public charging sockets, which are averaging around £1,500 per socket, with a further 23,000 awarded to them by UK local authorities. And they're currently bidding on a large number of additional sockets which are being awarded. In tech, the focus is on AI. We made a strategic investment in 11 labs, and we're also moving our in-house AI investments into the growth pillar, given their potential to sell services to third-party customers outside the Liberty family. We've also established a new services pillar and have transferred Liberty Bloom into it from Jan 2026. Now, Liberty Bloom develops tech-enabled back-office solutions for Liberty Global companies as well as third parties. It delivered over 20% revenue growth in 2025, achieving over £100 million of revenue with an order book of nearly £400 million. The initial value has been set at £100 million We've hired a new CEO to accelerate growth. Starting January 2026, we're also introducing an annual management fee of 1.5% of assets under management, paid by Liberty Growth to Liberty Services. This fee will be funded by distributions from the growth portfolio, including disposals, and will be used to fund direct and allocated operating costs, such as treasury and related legal services, and these are all directly attributable to the growth portfolio. So here's our guidance for 2026. we are providing guidance by operating company. For Virgin Media O2 from Q1, 2026, we will move to new disclosure, which better reflects the three key operating verticals following the creation of O2 Daisy. Now these are consumer, business, and wholesale. There's a performer information in the standalone BMO2 release, which explains this further alongside updated KPI disclosures. On this basis, the BMO2 revenue guidance is now set on total service revenues, which we expect to decline by 3% to 5%. Now, this is adjusted for the impact of the DAISY transaction, which is driven by continued promotional intensity, as well as planned streamlining of the B2B product portfolio following the creation of O2DAISY. Adjusted EBITDA is also expected to decline by 3% to 5%, also against a comparable period adjusted for the DAISY impact, driven by lower revenue and lower gross margin due to the changing customer mix. stable property and equipment additions of 2 to 2.2 billion pounds, excluding right-of-use additions, due to continued investment in 5G and fiber to the home, and adjusted free cash flow of around 200 million pounds for the year, supporting cash distributions to shareholders of the same amount. For Vodafone Zigo, we expect stable to low single-digit decline in revenue, driven by a lower fixed base and the flow through the front book pricing impact, albeit with support from continued price indexation and fixed and mobile. Mid to high single-digit decline in adjusted EVDA, driven by OPEX investments into network resilience and service reliability. Property and equipment additions to revenue is expected to be around 23% to 25%. driven by continued 5G and DOCSIS 4.0 investments, as well as the CAPEX component of investments into network resilience and service reliability. Now, to give more detail on this additional investment, we expect 100 million euros of incremental investment of OPEX and CAPEX into network resilience and service reliability during 2026. Now, this will reduce to 50 million OPEX impact in 2027-2028. And we're expecting adjusted free cash flow to be around 100 million euros with no shareholder distributions planned for the year. For Telenet, we're introducing new full-year 2026 guidance based on IFRS financials, excluding wire. We expect stable revenue growth, reflecting a stable operating environment and the annual price indexation under Belgian regulations. Low single-digit growth in adjusted EBITDA, supported by OPEC savings from significant digital and IT investments. and continued lower programming costs. Property and equipment additions to revenue of around 20%, as investments in 5G and digital upgrades step down, and positive adjusted free cash flow of around 20 million euros. And finally, for Liberty Corporates, we expect around $50 million negative adjusted EBITDA, driven by the annualization of the cost savings from the corporate reshaping that took place in 2025, and the implementation of the new 1.5% management fee from the growth portfolio.

Thanks, Charlie. Great job. And now we're going to switch gears to what I think, I hope, is the most important part of today's call. And that, of course, is an update on the key transactions we've just announced and how they significantly advance our plans to deliver value to shareholders. I'll start by revisiting the first slide that I showed you today. And that's the three core pillars of our operating structure, Liberty Telecom, Liberty Growth, and Liberty Global. I won't go back through the strategies for each of these. I think you've got them by now. But what I have done on this slide is present a very rudimentary sum-of-the-parts valuation exercise for these three pillars at the bottom of the slide. It shows that the Liberty growth portfolio today, accepting the fair market value that Deloitte has prepared, is worth roughly $10 per Liberty global share. Our corporate cash of $2.2 billion, even after a reasonable reduction of the value for the $50 million of corporate spend this year, is roughly $6 per Liberty share, which means that with an $11 stock price today, there's at least $5 per share of negative value being ascribed to our Liberty Telecom businesses. And of course, there are multiple ways of arriving at these figures. Some people start by valuing Liberty Telecom and then applying discounts to cash and Liberty Growth and corporate. But I like this approach. Cash is cash, and we believe the growth assets are valued fairly and appropriately. More importantly, we're rapidly turning those growth assets into cash We've already exited something like $1.6 billion in the last six years. So whether it's negative five or zero, you can see why we have focused a lot of time and attention on creating and delivering value in our telecom portfolio. Of course, the Sunrise spin-off just 14 months ago was step one. That transaction delivered what is today roughly $13 per share of value to Liberty Global investors, far more than anyone expected at the time or what the implied value was for that business at the time. And that's why we can say our stock, really on a combined basis, is up meaningfully over the last two years. Now, moving to the next slide, here's another thing that gives us some confidence in the value of our telecom business. The European telecom sector has been experiencing a broad-based rally this year with the Euro-Telco index up 16% year-to-date, and just about every major incumbent telco, and you know all the names, up even more than that, 20%, 25%. So what's happening here? We see three key tailwinds impacting the sector. First, of course, is an improving regulatory environment. This is not to say that we're totally satisfied with where things stand. You know us better than that. But if you look at the UK and the changes they've made to the CMA, or if you look at the recently published draft of the EU's Digital Networks Act, we believe there's a good chance regulators continue to loosen rules around consolidation and spectrum policies, especially in the age of AI, where telecom continues to be perceived rightly as critical infrastructure for consumers, for businesses, and for governments. Secondly, just as we are seeing in our own operations like Telenet, where 5G CapEx is largely behind us now, or Ireland, where our fiber build is coming to an end, there is light at the end of the CapEx tunnel. And when you combine declining CapEx intensity with telecom's high margins and stable revenues, you've got a strong recipe for improving free cash flow. And then finally, there is the AI thesis. It's hard to... to find an industry more ready to benefit from AI-driven efficiencies, customer improvements, network automation than the telecom sector. In addition, as AI permeates every aspect of our lives, our role, telco's role as foundational connectivity and data transport providers i think continues to increase and then lastly there appears to be and this is an area you're experts in more than me but there appears to be a rotation going on here investors growing a bit sour on capital light software driven industries and rotating capital into more infrastructure-based or defensive sectors where ai is a net net positive and quite frankly unlikely to be as disruptive over time I think the impact of AI, if you ask me, on our industry will be positively transformational. Now, I recently asked the CEO of one of the big tech companies, look, how do I go from spending $14 billion a year on OpEx to $7 billion? That's what I want to do. He said, bring me your P&L, and we'll go through it. The point is, we're just scratching the surface today. I think the upside for us from AI is massive, and it's massive for our entire industry. Now, so with that as background, on this call… last year and the year before, we laid out two very specific goals related to our telecom businesses, and they're summarized here on slide 16. The first was to prepare each of our Benelux operating companies, this was last year, for the next phase of value creation, and I'd say we achieved that goal, bringing in Stephen Van Rooyen as CEO has been a game changer for Vodafone Ziggo. And of course, today, we're announcing the acquisition of Vodafone's 50% stake in Vodafone Ziggo in order to advance our plans to spin off a new company that combines our Dutch and Belgian operations. More on that, of course, in a second. In the U.K., we committed last year to advance our plans to monetize our fixed network infrastructure for both financial and strategic reasons. Early last year, we pivoted away from a pure net go, as you know. But together with Telefonica, we continue to evaluate accretive ways to grow and finance fiber infrastructure in the U.K., Today, of course, we announced the acquisition of UK's second largest altnet, creating what will ultimately be an 8 million home fiber platform with the opportunity to further consolidate a fragmented market. So let's get into these deals. Beginning with the Vodafone acquisition on slide 17, after what can only be described as a very successful, and I mean, seriously, I mean rewarding partnership with Vodafone and the Netherlands, we're pleased to announce an agreement to acquire their 50% stake. in exchange for 1 billion euros of cash plus a 10% equity interest in a new company called Ziggo Group, which will own 100% of Vodafone Ziggo and 100% of Telenet in Belgium. Now, there's three primary reasons we're doing this, three primary benefits from this deal. To begin with, we believe the net present value of both operational synergies and incremental service revenues from this transaction and combination total about 1 billion euros alone. And, of course, pretty much all that accrues to us Second, we think the combination of Holland and Belgium is a financial winner. As the chart on the right shows together, the two operations serve 7 million mobile subs and over 5 million broadband subs with total revenue of 6.6 billion euros and over 2.5 billion euros of EBITDA. The combination also creates a clear roadmap to reduce leverage to what we're estimating will be about 4.5 times through a combination of synergies and improving operational performance. In fact, we think we'll generate 500 million of free cash flow by 2028. And then third, and perhaps most importantly, we are announcing today our intention to list Zygo on the Euronext exchange in 2027 and to simultaneously spin off our 90% interest to Liberty Global shareholders as we did in Switzerland. Interestingly, similar to Sunrise, there is a strong equity story here. Belgium and Holland are rational markets, just like Switzerland. We have a clear network strategy in each country, like we had in Switzerland. Our plans to reduce leverage are front and center and actionable, like they were and are in Switzerland. And the financial profile should support both free cash flow and dividends in the future. Interestingly, this is more anecdotal, just as Sunrise was once a very successful public company that we took private and then relisted, Ziggo was also a very successful public company that we took private. So we will be reintroducing Ziggo to the public markets as we did with Sunrise. Now, just a quick update on slide 18 of Vodafone Ziggo's recent performance. There's no question that Stevens How We Win plant is driving clear operational turnaround. A combination of OPEC savings, reposition broadband pricing, speed upgrades, and a multi-brand strategy are delivering materially low return. You can see that on the bottom right of this slide, where Q425 was the best broadband performance, I think, in 10 quarters, and things continue to look good into 2026. We've also provided a medium-term outlook for Vodafone Ziggo on slide 19, and while 2025 EBITDA was in line with our plan, 2026 guidance, as Charlie indicated, shows a decline impacted in part by our largely one-off investment we're making in network resilience and service reliability. In 2028, however, we expect EBITDA growth to rebound. We're not giving you actual numbers here, but we are confident in that trajectory. That EBITDA growth, combined with a very stable CapEx envelope, should generate the meaningful free cash flow I just referenced. And as Charlie indicated, leverage will peak in 2026 but should decline thereafter, both organically, that's, of course, from EBITDA growth, and through asset sales like our tower portfolio, the proceeds of which we intend to use to reduce debt. And then a quick strategic update on Telenet on slide 20. We can't underestimate the importance of the steps we've taken over the last 24 months in Belgium to both rationalize the market structure and create a clear operating roadmap for both of our businesses there. As you know, this is the first time we've completely carved out a fixed netco, which we call WIRE, and have even gone one step further by entering into a network sharing arrangement with the incumbent telco, Proximus, that will create arguably the most attractive fiber wholesale market in Europe. Now, to facilitate the carve-out, we secured 4.35 billion euros of new capital to both fund the WIRE build and reduce leverage at Telenet. And as we've discussed, we're in the process of selling a stake in wire with the proceeds earmarked for further deleveraging in Telenet. The goal here is to bring Telenet's midterm leverage down to the 4.5 times level. And Telenet, as part of the new Ziggo group, I think represents a very strong equity story itself with outstanding retail brands, significant B2B growth, an upgraded 5G network, and long-term access to fiber. Perhaps even more importantly, though, with CapEx declining significantly this year, Telenet's free cash flow is at that inflection point and poised for continued growth. Now, let's switch gears to the UK and our announcement today to use our FiberJV, NextFiber, to acquire a substantial group which consists of the Netomnia Fiber Network and a 500,000 subscriber broadband customer base for a total enterprise value of £2 billion and a net payment of £1.1 billion at closing hours. Now, I'll walk through the various transaction steps on the next slide, but the goal here is simple. The first goal is to create the second largest fiber network after BT OpenReach. When you combine Netomnia's 3.4 million fiber homes with NextFiber's existing 2.6 million fiber homes, and then you add 2.1 million VMO2 homes that will be made available to NextFiber for upgrade, the platform will ultimately reach 8 million fiber homes by 2027. As I'll outline in a moment, there are significant benefits to VMO2 stakeholders here. This is a fantastic outcome for VMO2. It's also a strong vote of confidence in the UK generally. We want the UK government to know that we, together with our partners, are willing to commit significant capital to the UK based upon their pro-growth policies. This next slide is one that you'll probably want to print out and tuck away somewhere. As I said, this is a complicated transaction. They often are. And this is an attempt to simplify it as best we can. On the left-hand side, you'll see the money and asset flows. The green numbers, when you take a look at the slide, if you aren't looking at it now, the green numbers simply show the cash and how it moves from and to the various parties here. Approximately 1 billion pounds of equity will be injected into NexFiber, the acquisition vehicle. And that's our 50-50 JV with Infovia, of course. And this will consist of 850 million pounds of cash from Infovia and 150 million from Liberty and Telefonica. So the first point to make is that Liberty Global directly will be responsible for 75 million pounds of cash in order to complete this transaction. The 1 billion together with a new debt facility, I think it's about 2.7 billion, will fully fund both this transaction and the longer-term strategic plans for NextFiber 2.0. Now, once capitalized, NextFiber distributes a little over $2 billion of cash, $950 million to a substantial group for the Natomnia fiber assets, and $1.1 billion to VMO2. Of course, VMO2 will use that capital to both acquire the broadband subscribers for $150 million and reduce leverage. The vast majority of the $1.1 billion going to VMO2... is in exchange for a significant commitment to utilize the NextFiber network on a wholesale basis. That's how these deals work. Specifically, VMO2 will provide access to 2.1 million of its own homes and will agree to pay NextFiber wholesale access fee on those homes once they're upgraded to fiber. And additionally, VMO2 will pay wholesale access fees day one on another 2.5 million homes that overlap NextFiber's footprint. So there's substantial value being contributed to the NextFiber 2.0 plan by VMO2, and that's why it's being paid. Now, as I mentioned, the benefits to VMO2 are substantial. Here to begin with, VMO2 gets cash to reduce leverage. This is necessary, of course, given the increased wholesale fees paid out to NextFiber. Second, it'll end up with 500,000 additional broadband customers. Third, there will be substantial capex avoidance here, both in terms of the cost to build and the cost to connect millions of premises. That will no longer be the responsibility of VMO2. We think the MPV of that is around £800 million. Fourth, VMO2 will be able to continue providing construction and managed services to NextFiber in exchange for revenue and positive EBITDA margin. The MPV of that contract, we think, is around £400 million. And then finally, in addition to having access to the second largest fiber footprint in the U.K., VMO2 will also receive a direct stake in NextFiber 2.0. Now, looking ahead, I think this transaction also opens up the market for further consolidation, something that we have talked about for a long time and may just be on the horizon. One quick slide here, providing additional context on VMO2's operational outlook. As I promised, on the left-hand side of slide 23, we make the point that despite a highly competitive market, VMO2 has delivered pretty good financial results, especially in comparison to its peers. While revenue has been largely flat over the last four fiscal years, and you know that, EBITDA has grown annually at around 1.5%. During the same time frame, VMO2 has generated 2.6 billion pounds of cumulative free cash flow and distributed 5.2 billion pounds to Liberty and Telefonica in the form of dividends. We are happy shareholders here. That's clear. Now, the rest of the slide identifies the main drivers of growth moving forward and why we're confident. in the VM02 story, including three powerful brands, Virgin Media, O2, and GiftGap, that reach every segment and help drive fixed mobile convergence. There's also synergies and B2B growth from the recently completed O2-Daisy merger. There's a strong wholesale position as the number one MVNO provider and now a key partner in the second largest fiber footprint. I mean, Lutz and the team, we believe a pretty good head start in AI-driven innovation and efficiency as well. And on top of that, There's the opportunity to drive growth off net to the 10 million homes we don't reach today. So a lot of really good things happening in the UK market for us. Finally, this is the key takeaways here on the final slide, what we'd like you to bring home, if you will, from the second half of this call. Number one, we think the telecom sector broadly and equity values in Europe more specifically are poised for continued appreciation in the eyes of investors. Tailwinds from consolidations. stable cash flows, and what appears to be a rotation into stocks that will be net beneficiaries of AI as opposed to roadkill our drivers here. Hopefully by now you're convinced that we are serious about delivering value to shareholders. The Sunrise spinoff was always step one, we told you that. And the transactions we announced today, in particular the Vodafone stake acquisition and our intention to list and spin off the new Zygo group will be step two. In the meantime, we've worked extremely hard to reshape our corporate operating model. This is not just a cost-saving exercise, even though it did save considerable costs. We believe that our structure today is fit for purpose both to continue operating and investing in the TMT sector as we've done for the last 20-plus years, but also to provide our unique form of expertise to existing and future affiliates. Now, while we were only marginally successful in convincing analysts to look at our corporate costs differently, we have been spectacularly successful at reducing those net corporate costs, as I said, by 75%. That is going to accrue to the benefit of our stock price. And we're excited about our growth platform. We have a great track record here, and we're focused on the right sectors where we have a clear right to play, as they say, and where there are tailwinds and scale-based opportunities that I think we're uniquely qualified to pursue. So stay tuned to see what we do there. And then finally, in our world, capital allocation is everything. Now, where you choose to invest your capital, especially in a capital-intensive business, has never mattered more. We've always run our telecom businesses as if we're going to own them forever. And even in that context, they generally have not required any cash from us to achieve their strategic and operating objectives. We will invest in a telecom business when it unlocks value for shareholders. We've said that many times. like we did with Sunrise, delivering the company pre-spin, and like we're doing with the acquisition of Vodafone Stake in Holland. We have been significant buyers of our own stock, $15 billion over the last nine years to be exact, reducing the number of shares outstanding by 63%, and ensuring that those who stuck around with us end up with a bigger piece of the pie. If you owned 1% of our company in 2017, you ended up with over 2.5% of Sunrise, for example. And finally, we do believe there will be opportunities in tech, infrastructure, energy, media, sports, and live entertainment. These are areas where we have significant deal flow, great partnerships lined up, $10 per share of value, and importantly, strategic flexibility to deliver that value to shareholders. So hopefully that update was helpful for you, especially on the recent announcements of the two deals this morning. So with that, operator, we'll get to questions.

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 only ask one question. If you are using a speakerphone, please ensure 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 will go to the line of Robert Grindle with Deutsche Bank. Robert, your line is open.

Hi, everyone. My head's spinning with all the news you guys have provided. So I'll ask one question about the UK deal. 8 million next cyber homes post-deal completion and the 2.1 million HFC home upgrade. Do you think that definitively unlocks the UK wholesale opportunity in a major way? Do you think you have to wait to get to the full $8 million, or are you on a course before you get to that point to get some more wholesale business in?

Thanks. I'll take a crack at it, Robert. Thanks for the question. And Lutz or others, Andrea can chime in here. But the $8 million will be achieved relatively quickly, end of 27 probably. So that's a good fiber number. for Next Fiber 2.0, both, as you say, from the contribution of the three entities. And VMO2 will be a significant whole-buy partner for that 8 million home footprint. And remember that Lutz and VMO2 continue to upgrade their network. So there'll be another 12 million homes on the VMO2 network that continue to be upgraded. So we believe you're looking at what is effectively a 20 million home footprint in the end, the vast majority of which will be fiber. So obviously, first order of business is to grow and manage our own customer base on that 20 million home network, but also, very much so, to provide a wholesale opportunity for the market, which is much needed for reasons that you understand very well. Does that answer your question?

It does, Mike. Is there a timeline on getting the rest of the M02 network upgraded?

Well, I don't know if we've disclosed that timeline. Lutz, if you want to reference that, let me know if you think we've disclosed that or not.

I would add only that we have already upgraded 5 million homes to fiber out of the 13 we are having. So, Robert, you can add these five to the eight. So you have very quick access to 13 million fiber homes. And the second part, right, I think we always said, that we will enter the consumer wholesale market. And obviously, the more homes and fiber we are able to offer, the more interested it is. Further guidance on how quickly we will upgrade the remaining homes, we haven't given and we don't want to give.

Okay, many thanks. That's great. Okay. Thanks, Robert.

Thank you, Robert. Our next question will go to the line of Josh Mills with BNP Paribas. Josh, your line is open.

Thanks, guys. Maybe I'll take my questions on the Vodafone Ziggo transaction. I think you're still talking about a stable CapEx envelope over the guidance period, but now that you're creating this new Ziggo group with more scale, does it change your appetite or opportunity to invest more on the cable to the fiber upgrade strategy? Is there any images there you can take from your learnings in the Telenet business and bring them over to the Netherlands would be very helpful. And then secondly, I think on slide 17 where you talk about the clear roadmap of the bring Zygo group leverage to four and a half times, is that all organic deleveraging or would you be willing to inject cash into this business prior to a spin-off as you did with Sunrise? Thank you.

Great questions. Listen, I think on the network strategy for Holland and Belgium, those plans are set. So we have made a definitive assessment of the APEC strategy and network strategy for fixed business in Vodafone Zygo's market, and we are going with DOCSIS 4. The team has already done a great job of getting 2GB rolled out nationwide with a large 2GB provider, and they'll be at 4GB and 8GB right around the corner. There is no strategy or plan to build fiber in the Netherlands, and we don't believe it's necessary, either from a commercial and certainly not attractive from a capital point of view. So the CapEx profile does not change as a result of this or any announcements that we're making today. On the leverage, I think, as we mentioned, there's two very clear reasons sources of deleveraging. One is organic growth. The second is free cash flow and paying down debt, as we're doing in Sunrise. And then three is asset sales. So in the case of Holland, we have PropCo, a TowerCo. In the case of Belgium, we have the WireStake. So there will be asset sales with those proceeds used to deliver. There will be growth in EBITDA, organic. and there will be free cash to organically deliver. And that is the plan. At this stage, we don't anticipate putting any capital or cash into the Ziggo Group to get the plans launched in 2027. Now, Charlie, you want to add anything to that?

No, I absolutely endorse what it is. I mean, remember there are some pretty material financial synergies that we get, which obviously give us strong free cash flow. And I should clarify that that $500 million is the annual target. It's not a cumulative target. I also think that, you know, Stephen has performed, and his team, by the way, have performed fantastically. And as they, you know, give this MDA a turnaround, I think you can do the maths and figure out how that contributes to getting towards this four and a half target, which we think works based on what we saw in summarize.

Thank you, Joshua. Yes, my apologies. The next question will go to the line of Matthew Harrigan with Stonex. Matthew, your line is open.

Thank you. Since I'm the last American left in the draw again, when I talk to your U.S. peers on AI, they don't expect to see too much quantifiable benefit this year, but pretty substantially by 2018. Is that something that you layer into your numbers somewhat? And clearly the market's not remotely assigning the value of the ventures plus cash, so they're not going to give you anything for having your telecom OPEX. But what are your thoughts on really seeing that discernible in the numbers? And when you look at AI, is that something – I mean, clearly a lot of the value in your network has been appropriated by Silicon Valley and other – you know, tech companies, but when AI really sticks in, are you going to see, you know, 85% of the benefit on the cost side, or do you expect to see some revenue enhancements that actually attach to you as well? I know it's a fairly big question, but obviously people are, it will be very transformative if you can have your OpEx, even if it's in eight to 10 years. Thank you.

Yeah, look, I'll address that generally, and I'll ask Enrique to step in and provide a bit more color. But three things are really driving, for any telco, driving the benefits from AI, right? Beginning with customer acquisition and retention, which we're all seeing marginal improvements from, the investment in our call centers and things like that. The second is you know, fraud, credit, things like that, that can really drive down OPEX and inefficiencies. And then, as you mentioned, the network and operations. And I don't know, roughly, those are each going to contribute about a third, let's say, of the demonstrable benefits we expect to see in the next, let's say, one to three years. And they're not small numbers. There will be real benefits. And I think the nice thing that I'm seeing in the space is that Whereas a year ago on this call, I would have said that we're inventing a lot of these applications. Right now, we're getting bombarded with startups and third parties and Silicon Valley companies that are doing a much better job in many instances of creating these solutions for us. And so the pace of integration and implementation, I think, is speeding up, and it's real. So as I said in my remarks, I don't think there's an industry better positioned to benefit from marginal improvement in CapEx, OpEx, and revenue than from AI, but I would emphasize the word marginal there. That's really all we're doing at this stage as an industry is finding marginal benefits. I think the real home run is to think more broadly and bigger about how we kind of disrupt our own supply chain, our own software stacks, our own operating models, and to do that could be material. I'll let Enrique chime in if you want, if you're on, Enrique. Okay.

Yeah, I mean, I think maybe the first thing I'll emphasize, Mike, is as you said, it is real. We have gone from a year ago exploring AI to now seeing real benefits being delivered today, and even more importantly, over the next 12 to 24 months, pretty material improvements, I would say, maybe as most of the industry is seeing a lot of benefits on the call center and the support part of the business first. We'll see that go into operations. But we're really, really getting excited about what we're starting to see as innovation more on the revenue side. I think, you know, we're going to see 26. At the end of 26, we're going to look back and look at those revenue opportunities as the year where they became real.

Thank you, Matthew.

Mike, can I just have a quick plug? Sorry, I was going to say, can I have a quick plug for Liberty Bloom? The other aspect of this is back office services, which is not as big as what Mike and Enrique said in the front office and middle office, but the back office still is material for a telco, and it's about a billion, billion five by some definitions of spend for us. And what Bloom is finding out is there's lots of tech enablement with AI tools to significantly reduce the accounting of payments, of procurement, of these financial products, etc., etc., And we're finding actually these are opportunities where we're getting, you know, massive savings by reducing heads, but we're able to scale our existing heads to grow revenues. And that's really what's driving that 20% revenue growth that we see in Bloom. And actually, we see that continuing for many years.

Thank you. And thank you, Matthew. Our next question will go to the line of Polote with UBS. Polo, your line is open.

Hi. Thanks for taking the question. It's really about VMO2 guidance. It was weaker than expected with a minus 3% to minus 5% decline in EBITDA. I think consensus on the same basis was probably going for about minus 1%. Can you help us understand how much of the decline relates to the rationalization in B2B that may be specific to VMO2? And separately, how much of the decline reflects weakness in the broader UK market? And can you maybe just give us some color in terms of what you're seeing in terms of UK competitive dynamics in both mobile and broadband? And I also have a quick clarification in terms of the Natomia NEX fiber deal. Because VMO2 is receiving in 1.1 billion of cash from NexFiber. Can you clarify what VMO2 is giving up? So specifically, what is the minimum commitment on the 4.6 million fiber footprint? And can you give some sense in terms of what the wholesale rate is per subscriber? Thanks.

Yeah, thanks, Paulo. I'll let Lutz address your first question around VMO2 guidance and what we're seeing in the market. And then Andrea, you can work up a good answer to the question around VMO2's commitments. I don't know how specific we're being about that as we sit here now, Paolo, but I'll let Andrea address that. Guys?

Yeah. Hi, Paolo. So you can broadly contribute 30% to the B2B restatement of numbers, including DAISY, and 70% is attributed to a cautious view on the fixed consumer market. So it's not mobile, it is fixed consumer. As we all know, competition is very high as we speak. Yes, as Mike alluded to, I think we had a pretty good Q4 with very low fixed net ad losses and a pretty stable ARPU. But so far, right, the market is even more competitive. There's some fixed telecom access ready outstanding from Ofcom. And therefore, we have factored this in a cautious guidance. The reason why you see a similar number on EBITDA is simply that we are also paying more and more wholesale fees to NextFiber. And that is, to some extent, eating up some of our efficiency.

But just to be clear, and Charlie, you can be honest here, but the guidance we've provided today for VMO2 does not pro forma into that guidance the transaction with substantial group. So we'll have to... Correct. It's all happening real time.

We're going to have to amend it.

So whatever benefit or cost...

Completely excludes it. Also, I think, Mike, why I said NextFiber is we have a growing customer base in the existing NextFiber coverage.

I know why you said it. I just wanted to clarify it. Andrea?

Hi, Paolo. I think there were three questions there. One was, you know, are we giving any sort of minimum penetration coverage? No, there's an adjustment at closing, depending upon how many subs get transferred over, but that's very manageable. But going forward, there's no minimum commitments. There's also no migration commitments. The transaction's been designed to give LUTs full flexibility in terms of managing the migration from HFC to FIBA, which we obviously thought was very important in the overall market context. I think the second question was, you know, just a clarification on what is Motu getting. And I think if you break it down, VMO2 is getting $1.1 billion in cash and is getting a 15% stake in NextFiber. In return for that, it's going to spend $150 million to buy approximately 500,000 subscribers at closings, what we think is the estimate that the substantial group will have. And it's also committing its traffic on 4.6 million homes. 2.4 million are in the overlapping Net Omni area, and then 2.1 are in these new homes that were contributing into the Next Fiber 2.0, which have been carefully selected to make it a contiguous, you know, complete network. So it's not going to be a sort of Swiss cheese. I think there was a third point. I'm sorry.

The third question was are we providing any detail on wholesale rates and things of that nature, and the answer is no.

No, yeah, thank you, Mike. Yeah, thank you. We're not today, but it's a competitive wholesale rate.

Thank you, Polo.

Operator?

Our next question will go to the line of Ulrich Reis with Bernstein Society General Group. Ulrich, your line is open.

Thanks very much. On the Belgian deal, you mentioned a synergy figure there. Could you talk a little bit about what kind of synergies these are? Because this is a cross-border deal. where the story in European telecoms has always been that it's harder to create synergies, and specifically on the synergies with the financial synergies that Charlie sort of alluded to be included in that one billion figure. And if I may just add a clarification, there was some Bloomberg sort of headlines about Telenet deferring refinancing because of difficult markets. Could you comment on that, if that is appropriate at this time? Thank you.

Johnny? Yeah, let me just comment on the telenet refinancing. I think we felt that the market fully understood the number of steps we were taking in Belgium, which essentially were to pay down debt to four and a half times on telenet through the wire sale. And the fact that we docked in the refinancing to separate out wire at the 4.35 billion euros, we thought had been well understood. I think it probably was in hindsight too much for the credit market to digest in one go. And that's fine. I mean, it was an opportunistic transaction, as we always do. We thought that by halving the amount of available Belgian debt, there'd be a lot more demand than we felt. And it was a pretty choppy market. You may recall it was a software market that we had a few weeks ago. So I think discretion is the better part of valor. Nick and I felt that the right thing to do was take a pause. We will let these transactions settle. We'll prove out the various steps. And at the right time, we'll go away and do what we usually do, which is in these $500 to $1 billion tranches, refinance. We still have plenty of time. I think as we try to show in the results call, we actually don't have any material debt maturities, particularly if you include our revolver, until 2029 in Telnet. But we're very confident, and I hope the credit markets will support this, that as these steps unfold, we can essentially reprice the debt and extend the maturity. And it's interesting, actually, the debt still trades. at a very tight level despite this transaction last week, which perhaps is a bit bewildering. But I think in terms of the synergies, I think – I slightly disagree with you. I think there are cross-border synergies. Enrique has proved that with the incredible work he's been doing on technology. I mean, there's an awful lot of scale benefits, and national technology doesn't really have a difference market to market. And I think also, as you rightly point out, the ability to drive financial synergies will come because we are able to use the platform that we will create in Vodafone, Zygm, and Telenet to really drive the technology across the broader footprint, which obviously has some benefits to us. So I think we feel pretty good about the synergies. And actually, to be honest with you, we might have undercooked them because we were obviously operating on a clean team basis in this transaction. So stay tuned. Let's see what we can come up with.

Our track record on synergies is pretty good, and I would agree with Charlie's comment that we've probably undercooked them, especially on the op-ex and potential revenue side. Does that answer all your questions, Ulrich?

Yeah, I was just wondering, so are the financial synergies included, or is the $1 billion just the operation of it?

They are included. No, the financial synergies. Yes, fine.

Thank you, Ulrich. Our next question goes to the line of David Wright with Bank of America. David, your line is open.

Yeah, hi, guys. Again, so much to absorb here. I guess when we're thinking about the Zygo spin, Mike, you know, it says strong equity story similar to Sunrise, but that does ignore what I think you flagged at the time, which was Sunrise was a very clear and strong dividend payor. obviously in a very low rate market. And we've seen that dividend growth just today in the Sunrise share price work so well. There's no dividend story here in Ziggo. And I guess my other question is, what's the sort of run rate of synergy you guys sort of need to hit in the short term to really commit to the spin? Is that date really in stone there? And I guess my sort of associated question is, I think the VOD ZIGO guidance was also quite a lot weaker than most of us had forecast alongside VMO2. I'm just wondering, you know, is there a sense as you sort of restack this business that you're, I don't want to use the phrase kitchen sinking, but, you know, you are guiding to find a level you can absolutely deliver on and maybe puts a little bit more investment into 2026 to grow from. Thanks.

Yeah, David, that's a lot of good questions there that I'll try to address, and Stephen can jump in here as well. With respect to timing, I mean, we were purposely general about timing. We believe 2027, as we especially get into the second half of next year, we are going to be able to see or forecast the kind of storyline here that the market will want to see. That does reflect and has comparisons to Sunrise, namely a deleveraging story from free cash flow, EBITDA growth, and asset sales. Secondly, the ability to project or forecast a free cash flow number. We gave you a number today, 500 million euros. That's 50% more free cash flow than Sunrise generates. It's not coming this year. or next year, but we believe we'll be able to forecast that kind of free cash flow story when it's time to get to the market. And I think the growth, you know, we've talked quite a bit about the How We Win plan and we even showed you some visuals on the slides about how 26 is an investment year, 2027 and 2028. We start to see a rebound. So it's our view that all those things, when they come together, will tell a compelling equity story. But here's the other thing to point out, which is unlike, say, Odido, we're not listing this company through an initial public offering. We're not waiting to build a book. We're not looking for a minimum price. We're not going to raise primary capitals. So we don't have any of those stripes. against us. We're listing the shares and spinning them off to shareholders exactly as we did with Sunrise and the market will find a value we believe a healthy good value well above the negative five dollars we're getting in our stock today. That's all you gotta believe. That's it. You gotta believe that there's good equity value in this story that in the hands of our shareholders that equity value will trade well on a Euronext exchange with a compelling operating and driven storyline and it'll be less than zero. It'll be more than zero. That's all you gotta believe. And so I think we have lots of flexibility here, tons of freedom to plan how and when and what we do, which to me is very exciting. Stephen, you want to add anything to that on the Vodafone tip side?

Well, I think the only component I'd add to is that, as you said, can you hear me, Mike? Got you. Hello. Hi, Emma. So as you said, I think the core of it is that we have an unfolding story of business improvement. So the underlying value of the core Vodafone Seeker business, I think, will come through as we get through the investment in 2026 and into 2027. We've shown a track record so far in the last 12 months, and we've got high confidence given what we're seeing today and given the plans we have ahead of us, that 2026 will be another step forward in the plan. And As you say, 2027 will show those return on investments, and we'll accelerate out of that. So I think the core business, if you value the core business, will look slightly different in 12 months from now.

Thank you, David. Our next question goes to the line of James Retzer with New Street Research. James, your line is open.

Yes, good afternoon, everyone. Thank you for taking the question. Interested in following up on the slide you had to discuss the kind of Net Omnia Virgin transaction in a bit more detail on slide 22. So you've got a very kind of helpful chart there showing all the cash movements. Could you just run me through also what the debt movements are? Because Net Omnia I think will have around maybe a bit over a billion pounds of debt on closing. Does that all go to Next Fiber or does some of it go to VMO2? And then of the subscribers or the homes, sorry, you've got the 2.5 million homes where VMO2 is going to pay committed wholesale fees on closing. How many subscribers does VMO2 have in that footprint, please? And then secondly, on the 2.1 million homes that their next five will be upgrading, what's VMO2's customer volume in that footprint? And to give us an idea of kind of Lutz's incentive to migrate customers over to FTTH, can you let us know, please, how many customers today within VM02 have been upgraded from HFC to FTTH where VM02 has done that upgrade itself as a result of the overlay? Thank you.

Thanks, James. Charlie, you hit the question, please.

Yeah, so first of all, there's no incremental debt going on to BMO2. I'm not sure how much we're disclosing, but I would underline that NextFiber will have a fully financed business plan to get to 8 million fiber homes, a combination of existing debt but also the undrawn facilities. So this is a fully financed, cash flow positive alt net, which I don't think we can say about all of them. And I think in terms of the details of the numbers, let's say that offline because I'm not entirely sure what we've agreed to disclose or not disclose, but that is the key message, fully financed and no debt into BMO2.

And on the 4.6 million homes, Andre, keep me honest, I think you could, we're not disclosing the number of customers today, but you can read across from our broad penetration rates to those areas. It's going to roughly equal our current penetration rates. I think it's a safe bet. Lutz, do you want to address the fiber question?

Yeah. So far, we have a very low number on fiber in our existing Virgin Media O2 cable coverage. The majority of our customers in fiber are coming from the fiber network NextFiber owns. And so we still, no customer is leaving us because of technology. Also, we are able to acquire exactly the same number of customers in the cable network as well as in fiber. So therefore, commercially, we don't have at the moment an incentive to put customers on fiber. And therefore, we have a low number for now.

Yeah, but in this, you should assume in the deal we just announced, there will be some incentives. For example, CostaConnect, wholesale rates, but we're not disclosing those details today.

Thank you, James. That will conclude the formal question and answer session. I would now like to turn the call over to you, Mr. Friese, for closing remarks.

Sure. Thanks for sticking with us, guys. Sorry we went a little bit over. We had a lot, as you said, to disclose. I just want to say quickly thank you to everybody on the call today from my team, because this has been a Herculean effort, and just about everybody on this call was involved in these transactions. And of course, delivering these results. So thank you to each of you for the great work and terrific, terrific outcomes. And look at the deals we think were announced today. I'm excited about. I think they unlock both value, but also give us a tactical runway to control our destiny here, specifically in the Benelux region, but also I think increasingly in the UK market. So they're the right kind of deals with exactly what we told you we would do a year ago. I think you can Trust us when we tell you what we're focused on and how we intend to create value. So appreciate you joining us. I know there will be a lot of questions and follow-up. You know where to find us. So thank you, everybody.

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