Liberty Global Ltd.

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Liberty Global's first quarter 2026 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 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 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 expectation or in the conditions on which any such statement is based. I would now like to turn the call over to Mr. Mike Frese.

All right, thanks, Operator. Hello, everyone. I appreciate you joining the call today. As usual, Charlie and I will handle the prepared remarks and the presentation, and then I have my core leadership team on the call with me and on standby for Q&A as needed. I've got a lot of ground to cover, so I'm just going to jump right in on the first slide, which provides some key takeaways from the quarter. To begin with, we delivered strong operational performance, and we'll go through it all in a moment, but one big headline here, this was our fourth straight quarter of steady broadband improvement across each of our big three markets, with fixed to mobile ARPUs remaining largely stable. Now, Charlie will walk through how this translates into our financial results, but if the punchline is, we will be confirming all of our 2026 guidance today. There are lots of reasons for this commercial momentum, including our multi-brand strategies, our network investments, AI implementations around personalization and churn and call centers. And we'll talk about all that a bit today, but really what we'll do in our second quarter call is do a deeper dive on our AI initiatives. So stay tuned for that. Equally important for this audience is the fact that we are making real progress on the value unlock initiatives announced this past February. The acquisition of Vodafone's 50% stake initiative in our Dutch JV is on track to close this summer, and we see no obstacles to getting that deal done on time. That, of course, is just one of the main building blocks underlying our strategy to spin off our Benelux assets in the second half of the next year. I'll walk you through each of those building blocks in just a moment, as well as the value we could and should create for you all by spinning off the Zigo Group. Quickly on Netomnia, that transaction in the UK is now officially in the regulatory process, and While the noise from one or two competitors has escalated recently, we're pretty confident this deal will be approved. It's a very positive development for the UK fiber market, which is in desperate need of rationalization, as you all know. And it's a great outcome for VMO2 for all the reasons we reviewed on the last call. And finally, you won't be surprised to hear that we are highly focused on capital allocation at the corporate level. Over the last two years, we brought our net corporate cost down by 75%. We talked about that on the last call. And we've articulated what we believe is a clear investment strategy around telecom and growth, and we've strengthened our balance sheet. After funding the $1.2 billion needed to close the Vodafone transaction and executing on around $700 million of asset sales from our growth portfolio, we should end the year with around $1.5 billion of corporate cash. And as noted here on the slide, through April, we've generated around $300 million in proceeds So we're sort of on our way. And finally, just one quick remark on the broader telecom environment in Europe. As you would know, the sector has performed well in the last 12 months or so. That's driven in part by improved operational performance, reduced capex, and a general rotation out of software and into industrials. You're all familiar with those trends. I want to add to the list what appears to be an improving regulatory climate in Europe when it comes to telecom broadly and more specifically when it comes to consolidation. Now, we await the formal release of the EU merger guidelines, for example, but these changes are expected to redefine the rules. And that's going to be a big positive together with an increasing commitment to sovereignty to our sector and the broader telecom industry. So I'm sure you're aware of that, but important to note. Now, moving on to the next slide, let me start by saying that there will come a point in time when I don't need to put this chart in the deck. But for now, I think it's helpful. To summarize our operating structure, specifically our three core pillars of value creation, Liberty Telecom, Liberty Growth, and the Center of Liberty Global itself, and to highlight the strategies we're executing to create and deliver that value. Liberty Growth, on the far right, houses our portfolio of media, infra, and tech investments, totaling $3.4 billion today. Here we're focused on rotating capital, investing in high-growth sectors with scale and tailwinds. We'll try to spotlight a few of those in each quarter, and today we'll lay out the thesis for the experience economy. In the center sits Liberty Global itself with $1.9 billion of cash and a team with decades of experience operating and investing in these businesses. And as we reported last quarter, we've restructured our operating model and reduced net corporate costs by 75% since 2024 to around $50 million this year. And these two asset pools alone, by the way, our cash and the market value of our growth investments exceed the current price of our stock by around 30%. which means, of course, that everything in our core Liberty Telecom business on the left, maybe $22 billion of revenue, $8 billion of EBITDA, and four incredible converged telecom champions, are receiving no value at all in our stock. In fact, negative value, if you give us credit for our substantial reduction in corporate costs. Now, as we've said over and over and over, our primary goal here in telecom is to drive commercial momentum and, importantly, to unlock value for shareholders. And that's was the impetus behind our Sunrise spin-off, which you all know about, and which we believe has worked extremely well for investors. And that's why on the last call, we described the formation of the Zygo Group, a combination of our Benelux assets in Holland and Belgium, and our intention to spin off our interest tax-free to shareholders in the second half of 2027. So where are we on that specific initiative? I referenced earlier the building blocks that form the foundation of our expected value unlock for the Zygo Group. And you can see The most significant ones outlined on the left-hand side of the next slide. Let me just say that each of these steps, each of these blocks, if you will, are centered around strategic catalysts, free cash flow growth, and deleveraging. And they each represent a foundational element of the value creation plan here. This is the primary blueprint we've been executing, of course, with dozens of overlays and work streams, but it should give you greater confidence and awareness of our plans here. Let's start with Belgium. The first step was, of course, separating Telenet from its fixed network, which is now a two-thirds, one-third JV called Wire. This restructuring accomplishes or has accomplished four key things. First, it isolates a significant fiber capex and debt capital needed to upgrade the HFC network in Flanders into an off-balance sheet vehicle. Second, it precipitated a comprehensive network cooperation agreement between Wire and Telenet on one hand and Proximus and its fiber asset, FiberClar, on the other hand, which I'm pleased to say was just signed yesterday, and will result in a single network, ours or theirs, in about 75% of Flanders. That's a great, great outcome. Third, it creates a cleaner, more consumer and B2B-focused Telenet, Servco, with a significant free cash flow turnaround story supported by declining mobile CapEx and mostly AI-driven OpEx reductions. And then fourth, it facilitates a reduction in Telenet's leverage from both the rebalancing of debt between WIRE and Telenet and the sale of a portion of our stake in WIRE, not a premium, by the way, which will be used to repay debt at Telenet. So really critical steps to getting where we want to be. Moving to the Netherlands, for me, the first strategic catalyst here was bringing in a new management team, one that could set the tone for a return to growth and for winning results in the Dutch market. And Stephen and his team have delivered exactly that. And the second strategic catalyst was, of course, reaching an agreement with Vodafone They buy their 50% stake in our Dutch JV. This deal, as I just said, is scheduled to close in less than three months. Now, not only is that deal accretive from a financial point of view, but it strategically unlocks about a billion euros in synergies we've referenced and provides the structural elements necessary to complete a tax-free spinoff next year. Each of these steps accelerates our commitment to reducing leverage at Vodafone Ziggo, which we'll accomplish through asset sales, a return to EBITDA for cash flow growth, and synergies. Now, on top right of this slide, you can see a side-by-side of Sunrise and the combined Zigo Group. If you look at 2025, the Zigo Group is bigger. It's about two to two and a half times larger in revenue and EBITDA and a bit more profitable. But importantly, you'll see that in 2028, we're estimating free cash flow of around 500 million euros and leverage of four and a half times, which presents a comparable financial profile to Sunrise when we spun it off in Q4 2014. On the chart on the bottom right provides an illustrative bridge to the 500 million in free cash flow, which is estimated to be 120 million euros this year. And the biggest components of that, as you can see, are the non-recurring nature of some costs this year in Holland, combined synergies, Telenet's mobile capex reduction, and organic EBITDA growth. We think the Zigger Group represents a compelling equity story, and it's anchored around four selling points. Number one, This is a strong regional business with two of Europe's most rational telecom markets that are best-in-class brands. Number two, we have clear network strategies here with declining CapEx as 5G investments subside and fiber costs are moved off balance sheet in Belgium and a cost-efficient DOCSIS 4 rollout in Holland. so declining CapEx and great visibility to the network strategies. Number three, rising free cash flow and declining leverage, and that's supported by organic growth, synergies, and 1.2 to 1.4 billion euros of local assets, sales I've already described, towers, property, et cetera. And then number four, a commitment to pay dividends from free cash flow, as we've done with Sunrise. So we have lots of work to do, but this plan and this path forward is clear for us, and we look forward to updating you each quarter on our progress. Now, what does it all add up to? I'm sure many of you are wondering, you know, what sort of value creation do we think is achievable here? The chart on the next slide is actually simpler than it looks, but it moves left to right, and it demonstrates how we have and how we intend to create value through this unlock strategy. Let's start on the far left. The day we announced our intention to spin off Sunrise in February 2024, our stock closed at $18. Of course, nine months later, we completed the spinoff. And using Sunrise's current stock price, we feel we delivered a tax-free dividend that's valued today at $13 per liberty share. So together with our $12 stock, you get to $25, or about a 40% value appreciation in the last 14 months or so. So far, so good. About two months ago, we announced the second step in our value unlock strategy, too, with our intention to consolidate Benelux and spin off the Ziggo Group in the second half of next year. So what might that be worth? These numbers are illustrative. Lawyers maybe say that, of course. But if you move to the right, to the third column, I think you'll see the answer. We believe a publicly listed Zigo Group, if it were to trade at, let's say, the same implicit valuation as Sunrise today, essentially an 11.5% free cash flow yield, could be worth up to $14 per Liberty share based upon the 2028 free cash flow estimate of 500 million euros that we just discussed. Without debating the point, we believe this could be conservative. As you would know, many of our peers, KPN, Swisscom, Orin, Zagona, they trade at free cash flow yields of 5% to 7%, albeit with different leverage profiles. So let's stick with the 11.5% free cash flow yield. The primary question then is where will Liberty itself trade post-spend? Remember, we believe that the entire Liberty Telecom Group, has negative value on our stock today of around $4 per share, despite our announced intentions regarding Zigo. With our cash and growth assets worth $16 and our stock at $12, that's the only conclusion we can reach. Now, to arrive at $14 post the Zigo Group spin, we simply added our pro from a cash balance after the Vodafone deal and asset sales, together with the value of our remaining growth assets, including our residual stake in wire, and we get to $14. By the way, these numbers assume that the market continues to assign no equity value, that's zero equity value, to our remaining telecom businesses in the UK and Ireland. Of course, we think there's substantial equity value in these businesses, but we don't need to agree on that to get to these numbers. So to recap, if you follow the light blue boxes, from February 24, the day we announced our plans to spin off Sunrise, to today, We created $7 on what was an $18 stock, so that's 40%. And we believe for those who had held on to the Liberty stock and their Sunrise stock, that number gets to 41 with the Ziggo Group spin. If you do the same thing with the dark blue boxes, for those who bought their shares after the Sunrise spin-off, we think we can take $12 today to as much as $28 by the second half of next year when we spin the Ziggo Group. Now, while there are no sure things in life, And plenty to do between now and then, trust me, the building blocks we think are in place and we feel good about the plans and these estimates here. Now, one of the reasons for that good feeling is the progress Stephen and his team have made over the last five quarters. This next slide summarizes some of those initiatives and some of the progress beginning early last year when we repositioned broadband pricing, changed the operating model, rejuvenated our campaigns, even expanded our footprint through the deal with Delta Fiber. As a result of that, we saw steady improvements right away in broadband, where we'd been losing over 30,000 subscribers every quarter. Those changes continued into 26 when we rejuvenated the Ziggo brand with a new campaign, the Everything Network, that was supported by our UEFA rights, by the way, which we just extended. We also launched broadband into our No Frills Flanker brand, bringing a simple and value-driven connectivity product to that critical segment. You can see at the bottom right, the broadband net ads have been moving in the right direction for four straight quarters. In fact, our first quarter result was the best in three years, driven by all the initiatives I just referenced, pricing adjustments, new campaigns, products expansion, network improvements. And by the way, we have the largest reach of two gig broadband services in the country. And we just launched field trials with DOCSIS 4 in anticipation of launching four and eight gig products later this year. So operationally, Vodafone Ziggo is in great shape and improving. Exactly what you want to see as we plan for a public listing next year. Now, the next two slides summarize Q1 operating performance across our four markets. We're going to do this quickly since the CEOs are on the call and they can provide color if needed. I think the main headline here is that we continue to see good broadband trends pretty much across the board and stable fixed and mobile ARPUs. Starting with Vodafone Ziggo, like I just talked about, our broadband performance improved significantly. for the fourth consecutive quarter, and post-paid mobile net ads also improved sequentially. We continue to invest in our fixed mobile markets in Holland, with both the Vodafone and Ziggo networks receiving outstanding awards in the UMLA test. With ARPU's merely 57 euros in fixed and 18 euros in mobile staying steady, this has been a good outcome. Turning to Belgium, Telenet delivered its highest quarterly broadband result in 10 years, driven by successful cross-sell campaigns and strong performance with our base, our flanker brand there, Post-date mobile results remain subdued in Belgium as the market's pretty competitive. And here, too, our base brand is outperforming, while both mobile ARPU at 16 euros and fixed ARPU at 63 euros remain largely stable ahead of upcoming price adjustments in Q2. Now, turning to UK on the next slide, despite a market that remains highly competitive, Virgin Media 02 delivered a third straight quarter of broadband improvement with just 6,000 losses compared to 43,000 losses a year ago. And this was supported by strong commercial and retention initiatives and, of course, low return. Importantly, and despite pressure on the overall market pricing, here our fixed ARPU remained relatively stable at 46 pounds 50 pence, supported by more and more personalized and AI-driven pricing. And with the Natamia deal working its way through the regulatory process, we continue our fiber-to-the-home expansion with 8.7 million fiber homes available today. In UK Mobile, we launched O2 Satellite. You might have seen that making us the first operator in the UK to switch on directed device satellite connectivity. In addition, our mobile network transformation is progressing with new RAN upgrade agreements and the transfer of the second tranche of spectrum from Vodafone 3. That's hugely important to us. O2 now has the largest 5G standalone footprint in the UK. Net post-pay losses of 60,000 were materially better than last quarter, as churned from the Q4 price adjustment, we've talked about that, subsided, and ARPU of around 17 pounds was broadly stable. In Ireland, lastly, we continued to execute strategically with growth in wholesale and off-net traffic more than compensating for retail pressure on-net. A fixed retail ARPU of 61 euros remained stable, despite no price rise in 2025. And importantly, our fiber rollout, this is critical, remains on track to be substantially complete in 2026, with nearly 20% of the retail base now taking a fiber product, and that will also drive free cash flow in 2027 and beyond. Now, just one slide on our Liberty Growth portfolio, currently valued at $3.4 billion, and centered around four key verticals you know and love, infrastructure and energy, technology and AI, services, and of course, media and sports. Now, the strategy here has been consistent for some time. We are exiting positions that are no longer strategic and using that capital to both invest in new opportunities as they arise and, as needed, provide capital for transactions that will unlock value in our telecom assets. That second point's really important. Historically, we've divested investment positions, totaling something like $1.6 billion since 2019, and we've targeted another $700 million in sale proceeds this year, of which, as I said, $300 million is already accounted for. Now, a few comments on sports and live events. Of course, we're already invested heavily here through Formula E, but we also believe there are significant structural tailwinds that warrant us evaluating additional opportunities, and we're doing that. These points are probably well-known to all of you, I'm sure, but there's clearly a generational shift from physical goods to experiences. That's live events, sports, travel, entertainment. Many of these markets are fragmented, and most are protected from AI disruption. So it's an interesting space There's also a clear momentum in the sector, right? Just look at sports. Global revenue in sports growing well in excess of GDP over the last 10 years and by almost everybody's estimation, poised to increase and accelerate from here. What's our right to play, you might be asking? Well, we know how to consolidate a fragmented industries, both in telecom, but also we've been doing that for decades and recently with all three media before exiting at a premium. We've got strong relationships across these sectors. Really, the deal flow is the easy part. And when you factor in our expertise in things like treasury, operations, and technology, it's a pretty strong combination. And we have a good track record in sports, specifically with Formula E, the fastest growing motorsport globally, and one of only eight global sports leagues, which is a great segue to my last slide. I always get excited when I talk about Formula E, sometimes too excited. But I think this moment is perhaps our biggest yet. Over the last 10 years, as you've been following this, we have constantly innovated. Investing significant energy and time in the car, the technology, and the racing. Well, the wait is over. Last week at the Paul Ricard circuit in France, Formula E unleashed the next generation race car, Gen 4 we call it. And the motorsports world is still reverberating. First of all, you have to see it in person. Yes, it is a beast, but it's a beautiful, beautiful race car. Step-up in power and performance is incredible. 600 kilowatts of power represents a 71% increase in base output over the current Gen 3 Evo car. The acceleration is insane, 0 to 100 kilometers in 1.8 seconds. That's meaningfully faster than an F1 car. And top speeds in excess of 335 kilometers an hour, nearly 210 miles per hour. We estimate, because it's an estimate at this point, that lap times will decrease 10 seconds on average from the current generation car. That's a lifetime in racing. It's also the first single-seater race car with active all-wheel drive all the time, which will provide incredible acceleration and torque out of the turns. And, of course, it meets all of our expectations from a sustainability point of view. It's made from at least 20% recyclable materials. It's 98.5% recyclable itself. And it allows us to continue claiming that our race-related carbon footprint for the entire championship would fit into one F1 team, by the way. Speaking of F1, yes, we might have taken a few shots at them since the Gen 4 launch. You know, might be deserved also. You're obviously aware of the issues they're dealing with currently and that they're going through with the hybrid engine. And it just reinforces our view that going halfway on anything does not make history. And, you know, we love the position that we're in technologically, competitively, from an entertainment and motorsports point of view. But, hey, just don't take my word for it. In the next slide. You can see, go ahead and scan social media, the motorsports press. There is widespread consensus. I know I'm quoting. This Gen 4 car is a quote-unquote monster. It's quote-unquote ushering in the most extreme era of electric cars. And it's expected to change perceptions of Formula E forever. Even Max gives it a thumbs up, as you can see on the bottom right. So I'm super excited about Gen 4 car and Formula E. And with that, Charlie, I'll turn it over to you.

Thanks, Mike. My first slide sets out the Q1 financial results for our Benelux companies. Now, as you can see on this slide, we're now presenting WIRE's financial performance for the first time separate to Talonet to give investors clarity on their respective financials before we complete the full separation of the two companies and their capital structures later this year. Vodafone Ziggo reported a revenue decline of 1.8% in Q1, driven by a lower customer base and ongoing repricing impact. Now, this was partially offset by the price indexation and higher revenue from Zyga Sports, and adjusted EVDA declined 6.4%, driven by higher marketing costs and some incremental investments in network resilience and service reliability, in line with our guidance in March. At Telenet, revenue was broadly stable in Q1, reflecting our strategic decision not to renew Belgian football rights, which was partly offset by a strong broadband performance, which was driven by effective cross-selling into the video customer base. Adjusted EBITDA grew 8.9%, driven by lower content costs following the exit from the football broadcasting rights. And at WIRE, revenue declined by 1%, impacted by the implementation of a new pricing model, which was partially offset by strength in wholesale growth. Adjusted EBITDA declined by 4.6%, and this was driven by an investment in build capability as we start to accelerate WIRE's fiber build-out capability. Turning to the UK and Ireland, Virgin Media O2 delivered a total service revenue decline of 3% on a guidance basis. Now, this was impacted by competitive pressure in the consumer fixed market and lower B2B revenue, as the newly rebranded O2 business rationalizes its product portfolio to support its long-term growth in the mobile segment. This was partially offset by wholesale revenue growth, which was supported by growth in MVNO revenue, and adjusted EBITDA declined by 3.4% as a result of the lower total service revenues and a non-cash provision for legal matters recorded in the quarter. This was partially offset by cost reduction initiatives. At Virgin Media Ireland, revenues declined by 1.4% in Q1, impacted by intense competition in the consumer fixed and mobile markets, as well as a decline in advertising revenues at VMTV. This was partially offset by a strong wholesale performance, Meanwhile, adjusted EBITDA declined by 7.1%, driven by these top-line pressures, and was also impacted by a one-off benefit in Q1 last year. Turning to the next slide, we remain committed to our disciplined capital allocation model as we rotate capital into higher growth investments and strategic transactions. Starting in the top left, Telenet reported €10 million of free cash flow during the quarter and is expected to deliver at least €20 million of free cash flow for the full year. Additionally, Liberty Corporate delivered adjusted EBITDA of $-2 million, putting us firmly on track to achieve our full-year 2026 guidance of $-50 million. Turning to the bottom left, CapEx has meaningfully stepped down at Telanet and Q1 on a guidance basis, driven by the 5G upgrade nearing completion at the end of 2025 and lower spend on digital platforms. Capital intensity remains elevated at the other opcos, reflecting investments in our fixed networks and also 5G upgrades. Moving to the Liberty Growth Walk in the top right, the fair market value of our growth portfolio remained broadly stable versus 2025 year-end at $3.4 billion. This was driven by modest investments in Atlas Edge, Egg Power, Next Fiber, and Edge Connects, offset by the partial disposals of our ITV and some of our Edge Connect stake, as well as a positive fair market value adjustment at Edge Connects, along with the recent decision to move Liberty Bloom out of our corporate and services segment and into the growth portfolio. Turning to our cash walk on the bottom right, we ended the quarter with a consolidated cash balance of $1.9 billion. Q1 distributable free cash flow was impacted by high capex levels related to the fibre-to-the-home rollouts at WIRE and Virgin Media Ireland. In addition to working capital movements at Telenet, now it's worth noting, we continue to anticipate that WIRE will draw on its standalone facility following BCA approval and will fully repay the short-term funding provided by Liberty Global consolidated cash via Telenet. As a reminder, we are aiming to end 2026 with around $1.5 billion of corporate cash, despite the expected outflows associated with the incremental Vodafone stake, and also to a lesser extent, the Net Omnia acquisition. And finally, turning to our full-year guidance targets for 2026, we are reconfirming all guidance metrics of VMO2, Vodafone Zigo, and Telenet, as well as our guidance for corporate costs. And that concludes our prepared remarks for Q1, and I'd like to hand over to the operator for Q&A.