Liberty Global Ltd.

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Liberty Global's second quarter 2026 investor call. This call and the associated webcast are the property of Liberty Global in 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 two of the slides details the company's safe harbor statement regarding forward-looking statements. Today's presentation may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including the company's expectations with 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 10-Q and 10-K as amended, Liberty Global disclaims any obligation to update any of these forward-looking statements to reflect any change in its expectations or in the conditions on which any such statement is based. I would now like to turn the call over to Mr. Mike Fries.

All right, welcome everyone. Thanks for joining us. We've got plenty to share with you today, so I'm just going to jump right in and then hand it over to Charlie. Of course, I've got the whole team here with me, so get your questions ready. And we are speaking from slides today. I'm going to kick it off on slide 5. I really like to start with this graphic. I think it demonstrates pretty clearly how we operate, how we allocate capital, and how we create value at Liberty Global. Our story is, of course, anchored by world-class telecom assets in Europe that generate $22 billion of revenue and $8 billion of EBITDA on the aggregate. You know that. And while each of these markets has its own unique operating characteristics... Europe as a whole, in my opinion, is catching a bit of a tailwind, right? Deregulation, sovereignty, the benefits of AI, they're colliding to change the narrative, and I think we'll benefit from those trends. Now, you know what I'm going to say next. Despite the size and scale and growth prospects of our businesses, we believe our stock today reflects no value for these assets, and I'll show you how I get to that conclusion in a moment. That belief is what is driving us to unlock the intrinsic value of our telecom businesses, and fortunately for us, unlike many of our peers, Thank you for joining us. We'll see you next time. where we have demonstrated again and again our ability to create significant value in media, sports, infrastructure, and tech. The recent sale of our stake in Edge Connects, which we talk about in this press release and in these slides, where we took out three quarters of a billion dollars, four times our investment over about 10 years, is just the latest example of that. And finally, we have reshaped our corporate or central structure to be both more agile, more efficient, and more focused on these two core platforms. As a reminder, we are generating today hundreds of millions of annual revenue into Liberty Global, the corporate group from tech, financial, and management services that we provide to both our telecom and growth operating companies. And when you factor in the recent restructuring of our operating model and reduction of our headcount, we've effectively brought down our net corporate costs by nearly 75% over the last two years. and we believe we're on our way to a break-even position as early as next year. So that's the broad picture. So let me jump into the three key highlights I think are most critical for you to know about this quarter. That's on the next slide. Number one, it was a strong quarter commercially and particularly in the Netherlands where Vodafone Ziggo continues to execute brilliantly, in fact, on its turnaround plan. This was our best consumer broadband performance in six years. I'll talk about that. As Charlie will outline, we're confirming all of our 2026 guidance across the board. Second, our plan to spin off the newly formed Ziggo Group, which of course consists of our Dutch and Belgian operations, is right on track. I'll go through this in some detail, but importantly, our fiber sharing arrangement with Proximus that will result in a single fixed network across 75% of Flanders was approved by the Belgian regulator yesterday. This is a big milestone for both our operational and balance sheet initiatives in this market. and I'm pleased to report that we will be closing on the acquisition of Vodafone and their 50% interest in the Dutch business at the end of this month. Then lastly, we have, the only way to describe it, overachieved in our plans to monetize assets and generate cash from our Liberty Growth portfolio. Year to date, we've raised $1.2 billion, well in excess of what we might have indicated, including $900 million from disposals of Liberty Growth and $340 million from an asset-backed loan on our wire stake in Belgium. I think it's important to point out that This $1.2 billion is above and beyond the 1.2 to 1.4 billion euros we intend to raise from asset sales in Belgium and Holland to reduce debt in those markets. As a result, we're increasing our year-end corporate cash forecast pro forma for the Vodafone acquisition from 1.5 billion to 2 billion. So essentially, we will end the year exactly where we started the year from a cash point of view. Now, the next slide goes deeper. Banner announced plans to spin off the newly formed Ziggo Group. The key takeaway here is that we are making substantial progress on all the key building blocks required to achieve this major milestone for shareholders. You'll see on the left side where we are on the three strategic and financial pillars that underpin the listing of Ziggo Group and the tangible progress we've made across each of them. As I mentioned, we have all the approvals we need and are on track to close on Vodafone's 50% stake in the Netherlands by the end of the month. This is obviously foundational for the creation of the Zygo Group, and it unlocks multiple other benefits, including the realization of financial and cross-market synergies. The completion of our Netco-Surfco split in Belgium into Wire and Telenet was another landmark achievement. This gave us four key things, right? A fully financed fiber build-out that is off the Zygo Group balance sheet. Secondly, the rationalization of the fiber market in Flanders through our cooperation agreement with Proximus I just referenced. The opportunity to raise capital and reduce debt through the sale of a portion of our wire stake and the rebalancing of debt between wire and Telenet, which will result in a less levered Telenet with a declining CapEx profile that goes into our Ziggo Group structure. And then finally, we've, of course, announced Steven Van Rooyen as the CEO of Ziggo Group and Yanni Frutier as the incoming CFO. And you should know we are making significant progress to round out the balance of the team, which we'll let you know about in September. Final piece of good news here, we have already increased, in our own minds, we haven't publicly increased it, but internally increased our estimate of the synergies from this transaction and expect to be meaningfully higher than the 1 billion NPV we announced previously. So stay tuned for more details on that. As a result of this progress, we are a bit more ambitious on the timing of the spinoff, and we're currently saying mid-27 versus H2-27. Now let's see how things transpire here. Could be even faster, let's see. And as we said in the past, the equity story is built around two things, reducing leverage to four and a half times and driving free cash flow to 500 million euro in the 2028 timeframe. The bridge to 500 million of free cash we talked about on our last call. And of course, the deleveraging is further supported by asset sales of the 1.2 to 1.4 billion euro that I just mentioned, all of which are underway and we're making substantial progress on and you'll probably learn about before our next call. Now, the right-hand side of the slide is the money shot here, as they say, so I'll take a moment to walk through these valuation metrics. They break down into three main components. On the bottom right, you'll see our current stock price, roughly $11 in the orange bar. We believe this represents a 20% discount to the fair market value of our cash and our Liberty Growth assets alone, and those are valued by independent appraisers, of course. You know what I'm going to say here? It implies essentially zero equity value attributed to our Liberty Telecom operations. Now, we don't need to debate that conclusion. Everyone, some of the parts may look a bit different. It's not the main point of the slide. Moving up the scale, about 19 months ago, we spun off Sunrise, which we now believe represents $12 per Liberty Global share. That's the red bar. Sunrise, as you know, is traded on the Swiss exchange between around 10.5% and 13.5%. Free cash flow yield of roughly eight times EBITDA and has really unlocked substantial value. And we believe over time, on a fully distributed basis, the Ziggo Group itself should trade on the Euronext at a value of up to $14 per Liberty share. Assuming we reach or can confidently guide towards the $500 million free cash flow target and the four and a half times leverage, and the market applies similar free cash flow yields to some. So that's what we're playing for here. It means that from an $18 stock, When we announce the Sunrise Spinoff, we have a clear opportunity to create $37 to $40 of value for shareholders, and you should assume we are squarely focused on just that, delivering that value, and we're making great progress on that goal every day. Now, our confidence in that goal, or the Ziggo Group, is bolstered, of course, by the great turnaround story at Vodafone Ziggo, which we'll highlight on the next slide. Essentially, just going to go right to the chart on the right-hand side of that slide. You can see in the second quarter last year, 2025, We lost 26,000 broadband subs and 5,000 mobile subs, and quite frankly, that was after quite a long period of declining performance. Through a combination of commercial strategies, including new pricing structures, new broadband bundles, new converged propositions, new premium sports content, and importantly, a strong campaign promoting the quality of our broadband network, Stephen and the team have delivered quarter after quarter of improved results since then. culminating in our first positive broadband quarter in Q2 since I think Q4 2022 and as I said the best performance in six years and that goes along with 32,000 new post-paid mobile subs so great progress on the operating performance there. The next slide shows you that performance and I've just discussed it so I'll just jump to the ARPU stats here for Vodafone Ziggo. Fixed ARPU was stable both sequentially and year-over-year around 56 euros and that's despite new front book pricing and Thank you for joining us. Broadband and mobile ARPUs are both up sequentially in Belgium and stable year over year. Now, moving to the UK. Before I jump into the operating results for VM02, let me just spend a minute highlighting where we see this business today and the core drivers of value tomorrow. First of all, it's important to remember that Virgin Media 02 is the only scaled challenger in the UK, one of Europe's largest markets. with the number one mobile network by connections and the number two most reliable broadband network according to recently released research, which we agree with. By the way, our fixed network currently reaches just under 19 million homes, nearly half of which are already fiber today. Now, you can add to that incredibly strong brands like Virgin Media, O2, GiffGaff, which support over 10 billion pounds of revenue, annual revenue, and facilitate regularly the launch of new services like O2 Satellite, which we were the first to do, Broadband, GIFGAF, Volt, our new FMC product, and a host of other commercial initiatives. So that's a strong foundation we have in the UK. Now, as we speak about every quarter, this is a highly competitive market. It's becoming a street fight in the consumer retail sector, particularly with Altnets and MVNOs, which means we have to continue getting sharper, becoming more agile and more innovative. And I like the moves we're making to achieve that. I've listed just a few of them on the right-hand side here. First and foremost, we've just hired Lisa McGowan, our new CEO of Consumer, now has the entire consumer division reporting to her. She spent 10 years at Sky launching broadband, mobile, and Skyglass, and in two weeks is already making a difference in our commercial strategy. So stay tuned for her keen eye and her strategic perspective on our consumer business. We have great potential in wholesale. First in mobile, where we generate today over $800 million of extremely profitable revenue, and we'll shortly launch Monzo to our list of MVNO customers. And in fixed wholesale, where we are striving every day to capitalize on our scale and our growing fiber footprint, which the Nectami acquisition will only advance once that's approved. Now, Lutz and the team are well underway with their AI-driven efficiency and growth programs. I'll talk about that in a minute. You're already aware of our commitment to advancing our network's For example, our 5G reach is now 88%, and even before fiber, we have 1G broadband available across the market. Now, these commitments will pay dividends, both in our B2C and B2B business. Finally, just a word on our capital structure in the UK, and Charlie's going to address this more specifically. The most important message I want you to hear from me is that both Liberty and Telefonica are completely aligned on our commitment to this business long-term. While we appreciate that leverage today exceeds our original targets, and as a result of I would urge you to remember that we have many tools at our disposal if necessary, both organic and inorganic, to drive greater pre-cash flow, stronger operating performance, and lower leverage over time. So more on that with Charlie in Q&A if you like. Turning to VMO2's quarterly operating results on the next slide, you can see that while our broadband and mobile net losses were better than a year ago, we are still encountering significant competitive activity and increased churn. I believe that the initiatives I just referenced and discussed on the prior slide, as well as the new consumer management team and structure, will address these challenges. Meanwhile, mobile operators are up sequentially and flat year over year as we focus on retention efforts there, primarily maintaining value over volume. Fixed ARPUs were flat sequentially, but down 4.6% year-over-year, and that's largely in line with overall pricing in the market. Now, Lutz is on, and of course, we can dig into these results further during the Q&A. Turning to Virgin Media Ireland, you'll see that broadband ad ads have been steady over the last five quarters, and that's supported principally by our wholesale fiber business. Good example of what we can do with wholesale. It's worth mentioning that our fiber rollout is on track to be substantially complete at the end of the year. Thank you for watching. The headline is the message here, right? The telco sector, in my view, is ready-made to realize AI benefits, which over time should be transformational for us and our peers. For starters, we sit on the assets, the very assets AI needs most to succeed. What am I referring to? Largely, large amounts of data that can't be replicated, massive cost structures like call centers, field ops, and networks that are built for automation, millions of daily touchpoints with consumers, and the infrastructure like connectivity and data centers that support the distribution layer for AI. And not surprisingly, we are looking to benefit from the very same opportunities that our peers are attacking, namely driving margins through cost efficiencies, driving customer and revenue growth through hyper-personalization, driving demand for our infrastructure, including power, space and cooling, and driving interest in our stock as investors rotate into sectors that are net beneficiaries of AI and not candidates for disruption. and we learned a lot of lessons like everybody, right? A big one for me has been finding the right balance between building and buying solutions. Increasingly, we're finding that partners, many of them listed here on this slide, are able to help us integrate faster, launch sooner and scale much more effectively. On the top right of the slide, we've shown some examples of what we're doing today and the results we're generating and things like reaching 65% of our VMO2 customer base with our personalization engine, generating 75% call Thank you for joining us. I know we are just scratching the surface here. Based on some work we did with McKinsey and Google, we analyzed some of our core operating expenses across the group to assess both the proportion of that cost, which could be addressed by AI over time, and what some more ambitious savings targets might look like. And you can see this on the bottom right of the chart. Show savings of between 20% and 40%, even as high as 70% at things like customer care. And we're not providing guidance here. These are just indications of what we think could and should be achievable over time. These are not fanciful numbers in my view. They look more realistic to me every day. Why is that? A lot of things are working in our favor here. On one hand, of course, we're implementing our own AI solutions with sophisticated and skilled partners to drive benefits, but Equally important, on the other hand, we're seeing our largest suppliers, typically software and outsourcing partners, looking for early renewals in exchange for passing along to us the significant AI savings they themselves are realizing and must realize to stay relevant. So we're getting it on both ends. Obviously, as we develop these initiatives more fully, we'll share more detail. And remember, this example just covers OpEx, right? There are significant revenue and CapEx benefits to be realized as well. And then finally, on my last slide, we're not only taking advantage of AI in our telecom and growth businesses, we're also prioritizing opportunities to invest in AI companies through our existing tech portfolio as part of Liberty Growth. Now, we discussed this, you know, on and off in the past, but let me get into a bit more detail here. As a reminder, we've had a pretty good track record investing in tech, typically companies in their scale-up phase and where we see some strategic value to our existing businesses. Good examples would be Plume or Aviatrix or Samba TV. Our track record has been good. Since inception, we've invested a total of $700 million into our tech portfolio and taken out around $600 million through distributions and exits. So we're funding our investments with proceeds. And with about net $100 million in today, we're sitting on a market valuation of $400 million, so in a good spot. Now, recently, we've pivoted to AI-driven investments where it makes sense. I'm not talking about OpenAI or SpaceX. Good examples would be Eleven Labs. Maybe some of you know this company, a leader in voice AI. with advanced automated customer service solutions that we're actually using today. Expo and cybersecurity and scan AI and data and automation are two good examples of companies directly addressing the operational backbone of a telco. So we're enhancing network security, optimizing processes and driving efficiency there. Arcus is optimizing the next generation of network infrastructure, a perfect fit for the rest of our infrastructure businesses like Atlas Edge. Now, if you look at these businesses, and you look them up, you'll see that we're typically investing with the smartest VC firms and tech companies. We're not alone here. We're partnering with smart money on these things. And going forward, we'll remain focused on AI infrastructure, models, invoice and video, cybersecurity, applications in things like customer care, sales and financing, all things that we think could be useful to us and also very successful. And lastly, I'll just point out that Our infrastructure vertical within Liberty Growth is playing the AI space as well through our data center investments in Atlas Edge, of course. We have hundreds of millions committed there and our alternative energy investments. So we're taking a 360 degree view of the AI opportunity, which we believe is the best way to innovate and transform our business over the long term. I think it's going to be one hell of a ride. I'm excited about the stuff we're doing and happy to get into any questions you may have. In the meantime, Charlie, over to you.

Thanks, Mike. Turning to our Q2 financial highlights, our OPCO performance continues to track against 2026 guidance, as I'll get into starting on the next slide. We closed the quarter with $2.4 billion of corporate cash, supported by proceeds from our EdgeConnex disposal, and additional corporate liquidity provided by a new wire stake asset-backed loan. and we've completed $4.1 billion of financings year-to-date, including the imminent separation of the Telenet and WIRE capital structures following the recent approval of the Fibre Sharing Agreement. The next slide sets out the Q2 financial results for our Benelux companies. And as a reminder, we now present Telenet's financial performance excluding WIRE to provide greater clarity given the full separation of the two companies and their capital structures. Thank you very much. Adjusted EBITDA declined in line with our guidance, reflecting the in-year impact of the How We Win plan and some one-off investments in network resilience, which we identified when we gave guidance. Cost reduction initiatives remained firmly on track and continue to support our expectation of returning the business to EBITDA growth from 2027. Adjusted EBITDA less P&E additions were lower year-on-year, primarily reflecting higher capex in the quarter related to the network resilience investments. At Telenet, revenue continued to be impacted by our strategic decision not to renew Belgium football rights for a season and a one-off adjustment related to a VAT dispute, partly offset by higher revenue from the new wire management services agreement. EBITDA growth was driven by the wire management services agreement and lower wire wholesale fees. Looking ahead, we will see adjusted EBITDA impacted by the return of costs associated with the new Dupont League contract in the second half. Tying to the UK and Ireland, Virgin Media O2 service revenue was broadly in line with our expectations. Competitive intensity in the fixed market remained elevated, whilst the O2 business continued to rationalize parts of its portfolio to support long-term growth, resulting in a reduction in headline revenues. This was partially offset by wholesale revenue growth in our market-leading MVNO business. There was also an improvement in mobile service revenue trends sequentially. Adjusted EBITDA declined by 2.9%, driven by lower revenue, but supported by further cost efficiency measures. At Virgin Media Ireland, service revenues modestly declined, impacted by continued competition in the consumer fixed markets, but because of this, adjusted EBITDA declined by 4.7%. Turning to the next slide, we remain committed to our disciplined capital allocation model, rotating capital into high-growth investments and strategic opportunities that drive long-term value creation. Capital intensity at our key opcos remains elevated, but all within guidance ranges for the full year. Virgin Meteor 2 continues to see elevated capex, driven by higher investments in mobile capacity, including spectrum integration from Vodafone, the ongoing fiber upgrade program, and IT digital spend, to put us in better position in terms of seamless FMC offerings. Vincenzo Capex was driven by network upgrades, including the DOCSIS 4.0 digitization efforts and one-off investments in network resilience and service reliability in 2026. Capex has meaningfully stepped down at Telenet as the 5G network upgrades are now largely complete and as we complete much of our investment in our digital platforms. We expect this to continue to trend down further next year. And Virgin Media Ireland Capex continues to step down in 2026 as we largely complete the Fibre upgrade of around 1 million premises. We expect Ireland to be free cash flow positive because of this in Q4 for the first time since the beginning of the upgrade program. Moving to the Liberty Growth Walk in the top right, the fair market value of our growth portfolio decreased to $2.9 billion in Q2. This was mainly driven by the successful sale of EdgeConnex, which I'll detail more on the next slide, and UBC Slovakia, partially offset by modest investments in Formula E, Nextfiber, and the IAO and TechPillar. The key fair market value adjustments were an increased value for EdgeConnex on sale and an increase in the Lionsgate stock price. Turning to our cash walk on the bottom right, we enter the quarter with a consolidated cash balance of $2.4 billion. This was mainly driven by the proceeds received from EdgeConnex and UPC Slovakia transactions. And this excludes the $340 million of additional liquidity provided by our loan facility backed by our wire stake. Half of which resides outside the Zygo Group, according to the terms of the Vodafone transaction. Next, I want to spend a moment on H-Connex, which was an excellent outcome for our growth portfolio and a clear demonstration of our strategy working as intended. We first invested back in 2015, taking a minority stake in what was then a relatively early stage data center business. Over the following 11 years, we funded its growth consistently and rationally, with around $177 million of gross equity in total. We supported a company as it scaled without overcommitting capital. And today, Edge Connects is a truly global platform with over 50 data centers across more than 40 markets and four continents, spanning the full spectrum of edge and hyperscale developments. Our exit strategy reflected the same discipline that characterized our investment approach. We monetized the position in stages, crystallizing value while maintaining upside exposure. We achieved a full exit in Q2 2026 with $604 million of proceeds from the final stake on top of $122 million from earlier sales. And the headline numbers speak for themselves. $177 million invested, $726 million of total proceeds and roughly a 30% IRR and a four times multiple of money. Now beyond the financial terms, the outcome of our EdgeConnects investment validates our right to play in digital infrastructure and data centers. We now have more than 10 years of hands-on experience in this space, and we're applying that playbook to our Atlas Edge investment. Moving to the Treasury slide, we've been proactively dealing with our 2028 and 2029 maturities. And overall, we have successfully refinanced more than $4 billion across our credit silos year-to-date. In Belgium, we are now formally separating the capital structures between Tamina and Waa, following BCA approval of Waa's Fibre Sharing Agreement with Proximus. Wire now can draw down the $5 billion fully underwritten facility to repay $2.3 billion into company loan with Telenet and a $0.4 billion Wire dividend as part of the wider debt rebalancing. Telenet will use the proceeds received to repay $2.5 billion of 2028 maturities. At Butterfield and Ziggo, we were able to refinance $1.3 billion, leaving us with no 2028 maturities and reducing 2029 maturities. We remain opportunistic here ahead of the spin-off, and as Mike noted, are on track to execute a number of deleveraging steps pre-spin. At Virgin Meteor O2, we remain opportunistic in the debt market as we look to continue to push out our 2029 maturities, but we acknowledge recent trading levels. Now, as Mike discussed, we are committed to a stable long-term capital structure of VMO2. We in Telefonica recognize that leverage is above our four to five times target, and the credit spreads are currently elevated, but we both believe that we are making the investments today that will deliver EBITDA growth to deleverage that company back towards our target range. We're investing capex at 22% of sales. It's actually 25% of sales if you exclude hardware sales, which is significantly above the average through the cycle for a telecom company to support this strategy. including significant near-term investments in the mobile and fixed networks to improve customer experience and competitiveness as well as in digital IT transformation to realize the cost reduction opportunities presented by AI. The small dividend projected to be paid to the shareholders will be reinvested into the Net Omnia transaction which is a key transaction for Virgin O2 to keep investing in its fiber plan, which we believe will further strengthen the product offering for VMO2 and help establish a credible second fiber network to compete with BT and unlock wholesale revenues. Both shareholders continue to look at inorganic opportunities to further strengthen the competitive position and financial performance of Virgin Media O2, as we did with both O2 Daisy and the Net Omnia transactions. Both shareholders recognize the importance of credit providers, which is why they're making these investments and acquisitions to support the long-term future of the company. Now, we remain on track to deliver against this strategy and will update investors as we always do in February of next year. And finally, turning to our full-year guidance for 2026, we are reconfirming all guidance metrics of BMO2, Vodafone Zigger, and Telenet, as well as our guidance for Corporate Adjusted EBITDA. and in addition, we're upgrading our full-year corporate cash target from $1.5 billion to $2 billion, supported by the EdgeConnect proceeds and wire asset by loan. And that concludes our prepared remarks for Q2 and over to you for questions.