Release Date: February 19, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Liberty Global Ltd (LBTYA, Financial) delivered over $4 billion in shareholder remuneration in 2024, demonstrating a strong commitment to shareholder value.
- The company successfully spun off its Swiss subsidiary, Sunrise, providing a $9 per share tax-free dividend to shareholders.
- Liberty Global Ltd (LBTYA) achieved 13 out of 14 financial guidance metrics, showcasing strong operational performance.
- The company has a substantial cash balance of $2.2 billion, which it plans to use for buybacks, deleveraging, and strategic investments.
- Liberty Global Ltd (LBTYA) is committed to buying back up to 10% of its shares outstanding in 2025, indicating confidence in its valuation and future prospects.
Negative Points
- Liberty Global Ltd (LBTYA) reported revenue declines in key markets such as Telenet, Virgin Media O2, and VodafoneZiggo, primarily due to customer base declines and lower handset sales.
- The company's adjusted EBITDA decreased across several markets, impacted by wage increases, higher programming costs, and increased marketing investments.
- Liberty Global Ltd (LBTYA) faces challenges in the competitive Dutch broadband market, with intense competition leading to customer losses.
- The company anticipates negative free cash flow for Telenet in 2025 due to heavy network CapEx, which could impact overall financial performance.
- Despite strategic initiatives, Liberty Global Ltd (LBTYA) shares remain significantly undervalued, with the market not fully recognizing the equity value of its telecom assets.
Q & A Highlights
Q: Can you provide an outlook for free cash flow beyond 2025, considering CapEx trends and other financial factors?
A: Michael Fries, CEO, explained that free cash flow is a key metric for Liberty Global. He noted that VMO2 and VodafoneZiggo are generating free cash flow and expect growth. In Ireland, CapEx will decrease as fiber build completes, leading to positive free cash flow. Belgium's situation is more complex due to ongoing NetCo consolidation, but the company anticipates positive free cash flow trajectories across all markets over time.
Q: How do you plan to balance increasing MSA fees from OpCos with maintaining their EBITDA and free cash flow, especially with potential IPOs or spinoffs?
A: Charles Bracken, CFO, stated that the focus is on providing valuable services that are expensive to replicate at the OpCo level, such as treasury services. The goal is to ensure the value provided is recognized while also considering cost reductions and rethinking the operating model. The approach is not just about cost allocation but also about value creation.
Q: What is the strategy for share buybacks, particularly regarding A shares versus C shares?
A: Michael Fries, CEO, mentioned that the company has not been buying shares recently but plans to resume buybacks. The decision on which share class to buy back will be dynamic and disclosed over time.
Q: How might an acceleration in the handset replacement cycle impact your mobile operations in the UK and Benelux?
A: Lutz Schüler, CEO of Virgin Media O2, noted that while O2 is a premium brand with a strong position in high-end handsets, they have not yet seen an acceleration in demand due to AI functionalities. Any increase in demand would be considered upside, but it is not currently factored into their guidance.
Q: Can you provide details on the spectrum position in the UK, especially in light of the Vodafone 3 transaction?
A: Lutz Schüler, CEO of Virgin Media O2, explained that while specific details on spectrum and pricing cannot be disclosed, the transaction will significantly improve their spectrum position relative to market share. This strengthens their long-term relationship with Sky and positions them well in the market.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
