Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Liberty Global’s Fourth Quarter 2024 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 expressed written consent of Liberty Global is strictly prohibited. At this time all participants are in a listen-only mode. Today’s formal presentation materials can be found under the Investor Relations section of Liberty Global’s website at libertyglobal.com. After today’s formal presentation, instructions will be given for a question-and-answer session. Page 2 of the slides details the company’s safe harbor statement regarding forward-looking statements. Today’s presentation may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including the company’s expectations with respect to its outlook and future growth prospects and other information and statements that are not historical facts. 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 any conditions on which any such statement is based. I would now like to turn the call over to Mr. Mike Fries.

All right, thank you and welcome everyone to our year-end investor call. It’s great to have you join us today. I’ve got the core team on the line as usual, so after prepared remarks we’ll get right to your questions. And as a reminder, we always post a slide deck, which has really good data and follows the narrative that Charlie and I will deliver right now. So I’m going to start on Slide 3. Most of you know who we are and you know what we do, but it’s always good, I think, to start with the big picture, especially now. 12 months ago on this call we presented a plan to generate and importantly deliver value to our shareholders. That’s exactly what we did in 2024, with over $4 billion in shareholder remuneration delivered on a market cap of $7 billion just 12 months ago. And as we’ll talk about today, this remains our primary focus. So to kick us off, I think the chart here on this slide is the simplest, least complex way to understand the business of Liberty Global today. We consider ourselves to be a dynamic team of veteran operators and investors committed to generating and delivering shareholder value through the strategic management of three platforms. Liberty Telecom consists of our four remaining European telcos, you know these well in the UK, Ireland, Belgium and the Netherlands, serving 80 million fixed and mobile connections and generating $22 billion of aggregate revenue and around $8 billion of aggregate EBITDA. I’ll talk about our strategic plans for growing and ultimately crystallizing the value of these fixed mobile champions in just a moment. Liberty Growth represents our $3.1 billion portfolio of investments in technology, media, sports and infrastructure. We’ve grown this business substantially over the last five…

Thanks, Mike. The next slide sets out a summary of the quarterly revenue and EBITDA performance in our key markets. Telenet reported a revenue decline of 0.4% year-on-year in Q4, primarily driven by a decline in customers, which was partially offset by the 3.5% price rise in June and the continued shift towards higher-tier broadband plans. Virgin Media O2 reported a revenue decline of 2.8%, excluding the impact of nexfibre construction, driven by decreases in mobile revenue due to lower handset sales and B2B revenue. Encouragingly, underlying mobile service revenues was stable and residential fixed revenues increased in the year. VodafoneZiggo reported a revenue decline of 2.5% in Q4 primarily due to a decline in the consumer fixed customer base, lower out-of-bundle revenue and a decrease in low-margin handset sales. This was partially offset by growth in Ziggo Sport Totaal subscribers and continued growth in B2B revenue. Moving on to our Q4 adjusted EBITDA performance, Telenet’s adjusted EBITDA decreased 3.9% in Q4 driven by wage increases and higher programming costs. And VMO2’s adjusted EBITDA in Q4 decreased 5.9%, excluding the impact of nexfibre construction. In addition to the revenue impacts, the decrease was impacted by increased marketing investments on the nexfibre footprint and reduced year-on-year growth in the B2B segment. VodafoneZiggo reported an adjusted EBITDA decrease of 4.8% driven by the decrease in revenue, higher programming costs related to the UEFA broadcast, wage increases relating to the collective labor agreement and an $8 million one-off impact following the sale of certain handset receivables during the quarter. Turning to our next slide, we continue to remain committed with a strong capital allocation model. In terms of cash generation, we surpassed free cash flow guidance at Telenet and achieved our target for Liberty Services and Corporate adjusted EBITDA less P&E additions. Virgin…

[Operator Instructions] Our first question comes from the line of Steve Malcolm with Redburn. Your line is now open.

Yes, hi there. I hope you can hear me guys. Yes, one question is tricky. Yes, I just wanted to sort of a general free cash flow question beyond 2025. I don’t want you to guide on EBITDA beyond this year. I know you can’t group wise, but it feels like it’s another transition year for Liberty. We’ve had a few this year feels particularly transitional but as you look into sort of 2026 and beyond, maybe just give us a flavor of your outlook for CapEx across the major regions, you talked about Belgium that’s going to be down I guess, Ireland will be down as well where we are on 5G CapEx in the UK, some quite big moving parts on tax as well, obviously demand repatriation tax on that ends you’ve done a lot of refinancing or the interest cost outlook is beyond 2026. It would be very helpful to get a sort of sense of direction of free cash flow beyond this year below the EBITDA line. If you can sort of throw a bit of light and that’d be very helpful. Thanks a lot.

Yes. Thanks, Steve. Listen, as I said in my remarks, and by the way, we appreciate you being so patient this morning, but at year-end, we have a lot to say. I mentioned that free cash flow, as you’re indicating is the key metric here that we’re driving towards in every market. I’m not going to go one by one by one, but obviously Charlie showed you in his guidance that we’re generating free cash at VMO2 and VodafoneZiggo as we have in the past and as we expect to in the future. So I think in those two instances, clearly, with – and especially with the NetCo separation in the UK, we expect that free cash flow is a critical metric for us and one that we anticipate growing. In the case of Belgium and Ireland, I mentioned that Ireland is coming through its CapEx funnel, if you will, and ought to be finished largely in the early part of next year with its fiber build and can’t give you the numbers, but obviously, we expect that a marginally negative free cash flow figure this year becomes a meaningful free cash flow figure over time. So that trajectory mirrors more of what you’re seeing more broadly in the European telecom sector, which is reduced CapEx over time that should generate free cash flow. So those three assets I think are pretty clear, or should be pretty clear. Belgium, a little more complicated because there we’re still consolidating the NetCo and that NetCo has at least €2 billion in front of it, some of which we financed, some of which are partner financed, some of which will be debt financed. And what we haven’t yet done there is really engage the market or sell a stake, to be more blunt about it, in the wire asset. There may come a time, will come a time where that is the right move. Wire is arguably going to be the most interesting, attractive infrastructure asset in Europe, given what we’re trying to do there with utilization rates at 80% or more in a big chunk of the network. So we fully anticipate that that asset could either be deconsolidated or certainly reflect a value contribution to our value creation narrative that’s substantial and over time, reduce the focus on CapEx and really put the attention back on ServeCo. And the ServeCo in Belgium has some 5G CapEx, which we’ve discussed, and others but that trajectory also looks positive. So I think I’m answering your question more indirectly than directly, but I’d say market by market, we absolutely believe the free cash flow trajectory of these businesses looks good. That’s why we’re investing the CapEx. That’s why we’re being creative as to how we invest the CapEx. That’s why we’re establishing NetCos in two instances. I think you’re going to like what you see longer-term.

Thank you for your question, Steve. Our next question comes from the line of Joshua Mills with BNP Paribas. Your line is now open.

Hi guys. I’ll use my one question to go into a bit more detail on Slide 14, please. If I understand this right, I think what you’re saying to us is, going forward, you want to illustrate the value of the central services business. Part of the way you’re going to do that is by increasing the MSA fees and trying to get more money from the OpCo levels. I guess my question is how do you think about the balance there? Because on the one hand, yes, you’ll potentially neutralize this negative cash drag, which is clearly a headwind from a valuation perspective, but it’s also going to reduce the EBITDA and the free cash flow at those businesses, which in some cases are already under pressure. And you’re talking about spinning off or doing IPOs within the next few years. So maybe a couple of commentaries on how you get that balance right, so that you can still get what you deem to be fair value for those businesses when they come to market whilst upstreaming cash in an appropriate way to Liberty would be helpful. And then maybe just part B to that question, are we talking here mainly about the businesses within your 100% ownership, or have you had the conversations with Telefônica or VMO2 and VodafoneZiggo that they should be paying you more effectively from the JV level up to Liberty because of the services you provide. Thanks.

Mike, are you there?

Yes. Sorry, I was on mute. That was a great question, Josh. I’m going to let Charlie address most of it. I just want to say quickly up front that while we definitely mentioned MSA’s at the outset as to a source of net corporate spend reduction, there is an additional source, which is of course just simply reducing costs. And I would not be surprised if we take a good hard look at the operating model and the expenses and size and scale of the corporate group at the same time. So it’s not simply laying off costs to OpCos, as you point out, who are already having their own issues and quite frankly, which we want to maximize the value of, it’s also rethinking the operating model as we move forward. So you should expect both things to occur. Charlie, you want to address the MSA question?

Yes. So I think summarize is a good test case. What services make sense to scale and where we have expertise that is expensive to replicate at the OpCos and what doesn’t. I’m not going to go through each of the key levers I tried in my remarks to do that. But to give you an example, treasury would be a good example. Right or wrong, we think we have a very, very good treasury who are well experienced on managing debt facilities and bank balance sheets. They just for example did actually a very good refinancing for Sunrise since its spin, which maturity reduced the cost of its capital and extended its average life. Now it doesn’t make sense for Sunrise to build its own treasury for less regular transactions and also they’d find it hard to replicate the level of expertise we have. So in getting that balance right, that is the kind of thing we’re trying to get right. I think it’s also worth pointing out that we have obviously charged these companies for many years MSA’s, but they’ve always been below the EBITDA line. There’s nothing new going on here. What we’re now when we spin them is making explicit what proportion of that should be above the line. Just to confirm, what I’m talking about here is specifically related to those corporate advisory services. Liberty Tech and indeed Liberty Blume are genuine arm’s length businesses where they win or lose according to third-party contracts. And in the case for example of Zayo, we were competitive not to win from a third-party. And the same thing applies with each of these OpCos.

On your question around JVs, we do collect management fees, MSA fees from VMO2 that was established at the outset along with TEF and Charlie is working very hard at on our growth portfolio where we are providing meaningful services to controlled and minority owned positions there. So this isn’t an extraction exercise, this is a value creation exercise. But it’s also ensuring that the extraordinary value we think we provide is being properly recognized. But also, as I’ll repeat, we’ll look at the operating model as well. This is not just offsetting, this is going to be rethinking the operating model as the shape of the business changes.

Thank you for your question, Joshua. Our next question comes from the line of Carl Murdock-Smith with Citigroup. Your line is now open.

That’s great. Thank you very much. I’ll ask the A shares versus C shares question please, regarding the buyback. Just an update on how you’re thinking around that. All of the buyback last year I think was done on the C line, despite it being more expensive and now having lower liquidity than the A shares. So I was just wondering on what your thoughts are around the buyback going forward and in terms of which line to do it on. Thank you.

Yes. Thanks, Carl. Listen, I think we are – we do this on a relatively dynamic basis, so I don’t know that we have at this very moment a grade we’re willing to disclose. I will say we haven’t been buying any stock through the course of this year. We did not have a 10b5-1 plan in place at year-end. So through February 19, we haven’t bought a single share. But we anticipate obviously doing that. And as you’ll see what we do as time goes by as we disclose it. But I’m not going to give you the expectation at this point.

Thank you for your question, Carl. Our next question comes from the line of Matthew Harrigan with the Benchmark Company. Your line is now open.

Thank you. Thank you. There is a sense at CES this year and some other forms that you get an acceleration in the handset replacement cycle. Right now it’s about four years. It’s been the longest it’s ever been. Some of that could be prompted by AI functionality of the phones beyond the facial recognition and transcription. Maybe it’s better integrated, so you don’t have to fumble around with an app. How do you think an increase in switching activity on the high end of the market could affect your mobile operations in the UK and Benelux? What are the opportunities there and would you expect to gain share if that finally happened? Obviously, everyone on this call is well aware that 5G in Europe has substantially lagged that in the U.S., but it does feel like it could be an interesting propellant for your business. Thanks for taking the question.

Thanks, Matt. Lutz, you want to address that in the UK? Lutz Schüler: Yes.

You might be on mute. Lutz Schüler: Can you hear me? Hello?

Yes. Lutz Schüler: Yes. Okay. So as you rightly point out, Matt, right, O2 has really the majority of premium customers. So we are the home of iPhone and also we have recently launched the flagship innovation from Samsung. But with all of it, we don’t see any acceleration based on AI on these demand for these kind of phones yet. So therefore, we are very cautious factoring this in the future. I mean, if your forecast is right, it’s upside, but it’s not really in our guidance. So we don’t see that. But I agree with your question and hopefully, you’re right.

Thank you for your question, Matthew. Our next question comes from the line of Ulrich Rathe with Bernstein Societe Generale Group. Your line is now open.

Thank you very much. Thank you so much. I have clarification questions on the UK. What was the nature of that working capital benefit in the fourth quarter that’s now weighing in a way sort of on the year-on-year trends for free cash flow? And also what is the nature of these prostate matters in terms of the acquisition ARPU? I think you mentioned giffgaff as a particular driver, which suggests that this could be ARPU dilutive, this recovery of the net adds. And if I may, just to clarify, one thing that was left open in the guidance was the nexfibre impact, which has been either way in the past. I mean, how do you actually expect that to unfold in 2025 in the UK? Thank you so much.

Thanks. Charlie, you want to take the working capital question and maybe the nexfibre question and then Lutz, you can handle the postpaid ARPU.

Yes. So on the working capital, just to remind you, we try – we believe telecom companies run their working capital broadly flat, because our customer cycle, broader the customer pays us real time. And to the extent to which your costs stay flat, you broadly have a payable cycle that doesn’t really finance. Now within that, there are obviously seasonal variations. Q4 variation makes a big difference. And we do do some optimization of it, for example, around realizing a much lower cost of capital by what they call factoring receivables. We do handset receivables as many people do. And in the case of our payables, we try and take the pressure off our suppliers by doing what’s called vendor financing, which I think we’ve talked about over the years. I would characterize the 2024 swing as within broadly flat, because it’s a big company, $10 billion of revenue, but it was slightly positive there. And I think what we’ve suggested in 2025 is that we are just reverting back to a pure flat number. And to be honest with you, the only certainty is it will be plus or minus around that. It could be a bit more positive, it could be slightly negative. And it will depend a lot on the seasonal nature and also the timing of certain Cape, et cetera. Do you want to take the…

Nexfibre on guidance, Charlie?

So what was the question on nexfibre? Because I beg your pardon. Lutz Schüler: I can do this. I mean, we are not guiding nexfibre. Yes, so maybe then I start with nexfibre question. I mean, as you know, we are not publicly differentiating in our net add growth between our existing coverage and nexfibre. So therefore, you get the blended number. I think underlying, of course, it shouldn’t be a surprise for you that in the BAU coverage, we are losing customers, small amount, but we are losing it. And in nexfibre, we are growing because we are penetrating a new network. Now what I can tell you is that our losses in our existing coverage are significant less to other big market players. This is what we believe. But aggressive org nets, yes, with very aggressive prices are getting some customers also away from us. The question is, for your models, what do you factor in? How long will this last? How sustainable is this? On the postpaid question, so first, I think it’s very important to understand that we’ve taken a conscious decision to approach the market in postpaid, so in pay monthly with two brands, O2 and giffgaff. So therefore, deliberately, we are not lowering prices or not too much because this is our premium brand. And if we are going in acquisition too aggressive, we also would offer that to our existing base. So therefore, there are two markets we are playing in, the classical MNO market, this is O2, and here we look clearly more after ARPU than after volume. Giffgaff is the volume brand. Here, we look more after volume and less after ARPU. And if you edit those up, you can see on Page 8 of the deck that the postpaid ARPU in Q4 has been shrinking minus 6%, but the – a year ago, it was a tough comparator. And as you know, we are doing the price rise in Q1, and I think you know the level of price rise we are doing. So we have a much less tough previous year comparator out of price rise last year, and the price rises are quite interesting for us. So therefore, going forward, we are pretty confident that, right, ultimately what we are interested in is to grow mobile service revenue out of P times Q out of both brands, and we are confident in them.

Thanks, Lutz.

Thank you for your question, Ulrich. Our next question comes from the line of David Wright with Bank of America. Your line is now open.

Yes. Thank you and thank you for taking my calls. I’m just going to come back to Slide 6, your sum of the parts walk, which I think there’s an element of – there’s a lot of debate around this, of course, if only the fact that obviously the market is not agreeing and thus your derivation of the undervalued assets. I guess my question is, is UK related, but as a derivative of this, which is you talk about there being zero equity value for the telecom assets. But obviously, what we are observing in telecom, I think we know very clearly is that the equity infrastructure assets are valued at a much higher multiple than the circle assets. So if you do go down the route in the UK or in Belgium of selling off infrastructure within the NetCos or Wire or whoever it may be, is it not the case that the value of the mix of the telecom asset will be on a lower EBITDA multiple, because you’ve got less infrastructure and more ServCo. And that’s coming to I guess my key question here is what potential equity…

Thank you for your question.

David, did we lose you? Well, sorry, we lost the last little bit of your question, David, but I’ll try to riff off of what I think you’re getting at. Look, there’s lots of ways of answering that. I would say, number one, whether it’s one turn on the integrated EBITDA or it’s three turns on the NetCo and half a turn on the ServCo, there’s no question that we’re trading at the value of our debt. And that’s where Sunrise was trading as well as an integrated operator. If you look at the telco average across Europe, which is a mix of NetCo, ServCo’s integrated companies at 6.5%, does it seem extraordinary to us to think that getting people to appreciate the value of our infrastructure, the value of our free cash flow potential over time is worthy of a higher multiple. And by the way, I’m not going to wait around for you to get there. Meaning, if the market doesn’t appreciate it, we’ll just have to prove it. And that’s really the difference. The strategic pivot 12 months ago was we ain’t waiting around anymore for you to figure it out. We’re just going to prove it. And we did that with Sunrise. So to me, it’s not a question of will it or won’t it. We’ll demonstrate that it’s there. We’ll show you with transactions, with strategic opportunities that it’s there. And people who stick around will get the benefit of it. I mean, we certainly want research analysts, yourself included, to see the value in what we’re doing. We want you to appreciate the free cash flow potential of our businesses. We want you to understand the network infrastructure strategies. That’s no question. But we know that over time, a combination of these things will absolutely be reflected in the value of these telecom businesses. And that if I went to my partners, if I went to an investment bank to list something, if I went to a private equity shop to sell it, they’re not giving me zero, all right. They’re not giving me zero. So the fact that we think it’s zero, I think is the starting point and we can debate whether it’s one turn, two turns, three turns, whether it’s free cash flow dividend yield strategy or network infrastructure premium multiple strategy or a combination of all of those. But we’re convinced that over this 24 to 36 month timeframe, we’re going to demonstrate that. And that is what you have to believe to buy this stock. That’s the bottom line. Whether you get there or other analysts get there, I don’t really care. We’re going to get there and it will be delivered through external independent transactions or opportunities as opposed to analytical research. But Dave, we didn’t get the end part of your question, but I hope that’s responsive.

Thank you for your question, David. Our final question comes from the line of James Ratzer with New Street Research. Your line is now open.

Yes, Mike, good morning. Thanks very much for taking the question. So the area I was interested in focusing on today, please, was just the spectrum position that you have in the UK asset with Virgin Media. So obviously with the Vodafone-Three transaction, they build a pretty dominant spectrum position, but to offset that, you will be buying some spectrum from them to strengthen your own position. So I was wondering if you can give us some more insight into the moving parts here. Can you let us know, for example, how much spectrum you will be purchasing? Can you give us some steer on what the cost of that will be? Will we see the cost of that in 2025? Or is it going to be phased in over a few years? And then with this new spectrum position, how secure do you feel about, for example, the Sky, MVNO on your network and whether they could be lured across with a stronger spectrum position at Vodafone-Three? When does that contract with Sky next come up for renewal? Thank you.

Yes, lots of really good questions there. I’ll let Lutz dig in. I don’t believe we disclosed much in the way of detail, Lutz, on price and megahertz spectrum and the bands we’re buying, but I’ll let you address that as well as the Sky contract length. Lutz Schüler: Yes, thank you. Yes, James. As Mike said, right, we can’t really disclose neither the concrete spectrum nor the price. The deal is also not closed on Vodafone-Three yet. I think the spectrum will be disclosed by Ofcom, if I’m not mistaken, after the deal has been closed. And also to share with you the price, we need agreement from our partners there. So unfortunately, we cannot say that. I think what I can say is, you know that our market share is significantly higher today compared to the spectrum we hold, and we fix that with this kind of deal. So we put ourselves in a healthy position. I also don’t want and I’m not allowed to disclose with you the term of the deal with Sky. But what I can tell you is that the spectrum we are sitting on, the investments we are doing in our mobile network, we have done, especially in 2024, which was significantly higher and we will do going forward, puts us in the position to really stay in a long-term relationship with Sky.

Thanks, Lutz. I think that’s time, operator, or was there one more?

No, sir. That concludes today’s question-and-answer session. I would now like to pass the call back to Mr. Fries.

Yes. Fries here. Thanks, everybody. And David, sorry to get animated on your question. I didn’t get the end part of it. So I hope we were responsive. But listen, I appreciate you joining us a little longer remarks today, but I think appropriate given year end. And as far as we’re concerned, we think 2024 was a standout year. We hit 13 to 14 guidance metrics on Sunrise and more or less achieve all the strategic goals. And we’re setting ourselves up for an equally ambitious 2025 and beyond. So we feel like, this is nothing but upside here and of course the buyback will help us benefit from that and you hopefully over time. So we’re excited about where we’re heading and we always appreciate your questions and your support and where to find us. So thanks everybody.

Ladies and gentlemen, this concludes Liberty Global’s fourth quarter 2024 investor call. As a reminder, a replay of the call will be available in the Investor Relations section of Liberty Global’s website. You can also find a copy of today’s presentation materials. Thank you and have a wonderful day.