Good morning, ladies and gentlemen. And thank you for standing by. Welcome to the Liberty Global's Full Year 2023 Results and Strategic Update Investor Call. This call and the associated webcast are the property of Liberty Global and any redistribution, retransmission, a re-broadcast 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 a question-and-answer session. Page 2 of the slides details the Company’s Safe Harbor statements 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 in the conditions on which any such statement is based. I would now like to turn the call over to Mr. Fries.

Thanks, operator, and welcome, everyone, to our Q4 results call. As promised, this will be a slightly longer session today with prepared remarks covering first our results and then followed by a brief strategy update that we think you'll find pretty interesting. About 20 or so slides in total will bear with us. I promise we will leave plenty of time for questions as we scheduled this call for 90 minutes. Now as usual, I'm joined by essentially my entire leadership team, so we should be prepared to answer pretty much any question you may have. And with that, I'll get started on Slide 4, with 3 key takeaways from our fourth quarter and fiscal year 2023 results. Message number one is that overall, we feel good about our operating performance despite the macro and competitive headwinds we've been managing through this past year. Every market was focused on commercial and marketing initiatives that reinvigorated growth in the fourth quarter as we added 80,000 postpaid mobile subs and saw improved broadband performance in Switzerland, Belgium and Holland. In every market, we continue to focus on the right balance between value and volume with price adjustments supporting stable to growing revenues. Financially, we saw a strong Q4 with accelerated EBITDA at BMO 2 and Sunrise, which reported nearly 8% and 6% growth, respectively. Importantly, this enabled us to deliver on all of our OpCo guidance metrics for the full year and to actually exceed our original distributable cash flow guidance when you exclude the unexpected tax payment in Q4. And then lastly, we remain ahead of plan on synergy execution with both the U.K. and Switzerland, around two third of the way through their respective targets. More on all of this as we move through the slides, I promise. The last…

Thanks, Mike. Turning to our 2023 key financials. Across our companies, we saw stable to growing revenues across our core markets. In line with the revised guidance, VMO 2 delivered stable revenue in 2023, despite continued fixed pressures and weak handset sales. Underlying service revenue trends remain positive. Vodafone Ziggo delivered 1% revenue growth in 2023, driven by a strong Q4 performance, supported by a 10% level price rise in October. And Telenet delivered 1% revenue growth in 2023, supported by their price rise in June and a return to growth in Q4. Sunrise that has stable revenue in 2023 despite the headwinds resulting from the migration of the EPC back book onto the Sunrise brand. Growth of 2.5% in Q4 was primarily driven by mobile and B2B. Turning to EBITDA. Virgin Media met their full year guidance here as well, delivering 3.8% rebased adjusted EBITDA growth for full year '23. Adjusted EBITDA growth was primarily supported by strong execution on synergies and as the business tracks ahead of their original plan, although this did result in higher cost to capture in the year than we originally projected. Vodafone Ziggo met the full year guidance of low mid-single-digit decline as the business works through the extraordinary cost inflation impacts that we've been highlighting since the beginning of the year, particularly in energy. Telenet delivered stable EBITDA for the year and achieved guidance despite an IT issue that impacted customer services from Q2. And finally, Sunrise posted strong adjusted EBITDA growth in Q4 and in full year 2023, came in towards the top of their guidance range, supported by good execution of the merger synergies and the in-year price rise. On the next slide is a breakdown of our free cash flow profile for 2023 by operating company. We ended the…

Thanks, Charlie, and nice job. So that concludes our prepared remarks on our Q4 and 2023 results, which means we're going to transition now to our strategy update. Hopefully, you've got a copy of these slides in front of you as well because there's quite a bit of information to cover. And I'm on the first slide, Slide 14, I believe, which summarizes pretty much everything we're going to talk about today and beginning at the top with a statement that I believe captures our main message to you here, clearly and concisely, which is moving forward, our strategy will be focused on maximizing the inherent value of our core assets, which we believe is substantial and importantly, delivering that value to shareholders over time. So how does that differ from what we've been doing? The clear pivot here is in the commitment to take the financial and strategic steps necessary to deliver that value to you, which will come in 3 ways: first, we will continue to focus on shrinking our equities so long as our stock trade at a sizable discount; but second, in certain circumstances, we intend to actually put that value in your hands through dividends, spin-offs, tracking stocks; and third, as we execute on this plan, we also expect to deliver that value in the form of a higher share price. Now you might be asking, why now? Well, we've been working towards this moment for some time. For starters, we've completely repositioned our portfolio of operating businesses over the last six or seven years. We were among the first to see the importance of fixed mobile convergence in Europe, which led us to sell more than $25 billion in cable assets over that time frame at an average of 11x EBITDA. And acquire or…

Thanks, Mike. Turning to the next slide on capital allocation. Firstly, I wanted to start with a high-level view of our historic capital allocation, which has been focused on driving shareholder value through buybacks, M&A and modest investments into ventures. Taking the period 2017 to the end of 2023, which started with the sale of Germany and Central Eastern Europe to Vodafone, we generated around $14 billion in net after-tax proceeds from asset sales. And alongside that, primarily from distributable cash flow at our FMC champions, we distributed to the parent company over $9 billion of distributable cash flow. As you can see in the bottom half, we have put this capital to work by spending $14 billion buying back our stock, reducing the number of shares outstanding by around 60% since January 2017, $4 billion in M&A transactions, primarily invested in the acquisition of Sunrise. $2 billion in our ventures portfolio, in particular, fast-growing sectors such as infrastructure, where we hope to create new unicorn assets and retaining around $4 billion in cash. In addition to our current cash balance of $3.7 billion, we also have $900 million of listed equity securities as well as $2.3 billion of venture assets where we're on track to make disposals to support our $500 million to $1 billion target of noncore asset disposals by the end of this year, which gives us potential liquidity to allocate of just under $7 billion. Despite investing in the transition of our mobile networks to 5G and fiber capacity in many of our markets, each of our key FMCs continue to generate upstreamable cash flow, which will provide us with further capital to allocate. Now in allocating this capital in addition to using up to $1.7 billion to facilitate the spin of Sunrise. We are targeting…

Thanks, Charlie. And now that concludes our prepared remarks for this brief strategy update. I'm just going to close with 5 key takeaways. And these are the things you want to focus on as you digest this information, I think. First of all, this is a clear pivot in our strategy. That is clear. We realize that the time is right to not only create value, but to distribute that value to shareholders if and when we can. Oh, and this is not a new strategy. John and the Liberty companies have been practicing this for decades. Liberty Global itself was spun off from Liberty Media. So this is a well-known path, and we're excited to pursue it. Second, the spin-off of Sunrise, together with our buyback commitment reflects a significant commitment to investor returns. And I mentioned some moment ago in my remarks, this will be a record year for shareholder remuneration at a time when our share price reflects perhaps its largest discount, we expect to see that discount shrink. Third, this is unlikely to be our last equity capital markets transaction or unique value creation event. Each of our FMC operations are positioned well for growth for strategic moves asset monetization and at the right time for potential equity market or financing transactions that would be value accretive. The pipeline is full. That's the main point. And fourth, our ventures portfolio is not a hobby. Many of these assets are significant in their own right and are already there or on their way to becoming billion or multibillion dollar unicorns themselves. These investments support our strategic and technology plans include themselves be assets that we consider distributing or sharing with investors. And then finally, we have significant cash and liquidity to implement the strategic road map we've just outlined. And just as importantly, we have the ability to replenish that liquidity through both upstream free cash flow from our operating companies and asset sales as and when needed. Needless to say, we are extremely excited about the future. I want to thank you for your patience today. I know it's been a long call, and I know we covered a lot of ground, but we really look forward to your questions. And operator, we are ready to go.

[Operator Instructions] The first question comes from the line of Steve Malcolm with Redburn Atlantic.

Yes. Good afternoon, guys, and thanks for putting up the question. It's hard to just ask one. So probably on about 17 parts, but let's kind of go to the U.K. It's obviously sort of hinging on the NetCo Serco separation is your fiber trajectory. You're up to 4 million homes in the U.K. Can you just sort of give us a sense of what the mix of that between nexfibre and the business as usual footprint is? And looking forward, just help us understand the moving parts of your CapEx guidance looks a little higher than I to this year to 2.2% for '24, but you talked about it falling off in future years. How do we think about the fiber upgrade, the 5G investment? And also maybe just touch on cost to capture because it looks like you look to get the GBP 700 million by the end of this year, whether that disappears from '25. So a few sorts of questions wrapped into U.K. CapEx and cost of capital there in fiber. Hopefully, you can help us out. Thanks.

Yes, I think it's pretty straightforward. I don't know whether we've disclosed this much detail, but I'll go ahead and do it. I mean if you look at the 4 million homes, our fiber up or our upgrade program represents about 1.5 million of those at this point. Nexfiber, about $800,000, and the balance are homes that we built through our Lightning program, a slightly different technology, fiber technology, but nonetheless, fiber, about $1.9 million. And that, of course, that program going into '24, the Lightning program ceases to really be no more upgrades via lightning as such. But the nexfibre plan, which has, I think, been publicized, should build 1 million plus and fiber up itself, which we probably haven't publicized, we'll build more than it built last year. So $4 million will go to now $6 million, $6.5 million, but the breakdown is, as I just described it, hopefully, that helps. The vast majority of that is in next Fiber, which, of course, is our footprint. The CapEx that you referenced includes only the CapEx to upgrade the roughly GBP 100 a home, the homes that we would be continuing to upgrade on the 16 million home footprint. Is that clear?

Yes, what run rate are you on Project Mustang now, Mike? I mean are you -- in terms of 100,000 premises per quarter and [inaudible]

Yes. Well, we did -- I think we did roughly -- yes, we did 800,000 or 900,000, I believe, in '23, and we should do more than that in '24.

Okay. And just on the sort of overall CapEx picture in the U.K., you've got lots of things going on. Help us understand how we think about '24, '25 and '26, 5G, fiber and -- fibers go?

Yes. I'm going to get, yes, Lutz is on, so I'll let him dive into it, but I think '24 includes, obviously, what I just described as well as fair amount of mobile CapEx to advance our 5G plans. And our sense is -- well, I'll let Lutz handle it in terms of where we are in peak CapEx intensity. Lutz, are you on? Lutz Schüler: I'm on. Hi, Mike. Steve. Can you hear me?

Yes, we hear you fine. Lutz Schüler: Sorry, sorry, I got the question. Sorry for that. So I mean, obviously, we don't give a guidance on CapEx longer than the year '24. But Steve, broadly, you don't see any material difference in the upcoming years, right? So we are ramping fiber up, as Mike said, I think we have done close to 1 million in '23, and we will do a bit more this year. And I think the number is about GBP 100 per home. And then we keep investing into 5G. And -- but this is getting cheaper because we have the shared rural networks with Vodafone and 3. So don't expect a massive peak in the CapEx going forward. Hope that helps.

The next question comes from the line of Maurice Patrick with Barclays.

Yes, thanks for taking the questions and the presentation earlier. Just one question really on the U.K. Nikko side. I mean, in the slides, you talk about the U.K. NetCo being vehicles or M&A, I think, of altnets. In the past, Mike, you've talked I think about the acquisition of altnets being more outside the current footprint rather than inside legacy footprint. So just curious to your thoughts in terms of -- is it NetCo buying out net? Is it nexfibre doing it? And is nexfibre actually the overbuilding outlets at the moment?

Yes. So nexfibre has its own program and is building on basis where it sees the best opportunities off the Virgin footprint. So that program will continue as it is. It won't be impacted at all by the creation of this U.K. NetCo. And nexfibre itself might look at altnet acquisitions as it did more recently in 2023 as would the U.K. net go. And so I think you're correct to say that on footprint altnet have less value to us, but they don't have 0 value. And we're not clear on where exactly the altnet market will go. Nobody is. But it's nice to have two vehicles for potential consolidation, a very sizable and substantial one that has a significant amount of EBITDA day 1 in terms of having customers from BMO 2 on the U.K. NetCo day 1 and has financing capability day on that's a nice thing to have as well as the nexfibre -- fully fans nexfibre JV. So now we think we're just increasing our opportunities to be a consolidator if and when appropriate versus confusing or reducing those opportunities is actually getting better. I hope that's clear.

Great. And the extent to which nexfibre is actually the building outlets currently?

I don't know that we've been public on that, I may have a view here to the next or Board of where exactly we're building. But I think you should assume, since there's quite a bit of [inaudible] that in some instances, we are, in fact, overbuilding altnets if they're in the path that we've chosen. But I'm not -- I don't know if we're giving anybody an exact number on that. Lutz Schüler: I mean I can help. It's very, very minor. Yes. I mean we are doing the rollout for nexfibre. And obviously, the plan is to overbuild as less as possible. And so far, we have very, very little overbuilt. I don't want to tell the number, but it's really more immaterial.

The next question comes from the line of Robert Grindle with Deutsche Bank.

Yes, thank you. Congratulations on all the initiatives. My question would be around the Benelux that you left a lot of cash in Telenet, the best part of $1 billion and raise new finance to repay the holdco debt for the minorities rather than dividend up the money. Is the cash left in there buy the bit of VODZiggo you don't own or even the bit you do own from the parent company? And related to that is, in a nutshell, within what you've announced today, what's easier because you're now in Bermuda? Is it more on the approval side of things or something else?

Yes. Thanks. Charlie, you can chime in here. But the cash that was residing in Telenet has been upstreamed for all intents and purposes. So it can easily be downstreamed again. It's 100% of entity. But today, that cash is upstream. So the cash I think we've been clear about the current leverage and net debt position of selling it. So that -- of course, we can do what we want with that over time.

Just to clarify that -- just to clarify that, yes. Sorry, just to clarify, as Mike is quite right, it's been -- it's now part of the corporate cash, but there is still some cash in Belgium for the time being, just waiting on a tax ruling. But Mike is absolutely right, that it's essentially corporate cash, but it may be located at a Belgian bank account and therefore, contributes to the net debt position of tone. Sorry, Mike, I didn't mean to interrupt.

No, fine, no. That's good clarification. And then the -- what was the second question, Robert?

Bermuda, what's -- a lot of these things you've announced today might be you could have done anyway, but I'm just wondering what -- is Bermuda really help and other things you might be considering?

Sure. The implementation of the Sunrise spin-off will require a shareholder vote. As such, the shareholder vote will be conducted consistent with Bermuda governance, not U.K. governance. We think that makes it a simpler, more appropriately run process is just 1 big example. I think that's probably the biggest example. And so without getting into detail because we've gone through the exhaustive benefits. That's just 1 example of where we think we can achieve an important and strategic transaction for shareholders in a straightforward and predictable way.

The next question comes from the line of David Wright with Bank of America Merrill Lynch.

Thank you very much. Hi, guys. Yes, a lot to digest here. So my question, if I'm allowed just 1 is on, again, the Benelux holdco. So there could potentially be synergies. And I think 1 we've discussed in the past, this potential option, there was always not a fiscal synergy potential with quite significant cash tax now paid to Telnet, maybe some opportunity to migrate noses against that. So I guess my question is, if there is fiscal synergy, how does that feed up to Vodafone as the joint venture or the half? How would they benefit from that fiscal synergy that could potentially be given from a sort of Vodafone Ziggo to a Telenet? Or maybe I've misunderstood that. That would be great.

Yes. I'll let Charlie speak to the synergies more specifically, but I'll say from the Vodafone perspective, you could argue this is a nonevent. Meaning we're entitled to move our 50% interest into any 100% owned company we choose. And rather than own our stake directly in Vodafone Ziggo, we will own it through this holding company, Liberty Global Benelux. In fact, we can even raise capital in this company to a limited degree without their authority or approval to a limited degree. And what happens upstairs, if you will, in this holding company is a nonevent for them, it's irrelevant. If we discover synergies between the entities, it would have to be synergies that are realized without a consolidation of the 2 entities, but rather just 1 that we're generating through our single focus on management or some other financial benefits we can derive. I think you could argue that from Vodafone's perspective, this is a nonevent. They are aware of it. They certainly are looking at what it might mean to them and strategically inorganically. But at this point, it's really what we're doing with our interests and the opportunities we think it creates for us to do the things I described from the point of view of either synergies or financings or capital raising or other things. So Charlie, do you want to talk about synergies?

Yes, sure. And I think there were just two broad points. One is clearly for the Telenet, they want financing synergies, clearly the Telenet group would now benefit from the equity body that is now being contributed from a 50% stake. I think the other issue is that it does give you an opportunity to do additional tax optimization, which would allow us to increased basis as they call it. But it's probably so which we can go into offline on the more specifics, which is there are opportunities for incremental tax planning.

And can I just ask, have you discussed with Vodafone, whether they would consider sort of blending their stake into a merged entity? Or is that even something that we could think about if those synergies start to really accrue?

Well, I'm not going to comment on what we have or haven't discussed with them, but it's certainly theoretically possible, right?

The next question comes from the line of Carl Murdock-Smith with Berenberg.

Hi, thank you. I wanted to ask about price increases in the U.K. So on Slide 7, you mentioned that price rises are embedded into contracts. One thing you'll have to navigate this year in the U.K. is Ofcom's proposed ban on inflation-linked pricing. I wanted to ask how you're thinking about that. Obviously, BT has signaled its planned approach are you likely to follow suit with a contractualized absolute price increase? Or would you consider reverting to your old approach of ad hoc price increases? And how do the customer service issue you've been facing in the U.K. plans your thoughts on pricing going forward?

Yes, good question. I'll let Lou handle both of them. I'll simply say that on the price increases, we can and expect to take price increases in a manner similar to 2023, given the timing of when our price increases are expected to occur. So we don't believe the Ofcom issue impact 2024 price increases as they currently stand. But Lutz, do you want to talk any further about that and that will let you deal into customer service. Lutz Schüler: Yes. So first of all, Ofcom, right, is currently reviewing the price increase process, and they have shared the idea, and this idea is only -- will only be applied for new customers, not for existing customers, right? So I think that is also important to understand. So -- and it might come into effect in whatever form in summer cars. So therefore, as you know, we just went ahead with our price increase. And this is in contract price increases. And how -- to what opinion Ofcom finally gets, we don't know yet. And yes, we have also noted BT's thoughts how to deal with it in the future. And we will take everything into account. And make up our mind what we will be doing going forward. But nothing to be -- to get rebuilt yet. Customer service, I mean, definitely an area where we have to get better, no doubt about that. Customer is not interested that we have integrated a lot of our systems and stuff. But we have improved significantly. We will be improving our customer service. So it's top of our agenda. Actually, we are investing a lot of money into systems and into also care resources in '24, which is part of our OpEx increase. So therefore, we are not considering the impact of customer service and our pricing strategy going forward. Hope that helps.

I think it's also worth pointing out that the complaint numbers are Ofcom are important to us, and we take it seriously, but quite small. I mean the broadband complaints, for example, represent 0.03% of our customers, 0.03% of our customers have filed a complaint with Ofcom. So that information doesn't generally find it into the press releases or the news stories. That doesn't mean we don't take it seriously. We do and Lutz is correct. He's all over it, but it's a relatively small number.

Our next question comes from the line of Ulrich Rathe with Societe Generale.

Yes, thank you very much. So on the five initiatives that you highlighted for sort of crystallizing value, obviously, the All3Media divestment and the Sunrise spin are the most tangible ones and they make perfect sense, if I may say so. But the U.K. NetCo and the Benelux Hold co-creation, they're just internally rejigging, right? So any value creation, tangible value creation would come from the optionality that arise from these moves? So what I'm wondering about is what you have in mind is this now a stream of corporate action that's unfolding? Or is there going to be a bit of a pause into next year or even the year after before we see more moves. I'd just like to sort of see what your views are. And if I may just sneak in one, please, strategically, refer to IR. But in the 10-K, there is a statement that says the P&E additions in 2024 would be broadly stable. That seems a bit difficult to construct with the divisional guidance, especially because Telenet CapEx is due to step up quite a bit. How do I -- what goes down when Telenet goes up and the group P&E consolidated would remain stable?

Yes. I'll let Charlie or Rick and Michael work on the second question. On the first question, listen, it's the beginning. It's certainly going to take time for all of these things to be implemented. Don't confuse that. I mean Sunrise is clear. We are moving this direction. It is happening. We will advance the transaction as rapidly as we can within reason, and shareholders will have 2 shares to stop before the year is out. That's for sure. And that we think will be a big moment for our stock, given where we think the value of that dividend will end up and given the fact that we're investing into Sunrise to delever in advance of that. So that's a big moment along with the buyback. So to me, those things are tangible, you can bank on them and they should have real value to shareholders along the course of all 3. In the U.K., in my opinion, opens up a lot of optionality, not just in terms of consolidation, in terms of financing. But I think it sends a message and a signal to the market that we are serious, that this is going to be a big strategic reorientation of our investment focus in the marketplace. And I think you'll see things happen throughout the year based on that announcement. And it will take time to implement. It doesn't happen overnight. It will take time to implement. But I think that's the direction we're going, and I see lots of positive things following from that, even before we actually go through a functional separation of the businesses. So that, I think, watch that space. In Benelux, we'll see. I mean I think this is step 1, just occurred. I think I think people -- certain investors might see it as an interesting platform to be part of. I think we'll make some announcements around management structure during the year. Who knows? Maybe we'll have things to discuss with Vodafone. So I do think each of these announcements we're only in February here. Each of these announcements will be things we talk about through the course of this year. And so I would be prepared.

I think just on the CapEx side -- Sorry to jump in here.

Sorry, Charlie. Go ahead.

On the cap -- so I was going to say, look, I think best take it offline, but I don't think we're giving formal guidance for '25 and '26 on CapEx. Clearly, things change and move along. But I think the point was is that we believe we are at a reasonably elevated point in the CapEx cycle based on what we know today. And we are heavily investing. I might make this point in 5G and fiber, particularly actually in the U.K., but also across our footprint. So I think that was the point of the disclosure.

The next question comes from the line of Georgios Ierodiaconou with Citigroup.

Good afternoon and thank you for taking my questions. Maybe in two parts, please, around the U.K. medical separation. Firstly, I'm curious as to why the U.K. and not Belgium given that has a much higher penetration already wholesale business, much more expensive rollout that requires more funding that you consolidate curious why not that for the time being and just the U.K. And just to understand the rationale around the financing options in the U.K. Is it fair to assume higher leverage of net core where the process of that can be used to strengthen the self-cobalance sheet or whether it's just a vehicle mostly for acquisitions and investment and therefore, dramatic difference in terms of the leverage ratios of what's left agreement?

Yes. On the first question, we have created a NetCo in Belgium. Perhaps you meant the Netherlands. In Belgium, we have a NetCo, it's called Wire. It's already working on building out 80% of the country. It has 60% utilization and significant EBITDA. So we are well underway even farther along, fully and functionally and legally separated out in the Belgian market. So there, we are well underway. And that's sort of the model, to some extent, a similar model that we're trying to pursue in the U.K. I mean, did you mean Belgium or did you mean Holland?

No. I mean Belgium, but I meant more the next step of monetizing and deconsolidating the CapEx [inaudible] to Wire.

Well, we're not -- we haven't announced that in either U.K. or Belgium, and we may do that in Belgium. It's too soon to know how we'll approach that. What was your second question? Or maybe, Charlie, you caught that.

Yes. It was financing. Well, first of all, I think we'll be the same structure as we use with Wire. NetCo is a subsidiary of Virgin Media, too. And I think it's a good news story for the bondholders because to the extent to which additional equity comes into that business, the body equity, that obviously enhances the value of their debt stack. There are no plans at this stage to refinance the entire Virgin Media debt stack so that we would end up with two separate capital structures that may come over time. Let's see, but it's certainly not the right time now with the credit markets. We've got some very cheap debt in Virgin. So now is not the time to give that up. But I do think long term, you're probably right that a Servco probably has lower leverage than a NetCo. I think NetCo's predictability asset backing lends itself to higher leverage. And certainly, as we pursue not just this infrastructure, initiatives in other infrastructure initiatives like our dental center initiatives, I think you should expect to see us use leverage as we always do, to try and optimize returns for shareholders.

The next question comes from the line of Matthew Harrigan with the Benchmark Company.

Thank you. Two wonky valuation points, if you would. One thing that's interesting with Switzerland, I know you and Charlie have spoken about just the general credit equity market conditions, the government bond rates, you look at the PE, you're in the low 20s versus low teens in the U.K. So you've got a really favorable just kind of generic valuation headwind. And if you strip out Switzerland to a decent price. I mean, obviously, the other assets are going to look even more compelling in terms of the underlying multiple. But what sort of benign tailwind do you think just by giving people another Swiss telecom, pure play? And then secondly, when you look at your capital structure to your credit, I mean, you've got 5-year bond duration, 3 handle on the fully swap borrowing cost, it's remarkable. But we just had another hot inflation number a few minutes ago. Is your attitude for leverage over the next 5 years really going to change if we're in this persistent somewhat higher rate environment. Because surely, if you refinance everything, you'd be materially higher on your debt costs. And congratulations on the transaction.

Yes. Thanks, Matt. I look at -- Charlie can work up an answer to the capital structure and leverage point. On the valuation, listen, it's our view that this announcement should create a tailwind for sure because this will be a transaction that occurs in '24, we think a sizable dividend to investors and something that they will -- it's certainly not valued in our stock today. No question about it. So -- and the tailwind it should create is I think it is the first example of a pivot in our approach to distributing value, and it could be followed up by many similar type structures or transactions. And you have to start somewhere. And I think we're starting in the right place with the right asset at the right time. And I think what's most important for people who understand about these announcements today is what it means about the broader strategic road map we're pursuing and that's how the lens that we're putting on value creation and value distribution going forward is slightly different, and we'll keep you posted as things start to develop. But I think, yes, I think that should create a tailwind if people are looking at it correctly. I appreciate that there is some frustration about our guidance in 1 particular market, and we'll address that. It seems to be shortsighted to be focused on that. But nonetheless, we'll address it. I think the bigger message here today is the way we're going to create value for you.

Matt, on the leverage side, we've been around a lot of time to get you and I, but it's 4x to 5x leverage through the cycle. It's been pretty successful for us, and rates were a lot higher for much of that period. So I think that we obviously recognize that we've been benefiting in the last 5, 10 years from some very low rates. But I do also think that these businesses have proven to be able to drive an optimal cost of capital even with higher interest rates. And I think the question of whether we would be the bottom end or the top end of that range wants to make a decision when we come off these fixed-rate deals. And just to remind you, I mean, that is a decision that's coming up the back end of the decade because most of our average life of debt as you already point out, is going to come off fixed rates '27, '28, '29, '30, '31, and what's to come her. I think we'll see at that point whether we think it's more prudent to be the lower end of the range, higher end of the range, it will depend on the underlying growth of the assets. I mean by then, we'll be through the investment cycle, particularly on 5G and most of the fiber builds. We'll be in a position where we will hopefully have much more rational market. I just think that it's too early to call it out. But you're 100% right. If we had to reproduce our capital structure today, the underlying base rates we have locked in are significantly lower than the market rates. But let's see where rates are back end of the decade, and we can make some judgments on where we would be in that 4% to 5% range.

And you would probably -- valuation halo and a Swiss asset?

Sorry, I didn't hear it.

No, I'm sorry, you would probably agree that there's a material valuation halo multiple-wise on a Swiss asset?

Yes, I agree with that. With the free cash flow -- listen, clearly, the free cash flow yields in Switzerland for distributed listed stocks, all things being equal, are lower than for euro or pound stocks. And the reason is, of course, of the low cost of debt low, cost of capital, if you like, in Switzerland. Swiss government bonds are amongst the cheapest in Europe. So clearly, this spin is going to unlock that part of the conglomerate discount. And I think that it's obviously a very attractive market for other reasons. So I think at first, you're going to hold a lot of shares. So I'm very excited about seeing how Andre and team progress over the next few years.

The next question comes from the line of Polo Tang with UBS.

Hi, thanks very much for the presentation. Just two very quick questions. The first one is on U.K. cable ARPU, it was now stable in Q4, but how should we think about the trajectory of U.K. cable ARPU going forward? So are there still legacy voice and video declines as well as maybe back book repricing in the U.K.? Or are you through a lot of these headwinds? And the second question is just on Switzerland. Can you comment in terms of what you're seeing on competitive dynamics? And specifically, what are you seeing in terms of promotional activity in Switzerland?

Sure. Lutz, we'll get you involved. Do you want to address the cable ARPU point? Lutz Schüler: Yes, sure. So yes. So I think, as you might have seen it, the good news is that we have managed to stabilize the cable fixed ARPU in the U.K. year-over-year when you compare the number with Q4 '22. And going forward, unfortunately, right, there's still the constant living crisis in U.K. There are still customers calling in for saving costs, which leads to eliminating the landline or mid-tier pay-TV products. On the other hand side, we are able to monetize speed and sell customers more. So I mean we are not giving an ARPU guidance for '24, as you know. But I would say the macro hasn't changed, but we take some positivity out of the stabilization of the fixed ARPU out of last quarter compared to a year ago. Hope that helped.

Yes. Andre, do you want to address the Swiss question? André Krause: Yes, sure. So I would say it's pretty stable. So no real acceleration or growth of promotions. I would say. We have seen, of course, lots of liquidity in Q4, which was driven by like Friday, driving a lot of consumers onto the market again. We have been more active than in previous quarters just because we had the price rise behind us, and that actually paid off in the numbers that you saw in terms of net adds in the quarter. And still, we have some delayed activations only coming through in Q1. So we're quite happy with our return to the market, if you want, in particular, on the main brand. We have seen Swisscom not being aggressive really with their main brand in the Black Friday period, essentially, they have not taken any promotions in that period of time. So we think that the market is actually trading quite constant compared to what we have seen previously. We also don't see a lot of more aggressive price points coming in. So it feels like that the main brand flanker brand set up and the promotional games in those two segments is pretty stable at this moment in time. And after the price rise, we have come back being more active and taking our share in the market. And I think that pretty good outcome for Q4 and Q1 is starting in the same way.

The next question comes from the line of James Ratzer with New Street Research.

Yes. Hello. Thanks very much indeed. So I have some questions on the Sunrise part of the announcement today specifically. So Mike, you were saying at the beginning, you kind of never seen as wide a discount between your asset values and the share price. So with that in mind, I was wondering why you've decided, therefore, to push cash from the TopCo down into Sunrise and spin it out to shareholders rather than actually use it for share buybacks, which presumably would actually create more value. And then on the Sunrise transaction itself, just from what's going to be left with Liberty Global. Can you just run through what it's going to mean for your central costs? I think those have been $200 million to $250 million outflow a year? What does that now come down to? And also your shareholder -- sorry, your share compensation costs, those that were running at about $230 million last year, I think, in the 10-K, but you become a smaller company with the spin-off of Sunrise, what happens to your share-based compensation payments for the group? Thank you.

Yes. All good questions. I'll let Charlie work up an answer to the central cost point listen, on your first question, why would we invest the capital into Sunrise pre-spin versus increasing the buyback? Look, I'm really proud of what we've done in terms of buybacks, owning 60% of the business has been the right move, especially given where we're going. And we don't -- we continue to see buybacks as an important part of the strategy, but it's -- they're not mutually exclusive. It's not one or the other. And what buybacks do is they shrink the equity. They demonstrate our commitment to the business. And over time, they reduce the denominator at a point where when these things occur, they occur at a greater multiple or a greater valuation, and that's all well and good. But we also know that something like this, a spin-off of Sunrise, with an injection of cash, which we were doing principally to maximize the fully distributed value of Sunrise, knowing that listing it is going to be difficult at its current leverage, and so we would reduce less. In essence, what we're doing is giving that money to investors and saying, if you -- whatever you think Sunrise has worked for share in our stock today, pick a number, you're going to have to increase that about $5 or whatever, whatever the number is because we're essentially increasing the equity value of the business with this cash injection, $4.50 a share. And so at a minimum, there's a $4.50 share dividend tax-efficient distribution happening, which I think many investors, maybe most investors, perhaps not analysts, but most investors will see as extremely positive. Because buybacks take time to impact. They have to be followed up by events or moments where that denominator matters. So that's the answer to that question. On the share compensation, we'll see how it unfolds. I mean, this transaction will happen in second half of the year. We hope it does. There will be -- most of the current employees who have shares in Liberty Global will end up with shares in Sunrise, and the comp committee will determine how best to manage that probably in 2025 and beyond. In 2024, I don't know that it's going to change anything because this transaction second half of the year, and it's hard to know what impact it will have. 2025 and beyond, we'll let the comp committee figure that out. Charlie, do you want to talk about central costs?

Yes, Sure. And as you already pointed out, we've been running about $200 million to $250 million, much lower this time around. And we'll see how the year has go on. That's a pretty established number. Just to remind you, there were 2 additional central costs which are, I believe, assets. One is our Liberty Tech, which Enrique has done an amazing job of creating market-leading connectivity and entertainment platforms that are very attractive, and you heard about that Infosys transaction. I'd point out that it has a massive order book. and is already through emphasis, exploring third-party opportunities. So one could argue that, that is a potential unicorn. And we've also aggregated all our back-office services and we've been -- created a company, which itself is also profitable and very attractive. We actually had a reverse inquiry about buying it. But essentially, the same principle, we have scale. We have best practice. We can invest from the investment in technology. And we think we provide a very, very competitive product to our FMCs, and that's underpinned by some pretty long-term contracts. So what you're really talking about is a central cost, which broadly breaks down into 3 buckets. One is the cost to maintain the current listing. Secondly, the cost of developing the next wave of growth, investing in things like adverse edge and what we hope to be very successful Utica and potential trackers over time. And then thirdly, a series of a real shared service, high expertise activities, treasury per good example, tax will be a good example. And I think 1 of the lessons that we learned from the LiLAC spin was that we actually lost economies of scale. We lost expertise, and we should have preserved it. So we would be proposing to continue to provide many of the specialist services on our site agreements, but there will be multiyear agreements, probably broadly in line with what we use for internal transfer pricing purposes, I think or GSA, which is often embedded deep in these indentures. So you should assume that with Sunrise, there will be some long-term contract for them to provide what we hope will be real value-added expertise. And I really do think it's value added. And I think what the merchant does as a treasurer will be very hard to recreate on each of these opcos, and they're very happy to take those services. So I would say the churn will come down over time on a net basis. And hopefully, we're going to create the next wave of multibillion dollar companies from the dispentures portfolio.

So Charlie, does that mean given the size of Sunrise of your consolidated operations there? I mean can that $200 million to $250 million, does that half because of the GSA revenues you'll get from Sunrise?

No. It doesn't mean that. Remember, that $200 million, $250 million about -- I mean, I don't want to precise numbers, but as I said, there were 3 buckets of public listing. The cost of developing these new ventures. But there's a proportion that is allocated to that, we will allocate as we see fit to -- over time to these 4 big companies. Remember, we're still continue to and am course. We still continue to provide significant services to companies like BMO 2 and the Benelux, way beyond the spin of Switzerland. But there'll be some net income, and we'll disclose that at the right time as the spin documents unfold.

The next question comes from the line of Joshua Mills with BNP Paribas.

Hi, there. Thanks for taking the question. Mine with on the Virgin Media O2 guidance on Slide 12. So in the press release, you did comment that there was some anticipation of B2B revenue weakness in 2024, which underpins the guidance for stable to declining revenue. It'd be great if you could give a bit more color on that, given -- do you remain positive on the basis in 2023? Is it contract losses? Is it something you're seeing on that side? Or is it just a reflection of the macro situation? And then secondly, on the EBITDA guide for low to mid-single-digit declines. If I were to estimate, that was around, say, $200 million of EBITDA. Can you give us a bit of a breakdown perhaps on how much is being spent on IT efficiencies versus marketing expenses just so we can build a picture for or would be one-off investments, which may be reversed in 2025 and beyond? And which of these higher investment levels are more structural?

Lutz, why don't you handle the B2B point straightaway? Lutz Schüler: Yes, sure. So we have done a lot of sales-type lease deals. So meaning we are selling dark fiber or Ethernet, a lot of mobiles backhaul or to link base stations to other mobile network operator. And the nature of these deals is that you can identify the revenue and the EBITDA right away at the beginning. Now we see, at the moment, less of these types of deals happening in '24, which is a bigger driver for less revenue on the B2B side. The other factor we take into account in our revenue guidance is still on the consumer side, the cross the living crisis. And the mobile handset market is materially down. I think you've seen it also from competitors or something in the region of 20% or more year-on-year. So therefore, we are simply cautious on that one. Do you want to answer the EBITDA question, Mike, or should I do?

Well, you can address that. I mean, we're not providing where in that range will be, whether it's low or mid the budget. I know where it's going to be. I'm not sure how much detail we can provide a point to make on the EBITDA and growth rate is quite a few one-offs in 2023. Those are also impacting the ability to generate a higher result on a percentage basis because of the pretty big one-offs in the fourth quarter that are not a great comparable. So I don't know how much detail you want to provide, Lutz, but I think the question was, would you look at IT, do you look at marketing, you look at things that we're doing in the year to drive growth, maybe provide a little color on that. Lutz Schüler: I think for -- what I would provide without giving a number is, I mean, if you add, right, also next fiber has announced a number today what they are going to spend on network rollout. So that means, right, next cybers 800,000 homes, right? It's easy to understand that the additional fiber homes will be more than 1 million. So if you think about what typical penetrations are from Virgin Media in these fiber new fiber homes, right? It's easy to understand that this already leads to material cost in EBITDA, yes? And for that, you also need marketing and stuff. So I don't give numbers. We don't give numbers, but I think this is a big driver, and it's therefore also easy to understand that when we have these customers that will -- they will help us then with additional growth in 2025, our IT costs and they're not immaterial, but I think the biggest hard to mention is the customer growth.

I think we're at the bottom of the hour here.

This will conclude our Q&A session. So I will hand the call back to Mr. Mike Fries for closing remarks.

Yes. Thanks, everybody. Appreciate you standing on so long. I know it's been a busy morning and 90 minutes is a big ask. So thank you for that. Slightly tough data to announce these results with market conditions, but clearly, there's a lot of anticipation for what we had to say and maybe that's been part of the buildup. Obviously, I sense and we all sense the disappointment in the BMO 2 guidance, I will simply say whether it's investment one-offs, this business will return to growth. And in our view, it's a blip, not a major issue whatsoever, and we're excited about Lutz and what he and the team are doing for sure. Our excitement hasn't changed one bit. And I also think the announcements you made today are substantial. The gap in our stock is real, whether you think the FMCs are valued at $2, $5 or $6 or not valued at $30. We will show you with the spin-off of Switzerland, what that business will be worth. That will be a big moment, and I'm confident that, that will be a positive event for investors. And I think we have a pipeline of opportunities very, very similar to that. So shareholder remuneration is multi-pronged going forward. It's not simply buybacks. It's finding ways to put value in the hands of shareholders, and that will be how we approach things going forward. Thank you for your continued support and patience. And as always, you know where to find us if you have follow-up questions. Thanks, everybody.

Ladies and gentlemen, this concludes Liberty Global's Full Year 2023 Results and Strategic Update Investor Call. As a reminder, a replay of the call will be available in the Investor Relations section of Liberty Global's website. There, you can also find a copy of today's presentation materials. You may now disconnect your lines.