Liberty .(US:LBTYA)2022-05-11 19:22Financial Data and Key Metrics Changes - The company reported stable to slight growth in core assets, with Virgin Media O2 delivering stable top-line growth and mobile revenues excluding handsets [26] - EBITDA growth for Virgin Media O2 was over 2%, while Sunrise UPC achieved close to 10% EBITDA growth [28][29] - The consolidated group reported over 2% EBITDA growth, with free cash flow of $137 million on an adjusted and distributable basis [30][29] Business Line Data and Key Metrics Changes - Virgin Media O2's broadband and postpaid mobile ads were flat for the quarter, impacted by a significant price rise and reduced marketing activity [11][12] - Sunrise UPC experienced strong broadband and postpaid mobile growth, totaling 56,000, supported by a new full-service offering [15] - Telenet delivered positive broadband and postpaid mobile ads, aided by a single product marketing strategy [17] Market Data and Key Metrics Changes - The U.K. market saw a decline in broadband sales, attributed to the end of lockdowns and consumer focus on utility costs [12] - In Switzerland, Sunrise UPC's mobile subscription revenues grew, driven by brand segmentation and reduced discounting [27] - The Netherlands reported stable revenue growth supported by mobile subscriptions reaching a five-year high [27] Company Strategy and Development Direction - The company is focused on M&A opportunities in the European Telco sector, having successfully closed the sale of its Polish business for $1.7 billion [9] - The strategy includes prioritizing stock buybacks and exploring direct investment opportunities in core FMC operations [24][25] - The company aims to achieve significant synergies from fixed-mobile mergers, with expectations of $11 billion in total synergies [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current macroeconomic environment, citing low churn rates and stable revenues despite inflationary pressures [8][10] - The company reiterated its 2022 guidance, including $1.7 billion of distributable cash flow, despite higher energy and inflation costs [36] - Management highlighted the importance of price adjustments to mitigate inflation impacts and maintain financial stability [31][66] Other Important Information - The company is transitioning to report EBITDA after leasing expenses (EBITDAaL) to align with European competitors [37] - The company has a strong balance sheet with total liquidity of $4.7 billion, including $3.2 billion in cash [35] Q&A Session Summary Question: Thoughts on net churn fee lobbying - Management acknowledged the ongoing debate in the European Telco sector regarding recouping network costs from streaming services, expressing skepticism about its success but willingness to participate if beneficial [40][41] Question: Buyback strategy and potential increase - Management confirmed an opportunistic approach to buybacks, indicating that they are ahead of the 10% target and will assess the situation in the second quarter call [44][46] Question: VodafoneZiggo ownership discussions - Management stated that VodafoneZiggo remains a successful FMC champion, with no current plans to discuss full ownership but recognizing its strong performance [48][47] Question: Broadband net ads and disconnections - Management noted that price rises have led to higher disconnections, but churn rates remain stable, and they are monitoring the situation closely [50][51] Question: Mitigating cost inflation - Management emphasized the importance of passing through price increases to customers to mitigate inflation impacts, with various price adjustments planned across markets [66][67] Question: Venture portfolio and 5G opportunities - Management expressed confidence in their venture portfolio, focusing on strategic tech investments, and acknowledged the potential of 5G enterprise networks as a long-term opportunity [74][75]