Liberty .(US:LBTYA)2022-02-18 19:42Financial Data and Key Metrics Changes - The company achieved a nearly 40% growth in adjusted free cash flow to just under $1.5 billion in 2021, meeting its guidance [31] - Consolidated adjusted EBITDA declined by 1.4% in 2021, impacted by increased costs to capture in Switzerland [29] - Total buybacks in 2021 totaled $1.6 billion, equivalent to 10% of shares outstanding, with a commitment to continue this in 2022 and 2023 [9][34] Business Line Data and Key Metrics Changes - Virgin Media O2 saw a revenue decline of 1.1% in 2021, while Telenet delivered 0.7% revenue growth, and Sunrise UPC achieved 0.5% growth [28] - VodafoneZiggo maintained revenue growth momentum, achieving a 1.9% increase in 2021, marking its 11th consecutive quarter of revenue growth [28] - The Ventures Portfolio increased in value to $3.5 billion, a 46% increase year-over-year, primarily due to appreciation of portfolio investments [8][32] Market Data and Key Metrics Changes - The U.K. market is experiencing a significant rise in inflation, with operators implementing price increases, which are expected to provide tailwinds for 2022 [16] - In Switzerland, the market remains rational with low inflation, and no significant price rises are expected this year [15] - The Dutch market remains competitive but rational, with VodafoneZiggo experiencing modest erosion in its broadband base due to competition [19] Company Strategy and Development Direction - The company is focusing on fixed-mobile convergence (FMC) as a key strategy, with nearly 50% of broadband subscribers taking a mobile product [20] - The company plans to accelerate its Lightning build program in the U.K. to over 500,000 homes in 2022, aiming to fortify its lead in 1-gig services [24] - The Ventures Platform is strategically aligned with broadband and mobile businesses, focusing on tech, content, and infrastructure for value creation [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's performance despite challenging market conditions, highlighting strong demand for connectivity [7] - The outlook for 2022 includes improved revenue growth for Virgin Media O2 and stable to modest growth for Telenet and Sunrise UPC [36][37] - Management noted that the current wave of fiber and 5G CapEx is expected to slow down, attracting private equity capital into the sector [11] Other Important Information - The company is committed to a new fiber NetCo in the U.K. with financial partners, aiming to build up to 7 million new homes [25] - The company has a strong balance sheet with total liquidity of $5.3 billion and a blended cost of debt around 3.4% [34][35] - The company is actively pursuing ESG initiatives, including a commitment to Net Zero by 2030 [35] Q&A Session Summary Question: U.K. footprint expansion and interest from strategic partners - Management confirmed discussions with financial and strategic partners regarding the U.K. footprint expansion, emphasizing the unique opportunity presented by Virgin Media O2 [42][44] Question: Customer reaction to U.K. price increases - Management reported that customer reaction to the 6.5% price increase has been as planned, with low churn rates observed [45][46] Question: Outlook for VodafoneZiggo and guidance - Management stated that VodafoneZiggo has performed well, with solid EBITDA growth and significant free cash flow, while guidance reflects necessary investments in new products and services [49][51] Question: U.K. fiber joint venture and funding - Management indicated that the joint venture will provide flexibility and off-balance sheet benefits for Virgin Media O2, with funding discussions ongoing [54][56] Question: Ventures portfolio and future investments - Management clarified that while content investments will be evaluated for monetization, the focus will be on infrastructure as a net user of capital moving forward [61][64] Question: Acceleration of the Lightning rollout - Management expressed confidence in the ability to accelerate the Lightning rollout, citing strong supplier relationships and a history of successful builds [66][68]