Liberty Global has announced its Q2 2024 financial results.

CEO Mike Fries stated, “Q2 has been another active quarter as we’ve continued to drive our strategic priorities; maximising the value of our FMCs, leveraging our Ventures portfolio, and taking steps to deliver that value directly to shareholders over time. ”

“Our plan to spin-off Sunrise remains on track for Q4 this year and the Sunrise management team will host a Capital Markets Day in Zurich on September 9th. We have also confirmed our intention to pay a CHF 240 million dividend in 2025.”

“In the UK we announced a new, long-term mobile network sharing and spectrum acquisition agreement with Vodafone, and our fibre reach is now over 5 million homes and ramping. Preparations for the formation of our fixed NetCo are progressing well.”

“We’ve reached a fixed network sharing MOU with Proximus in Belgium, secured 5G spectrum in the Netherlands at an attractive price, and excited to welcome Stephen van Rooyen, formerly of Sky, as CEO at VodafoneZiggo.”

“We continue to rotate capital in our Ventures portfolio, independently valued at $3 billion, following the ~$420 million in proceeds we received from the sale of our stake in All3Media. We also announced our intention to take a controlling position in the world’s fastest growing motorsport, Formula E.“

“Our value creation strategy is supported by our robust balance sheet and disciplined capital allocation model. We have $3.5 billion of cash and a long-term, fixed-rate debt profile with no material maturities until 2028. As part of our ongoing commitment to shareholder remuneration, we’ve repurchased ~5 per cent of our shares outstanding through July 19th against our target of up to 10 per cent of shares by year-end.”

“Against a highly competitive backdrop in the UK our strategy of focusing on value over volume, as well as successful implementation of the price rise, supported a recovery in fixed ARPU. In Switzerland, we’re continuing to build operating momentum in both the main brand and flanker brands, supporting continued growth in broadband net adds and strong growth in mobile postpaid. We delivered a standout performance in the Netherlands during the quarter, supported by the fixed price rise and solid growth in mobile and B2B. In Belgium, as anticipated, a tough comp from the prior year did impact financial performance, but we continue to drive strong fixed ARPU growth, and we’re seeing good trading performance following the launch of our BASE FMC offering nationwide. We are confirming today all 2024 guidance metrics, with the exception of VMO2 revenue, which moves from ‘stable to decline’ to ‘low to mid-single-digit decline’, reflecting the continued pressure on low-margin mobile hardware revenues,”  Fries concluded.

Q2 Operating Company Highlights 

Sunrise (Consolidated) 

Sunrise delivered strong broadband net adds and a solid financial performance in Q2 

Operating highlights: During Q2, Sunrise delivered a second consecutive quarter of broadband growth, achieving 5,000 net adds, primarily driven by reduced churn on the main brand. In mobile, growth in postpaid accelerated, as Sunrise delivered 32,900 postpaid net adds, supported by an improved main brand performance and reduced churn. FMC penetration across the Sunrise broadband base continues to grow steadily, reaching 59 per cent in Q2, an increase of 0.9 per cent YoY. The spin-off remains on track for Q4’24. 

Financial highlights: Revenue of $815.8 million in Q2 2024 was flat YoY on a reported basis and increased 0.5 per cent on a rebased4 basis. The rebased increase was mainly due to (i) the positive impact of last year’s July price rise and (ii) continued momentum in mobile subscription and B2B revenue. Adjusted EBITDA increased 0.3 per cent YoY on a reported basis and 0.9 per cent on a rebased basis to $288.0 million in Q2 2024, including $2 million of costs to capture5. The rebased increase was mainly due to (a) the aforementioned revenue increase, (b) a decrease in labor costs and (c) lower marketing spend, partially offset by higher wholesale costs. Adjusted EBITDA less P&E Additions of $148.0 million in Q2 decreased 10.1 per cent YoY on a reported basis and 9.5 per cent on a rebased basis, including $5 million of opex and capex costs to capture. 

Telenet (Consolidated) 

Telenet performance impacted by tough comparison base against Q2 last year, on track to deliver on full-year guidance 

Operating highlights: During Q2, Telenet’s postpaid mobile base declined by 500 while its broadband base declined by 4,800. Despite the intensely competitive market environment, the sequential improvement was driven by successful marketing campaigns and the launch of BASE Internet and BASE TV in early June. Following the launch of the fixed BASE product in Wallonia as well as in the Flemish and Brussels footprint, BASE is now a nationwide FMC brand. Earlier today, Telenet announced the signing of a MOU for collaboration on the further deployment of fiber networks in Flanders. 

Financial highlights: Revenue of $755.1 million in Q2 2024 decreased 1.6 per cent YoY on a reported basis and 0.9 per cent on a rebased basis. The rebased decrease was primarily driven by (i) a decrease in B2B wholesale revenue following the loss of the VOO MVNO contract and (ii) a decrease in mobile revenue driven by lower interconnect revenue and handset sales, partially offset by the benefit of the June 2023 price rise. Adjusted EBITDA decreased 9.9 per cent YoY on a reported basis and 9.2 per cent on a rebased basis to $311.9 million in Q2, primarily due to (a) the adverse impact of a $11.2 million decrease in costs in the prior year period associated with the one-time benefit from expected settlements of certain operational contingencies, (b) higher staff-related expenses and (c) an increase in sales and marketing expenses, partially offset by lower interconnect and energy costs. Reported and rebased Adjusted EBITDA less P&E Additions decreased 39.8 per cent and 39.5 per cent, respectively, to $110.7 million in Q2. 

VMO2 (Non-consolidated Joint Venture) 

VMO2 advances network evolution as targeted investments in future growth drivers continue 

Operating highlights: VMO2’s fixed customer base declined by 13,600 in Q2. Customer growth in the nexfibre footprint continues to build steadily and is expected to rise as marketing increases, however, this was offset by a moderate loss on the VMO2 footprint during the quarter when price rises were implemented. Having stabilised in recent quarters, fixed ARPU returned to growth in Q2, growing by 3.1 per cent YoY. In mobile, the postpaid base declined by 118,400 in Q2. Reflective of wider market trends, activity in the premium end of the market remained lower than the prior year, impacting gross additions, while churn remained stable. VMO2’s full fibre footprint reached the milestone of 5 million premises2 at the end of Q2. Fibre build pace increased by 68 per cent YoY, as the total serviceable footprint grew by 295,300 homes in Q2, principally through build on behalf of nexfibre. On the mobile side, almost two thirds of the UK population is now covered by VMO2’s 5G connectivity and in July, VMO2 and Vodafone announced a new, long-term network sharing agreement. 

Financial highlights (in U.S. GAAP): Revenue11 of $3,375.4 million in Q2 2024 decreased 0.5 per cent YoY on a reported basis and 1.4 per cent YoY on a rebased basis. The rebased decrease was primarily due to the net effect of (i) a decrease in mobile revenue due to lower handset sales, (ii) an increase in other revenue due to low-margin construction revenue from the nexfibre JV, (iii) an increase in residential fixed revenue due to the implementation of contractual price rises and (iv) a decrease in B2B fixed revenue, with each revenue category as defined and reported by the VMO2 JV. Q2 Adjusted EBITDA11 decreased 0.6 per cent YoY on a reported basis and 1.5 per cent YoY on a rebased basis to $1,132.4 million, including $13 million of opex costs to capture. The YoY decrease in Adjusted EBITDA was primarily due to the net effect of (a) a benefit of approximately $13 million during Q2 2024 related to higher capitalised costs by the VMO2 JV due to a change in the terms of a related-party contract and (b) investment in IT and digital efficiency programs. Q2 Adjusted EBITDA less P&E Additions increased 16.8 per cent YoY on a reported basis and 15.7 per cent YoY on a rebased basis to $546.4 million, including $39 million of opex and capex costs to capture. 

Financial highlights (in IFRS): Revenue of £2,673.7 million ($3,375.4 million) in Q2 2024 decreased 1.4 per cent YoY on a rebased basis. Q2 Adjusted EBITDA of £987.8 million ($1,247.1 million), including costs to capture, decreased 1.0 per cent YoY on a rebased basis. Q2 Adjusted EBITDA less P&E Additions of £424.8 million ($536.7 million), including costs to capture, increased 1.6 per cent YoY on a rebased basis. The drivers of these IFRS changes are largely consistent with those under U.S. GAAP detailed above. 

VodafoneZiggo (Non-consolidated Joint Venture) 

VodafoneZiggo sustains solid financial performance, confirming 2024 guidance 

Operating highlights: During Q2, mobile postpaid net adds declined by 18,400, driven by B2B government contract losses. The broadband base contracted by 22,600 in the quarter, as a 27,400 decline in Consumer was only partially offset by a 4,800 increase in B2B. Both mobile and fixed ARPU continued to grow in the quarter, supported by the benefit of the price indexation implemented in October. The FMC broadband households penetration remained stable at 48 per cent. In July, VodafoneZiggo successfully acquired 100 MHz spectrum license in the 3.5 GHz band. 

Financial highlights: Revenue increased 0.3 per cent YoY on a reported basis and 1.5 per cent YoY on a rebased basis to $1,091.6 million in Q2. The rebased increase was primarily due to continued growth in mobile and B2B fixed revenue, partially offset by a decline in the B2C fixed customer base. Adjusted EBITDA increased 7 per cent YoY on a reported basis and 8.2 per cent on a rebased basis to $518.7 million in Q2. The rebased increase was primarily driven by (i) the aforementioned revenue increase and (ii) lower energy and consulting costs. Adjusted EBITDA less P&E Additions increased 15.5 per cent YoY on a reported basis and 16.9 per cent on a rebased basis to $263.8 million in Q2. 

Liberty Global Consolidated Q2 Highlights 

• Q2 revenue increased 1.4 per cent YoY on a reported basis and 2.2 per cent on a rebased basis to $1,873.7 million 

• Q2 net earnings (loss) increased 153.8 per cent YoY on a reported basis to $275.2 million 

• Q2 Adjusted EBITDA increased 0.5 per cent YoY on a reported basis and 1 per cent on a rebased basis to $604.7 million 

• Q2 property & equipment additions were 20.0 per cent of revenue, as compared to 19.1 per cent in Q2 2023 

• Balance sheet with $5 billion of total liquidity 

• Comprised of nearly $2 billion of cash, $1.5 billion of investments held under SMAs and $1.5 billion of unused borrowing capacity

• Blended, fully-swapped borrowing cost of 3.45 per cent on a debt balance of $15.6 billion 

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Categories: Articles, Business, Results

Tags: Liberty Global, Sunrise, virgin