Q2 2020 Liberty Global PLC Earnings Call

[music].

Good morning, ladies and gentlemen, thank you first.

Welcome to the Liberty Global's second quarter 2020 Investor call.

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At this time, all participants are in listen only mode.

Todays formal presentation materials can be found under the Investor Relations section of global Liberty Global's website at Liberty Global Dotcom.

After todays formal presentation instructions will be given for question and answer session.

Each of the slide details the Companys 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 with outlets 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 and Liberty Globals filing with the Securities and Exchange Commission, putting its most recent filed form 10-Q [laughter] pay as amended.

Liberty Global disclaims any obligation to update any these forward looking statements reflect any change in its expectations were in the conditions on which any such statements based I would now like to turn the call over to Mr. Freeze.

Thanks, Operator, and welcome everyone to our Q2 results call first of all Openreach safe well and as always we appreciate you joining us today I plan to run through the slides are prepared remarks were about 20 minutes or so to be sure. Your level set on the key messages. This quarter and then we'll spend the majority of our time answering your questions.

Who have asked a handful of became exacts to join me on the open line and I'll be sure to get them involved the QNX session as needed.

I'll kick it off on slide four for those who are falling along with a summary of the key highlights from the quarter to pretty comprehensive slide So bear with me I want to be sure to hit each point beginning with a few remarks on how we'd been navigating the cobot 19 pandemic. Obviously this is on top of everybody's mind. So I'll spend a couple of minutes upfront and then we'll get into some more color in detail.

Ill do the course of the presentation you Tonight.

Clearly our primary focus has been in remains safety and well being of our people.

If I did 90% of who continue to work from home like most companies you've heard from working from home can and does work and we're no exception of course in our case you at the balance that with the need to be the field building and maintaining planted installing in servicing customers.

Washington governed by different local regulations and protocols in each country, most of which have required that we opened up office and slowly and carefully and that's exactly what we're doing [laughter] as we get back to normal everyone. In our sector is working on bottling. The magic so to speak whether its record customer satisfaction levels are faster and more agile ways of working it I'm really excited about the progress.

We're making here, which I think it's going to be definitely positive for us down the road.

A lot of macro environment in Europe has been severely challenged by Koby 19, new regional the whole is whether the crisis pretty well better than many expected as anticipated eurozone GDP fell 40% in the quarter back 12% sequentially, but there are some bright spots, they're not the least of which is by all accounts a pretty affecting the handling of the pending.

Nick.

All of our core operating markets in Europe have successfully flattened the curve daily confirmed cases anywhere from 75% to 95% below peaks in March and April and fingers crossed staying pretty constant.

Just as impressive while every death this tragic mortality rates have fallen to levels at or near zero in most of these countries. If you contrast that with the U.S., it's pretty striking.

Because this is also brought the Rooijen together you know in addition to stimulus measures rolled out of the National level. You mentioned, we adopted a 750 to 50 billion Euro recovery fund designed to help businesses rebound, we form those economies hardest hit protect against future crises. It appears to us confidence both among consumers and investors.

Seems to be on the rise you can see that in euros recent strengthening against the dollar by about 10% since mid may.

Against this backdrop, our business continues to perform well very well in fact fueled by record MPS levels, lower churn robust and reliable networks and significant steps to give customers more more speed more data more content.

That's a theme I know you've heard from heard about for many of our peers.

In our case broadband net adds were the highest we've seen since Q3 17 and customer additions to than anybody you gave it as best we delivered another two years.

Now about cobot had a modest impact on reported revenue and Charlie is going to dig into that in a bit.

All of that shortfall occurred in low or zero margin line items, which allowed us to deliver better than anticipated EBITDA and operating free cash flow. The latter was up 14% year over year.

Not surprisingly, we're reconfirming, our original 2020 guidance and quite frankly, we hope to exceed those levels.

Switching gears I'm pleased to report that our UK JV with Telefonica is off to a great start.

As we reviewed on our last call. This will be a transformational deal for the UK our respective customers.

Our shareholders. It's a win win win is and we like to say.

A couple of months of pre merger planning my excitement level for this combination is even higher locking review all the details again I'll just remind you that we're talking about 6.2 billion pounds synergies a great valuation for Virgin media going into the deal and expected proceeds to liberty coming out of the deal not 1.4 billion pounds.

I'm talking about a fixed mobile convergence in a moment on the next slide but when you combine UK fastest broadband network with the country's largest and most admired mobile company. The long term value creation opportunity is extraordinary.

Also good to hear the teams are working extremely well together the financing is falling into place and the regulatory process is underway to every everything's on track with the completion of this deal.

Just a couple of additional points your capital allocation as we indicated on our last call, we definitely front loaded our buyback activity into the first half of the year, which you would expect us to do given the price really that means is already purchased around 750 million of stock in the last five months.

The question I know, you're going to ask who don't have any announcement today about adding to the buyback program. We're always you're viewing those options of course, but we have 250 million remaining on the plan will be putting back to work for the time being.

And finally, our treasury teams out we're really active in the capital markets. This year refinancing over 10 billion of debt extending our tenant over seven years, and reducing our fully swapped borrowing costs to 4%. So to recap we delivered strong subscriber results, but EBITDA and operating free cash flow are ahead of consensus and we're confirming our original.

Cadence for 2020, and then of course, we're making great progress on the JV with Telefonica in the UK.

Speaking of the UK I thought it would make sense to revisit the fundamental logic underpinning this deal and the other fixed mobile combinations of orchestrated recently this is a very clear and powerful strategy at work here since 2015, we've completed or announced five fixed mobile merger the total deal value over <unk>.

80 billion and in each case, the fulcrum asset with our broadband network built over the last two decades through organic growth and national consolidation.

In certain of those transactions, we enabled the creation of a fixed mobile champion through the sale of our cable operations to a mobile only player that was the case of course with the feel of our Austrian business T. Mobile for 2.2 billion or 11 times EBITDA in 2017, and the more recent sale of our German business, along with some smaller operations to Vodafone for 22 billion or 11.5.

Five times EBITDA.

And you are highly accretive deals for us right, where we were exiting at premium multiples and banking significant returns on our long term tax efficient investments in these markets you've all seen in numbers, but by all accounts. These were also home run deals for Vodafone It looks telecom, because whether you're a seller or buyer.

Fixed mobile convergence works in fact, I think I think it's one of the most important strategic development I've seen in Europe in my 30 years.

Drive scale it drives master synergies it drive sustainable cash flow and ultimately it drives better valuations, which is why in Belgium, Holland any UK, we chose to create our own fixed mobile champions by either by acquiring a combining with a mobile player in those markets and the strategy is working brilliantly for a slide five provide some numbers. This is.

Note that the top left we highlight the scale of our combined operations today in these markets in Belgium in Holland, which surpassed the incumbent in fixed BDC services.

And if we're number one in broadband and TV in both cases, we're gaining share in mobile with convergence ratios exceeding 40% in growing.

And you can't will start to JV with the number one share in mobile and on footprint will be number two in TV and number one in broadband.

We know that roughly 80% of Virgin customers are using someone else's mobile product today in a highly interested in a converged bundled from us and as we continue to expand the reach of our gigabit broadband network will reach more and more to customers.

Also drive strategic leverage and opportunity in these markets what does it do it enhances our ability to shake the political and regulatory agenda, which are you. All know is critical and it puts us in a position to take advantage of ancillary opportunities in areas like content and new services and infrastructure.

It's not surprising that shouldn't be that Vitaphone ziggo was the first to launch Fiveg.

It's also not surprising that verticals do success with fixed broadband is anchored by one good rollout and the strongest sports franchise in Holland.

Telenet Similarly acquired a free to air Channel is now launching the new Belgian Netflix or several minutes ODP content offering. They also recently announced project the largest utility company planners to own a control the network of the future.

And the merger, though too in the UK makes our previous expansion and network expansion strategies in infrastructure monetization ideas, even more compelling in my view.

Second as you've seen synergies in fixed mobile transactions are a significant source of value creation just in the three deals where we remain directly involved Belgium Holland in the UK announced synergies total over 12 billion euros and an NPV basis massive demonstrated again and again these synergies are real achievable and sustainable.

That was never missed a synergy target in Belgium, we've exceeded expectations and then Holland, we expect to do the same this bodes really well for the UK and accrues to the benefit of shareholders of course, but also the customers as we get smarter faster and more responsive to their needs.

Fixed mobile mergers also generate real growth anchored by stable recast. So you can see that on the top rather slide in the kitchen, Belgium and Harlan.

Able to turn around me the Doctor Directory, and even more important deliver significant distributable free cash flow of over 4 billion euros.

Relative derived from what are increasingly predictable outcomes the realization of synergies better customer experience is reductions in churn increases and M. P. S and the inevitable repair that occurs over the longer term when markets rationalize and consolidate.

And lastly, investors, particularly in Europe are signing higher valuations to fix mobile platforms on the bottom right. We show you a half dozen examples including companies like Swisscom TPN and tell it too and you can add your own or take these obviously, it's up to you but on average in stocks are trading at eight times EBITDA with operating recapture multiples in the mid teens.

Digit levered free cash flow yields, so clearly skill synergies and stable free cash flow, our desirable investment characteristics, especially when you're a national champion or national Challenger.

This underpins our perspective interest in public listens to be Frank where it makes sense for us in certain instances to try to take advantage of these market valuations.

Partly because higher valuations of greater transparency and sustainable free cash flow should support our own valuation at the parent company, regardless of whether you look at us kind of some of the parts basis or use proportionate EBITDA or operating pre castle or if you focus on levered free cash and annual dividend stream. We collect are these high margin operating assets.

Speaking of operations, we have our usual updates.

Each operating company in the presentation for your information been interesting time, what's gonna hit a few high points here from each market and then we can address any questions. Your thoughts you might have during acumen that I'll start with Virgin media, which by all accounts had a strong quarter 24000 fixed customer additions, including growth on both the lightning and be a you footprint.

These results are supported in part light reduction in churn and 33000 broadband edge, which we estimate to be 75% of all broadband adds in the UK.

This customer ARPU was impacted by coded.

Particularly pausing and the premium sports, but on a normalized basis ARPU was flat.

We had a 90000 homes lightning footprint in the quarter, bringing our cumulative built a 2.3 million in total gigabit ready homes in the market. The 15 million nobody has a faster or more robust network and Virgin media, it's not even close.

And Virgin had another strong quarter on mobile 85000 postpaid adds on the back of the month Quad play bundles, adding three points to the fixed mobile ratio.

Listen the team I think are really started a hit an all cylinders and that sets us up really well leading into the merger with though too.

I suppose market remains highly competitive by the way you know that which is why we've invested last year in the nation buy one get rollout and our new video platform and digital initiatives across the customer operation. Good news is these investments are beginning to pay off.

With commercial momentum building in Q2 and operational trends improving for example, NPS is at an all time high in sales in June actually exceeded both last year end pre koby levels. We also announced an agreement with Swisscom that rationalize a sports in the market and ensures that each of our customers who have access to both Tele club in my sports going forward now.

As you've heard of said many times were particularly focused on free cash flow in this market and you'll see that operating free cash was up 10% in the quarter, which supports our full year forecast of 170 million of Levered free cash flow.

<unk> look and I say, we remain opportunistic you'd expect me to say that this market still required rationalization by the way. We don't think the announcement by Sunrise insult to jointly builds on fiber over the next five to seven years, if they can get the financing to do that changes much of anything really we already reached 75% of the country. One gigabit speeds are the competition had to articulate sums.

Sort of plan, which is what we think that as up to.

Moving to telling that they had a strong quarter on a number of levels with their best broadband and digital TV net adds since 2015, a customer ARPU is rose 2.4% year over year that was supported by a higher proportion of fast broadband and quad play subs.

During the Quad play the fixed mobile base now stands at 600000, and the total convergence ratio or mobile attach rate exceeds 40% in Belgium.

While there was a revenue impact on cobot, particularly handset sales in advertising underneath it all you'll see that subscription revenues are growing and above target. That's a good thing not surprisingly telling that confirmed the 2020 and got if they gave in April and that stuck to its original free cash flow and dividend forecast for the full year. Then finally, vodafones <unk> also performed well who depend.

The investment in networks and infrastructure continues with nationwide Fiveg coverage now available and new 20. Your spectrum life is just acquired a few weeks ago [laughter]. The rollout of one gig is also back on track with.

With nationwide coverage slotted for the end of 2021.

Vodafone Nichols results in the second quarter was solid the team managed to mitigate the revenue impact of co bid in the mobile space, mostly roaming related with 6% opera growth in the fixed business and proactive cost controls, which drove normalized Q2 EBITDA up 6%.

So there is all verticals there will also reiterated their full year guidance, including positive EBITDA growth and four to 500 million of free cash flow available available for distributions to shareholders.

Now before I hand, it back to Charlie.

To talk through the financials I just want to take a moment.

Switch gears here and recognize the passing of one of our board members.

Dear friend and mentor to me JC Sparkman, you might have seen habitual in Wall Street Journal, a just say JC was a legend and the cable industry down the loans words, a T. I was built on jaycees back over the 25 years that he was chief operating officer and he brought that same energy and operating listen to our board.

Over the last 15 years like this part of the Liberty Global family.

It will be sadly missed by all of us.

I don't want to end on a sad note, but just want to be able to convince your I have a moment to recognize him and his great contributions to our company over the last 15 years, but thats probably over to you.

Thank you Mike on the slide instantly Q2 impacts would come at 19.

Overall about 4.3 person can to consolidated year on year revenue decline, we estimate the combined impact is roughly 4% for around $110 million.

Within that we estimate the reduced revenues from premium sports accounted for $34 million, an increase like challenges around $8 million, you should be fixed and mobile impacts were around $19 million.

You asked me about running some reduced handset sales contributed $17 million and $10 million respectively.

We also saw reduced revenues at our recent Belgium glucose businesses, which we estimated 20 normal indoors.

So when you consider the estimates will be covered impacts to revenue trend is actually in learning moved resources.

Yes, there is available in parts of covered on adjusted ever during the quarter was minimal many of the impacts such as premium sports and mobile handset revenues and learn margin. I mean also benefited from reduced churn and lower sales and marketing expenses, which helped to offset material impacts as a result, we believe it or Q2 adjusted EBITDA growth right.

<unk> largely unaffected by covered.

The next slide in talking group had a view we show the key financials for the group.

But the revenue declined 2.3% adjusted EBITDA declined 2.4% for the quarter buses the declined 3.6% in Q1.

Okay. The clintons additions were 21.6% of sales in Q2 I'm about the impact of let me were 18.8% of sales.

As a result, we saw strong operating free cash flow growth, but pretty lucky in construction see after the quarter at $678 million, a 12% year on year improvement and also loving capex $601 million up 18.3% year on year.

Great liquidity remains strong at $9.8 billion and of course around our gross that was 5.3 times adjusted EBITDA and 3.8 times net.

We completed a number of refinancings in Q2, our average that tenant remains to be almost seven years with an average cost of 4%.

Page I'll talk to pay any additions, we provide more detail around our capex, which we continue to analyze in five from major buckets.

So the did have an impact on ROIC, CP spend which was down 34% year on year.

How do we feel great about set top box intranet books, a state we expect to see a reduction in spend in this category, even without the impact of covered.

It's like Tom said, we continue to invest in the other capex categories and later platform for future growth project Lightning builds volumes were down modestly year on year, but we still constructed 93000 homes in the quarter.

Customer premise trended down with the customer premise of 626 pounds in the quarter burst is 665 times cost per home across the project today.

Capacity and vessel was down 18% as we benefited from the completion of the large spectrum upgrade in Belgium.

So the one gig upgrades in the UK.

Increased cost spend in the product roadmap, 18% supporting our mobile platform from the UK and Belgium is one of the C.I.T. investments required to drug Digitization efficiencies.

I find which is a major platform women's category was boardroom on the previous years.

In the aggregate, we spent 1.2 billion in the first half of the Oh around 22.2% of sales.

But other lightning construction capex this figure would it be 19.1% of sales and with the completion of significant projects in the coming from video space as well as a major capacity narci upgrades behind us.

We expect to our capital intensity, excluding run into remain below 20% and trend lower in the coming years.

Turning to the divisional overview, which breaks some figures by all key major subsidiaries and provides a roadmap to analyze the free cash flow of a major assets.

You cannot show so were revenue decline in the first half of 2.1% adjusted EBITDA declined 2.5%, Oh, Yes, yes were strong at $749 million before like being construction capex.

$573 million off the underlying that remains a strong cash flow generating asset despite our newbuilding investment.

It also benefits from significant tax loss carryforwards, meaning a higher free cash conversion on its own Akcea Ben for example, Duncan.

It wasn't a group as a whole Belgium revenue in the first off between 2.8% Bugs recorded positive adjusted EBITDA gross 2.2% operating free cash flow $428 million.

Recently confirmed that free cash flow guidance, because the low end to the 415 to 435 million euros.

As Mike discussed the repricing the Swiss market continues to put pressure on the topline and despite operating efficiencies adjusted EBITDA declined 12.9% in the first half.

Our next year for the period was $140 million, we remain confident.

Yeah that we'd love to $170 million of attributable free cash flow at today's exchange rate.

As Mike highlighted to stand up before a major I since we started friends ago.

But covered in the first off the reported 2.6% revenue grew 8.1% adjusted EBITDA growth and increased Oh, FCF to $562 million turning to the adjusted free cash flow for the group as a whole after the first six months operating free cash flow before lightning Capex was just under 1.3 billion.

In dollars.

At half your interest of $600 million and cash tax of $57 million.

The joint venture paid interest on the shareholder loan of $22 million for the first six months I mean, we expect the remainder about 50% of 400 to farm increment in Europe protecting shareholder distributions in the second half of the yeah.

Working capital for the first half was negative $323 million consistent with previous years, and we expect the working capital impacts to be broadly flat for the full year.

As a result, adjusted free cash said before lightning Capex was $350 million, an after capex $139 million.

We remain confident subject to my major further disruptions from corporate realizing a full year free cash flow target of $1 billion, even after lending construction capex. So in conclusion UK JV with Telefonica remains on track.

We're continuing to navigate through covered 19, so far the impacts would be manageable.

Despite covered we were able to achieve record high NPS in Q2 and positive customer additions.

We're encouraged by our first off financials I'm not sure optimistic for the remainder of the yeah.

We are confirming what about Twentytwenty gardens metrics based on no return to the full locked down slightly so between March and May I'm, assuming a gradual economic recovery.

Given the uncertain to this backdrop, we're not raising I've gotten to this time and we'll take questions now.

The question and answer session will be conducted electronically.

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Oh for just a moment to get probably want an opportunity to join the queue.

And we'll go first to Steve Malcolm with Redburn.

Oh I'm sorry.

But can you hear me guys.

Got you.

Yeah, Yeah, yeah, Doug so like the presentation, just coming back to slide five in your and your multiples I guess, it's held at multiple kind of jump started but trading it says.

10% recaps the old I mean, I guess or what are your question for you and the board, Mike and Charlie <unk> are you. It seems like you're not getting tremendous equity volumes, but that's I can tell him at the voted for God's sake. Why do you think that is the list the board happy with the status quo. So you quoted in the region.

Cell type companies that you'd love to add more buttons are good.

Sort of it.

So why you think the spot market is not giving you you don't you clearly think it's fairly fair value for your stakes moves that Benelux assets and what you could do to sort out.

Sure and that was really the point of that slide but could you talk about the FMC tragedy, but the punch line being that we believe if we continue along this path, which we are of course.

Continuing on.

The devaluation.

<unk> line businesses in those local markets will be there and I think you do they sell on that that's a good example, trades at a premium to us on a number of levels are we getting that valuation in our stock question, Mark, but I think that she begins with the underlying businesses and I think the pack were on two could drive the that then.

She champions to greater free cash flow yield.

Greater stability and in operating performance is the starting point and it's clear also that local investors. Many of these markets refer to all these businesses and understand the benefits of a stable sustainable free cash flow and as a result, as you can see on the page <unk> or are giving these businesses higher multiples and.

You know better valuation so.

If we're able to achieve those same resulted in the results have already been its eating or we can get for example protocols. They go public or perhaps even though to be taken down a burger Lydia.

Though that could be a real positive events or the stock I'm not saying that's the only reason.

To look at it it's not explaining the entire gap that we have today between underlying value at Taco, but it certainly will help bridge that gap and you know we're we're all about as I've talked many times bridging that value gap.

And I think that strategy. We're pursuing here is the right one at investors need to see if you think that it wouldn't be surprising I want to see these transactions get done so we need to get the transactions a telephonic and you get completed and approved of course that will be a positive. When it is you need to continue to show and demonstrate the sort of strong before.

It's a cash flow that we're demonstrating how to be businesses today.

No question, we have to.

Put feel about money to work I think the money on our balance sheet is helping today and for some investors would like to see that money because the work. We appreciate that wasn't saying boat money to put.

Sure there is a combination of things, but hopefully this slide shows of the path.

Is the right so could walk evaluation and.

That's that's what we're.

Oh, that's also I might look like as Charlie just <unk> I didn't really I think we do feel ton it's pretty undervalued.

I think that it has done it is not clear to us why it would trade so distance to KPN proximate us which have less attractive cause protocols less stability in the cash flow sector and that's something we're certainly working with ever can join them because I think there's a number opposed to be technical reasons around liquidity to start kind or could it be around couch. Your on shoulder distributions here, the Palestinian buybacks and dividends.

No I wouldn't say that we feel comfortable with the value of upturn that we think its strong.

<unk>.

Yeah, that's really my question, but it doesn't seem like the current structure, where you and 60% Telenet and 50% of buttons that Guy is doing a great. You are there for you mentioned local this thing, but it certainly working with tell them at the moment I guess about for its own it trades and but.

But what did that despite really good numbers this quarter.

That was pretty my questions, whether you think the current garden setup work well out yet, but I think what about your favorite.

Yeah.

Steve I think I think we can make your the case, it's got to take a superior growth tortured any telco in Europe. So they would trade substantially so they're just speaking kipp you have on every single metric. So I think it's fair to say that valuation of them. We would expect to be inside KPN they'll go the way around particularly there seems to have I think the telenet somebody who is a is a a temperature and we're certainly aware of the.

The disconnect and we're talking about with them about it but it's a fundamentally a very strong company very predictable cash flows I think at this stage for whatever reason isn't getting the valuation, but its record mikes point, even at that valuation betrayal discount to that is up there.

I guess unusual I agree with you know just trying to figure out you know whether it was it better structure out there that would close that you know it's undervalued with a new and then it's the local listing itself is probably had a big discounts the companies like probably too that I I think it will be performing better than women.

Hi, there, it's a chronic Yemen lower.

But any more elaborate.

Yeah, well a bit more levered than some of it stops on this page of course, a telenet and political and video rather the you know the answer is saying which is.

Fundamentally tell it might be undervalued, what clearly undervalued, but the strategy of creative transparent value have to do that they all the time.

Based on what with the banks about right. Operator next question you got it.

Well go next to David Wright with Bank of America.

Yes, hi, guys. Thank you very much for taking questions.

Just on the UK trends, obviously strong internet ads cable on US you guys are committed to maintaining quite a lot of the provisioning through the locked down period, which will surely have supported.

The trend or it's still does stand out.

As a much better commercial performance.

Could you maybe just a.

A little color on what do you think is driving not was it perhaps that's a in the UK consumers reacted a little bit less.

He sort to the and the contract regulation, what does it you, saying history it really driven.

Okay outperformance. Thank you.

I'll, just say a couple of things and then loop or what you chime in here from my perspective.

The fact that we were still installing customers.

ER actively in the field certainly advantage to us we didnt stop installations, we felt that that was critical in central and continued to make a products and services available to consumers, which is important and then secondly at times like this there's usually a flight to quality and when we're operating profit of bag.

Cross the country.

And the competition as a 30 or 50 or maybe others. In some cases are slightly more that's certainly matters a those two things in my mind.

Resulted in certainly better better performance than we'd expected together with reduce churn in each of the numbers with you on after that.

Yeah.

I think.

Actually what you said Mark and I mean, what we did was a we came out right at the beginning of the crisis was the generosity program for our customer so I thought that having a more the offer them mobile data packages of her removes any tax on on board. It came up with ER free of charge.

Walk up in China, how kids and stuff like that and ER. So I guess has increased rapidly.

Oh, that's number one number two it I mean actually said affection ultimately is increasing in quite some time and to our people people.

Eight committed to the company and so they decided to keep installing and keep it keep expanding that for so which was also great contribution to success Thirdly, we quickly moved to digital like I mean, we've started to try me today, it's a to life. So to me yeah.

And.

Now our sets channel or digital chipsets 10 has increased by 50% from Q1, two Q2, so that Chet <unk> general, but 10 touch digital has increased to 68%.

And on the trailing five then high and pass it to lower our children and also obviously optical openreach. They have stopped installing so therefore, you could not really trying to another network.

And Ah, but also you'd see that our quarterly churn, it's going to own all but three consecutive quarters in a real. So therefore, we have sets momentum we happening when Camillo Watcher and we have high Emcare and also as Mike said I have to speed and higher quality met or.

When the connectivity the connection to the output deals.

I'm trying to put up possibly US then we know that Openreach was back in the market in June.

With a lot more installations, almost back and kind of full run rate.

Can you kind of gave as any indication that the sort of into interest sort of quarter trends and whether you know you kind of exiting the quarter, you know, maybe a little bit more normally rather than not that kind of initial spike what was the real outperformance sort of through April may and June maybe a little bit more meat.

Good.

So from the fifth perspective, we actually accelerate momentum.

So we have not felt that ER, our compared pick up back in the market.

From that sure on you see I mean, we have seen in I think may in April on our churn numbers.

Right I mean, Deborah dramatic, though the churn levels has come up a bit more but it's still lower than it used to be.

Okay very interesting thank you.

Well the next to James Ratcliffe Evercore ISI.

Hi, Thanks, taking my question, Tim if I heard one answer it picture of discussion on fixed mobile convergence and have the rationale UK transaction can you talk about what the.

Pitch to the customer what the compelling proposition for the customer is on fixed mobile convergence beyond just you got a bundled dead cat.

And secondly.

Quick commentary that preferred stock in sports packages and <unk>.

Probably isn't a lack of sport for though that there were no margin.

But our sports a big part of the leasing people take pay TV.

So can you talk about the longer term impactful so a lot sports and secondly, how profitable is the TV business for you at this point you OS operating system, but pretty much throwing the towel on it but how beyond those are trying to do so how liquidity is that the TV product itself.

[laughter] quite a few questions there yeah.

Let's see.

Did you think that work up what we're doing a little for the UK and at least one example of a fixed mobile proposition to consumers today, and how that might evolve in an antidote to environment I'll say on the TV business of course, we evaluate this very closely across every marketplace, we still deliver and generate.

Pretty good growth margins on our TV business in comparison to say the U.S. industry.

That's principally because we don't have massive.

<unk> expense in the basic package for sports.

And so our growth margins.

Area by market, but there could be ittai 60, 75%.

In our TV business that that's you know from our point of view.

Nice apiece, nice contribution to the EBITDA and something quite important to us and we don't intend to sort of let it go if you wells you think you applied.

We do realize though that the overall economics of TV happy involved in our evolving.

So what you're spending quite a bit of time on is reducing the cost of or the device. We put in home of ensuring that things like sports are available on a premium basis and integrating OTI t. apps. So that your experiences seamless so that could have a TV on you just say play metrics play Amazon, but I didn't see and you're ready to rock and roll. It. So we do.

Thank you Entertainment platform, we've developed has longevity and has relevance to consumers because we're integrating apps, because it's cheaper and easy to utilize and we intend to continue to drive the cost of that down so there's margin of the TV business.

There is profitability of the TV business.

From a sports point of view, yes, we're in sports pause, we did lose a handful of customers, but most customers just pause.

And Fortunately for us whatever money, we lost from sports customer pausing, we ended up getting reimbursed adjacencies and not having to pay those costs. After all providers, so with a lot, but largely a wash for us.

Zero margin was last one on like is that we know because we have restricted.

That the entertainment.

Pulled ahead of the bundle matters to broadband customers.

You know vast majority of broadband customers want to see a TV product in the bundle and that is hugely impactful for their back their purchase decision. So you can't just eliminate the entertain a crack and we wouldn't do that anyway. It part of our revenue and contribute to the Doe.

But I'm going back just to point out that it is still highly relevant part of the bundle for consumers across Europe, who watch a lot of free to air television still and who are.

Breaking oki apps, but but equally embracing them on our platform. So we talked about deal bundled into your debt and how you see that evolve in l. too.

Yeah.

I think it not only a discount which brings the customer.

Bye bye.

Fixed local drug product I think it's a combination of benefit.

But what we've done with.

Yeah.

We are offering and too much I ask Pete.

Surely now they don't forget 600, and it when they get the high ticket.

Speed, they don't get without them.

Hi are more by Baker package, so two gics instead of war on or candidate instead of five contract that.

And then also a special a couple not sort of the.

Offline or where they have great support and this combination I think it creates then its strong momentum and put some cut them sixtyv, it's more important for them at some of the package for them, it's a combination with great.

And.

And so it's it's it's much more than in difficult I mean, the this calling tax beam and plate.

Here, but the fixed mobile convergence customer base has not to increase the last.

From 2016 to oppose show the 19, and then really came up.

I think big time, but we're not create three percentage point now what are your take that too old to.

And I mean that simply provide a huge opportunity.

Because 80% or or perhaps tomorrow.

Do have different six brought that provides I remembered media.

To sell stuff that we have made some market research are actually interested in such a corporate bonds. We just talked about and the brands like very close and they would prefer a product like that.

So therefore now it's all about I missed any different segment.

And then coming up right product combination and then offering that and bid.

Then I think the tailwind for the revenue synergies in the case.

You can see it even though you would studied the Vodafone visible results.

Second quarter, but almost.

Every metric.

You know, we've outperformed KPN and that's because you know we're finding the rhythm that matters to consumers in that to fix mobile space you know and it is feed a base. It is not just leasing cost it is giving people more sometimes it's more for the same more for more maybe even more for less sitting on the combination more mass.

Matters, and that's exactly what fixed mobile convergence whatever so.

Great. Thank you.

Right.

Well go next to Robert Grindle with Deutsche Bank.

Yeah, Hi, though family they're much for UK you seem to have played locked down very well, indeed, and perhaps benefited by some of your peers not playing so well.

But last week Ofcom recommends that more than 60% of your broadband customers are out of contract, but that number been moving up quite a lot with make and do you intend to address this perhaps an h. too.

Then the construct of your guidance. Thank you.

Did you want to tackle that.

Yeah Yeah.

So we have talked at length of contract Acacia and I think in the previous quarterly calls.

And I can confirm the message I've given there so actually the impact and Gulf contract modification is let them get planful.

So what does that mean that means that customer.

Seek the less challenging to get additional ER This code to stay.

As we have sample.

So I think that's number one but the number two it that.

We think that.

Pete matters more than ever right I mean, when you have four five cold cold member.

Mom and dad are doing video called the kits up playing or are you just when you.

You need speed and when it's really rely with food and therefore, our efforts to be UK.

It's two and a half times higher than the average.

And we are working on a increasing that that.

Yeah, and therefore, we think that our customers if they perceived value for money.

And that we actually not so concerned about that 60% of all customer up in contract and we don't think that we should all of them down with big discounts with state and if you look at our NPS member and proving that our churn number we on the right path.

Yeah, I just said when we even at the end of contract goes kitchen paired began before code that really hit and then it was largely pause on most of the industry, but during the period of time that it was you know active.

Let's say you saw the churn was maybe more or less what we expected that the discount acquired.

He customers was also significantly less and so it really in the short period of time, we had pretty cold at the end of contract impact leads for our business was less than we expected.

We all more recently gotten back to engage with customers I listen, we'll let you know well to get to our third quarter results, but so far so good.

Yeah, we happen to be 10 days or offline.

Obviously also to support wasn't like that right and also a bit in breakout for guidance.

It's now ever expect her notification coming and we would talk with seven fall and obviously, we are capital in our planning at 15 with enterprise notification.

He was here.

Okay.

Mhm.

Thank you.

Yep.

Operator.

One moment.

Hello.

I don't think our next question from Nick Lyall.

Hello.

It was a cool that question sorry on the.

Churchill essential came I can you mention publish their horizons low quite white blood cells gigabit convergence is coming up and also you got the Swisscom sports the all the way, but EBITDA was still down about 11% ex the one off so could you just chime way up here between me you, obviously mentioned some operational changes to the business to hold.

Long before you can start to think about stabilize or whether we'll move it die. If it's always it still seems quite a long way away.

Thanks.

Sure.

With the turnaround plan remains as it's been described in terms of our tactics in our strategy. So it's all about one gig gay the TV box deals penetration.

Maximize.

And to retain some of the you know record NPS that lead the we've been delivering another and driving the fixed mobile convergence, which has been a steady.

Steady success story for Us every quarter.

And it and then lastly, keeping ensuring that our customer operations continued to be smoothly and the digital transformation process. Also there was working quite well, there's a lot of positive things happening, having said that led to the market is competitive.

You know, we have to stay competitive which will be thoughtful pricing.

And offers and packages and I think you know as you didn't really provide anybody I don't believe a specific details as to when we would be breakeven EBITDA, but we'll be back to growth. We continue to evaluate that timeframe of course and Ah I don't know that we've made that public and I'm not sure. They go at this point, except to say that we feel good.

Very positive about the plan.

Even if the plan, but to take a bit longer you know we're in this for the long term or the plant itself is solid and sound and we look to us like it's working.

I don't know that teachers aren't going to add anything to that that piece around use of momentum.

Current I missing on the ground go ahead.

Yeah, there's about this.

I think its dislike medmarc Mike's as it continues to be a very competitive market, but we're building commercial momentum and loose was saying that he saw growth in the quarter and the same we can say, Switzerland through June was better than may enables better than April in terms of sales.

I'd like to find the point out the switch with his boss the board the movie investment. If you look at the operation free cash flow margins that was 28% in the second quarter.

It's not an incident. So we're past investments are the ones get network news video platform.

Now taking your opportunities to really simplify the business.

So this continues to be available cash generated less than that if sales momentum coming up.

Okay. Thank you.

Yep.

Well the next two Matthew Harrigan with benchmark capital.

Oh, thank you.

Okay, Yeah remember controlled.

Pointed out a lot.

Taking definitely your network is really.

Got a transfer to get the writer effect almost.

Great and Google now you got your even more is already going forward, maybe five years ago Ultra broadband business is that by GE. NPRM, then you probably even more value and that work you know with that some of the labor issues between DOCSIS three parts youll see being addressed.

Is there any possibility that you could kathy.

Sure Okay.

All right you grow overtime and I know right now.

Good numbers, you're kind of looking at your lawyers and from you're ready to be heard the cost to be hurt at the same partner.

Sure sure Paul you can estimate there you can foresee due to revenue before we go little bit perhaps your longer term, but can you kind of where that al you can talk at all.

Also you characterize it reaches change year on Mako getting them.

It's no urgency and hopefully getting more benefit to that that working is 80 people were using your network other companies wanting to be I apologize.

Hey, Matt I wasn't sure I follow up question. It sounds like you're asking couple of things there I mean, our network strategy with them. They take a jump in here and talk about that shows us continuing to drive speed from one did that can give all the time. So there's no. The strategy, it's clear you know or whether its.

DOCSIS Ford, although weather fiber to the homebody like after rebuilt and enlightening fiber to the home built we're going to continue to lead.

Wherever we can the speed rates and that matters considerably to consumers.

Mobile and fixed mobile convergence the same can be said on the wireless supplied by GE and one gig board powerful combination.

By GE and then give you the more although idea ones is it sort of the killer App and if you look across the markets. We operate in where the only want really providing those options today in the UK. Once we get the deal would go to close loop about and they're locked in there as well as there's lots of.

Physically.

You know the growth over the long term is not an accident I'm not sure. If it's certainly something that's quite deliberate and purposeful and driven by all the things. We described on the cost side, you've got lower cost you've got synergy on the revenue side, you've got less churn you've got higher NPS and you in it you continue to innovate on the network.

In the bundles and the products and consumers have shown everywhere. We operate that you could not just drive sustainable EBITDA growth, which matters, but also in just as importantly, significant greencastle margins and free cash. So that is where we're ahead, which is ensuring that all these operations are able to deliver sustainable.

Hi margin free cash flow.

<unk> dividend back to us to ourselves, but we're taking those assets public and looking at market values. You know, we know that theres an opportunity to capitalize on on the infrastructure in the retail relationships in a way that we haven't done historically so that is.

That is basic strategy I'm not sure of dressed your specific question, yes, it's better.

What do you think would apply to go would've been given that increase all your network you eat or you're going to do more routes your pricing more than you have that historically because you are undervalued are now what could be pretty equal but outside of people really benefiting from your network in the different because it translates to better pricing power over <unk>.

Our.

Can I did I hear you know my.

Yes, you're right on idea.

Just one idea right I think I'll try to do show, though that we are combining for products now right. So we are combining fixed mobile voice mobile broadband and video and the video product.

It's getting more mall to keep product what we're doing it.

With the help of data, we understand our customer in a in a perfect way.

Hi, Bob did it till we really offer a combination for all the customer all the.

The right level.

And therefore, then we are creating a high stickiness overall customer.

Going forward.

Therefore, when we have successfully with that they can also got all the stuff.

And this will give a.

They have into position, where we have successfully with that also includes our margin or pricing right and our operators who have done that hopefully when you're thinking about core playing as you think about that that's an opportunity to get there, but I think the first step is that we are able to offer quad play.

That's perfect way to all across America, and this is the FMC that.

I don't know if that help.

Oh It does in fact BARTEX lot sorry, Paul So for me under your belt Okay.

Well as Matt.

Operating their cycle or more.

So.

Yes, well go next when a couple more in the Q.

Or something then with HSBC.

Hey, guys and thanks for the question.

Back to this to Switzerland, I mean, it's you know I would say that the weak spots in overall pretty good results.

You mentioned that my earlier.

Switzerland unfolds and you know joining forces with some north on the fiber to the home from.

Well what are your strategic options in Switzerland down the road I mean, the but the last year failed so would be interested in your thoughts there.

Then a bit of a follow up too, but the point.

What are we seeing in terms of market aggressiveness awful and I've seen that Bdcs also know going backwards. So what are the trends that youre seeing roughly speaking for the second half is it better than each one or can it be better because of lower investments.

Okay, but that gives you could work have been answer on the second month on the first one the strategic options remain the same ones that we've always articulated and I'm not going to getting to speculate which of these make the most sense, but clearly as I mentioned in my remarks.

We think the market would benefit from rationalization, we are trying to do our part game. That's of course, it very small part we achieved in the second quarter with the announcement.

The sports deal with Swisscom wouldn't underestimate that I think that's going to have a major impact long haul both on our own investment in our sports product product as well as our consumers as a benefit to our customers of having access reciprocal access to both sports products.

You know we have a strong as you know agreement with Swisscom, a very rational and beyond agreement with them that gives us great pricing at a reduced prices further in this where this agreement.

And so many of the operators in the marketplace as interest on the particular are starting to make decisions and work in a in a manner that that we think field the marketplace.

I mentioned on the Swiss fiber announcement.

If you parse through that you break it down you know, we're reaching already 70, 75% of the homes, where the won't get product.

I hope to build 1.5 million at about 4 million homes in five to seven years.

If they can get the financing to do that and you know that makes sense to us if I were in their shoes I would certainly look at something like that they see the infrastructure capital sloshing around they they figure one that awesome.

For something to work that realize that makes our reliance on swisscom less and I appreciate that strategic decision those things will take time, and we'll be extensive and let's see what the ultimate you know market situation looks like in five to seven years in the meantime, you know, we just deeper or head down and push the benefits of our networking.

Our products, which are pretty strong you know and I think it's you know I'm not going to give guidance you run the numbers start to continue to look.

You know better on the financial fraud, but you can see that a customer adds certainly better than the last.

Two quarters or same as last quarter better quality prior to that and you know market market improvement here, it's going to take a little bit more time to be probably thought but that trajectory looks good and we're still confident and the number one thing here is to drive free cash flow.

But whatever yield you want on the 170 million of free cash flow that meaningful equity valuations business. We continue to drive free cash flow that the you know that's the metric that matters in this particular and.

If you want to provide some color on the ought to be there's no no I think I think that free cash flow of this quarter concerns the oneseven legal school and that he principally in this business.

Secondly, as a decline in Switzerland has these low margin cobrand intact. The Charlie explained if you look under the route.

The need to be business continues to grow will be could be business still grow 3%. If you take out the low margin is that could go live.

Then in consumer business, we deliberately because all those lives that plan starts to improve.

We found a way unless the by rising you found a way with better distribution, we found a way into the motion signs price boards and I was just would like to reiterate lease exit run rate of quarters is good.

And the estimates from all the school has never been as high as we can go back for UGI in Switzerland. So the momentum is there.

At a time now with whom they stay with free cash flow, but school.

Right. Thanks, guys.

Yep.

Well take our last question from James Ratzer News Street research.

Yes. Thank you very much and beat up two questions. Please just coming back to the U.K. The first one.

Take a picture one around your your strategy.

I mean I was wondering if you are kind of pivoting the strategy now, it's becoming a little bit more price competitive I mean, I seen they just being sending letters out saying no price rises that hearing you have extended youre in introductory offer appeared from 12 to 18 months.

Both of which would seem to be making you more price competitive versus the competition. So I was wondering if this is a little bit of a pivoting strategy to to help support K T eyes.

And then the second question I had where he was just trying to quantify the impact of and contract notification and the best Harris and education as well I mean, you're saying excluding sports all too in the quarter seem to fall about 1.2% growth to being flat.

How much of that is actually driven by end of contract and that terrorists what percentage of your customer base now actually have had a notification space. So I mean, you're telling us its land inline with expectations, maybe you could steer us towards what you think that impact.

I will be when it's worked its way for the three the base that would be great. Thank you.

Dan I don't think we provided any guidance specific monetary guidance on ER and its contract at the beginning of year. We've said in our original guidance. There was a 100 million pounds headwinds, which included end of contracting I know, that's tariffs as well as Blake network taxes and things of that nature. So.

Let me be broken that down in two components and what we said is that the under contract experience prior to closing, but better than expected not as expected in a sense that the chair numbers were largely what we expected them to be but the amount of discount we had to offer to achieve those levels was less and.

I think we've already got that Oh, it's only been a very short period of time that we activated and contracts are not much color to give you there but third quarter.

Get back on the phone Nov will certainly have a longer track record to be a.

Sense of how things are moving and you know leads you can dig in on the price increase which yeah correct. If there has been a.

Close down here and I think that makes total sense in the environment that we're in.

Taking into consideration this uncertain time for customers.

Seems to walk you know from our point of view very.

Appropriate thing to do but I've loops has a great plan, which we just approved to go ahead and actually neutralize the impact of that price increase not occurring fourth quarter through greater volume growth. So you can talk about that quickly.

Yeah. So trust you ops your question.

The development of the opt to you.

From Q2 18 under two to 19 right click 50 years ago was an ARPU gross or dog fight the time.

Now if you know look at the opposite development and if you exclude the corporate impact we haven't after gross or one portfolio.

Well the delta between the two years is booked focusing and we have quote the price right. One month for work, which explains the majority of it because of the different.

Phasing out the practical.

So therefore and the rest is a bit under contract modifications. So therefore, I think what I'm, saying eight that's not a deterioration on the appeal in general other than a bit from end of contract for the vacation and this is lower than the estimated.

Second.

On the price right, we have decided not to do it in 20 trendy and we have.

On one end type absolutely Patriot act to liquidation.

We also looked at sensitivity sell them if certain higher reaction would have kicked it ended up would have been also margin dilutive for us.

The current momentum we see on net ads.

Yes compensating for that.

In 2020, and the momentum if we can get into a certain pond can also compensate that for certain time in 2021.

And to finish with your question are we more price aggressive to make some cosmetic customer net ads.

I would say Yonkers, no so our ambition.

To create long term OTI, Oh actually act.

Growing.

Provider.

So therefore, it's not about couple on it but having said that the market.

Speaking when do you watch acquisition price levels across different speed.

It has come down that over the years.

And also in the last 12 month by 6% and obviously, we are reacting to that to get a fair share, but the idea that absolutely not.

Change the price position the value proposition here from a market and compared to competition that is not all that stuff.

Right. Thank you.

Yeah, but lets take everybody in or with the a copy out here a little bit pass. So appreciate you joining us as always appreciate your support hope you say well and safety rest of this summer.

We've got a lot of positive things happening talked about those today the UK transaction on track.

Good performance all things considered to all of our markets in this Kobe pandemic period, and a number coming out of it.

Lot of positive momentum. So look forward to talk is due in November that there.

Ladies and gentlemen, this concludes Liberty Global's second quarter 2020, Investor call. As a reminder, a replay of the call will be available and the Investor Relations section of Liberty Global's website. There you can also find a copy of today's presentation materials.

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[noise] good morning, ladies and gentlemen, thank you for standing by welcome.

Welcome to the Liberty Global's second quarter 2020 Investor call.

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Mr Relations section of global Liberty Global's website at Liberty Global Dot Com.

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Today's presentation May include forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.

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These forward looking statements involve certain risks that could cause actual results may differ materially from those expressed or implied by these statements.

These risks, including those detailed and Liberty Globals filings with the Securities and Exchange Commission, putting his most recent filed.

<unk>.

Hey, Adam.

Liberty Global disclaims any obligation to update any of these forward looking statements.

Any change in its expectations work and that condition on with any such statements.

I'd now like to turn the call ever to Mr. Freeze.

Thanks, Operator, and welcome everyone to our Q2 results call first of all hoping each safe well and as always we appreciate you joining us today.

Plan is to run through the slides in prepared remarks were about 20 minutes or so to be sure. Your level set on the key messages. This quarter and then we'll spend the majority of our time answering your questions as usual have asked a handful of the key exacts to join me on the open line and I'll be sure to get them involved mcewen a session as needed.

Okay. Good off on slide four for those who are falling along with a summary of the key highlights from the quarter to pretty comprehensive slide So bear with me I want to be sure. It hit each point I beginning with a few remarks on how we'd been navigating to covert 19 pandemic.

I see this is on top of everybody's mind, so I'll spend a couple of minutes upfront and then we'll get into some more color in detail to the course of the presentation in Q in a.

Clearly our primary focus has been in remains.

Safety and well being of our people now 85% to 90% of who continue to work from home like most companies you've heard from working from home can and does work in were no exception of course in our case it the balance that with the need to be in the field building and maintaining plant and installing in servicing customers.

We're also governed by different local regulations and protocols in each country, most of which have required that we open up offices slowly and carefully and that's exactly what we're doing.

As we get back to normal everyone in our sector is working on bottling. The magic so to speak whether its record customer satisfaction levels are faster and more agile ways of working it I'm really excited about the progress, we're making here, which I think is going to be definitely positive for us down the road.

Now while the macro environment in Europe has been severely challenged back over 19, new region on the whole has weathered the crisis pretty well and better than many expected as anticipated eurozone GDP fell 40% in the quarter.

12% sequentially, but there's some bright spots there not least of which is you know by all accounts a pretty effect in handling of the pandemic.

All of our cooperating markets in Europe have successfully flattened the curve is daily confirmed cases anywhere from 75% to 95% blow peaks in March and April and fingers crossed staying pretty constant justice impressive well every death is tragic mortality rates have fallen to levels at or near zero in most of these countries. If you contrast.

That with the U.S., it's pretty striking the crisis is also brought the region. Together you know in addition to stimulus measures rolled out of the National level. You. You mentioned, we adopted a 750 50 billion Euro recovery fund designed to help businesses rebound, we form those economies hardest hit protect against feature crises in it.

First unless a confidence both among consumers in investors seems to be on the rise you can see that in euros recent strengthening against the dollar by about 10% since mid may.

Against this backdrop, our business continues to perform well very well in fact fueled by record MPS levels, lower churn robust and reliable networks and significant steps to give customers more more spend more data more content and that's a theme I know you've heard from a unified heard about for many of our peers.

In our case broadband net adds were the highest we've seen since Q3 17 in customer additions driven mainly by the UK with as best we delivered another two years.

Now about cobot had a modest impact on reported revenue and Charlie is going to dig into that and event.

All of that shortfall occurred in low or zero margin line items, which allowed us to deliver better than anticipated EBITDA and operating free cash flow. The latter was up 14% year over year.

Not surprisingly, we're reconfirming, our original 2020 guidance and quite frankly, we hope to exceed those levels.

Switching gears I'm pleased to report that our UK JV with Telefonica is off to a great start.

As we reviewed on our last call. This will be a transformational deal for the UK our respective customers in for shareholders. It's a win win win as and we like to say after a couple of months of pre merger planning my excitement level for this combination is even higher and I think as you all the details again I'll just remind you that we're talking about 6.2 billion pounds.

Synergies a great valuation for Virgin media going into the deal and expected proceeds to liberty coming out of the deal not 1.4 billion pounds.

I'm talking about a fixed mobile convergence in a moment on the next slide when you combine the UK fastest broadband network with the country's largest and most admired mobile company. The long term value creation opportunity is extraordinary.

Also going the other teams are working extremely well together the financing is falling into place and the regulatory process is underway. So everything everything's on track with the completion of this deal.

Just a couple additional points your capital allocation as we indicated in our last call, we definitely front loaded our buyback activity into the first half of the year, which you would expect us to do given the price facility that means is already purchased around 750 million of stock in the last five months.

The brands. The question I know you're going to ask you don't have any announcement today about adding to the buyback program. We're always you're viewing those options of course, but we have 250 million remaining on the plan will be putting back to work for the time be.

And then finally, our treasury teams, we're really active in the capital markets. This year refinancing over 10 billion of debt extending our tenant over seven years and reducing our fully swapped borrowing cost to 4%. So to recap we delivered strong subscriber results.

The down operating free cash flow are ahead of consensus and we're confirming our original guidance for 2020, and then of course, we're making great progress on the JV with Telefonica in the UK.

Speaking of the UK I thought it would make sense to revisit the fundamental logic underpinning this deal and the other fixed mobile combinations of orchestrated recently this isn't very clear and powerful strategy at work here since 2015, we've completed or announced five fixed mobile mergers the total deal value over.

80 billion in each case, the fulcrum asset with our broadband network built over the last two decades through organic growth in national consolidation.

In certain of those transactions, we enabled the creation of a fixed mobile champion through the sale of our cable operations to a mobile only player that was the case of course for the sale of our Austrian business T. Mobile for 2.2 billion or 11 times EBITDA in 2017, and the more recent sale of our German business, along with some smaller operations to Vodafone for 22 billion or 11.5.

Five times even to.

And your highly accretive deals for us right, where we were exiting at premium multiples and banking significant returns on our long term tax efficient investments in these markets you've all seen in numbers. The by all accounts. These were also homeland deals for Vodafone It goes telecom, because whether you're a seller or buyer fixed mobile convergence works is that I think I think it's one.

The most important strategic developments I see in Europe in my 30 years.

Drive scale, it dries massive synergies it drive sustainable cash flow and ultimately it drives better valuations, which is why in Belgium, Holland any UK, we chose to create their own fixed mobile champions bladder by acquiring a combining the mobile player in those markets and the strategy is working brilliantly for our slide five provide some numbers the supply.

With that and the top left to highlight the scale of our combined operations today in these markets in Belgium in Holland, we surpassed the incumbent in fixed BDC services.

And if we're number one in broadband and TV in both cases, we're gaining share in mobile the convergence ratios exceeding 40% and growing.

And you can't will start to JV with the number one share in mobile and on footprint will be number two in TV a number one in broadband.

We know that roughly 80% of Virgin customers are using someone else's mobile product today in a highly interested in a converged bundled from us and as we continue to expand the reach of our gigabit broadband network will reach more and more to customers.

Also drive strategic leverage and opportunity in these markets what does it do it enhances our ability to shake the political and regulatory agenda, which are you. All know is critical and it puts us in a position to take advantage of ancillary opportunities in areas like content and new services and infrastructure.

It's not surprising that shouldn't be analytical ziggo was the first to launch Fiveg.

It's also not surprising there, but if I'm going to success with fixed broadband anchored by one good rollout and the strongest sports franchise in Holland.

Telenet seemingly acquired a free to air channel is now launching a new Belgian Netflix to several minutes OTI content offering. They also recently announced project to the largest utility companies planners to only control the network on the future.

And the merger, though too in the UK makes our previous expansion and network expansion strategies in infrastructure monetization ideas, even more compelling in my view.

Second as you've seen synergies is fixed mobile transactions are a significant source of value creation just in the three deals where we remain directly involved Belgium Holland in the UK announced synergies total over 12 billion euros in an NPV basis, NASDAQ demonstrated again and again these synergies are real achievable and sustainable.

That was never missed a synergy target and indulgent, we've exceeded expectations in Holland, we expect to do the same this bodes really well for the UK and accrues to the benefit of shareholders of course, but also the customers as we get smarter faster and more responsive to their needs.

It's more mergers also generate real growth anchored by stable free cash. So you can see that on the top rather slide in the case in Belgium, and Holland, we're able to turn around me the Doctor Directory and even more important deliver significant distributable free cash so over 4 billion euros in.

These results are derived from what are increasingly predictable outcomes. The realization of synergies better customer experience is reductions in churn increases in MTS and inevitable repair that occurs over the longer term when markets rationalizing consolidate.

And lastly, investors, particularly in Europe are signing higher valuations to fictional platforms on the bottom right to show you a half dozen examples including companies like Swisscom TPN, Intel or two and you can add your own or take these obviously, it's up to you but on average the stocks are trading at eight times EBITDA with operating free cash of multiples in the mid teens and midstream.

The digit levered free cash flow yields, so clearly skill synergies and stable free cash flow, our desirable investment characteristics, especially when you're a national champion or national Challenger.

This underpins our perspective interest in public listens to be Frank where it makes sense for us in certain instances to try to take advantage of these market valuations.

Because higher valuations in greater transparency and sustainable free cash flow should support our own valuation at the parent company, regardless of whether you look at us some of the parts basis or use proportionate EBITDA or operating free castle or if you focus unlevered free cash and the annual dividend stream, we collect on these high margin operating assets.

Speaking of operations, we have a usual updates.

Each operating company in the presentation for your information an interesting times, there's going to hit a few high points here from each market and then we can address any questions. Your thoughts you might have during acumen and I'll start with Virgin media, which by all accounts had a strong quarter 24006 customer additions, including growth on both the lightning and be a you footprint.

These results are supported in part by reduction in churn and 33000 broadband edge, which we estimate to be 75% of all broadband adds in the UK.

This customer ARPU was impacted by Tobin.

Particularly pausing in the premium sports, but on a normalized basis ARPU was flat.

We had a 90000 homes enlightening footprint in the quarter, bringing our cumulative built a 2.3 million in total gigabit ready homes in the market to 15 million nobody has a faster and more robust network and Virgin media, if not even close.

And it doesn't have another strong quarter on mobile 85000 postpaid adds on the back of their own quad play bundles, adding three points to the fixed mobile ratio.

Listen the team I think a really start to hit an all cylinders and that sets us up really well leading into the merger with though too.

I suppose market remains highly competitive by the way you know that which is why was invested last year in the nation, my youngest rollout and our new video platform and digital initiatives across the customer operation. Good news isn't investments are beginning to pay off.

With commercial momentum building in Q2 and operational trends improving for example, NPS is at an all time high in sales in June actually exceeded both last year end pre koby levels. We also announced an agreement with Swisscom that rationalize a sports in the market and ensures that each of our customers will have access to both telecom in my sports going forward.

As you've heard of said many times were particularly focused on free cash flow in this market and you'll see that operating free cash it was up 10% in the corner, which supports our full year forecast of 170 million of Levered free cash flow.

Taking a look and I say, we remain opportunistic you'd expect me to say that this market still required rationalization by the way. We don't think the announcement by Sunrise insult to joint you build some fiber over the next five to seven years, if they can get the financing to do that changes much of anything really we already reached 75% of the country. One gigabit speeds are the competition had to articulate some.

Sort of plan, which is what we think that adds up to.

Moving to telling that they had a strong quarter on a number of levels with their best broadband and digital TV net adds since 2015, a customer artisans rose 2.4% year over year that was supported by a higher proportion of fast broadband and quad play subs.

In the Quad play the fixed mobile base now stands at 600000, and the total convergence ratio or mobile attach rate exceeds 40% in Belgium.

While there was a revenue impact from covert, particularly handset sales in advertising underneath it all you'll see that subscription revenues are growing and above target. That's a good thing not surprisingly telling that confirmed the 2020 in guidance you gave in April and that stuck to its original free cash flow and dividend forecast for the full year and finding Vodafone Ziv will also performed well who depend on.

The investment in networks and infrastructure continues with nationwide Fiveg coverage now available and new 20 or spectrum life is just acquired a few weeks ago [laughter]. The rollout of one gig is also back on track with.

With nationwide coverage slotted for the end of 2021.

Vodafone Nichols results in the second quarter were solid the team managed to mitigate the revenue impact of Covidien, a mobile space, mostly roaming related with 6% opera broken that business and proactive cost controls, which drove normalized Q2 EBITDA up 6%.

So there's overtones it'll also reiterated their oh your guidance, including positive EBITDA growth and four to 500 million of free cash flow available available for distributions to shareholders.

Now before I hand, it back to Charlie to talk through the financials I just want to take a moment a switch gears here and recognize the passing of one of our board members.

Dear friend and mentor to me JC sparkling.

Might've seen habitual in Wall Street Journal.

I, just say JC was a legend in the cable industry Jana loans words, a T. I was built on JC back over the 25 years that he was chief operating officer and he brought that same energy and operating listen to our board over the last 15 years laws as part of Liberty Global family.

He will be sadly missed by all of us.

I don't want to end on a sad note, but I just want to be able to can be sure I have a moment to recognize him and his great contributions to our company over the last 15 years, but thats really over to you.

Thank you Mike.

Slide into Q2 impacts would come at 19.

Overall about 4.3 person can to consolidated year on year revenue decline, we estimate the combined impact is roughly 4% for around $110 million.

Within that we estimate that the reduced revenues from premium sports accounted for $34 million, an increase like challenges around $8 million, we need to be fixed and mobile impacts for around $19 million I'm glad you asked me about running some reduced handset sales contributed $17 million and $10 million respectively.

We also saw reduced revenues at our recent Belgium do cost businesses, which we estimated 20 moment indoors. So.

So when you consider the estimates will be covered impacts to revenue trend is actually in learning was a recent courses.

We intend to the overall impact you covered on adjusted EBITDA in the quarter was minimal many of the impacts such as prana sports a mobile handset revenues and learn margin and we also benefited from reduced churn and lower sales and marketing expenses, which helped to offset material impacts as a result, we believe it or Q2 adjusted EBITDA growth right.

Good largely unaffected by covered.

The next slide in total agreement view, we show the key financials for the group.

Despite the revenue declined 2.3% adjusted EBITDA declined 2.4% for the quarter versus the declined 3.6% in Q1.

Okay. The equipment additions were 21.6% of sales in Q2 and without the impact of lending were 18.8% ourselves.

As it was obviously a strong operating free cash flow growth, but pretty lucky in construction see after the quarter at $678 million, a 12% year over year improvement and also learning capex $601 million of 18.3% year on year.

Great liquidity remains strong and $9.8 billion and of course around our gross that was 5.3 times adjusted EBITDA and 3.8 times net I.

Having completed a number of refinancings in Q2, our average debt tenant remains beyond seven years with an average cost of 4%.

Page and tried to pay any additions we provide more detail around our capex, which we continue to analyze in five major buckets.

For the did have an impact on C.P. spend which was down 34% year on year.

Oh, the with the upgrade of our set top box function that books. The state we expect to see a reduction in spend in this category, even without the impact of covered.

It's Mike covered we continue to invest in the other capex categories and made a platform for future growth project Lightning bills volumes were down modestly year on year, but we still constructed 93000 homes in the quarter.

Cost of promise trended down with a customer premise of 626 pounds in the quarter boasts the 665 times cost per home across the project today.

Capacity vessel was down 18% as we benefited from the completion of a large spectrum upgrade in Belgium, and much of the wanting to get upgraded in the UK.

We increased our spend in the product roadmap, 18% supporting our mobile platforms in the UK and Belgium, as one of the C.I.T. investments required to drug Digitization efficiencies.

They find which is a major platform movements cross screen was brought him on the previous years.

In the aggregate, we spent 1.2 billion in the first half of the around 22.2% of sales.

But other lightning construction capex. This figure would have been 19.1% ourselves with the completion of significant projects from the connect them video space as well as the major capacity not you upgrade behind us.

We can expect to our capital intensity, excluding run into remain below 20% and trend lower in the coming years.

Turning to the divisional overview, which breaks some figures by all key major subsidiaries and provides a roadmap to unless the free cash several major assets.

You cannot show so were revenue declined in the first half of 2.1% adjusted EBITDA declined 2.5 cents, an ownership was strong at $749 million before like being construction capex a $573 million after underlying the remains a strong cash flow generating asset despite on you.

No the investment.

It also benefits from significant tax loss carryforwards, meaning a higher free cash conversion on its own Akcea done for example, Duncan.

Unless it was a home those revenue in the first off between 2.8%, but we couldn't positive adjusted energy gross 2.2% operating free cash flow $428 million. They recently confirmed that free cash flow guidance. The low end to the 450 to 235 million euros.

As Mike discussed we try to seamlessly smoky continues to put pressure on the topline and despite operating efficiencies adjusted EBITDA declined 12.9% in the first off.

Our next year from appears was $140 million, we remain confident to the full year, then we'd love to $170 million of attributable free cash flow at today's exchange rate.

As Mike highlighted to sign up for from a major reference was voted friends Ziggo.

Despite colder than first half there, which is 2.6% revenue grew 8.1% adjusted EBITDA growth an increase over last year to $562 million.

Turning to the adjusted free cash flow for the group as a whole after the first six months operating free cash flow before lightning Capex was just under $1.3 billion.

We had half your interest of $600 million and cash tax or $57 million.

The joint venture paid interest on the shuffled around a $22 million for the first six months I mean, we expect the remainder of a 50% of the 400 to farm in Germany in Europe projections show just distributions in the second half of the yen.

Working capital for the first half was negative $323 million consistent with previous years, and we expect the working capital impacts to be broadly flat for the full year.

As a result, adjusted free cash said before let me Capex was $350 million, an after capex $139 million, we remain confident subject to no major further disruptions from covet, realizing a full year free cash flow target a $1 billion, even after lunch in construction capex so in conclusion.

The UK JV with Telefonica remains on track.

We're continuing to navigate through covered 19, so far the impacts would be manageable.

Despite covered we were able to achieve record high NPS in Q2 and positive customer additions.

We're encouraged by our first half financials, unless you're optimistic for the remainder of the yeah.

We are confirming what about Twentytwenty gardens metrics based on no return to the full locked down slightly so between much a may I'm, assuming a gradual economic recovery.

Given the uncertain to the spectral were not raising I've gotten to this time and we'll take questions now.

The question and answer session will be conducted electronically.

I could ask a question please stop by pressing the star <unk> asked Turkey.

By the they don't want on your phone.

Good to accommodate everyone really we request that you ask only one question.

If you are using speakerphone. Please make sure your mute function it's turned off.

I think no three truck maintenance.

Hi for just a moment to get everyone an opportunity to join the queue.

And we'll go first to see Malcolm with Redburn.

Oh I'm sorry.

But can you hear me guys.

That yet.

Thank you, yes are able to get it back so like the presentation, that's coming back to slide five in your your multiples I guess, that's held at multiple kind of jump started but you're trading at north of.

10% recast the old I mean, I guess or what are your question, but for you in the board, Mike and Charlie <unk> are you. It seems like you're not getting tremendous equity value from that that's taken telenet devoted but they're going to say why do you think that even if the board happy with the status quo. So you quoted in the region.

We sell Tech conference and you'd walk through more of a defensive but it's just sort of interesting or your thoughts on why you think the spot market is not giving you.

You clearly think is fairly fair value for your stakes moves that Benelux assets, and what you could do to sort out.

Sure and that was really the point of that slide but to talk about the FMC tragedy, but the punch line being that we believe if we continue along this path, which we are of course are continuing on.

At the valuation and equally underlying businesses in those local markets would be there and I think you. They sell on that that's a good example trade at a premium.

To us on a number of levels are we getting that valuation in our stock question, Mark, but I think that she begins with the underlying businesses and I think the path. We're on two could drive these FMC champions.

Ooh greater free cash flow yield a greater stability and in operating performance is the starting point and it's clear also that local investors in many of these markets refer to own these businesses and understand the benefits of stable sustainable free cash flow and as a result, as you can see on the pay good or are giving them.

Business at higher multiples and and.

Better valuation so.

If we're able to achieve those same resulted in the result of already been its eating or we can get for example, vodafones. They go public or perhaps even though to be taken day or those immediately.

Though that could be a real positive events or the stock I'm, not saying that the only reason but to look at it it's not explaining the entire gap that we have today to an underlying value at taco, but it certainly will help bridge that gap and you know we're we're all about enough prop many times bridging that value gap.

And I think that strategy. We're pursuing here is the right one at investors need to see if you think that it wouldn't be surprising I want to see these transactions get done so we need to get the transaction. The telephonic and you get completed an approved of course that'll be a positive when it is you need to continue to show and demonstrate sort of strong.

Performance and cash flow that will demonstrating how to be businesses today.

No question, we have to.

Putting that money to work I think the money on our balance sheet is helping today and for some investors would like to see out money because the work. We appreciate that we're in the same boat might have put to work, there's a combination of things, but that the hopefully this slide shows at the path.

Is the right so could walk evaluation and.

But that's what we're.

Oh, that's supposed to what it might look like it's Charlie just to <unk> I didn't really I think we do feel ton it's pretty undervalued.

I think that it has done it is it's not clear to us why it would trade so distance to KPN proximate, which have less attractive course principles less stability in the cash flow sector and that's something we're certainly working with ever can join on because I think there's a number possibly technical reasons around liquidity to start kind or could it be around cloud your on shareholder distributions or the balance between buybacks and dividends.

No I wouldn't say that we feel comfortable with the value of upturn that we think it's <unk>.

Right.

Yeah that was really my question, but it doesn't seem like the current structure were you in six exempt telenet and 50% of Bourbons ago is doing a great. You are there for you mentioned local this thing, but it certainly working we tell them at the moment I guess about for its own it trades and but arguably below that despite really good numbers this quarter.

That was pretty my questions, whether you think the current garden setup work well out yet, but I can't go to market saver.

Yes.

Steve I think I think we can make your the case it throws it got a superior gross virtually any telco in Europe. So they would trade substantially is are there just beaten kipp you have on every single metric. So I think it's fair to say that valuation of them you would expect to be inside chip yet another way around particularly the seems to have I think the telenet valuation is a is a a temperature and we're certainly aware of.

Disconnect are we talking about with them about it but it's a fundamentally a very strong company very predictable cash flows and I think at this stage for whatever reason isn't getting the valuation, but took to echo mikes point, even at that valuation betraying I just kind of to that is up there.

But I guess unusual I agree with you know just trying to figure out you know, whether there's a better structure out there that that would close that you know it's undervalued with a new in minutes. The local listing itself is probably had a big bets kinds of companies like probably too that I I think it will be performing better than women.

Hey, David supremacy, Yemen, and they were wiped out by my right into more leverage.

Yeah, well a bit more levered than some of the stops on this page of course, it telenet and Vodafone.

That is the you know we answered say which is.

Fundamentally tell it might be undervalued, what clearly undervalued, but the strategy of creative transparent value have to do that they overtime.

Based on what would like about right up there and that's what you got it.

Well go next to David Wright with Bank of America.

Yeah, Hi, guys. Thank you very much for taking questions.

Just on the UK trends, obviously I'm in a strong internet ads cable on US you guys are committed to maintaining quite a lot of the provisioning through the lockdown area, which will surely a supported.

The trend the book, it's still does stand out.

As a much better commercial performance could you maybe just a.

A little color on what we think is driving not well that perhaps that's a you know the UK consumers reacted a little bit less than resort to the and the contract regulation what does it you, saying a history it really driven not a market outperformance. Thank you.

I'll just say a couple of things and then do all that you chime in here from my perspective.

The fact that we were still installing customers.

Actively in the field certainly advantage to us.

We didnt stop installations, we felt that that was critical in central and continue to make.

Their products and services available to consumers, which is important and then secondly at times like this there's usually a flight to quality and a one we're operating profit of Mag across the country and the competition as a 30 or 50 or maybe others. In some cases are exciting more that certainly matters a those two things in my mind.

Resulted in certainly better better performance than we'd expected together with reduce churn in each of the numbers show with you on after that.

Yeah.

I I think.

Exactly what you said Mark and I mean, what we did was a we came up right at the beginning of the crisis was the generosity program for our customer offer them a more to be offered them mobile data packages offer remove any tax on on board that came out with a free of charge.

Much walk up in China, or kids and stuff like that and ER. So I guess has increased rapidly.

So that's number one number two it I mean actually said affection ultimately is increasing in quite some time and to our people people.

Eight committed to the company I'm, so they decided to keep installing and keep it keep expanding that for so which was also great contribution to et cetera.

Lastly, we quickly moved to digitally right I mean, we've started to try me today, it's a to life Virgin media.

And no or sets channel or digital chipsets chairman has increased by 50% from Q1, two Q2, so the Chet fixed general Okay pitch of digital has increased to 68%.

And on the churn side, then high and pass it to lower true then also obviously optical openreach. They have stopped installing so therefore, you could not really trying to another network.

And Ah, but also you see that our quarterly churn, it's going to own over three consecutive quarters in a real. So therefore, we have sets momentum we happening when Camillo Archer and we have high Emcare and also as Mike said I have to speed and higher quality met or.

When are the connectivity, it's the connection to the opposite walls.

I'm kinda craft, possibly US then we know that Openreach was back in the market in June.

With a lot more installations, almost back and kind of full run rate.

Continue kind of gave those any indication that the minnesota into interest sort of quarter trends and whether you know you kind of exiting the quarter, you know, maybe a little bit more normally rather than not that kind of initial spike what was the real outperforming sort of through you know April may and June maybe a little bit more.

You did.

So from the sets perspective, we actually accelerate momentum.

So we have not felt that ER, our compared to go back in the market.

From that sure on you see I mean, we have being home in I think may in April on our churn number.

Right I mean, Deborah dramatic, though the churn level has come up a bit more but it's still lower than it used to be.

Okay very interesting thank you.

Well the next to James Ratcliffe with Evercore ISI.

Hi, Thanks, taking my question two if I heard one it's a big picture of discussion on fixed mobile convergence.

And the rationale for the UK transaction can you talk about what the.

Pitched to the customer what the compelling proposition for the customer is on fixed mobile convergence beyond just that you've got a bundled discount.

And secondly.

Quick commentary that preferred stock and sports packages, when coupled with a lack of sport.

The total margin.

But I sports a big part of the reason people take pay TV.

So can you talk about the longer term impact so a lot sports and secondly, how profitable is the TV business for you at this point you are suggesting that pretty much filling in the towel on it but oh, how beyond just trying to do so how liquidity is the if he product itself.

[laughter] quite a few questions there Dan.

Let's see.

Looting that work up what we're doing a little for the UK and at least give one example of a fixed mobile proposition to consumers today, and how that might evolve in and out to environment I'll say on the TV business of course, we evaluate this very closely across every marketplace, we still deliver and generate.

Pretty good gross margins on our TV business in comparison to say the U.S. industry and that's principally because we don't have massive.

<unk> expense in the basic package for sports.

And so our growth margins, you know vary by market, but there could be at high 60, 75%.

In our TV business that that's you know from our point of view.

Nice a piece of nice contribution to EBITDA and something quite important to us and we don't intend to sort of let it go if you will hear you applied.

You do realize though that the overall economics of TV happy involving our evolving.

And so what we're spending quite a bit to climb on is reducing the cost of or the device we put in home.

Ensuring that things like sports are available on a premium basis and integrating OTI t. apps. So that your experience a seamless so that could have a TV on you just say claim ethics play Amazon.

Do you see it you're ready to rock and roll. It. So we do think the entertainment platform. We developed has longevity and has relevance to consumers because we're integrating asked because it's cheaper and easy to utilize and we intend to continue to drive the cost of that down. So there's margin of the TV business. So there is.

Profitability of the TV business.

From a sports point of view, yes, we're in sports pause, we did lose a handful of customers, but most customers just pause.

And Fortunately for us whatever money, we lost from sports customer pausing, we ended up getting reimbursed MRMC and not having to pay those cost after about provider so with a lot, but largely a wash for us.

Zero margin was last one all night is that we know because he brings with it.

That the entertainment.

Component of the bundle matters to broadband customers.

You know vast majority of broadband customers want to see a TV product in the bundle and that is hugely impactful for their back there their purchase decisions. So you can't just eliminate the entertainment product and we wouldn't do that anyway. It part of our revenue and contribute to the go.

But I hear that just to point out that it is still highly relevant part of the bundle for consumers across Europe, who watch a lot of free to air television still and who are.

Breaking L.P.T. apps, but but thankfully embracing them on our platform. So we're talking about deal bundles, and then you bet and how you see that evolve in L. too.

Yeah.

I think it's not only a discount which brings the customer.

To buy a fixed mobile congrats product I think it's a combination of benefit.

So what we've done with.

We are offering on too much I have to be actually now they are going to get 600 and it when they get the high ticket.

If they don't get without them.

Hi are more by Baker package, so two gig instead of war on or candidate instead of five something like that.

And then also a special customer service.

Hotline, where they have great support and this combination I think it creates then its strong momentum and for some custom sixtyv, it's more important for them at some of the package for them, it's a combination with great.

And the and so it's it's it's much more than in difficult I mean, the this calling tax beam and plate.

Our next year.

At the fixed mobile convergence customer base has not increased the last or.

And from 2016 to a coke so the 19 and then really came up.

<unk> increased big times that will not create threep attendance from now when you take that too old to.

I mean that simply provide the huge opportunity.

Because 80% or or perhaps tomorrow.

Do have different six brought them provide I remembered media.

To sell them, we have made some market research are actually interested in such a converge ponder the chip talked about and the brands are very close and they would prefer a product technology media. So therefore now it's all about understanding different segments.

And then coming up right product combination and then I'll frame that and this is Ben I think the tailwind for the revenue synergies in the case.

You can see it even though you you have studied the Vodafone do those results.

Second quarter, but almost every metric.

You know, we've outperformed KPN and that's because you know we're finding the rhythm that matters to consumers and that to fixed mobile space you know and it is feed. It is it is not just reducing cost. It's it's giving people more sometimes it's more for the same more for more maybe even more for let sitting on the.

Combination more matters and that's exactly what fixed mobile convergence whoever's. So.

Great. Thank you.

Right.

Well go next to Robert Grindle with Deutsche Bank.

Yeah, Hi, though I'm going back for UK, you seem to have played locked down very well, indeed, and perhaps benefited by some of your peers not playing so well.

But last week, Ofcom reckons, but more than 60% of your broadband customers artist contract. So that number been moving up quite a lot with make and do you intend to address this and perhaps an h. too.

In the construction of your guidance. Thank you.

Did you want to tackle that.

Yeah Yeah.

So we have to talk about end of contract Acacia and I think it creates a quote could be called.

And I can confirm the message I've given there so actually the impact of and Gulf consequences, Acacia is let them be a platform.

So what does that mean that means that customer.

Seek the less challenging to get additional ER This code to stay.

As we have tent pole.

So I think that's number one but the number two it.

That.

We think that.

Keep matter more than ever right I mean, when you have four five hotels members.

Mom and dad are doing video called the kicks up playing or are you just when you.

You need speed and when it will rely with food and therefore, our efforts to be UK.

The two and a half times higher than the average.

And we are working on a increasing Beth.

And therefore, we think that our customers if they perceived value for money.

But yeah actually not so concerns about that 60% of or customer up in contract and we don't think that we should all of them down with big discounts with state and if you look at our NPS number and proving that our churn number we on the right path.

No I just said when we even at the end of contract notification period began a before code that really hit and then it was largely pause almost an industry, but during the period of time that it was you know active.

That said, we saw the churn was maybe more or less what we expected that the discount acquired.

Customers was also significantly less and so the elite in the short period of time, we had pretty cold at the end of contract impact before our business was less than we expected.

We only more recently gotten back to engage with customers are less and we'll let you know well to get into our third quarter results, but so far so but.

Yeah, we have to be 10 days or offline and obviously also to support wasn't like said right and also a bit in regard to our guidance.

That is now at Richmond Tower notification coming and we will talk to seven fall and obviously, we are capital in our planning at 15 with Andrew.

Notification.

Let me repeat.

Yeah.

Thank you.

Yep.

Operator.

One moment.

Oh.

I don't think our next question from Nick Lyall.

Hello, It was a cool that question sorry on.

Churchill essential came I can you mentioned the release their horizons low quite white blood cells gigabit convergence is coming up unless you've got the swisscom sports the on the way, but EBITDA was still down about 11% takes the one off so could you just trying to go way up here between me you, obviously, making some operational changes to the business to hold.

Long before you can start to think about stabilize or whether the little bit die for chose it still seems quite a long way away.

Thanks.

Sure with the turnaround plan.

Remains as it's been described in terms of our tactics in our strategy. So it's all about one gig getting the TV box yields penetration.

Maximize trying to retain some of it the you know record NPS that meet the we've been delivering and driving the fixed mobile convergence, which has been a steady.

Steady success story for US every quarter anyway, and then lastly, keeping ensuring that our customer operations continue to be smoothly and the digital transformation process also there's working quite well says a lot of positive things happening, having said that and that's in the market is competitive you know we have to stay competitive.

Yeah be thoughtful pricing and offers and packages and that that you know as we didn't really provide anybody I don't believe a specific details as to when we would be breakeven EBITDA, but we'll be back to growth. We continue to evaluate that timeframe of course, and I don't know that we've made that public.

Not really look at this point, except to say that we still feel very positive about the plan.

The plan, but to take a bit longer you know we're in this for the long term or the plant itself is solid and sound and we look to us like it's working.

I don't know that teachers aren't going to add anything to that that piece around use of momentum.

Current I'm missing on the ground go ahead.

Yeah, there's roughly.

I think its dislike medmarc Mike's as it continues to be a very competitive market.

But we're building commercial momentum and lease was saying that he showed growth in the quarter I'm, just saying, we can say, Switzerland to June was better than may enables better than April in terms of sales.

And I would like to sign but the point out the switch with his boss the boys. The movie investment. If you look at the operations. He gets a little margins that was 28% into second quarter.

It's not an incident, so we're past investments or the one gig network news video platform.

Now taking the opportunity studies simplify the business.

So this continues to be there it just won't get generated less than that if sales momentum coming now.

Okay. Thank you.

Yep.

Well the next two Matthew Harrigan with benchmark capital.

Oh, thank you.

Okay, Yeah, remember consultancy pointed out a lot of innovation definitely your network is really.

To translate to get right or if that's almost doubling Facebook and Google now you've got your even more is already.

Or maybe five years ago broadband businesses, you've got bark GE in the author and you probably even more value and I work with that some of the latency issues between DOCSIS three parts you will see being addressed.

If there any possibility that you could calculate.

Chunky bad it's already.

Grow overtime and I do right now we will control that members the kind of looking at your lawyers and of you're ready to be heard your cost of the hurt and became part of your cost structure. Paul can you can estimate there you can foresee do directly with probably grow a little bit fast your longer term, but can you kind of later that.

Now you can talk at all.

Yes, you characterize it reaches change or Moscow, there the man.

No convergence and hopefully getting more benefit to that that working as opposed to people were using your network of the companies like a one will be I apologize.

Ah Hey, Matt what sort of the shape of question sounds like you're asking a couple of things there I mean, our network strategy, which I may take a jump in here and talk about that shows us continuing to drive Steve from one did that can give all the time. So there's no the strategy. It's clear you know.

Whether it's the DOCSIS Ford, although weather fiber to the home by the way after all built and lightning fiber to the home built we're going to continue to lead a.

Terribly can the speed rates and that matters considerably to consumers.

Mobile and fixed mobile convergence. The same thing you said on the wireless side supplied by GE and one gig <unk> powerful combination.

Fiveg intended even more of an idea one good it's sort of the killer App and if you look across the markets. We operate in where the only want really providing those options today and in UK. Once we get the deal with it you closed loop about and they're locked in there as well as they've lots I think this city the rate.

You know the growth over the long term.

Not an accident I'm not so it's certainly something that's quite deliberate and purposeful and driven by all the things. We described on the cost side, you've got lower cost you've got synergy on the revenue side, you've got less churn you've got higher NPS and you in it you continue to innovate on the network in the bundles or the products and consumers have shown everywhere.

We operate that you could not just drive sustainable EBITDA growth, which matters, but also and just as importantly significant free cash flow margins and free cash. So that is where you work, which is ensuring that all these operations.

Well to deliver sustainable.

Arjun free cash flow and whether the dividend back to us to ourselves, but we're taking those assets public and looking at market values. You know, we know that there's an opportunity to capitalize on on the infrastructure and the retail relationships in a way that we haven't done historically so that is.

That is basic strategy I'm not sure of dressed your specific question.

As you got right.

What do you sleep wake at Flaga would've been giving it increases the older. Your network, you eat or you're going to be able routes your pricing more than you have that historically, because youre going to value in our country.

Outside people really benefiting from your network and we do you think it translates the better part and bell recur in part.

Can I did I hear you know you might.

Yes, you're right back on idea.

Just one idea right I think I'll try to do show though.

We are combining for products and all right. So we're combining fixed mobile voice mobile broadband and video and the video product.

Getting more mall to keep other.

What we're doing it.

The help of data, we understand our customer and a in a perfect right.

But does it till we really offer a combination for all the customer all these.

The right level.

And that for them, we are creating a high stickiness of all customer.

Going forward. Therefore, when we have successfully with that they can also set all though.

And this will give a.

They have into position, where we have successfully with that also includes our margin or pricing right and our operators who have done that hopefully when you're thinking about core playing as you think about that that's an opportunity that that but I think the first step it that we are able to offer quad play.

That's perfect way to all our customers and this is the FMC is that.

I didn't know if that help.

Oh It does in fact BARTEX lot sorry, Paul So for me under your belt Okay.

No as Matt.

Operating their cycle or more.

So.

Yes, well go next when a couple more than the Q.

Sanguine with HSBC.

Hey, guys and thanks for the question.

Back to the Switzerland, I mean, if you know I would say that the weak spot and overall pretty good results.

You mentioned that my earlier.

Switzerland, and folds and you know joining forces with some work on the fiber to the on Friday.

Well what are your strategic options in Switzerland down the road I mean, the but the last year sales so would be interested in your thoughts there.

And then a bit of a follow up too, but if point.

Well that we're seeing in terms of market aggressiveness.

Okay, cool and I've seen that need to be is also now going backwards. So what are the trends that youre seeing roughly speaking for the second half is it better than each one or can it be better because of lower investments.

Okay, but that gives you could work have been answer on the second month on the first one the strategic options remain the same ones that we've always articulated and I'm not going to get into speculate which of these make the most sense, but clearly as I mentioned in my remarks.

We think the market would benefit from rationalization, we are trying to do our part in that's of course, it very small part we achieved in the second quarter with the announcement of the sports deal with Swisscom wouldn't underestimate that I think that's going to have a major impact long haul both on our own investment in our sport.

That product as well as our consumers are the benefit to our customers of having access or cyclical access to both sports products.

Have a strong as you know agreement with Swisscom, a very rational and beyond agreement with them that gives us great pricing back they reduced pricing further in this way this agreement Wow and so many of the operators in the marketplace. I was just on the particular are starting to make decisions and work in a in a manner that that we think field the marketplace are going.

Centered on the Swiss fiber announcement.

If you parse through that you break it down you know, we're reaching already 70, 75% of the homes, where the won't get product a they hope to build 1.5 million out about 4 million homes in five to seven years, a if they can get the financing to do that and you know that makes sense to us if I were in their shoes I would certainly look at something like.

That they see the infrastructure capital sloshing around they they figure one that's awesome. That's helped put something to work that realize that makes our reliance on swisscom less and I appreciate that strategic decision those things will take time, and we'll be extensive and let's see what the ultimate you know market situation looks like it.

Five to seven years in the meantime, you know, we just deeper or heads down and of course, the benefits of our network and our products, which are pretty strong you know and I think it's you know I'm not going to give the guidance you run the numbers start to continue to look you know better on the financial fraud, but you can see that a customer ads.

Certainly better but in the last.

Two quarters or same as last quarter better quality prior to that and you know market market improvement here, it's gonna take a little bit more time than we probably thought but that trajectory looks good and we're still confident and the number one thing here is to drive free cash flow.

But whatever yield you want on 170 million of free cash flow that meaningful equity values business. We continue to drive free cash flow. That's the that's the metric that matters in this particular and stuff, but if you want to provide some color on the ought to be there's no no I think I think that free cash flow this quarter concerns the oneseven legal pool.

That is principally in this business.

Secondly is designed to Switzerland has these low margin covertly index the Charlie explained.

Look into the route.

The need to be business continues to grow sort of core be could be business still grow 3%. If you take out the low margin impact of causes.

And in consumer business, we deliberately because their brands lines that plan starts to improve.

We found a way unless the by then you found a way with better distribution, we found a way into the motion signs price boards and I was just would like to the isn't a lease exit run rate of quarters group and the estimates the most the school has never been as high as we can go back for UGI in Switzerland, So the momentum.

Is there it's a matter of time now, but we'll make stable free cash flows that school.

Right. Thanks, guys.

Yep.

Well take our last question from James Ratzer News Street research.

Ah yes, thank you very much and beat up two questions. Please just coming back to the U.K. The first one.

Take a picture one around your your strategy.

I mean I was wondering if you are kind of pivoting the strategy now, it's becoming a little bit more price competitive I mean, I've seen it gives being sending letters out saying no price rises this year and you have extended you'll any introductory offer appeared from 12 to 18 months.

Both of which would seem to be making you more price competitive versus the competition. So I was wondering if this is a little bit of a pivoting strategy to to help support K.P. eyes.

And then the second question I had where he was just trying to quantify impacted and contract next vacation in the best Harris and education as well I mean, you're saying excluding sports all too in the quarter seem to falls from about 1.2% growth to being flat.

How much of that it actually driven by end of contract and that terrorists what percentage of your customer base now actually have had a notification space. So I mean, you're telling us that land inline with expectations, maybe you could steer us towards what you think that impact.

We'll be when it's worked its way for the tree the base that would be great. Thank you.

Dan's I don't think we provided any guidance specific monetary guidance on ER and its contract at the beginning of year. We've said in our original guidance, there's about 100 million pounds headwinds, which included end of contracting and the best as well as Blake network taxes and things of that nature. So.

I don't think was broken that down into component and what we said is that he had a contract experience prior to cold is better than expected not as expected in a sense that the chair numbers were largely what we expected them to be but the amount of discount we had to offer to achieve those levels was less and.

I think we've already got Oh, it's only been very short period of time that we activated and contracts are not much color to give you there but third quarter.

Attack on the phone Nov will certainly have a longer track record to be a in a sense of how things are moving and you know lead you can dig in on the price increase which yeah correct. If there has been oh pushed down here and I think that makes total sense in the environment that we're in a taking into consideration this on.

Certain time for customers.

It seems to walk you know from our point of view very.

Appropriate thing to do but at least has a great plan, which we just approved to go ahead and actually neutralize the impact of that price increase not occurring fourth quarter through greater volume girls. So you can tell like that quickly.

Yeah. So trust you ops your question.

The development of the up you are from Q2 18 under two to 90 like like 50 years ago wasn't up your gross or duck five full time.

Now if you know look at the opposite development and if you exclude the corporate impact we haven't after gross or one quick one.

Well the delta between the two years, it's got focusing and we have quote the price rise one month for work, which explains the majority of it because of the different.

Phasing out the correct.

So therefore, and the rest is a bit under contract.

So therefore.

I think what I'm, saying eight that's not a deterioration on the appeal in general other than a bit from end of contract for the vacation and this is lower than we estimated.

Second.

On the price right, we have decided not to do it in 20 trendy and we have.

On one end type absolutely Patriot Act to sedation, but we also looked at sensitivity selling this sudden higher reaction would have kicked in that would have been also margin dilutive for us.

The current momentum we see on net ads.

Yes compensating for that.

Implanted Randy and the momentum if we can get into certain pond and also compensate that for certain time in 2021.

And to finish with your question are we more price aggressive to make some cosmetic customer net ads.

I would say Yonkers, no so our ambition.

To create long term OTI, Oh actually act.

Lowering.

Provider.

So therefore, it's not about tuck them on it that having said that the market.

S.P. and when do you watch acquisition price levels across different speed.

It has come down over the year.

And also in the last 12 month by 6% and obviously, we are reacting to that to get a fair share, but the idea that absolutely not.

Who change the price position the value proposition here from a market.

Compared to competition that is not all that stuff.

Right. Thank you.

Yeah, let's take everybody in or with the property out here a little bit pass. So appreciate you joining us as always appreciate your support hope you say well and safety rest of this summer.

We've got a lot of positive things happening talked about those today that you take transaction on track.

Great performance, all things considered through all of our markets in this Kobe pandemic period, and a number coming out of it. It's a lot of positive momentum. So look forward to talking to you in November that there.

Ladies and gentlemen, this concludes Liberty Global's second quarter 2020, Investor call. As a reminder, a replay of the color will be available and the Investor Relations section.

Moneygrubber website. There you can also find a copy of today's presentation materials.