Q3 2020 Liberty Global PLC Earnings Call
[music].
Ali we will drill down on those figures, but we are largely on plan for the year, which means we're managing through both the expected headwinds we identified at the beginning of the year and the unexpected impacts of Cove, it pretty well and that's one of the reasons were confirming our original 2020 guidance today.
In particular mid single digit operating free cash flow growth and $1 billion of adjusted free cash flow both of which are benefiting from continued declines in capital intensity sales.
Some other operators the covid headwinds were less severe in Q3 than in the prior period, the return of sports improve roaming traffic and growth in both fixed and mobile subs helped our results more recently, however, we've seen a return to more stringent lockdown and social distancing protocols in Europe as infection and positivity rate of Spike Gimme fur. This.
Could impact on medium term outlook, but I point out a few things most of the measures are intended to be short term and duration two to four weeks typically and generally they're more moderate and more targeted and last spring and after six to seven months of this businesses and consumers are more prepared this time around so I hope as I said before us to build on our improved relationship.
With subscribers regulators and politicians and to make sure we come out of this period, even stronger and more customer focused and I think we will.
And the pandemic is also reinforced the fact that our strongest customer proposition is connectivity fixed and mobile fast and reliable and intelligent and adaptable connectivity, including also the integration of incredible features content and applications and on slide six you can say that our broadband results reflect that was.
We do this including of course, a significant synergy target that was achieved year early but equally important is the positive impact of higher NPS and reduce churn levels from fixed mobile subs, that's anywhere from 50% to 80%.
Our box. This is network agnostic app centric portable and low cost. This is where the entertainment business is headed and we're leading the way again in Europe.
Now our success in Holland and Belgium.
Really underscore our excitement about the Sunrise acquisition, which we recap a bit for you on slide seven the main driver here is scale MPC and Sunrise together create a clear number two to swisscom one of Europe's most attractive and stable markets with around a 30% share across all services and a significant opportunity to grab meaningful share and b to b.
Unlike our other FMC deals the combination is anchored in best in class networks right out of the gate MPC.
MPC Sunrise will reach 90% of the fixed market with one gig services they'll have leadership in Fourg mobile and the largest and fastest fiveg network in the country now the synergies are also substantial you'd expect that with an NPV of over 3 billion Swiss francs.
Small, but important interesting content platforms in our largest markets. Our infrastructure portfolio was an early investor an edge connects which was just acquired by EQ T and a multibillion dollar transaction and we're actively pursuing ways to monetize or grow our own infrastructure and property related assets, which is an exciting space right now you're following that I'm sure.
So I'm looking forward were mainly focused on for things.
Firstly delivery stable and longterm free cashflow in our core fixed mobile markets have just talked about that looking for ways to close the value gap on those assets. What you think are a real and tangible opportunities.
Investing in our own equity story through buybacks of course, we've just added more to a buyback program and then selectively and only want appropriate investing in adjacent and attractive opportunities. That's the strategy. So I'm happy to take questions on any or all of my remarks at the end, but for now all right now I'm Gonna turn it over to Charlie Charlie to you. Thanks, Mike.
To a consolidated numbers I'm supposed to go to page entitled underlying revenue stable.
Type of great revenue sort of decline at 1.3% in Q3.
The room in my house or another page, we set out our estimates for the input too covered uhm, what it has done to underlying revenue grows which as you can see your account so moving 100 per cent of the Q3 decline.
And can't really estimate of Covid reduced revenues by $41 million compared to $110 million in queue too.
Oh, the turtle premium sports accounted for around $13 million.
Revenues will also impact too much $19 million mobile revenues, where would you spread $9 billion predominantly by rooming revenues.
Will cost the revenues accounted for around $6 million with the drug.
Many that affected revenue streams or other Venezuela margin will have other compensating operating expense impacts, which is why are adjusted EBITDA growth was not significantly impacted and a quarter.
On the next slide will provide details of adjusted EBITDA. The rebates congested EBITDA growth was one is 5% of the quarter, which means you have to date growth is one's 3%.
Now what confirming a full year guidance for mid single digit me base, adjusted EBITDA decline, which implies a significant decline in queue for.
Why is this.
2019 sort of materials step up and adjusted EBITDA in Q4 versus Q3, whereas in 2020, we expect queue for <unk> people will be flat 223.
This is because we have deferred the UK crosswise, but we typically executed in Q4, resulting $26 million Delta.
And we're supposed to the demands of coverage, we are ensuring certain customer calculations and I've accelerated investments in a number of digital initiatives to go with this results in an increase spend year on year of $17 million.
We expect these investments to deliver long term savings going forward, but these off these initial setup costs.
Finally in both the UK and Switzerland, we expect to encounter pre merger integration cost of $8 million at $9 million due to the pending transactions.
Turning to a copy of intensity year to date, we continue to reduce our capex spend versus previous years due to the completion of many of our investments and capacity and roadmap projects as well as a decrease spend resulted from upgrading our customer premise equipment on a new platforms.
And casually reported capex to sales ratio of 22.3% or 19.9% on a pre lightning basis.
There was a reduction of newbuild spend in the quarter, but we still succeeded in building 125000 times in the UK an island contributing to a year to date title of 311000 homes.
We're looking to complete a further 100000 homes in queue for assuming uplands aren't affected by the upcoming lockdown.
And cancel we do not expect Capex to rise as it did in 2019 I'm sorry for the full year, we estimate capex the sales pre lightning we around 20%.
The current events reduction in Capex will remain on track to grow Scf mid single digits in 2020, as we set out to the next page.
423, and reported oses, a $552 million and then a pre lightning basis $623 million of underlying oses.
All of our markets, except Belgium, where it was flat show underlying growth and oses versus the Q3 2019 numbers.
<unk> in particular, so very strong growth rising from $247 million to $348 million year on yet.
We expect this underlying growth to continue in queue for across all markets targeting $500 million, a consolidated OFC F. The queue for including the impact of a lightning investments up from $433 million the previous year, turning to free cash let me confirm all guidance of $1 billion, a free cash flow for the full year increasing from 542.
Million dollars a year to date.
Setting of the key drugs to achieve this we expect no further material interest payments in queue for Enron, the previous years and tax payments will be minimal.
We expect to receive the balance of the show will distributions and developing zygote, which we expect to be 50% of the upper end about four to 500 million Euro target range.
He is a big working capital as positive $31 million and we expect it to be broadly flat for the full year.
Underlying year to date pre lightning adjusted free cash flow with $789 million demonstrating the continued strong cashflow generation of our businesses.
Turning to our capital allocation on the next page Grove liquidity remains strong.
We reported full company liquidity of $9.3 billion at the end of Q3, including six $8 billion of cash and Sma's.
Performing for the Sunrise transaction close this will be reduced to five $4 billion, including approximately $2.9 billion of cash and Sma's.
If you overlay the clothes or the Virgin media room C transaction pro forma cast is expected to be $4.7 billion.
Now with that transaction, we would be consolidate virgins revolving credit facility, leaving remaining verbal there's a $1.2 billion predominantly UPC credit pool, resulting in total group liquidity of five $9 billion, which will continue to provide the great with the excess capital to invest.
We continue to repurchase our stock and purchase $1 billion through the end of October.
Since category of 2019, we'd be purchased 29% of our market cap and continues to look to repurchase further stroke.
As Mike indicated we're looking to opportunistic barbecue further $1 billion through 2021.
Turn it stands up as dividend distribution level coming into a dividend for $2 75 euro per share going forward. We see this firm dividend distribution policy as a template for our future FMC companies as we explore like orange things over time.
In terms of leverage we remain committed to a four to five times leverage targets and I'm very comfortable that's open to the range is there is clear near term visibility EBITDA growth as we realized FMC synergies, which allows us optionality today level towards the middle of the range and below over time.
Both of our existing FMC champions, Belgium, Buddakan zager on this costs, both have long dated that with an average life of around eight years and load borrowing costs fixed at $3, 4% in Belgium for 2% of Britons ago.
Those are leverage mine's, a four four times in the U S got basis for the execution of the percentages of it's fix my ball consolidation.
But other times bigger is continuing to execute percentages from its manager and should deliver further from his current but from two five times.
We can put it in a number of financing for the quarter, including a transfer financings in advance of cleansing, all UK and Swiss transactions.
In both the UK in Switzerland companies will be about five times before the benefit of any synergies with average lives around eight years and the cost of that in the UK, a four 4% and 3.8% in UPC, which benefits from the underlying Swiss rates.
Given the completion of his commencing so we do not anticipate having to allocate any of our excess capital to further deleverage these or any of our other credit silos.
Inclusion Q3, so strong customer and broadband performance with high end P. S.
The Swiss transaction has been approved and we're close around mid November.
In the UK transaction remains on track.
Our underlying cashflow generation remains strong with capital intensity established by 20% of sales excluding lightning.
We are reconfirming all of 2020 gardens metrics, maybe mid single digit adjusted EBITDA decline.
Mid single digit ospf growth and adjusted free cash flow for the full year $1 billion, including Lightning construction Capex, and then finally, where amount to a new $1 billion buyback authorization.
And with that operator over two questions.
The question and answer session will be conducted electronically. If you would like to ask a question. Please do so by pressing the start or extra T O. If I could get one on your phone.
In order to accommodate everyone <unk> request that you ask only one question if you're using a speaker phone. Please make sure. Your meat option is turned off till I, you said no to retire Clinton.
What part for just a moment to give everyone an opportunity to join the queue.
And we will take our first question from D J diet with Everquest.
Good morning, Mike two questions.
In the UK you'd be reconnecting with your customers and instead of contact them on modification debit plans as part of the.
The pricing of the base can you just talk about how much was done what the customer impact in terms of dollars.
An Indian outlook on what that could be going forward.
Second set of a bigger picture question, obviously, all fixed Ballbot conversion strategy is it's showing a lot of success in Harlem in Belgium expect that to come in the UK in Switzerland over the next year can you talk about structurally a competitive me constantly is there any will be.
And those two market the new market one have similar success and we can get back to pretty healthy EBITDA growth and kick back road and and in that context is there any way to even start to quantify what side of the modern benefits are getting I know, but you're on it down.
Better, but any sort of profitability measure on on this convergence.
Thank you.
Sure. Thank you get Mr. <unk> and I'll, let him go at the end of the contract angle Best Terror issue. What we've said in the past I'd go with a P. Here that witches, we're not giving specific without disclosing specific numbers to who've contacted how many years, but we have said publicly that so far.
The effect of that in the contract notification process has been better than we expected, which means that while our churn from that process was larger than the line. We have not had to provide the same level of discounting or or or Kansas to offer that we thought worker. So.
In the end, we believe that the end of contact location process. Thus far has been better than we expected, but I'll, let me get into that one you just answered. The second question. If there's more to add to that does go ahead well go ahead and do that now that you've you have something else to add to that but.
Yeah, I think what I cannot it's light over all you have to be strong in that day and you K. So therefore, you see that the total number of end up conflict notification, but it's not really material Oh, well, yeah, but yeah, we are doing much better on trial and on <unk>.
1% down about.
Yeah go we have half the price rise.
It started first of September and cause of October half and half the 12th of customer base. So therefore, you see all told that the impact it's not too high. However, this name tech.
And that's.
It's in Tech will also obviously flow through into a 2021. So that we have for me swallow and picked in a negative way 2020.
Yep and annual best tear up is really just started so it's too soon to know what handles that would've got it yeah, sorry that yeah.
But on the offensive question listen I I do believe to answer your question and sort of the Gal do believe that both the UK in Switzerland can show should show.
Similar trends in terms of both financial trends in operating transfer to what we've seen in Belgium, and Holland. There's a couple of things out of the same of course, you can look at the synergy estimates there in both markets there within.
<unk> of what we've seen and all the other transactions you've been involved in within a ballgame over eight different country mergers, whether we're a seller or a buyer or a partner with F. M. C and so there's a lot of data on synergies Justin's in the case of Holland, Belgium. It was about 5 billion euros send you estimate and knocked the ball out of the pocket they say.
Both in both countries. So we've got experiencing I'd actually like to know if you'd have to leave the estimate.
Been validate I don't believe I know the estimates of the validated both transactions by both sides of the equation and it's a really good about those estimates.
To the number that you can switch it on and the 6 billion number in in the UK those provide a lot of T always financially obviously, a course on the operating side or the benefits of FMC hard to argue with structural reductions insurance.
Consistent and regular improvements in M. P S.
A competitive market, having this quadplay bundled and 7000 see at home.
<unk> bundle matters being able to provide the full package of products and services are all connectivity matters, having a mobile operation to cross celebre I've been having a broadband platform through crossville mobile matters.
And you know the the statistics and the opportunities with very similar in both countries to what we've seen I can't share with you the long range plan, but if I could which would seem similar kinds of profiles.
<unk> you know up the guidance on.
<unk> mid single digit while I just showed you that three years ago. It was negative five per cent.
And we do think that you know those same kinds of characteristics of operating and financial are achievable and again I can't hear you My plan, but you should assume that and see that opportunity. Similarly as to our partners in the case of UK and I think the Sunrise management team as well of course.
They were on the other side of the transaction for a long time, so everybody seems to be a line here and were anxious to get service.
Thanks Bye.
Yep.
We'll take our next question for Michael that you have to call me back.
Yeah. So I just have one question, which is also on UK pricing and just wanted to understand how you think the price buses volume equation has what in the yeah, not taking price and.
And that's with a view tat essentially what you're thinking about next yeah give him B T means I'd actually some of the moves on UK might've, all we've seen as well so just in general the pricing environment sales like installed quite a bit better despite curtis.
Well the guys I.
<unk> Oh, Yeah go ahead, and all that I need to go ahead yeah.
Well, we have only postpone could price rise for this year Michael.
And you wanted to make sure that we really continue with the momentum re boot up in especially brockman.
And but if you record have recognized yourself.
The market seems to get more rational on the price increase site and obviously, we cannot disclose here, what we're going to do but I think overall iced tea, that's a pretty positive.
Yeah, I think the decision made to defer the French fries in 2020 with the right decision. It had perhaps a module impact on volume, although I think it will reduce churn the pandemic central element of our products and services probably had more of an impact on that but as you pointed out loose the the market is clear.
<unk> expecting from other operators and other options I made this clear publicly does that they will be taking price rises in 2021. So yeah, we'll we'll decide and generally what our best movies, but what we think the decision in 2020 with the right one and you know.
For sure it set us up for a stronger 21.
And it looks like our next question have been Sunday with Morgan Stanley.
Thanks, Good morning.
And good afternoon to the folks overseas I wanted to just stay in the UK. If we could two questions. One you guys have had some programming cost pressure I think over the last couple of years, probably largely tied to sports I'm wondering if you look out from here. If you see the curve, they're spending one way or the other partly bring it up because sky's talking about.
Yeah, some real opportunities in terms of driving down I think entertainment expenses.
So I'm just wondering if if if you see that in your outlook as well and then sticking with video I know, we don't talk about video much anymore, but this Virgin T. V. 360 platform is this a big deal for your position in the market I don't know, how you would compare that to sky queue and I think it's I don't think it's a new set top box or does it feel like a big capet.
X deployments I want to just make sure that's the case and it's getting a little more color on that product, which launched this quarter.
Yeah, I'll, let Michigan and just a couple of things I don't have an overview of the three kicking platform.
Really with a new user interface the horizon for your user interface, which is you know X one plus plus you know with everything you would expect to see in that you think is a game changer.
In this market where everybody.
Continues to watch video pretty pretty significantly on the TV [laughter], but it also integrate so I'll be apps and has the full that's why it's called me. So if you have a full.
Integrated OTT experience built in so we do think that's a game changer later this year when it when it rolls out it has been in other markets in Switzerland. This war without an island M. P. S.
And then palm M. P. S rises materially if people see it as the next the next generation has been your experience, which we need to be part of it and our customers are as well on.
On the program the point.
Without being specific about any particular programmers I think it's fair to say that across Europe, not just in the U K, we anticipate a different type of discussion with all of our linear providers, whether it be sports or entertainment when you're seeing one and most of our market for not disclosing it.
And why is that occurring for the same reason you're seeing if you are yes, perhaps.
Wow viewership many of viewership remains pretty well Boston Europe.
The U S. It's clearly moving the other direction over time, and you're seeing some modest losses and some can video subscribers. So the idea that will continue to pay more for linear program in Europe that will continue to play pay flat rates, if you will or not customer dependent rates is is crazy, it's not gonna happen.
So <unk> in all of them Gucci nations with with these providers were finding that there.
Their desire to go over the top.
Together with the head with Lucille in the video linear video business.
Will result in better margins over time on the video product, but I think most importantly on that issue, we're not waiting around for that that transformation, we're integrating apps and a lot of boxes today like I mentioned in my remarks, our I T boxes is rolled out in Poland. That's an app centric you know network agnostic box.
You can roll it out anywhere we have I P rights. So clearly Europe is heading the same direction integration of O T T apps aggregation of over the top content.
Seamlessly and.
Entertainment experience.
And you know we need the package you up on that on that on that roadmap. So similar kinds of your life's not quite as progressive or quickly, appearing but I think bold pro programming cost pressure ought to be lessening for us over the longer term here, which is natural given where the the market's evolving.
Yeah, I don't care that most of it Mike so.
I I think <unk>.
A bedroom you get T V. Through 60, do you think it's a bit better vanskike cute alright. It has some furniture and it's got a cute doesn't that.
And it's an over the air software update or customer, so adept and therefore, not high cost and it <unk> alright, so because we know it from other markets that that M. P. S is extremely high and it needs to know a truck and we will check though that day.
And on the on the program club card well when you compare primary programming <unk> 21 for 20, obviously the cost increase has flat lots.
But this is mortgage with covid it in the long to we're doing exactly what my cats explained for the oval European market, we want to get much much available. So I can we help all I'll pop enough on their way to direct to consumer and we have a lot to offer that from home and then.
<unk> and on the other hand side, we are keen on getting a more on variable content cost for linear viewing and we have already managed to kill some of these contracts and and home all over your full name. Please.
And don't underestimate the the leather hood bring of those conversations today you know years ago, then we didn't have any mobile customer today.
It'll include anything else that I will have something like 50 million mobile sides.
See if you guys are searching us out.
They they want you know it you've seen how well Verizon date for busy flossing, you've seen all you can teach you guys here looking for mobile partnerships to get launched we're in a position and all the core markets to play that will Oh, two is already the lodge partner for Disney, possibly bouquet, so will be in that position and all these core with M T markets with the mobile <unk>.
At four in which gives us additional leverage in those conversations right.
Got it and that makes sense. Thank you both.
Okay.
I don't think our next question comes Steve Malcolm with that bank.
Yeah. Good afternoon, guys Uhm I, just Wanna come back to that question on programming costs and I just clarify uhm. If that's okay. And then one more quick question. After that Uhm you basically have two large premium sports providers in the U K B T and sky. The P. T deals largely fix the sky deals kind of fixed and variable.
From what you're saying you know I think it's frequently cleared it should be a student overtime, you're making every effort to make those fixed costs for most two large suppliers more variable and give them kind of get more access to a larger base and ability to go or T. T. So I got that scratchy, one and then secondly, just on the local listings point like I'm trying I did off.
This last time right, but when I look around Europe, there to kind of get.
Company that <unk> telnet in order to D. Both trade it very high dividend yields and pretty like multiple so I guess the question is what's the market missing why would switch it wouldn't be that different is it just because it's a better market would you consider something a bit more radical say a food the merger to your shareholders in an effort to create value. Thank you.
Well I'll take the second one and that you can be thinking about the first one Charlie.
And here too if you want I could I think there is you did ask the same question authenticate that doesn't there are lots of reasons, while telling it is where it is we think that the the dividend they've announced longterm free cashflow profile their competitive position in the marketplace or a winning characteristics I think there was some concern that's neat to tell.
<unk> amongst shareholders, specifically related the strategic issues, whether it's the <unk> conversation capital expenditures that it'll be can you look a towel on it and read across the rest of Europe, and say well because of trade here you know a Swiss I P. O R. A U K I P O won't trade well if you just let the Vodafone Jacob K P and trade with <unk>.
<unk> need K P N and all the court metrics. If you look at the three months or a year to date results for both companies, It's night and day and yet you know that that will also could be an opportunity for a reasonable valuation I'll lastly, I'll just say that.
Wow Yoki it could be right in the valuation fluffy is real bastard, perhaps we hope for they couldn't be any lower than our own valuation. Let me just pause there alright. So so perhaps it won't be nine times, EBITDA and 6% free cashflow deal, but if you look at where we tried today, creating local listings.
With local following local energy in that market place gives you the shot at and manage though with the balance sheet correctly and the dividend profile correctly give you a shot at longterm value creation day, but apparently we're not able to achieve at the top go here for reasons, you would know better than me I suppose and so from my point of view, creating value at the Opco, whether it's lately so.
Germany, the roll over to a manager telling it was a valuable creative both on your though that's the core of that prayed value for us and we will look at all options to address your last point will look at all options to create bye bye bye valued flush with the value gap.
Goes to it or whatever that might look like.
It should be a state New York instead of number one <unk>.
No. You go ahead I was just <unk>.
I'm just gonna walk in it should we assume that you would seek to use any proceeds racer and Ikea just to retire more equity arbitrage a hard multiple in Switzerland, possibly against your you know your group multiple.
I think it's you know can we generate free cash flow. So we don't need to look at inorganic transactions to raise cash for equity shrinks. So the generate pretty catch but look it will be opportunistic you've seen that over the last five years ready we've always done what we believe is the right thing both in terms of the operative strategic position, we're in and you'll.
Build it and manage our capital capital allocation, so nothing's off the table.
No doubt about us however, I think that the <unk> should be pretty clear that you wanted to ask what we're going to cost question.
Yeah. My my comments the fourth more across all talk I'm. It costs. So you will know old airy fairy to the sports premium programming plus five so therefore take this view a bit more broadly across all of our content close snuck onto the Prince when it comes to the spot premium.
Obviously, we have with bows path P. T N sky still we we have to be in a in an existing contract and reviewers would come up I think in 18 months from now.
So yeah, we need to find the weight on one hand five to to help our partner to have the secure revenue stream that ran.
952.
<unk> to sit on some saying more bearable and this is something you see where you go figure out in the.
It makes the 18 months and then and then.
See where we can share that with you guys that that'd be the idea is that obviously strategically and generally we wanted to get more or variable cost and on the other hand side. If it comes to available then obviously, we use all of the yes. It's we are having to true then come to.
<unk> plan behind that.
Do you just wanted to let you figure negotiating position with those offers are stripes into the last eight months given what's happened.
Well I mean, so first of all we have well very good together.
During the pandemic I think that's good that's very good and then I mean, these calling to M U Conn.
Contract come into play I think when we are old so hopefully as close and and then yes I need them, we have mobile endothrix catch the mind hopefully they have multiple for for the submission all of them.
Alright, Thanks, a lot.
Uh-huh.
And we'll take our next question from Matthew hair again with benchmark.
Well, Thank you, Mike and your comments with a cable tech you kind of highlight some differences between your position and in the U S operators a lot more fireworks competition over in Europe, and how about you also seem to suggest pretty explicitly even that you thought the the headroom a doctor three one with a little bit.
Last name what the U S offers were saying in gorilla that <unk> requires a need for deeper fiber.
And your boxes four O L may I mean, do you think that's a fair characterization and do you think that with all this capacity being brought on five G. M. DOCSIS four O and all that you're going to finally see some better App development that you can monetize a nursing cool things the cable side like the light field Hulk right.
Coffee frog and all that but if it feels like you really could see some.
Yeah, that's celebration in your in your perceived value in price for cancellation.
What we're seeing what was zoom in conferencing and all of that thank you.
I think that that is a couple of points there the value of our networks is an undeniable you could just look at what's happening European discuss your space can let me know networks are valuable today, well beyond you know what what with a few valued in and and for all kinds of reasons. It made good sense the path to continue to speed.
Enhancement in our in our fix networks you know we've got multiple paths.
Today, we're getting the most out of three that one with a good we can we've already trial, two and a half Phds with me that one you know that's something that's something we can do to choose to do tried that in the UK, but we're really focused on 10 G. A 10 gig and to be honest with you. When I mentioned, one gig five or six years ago, everybody was like what the heck is that needed for.
Trust me when I say that you know the 10 gig conversation will be starting and restart can will be Saudi pretty quickly and let me look at our networks, you've got a couple of ways to get there with Doctor Sport I'd always you mentioned and where would would fall right in line with the U S operators charges Comcast both of them to be pursuing a strategy like that and we could also decided at home.
Yes, pawn, where we had because the economics to support that kind of road map. The time do you. So stay tuned lots to talk about there and as you point out lots of cool things with faster speeds are low latency lots of cool things. We can do both of that fixed and mobile networks. You know, we just talked yesterday as a team on some of the internet or the ideas or anything.
Things and.
No that'd be it to be honest with you there's no benefits should being in the mobile space for the I O T opportunity. It's also advantageous to be partners with companies that Telefunken, Vodafone who are leading the way in the development Iot Avenue and his partners of ours, we learn and benefit from that too. So I think there's tens of opportunity to monetize networks fixed and mobile continue to <unk>.
Stan speed and capacity introduced late in two to five G and 10 gig and you know Sky's the limit I think that's really why these networks are being valued where they are.
That's fine.
Yeah.
And we'll take our next question from change that Sir with Me Street research.
Yes. Thank you very much and date and two quick questions. Please. The first one was just regarding your U K K P. I mean, the customer adds his quartet ready look to me like one of the kind of stand out fake as in the <unk> I was wondering if you could kind of just talk us through a bit more what's help.
To drive throughs adds up you know you can start. It then we saw in queue to I mean, it in fact solely down to be more kind of price can patched. It at a thought not having the price rise might've been any impacted September so I'm a strong performance day I was wondering.
You know what you can say about how you see that in future Cortes as well.
And secondly, just interested to get your updates its thoughts on the I T V. Steak I believe that that call up position. You have is now on winding I think about 30% unwound in the quarter. So you are now running a kind of economic stake wait at quickie expenditure on the I T V steak again.
<unk> just interested in your thoughts on the kind of rationale so continuing to hold back and what you want to do with that state longer time. Thank you.
I'll take the second one did you can take the first one look at an I T V. As he would know games. When we originally acquired our position some time ago average cost with well over two pounds. Fortunately, we call in that position and had virtually no economic exposure to the ups and downs of I T V as those colors arched.
Fiery, we had a choice to make and we decided to average down the price around 70% or more so we're essentially owning the shares if the market. Thanks, we own anyway at about a 70% reduced price in our minds that was worth exploring and we are doing that from time to time and we think that's smart we have no intention of <unk>.
Anything with the state we have no intention of doing anything with ITV they'll look at we're gonna be the second largest telco in this market second only to beauty and I view as a small stake in the largest broadcasters could be strategic.
Definitely offensive it I don't know if there's an opportunity to own that state for 70 per cent left a new thought we owned it let me think that's a good trade so what room might look at that we might not we could head the position again once we what's the online but we can also had you to get so and that expect us to be you know.
Financially astute and take advantage of any opportunities are are that to the average down and be and be stronger position anymore.
<unk> on that if you could take a position or a strategic steak. So would you want to take the cake that one.
Yeah on on for W. A Christian walk around it or fix it.
And then so I think it's two sector right. The Charlestown and this is not only because of covid cold with <unk>, especially in queue to add Openreach had no inclination teams all day and we have Ah that booked up the case into your street. In fact, we have done it look for a customer.
<unk> on the show up your call Center resources that we have all sorts a lot of <unk> furniture hours with poor customer we have offered hand up and the speed at the minimum for everybody without charging more so we have to offer them up to them and N. P. S has increased at 10 percentage points in previous years. So.
That lead to nowhere to them.
And this is in effect, which we see if if it's not only into 223, it's more midterm and obviously also we are making up for the chair on Los Angeles and up contracts notification for that could be cool.
And then on the other hand side, although we have close all our reset stores you must remember that we have been able to accelerate sales. So we not only about budget you have <unk> previous yes in terms of sales and and I mean <unk> physician.
Price if.
If more under pressure alright, so that is why the textbook it's getting more rational the acquisition pricing is skill. The February competition, we are not going down trees price levels, and we'd get <unk> and that's a combination and also up with me fix mobile convergence is hoping alright.
So we have launched 15 months ago, and I'll put that you would see that more more contributing pet for sure. So therefore, maybe long explanation, but <unk> sharp sorry, it's not that he has done anything special.
More commissions or no what a physician prices enormously or neutral attention and we can only do this for one quarter. It as an automatic effects awfully long to amoeba mortgages, so better and pay for customer and neutral.
<unk>. So I thought that was kinda suggests that the right you've seen in Q3, <unk> probably be sustained into it towards into queue for as well.
<unk>.
Okay. Thank you.
And we'll take our next question from Andrew be all with Eric Haven.
Hi, Uhm, just one of them from Steve early on a good question I mean, I I guess I understand the appointment process of the current let me see global equity valuation, but what what what are you thinking of some rough timeline can make listings I'm given the face of the European Circuit Devaluations why why do you think this is a better.
Midterm Bunny <unk> private milk, all corporate transactions, giving you know fairly unique footprint. The fact that it seems to be pretty wide Gulf between public and private.
Both of the operating system, so the I'm blowing infrastructure.
And also if I can just ask <unk> when you say strategic investments and Adjacencies can you explain what you're meaning I I mean I've seen the.
Uhm five Ah and told me he can contact with these rooms cause but what about geographic expansion excuse me content is there anything you can rule out.
Yeah, Okay. Good questions Uhm and sent out on the I P O question.
And the reference to public to buy the multiples and other sort of corporate transaction you know us we are always going to be opportunistic.
It isn't like we have one path and we will pursue that path at all costs, you know stand standby understand no stand down.
Going to be looking at all sorts of opportunities and sometimes it could be dual tractor, yeah, who knows but we do know that that taking action and being sort of on the first show up when it comes to value crystallization and things of that nature has the right posture for us and so you'll see US look at these opportunities may not take advantage of them, we might so we'll always be opportunists.
And and focused on create value first and foremost an would never exclude any particular financial corporate a strategic approach to doing that without getting into the details of what those might look like or.
Valuations of things of that nature, you just need to rest assured that we will email.
Email us you've seen as you've watched out with David and adjust and stay agile well. We can do what you think is the best for longterm value creation on which ones are adjacency, yes, certainly we can rule certain things out and you know what geographically our focus is principally in Europe. That's what we think the adjacencies reside yeah, because we have a strong.
<unk> pitch mobile footprint in Europe, and so for the most part the adjacencies geographically to be in your record don't exclude you know.
Absolutely anything else that you should assume that most of those adjacencies would be your focus and then you Jason cheese with the technology and content focused things that enable our core fixed mobile converge platform. So the things that we've done you know investments we've made in our tech platforms of things to Charlie and Andre I'm working on.
And infrastructure things that have content team or investing and neither all opportunities to not just to make money and the underlying investment but create value relationships longterm partnership with our operating assets. So the adjacencies are sort of you know structural in terms of all operations in our technology platform.
And they are you know geographic and it's also thirdly, using our expertise and that's one thing we know how to do is find itself company and one thing we know how to do is finance and managing and structure businesses. We have an incredible TNI platform that <unk> vast knowledge of where things are happening with technical that things.
Technologically and so the Adjacencies also exist in our talent pool and our expertise in our specific you know capabilities in this marketplace. So those are the three a day. Thank you for referring to and I would you know if you stick with those two lenses I think you'd be you'd be close to where we're heading.
Okay. Thanks, just on the timeline for like a listing of his room, who you can say without breaking news.
I don't think so yeah, no I don't have it wouldn't want to get into that right now.
And we'll take our next question from Christian thing then with each S E C.
Yeah, Hi, Thanks, I've actually a question on on the Swiss business it looks like the.
The U P. C. S. It's finally stabilizing it's onto your trends but.
But financially I mean, obviously, we have not seen a substantial improvement.
Why what what's the structure you sure that the <unk> is weaker than.
Then the then the top time performance I used to the investing in the infrastructure I was expecting a bit more you know, let's say closing the gap between the revenue trends in D. I bet that trend I mean, I know going forward now that you.
Sunrise things slow maturity to change anyway, but just trying to understand the the short term dynamics, Sir with respect to queue for maybe two one next year. Thanks.
And that seems to charity, you and I take them Sandra.
Yeah. They should about peace there may be late so we see now in the quota that in call at the moment I'm really calms <unk> lost.
<unk>.
Okay and does it really to me, but like always in a cable be since your transportation and show. Your last 18 months 24 months <unk> effects local U P N L.
But like blow most we were able to stabilize the seecatch, though and again, it's toll free cash flow court. So we did receive the momentum put through and around in the in the coming years as well so chatty.
Alright, <unk> you arrive at the result of the investments and just cause I can true across the board cause it has been accelerated what what's gonna be good return investments anyway. The other thing I think Christian which are very minded there's another switch across our cost structure from capex dwellings, which actually is a good thing.
So for example, if you provide services, which is what was he got more efficient way of providing I teach for that's actually all password in the old days you can save Capex. So that's one of the reasons why sometimes it seems counterintuitive, but all oses is growing so much but I'll quit Abigail I hope you have a declining a it was a bit of an accounting of <unk>.
I'm not trying to quantify that for you for the group as a whole lot for Ya.
<unk>.
Okay, and then I have one follow up regarding the U K D O. It looks like <unk> with respect timing kind of you are.
Scheduling or expecting it what kind of middle of next year that implies actually that that you think it's going to the U K level and rather than staying at the you is it is it a fair assumption.
Well this outside of our control really I I think you know it could that timeframe could also be consistent with a longer term evaluation from you right. So but yeah. It's really in the hands of the commission they will determine.
Whether to decide the case or refer back and we were prepared for the longer term process. If that's where it goes and will happily engage with C. N N. Since Alicia named it keeps understand off come on the transaction, which we think is absolutely in a positive for the UK consumer the UK business environment and.
Is virtually no competitive issues at all.
I think it's probably the cleanest simplest transaction then the regulators looked at so what we're excited to keep the process moving in the next year, what type and we've always talked about it and so what will hopefully make that time frame.
Okay. Thanks, Good luck alright, operator, I think yeah, you got it I think that's it for us operator, and I want to thank everybody for joining us spending a little over an hour. That's what you're still answer appreciate that just to point out the I R. T as in London in Denver always available.
For more questions and they're on standby so feel free to reach out to them ordered me and Charlie or anybody here that that you'd like to chat with about this we always appreciate your input questions and we look forward to talking to you in three months or shall between now and then the Tuesday safe and well. Thank you very much everybody take care.
Ladies and gentlemen, this concludes February global third quarter of 2020 Investor call. As a reminder, a replay of the call will be available in the Investor Relations section of Liberty Globals website. There you can also find a copy of today's presentation material.
[music].