Q2 2022 Liberty Global PLC Earnings Call

July 29, 2022

For your patience the Investor call will begin in a product and in just a moment.

Please note today's book.

Call is being recorded Friday July 29, 2022 again, we do thank you for your patience and ask that you. Please remain on the line.

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Thank you for standing by and welcome to Liberty Global's Q2, 2022 results call.

Your conference call will begin momentarily.

Please note today's call is being recorded Friday July 29, 2022, we thank you for your patience the investor call will begin momentarily.

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Good morning, ladies and gentlemen, and.

Thank you for standing by welcome to Liberty Global's second quarter 2000, <unk> invest.

Okay.

Nicole just dropped.

Rob.

Yeah.

We can hear you.

Sorry about that good morning, ladies and gentlemen, thank you for standing by and welcome to Liberty Global's second quarter 2022, Investor call. This call and the associated webcast are the property of Liberty global and any redistribution.

Retransmission or rebroadcast of this call or webcast in any form without the express written consent of Liberty Global is strictly prohibited.

At this time all participants are in listen only mode. Today's formal presentation materials can be found under the Investor Relations section of Liberty Global's website at Liberty Global Dot Com. After today's formal presentation instructions will be given for requests.

<unk> and answer session page two of the slides details the company's 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 $19 95, including the company's expectations with respect to its outlook 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 in Liberty Global's filings with the Securities and Exchange Commission.

Including its most recently filed forms 10-Q, and 10-K as amended Liberty Global disclaims any obligation to update any of these forward looking statements to reflect any change in its expectations or in the conditions on which any such statement is based.

I would now like to turn the call over to Mr. Mike Fries. Please go ahead.

Alright, Hello, everyone. Thanks for joining us on our second quarter results call. We've got a lot of ground to cover today, So we're going to jump right into it.

I will handle the prepared remarks, using the presentation, we posted and hopefully you've got in front of you and then we'll get to your questions I am starting on slide three as I, usually do with five key headlines from the quarter first of all it goes without saying that these are challenging times for all of US every market is grappling with inflation higher energy cost supply.

Jane issues and concerns about recession, obviously, we're not immune to these macro conditions as such and to be clear we are experiencing some headwinds across our business principally in energy cost and some emerging signs that consumers are growing fatigue and more price conscious but on the other hand, having operated through several of these moments before and based upon this.

Strong performance, we were able to sustain during the pandemic, we think we're really well positioned to manage through the current environment. The demand for connectivity fixed and mobile has never been stronger and we don't see anything impacting that long term secular trend.

In fact, we see more positive catalysts for consumption going forward, whether that's smart <unk> solutions in the <unk> space or the continuation of hybrid working the proliferation of gaming.

Option of streaming services or whatever ultimately flourishes out of the new members.

Secondly on top of these secular drivers we have some built in tailwind that support our operating and financial momentum as we've reported in just about every market, we've been able to adjust our prices to reflect rising inflation.

<unk> of our connectivity services. We're also right on track with the realization of significant merger synergies in the UK, and Switzerland, which combined will ultimately generate annual cash flow benefits to us of nearly $1 billion.

And then we continue to support volume growth in ARPA with innovative products and services across our FMC platforms I'll talk about that in a second.

Third consistent with these plans to innovate and compete we have prioritized the continued development of both our fixed and mobile networks.

As you would've seen we've announced some we think really smart and accretive decisions recently that will solidify our position as FMC champions in these core markets. This.

This includes two recent announcements the formation of a new infrastructure <unk> in Belgium that will slowly migrate telenet HFC network to fiber with the support of 60% utilization rates day, one and some really smart financing and then just today the announcement of our new 50 50 net <unk> in the U K with <unk> that will build $5 million and possibly.

As many as 7 million Greenfield fiber homes that will extend Virgin media <unk> reached over 80% of homes and drive new wholesale and strategic opportunities. These investments in network expansion and upgrade will have varying impacts on free cash flow in the medium term so assuming telenet retained the full 57% of the Flemish netgear.

And doesn't bring in a financial or strategic partner into that deal, which we think they will it will consolidate the capex and see a decline in free cash flow as I've explained several times this week, but in the U K the JV with <unk> reveal will actually deconsolidation all of our current Newbuild, Capex, which will actually enhance Virgin media reported free.

Cash flow.

Now as we highlighted on our last results call, we have been accelerating our stock buyback activity during the first half of the year, but as of today, we have already reached our goal of 10% of the shares outstanding.

Order to take advantage of what we think are really a widening value gap in our stock we are increasing our buyback commitment today by $400 million.

So for a total for the year of $1 7 billion or roughly 14% of our shares outstanding a Jan one.

And then finally and importantly, we are confirming our fiscal year 'twenty, two guidance and Charlie will walk through that.

So turning to slide four this is our standard slide showing recent connectivity results in broadband in postpaid mobile for our for FMC operations, beginning with Virgin Media, <unk>, which delivered 16000 broadband net adds and 13000 postpaid mobile adds both.

All of which are up from the first quarter, but below prior year.

A lot of color to add here on broadband as Youll recall, we landed our six 5% price rise in the first quarter largely in line with our expectations.

In the midst of a slowdown in the overall sector as it turns out the market remain subdued in the second quarter with nationwide broadband sales down an estimated 7% sequentially.

In that relatively quiet period, our estimated share of broadband net adds reached over 20% nationally that's a new high for us and that translates into roughly 40% share on our footprint where average speeds across our base are now 250, megabits per second or five times the national average.

While broadband churn remains low we are seeing as I indicated some pressure on acquisition of <unk> and retention discounts as the market responds to what is a worsening cost of living situation and competition intensified, but we're confident we have exactly the right products to keep our momentum and to give customers increased value for money when they need it most.

Our U K mobile growth strategy is driven by value creation through convergence, we are well positioned to take advantage of the market through our volt bundle, which is doing everything we hoped it would helping us acquire new BMO to customers.

Adding <unk> to mobile subs to Virgin broadband customers and importantly, it's bringing Virgin mobile customers over to our premium <unk> brand. The combination of these movements resulted in 13000 net postpaid adds but that understates to organic growth.

Oh, two base because it includes significant migration and losses in the Virgin Mobile base now in Switzerland, we've.

We've achieved a major milestone with the launch of a new single brand under Sunrise with a promise to dream Big and do Big I love that phrase.

Energy behind this move is really really exciting, but we did expect some near term pressure in broadband sales as we sunset. The UPC brand has stopped marketing around that and we did see that this past quarter with a stable broadband based on the flip side.

The rebrand and the new portfolio of Sunrise up did drive increased mobile sales drove a better tier mix that led to another strong quarter with a market leading 47000 postpaid ads.

Worth pointing out that our digital first no frills brand yellow is doing terrific Lee it contributed meaningfully to growth in the second quarter, we've been in Switzerland, All week with the board I'm still here now on the progress Andre and his team have made I think is just outstanding the Swiss market is stable Swiss consumers are in great shape relative to the rest of Europe and Sunrise is.

Simply getting it done now.

Now Vodafone Zig a reported 49000 postpaid mobile ads and a loss of 2000 broadband subs that was despite an averaged three 5% price increase in July and churn remaining relatively low. These results were actually strong in mobile Vodafone continues to have the highest NPS in the market and the lead competitors in mobile net adds.

And while our broadband base was largely flat in the period that was our best result in eight quarters, which we attribute to the team's aggressive fiber response plan and a new creative campaign.

Churn remains low but in part due to improvements in broadband capacity and quality and the availability of one gig services to 90% of homes, telling that just reported their results yesterday. So I'll be brief here. The market continues to exhibit low flux, but also relatively low churn so for the quarter, telling it had 8000.

Postpaid mobile adds and broadly stable broadband base now on the positive front all operators have recently introduced price adjustments with Telenet is at four 7% and that's going to help mitigate competitive pressure on arps I will discuss in a minute Telenet recently announced deal to create a new infrastructure company with movies I referenced that already.

<unk> line for US is that this is going to be a game changer for the market and ensures that telenet.

To offer the best fastest and most innovative services now in a world where broadband speeds and mobile platforms are harder and harder to differentiate the pace and quality of innovation is becoming the most important driver of success.

And I can tell you having evolved our business over the last 20 years from 100% video revenue to a diverse mix of mobile broadband entertainment and B to B, we understand the important role that bundles brands and new services play in our business slide five summarizes very briefly how we're doing this in each mark.

Today, rather than discuss this by country I'll just draw out some headlines from each category.

There is no need to repeat the strategic operating rationale underlying fixed mobile convergence right, but putting fixed and mobile platforms, together and generating significant opex and capex synergies is the easy part.

Real Magic lies in developing the converged services that excite customers lower churn and drive <unk>, we've done that in each of these four countries that continue to push FMC penetration to around 50% and above in each case. The formula generally includes faster broadband mobile data and other connectivity features.

Wi Fi pods or security services your new Entertainment offers.

Despite what you might see entertainment is increasingly a critical part of the bundle.

Some have asked is it necessary to offer video service and the answer is yes, especially in Europe , where a significant percentage of customers say, that's one reason why they subscribe to a broadband service.

Fortunately, we've been integrating streaming apps into our platforms for some time and customers increasingly rely on us to access their favorite providers in the U K. We just took that one step further with the rollout of our new IP device called TV stream.

The box sized box it costs 35 pounds upfront to the customer and has no monthly charge and it offers seamless and really beautiful access to the best apps 43 channels and of course, all the great BMO to TV services, if you want them and with this launch we're targeting really a new digital first segment of viewers and ensuring that our best.

In class broadband remains front and center and we're doing a number of things in the rest of our markets, whether that's entertainment upgrades to Netflix or my sports at Sunrise in Switzerland.

Were offering exclusive Flemish series of Telenet, where Vodafone zig offering free access to zero sport.

Now this will also sounds straightforward to you, but rewarding customer loyalty is increasingly a key expectation and we are right. There for example.

<unk> rewards program has helped to maintain the lowest customer churn in the market by offering our best customers opportunities for us to air time or money off of tickets to shows Swiss team has just launched Sunrise moments, which really is very similar to the U K and Vodafone Zynga is doing something like that as well and then finally, whether it's sponsoring the national rugby team in the U.

K will be coming to brand new lead sponsor of the Swiss National ski team.

Or putting your name on the Jersey of IX. The most iconic football club a Dutch history, we want customers to know we stand for more than just great connectivity. We are FMC champions, we associate our brands with National champion and we treat them like champions now I mentioned upfront the progress we've made on our fixed network development plans.

And the first slide sit here summarizes a recently announced deal with <unk> for the year to initially build 5 million Greenfield fiber to the home homes by 2026 with the possibility of taking that to $7 million.

Left of the chart if youre looking at it summarizes the structure of the deal, which will see liberty and Telefonica invest directly in the JV to a new holding company.

<unk> really thought it was cleaner to use a separate vehicle and move the project off balance sheet. It also preserves <unk> capital structure and its capital allocation framework and <unk> will provide construction in managed services to the new Nacco and will of course being anchor tenant on the wholesale front.

50, 50, JV is fully financed with equity and debt committed our share of the equity for the 5 million homes will be around 350 million pounds invested over the next four to five years.

Reasonable amount of capital as a reminder, we've already built 3 million new homes in the U K, which gives us confidence in our ability to execute the buildup at cost penetrate these new markets and generate a good economic return and that's before we add additional Isps as potential wholesale cost erosion that only makes the deal more attractive and there are still.

Many good reasons to move forward here first will be essentially putting the lightning build engine and the lightning capex into this off balance sheet venture, which will improve <unk>, who is free cash flow day, one I mentioned that second we'll be expanding the reach of Virgin media <unk> converged offerings at <unk> 21 to 22 million homes are up 80% of the market.

Of course, together with our announced upgrade of the existing HFC footprint to fiber, we are really cementing our position as the second national fiber network in the U K.

And the JV is well positioned it is also important to point out well positioned to capitalize on further consolidation in the fixed market if or when that happens. So we're really excited to get this done and look forward to a strong partnership with them for via now while we're on the subject of upgrades just a quick update on island, where we just upgraded our first 100000 homes to fiber and everything is now picking.

<unk> as a reminder, this is a very cost effective build around 200 euros per home, which made the decision to go fiber over DOCSIS, four pretty easy and to top it off we're making really good progress unlocking in our first wholesale deal in the market now slide seven you've already heard from John on the <unk>. This week on the new NAPCO with movies I will just add a few things from our.

Perspective first of all we think it's important to call out that this is a long term upgrade plan, which gives management pretty good flexibility to utilize different technologies or even whole by fiber.

From third parties, so while it's a $2 billion commitment on paper to get to the 78% coverage that's dependent on generating good returns along the way secondly.

Fatigue advantages this creates for telling it whereas interesting and important to US is the operating benefits. This net co starts out life with 60% utilization and really reasonable build cost for at least the first half of the network is highly likely that our financial or strategic investor will take a look at this and we all know that the current trading multiples for these.

Type of opportunities is really good and similarly, this gives telling that the option to work with strategic partners in the market to ensure the optimal use of capital for all of us and that consumers are the focal point for innovation and investment and of course. It also puts telling it in the pole position to both retain and grow its existing wholesale revenue base.

He has substantial now one last point here.

There is no read across from Belgium to haul and some have asked that question either on strategy or costs are Dutch management team is currently really leaning into DOCSIS, four where costs look very reasonable 150 to 200 euros per home and in the meantime of course, we're offering one gig services to 6 million homes or around 86% of the market and that will be 100.

Percent by year end, so finally, I'll wrap it up on slide eight.

Mentioned upfront, we are increasing our buyback commitment.

For 2022 from $1 3 billion to $1 7 billion.

And this is first and foremost a strong statement that the current market price does not come close to reflecting the inherent value of our company and the strategies. We're pursuing by December we will have retired around 14% of the shares just this year and over 50% since 2017.

That level of commitment is supported by our strong financial position.

Adding $1 7 billion of distributable cash flow generation this year and a strong balance sheet. As you know our debt is siloed long term fixed rates. So were largely unaffected by current conditions in the capital markets and we're sitting on a large cash balance of $3 3 billion.

Cash today, which should be $3 6 billion by year end. After the increased buyback commitment that cash balance. We think is a huge asset for us at times like this so while we continue to prioritize stock repurchases as today's announcement clearly demonstrates we also will stay opportunistic and offensive and our core FMC operations well.

We remain the fulcrum platform in every market.

<unk> change.

<unk> innovation, and creating long term value for shareholders.

Over to you.

Thanks, Mike.

The next slide sets out our revenue performance in Q2 broadly we've managed to deliver stable revenues. Despite a tough macroeconomic climate as price rises across our portfolio begin to feed through into increased revenue growth.

Because of this price rises, whereas <unk> has returned back to overall revenue growth this quarter showing in particular strong revenue growth in mobile.

Although fixed subscription revenues were broadly stable or decline in install revenues from circuit installations in our <unk> division compared to last year, but overall fixed revenue showed a small decline.

And Switzerland stable revenue growth in the quarter. It was a mix of continued strong mobile growth driven by strong volumes across our brands combined with a decline in fixed revenues fixed revenues declined due to auto pressure with some softer volumes in part because of the brand migration from sea to summarize in the quarter.

In the Netherlands, we saw a modest revenue decline year on year, driven by ongoing declines in the BTC fixed base.

Partly offset by our strong mobile and <unk> revenue growth the business introduced a blended three 5% price adjustment and fix this month, which we expect to improve fixed revenue growth in the second half of the year and.

In Belgium, Telenet topline growth continued driven by the 2021 price adjustments on subscription revenue strong handset sales I'm rubbing visitor revenues.

Given the price adjustment of four 7%, which landed in June we expect further support to the topline in half two as Atlanta across the majority of the base.

Moving onto our adjusted EBITDA performance in the quarter.

<unk> delivered around 4% EBITDA growth in Q2.

This included a $19 million opex cost to capture within the quarter.

EBITDA performance was driven by the price adjustment and early synergy realization.

We continue to expect EBITDA growth to trend upwards in half two as the impact of the price rises continues to land as well as the realization of further merger synergies.

Sunrise, so EBITDA growth moderate after a strong Q1 with Q2 broadly stable.

This was due to higher cost to capture operating costs compared to Q1, and a big part of the $19 million of cost to capture in the quarter was due to the sunrise rebranding excluding the cost to capture the EBITDA growth was supported by the ongoing benefits from the MD&A migration executed last year.

Vodafone Zika witness an EBITDA decline of up 2% driven by the topline decline and cost inflation, including energy.

The business also stepped up promotional activities for the Zika is Princess campaign in the quarter and finally Telenet reported a modest decline in EBITDA driven by the continued impact of energy and labor costs.

Overall in line with guidance, we expect EBITDA growth to be largely half two weighted supported by the mid June price rise.

The next slide has an update on the key inflation and macroeconomic challenges that we discussed last quarter.

Firstly on our energy costs, which typically can constitute a low single digit percentage of operating costs for 2022, we're now around 90% hedged in terms of our exposure across our operating companies and we also continue to hedge opportunistically, but 2023, we're looking to be fully hedged for 2023 by the end of this year.

Secondly, wage increases have largely been agreed across all businesses in line with the budget. However, we continue to monitor the impact on our workforces given the tight labor markets.

Thirdly, although we continue to see some macro driven pressures on our supply chain, we have managed to leverage our scale and longstanding supplier relationships to manage them well.

In response to high inflation generally we've implemented a number of price adjustments across our markets, which are generally higher than in prior years. Despite these higher increases our internal trends currently show that our price rises in the UK Holland Atlanta successfully with limited churn impact.

Finally, we continue to see our integration efforts in the U K, and Switzerland support profitability, which differentiates us from our competitors given the multi year synergy runway ahead in two of our biggest markets.

Moving to free cash flow and the key drivers, we did about $564 million of full company free cash flow on an adjusted and distributable basis in half one.

The second quarter was a strong quarter for distributable free cash flow was over $400 million and were supported by dividends from Virgin media to Vodafone Zika.

Turning to our capital allocation slide and starting with capital intensity on the left hand side.

We're on track relative to our Capex guidance across the full measure of what goes in the first half of 'twenty two.

As you can see capital intensity varies across the businesses.

<unk> already covered a number of our updated fixed line network investments, which is a major drive of depending on the vertical strategy.

On mobile we continue to progress well with five G. With the Opco is at different stages, often driven by the release of spectrum Swiss coverage is the highest at around 95% the doctor at 80% with the UK and Belgium now starting the rollout.

On a consolidated basis, our capex continues to be around half on products enablers in CPE and the other half from baseline capacity and Newbuild upgrade.

On the right hand side of the slide we give an overview of our debt complex as well.

We believe that these are well hedged and provide significant value to our shareholders. The interest expense on all our debt is 100% fix for any variable debt that we raised which is term loans, we swapped to fixed rates to maturity.

For any debt not raised in the currency of the local company that debt is swapped back into local currency.

And our debt is solid across various debt complex is but it means that even if one gets a company gets into distress. It will flip the other companies.

And virtually all of our loans don't have any covenants.

We've also locked into our long term debt structure with an average life of seven years <unk>.

Swiss franc in Europe borrowers are all locked in fixed rate debt below 4% and then the UK weather our underlying interest rates production 70, ADESA at four 6%.

Lastly, turning to <unk>, the fair value of the portfolio fell slightly to $3 2 billion.

Driven primarily by the continued decline in the ITV stock share price during the quarter and you can find additional detail around our portfolio and the key quarterly movements in the appendix.

Turning to our guidance, we are now confirming the guidance of each of our key companies set out on the left hand side of the page.

Despite this we continue to track well on free cash flow as highlighted by the strong Q2 free cash flow performance.

Now as a reminder, distributable free cash flow was a new metric. We introduced in 2022 that includes both our free cash flow has historically defined an additional cash that we received from our joint ventures from any recapitalizations.

Tributes over 2022 free cash flow forecast include cash that we expect from a debt raising at Virgin media to as part of that $1 6 billion pound overall shareholder distribution guidance.

Despite the market volatility and successfully arrange attractively priced financings to fund the distribution.

At least as we have pre hedged interest rate exposures last year for all the rates started rising.

We've continued to execute on our buyback commitment having already almost closed on the 10% by about Florida, we've been publicly targeting having bought back 50 million shares year to date.

As Mike mentioned, we're looking to execute another $400 million for the remainder of 2022 and take advantage of what we see is a large value gap in our stock.

Our balance sheet position remained strong with total liquidity of $5 6 billion, including $4 $2 billion of consolidated cash, which does include a large cash balance a ton of that coming from the tower proceeds that they made.

Given the increase in the buyback by $400 million, we now expect to end the year with around $3 $6 billion of corporate cash. So it doesn't include the <unk> cash corporate cash, which we can obviously use to support returns for our shareholders and with that operator, let's go to Q&A.

Thank you very much.

Ladies and.

Gentlemen, the question and answer session will be conducted electronically.

You would like to ask a question. Please do so by pressing the one followed by the four on your phone.

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We'll pause for just a moment to give everyone an opportunity to join the queue.

Yeah.

And our first question comes from the line of Steve Malcolm.

Of Redburn. Please proceed with your question.

Yes. Good afternoon, guys. Thanks for taking the question. It was just a question on the UK joint venture and the decision to re lever, whether you've given any thought to doing.

Doing that I mean, it doesn't seem to have benefited the shares, particularly as we go into tougher economic times. There is an argument that the debate.

This would be better off being <unk>.

Elaborate a little bit less lightly.

That's been the case it gives options right for you in the future. So just any thoughts on that and how you're thinking about the leverage going forward and whether youre going to try and run it up towards that five times ceiling on whether a lower level might be more appropriate in these are somewhat more challenging economic times.

Well I'll take a crack at that and Charlie you can fill in the gaps are Andre but.

First of all thanks for the question Steve.

Margins on these net co structures as you are probably familiar very very high.

And this net <unk> in particular is a light net meaning that many of the activities are being.

Off loaded to Virgin media to themselves. So it's.

Our belief that the funding structure, we put in place is fairly typical and not overly aggressive at all for these types of.

Platforms.

And that the equity and the debt together provide all the capital we need to get it on and that is certainly consistent with the leverage structure. We've implemented elsewhere in the organization on businesses with lower cash flow margins. So it seems deploy it to us.

Yeah.

Mike.

I was more I was more of a <unk> leverage dropping the <unk> leverage.

Oh, sorry, sorry.

Yes, no problem.

We've ever been.

No worries John you want to just leverage overall go ahead, Yeah, Hey look I think.

First of all as you know we've always been quite comfortable with four to five times leverage secondly, we are and this is a great Testament by the way too much and the Treasury team, we've been able to secure some very attractively priced financing at least for this recap and if you can borrow.

5% type numbers I think it's pretty attractive for shareholders. We can distribute the cash back to you and we can drive a higher return, but long term shareholder with benefited.

Thirdly, I think there is a pretty strong free cash flow cushion and an even bigger one if you wanted it because you could obviously scaled back the newbuild capex. So I don't think these companies were up 11, I do hear you.

If one were to IPO in Europe , there was a traditional policy of having a lower leverage.

We're looking at an IPO the version of <unk>.

At least in the near term not least because the story is coming together very very nicely and I must say this this off balance sheet JV that address I mean, it's really very impressive so and theres no reason to not.

Leverage of the monies that at an attractive price you bought his team with telling that we at least felt that it was very important to be given the dislocation in the market.

It wasn't that we they had in the range very attractive and I think they've got a terrific that that low 3% fixed rate six plus years in that market I didn't think it was sensible to commit to a dividend policy with you all recapping that business.

Because you know what we don't know what the price of that that will be it will be that so I think there's a distinct between that at least in the U K if that helps.

Can I just ask one quick follow up on the net.

Had the anchor tenancy works, if you commit to certain volumes or is it just best effort.

There is no minimum volume commitment, we shouldnt get into too many details there, but Virgin media <unk> will be an exclusive exclusive anchor tenant and we will use that network.

There will be a minimum volume commitment.

You will have to deliver the network is that really a well will not be.

There would be no minimum volume okay.

Correct.

Okay perfect. Thanks.

Mhm.

And our next question.

Comes from the line.

Lee look Harold.

Please proceed with your question.

How quickly do you think you can start rolling out and getting customers onboard given the complexity of planning and supply chains in the U K.

I'll, let you address that.

Yes.

Use of time.

Yes so.

I mean.

Maybe three answer number one right we have already 3 million homes. So that means we have a strong relationship with a couple of vendors who are helping us.

All of our network.

Second right now with Liberty Global Telefonica and.

The joint venture, we cannot give a long term commitment to these pop up suppliers in the market and we have to use the excess to that to ensure already additional tier one supplier and now we are able to.

Signing these contracts and so you will see from us a jumpstart going directly into hybrid.

After closing of the deal.

Thank you.

And our next question coming from the line of James Ratcliffe of Evercore ISI. Please proceed with your question.

Thank you.

Continuing on the topic of Nicos, you've done one now in Belgium, and for the expanded footprint in the UK could certainly understand the benefits of giving investors the opportunity to target an infrastructure play who might not find an opco, particularly attractive how do you balance that against the fact that this is creating wholesale net code that would certainly.

He's competitive entry for.

Oh I'm sorry.

They've providers rather than.

Owning the network essentially entirely yourself.

With the Opco and having quasi monopoly status, particularly in those additional areas that build out.

Yeah.

Well James I think in the U K, it's a pretty easy answer.

This is all Greenfield territory. So it just as with lightning when we build.

Network in the new markets that Virgin media has been expanding into four for years, we get between 25% to 30% penetration right away.

Even though there's other operators are everybody's already marketed that territory. So we feel very confident in our ability to penetrate this new greenfield.

Network <unk>.

7 million homes of it and to penetrate it well.

And we're not necessarily the most anybody who will who joined US on this net co infrastructure will already have marketed those territories and have other options for entering dose territory. So we're not we're not we're not giving anything away here.

Any other operators already got access to multiple networks, probably or at least one for sure in the territories that we're targeting and if they join us on ours. It just reduces our overall cost and increases our overall return on infrastructure, we would be building anyway. So it's a no brainer and the U K.

And I think in Telenet case remember Theyre already opened their network Telenet is already a wholesale provider on HFC all there'll be doing is becoming a wholesale provider on fiber over time.

And retaining and growing that wholesale revenue, which already supports their business. So I think in Belgium. It also makes it makes logical sense.

Just to follow up if I could when you think about the other parts of the footprint, both JV and wholly owned.

Does it make sense structurally for.

Net <unk> in the Opco to be separated if you're not talking about footprint expansion or are those two pieces.

We are better together.

Well, there's pros and cons. The pros are what we're leaning on here in both instances the pros are.

Youre a lot you are bringing in typically higher leverage outside capital.

And in infrastructure focus to an asset class if you will thats generally highly valued.

And in recent times materially higher multiples than our own business. So theres financial reasons strategic reasons, and ideally and operating regions for those separations. It doesn't mean that works in every case certainly doesn't work in every case and in for example, Switzerland, we're not doing this.

Ireland, we're building fiber, but retaining control of the asset because it's a relatively small investment in a relatively inexpensive build.

And it's unclear we would be able to attract interest in something that small so I think yes, it's horses for courses and I think that's the smart and agile way to run a business you don't come at it with.

A blocked view, it's only going to look like this you look at the market and then the and the variables in the market and you make the decision that creates the most value I think that's exactly what we're doing.

Thank you. Our next question comes from the line of Sam Mchugh of BNP Paribas. Please proceed with your question.

Good morning, guys just sticking on the UK, sorry, you mentioned.

It will impact from dilution of discounting so when we think about all three trend through the year should we think about them as being pretty similar this quarter may be getting a tiny bit.

How do you think in that context the growth in the headlines around talk talk.

I'm pretty sure you can't comment on that but strategically do you think it makes sense to get a bit more exposure to a discount market at this juncture and make any kind of.

Macrocycle, thanks very much.

Well answering your second question would be doing just that commenting on it so no comment, but you want to handle the first question.

Yes sure.

I mean, we have done the price rise in Q1, our customer had been necessary days cancellation period, and we have applied across the fence I mean other market participants to use a different mechanics, meaning the higher price rise.

No immediate cancellation right and Thats applied comprised fried also for customers who are within their existing promotional period.

So therefore, you can from our side say price rise has landed in Q1 as planned and as more customers coming off the promotion period over time and grow therefore get the prize for us during the year.

Other thing and Mike had mentioned that.

We see both in the acquisition market and also on the retention market a bit more pressure and we think that is partly coming from the cost of living process.

So meaning that when you look at sales so acquisition, it's more focused around 50, Meg product Supreme being around 2025 pounds and then obviously when there's a lot of advertising of this product in the market the appetite of existing customers to reduce them.

The bill and the cost saving process.

We see it a little bit.

And it's hard to predict how this will develop during the course of the year.

But.

We are not seeing a decentralization of Ark if that help.

Yes.

Thank you Doug.

Thank you. Our next question comes from the line of Robert Grindle of Deutsche Bank. Please proceed with your question.

Hi, there I hope you can hear me.

Sticking with the UK how would it work if there was M&A.

The fiber JV footprint is it that you had swapped capex for an acquisition and not build in those areas where could the footprint grow by more than 7 million by M&A and say <unk> bought more customers onto the JV.

You are more successful in getting the penetration of <unk> can you just got the value of that through the equity stake or do you get a sort of an earn out as penetration moves up thank you.

Yes, that's a good question, Rob I would say and your first question all of the above.

And in terms of.

Of how that would work in the M&A structure, we would and I think we say that I said in my remarks that this JV could certainly make acquisitions of existing <unk> and.

If they were interested or if it made sense.

And there was regulatory and financial support for the decision.

And I think we're uniquely positioned to do that with three partners, who have capital and understand the business very well, let's see how things unfold, but that's one of the interesting upsides here for sure.

And then on the second question.

Aren't that many customer basis to buy so it wouldn't even comment on it.

Most of the outlets don't have.

Retail operations or if they do they're quite small so I'm not sure that in the case of off net that would be material.

Yes, I was referring to a regular retail ASP actually.

I know you were.

Thank you. Thank you.

Thank you and our next question comes from the line of David Wright of Bank of America. Please proceed with your question.

Yes, thank you very much.

Perhaps just a little more top down Mike we've talked about strategy over the last few years very clear that you guys executed deals to build the FMC champions.

And then there was always this potential to consider local listings.

<unk> opened up the.

The asset opportunity to guys, who may become sort of acquired the U S.

Holdco.

It does feel like that's maybe.

That opportunity has perhaps been.

Moved on a little.

Note that net coast co question earlier.

Is that perhaps a better route now to sort of unlocking value is to stop.

Bringing some of the infrastructure assets together and I know you didn't go into this JV with <unk>.

The <unk> test.

As equity shareholders, and then I guess just to part two on the sort of net co concept.

The one thing we are noticing is that a lot of telcos are doing as you mentioned, it's similar to other deals, but what it is tending to do is bring complexity into the equity case, which is bringing increasing conglomerate discount.

And of course, you are essentially shifting away from net coach service Coke because you are selling part of your infrastructure and that means ultimately a b rating.

Multiple and I know that you very often talk about the market disconnecting youll share price with the value of your company, but.

Is basically not compromising that to some extent.

I'd be interested in your thoughts thank you.

Yeah. Those are really good questions, David I think on the second one.

I don't think it is compromising our goal.

Let's just take the UK for example.

And incremental investment on top of a core FMC business that we believe.

<unk> has immense tailwind, whether theyre synergy driven brand driven our operating driven.

And we make that argument all day long.

You'll you'll put whatever multiple you think it's worth will think gets higher and we know it is having said that this particular expansion of the network is incremental and on top of that and we believe as you've already indicated could generate potentially higher multiples. If we ever brought in additional financial partners or <unk>.

Some sort of roll up or things of that nature. So I think we're at the best of both worlds, where we are we're actually strengthening the core FMC business validating what we think value is in that core FMC business by giving it room to expand and grow its footprint in a really cost efficient and we think accretive.

Our structure now.

It might be slightly different I understand your point, perhaps differently in Belgium, where youre, taking business and breaking it into if you will.

And what does that look like and how would that be ultimately valued and I think even in that instance, and Intel and Thats trading as an integrated company at a pretty low multiple today you would know.

And over time, let's see how these strategies unfold, we're pretty bullish on what John's pursuing.

And we think the serco will be.

Valued at a particular number based on its ability to retain and grow customers and if I know the telenet management team theyre going to kick some butt and ensure that telenet remained the primary brand for consumers in that market and matter what network. They are using or who owns the network and.

And if I, if I know that this team like I do theyre going to make sure. This nacco together with their financial and strategic partners is the fulcrum.

And most important nacco at network in that in that marketplace and the only way to pull it together with movies was to do it like this we didn't have an interest in public stock or anything else. So part of it was circumstance in that market, but part of it and it gives us the right strategic.

Outcome now it's not the same in every in every case and as I said, just a moment ago, it's not as if we're going to pursue this in every instance, but it's our job to look at every market differently to see what is the right way to create value too.

To crystallize value and to demonstrate value, but also most importantly to sit back and make an argument that this is going to increase the core business.

Overtime, and then how you perceive it or the market proceeds it will take our chances with that but we know that both these transactions fundamentally grow the core business that we're invested in.

And the structures, we are using to do that or we think are accretive both at today's values are multiples.

And.

And that should play out over time, just as we think in terms of listings listen there is.

It's not a great market to be talking about Ipos and I don't know that we're saying we won't be doing it ever or in any instance, I just think it's obvious that with the current environment, we're not prioritizing it in both.

Our core businesses need time, especially in the U K and Switzerland to mature and demonstrate the core benefits both synergies and growth that we know they can demonstrate so we'll come back to that question, if and when it makes sense. It's obviously this makes sense now, but we never say never we're not shutting the door on those ideas, we're just understandably focusing on other strategies.

<unk>.

And we have a very interesting infrastructure portfolio not to go on too long here, but you mentioned infra as really an asset class.

We've developed some very interesting investments in infrastructure.

Telefonica has their own <unk> platform is it possible that we would look at some point too.

Their combined.

The ownership of these infrastructure business as possibly you know us I mean, we look at everything.

What we get paid to do is to be sure. We're always looking out for shareholders and trying to figure out what will create the most value for us.

Together and so that certainly could be an idea down the road we would investigate.

Okay.

Thank you. Our next question comes from the line of Polo Tang of UBS. Please proceed with your question.

Hi, Thanks for taking the question, maybe just fixing on Switzerland now can you maybe talk through the competitive dynamics in the market and what has been the reception to the new tariff portfolios from all the operators and you flagged softening trends in terms of fixed line that Alex.

Domestic argue that this can improve going forward. Thanks.

Sure and Andreas on the lines of Andre why don't you take that.

Yes. Thanks for the question Paul So firstly I would say the competitive dynamics in the first half year has been changing a bit but restoring to recent levels based on the I would say portfolio refresh the dfc why is that.

We have seen that in.

The fourth quarter.

The second quarter up until the beginning of May promotional intensity was reducing annual following that trend.

With the <unk>.

The portfolio of Swisscom, we have seen that while the promotional intensity has come down.

With Goldman is introduced.

Discounts like for example, the online benefit which customers could sign up form which has increased their competitive position on.

On the phone book.

As such we look forward to also bring up our promotional intensity again a bit in order to keep the pace in the market. So I would say.

We had said at the beginning of the year, which is model we are hopeful but the reality and we are not giving up on that.

So.

You are referring to is very much driven by the.

The consolidation of the brands and that starts with sunsetting of the UPC brand, which we have started to reduce our promotional activity.

On the grant earlier and are now ramping up again the food.

Based on the new portfolio.

I can say I'm pretty happy with the performance of your query on the new portfolio.

It does exactly what it should.

Grabbed some more bundled sales.

Of course, it will continue to fine tune it in order to get that back to the initial momentum that we had at the beginning of the year on fixed and on mobile we are continuing to doing well as we can.

Yeah.

Thank you very much.

Just real.

We're quickly what I said at the year.

The outset in the remarks, which is this market, Switzerland is.

Really unique almost living in a bubble here inflation is.

Low single digit interest rates are maintained I think theyre just now at zero consumer.

Confidence is.

<unk> remains higher than other markets. So essentially always seems to perform really really well in difficult times and.

It's a I think a safe haven as such but we're certainly glad to have a lot of capital invested here and I think that's just giving Andre and his team a lot of tailwind to to keep managing the business well.

Thank you. Our next question comes from the line of James Ratz, Sir of New Street Research. Please proceed with your question.

Yes, good afternoon, guys. So.

A question I had with just with regard to the.

Buyback I mean, I applaud the decision that youre allocating more capital towards the buyback, but when you sat down at the board lateral and thought about the extra $400 million you were going to commit.

Interested to understand.

What are the choices you looked at and in particular do you not feel it was interesting. This time to look at buying equity in <unk>, which has come down by more than the Liberty global share price.

And if I could just for point of clarity on an earlier question from Steve around you said no.

Volume commitment from BMO to textiles commitments, if anything you are making to the new joint venture because you say anchor tenant that's why I talked about on that front.

Actually means in the center.

Securities or debt lenders, therefore, getting and the new joint venture. Thank you.

Yeah on the second question Andre stepped in here, if I'm missing anything but on the second question. We are basically agreeing to use this network and nobody else's.

So remember as we rolled out the 3 million homes that we now have historically called lightning.

We have an exclusive obviously users of our own network in that context, and getting 20% to 30% penetration so in a sense.

The lenders or partners can.

To some extent bank on the fact that we are going to be aggressive marketers on this footprint as we have been on the prior 3 million homes and they can take comfort that we will get to a certain level of penetration and we won't use anyone else's network I think that's what anchor means in.

In that context.

On the buyback should we always look at different options and choices.

Never.

Our singular decision, we're always allocating capital just in this announcement around the U K, we will be putting capital into that.

Joint venture we've got the ventures portfolio, we're always looking at the most.

Efficient way to put our capital to work and buybacks is one of many of those ideas, but it's always a fundamental approach that we take to both create.

Creating value and capital allocation, we havent looked at telenet as such but I don't disagree with you I think telenet is poised to improve from here no question about it they've answered all of the outstanding issues for the most part around the JV and then the Netcode they've created by think they're not stressed about a potential fourth entrant.

I think in their capital markets day will clarify many of these things, but I think telenet certainly is undervalued.

And for the first time, probably trading at a lower multiple than we are but thats unusual and probably unlikely to remain.

For all of our Sakes. So we look at all different types of things I'm not going to comment specifically on what we might be looking at vis vis <unk>.

Alright, Thanks, Mike.

Okay got it.

Okay. Thanks.

Thanks.

Thank you one of them are now good question.

It comes from the line of Rick <unk> of Jefferies. <unk> Company. Please proceed with your question.

Yes. Thank you very much so a question on the UK and the operational side of things.

It sounds like the fixed price rise was about a two percentage point tailwind, whereas the ARPA trends improved.

Water off add roughly.

I entered with very broad brush stroke, So a question Ken.

Can that dropped through improved later in the year what are the mechanics of that relatively minor.

Through a fee of the incremental price increase versus last year. Thank you.

Yes go ahead Louis.

Yeah.

I'm not sure if I can add so much color to it and if I understood. The question right I mean.

And as I said before we have.

Leonard the price rise in Q1, we had a customer have had a cancellation right.

<unk>.

And that has gone so therefore it is in.

Incremental and now customers, who used to be on a promotional period.

Period, when they come off that will also get the price right. So during the year.

Grow out of that effect right.

Then there is another effect that is that if we keep acquiring customers with lower acquisition offer which we have done. So you can see that can see also that the acquisition market as such was under pressure and if we are forced to give higher discounts.

Retention is content. We have also done that then that is obviously into this app to increase now therefore.

It's a bit dependent on the cost of living crisis, I would say predominantly not only by predominantly and so therefore, we are very careful giving the guidance on that going forward.

<unk>.

The good thing is that.

But we have a lot of growth lever.

I have that right. So we are fully materializing the synergies.

30% end of this year from 540, and we're probably on track to do so we have digitalized our business.

We have an increased benefit out of that and now with the fiber joint venture obviously that we have.

Faster.

Network expansion, meaning for Virgin media, we can broadband we can sell more of it and then also because now a.

Possibly a wholesale partner had immediately speed advantage getting to one gig speed and 60 million homes enhanced the security to a half future proof network was 21 million homes latest 2028.

Itself is also another growth rate, which will come for sure. So therefore, I think on one hand side, we are a bit affected by the cost of living crisis, and it's hard to predict but we control a growing top line in that and second we are sitting on three growth rates, which are very tangible and solid to serve and just.

What we are doing.

That's helpful can I just clarify one aspect of your answer what you didn't mention was more aggressive retention discounts. So kind of just confirm you haven't obviously retention discounts.

This price rise here.

So the retention discounts during the prior price were exactly the same like a year ago also the retention volume losses. So this is the same what what we are seeing more starting in Q2 is irrespective of price.

Right.

Hi.

Time to renegotiate the contract down to a higher discount from simply customers coming out of their minimum contract period.

Irrespective of price rise because they have had the 30 days and et cetera, and exceptional cancellation right, but they haven't used therefore that has landed.

In Q1, as I said before in the same way less than a year ago, but what we are seeing now is a bit higher demand for retention discounts and this is now the question is.

Thats going to happen.

Our progress going forward right to ask the question and therefore, we have been carefully.

Go ahead Pat.

Yes. Thanks.

Yes, I think it does I.

I think operator, we are now we have time or are we taking one more guys.

For a time.

Okay awesome, so listen thanks for sticking with us.

Got a little bit over I apologize for that and I like <unk>.

<unk> growth waves, because we've got those really in all of our businesses I think number one where we're able to power through this macro environment really well in the businesses that we're in I think you know that you've seen us do that in the past.

We've got tailwind in many markets around synergies or new brands and new products that I think are going to benefit us in the second half and I think just.

Just as importantly, we're demonstrating you again that we're good at optimizing capital and allocating capital in our fixed network strategies that we've announced in the last couple of weeks or.

Right in line with that approach and I think will be highly accretive to us operationally and financially.

Today and down the road and then lastly, we're all about buying our stock.

The increase shouldn't have surprised you because we've been sort of signaling and and and.

And we're we're committed of course to the 10% next year as well. So it gives you some comfort that we're going to keep this program moving so thanks for joining us and we'll speak to you soon take care have a good summer bye bye.

Thank you ladies and gentlemen.

<unk> Liberty Global's second quarter 2022 investor call.

As a reminder, a replay of the call will be available in the Investor Relations section of Liberty Global's website. There you can also find a copy of today's presentation materials.

We thank you for your participation and ask that you. Please disconnect your lines have a great rest of the day everyone.

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Good morning, ladies and gentlemen, thank you for standing by and welcome to Liberty Global's second quarter 2022, Investor call. This call and the associated webcast are the property of Liberty Global and <unk>.

Any redistribution retransmission or rebroadcast of this call or webcast in any form without the express written consent of Liberty Global is strictly prohibited.

At this time all participants are in listen only mode. Today's formal presentation materials can be found under the Investor Relations section of Liberty Global's website at Liberty Global Dot Com.

After today's formal presentation instructions will be given for a question and answer session page two of the slides details the company's safe Harbor statement regarding forward looking statements.

And other information and statements that are not historical fact.

<unk> filed Form 10-Q, and 10-K as amended Liberty global disclaims any obligation to update any of these forward looking statements to reflect any change in its expectations or in the conditions on which any such statement is based.

I would now like to turn the call over to Mr. Mike Fries. Please go ahead.

Alright, Hello, everyone. Thanks for joining us on our second quarter results call. We've got a lot of ground to cover today. So we're going to jump right into it and Charlie and I will handle the prepared remarks, using the presentation, we posted and hopefully you've got in front of you and then we'll get to your questions I am starting on slide three as I, usually do with five key headlines from the quarter.

First of all it goes without saying that these are challenging times for all of US every market is grappling with inflation higher energy costs supply chain issues and concerns about recession, obviously, we're not immune to these macro conditions as such and to be clear we are experiencing some headwinds across our business principally in energy costs.

And some emerging signs that consumers are growing fatigue, and more price conscious but on the other hand, having operated through several of these moments before and based upon the strong performance, we were able to sustain during the pandemic. We think we're really well positioned to manage through the current environment the demand for.

For connectivity fixed and mobile has never been stronger and we don't see anything impacting that long term secular trend in fact, we see more positive catalyst for consumption going forward, whether thats smart <unk> solutions in the <unk> space or the continuation of hybrid working with proliferation of gaming adoption of streaming services or whatever ultimately flourishes.

<unk> added the new members.

Secondly on top of the secular drivers we have some built in tailwind that support our operating and financial momentum as we've reported in just about every market, we've been able to adjust our prices to reflect rising inflation for the quality of our connectivity services. We're also right on track with the realization of significant merger since.

In the UK, and Switzerland, which combined will ultimately generate annual cash flow benefits to us of nearly $1 billion and then we continue to support volume growth in ARPA with innovative products and services across our FMC platforms or talk about that in a second.

Third consistent with these plans innovate and compete we have prioritized. The continued development of both our fixed and mobile networks as you would've seen we've announced some we think really smart and accretive decisions recently that will solidify our position as FMC champions in these core markets. This includes two recent announcements the formation of a new infrastructure.

Net <unk> in Belgium that will slowly migrate telenet HFC network to fiber with the support of 60% utilization rate day, one and some really smart financing and then just today the announcement of our new 50 50 net <unk> in the U K with <unk> that will build $5 million and possibly as many as 7 million Greenfield fiber homes that.

We'll extend Virgin media <unk> reached over 80% of homes and drive new wholesale and strategic opportunities.

These investments in network expansion and upgrade will have varying impacts on free cash flow in the medium term.

So assuming telenet retained the full 57% of the Flemish nacco and doesn't bring in a financial or strategic partner into that deal, which we think they will and we'll consolidate the capex and see a decline in free cash flow as Dave explained several times this week, but in the U K the JV with <unk> actually deconsolidation all of our current Newbuild capex.

So which will actually enhance <unk> reported free cash flow.

Now as we highlighted on our last results call, we have been accelerating our stock buyback activity during the first half of the year and as of today, we have already reached our goal of 10% of the shares outstanding.

To take advantage of what we think are really a widening value gap in our stock we are increasing our buyback commitment today by $400 million.

So for a total for the year of $1 7 billion or roughly 14% of our shares outstanding a Jan one and then finally and importantly, we are confirming our fiscal year 'twenty two guidance and Charlie will walk through that.

All of which are up from the first quarter, but below prior year.

A lot of color to add here on broadband as Youll recall, we landed our six 5% price rise in the first quarter largely in line with our expectations.

In the midst of a slowdown in the overall sector as it turns out the market remains subdued in the second quarter with nationwide broadband sales down an estimated 7% sequentially in that relatively quiet period, our estimated share of broadband net adds reached over 20% nationally that's a new high for us and that translate.

So roughly 40% share on our footprint, where average speeds across our base are now 250, megabits per second or five times the national average.

And while broadband churn remains low we are seeing as I indicated some pressure on acquisition of <unk> and retention discount as the market responds to what does a worsening cost of living situation and competition incentivize, but we're confident we have exactly the right products to keep our momentum and to give customers increased value for money when they need it most.

Our U K mobile growth strategy is driven by value creation through convergence, we are well positioned to take advantage of the market to our volt bundle, which is doing everything we hoped it would helping us acquire new BMO to customers.

Oh, two mobile subs to Virgin broadband customers and importantly, it's bringing Virgin mobile customers over to our premium <unk> brand. The combination of these movements resulted in 13000 net postpaid adds but that understates to organic growth of the Goto base because it includes significant migration and losses in the Virgin.

<unk> base now in Switzerland.

We've achieved a major milestone with the launch of a new single brand under Sunrise with a promise to dream Big and debate I love that phrase.

Energy behind this move is really really exciting, but we did expect some near term pressure in broadband sales as we sunset the UPC brand and stopped marketing around that and we did see that this past quarter with a stable broadband based on the flip side, the rebrand and the new portfolio of Sunrise up did drive increased mobile sales drove a better tier mix that led to another.

Strong quarter with a market, leading 47000 postpaid at Tulsa.

Worth pointing out that our digital first no frills brand yellow is doing terrific Lee it contributed meaningfully to growth in the second quarter, we've been in Switzerland, All week with the board on still here now on the progress Andre and his team have made I think it was just outstanding the Swiss market is stable Swiss consumers are in great shape relative to the rest of Europe and Sunrise is.

Getting it done.

Now Vodafone Zig a reported 49000 postpaid mobile ads and a loss of <unk> 2000 broadband subs that was despite an averaged three 5% price increase in July and churn remaining relatively low. These results are actually strong in mobile Vodafone continues to have the highest NPS in the market and the lead competitors in mobile net adds.

And while our broadband base with largely flat in the period that was our best result in eight quarters, which we attribute to the team's aggressive fiber response plan and a new creative campaign.

Churn remains low but in part due to improvements in broadband capacity and quality and the availability of one gig services to 90% of homes Telenet just reported their results yesterday. So I'll be brief here. The market continues to exhibit low flux, but also relatively low churn so for the quarter, telling it at 8000.

Postpaid mobile adds and broadly stable broadband base now on the positive front all operators have recently introduced price adjustments with Telenet is at four 7% and that's going to help mitigate competitive pressure on ARPA as I'll discuss in a minute Telenet recently announced deal to create a new infrastructure company with movies I referenced that already.

<unk> line for US is that this is going to be a game changer for the market and ensures that telenet.

To offer the best fastest and most innovative services.

In a world, where broadband speed and mobile platforms are harder and harder to differentiate the pace and quality of innovation is becoming the most important driver of success.

And I can tell you having evolved our business over the last 20 years from 100% video revenue to a diverse mix of mobile broadband entertainment and B to B, we understand the important role that bundles brands and new services play in our business slide five just summarizes very briefly how we are doing this in each.

Today, and rather than discuss this by country I'll just dropped some headlines from each category. There is no need to repeat the strategic operating rationale underlying six mobile convergence right, but putting fixed and mobile platforms, together and generating significant opex and capex synergies is the easy part.

Real Magic lies in developing the converged services that excite customers lower churn and drive ARPA, we've done that in each of these four countries that continue to push FMC penetration to around 50% and above in each case the <unk>.

<unk> generally includes faster broadband mobile data and other connectivity feature like Wi Fi pods or security services Your new Entertainment offers.

What you might think.

Attainment is increasingly a critical part of the bundle.

Some have asked is it necessary to offer the service and the answer is yes, especially in Europe , where a significant percentage of customers say, that's one reason why they subscribe to our broadband service.

We've been integrating streaming apps into our platforms for some time and customers increasingly rely on us to access their favorite providers in the U K. We just took that one step further with the rollout of our new IP device called TV stream.

Box sized box it costs 35 pounds upfront to the customer and has no monthly charge and it offers seamless and really beautiful access to the best apps 43 channels and of course, all the great BMO to TV services, if you want them and with this launch we're targeting really a new digital first segment of viewers and ensuring that our best in <unk>.

Broadband remains front and center and we're doing a number of things in the rest of our markets, whether that's entertainment upgrades, the Netflix or my sports at Sunrise in Switzerland, or offering exclusive Flemish series of Telenet, where Vodafone zig offering free access to Zika sport.

Now this will also sounds straightforward to you, but rewarding customer loyalty is increasingly a key expectation and we are right. There for example.

<unk> rewards program has helped to maintain the lowest customer churn in the market by offering our best customers opportunities for us to air time or money off of tickets to shows Swiss team has just launched sunrise moments, which really very cylinder UK and Vodafone Zynga is doing something like that as well and then finally, whether it's sponsoring the national rugby team in the U.

K will be coming to brand new lead sponsor of the Swiss National <unk>.

And the first slide six here summarizes a recently announced deal with <unk> for the year to initially build 5 million Greenfield fiber to the home homes by 2026 with the possibility of taking that to $7 million.

<unk> left of the chart if youre looking at it summarizes the structure of the deal, which will see liberty and Telefonica invest directly in the JV to a new holding company.

We really thought it was cleaner to use a separate vehicle and move the project off balance sheet. It also preserves <unk> capital structure and its capital allocation framework that <unk> will provide construction in managed services to the new Netcom and we will of course be an anchor tenant on the wholesale front.

I think you gave you fully financed with equity and debt committed our share of the equity for the 5 million homes would be around 350 million pounds invested over the next four to five years.

<unk> amount of capital as a reminder, we've already built 3 million new homes in the U K, which gives us confidence in our ability to execute the buildup at cost penetrate these new markets and generate a good economic return and that's before we add additional ISP. This potential wholesale cost of tuition that only make the deal more attractive and they are still.

Many good reasons to move forward here first will be essentially of putting the lightning build engine and the lightning capex into this off balance sheet venture, which will improve <unk> free cash flow day, one I mentioned that second we'll be expanding the reach of Virgin media Ot's converged offering to 'twenty, one 'twenty 2 million homes are up 80% of the market and of course together with our <unk>.

<unk> upgraded the existing HFC footprint to fiber, we are really cementing our position as the second national fiber network in the U K and the JV is well positioned. This is also important to point out well positioned to capitalize on further consolidation in the fixed market if or when that happens. So we're really excited to get this done and look forward to a strong partnership with them for the year.

Now while we're on the subject of upgrades just a quick update on Ireland, where we just upgraded our first 100000 homes to fiber and everything is now picking up steam as a reminder, this is a very cost effective build around 200 euros per home, which made the decision to go fiber over DOCSIS, four pretty easy and to top it off we're making really good progress unlocking in our.

First wholesale deal in the market now.

Now slide seven you've already heard from John on the Telenet team. This week on the new NAPCO with movies I'll just add a few things from our perspective first of all we think it's important to call out that this is a long term upgrade plan, which gives management pretty good flexibility to utilize different technologies or even whole buy fiber from.

From third parties, so while it's a 2 billion euro commitment on paper to get to the 78% coverage that's dependent on generating good returns along the way.

The strategic advantages this creates for telling it whereas interesting and important to US is the operating benefits. This net co starts out life with 60% utilization and really reasonable build cost for at least the first half of the network is highly likely that our financial or strategic investor will take a look at this and we all know that the current trading.

<unk> for these type of opportunities is really good and similarly, this gives telenet the option to work with strategic partners in the market to ensure the optimal use of capital for all of us and that consumers are the focal point for innovation and investment and of course. It also puts telling it in the pole position to both retain and grow its existing home.

So revenue base, which is substantial now one last point here.

There is no read across from Belgium to haul and some have asked that question either on strategy or costs are Dutch management team is currently really leaning into DOCSIS, four where cost look very reasonable 150 to 200 euros per home in the meantime of course, we are offering one gig services to 6 million homes or around 86% of the market and that will be.

100% by year end.

Finally, I'll wrap it up on slide eight.

We're increasing our buyback commitment.

2022 from $1 3 billion to $1 7 billion and this is first and foremost a strong statement that the current market price does not come close to reflecting the inherent value of our company and the strategies. We're pursuing by December we will have retired around 14% of the shares just this year and over 50%.

Since 2017.

That level of commitment is supported by our strong financial position, including $1 7 billion of distributable cash flow generation. This year and a strong balance sheet. As you know our debt is siloed long term fixed rates. So were largely unaffected by current conditions in the capital markets and we're sitting on a large cash balance of $3 $3 billion of corporate.

Cash today, which should be three 6 billion by year end. After the increased buyback commitment that cash balance. We think is a huge asset for us at times like these.

While we continue to prioritize stock repurchases as today's announcement demonstrates we also will stay opportunistic and offensive in our core FMC operations, where we remain a fulcrum platform in every market driving change, forcing innovation and creating long term value for shareholders Charlie over to you.

You.

Thanks, Mike.

The next slide sets out our revenue performance in Q2 broadly we've managed to deliver stable revenue. Despite a tough macroeconomic climate as price rises across our portfolio begin to feed through into increased revenue growth.

Because of its price rises <unk> has returned back to overall revenue growth this quarter showing in particular strong revenue growth in mobile.

Although fixed subscription revenues were broadly stable or decline in install revenues from circuit installations on albi to be division compared to last year, but overall fixed revenue showed a small decline.

And Switzerland stable revenue growth in the quarter. It was a mix of continued strong mobile growth.

Driven by strong volumes across our brands combined with a decline in fixed revenues fixed revenues declined due to RP pressure with some softer volumes in part because of the brand migration from sea to summarize in the quarter.

In the Netherlands, we saw a modest revenue decline year on year, driven by ongoing declines in the BTC fixed base.

Partly offset by strong mobile <unk> revenue growth the business introduced a blended three 5% price adjustments and fix this month, which we expect to improve fixed revenue growth in the second half of the year and.

In Belgium, Telenet topline growth continued driven by the 2021 price adjustments on subscription revenue strong handset sales I'm rubbing visitor revenues.

Given the price adjustment of four 7%, which landed in June we expect further support to the top line in half two as Atlanta across the majority of the base.

Moving onto our adjusted EBITDA performance in the quarter.

<unk> delivered around 4% EBITDA growth in Q2.

This included a $19 million opex cost to capture within the quarter.

EBITDA performance was driven by the price adjustment and early synergy realization we can.

Continue to expect EBITDA growth to trend upwards in half two as the impact of the price rises continues to land as well as the realization of further merger synergies.

Sunrise saw EBITDA growth moderate after a strong Q1 with Q2 broadly stable.

This was due to high cost to capture operating costs compared to Q1.

And a big part of the $19 million of cost to capture in the quarter was due to the sunrise rebranding excluding the cost to capture the EBITDA growth was supported by the ongoing benefits from the MBNA migration executed last year.

Vodafone Zika witness in EBITDA kind of a 2% driven by the topline decline and cost inflation, including energy.

The business also stepped up promotional activities for the Zika sprints as campaign in the quarter.

And finally Telenet reported a modest decline in EBITDA driven by the continued impact of energy and labor costs overall in line with guidance, we expect EBITDA growth to be largely half two weighted supported by the mid June price rise.

The next slide has an update on the key inflation and macroeconomic challenges that we discussed last quarter.

Firstly on our energy costs, which typically constitute a low single digit percentage of operating costs for 2022, we're now around 90% hedged in terms of our exposure across our operating companies and we also continue to hedge opportunistically for 2023.

Looking to be fully hedged for 2023 by the end of this year.

Secondly, wage increases have largely been agreed across our businesses in line with our budget. However, we continue to monitor the impact on our workforces given the tight labor markets.

Thirdly, although we continue to see some macro driven pressures on our supply chain, we have managed to leverage our scale and longstanding supplier relationships to manage them well.

In response to high inflation generally we've implemented a number of price adjustments across our markets, which are generally higher than in prior years. Despite these higher increases our internal trends currently show that our price rises in the U K and Holland, Atlanta successfully with limited churn impact.

Finally, we continue to see our integration efforts in the UK, and Switzerland support profitability, which differentiates us from our competitors given the multi year synergy run way ahead in two of our biggest markets.

Moving to free cash flow and the key drivers, we delivered $564 million of full company free cash flow on an adjusted and distributable basis in half one.

The second quarter was a strong quarter for the distributable free cash flow was over $400 million and was supported by dividends from Virgin media to Vodafone Zika.

Turning to our capital allocation slide and starting with capital intensity on the left hand side.

We're on track relative to our Capex guidance across the full measure of what goes in the first half of 'twenty two as.

As you can see capital intensity varies across the businesses Mike's already covered a number of our updated fixed line network investments, which is a major driver depending on the vertical strategy.

On mobile we continue to progress well with five Jeep with the Opco is at different stages, often driven by the release of spectrum Swiss coverage is the highest at around 95% the doctor at 80% with the UK and Belgium now starting the robots.

On a consolidated basis, our capex continues to be around half on product enablers in CPE and the other half on baseline capacity and new build upgrade.

On the right hand side of the slide we give an overview of our debt complex as we.

We believe that these are well hedged and provides significant value to our shareholders. The interest expense on all our debt is 100% fixed for any variable debt that we raised which is term loans, we swapped to fixed rates to maturity.

For any debt rates and the currency of the local company the debt is swapped back into local currency.

That's just solid across various debt complex is but it means that even if one gets a company gets into distress it will be other companies.

Virtually all of our loans don't have any covenants.

We've also looked into our long term debt structure with an average life of seven years.

Swiss franc and euro borrowers all locked in fixed rate debt below 4% and then the UK weather our underlying interest rates production 70, ADESA at four 6%.

Lastly, turning to benches, the fair value of the portfolio fell slightly to $3 2 billion.

Driven primarily by the continued decline in the ITV stock share price during the quarter and you can find additional detail around our portfolio and the key quarterly movements in the appendix.

Turning to our guidance, we are now confirming the guidance of each of our key companies set out on the left hand side of the page.

We're also Reconfirming our group guidance for $1 7 billion of distributable free cash flow. This is based on guidance FX and since we got it thats been a pressure, particularly on the pound euro relative to the dollar. Despite this we continue to track well on free cash flow as highlighted by the strong Q2 free cash flow performance.

<unk> 2022 free cash flow forecast include cash that we expect from a debt raising at Virgin media to as part of the $1 6 billion pound overall shareholder distribution guidance now despite the market volatility successfully arrange attractively priced financings to fund the distribution.

As we have pre hedged interest rate exposures last year, but for all the rates started rising.

We've continued to excuse me not buyback commitment having already almost closed on 10% by about Florida, we've been publicly targeting having bought back 50 million shares year to date.

As Mike mentioned, we're looking to excuse another $400 million for the remainder of 2022 and take advantage of what we see is a large value gap in our stock.

Given the increase in the buyback by $400 million, we now expect to end the year with around $3 $6 billion of corporate cash. So it doesn't include the ton of cash.

Cash, which we can obviously use to support returns for our shareholders and with that operator, let's go to Q&A.

Thank you very much.

Ladies and.

Gentlemen, the question and answer session will be conducted electronically.

You would like to ask a question. Please do so by pressing the one followed by the four on your phone.

To withdraw yourself from the queue. Please press one followed by three in order to accommodate everyone. We request that you ask only one question.

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We'll pause for just a moment to give everyone an opportunity to join the queue.

Yeah.

And our first question comes from the line of Steve Malcolm.

Of Redburn. Please proceed with your question.

Yeah. Good afternoon, guys. Thanks for taking the question it.

It was just a question on the U K joint venture and the decision to re lever, whether you've given any thought to.

Doing that I mean, it doesn't seem to have benefited the shares, particularly as we go into tougher economic times. There is an argument that the.

This would be better off being <unk>.

Elaborate a little bit lightly.

That's been the case described to you in the future. So just any thoughts on that and how you're thinking about the leverage going forward and whether youre going to try and run it up towards that five times ceiling on whether a lower level might be more appropriate in these are somewhat more challenging economic times.

Well I'll take a crack at that and Charlie you can fill in the gaps are Andre but.

First of all thanks for the question Steve.

Margins on these net co structures as you are probably familiar very very high.

And this net go in particular is a light net meaning that many of the activities are being.

Off loaded to Virgin media unto themselves. So it's our belief that the funding structure. We put in place is fairly typical and not overly aggressive at all for these types of.

Platforms.

That the equity.

And the debt together provide all the capital we need to get it done and that is certainly consistent with the leverage structure. We've implemented elsewhere in the organization on businesses with lower cash flow margins. So it seems deploy it to us.

Yeah.

Sorry can I just.

I was more I was more of a <unk> levered drop in the net leverage.

Okay.

Oh, sorry, sorry.

Yes, no problem.

We've ever been.

No worries John do you want to just leverage overall go ahead, yeah sure look I think.

First of all as you know we've always been quite comfortable with four to five times leverage secondly, we are and this is a great Testament that much in the rest of the treasury team, we've been able to secure some very attractively priced financing at least for this recap and if you can borrow sub 5% type numbers I think it's pretty attractive for shareholders. We can distribute the cash back to you when we can.

Drive a higher return, but long term shareholder benefit.

Thirdly, I think there is a pretty strong free cash flow cushion and an even bigger one if you wanted it because you could obviously scaled back the newbuild capex. So I think these companies were up 11, I do hear you.

If one were to IPO in Europe , there was a traditional policy of having a lower leverage.

We're looking at an IPO.

No.

In the near term not least because they have a story is coming together very very nicely.

Let's say this this off balance sheet JV that address that and it's really very impressive so and theres no reason to not.

Leverage up if the monies that at an attractive price you bought as seen with telling that we at least felt that it was very important to be given the dislocation in the market and the fact that.

It wasn't without having a range very attractive and I think they've got a terrific debt stack.

Low 3% fixed rate six plus years and that market I didn't think it was sensible to commit to a dividend policy with you all recapping the business.

Because you know what we don't know what the price of it that will be it will be that so I think there is it the same story that at least in the U K if that helps.

Can I just ask one quick follow up on that.

Had the anchor tenancy works, if you commit to certain volumes or is it just best effort.

There is no minimum volume commitment, we shouldnt get into too many details there, but Virgin media <unk> will be an exclusive exclusive anchor tenant and we will use that network.

There will be a minimum volume commitment.

You will have to deliver the network is that really a well will not be.

There would be no minimum volume okay.

Correct.

Okay perfect. Thanks.

Mhm.

And our next question.

Comes from the line.

Lee look Harold.

Please proceed with your question.

How quickly do you think you can start rolling out and getting customers onboard given the complexity of planning and supply chains in the U K.

I'll, let you address that.

Yeah.

Use of time.

Yes so.

I mean, yes.

Maybe three answer number one, but we have built already 3 million homes. So that means we have a strong relationship with a couple of vendors here helping us.

All of our network.

Second right now with Liberty Gogo Telefonica and.

The joint venture, we cannot give a long term commitment to these pop out suppliers in the market and we have to use the excess to that to ensure already additional tier one supplier and now we are able to.

Signing these contracts and so you would see from us a jumpstart going directly into hybrid after.

After closing of the jumbos.

Thank you.

Yes.

And our next question coming from the line of James Ratcliffe of Evercore ISI. Please proceed with your question.

Thank you.

Continuing on the topic of net goes you've done one now in Belgium and for the expanded footprint in the UK, considering I understand the benefits of giving investors the opportunity to target an infrastructure play who might not find an opco, particularly attractive how do you balance that against the fact that this is creating wholesale net code that would certainly.

He's competitive entry for.

Oh I'm sorry.

If providers rather than.

Owning the network essentially entirely yourself and.

With the Opco and having quasi monopoly status, particularly in those additional areas that build out.

Well James I think in the U K, it's a pretty easy answer.

This is all Greenfield territory.

So it just as with lightning when we build.

Network in the new markets that Virgin media has been expanding into four for years, we get between 25% to 30% penetration right away.

Even though there's other operators are everybody's already marketed that territory. So we feel very confident in our ability to penetrate this new greenfield.

Network up to 7 million homes of it and to penetrate it well.

The other operators already got access to multiple networks, probably or at least one for sure in the territories that we're targeting and if they join us on ours. It just reduces our overall cost and.

Increases our overall return on infrastructure, we would be building anyway. So it's a no brainer and the U K.

And I think in <unk> case, remember Theyre already opened their network the telenet already a wholesale provider on HFC all there'll be doing is becoming a wholesale provider on fiber over time.

And retaining and growing that wholesale revenue, which already supports their business. So I think in Belgium. It also makes it makes logical sense.

Just to follow up if I could when you think about the other parts of the footprint, both JV and wholly owned.

Does it make sense structurally for the net <unk> in the opco to be separated if you're not talking about footprint expansion or are those two pieces.

So we are better together.

Well, there's pros and cons. The pros are what we're leaning on here in both instances the pros are.

A lot you are bringing in typically higher leverage outside capital.

And in infrastructure focus to an asset class if you will.

Generally highly valued.

And in recent times materially higher multiples than our own business, So theres financial reasons strategic reasons.

Ideally and operating regions for those separations. It doesn't mean that works in every case certainly doesn't work in every case and in for example, Switzerland, we're not doing this.

Ireland, we're building fiber, but retaining control of the asset because it's a relatively small investment in a relatively inexpensive build.

A blocked view, it's only going to look like this you look at the market and in the variables in the market and you make the decision that creates the most value I think that's exactly what we're doing.

Thank you. Our next question comes from the line of Sam Mchugh of BNP Paribas. Please proceed with your question.

Good morning, guys just sticking on the U K, sorry, you mentioned.

More impact from temporary dilution of discounting so when we think about all three trend through the year should we should we think about them as being pretty similar to this quarter may be getting a tiny bit.

How do you think in that context, the royalty and the headlines around talktalk.

And I'm pretty sure you can't comment on that but strategically do you think it makes sense to get a bit more exposure to a discount market at this juncture and make any kind of.

Macro cycle, thanks very much.

So answering your second question would be doing just that commenting on it so no comment, but you want to handle the first question.

Yes sure.

I mean, we have done the price rise in Q1, our customer had been 30 days cancellation period, and we have applied across the firm.

Other market participants to use a different mechanics, meaning the higher price rise.

No immediate cancellation right and Thats applied comprise fried also for customers who are within their existing promotional period.

So therefore, you can from our side say priced sites have landed in Q1 as planned and that's more customers coming off the promotion period over time and grow therefore get the prize for us during the year.

The other thing and Mike had mentioned that.

We see both in the acquisition market and also on the retention market a bit more pressure and we think that is partly coming from the cost of living process.

So meaning that when you look at sales pro acquisition, it's more focused around 50, Meg product Supreme being around 2025 pounds and then obviously when there is a lot of advertising of this product in the market the appetite of existing customers to reduce them.

The bill and the cost saving process, so we see it a little bit.

And it's hard to predict how this will develop during the course of the year.

But we are not seeing a decentralization of if that helps.

Thank you Max.

Thank you. Our next question comes from the line of Robert Grindle of Deutsche Bank. Please proceed with your question.

Hope you can hear me.

Sticking with the UK how would it work if there was M&A in the fiber JV footprint is it that you had swap capex for an acquisition and not build in those areas.

The footprint grow by more than 7 million by M&A, and say <unk> bought more customers onto the JV.

Most successful in getting the penetration up can you just got the value of that through the equity stake or do you get a sort of an.

<unk> earn out as penetration minutes up thank you.

Yes, that's a good question, Rob I would say and your first question all of the above.

Sure.

In terms of.

How that would work in the M&A structure, we would and I think we say that I said in my remarks that this JV could certainly make acquisitions of existing <unk> and.

If they were interested or if it made sense.

And there was regulatory and financial support for the decision.

And I think we are.

Uniquely positioned to do that with three partners, who have capital and understand the business very well.

Let's see how things unfold, but thats one of the interesting upside here for sure.

And then on the second question.

There aren't that many customer basis to buy so it wouldn't even comment on it.

Most of the outlets don't have.

Retail operations or if they do they're quite small so I'm not sure that in the case of off net that would be material.

Yeah.

Yes, I was referring to a regular retail ISP actually.

I know you were.

Thank you. Thank you.

Thank you and our next question comes from the line of David Wright of Bank of America. Please proceed with your question.

Yes, thank you very much.

Perhaps just a little more top down Mike we've talked about strategy over the last few years very clear that you guys executed deals to build the FMC champions.

And then there was always this potential to consider local listings.

<unk> opened up the.

The asset opportunity to guys, who may be comp sort of acquired the U S.

Holdco.

It does feel like that's maybe.

That opportunity has perhaps been.

Moved on a little.

Note that net coast co question earlier.

Is that perhaps a better route now to sort of unlocking value is to stop.

Bringing some of the infrastructure assets together and I know you didn't go into this JV with <unk> <unk> test.

As equity shareholders, and then I guess just to part two on the sort of net co concept.

And of course, you are essentially shifting away from net coach service Coke because you are selling part of your infrastructure and that means ultimately de rating of.

If you have multiple and I know that you very often talk about the market disconnecting youll share price with the value of your company, but.

Is this not compromising that to some extent.

I'd be interested in your thoughts thank you.

Yeah. Those are really good questions, David I think on the second one.

I don't think it is compromising our goal.

Let's just take the UK for example.

And incremental investment on top of a core FMC business that we believe.

Has immense tailwind, whether theres synergy driven brand driven our operating driven.

And we make that argument all day long.

Youll Youll put whatever multiple you think it's worth will think gets higher and we know it is having said that this particular expansion of the network is incremental and on top of that and we believe as you've already indicated.

Could generate potentially higher multiples.

<unk> brought in additional financial partners or did some sort of rollout or things of that nature. So I think it's the best of both worlds, where we are we're actually strengthening the core FMC business validating what we think value is in that core FMC business by giving it room to expand and grow its footprint in a really cost.

<unk> and we think accretive.

The structure.

It might be slightly different I understand your point, perhaps differently in Belgium, where youre, taking business and breaking it into if you will.

And what does that look like and how would that be ultimately valued and I think even in that instance, I mean, telling thats trading as an integrated company at a pretty low multiple today you would know.

And over time, let's see how these strategies unfold, we're pretty bullish on what John's pursuing and.

And we think the serco will be.

Valued at a particular number based on its ability to retain and grow customers and if I know the telenet management team theyre going to kick some butt and ensure that telenet remains the primary brand for consumers in that market and matter what network they are using or who owns the network and.

And if I, if I know that this team like I do theyre going to make sure. This necco together with their financial and strategic partners is the fulcrum.

To crystallize value and to demonstrate value, but also most importantly <unk>.

It back and make an argument that this is going to increase the core business.

Overtime, and then how you perceive it or the market perceives it we'll take our chances with that but we know that both these transactions fundamentally grow the core business that we're invested in and the structures. We are using to do that or we think accretive both at today's values are multiples and.

And that should play out over time, just as we think in terms of listings listen there is.

Our core businesses need time, especially in the U K and Switzerland to mature and demonstrate the core benefits both synergies and growth that we know they can demonstrate so we'll come back to that question, if and when it makes sense. It's obviously doesn't make sense now, but we never say never we're not shutting the door on those ideas, we're just understandably focusing on other strategies.

<unk>.

And we have a very interesting infrastructure portfolio not to go on too long here, but you mentioned infra as really an asset class.

We've developed some very interesting investments in infrastructure.

Telefonica has their own <unk> platform is it possible that we would look at some point too.

Their combined.

The ownership of these infrastructure business as possibly you know us I mean, we look at everything.

What we get paid to do is to be sure. We're always looking out for shareholders and trying to figure out what will create the most value for us.

Together and so that certainly could be an idea down the road we would investigate.

Okay.

Thank you. Our next question comes from the line of Polo Tang of UBS. Please proceed with your question.

Hi, Thanks for taking the question, maybe just a fixing on Switzerland now can you maybe talk through the competitive dynamics in the market and what's been the reception to the new tariff portfolios from all the operators and you flagged softening trends in terms of fixed line.

Thomistic argue that this can improve going forward. Thanks.

Sure and Andreas on the line so Andrew why don't you take that.

Yes, thanks for the question Paul.

Firstly I would say the competitive dynamics in the first half year has been changing a bit but restoring to recent levels based on the I would say portfolio refresh the dfc why is that.

<unk>.

We have seen that in.

The first quarter throughout the second quarter up until the beginning of May.

Most of intensity towards reducing or you will following that trend.

With the new portfolio of Swisscom, we have seen that while the promotional intensity has come down.

Swisscom is introduced.

Discounts like for example, the online benefit which customers could sign up for which has increased their competitive position.

The phone book as such we look forward to also bring up our promotional intensity again in.

Order to keep the pace in the market, So I would say.

We had said at the beginning of the year, which is model we are hopeful but the reality and we are not giving up on that.

The fixed cost.

Thank you.

Referring to is very much driven by the.

The consolidation of the brands and it starts with sunsetting of the UPC brand, which we have started to reduce our promotional activity.

On the grant that earlier and are now ramping up again, the fruit and trade on the new portfolio.

I can say I'm pretty happy with the performance of your query on the new portfolio.

It does exactly what it should.

Drugs more bundled sales.

Of course, it will continue to fine tune it in order to get back to the initial momentum that we had at the beginning of the year on fixed and on mobile we are continuing to doing that.

So from the numbers.

Yeah.

Thank you very much.

Just real.

We are quickly what I said at the year.

The outset in the remarks, which is this market, Switzerland is.

Really unique almost living in a bubble here.

<unk> is.

Low single digit interest rates are maintained I think theyre just now at zero consumer.

<unk> is.

<unk> higher than other markets. So essentially always seems to perform really really well in difficult times and.

It's a I think a safe haven, and such but we're certainly glad to have a lot of capital invested here and I think that's just giving.

Andre and his team a lot of tailwind to keep managing the business well.

Thank you. Our next question comes from the line of James Ratz, Sir of New Street Research. Please proceed with your question.

Yes, good afternoon guys.

First I had with just with regards to the.

Buyback.

Florida decision that Youre allocating more capital towards the buyback, but when you sat down at the board level and thought about the extra $400 million you were going to commit.

Interested to understand.

What are the choices you looked at and in particular do you not feel it was interesting. This time to look at buying equity in <unk>, which has come down by more than Liberty global share price.

And if I could just for point of clarity on an earlier question from Steve around you said no.

Volume commitments from the MAA to textiles commitments, if anything you are making to the new joint venture because you say anchor tenant types, what I talked about on that front.

Actually means in a sense.

Securities adaptive vendors, therefore, getting and the new joint venture. Thank you.

Yeah on the second question Andres stepped in here, if I'm missing anything but on the second question. We are basically agreeing to use this network and nobody else's.

So remember as we rolled out the 3 million homes that we now have historically called lightning.

We have an exclusive obviously users of our own network in that context, and getting 25% to 30% penetration so in a sense.

The lenders are partners can.

In that context.

On the buyback should we always look at different options and choices.

Never.

Our singular decision.

Allocating capital just in this announcement around the U K, we will be putting capital into that.

Joint venture.

The ventures portfolio, we're always looking at the most.

Efficient way to put our capital to work and buybacks is one of many of those ideas, but it's always a fundamental approach that we take to both create.

Creating value and capital allocation, we havent looked at telenet as such but I don't disagree with you I think telenet is poised to improve from here no question about it that answered all of the outstanding issues for the most part around the JV and then the Netcode they've created by think there theyre not stressed about a potential fourth entrant.

I think in their capital markets day will clarify many of these things, but I think telenet certainly is undervalued.

And for the first time, probably trading at a lower multiple than we are but thats unusual and probably unlikely to remain let's hope for all of our sakes.

We look at all different types of things I'm not going to comment specifically on what we might be looking at these would be telling it.

Great. Thanks, Mike.

Okay got it.

Okay. Thanks.

Thanks.

Thank you one of them are now good question.

It comes from the line of Rick <unk> of Jefferies. <unk> Company. Please proceed with your question.

Yes. Thank you very much so a question on the UK the operational side of things.

It sounds like the fixed price rise was about a two percentage point tailwind, whereas the upward trend improved by quarter Assad roughly.

With very broad brush stroke. So question can that dropped through improved later in the year what are the mechanics of that relatively minor drop through of the incremental price increase versus last year. Thank you.

Go ahead please.

Yeah, I'm not sure if I can add so much color to it and if I understood. The question right.

We.

As I said before we have landed the price rise in Q1, we had.

Our customers have had the cancellation right.

Sure.

That has gone so therefore it is ink.

Implemented and now customers, who used to be on a promotion.

Yet when they come off that will also get the price right. So during the year.

ROE out of that effect right and then there is another effect that is that if we keep acquiring customers with lower acquisition after which we have done. So you can see that could see also that the acquisition market as such was under pressure and if we are forced to give higher discounts.

Retention is content. We have also done that then that is obviously into this after you increase now therefore.

It's a bit dependent on the.

Cost of living crisis, our predominantly not only by predominantly and so therefore, we are very careful giving a guidance on that going forward.

I think.

The good thing is that we have for global growth lever. Besides that lifestyle, we are fully materializing the synergies.

30% end of this year from 540, and we're probably on track to do so we have digitalized in our business.

So we have an increased benefit out of that and now with the fiber joint venture obviously that we have.

Faster.

Network expansion, meaning.

Virgin Media, we can.

Broadband we can sell more of it and then also because now.

A possible wholesale partner had.

Immediately a speed advantage getting to one gig speed.

60 million homes enhanced the security to a half future proof network was 21 million homes later 2028.

<unk> is also another growth wafer to accomplish so therefore I think on one hand side we are.

Or a bit affected by the cost into the crisis and it's hard to predict.

We control a growing top line in that and second we are sitting on three growth rates, which are very tangible and solid too. So and this is what we are doing.

That's helpful can I just clarify one aspect of your answer what you didn't mention.

More aggressive retention discounts so kind of just confirm you haven't obviously retention discounts.

And this price rise here.

So the retention discounts during the prior price were exactly the same like a year ago also the retention volume off the same. So this is the same.

What we are seeing more starting in Q2 is irrespective of price rise.

At that time.

To renegotiate the contract down to a higher discount from simply customers coming out of their minimum contract period.

Competing irrespective of price right because they have had the 30 days and et cetera, and exceptional cancellation right, but they haven't used that so that has landed.

In Q1, as I said before in the same way less than a year ago, but what we are seeing now is a bit higher demand for retention discounts and this is now the question how is that going to happen.

Aggressive going forward. That's the question and therefore, we are its carefully.

What's that about.

Yeah. Thanks.

I think operator, we are now we have time or are we taking one more guys.

We're at time.

Okay awesome, so listen thanks for sticking with us.

A little bit over I apologize for that and I liked loses.

We've got tailwind in many markets around synergies or new brands and new products. So I think we're going to benefit us in the second half and I think just as importantly, we're demonstrating you again that we're good at optimizing capital and allocating capital in our fixed network strategies that we've announced in the last couple of weeks are right in line with that.

Approach and I think will be highly accretive to us operationally and financially.

Today and down the road and then lastly, we're all about buying our stock in.

The increase shouldn't have surprised you because we've been sort of signaling and and and.

Thank you ladies and gentlemen.

<unk> Liberty Global's second quarter 2022 investor call.

As a reminder, a replay of the call will be available in the Investor Relations section of Liberty Global's website.

There you can also find a copy of today's presentation materials. We thank you for your participation and ask that you. Please disconnect. Your lines have a great rest of the day everyone.

Q2 2022 Liberty Global PLC Earnings Call

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