Q2 2026 Liberty Global Ltd Earnings Call

Operator 1: Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Liberty Global's Q2 2026 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 a listen-only mode. Today's formal presentation materials can be found under the investor relations section of Liberty Global's website at libertyglobal.com. After today's formal presentation, instructions will be given for our question and answer session. Page two of the slides details the company's safe harbor statement regarding forward-looking statements.

Speaker #1: Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Liberty Global's second quarter 2026 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.

Speaker #1: 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 libertyglobal.com.

Speaker #1: After today's formal presentation, instructions will be given for our question-and-answer session. Page 2 of the slides details the company's Safe Harbor statement regarding forward-looking statements.

Speaker #1: Today's presentation may include forward-looking statements within the meaning of the private securities litigation reform act of 1995. Including the company's expectations with respect to its outlook and future growth prospects, and other information and statements that are not historical fact.

Operator 1: Today's presentation may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including the company's expectations with respect to its outlook and future growth prospects and other information and statements that are not historical fact. 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.

Speaker #1: These forward-looking statements involve certain risks that could cause actual results to differ 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.

Speaker #1: 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.

Speaker #1: I would now like to turn the call over to Mr. Mike Fries.

Speaker #2: All right, welcome, everyone. Thanks for joining us. We've got plenty to share with you today, so I'm just going to jump right in, and then hand it over to Charlie.

Mike Fries: All right. Welcome, everyone. Thanks for joining us. We've got plenty to share with you today, so I'm just going to jump right in and then hand it over to Charlie. Of course, I've got the whole team here with me, so get your questions ready. We are speaking from slides today. I'm going to kick it off on slide five. I really like to start with this graphic. I think it demonstrates pretty clearly how we operate, how we allocate capital, and how we create value at Liberty Global. Our story is, of course, anchored by world-class telecom assets in Europe that generate EUR 22 billion of revenue and EUR 8 billion of EBITDA on the aggregate. You know that. While each of these markets has its own unique operating characteristics, Europe as a whole, in my opinion, is catching a bit of a tailwind, right?

Speaker #2: Of course, I've got the whole team here with me, so get your questions ready, and we are speaking from slides today. I'm going to kick it off on slide 5.

Speaker #2: I really like to start with this graphic. I think it demonstrates pretty clearly how we operate, how we allocate capital, and how we create value at Liberty Global.

Speaker #2: Our story is, of course, anchored by world-class telecom assets in Europe that generate $22 billion in revenue and $8 billion in EBITDA on the aggregate.

Speaker #2: You know that. And while each of these markets has its own unique operating characteristics, Europe as a whole, in my opinion, is catching a bit of a tailwind, right?

Speaker #2: Deregulation, sovereignty, the benefits of AI—they're colliding to change the narrative. And I think we'll benefit from those trends. Now, you know what I'm going to say next: Despite the size, scale, and growth prospects of our businesses, we believe our stock today reflects no value for these assets.

Mike Fries: Deregulation, sovereignty, the benefits of AI, they're colliding to change the narrative, and I think we'll benefit from those trends. Now, you know what I'm going to say next. Despite the size and scale and growth prospects of our businesses, we believe our stock today reflects no value for these assets, and I'll show you how I get to that conclusion in a moment. That belief is what is driving us to unlock the intrinsic value of our telecom businesses. Fortunately for us, unlike many of our peers, we're lucky to have both the financial and structural flexibility to achieve transactions like the spin-off of Sunrise, which by any measure created meaningful value for all of us. As we'll discuss in a moment, we're making outstanding progress on our plans to do the exact same thing in the Benelux with the Ziggo Group next year.

Speaker #2: And I'll show you how I get to that conclusion in a moment. That belief is what is driving us to unlock the intrinsic value of our telecom businesses, and fortunately for us, unlike many of our peers, we're lucky to have both the financial and structural flexibility to achieve transactions like the spin-off of Sunrise, which, by any measure, created meaningful value for all of us.

Speaker #2: And as we'll discuss in a moment, we're making outstanding progress on our plans to do the exact same thing in the Benelux with the Ziggo Group next year.

Speaker #2: At the same time, as we reshape Liberty Global, we have pivoted resources towards our Liberty Growth portfolio. Where we have demonstrated again and again our ability to create significant value in media sports, infrastructure, and tech.

Mike Fries: At the same time, as we reshape Liberty Global, we have pivoted resources towards our Liberty Growth portfolio, where we have demonstrated again and again our ability to create significant value in media, sports, infrastructure, and tech. The recent sale of our stake in EdgeConneX, which we talk about in this press release and in these slides, where we took out three quarters of a billion dollars, 4x our investment over about 10 years, is just the latest example of that. Finally, we have reshaped our corporate or central structure to be both more agile, more efficient, and more focused on these two core platforms. As a reminder, we are generating today hundreds of millions of annual revenue into Liberty Global, the corporate group from tech, financial, and management services that we provide to both our telecom and growth operating companies.

Speaker #2: The recent sale of our stake in EdgeConneX, which we talk about in this press release and in these slides, where we took out three-quarters of a billion dollars—four times our investment over about 10 years—is just the latest example of that.

Speaker #2: And finally, we have reshaped our corporate or central structure to be both more agile, more efficient, and more focused on these two core platforms.

Speaker #2: As a reminder, we are generating today hundreds of millions of annual revenue into Liberty Global. The corporate group, from tech, financial, and management to both our telecom and growth operating companies, and when you factor in the recent restructuring of our operating model and reduction of our headcount, we've effectively brought down our net corporate costs by nearly $75% over the last two years.

Mike Fries: When you factor in the recent restructuring of our operating model and reduction of our headcount, we've effectively brought down our net corporate cost by nearly 75% over the last 2 years. We believe we're on our way to a break-even position as early as next year. That's the broad picture. Let me jump into the three key highlights I think are most critical for you to know about this quarter. That's on the next slide. Number one, it was a strong quarter commercially and particularly in the Netherlands, where VodafoneZiggo continues to execute brilliantly, in fact, on its turnaround plan. This was our best consumer broadband performance in 6 years. I'll talk about that. As Charlie will outline, we're confirming all of our 2026 guidance across the board.

Speaker #2: And we believe we're on our way to a break-even position as early as next year. So that's the broad picture. So let me jump into the three key highlights I think are most critical for you to know about this quarter.

Speaker #2: That's on the next slide. Number one, it was a strong quarter commercially, in particular in the Netherlands, where Vodafone Ziggo continues to execute brilliantly, in fact, on its turnaround plan.

Speaker #2: This was our best consumer broadband performance in six years. I'll talk about that, and as Charlie will outline, we're confirming all of our 2026 guidance across the board.

Speaker #2: Second, our plan to spin off the newly formed Ziggo Group, which, of course, consists of our Dutch and Belgian operations, is right on track.

Mike Fries: Second, our plan to spin off the newly formed Ziggo Group, which of course consists of our Dutch and Belgian operations, is right on track. I'll go through this in some detail, importantly, our fiber sharing arrangement with Proximus that will result in a single fixed network across 75% of Flanders was approved by the Belgian regulator yesterday. This is a big milestone for both our operational and balance sheet initiatives in this market. I'm pleased to report that we will be closing on the acquisition of Vodafone and their 50% interest in the Dutch business at the end of this month. Lastly, we have, the only way to describe it, overachieved in our plans to monetize assets and generate cash from our Liberty Growth portfolio.

Speaker #2: I'll go through this in some detail, but importantly, our fiber sharing arrangement with Proximus, which will result in a single fixed network across 75% of Flanders, was approved by the Belgian regulator yesterday.

Speaker #2: This is a big milestone for both our operational and balance sheet initiatives in this market. I'm pleased to report that we will be closing on the acquisition of Vodafone and their 50% interest in the Dutch business at the end of this month.

Speaker #2: Then lastly, we have only one way to describe it—we overachieved on our plans to monetize assets and generate cash from our Liberty Growth portfolio.

Speaker #2: Year to date, we've raised $1.2 billion, well in excess of what we might have indicated, including $900 million from disposals of Liberty Growth and $340 million from an asset-backed loan on our wire stake in Belgium.

Mike Fries: Year to date, we've raised $1.2 billion, well in excess of what we might have indicated, including $900 million from disposals of Liberty Growth and $340 million from an asset-backed loan on our Wyre stake in Belgium. I think it's important to point out that this $1.2 billion is above and beyond the €1.2 to €1.4 billion we intend to raise from asset sales in Belgium and Holland to reduce debt in those markets. As a result, we're increasing our year-end corporate cash forecast pro forma for the Vodafone acquisition from $1.5 billion to $2 billion. Essentially, we will end the year exactly where we started the year from a cash point of view. Now, the next slide goes deeper on our announced plans to spin off the newly formed Ziggo Group.

Speaker #2: I think it's important to point out that this $1.2 billion is above and beyond the €1.2 to €1.4 billion we intend to raise from asset sales in Belgium and Holland to reduce debt in those markets.

Speaker #2: As a result, we're increasing our year-end corporate cash forecast, pro forma for the Vodafone acquisition, from $1.5 billion to $2 billion. So, essentially, we will end the year exactly where we started the year, from a cash point of view.

Speaker #2: Now, the next slide goes deeper on our announced plans to spin off the newly formed Ziggo Group. The key takeaway here is that we are making substantial progress on all the key building blocks required to achieve this major milestone for shareholders.

Mike Fries: The key takeaway here is that we are making substantial progress on all the key building blocks required to achieve this major milestone for shareholders. You'll see on the left side where we are on the three strategic and financial pillars that underpin the listing of Ziggo Group and the tangible progress we've made across each of them. As I mentioned, we have all the approvals we need and are on track to close on Vodafone's 50% stake in the Netherlands by the end of the month. This is obviously foundational for the creation of the Ziggo Group, and it unlocks multiple other benefits, including the realization of financial and cross-market synergies. The completion of our NetCo/ServCo split in Belgium into Wyre and Telenet was another landmark achievement. This gave us four key things, right? A fully financed fiber build-out that is off the Ziggo Group balance sheet.

Speaker #2: You'll see on the left side where we are on the three strategic and financial pillars that underpin the listing of Ziggo Group, and the tangible progress we've made across each of them. As I mentioned, we have all the approvals we need and are on track to close on Vodafone's 50% stake in the Netherlands by the end of the month.

Speaker #2: This is obviously foundational for the creation of the Ziggo Group, and it unlocks multiple other benefits, including the realization of financial and cross-market synergies.

Speaker #2: The completion of our NetCo/SurfCo split in Belgium into Wyre and Telenet was another landmark achievement. This gave us four key things, right? A fully financed fiber build-out that is off the Ziggo Group balance sheet.

Speaker #2: Secondly, the rationalization of the fiber market in Flanders through our cooperation agreement with Proximus, which I just referenced. Third, the opportunity to raise capital and reduce debt through the sale of a portion of our WIRE stake.

Mike Fries: Secondly, the rationalization of the fiber market in Flanders through our cooperation agreement with Proximus I just referenced. Third, the opportunity to raise capital and reduce debt through the sale of a portion of our Wyre stake. The rebalancing of debt between Wyre and Telenet, which will result in a less levered Telenet with a declining CapEx profile that goes into our Ziggo Group structure. Finally, we've of course announced Stephen van Rooyen as the CEO of Ziggo Group and Jany Fruytier as the incoming CFO. You should know we are making significant progress to round out the balance of the team, which we'll let you know about in September.

Speaker #2: And the rebalancing of debt between VOO and Telenet, which will result in a less-levered Telenet with a declining CapEx profile that goes into our Ziggo Group structure.

Speaker #2: And then, finally, we've of course announced Steven Van Rooyen as the CEO of Ziggo Group and Jannie Fruitier as the incoming CFO. You should know we are making significant progress to round out the balance of the team, which we'll let you know about in September.

Speaker #2: Final piece of good news here, we have already increased our own minds having publicly increased it, but internally increased our estimate of the synergies from this transaction.

Mike Fries: Final piece of good news here, we have already increased in our own minds we haven't publicly increased it, but internally increased our estimate of the synergies from this transaction and expect to be meaningfully higher than the $1 billion NPV we announced previously. Stay tuned for more details on that. As a result of this progress, we are a bit more ambitious on the timing of the spin-off, and we're currently saying mid 2027 versus H2 2027. Let's see how things transpire. Could be even faster. Let's see. As we said in the past, the equity story is built around two things, reducing leverage to four and a half times and driving free cash flow to EUR 500 million in the 2028 timeframe. The bridge to EUR 500 million of free cash we talked about on our last call.

Speaker #2: And expect to beat meaningfully higher than the $1 billion MPV we announced previously. So stay tuned for more details on that. As a result of this progress, we are a bit more ambitious.

Speaker #2: On the timing of the spin-off, and we're currently saying mid-2027 versus H2-2027. Now, let's see how things transpire here. Could be even faster. Let's see.

Speaker #2: And as we said in the past, the equity story is built around two things: reducing leverage to 4.5x, and driving free cash flow to €500 million in the 2028 timeframe.

Speaker #2: The bridge to $500 million of free cash we talked about on our last call. And of course, the deleveraging has further supported by asset sales of the $1.2 to $1.4 billion euro that I just mentioned.

Mike Fries: Of course, the deleveraging is further supported by asset sales of the EUR 1.2 to EUR 1.4 billion I just mentioned, all of which are underway and we're making substantial progress on and you'll probably learn about before our next call. The right-hand side of the slide is the money shot here, as they say. I'll take a moment to walk through these valuation metrics. They break down into three main components. On the bottom right, you'll see our current stock price, roughly $11 in the orange bar. We believe this represents a 20% discount to the fair market value of our cash and our Liberty Growth assets alone, and those are valued by independent appraisers, of course. Perhaps even more importantly, you know what I'm going to say here, it implies essentially zero equity value attributed to our Liberty Telecom operations.

Speaker #2: All of which are underway, and we're making substantial progress on, and you'll probably learn about them before our next call. Now, the right-hand side of the slide is the "money shot" here, as they say.

Speaker #2: So, I'll take a moment to walk through these valuation metrics. They break down into three main components. On the bottom right, you'll see our current stock price—roughly $11—in the orange bar.

Speaker #2: We believe this represents a 20% discount to the fair market value of our cash and our Liberty Growth assets alone. And those are valued by independent appraisers, of course.

Speaker #2: Perhaps even more importantly—you know what I'm going to say here—it implies essentially zero equity value attributed to our Liberty Telecom operations. Now, we don't need to debate that conclusion.

Mike Fries: Now, we don't need to debate that conclusion. Everyone, some of the parts may look a bit different. It's not the main point of the slide. Moving up the scale, about 19 months ago, we spun off Sunrise, which we now believe represents $12 per Liberty Global share. That's the red bar. Sunrise, as you know, has traded on the Swiss exchange between around 10.5% and 13.5% free cash flow yield or roughly 8x EBITDA, and has really unlocked substantial value. We believe over time On a fully distributed basis, the Ziggo Group itself should trade on the Euronext at a value of up to $14 per Liberty share, assuming we reach or can confidently guide towards the EUR 500 million free cash flow target and the 4.5x leverage, and the market applies similar free cash flow yields to Sunrise.

Speaker #2: Everyone's some of the parts may look a bit different. It's not the main point of the slide. Moving up the scale, about 19 months ago, we spun off Sunrise, which we now believe represents $12 per Liberty Global share.

Speaker #2: That's the red bar. Sunrise, as you know, is traded on the Swiss exchange at a free cash flow yield between around 10.5% and 13.5%, or roughly 8 times EBITDA.

Speaker #2: And is really unlocked substantial value. And we believe over time, on a fully distributed basis, the Ziggo Group itself should trade on the EuroNext at a value of up to $14 per Liberty share.

Speaker #2: Assuming we confidently guide towards the $500 million free cash flow target and 4.5x leverage, and the market applies similar free cash flow yields to Sunrise—

Speaker #2: So that's what we're playing for here. It means that from an $18 stock, when we announce the Sunrise spin-off, we have a clear opportunity to create $37 to $40 of value for shareholders.

Mike Fries: That's what we're playing for here. It means that from an $18 stock, when we announce the Sunrise spin-off, we have a clear opportunity to create $37 to $40 of value for shareholders, and you should assume we are squarely focused on just that, delivering that value, and we're making great progress on that goal every day. Now, our confidence in that goal or the Ziggo Group is bolstered, of course, by the great turnaround story at VodafoneZiggo, which we highlight on the next slide. Essentially, just going to go right to the chart on the right-hand side of that slide. You can see in Q2 last year, 2025, we lost 26,000 broadband subs and 5,000 mobile subs. Quite frankly, that was after quite a long period of declining performance.

Speaker #2: And you should assume we are squarely focused on just that: delivering that value, and we're making great progress on that goal every day. Now, our confidence in that goal—or the Ziggo Group—is bolstered, of course, by the great turnaround story at VodafoneZiggo.

Speaker #2: Which we highlight on the next slide, essentially just going to go right to the chart on the right-hand side of that slide. You can see in the second quarter last year, 2025, we lost $26,000 broadband subs and 5,000 mobile subs.

Speaker #2: And, quite frankly, that was after quite a long period of declining performance. Through a combination of commercial strategies—including new pricing structures, new broadband bundles, new converged propositions, new premium sports content, and, importantly, a strong campaign promoting the quality of our broadband networks—Steven and the team have delivered quarter after quarter of improved results since then.

Mike Fries: Now through a combination of commercial strategies, including new pricing structures, new broadband bundles, new converged propositions, new premium sports content, and importantly, a strong campaign promoting the quality of our broadband network. Stephen and the team have delivered quarter after quarter of improved results since then, culminating in our first positive broadband quarter in Q2 since, I think, Q4 2022, and as I said, the best performance in six years. That goes along with 32,000 new postpaid mobile subs. Great progress on the operating performance there. The next slide shows you that performance, and I've just discussed it, so I'll just jump to the ARPU stats here for VodafoneZiggo. Fixed ARPU was stable, both sequentially and year over year, around €56. That's despite new front book pricing and can attribute that to both price indexation and some moves around content.

Speaker #2: Culminating in our first positive broadband quarter in Q2 since, I think, Q4 2022. And as I said, the best performance in six years. That goes along with 32,000 new postpaid mobile subs.

Speaker #2: So, great progress on the operating performance there. The next slide shows you that performance, and I've just discussed it, so I'll jump to the ARPU stats here for VodafoneZiggo.

Speaker #2: Fixed ARPU was stable. Both sequentially and year over year, around 56 euros. And that's despite new front-book pricing and can attribute that to both price indexation and some moves around content.

Speaker #2: We saw more or less the same outcome in mobile ARPUs, which were largely flat sequentially at €17.60, and down 2% year over year.

Mike Fries: We saw more or less the same outcome in mobile ARPUs, which were largely flat sequentially at €17.60 and down 2% year over year. On the bottom, you'll see operating results for Telenet in Belgium, which continued its recent commercial turnaround with improved broadband and mobile net adds versus last year. Lots of commercial drivers at work here, including new campaigns promoting our base brand and a revamped FMC offering, allowing customers to tailor really their own packages like an à la carte menu, which is well received. Broadband mobile ARPUs are both up sequentially in Belgium and stable year over year. Now, moving to the UK. Before I jump into the operating results for VMO2, let me just spend a minute highlighting where we see this business today and the core drivers of value tomorrow.

Speaker #2: On the bottom, you'll see operating results for Telenet in Belgium, which continued its recent commercial turnaround with improved broadband and mobile net adds versus last year.

Speaker #2: There are lots of commercial drivers at work here, including new campaigns promoting our base brand and a revamped FMC offering, allowing customers to really tailor their own packages, like an à la carte menu.

Speaker #2: Which is well received. And broadband mobile ARPUs are both up sequentially in Belgium and stable year over year. Now, moving to the UK—before I jump into the operating results for VMO2, let me just spend a minute highlighting where we see this business today.

Speaker #2: And the core drivers of value tomorrow. First of all, it's important to remember that Virgin Media O2 is the only scaled challenger in the UK, one of Europe's largest markets.

Mike Fries: It's important to remember that Virgin Media O2 is the only scaled challenger in the UK, one of Europe's largest markets, with the number one mobile network by connections and the number two and most reliable broadband network, according to recently released research, which we agree with. By the way, our fixed network currently reaches just under 19 million homes, nearly half of which are already fiber today. You can add to that incredibly strong brands like Virgin Media, O2, giffgaff, which support over GBP 10 billion of revenue, annual revenue, and facilitate regularly the launch of new services like O2 Satellite, which we were the first to do, or broadband with giffgaff or Volt, our new FMC product, and a host of other commercial initiatives. That's a strong foundation that we have in the UK.

Speaker #2: With the number one mobile network by connections, and the number two and most reliable broadband network according to recently released research—which we agree with.

Speaker #2: By the way, our fixed network currently reaches just under 19 million homes, nearly half of which are already fiber today. Now, you can add to that incredibly strong brands like Virgin Media O2 and Giffgaff, which support over £10 billion of annual revenue and regularly facilitate the launch of new services, like O2 Satellite—which we were the first to do—broadband with Giffgaff, or Volt, our new FMC product.

Speaker #2: And a host of other commercial initiatives. So that's a strong foundation that we have in the UK. Now, as we speak, about every quarter, this is a highly competitive market.

Mike Fries: As we speak about every quarter, this is a highly competitive market. It's becoming a street fight in the consumer retail sector, particularly with Altnets and MVNOs, which means we have to continue getting sharper, becoming more agile, and more innovative. I like the moves we're making to achieve that. I've listed just a few of them on the right-hand side here. First and foremost, we've just hired Lisa McGowan, our new CEO of Consumer. Has the entire consumer division reporting to her. She spent 10 years at Sky launching broadband, mobile, and Sky Glass, and in two weeks is already making a difference in our commercial strategy. Stay tuned for her keen eye and her strategic perspective on our consumer business.

Speaker #2: It's becoming a street fight in the consumer retail sector, particularly with AltNets and MVNOs, which means we have to continue getting sharper, becoming more agile, and more innovative.

Speaker #2: And I like the moves we're making to achieve that. I've listed just a few of them on the right-hand side here. First and foremost, we've just hired Lisa McGowan, our new CEO of Consumer, who now has the entire consumer division reporting to her.

Speaker #2: She spent 10 years at Sky launching broadband, mobile, and Sky Glass. And in two weeks, has already making a difference in our commercial strategy.

Speaker #2: So stay tuned for her keen eye and her strategic perspective on our consumer business. We have great potential in wholesale. First in mobile, where we generate today over 800 million of extremely profitable revenue.

Mike Fries: We have great potential in wholesale, first in mobile, where we generate today over GBP 100 million of extremely profitable revenue and will shortly launch Monzo to our list of MVNO customers and in fixed wholesale, where we are striving every day to capitalize on our scale and our growing fiber footprint, which the Netomnia acquisition will only advance, once that's approved. Lutz and the team are well underway with their AI-driven efficiency and growth programs. I'll talk about that in a minute. You're already aware of our commitment to advancing our networks. For example, our 5G reach is now 88%, and even before fiber, we have 1 gig broadband available across the market. These commitments will pay dividends both in our B2C and B2B business. Finally, just a word on our capital structure in the UK, and Charlie's going to address this more specifically.

Speaker #2: And we'll shortly launch Monzo to our list of MVNO customers. And in fixed wholesale, where we are striving every day to capitalize on our scale and our growing fiber footprint, which is an economy acquisition we'll only advance once that's approved.

Speaker #2: Now, Lutz and the team are well underway with their AI-driven efficiency and growth programs. I’ll talk about that in a minute. You’re already aware of our commitment to advancing our networks.

Speaker #2: For example, our 5G reach is now 88%. And even before fiber, we have 1 gig broadband available across the market. Now, these commitments will pay dividends, both in our B2C and B2B business.

Speaker #2: Finally, just a word on our capital structure in the UK. And Charlie's going to address this more specifically. The most important message I want you to hear from me is that both Liberty and Telefónica are completely aligned on our commitment to this business long-term.

Mike Fries: The most important message I want you to hear from me is that both Liberty and Telefónica are completely aligned on our commitment to this business long term. While we appreciate that leverage today exceeds our original targets and as a result of slower growth and our decision to reinvest more in our networks, I would urge you to remember that we have many tools at our disposal, if necessary, both organic and inorganic, to drive greater free cash flow, stronger operating performance, and lower leverage over time. More on that with Charlie in Q&A if you like. Turning to VMO2's quarterly operating results on the next slide. You can see that while our broadband and mobile net losses were better than a year ago, we are still encountering significant competitive activity and increased churn.

Speaker #2: While we appreciate that leverage today exceeds our original targets and as a result of slower growth in our decision to reinvest more in our networks, I would urge you to remember that we have many tools at our disposal if necessary, both organic and inorganic, to drive greater free cash flow, stronger operating performance, and lower leverage over time.

Speaker #2: So, more on that with Charlie and in Q&A if you like. Now, turning to VMO2's quarterly operating results on the next slide, you can see that while our broadband and mobile net losses were better than a year ago, we are still encountering significant competitive activity and increased churn.

Speaker #2: I believe that the initiative I just referenced and discussed on the prior slide as well as the new consumer management team and structure will address these challenges.

Mike Fries: I believe that the initiatives I just referenced and discussed on the prior slide, as well as the new consumer management team and structure will address these challenges. Meanwhile, mobile ARPUs are up sequentially and flat year over year as we focus on retention efforts there, primarily maintaining value over volume. Fixed ARPUs were flat sequentially, but down 4.6% year over year. That's largely in line with overall pricing in the market. Now Lutz is on, and of course, we can dig into these results further during the Q&A. Turning to Virgin Media Ireland, you'll see that broadband net adds have been steady over the last five quarters, and that's supported principally by our wholesale fiber business. Good example of what we can do with wholesale.

Speaker #2: Meanwhile, mobile ARPUs are up sequentially and flat year over year as we focus on retention efforts there, primarily maintaining value over volume. And fixed ARPUs were flat sequentially, but down 4.6% year over year.

Speaker #2: And that's largely in line with overall pricing in the market. Now, Lutz is on, and of course, we can dig into these results further during the Q&A.

Speaker #2: Turning to Virgin Media Ireland, you'll see that broadband net adds have been steady over the last five quarters, and that's supported principally by our wholesale fiber business.

Speaker #2: Good example of what we can do with wholesale. It's worth mentioning that our fiber rollout is on track to be substantially complete by the end of the year.

Mike Fries: It's worth mentioning that our fiber rollout is on track to be substantially complete at the end of the year, we'll be expanding our retail footprint off footprint, both of which will help our business moving forward, particularly the reduction in fiber CapEx. Fixed ARPU have been very steady at EUR 61, Mobile postpaid net adds remained positive, and those are supported by a EUR 15 offer and retention strategies. Now, I'll end with just a bit of commentary on AI, I think the headline is the message here, right? The telco sector, in my view, is ready-made to realize AI benefits, which over time should be transformational for us and our peers. For starters, we sit on the assets, the very assets AI needs most to succeed. What am I referring to?

Speaker #2: And we'll be expanding our retail footprint off footprint, both of which will help our business moving forward, particularly reduction in fiber capex. Fixed ARPUs have been very steady at 61 euros, and mobile postpaid net ads remained positive.

Speaker #2: And those are supported by a €15 offer and retention strategies. Now, I'll end with just a bit of commentary on AI. Underneath the headline is the message here, right?

Speaker #2: The telco sector, in my view, is ready-made to realize AI benefits, which over time should be transformational for us and our peers. For starters, we sit on the assets, the very assets AI needs most to succeed.

Speaker #2: What am I referring to? Largely, large amounts of data that can't be replicated. Massive cost structures—like call centers, field operations, and networks—that are built for automation.

Mike Fries: Large amounts of data that can't be replicated, massive cost structures like call centers, field ops, and networks that are built for automation, millions of daily touch points with consumers, and the infrastructure like connectivity and data centers that support the distribution layer for AI. Not surprisingly, we are looking to benefit from the very same opportunities that our peers are attacking. Namely, driving margins through cost efficiencies, driving customer and revenue growth through hyper-personalization, driving demand for our infrastructure, including power, space, and cooling, and driving interest in our stock as investors rotate into sectors that are net beneficiaries of AI and not candidates for disruption. We've learned a lot of lessons, like everybody, right? A big one for me has been finding the right balance between building and buying solutions.

Speaker #2: Millions of daily touchpoints with consumers, and the infrastructure—like connectivity and data centers—that support the distribution layer for AI. And not surprisingly, we are looking to benefit from the very same opportunities that our peers are attacking.

Speaker #2: Namely, driving margins through cost efficiencies; driving customer and revenue growth through hyper-personalization; driving demand for our infrastructure, including power, space, and cooling; and driving interest in our stock.

Speaker #2: As investors rotate into sectors that are net beneficiaries of AI, and not candidates for disruption. And we’ve learned a lot of lessons, like everybody, right?

Speaker #2: A big one for me has been finding the right balance between building and buying solutions. Increasingly, we're finding that partners—many of them listed here on this slide—are able to help us integrate faster, launch sooner, and scale much more effectively.

Mike Fries: Increasingly, we're finding that partners, many of them listed here on this slide, are able to help us integrate faster, launch sooner, and scale much more effectively. On the top right of the slide, we've shown some examples of what we're doing today and the results we're generating in things like reaching 65% of our VMO2 customer base with our personalization engine, generating 75% call containment rates through our agentic AI pilots in the Netherlands, reducing fraud, optimizing CapEx, and lowering truck rolls and technician costs. To be candid, these initiatives, I have to be honest, are table stakes for every telco. Don't get me wrong. I'm proud of it. We're proud of it. On balance, we're realizing strong marginal improvements to our economics, our customer interactions, and our network quality. As we've said publicly here, we expect to generate annual savings in the hundreds of millions.

Speaker #2: At the top right of the slide, we've shown some examples of what we're doing today and the results we're generating. This includes reaching 65% of our VMO2 customer base with our personalization engine, generating a 75% call containment rate through our agentic AI pilots in the Netherlands, reducing fraud, optimizing capex, and lowering truck rolls and technician costs.

Speaker #2: And to be candid, these initiatives have to be honest, are table stakes. For every telco. Don't get me wrong. I'm proud of it. We're proud of it.

Speaker #2: I'm balanced. We're realizing strong marginal improvements to our economics. Our customer interactions and our network quality. And as we've said publicly here, we expect to generate annual savings in the hundreds of millions.

Speaker #2: But everyone on this call knows, certainly I know, we are just scratching the surface here. Based on some work we did with McKinsey and Google, we analyzed some of our core operating expenses across the group to assess both the proportion of that cost, which could be addressed by AI over time, and what some more ambitious savings targets might look like.

Mike Fries: Everyone on this call knows, certainly I know, we are just scratching the surface here. Based on some work we did with McKinsey and Google, we analyzed some of our core operating expenses across the group to assess both the proportion of that cost, which could be addressed by AI over time, and what some more ambitious savings targets might look like. You can see this on the bottom right of the chart, show savings of between 20% and 40%, even as high as 70% in things like customer care. We are not providing guidance here. These are just indications of what we think could and should be achievable over time. These are not fanciful numbers in my view. They look more realistic to me every day. Why is that? Look, a lot of things are working in our favor here.

Speaker #2: And you can see this on the bottom right of the chart. Show savings of between 20 and 40%, even as high as 70% in things like customer care.

Speaker #2: And we're not providing guidance here. These are just indications of what we think could and should be achievable over time. These are not fanciful numbers, in my view.

Speaker #2: They look more realistic to me every day. Why is that? Look, a lot of things are working in our favor here. On one hand, of course, we're implementing our own AI solutions.

Mike Fries: On one hand, of course, we are implementing our own AI solutions with sophisticated and scaled partners to drive benefits. Equally important, on the other hand, we are seeing our largest suppliers, typically software and outsourcing partners, looking for early renewals in exchange for passing along to us the significant AI savings they themselves are realizing and must realize to stay relevant. We are getting it on both ends. Obviously, as we develop these initiatives more fully, we will share more detail. Remember, this example just covers OpEx, right? There are significant revenue and CapEx benefits to be realized as well. Finally, on my last slide, we are not only taking advantage of AI in our telecom and growth businesses, we are also prioritizing opportunities to invest in AI companies through our existing tech portfolio as part of Liberty Growth.

Speaker #2: With sophisticated and scaled partners to drive benefits. But equally important, on the other hand, we're seeing our largest suppliers, typically software and outsourcing partners, looking for early renewals in exchange for passing along to us the significant AI savings they themselves are realizing and must realize to stay relevant.

Speaker #2: So we're getting it on both ends. Obviously, as we develop these initiatives more fully, we'll share more detail. And remember, this example just covers opex, right?

Speaker #2: There are significant revenue and capex benefits to be realized as well. And then finally, on my last slide, we're not only taking advantage of AI in our telecom and growth businesses, we're also prioritizing opportunities to invest in AI companies through our existing tech portfolio as part of Liberty Growth.

Speaker #2: Now, we’ve discussed this on and off in the past, but let me get into a bit more detail here. As a reminder, we’ve had a pretty good track record investing in tech.

Mike Fries: Now, we discussed this on and off in the past, let me get into a bit more detail here. As a reminder, we have had a pretty good track record investing in tech. Typically, companies in their scale-up phase and where we see some strategic value to our existing businesses. Good examples would be Plume or Aviatrix or Samba TV. Our track record has been good. Since inception, we have invested a total of EUR 700 million into our tech portfolio and taken out around EUR 600 million through distributions and exits. We are funding our investments with proceeds. With about net EUR 100 million in today, we are sitting on a market valuation of EUR 400 million, so in a good spot. Now recently, we have pivoted to AI-driven investments where it makes sense. I am not talking about OpenAI or SpaceX. Good examples would be ElevenLabs.

Speaker #2: Typically, companies in their scale-up phase and where we see some strategic value to our existing businesses. Good examples would be Plume or Aviatrix or Samba TV.

Speaker #2: Our track record has been good since inception. We've invested a total of $700 million into our tech portfolio and taken out around $600 million through distributions and exits.

Speaker #2: So we're funding our investments with proceeds and with about net $100 million in today, we're sitting on a market valuation of $400 million. So in a good spot.

Speaker #2: Now, recently, we pivoted to AI-driven investments, where it makes sense. I'm not talking about OpenAI or SpaceX. Good examples would be Eleven Labs, maybe some of you know this company, a leader in voice AI with advanced automated customer service solutions that we're actually using today.

Mike Fries: Maybe some of you know this company, a leader in voice AI with advanced automated customer service solutions that we are actually using today. Expo in cybersecurity and Skan AI in data and automation are two good examples of companies directly addressing the operational backbone of a telco. We are enhancing network security, optimizing processes, and driving efficiency there. Arrcus is optimizing the next generation of network infrastructure, a perfect fit for the rest of our infrastructure businesses like AtlasEdge. Now, if you look at these businesses and you look them up, you will see that we are typically investing with the smartest VC firms and tech companies. We are not alone here. We are partnering with smart money on these things. Going forward, we will remain focused on AI infrastructure like models and voice and video, cybersecurity, AI applications in things like customer care, sales, and financing.

Speaker #2: Expo and Cybersecurity and Scan AI and Data and Automation are two good examples of companies directly addressing the operational backbone of a telco. So, we're enhancing network security, optimizing processes, and driving efficiency there.

Speaker #2: Arcus is optimizing the next generation of network infrastructure. A perfect fit with the rest of our infrastructure businesses, like Atlas Edge. Now, if you look at these businesses, and you look them up, you'll see that we're typically investing with the smartest VC firms and tech companies.

Speaker #2: So we're not alone here. We're partnering with smart money on these things. And going forward, we'll remain focused on AI infrastructure—like models, voice and video, cybersecurity, AI applications, and things like customer care, sales, and financing.

Speaker #2: All things that we think could be useful to us and also very successful. And lastly, I'll just point out that our infrastructure vertical within Liberty Growth is playing the AI space as well through our data center investments in Atlas Edge, of course, with hundreds of millions committed there.

Mike Fries: All things that we think could be useful to us and also very successful. Lastly, I'll just point out that our infrastructure vertical within Liberty Growth is playing the AI space as well through our data center investments in AtlasEdge, of course, we have EUR hundreds of millions committed there, and our alternative energy investments. We're taking a 360-degree view of the AI opportunity, which we believe is the best way to innovate and transform our business over the long term. I think it's going to be one hell of a ride. I'm excited about the stuff we're doing and happy to get into any questions you may have. In the meantime, Charlie, over to you.

Speaker #2: And there are alternative energy investments. So we're taking a 360-degree view of the AI opportunity, which we believe is the best way to innovate and transform our business over the long term.

Speaker #2: I think it's going to be one hell of a ride. I'm excited about the stuff we're doing and happy to get into any questions you might have.

Speaker #2: In the meantime, Charlie, over to you.

Speaker #1: Thanks, Mike. Turning to our Q2 financial highlights, our opco performance continues to track against 2026 guidance. As I'll get into starting on the next slide, we close the quarter with 2.4 billion of corporate cash, supported by proceeds from our edge connects disposal and additional corporate liquidity provided by a new wire stake asset-backed loan.

Charlie Bracken: Thanks, Mike. Turning to our Q2 financial highlights, our OpCo performance continues to track against 2026 guidance, as I'll get into starting on the next slide. We closed the quarter with $2.4 billion of corporate cash, supported by proceeds from our EdgeConneX disposal and additional corporate liquidity provided by a new Wyre asset-backed loan. We've completed $4.1 billion of financing year to date, including the imminent separation of the Telenet and Wyre capital structures following the recent approval of the fiber sharing agreement. The next slide sets out the Q2 financial results for our Benelux companies. As a reminder, we now present Telenet's financial performance excluding Wyre to provide greater clarity, given the full separation of the two companies and their capital structures, which as Mike just presented, is set to happen following BCA approval of the fiber sharing agreement in Belgium.

Speaker #1: And we've completed $4.1 billion of financing year to date, including the imminent separation of the Telenet and Wyre capital structures following the recent approval of the fiber sharing agreement.

Speaker #1: The next slide sets out the Q2 financial results for our Benelux companies. And as a reminder, we now present Telenet's financial performance excluding WIGO, to provide greater clarity given the full separation of the two companies and their capital structures.

Speaker #1: Which, as Mike just presented, is set to happen following BCA approval of the fiber sharing agreement in Belgium. Turning to the financials, revenue trends of VodafoneZiggo sequentially improved during the quarter, supported by fixed customer volumes returning to growth in line with the Howie Wim plan.

Charlie Bracken: Turning to the financials, revenue trends of VodafoneZiggo sequentially improved during the quarter, supported by fixed customer volumes returning to growth in line with the How We Win plan. Whilst repricing remains a headwind today, we anticipate that impact to reduce as we move into 2027. Adjusted EBITDA declined in line with our guidance, reflecting the in-year impact of the How We Win plan and some one-off investments in network resilience, which we identified when we gave guidance. Cost reduction initiatives remained firmly on track and continue to support our expectation of returning the business to EBITDA growth from 2027. Adjusted EBITDA less P&E additions were lower year-on-year, primarily reflecting higher CapEx in the quarter related to the network resilience investments.

Speaker #1: Whilst repricing remains a headwind today, we anticipate that impact to reduce as we move into 2027. Adjusted EBITDA declined in line with our guidance, reflecting the in-year impact of the Howie Wim plan and some one-off investments in network resilience, which we identified when we gave guidance.

Speaker #1: Cost reduction at NISTIS remained firmly on track and continues to support our expectation of returning the business to EBITDA growth from 2027. Adjusted EBITDA less P&E additions were lower year-on-year, primarily reflecting higher capex in the quarter related to network resilience investments.

Speaker #1: At Telenet, revenue continued to be impacted by our strategic decision not to renew Belgium football rights for a season, and a one-off adjustment related to a VAT dispute.

Charlie Bracken: At Telenet, revenue continued to be impacted by our strategic decision not to renew Belgian football rights for a season and a one-off adjustment related to a VAT dispute, partly offset by higher revenue from the new Wyre management services agreement. EBITDA growth was driven by the Wyre management services agreement and lower Wyre wholesale fees. Looking ahead, we will see Adjusted EBITDA impacted by the return of costs associated with the new Jupiler Pro League contract in the H2. Turning to the UK and Ireland, Virgin Media O2 service revenue was broadly in line with our expectations. Competitive intensity in the fixed market remained elevated, whilst the O2 business continued to rationalize parts of its portfolio to support long-term growth, resulting in a reduction in headline revenues. This was partially offset by wholesale revenue growth in our market-leading MVNO business.

Speaker #1: Partly offset by a higher revenue from the new wire management services agreement. EBITDA growth was driven by the wire management services agreement and lower wire wholesale fees.

Speaker #1: Looking ahead, we will see adjusted EBITDA impacted by the return of costs associated with the new Jupiter League contract in the second half. Turning to the UK and Ireland, Virgin Media 02 service revenue was broadly in line with our expectations.

Speaker #1: Competitive intensity in the fixed market remained elevated, whilst 02 business continued to rationalize parts of its portfolio to support long-term growth, resulting in a reduction in headline revenues.

Speaker #1: This was partially offset by wholesale revenue growth in our market-leading MVNO business. There was also an improvement in mobile service revenue trends sequentially. Adjusted EBITDA declined by 2.9%, driven by lower revenue, but supported by further cost-efficiency measures.

Charlie Bracken: There was also an improvement in mobile service revenue trends sequentially. Adjusted EBITDA declined by 2.9%, driven by lower revenue, but supported by further cost efficiency measures. At Virgin Media Ireland, service revenues modestly declined, impacted by continued competition in the consumer fixed markets, but because of this, adjusted EBITDA declined by 4.7%. Turning to the next slide. We remain committed to our disciplined capital allocation model, rotating capital into high growth investments and strategic opportunities that drive long-term value creation. Capital intensity at our key opcos remains elevated, but all within guidance ranges for the full year. Virgin Media O2 continues to see elevated CapEx driven by higher investments in mobile capacity, including spectrum integration from Vodafone, the ongoing fiber upgrade program, and IT digital spend to put us in better position in terms of seamless FMC offerings.

Speaker #1: At Virgin Media Ireland, service revenues modestly declined, impacted by continued competition in the consumer fixed markets. Because of this, adjusted EBITDA declined by 4.7%.

Speaker #1: Turning to the next slide, we remain committed to our discipline capital allocation model, rotating capital into high-growth investments and strategic opportunities that drive long-term value creation.

Speaker #1: Capital intensity is our key opcos, remains elevated, but all within guidance ranges for the full year. Virgin Media 02 continues to see elevated capex, driven by higher investments in mobile capacity, including spectrum integration from Vodafone, the ongoing fiber upgrade program, and IT digital spend, to put us in better position in terms of seamless FMC offerings.

Speaker #1: VodafoneZiggo capex was driven by network upgrades, including the DOCSIS 4.0, digitization efforts, and one-off investments in network resilience and service reliability in 2026.

Charlie Bracken: VodafoneZiggo CapEx was driven by network upgrades, including the DOCSIS 4.0, digitization efforts, and one-off investments in network resilience and service reliability in 2026. CapEx has meaningfully stepped down at Telenet as the 5G network upgrades are now largely complete, as we complete much of our investment in our digital platforms. We expect this to continue to trend down further next year. Virgin Media Ireland CapEx continues to step down in 2026 as we largely complete the fiber upgrade of around 1 million premises. We expect Ireland to be free cash flow positive because of this in Q4 for the first time since the beginning of the upgrade program. Moving to the Liberty growth walk in the top right, the fair market value of our growth portfolio decreased to $2.9 billion in Q2.

Speaker #1: Capex has meaningfully stepped down at Telenet, as the 5G network upgrades are now largely complete and as we have completed much of our investment in our digital platforms.

Speaker #1: We expect this to continue to trend down further next year. And Virgin Media Ireland capex continues to step down in 2026, as we largely complete the fiber upgrade of around one million premises.

Speaker #1: We expect Ireland to be free cash flow positive because of this in Q4, for the first time since the beginning of the upgrade program.

Speaker #1: Moving to the Liberty Growth Walk in the top right, the fair market value of our growth portfolio decreased to $2.9 billion in Q2. This was mainly driven by the successful sale of EdgeConneX, which I'll detail more on the next slide, and UBC Slovakia, partially offset by modest investments in Formula E, NextFiber, and the IARN Tech Pillar within the growth portfolio.

Charlie Bracken: This was mainly driven by the successful sale of EdgeConneX, which I'll detail more on the next slide, and UPC Slovakia, partially offset by modest investment in Formula E, nexfibre, and the IL and Techpillar within the growth portfolio. The key fair market value adjustments were an increased value for EdgeConneX on sale and an increase in the Lionsgate stock price. Turning to our cash walk on the bottom right, we ended the quarter with a consolidated cash balance of $2.4 billion. This was mainly driven by the proceeds received from EdgeConneX and UPC Slovakia transactions. This excludes the $340 million of additional liquidity provided by a loan facility backed by our Wyre stake, half of which resides outside the Ziggo Group according to the terms of the Vodafone transaction.

Speaker #1: The key fair market value adjustments were an increased value for edge connects on sale and an increase in the Lionsgate stock price. Turning to our cash walk on the bottom right, we ended the quarter with a consolidated cash balance of 2.4 billion.

Speaker #1: This was mainly driven by the proceeds received from EdgeConneX and UPC Slovakia transactions. This excludes the €340 million of additional liquidity provided by our loan facility backed by our VTR stake, half of which resides outside the Ziggo Group, according to the terms of the Vodafone transaction.

Speaker #1: Next, I want to spend a moment on edge connects, which was an excellent outcome for our growth portfolio and a clear demonstration of our strategy working as intended.

Charlie Bracken: Next, I want to spend a moment on EdgeConneX, which was an excellent outcome for our growth portfolio and a clear demonstration of our strategy working as intended. We first invested back in 2015, taking a minority stake in what was then a relatively early-stage data center business. Over the following 11 years, we funded its growth consistently and rationally with around $177 million of gross equity in total. We supported the company as it scaled without over-committing capital, and today, EdgeConneX is a truly global platform with over 50 data centers across more than 40 markets and four continents, spanning the full spectrum of edge and hyperscale developments. Our exit strategy reflected the same discipline that characterized our investment approach. We monetized the position in stages, crystallizing value while maintaining upside exposure.

Speaker #1: We first invested back in 2015, taking a minority stake in what was then a relatively early-stage data center business. Over the following 11 years, we funded its growth consistently and rationally, with around $177 million of gross equity in total.

Speaker #1: We supported the company as it scaled, without overcommitting capital. And today, edge connects is a truly global platform, with over 50 data centers across more than 40 markets and four continents, spanning the full spectrum of edge and hyperscale developments.

Speaker #1: Our exit strategy reflected the same discipline that characterized our investment approach. We monetized the position in stages, crystallizing value while maintaining upside exposure. We achieved a full exit in Q2 2026, with $604 million of proceeds from the final stake, on top of $122 million from earlier sales.

Charlie Bracken: We achieved a full exit in Q2 2026 with EUR 604 million of proceeds from the final stake on top of EUR 122 million from earlier sales. The headline numbers speak for themselves. EUR 177 million invested, EUR 726 million of total proceeds, and roughly a 30% IRR and a 4 times multiple of money. Beyond the financial terms, the outcome of our EdgeConneX investment validates our right to play in digital infrastructure and data centers. We now have more than 10 years of hands-on experience in this space, and we're applying that playbook to our AtlasEdge investment. Moving to the treasury slide. We've been proactively dealing with our 2028 and 2029 maturities. Overall, we have successfully refinanced more than EUR 4 billion across our credit silos year to date.

Speaker #1: And the headline numbers speak for themselves: $177 million invested, $726 million of total proceeds, and roughly a 30% IRR and a four-times multiple of money.

Speaker #1: Now, beyond the financial terms, the outcome of our EdgeConneX investment validates our right to play in digital infrastructure and data centers. We now have more than 10 years of hands-on experience in this space, and we're applying that playbook to our AtlasEdge investment.

Speaker #1: Moving to the Treasury slide, we've been proactively dealing with our 2028 and 2029 maturities. Overall, we have successfully refinanced more than $4 billion across our credit silos year to date.

Speaker #1: In Belgium, we are now formally separating the capital structures between Telenet and Wyre, following BCA approval of Wyre's fibre sharing agreement with Proximus. Wyre can now draw down the $5 billion fully underwritten facility to repay a $2.3 billion intercompany loan with Telenet, and a $0.4 billion Wyre dividend as part of the wider debt rebalancing.

Charlie Bracken: In Belgium, we are now formally separating the capital structures between Telenet and Wyre following BCA approval of Wyre's fiber sharing agreement with Proximus. Wyre now can draw down the EUR 5 billion fully underwritten facility to repay EUR 2.3 billion intercompany loan with Telenet and a EUR 0.4 billion Wyre dividend as part of the wider debt rebalancing. Telenet will use the proceeds received to repay EUR 2.5 billion of 2028 maturities. At VodafoneZiggo, we were able to refinance EUR 1.3 billion, leaving us with no 2028 maturities and reducing 2029 maturities. We remain opportunistic here ahead of the spin-off, and as Mike noted, are on track to execute a number of deleveraging steps pre-spin. At Virgin Media O2, we remain opportunistic in the debt market as we look to continue to push out our 2029 maturities, but we acknowledge recent trading levels.

Speaker #1: Telenet will use the proceeds received to repay $2.5 billion of 2028 maturities. At VodafoneZiggo, we were able to refinance $1.3 billion, leaving us with no 2028 maturities and reducing 2029 maturities.

Speaker #1: We remain opportunistic here ahead of the spin-off, and as Mike noted, are on track to execute a number of deleveraging steps pre-spin. At Virgin Media O2, we remain opportunistic in the debt market as we look to continue to push out our 2029 maturities, but we acknowledge recent trading levels.

Speaker #1: Now, as Mike discussed, we're committed to a stable, long-term capital structure at VM02. We at Telefónica recognize that leverage is above our 4 to 5 times target and that credit spreads are currently elevated, but we both believe that we are making the investments today that will deliver EBITDA growth to deleverage the company back towards our target range.

Charlie Bracken: As Mike discussed, we are committed to a stable long-term capital structure of VMO2. We in Telefónica recognize that leverage is above our 4 to 5 times target and that credit spreads are currently elevated. We both believe that we are making the investments today that will deliver EBITDA growth to deleverage that company back towards our target range. We're investing CapEx at 22% of sales. It's actually 25% of sales if you exclude hardware sales, which is significantly above the average through the cycle for a telecom company to support this strategy, including significant near-term investments in the mobile and fixed networks to improve customer experience and competitiveness, as well as in digital IT transformation to realize the cost reduction opportunities presented by AI.

Speaker #1: We're investing capex at 22% of sales. It's actually 25% of sales if you exclude hardware sales, which is significantly above the average through the cycle for a telecom company, to support this strategy.

Speaker #1: Including significant near-term investments in the mobile and fixed networks to improve customer experience and competitiveness, as well as in digital IT transformation to realize the cost reduction opportunities presented by AI.

Speaker #1: The small dividend projected to be paid to the shareholders will be reinvested into the Net Omnia transaction, which is a key transaction for Virgin O2 to keep investing in its fiber plan. We believe this will further strengthen the product offering for VM02 and help establish a credible second fiber network to compete with BT and unlock wholesale revenues.

Charlie Bracken: The small dividend projected to be paid to these shareholders will be reinvested into the nexfibre transaction, which is a key transaction for VMO2 to keep investing in its fiber plan, which we believe will further strengthen the product offering for VMO2 and help establish a credible second fiber network to compete with BT and unlock wholesale revenues. Both shareholders continue to look at inorganic opportunities to further strengthen the competitive position and financial performance of Virgin Media O2, as we did with both O2 Daisy and the nexfibre transactions. Both shareholders recognize the importance of credit providers, which is why they're making these investments and acquisitions to support the long-term future of the company. We remain on track to deliver against this strategy, and we'll update investors as we always do in February of next year.

Speaker #1: Both shareholders continue to look at inorganic opportunities to further strengthen the competitive position and financial performance of Virgin Media 02, as we do with both 02 Daisy and the net omnia transactions.

Speaker #1: Both shareholders recognize the importance of credit providers, which is why they're making these investments and acquisitions to support the long-term future of the company.

Speaker #1: Now, we remain on track to deliver against this strategy, and we'll update investors as we always do in February of next year. And finally, turning to our full-year guidance for 2026, we are reconfirming all guidance metrics for VM02, VodafoneZiggo, and Telenet, as well as our guidance for corporate-adjusted EBITDA.

Charlie Bracken: Finally, turning to our full year guidance for 2026. We are reconfirming all guidance metrics of VMO2, VodafoneZiggo, and Telenet, as well as our guidance for corporate adjusted EBITDA. In addition, we're upgrading our full year corporate cash target from $1.5 billion to $2 billion, supported by the EdgeConneX proceeds and Wyre asset-backed loan. That concludes our prepared remarks for Q2 and over to you for questions.

Speaker #1: And in addition, we're upgrading our full-year corporate cash target from $1.5 billion to $2 billion, supported by the Edge Connect proceeds and wire asset-backed loan.

Speaker #1: And that concludes our prepared remarks for Q2, and over to you for questions.

Operator 2: The question and answer session will be conducted electronically. If you would like to ask a question, please do so by pressing the star or asterisk key followed by the digit one on your phone. In order to accommodate everyone, we request that you ask only one question. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. We'll pause for just a moment to give everyone an opportunity to join the queue. Your first question will go to the line of Joshua Mills with BNP Paribas. Joshua, your line is open.

Speaker #2: The question-and-answer session will be conducted electronically. If you would like to ask a question, please do so by pressing the star or asterisk key, followed by the digit 1 on your phone.

Speaker #2: In order to accommodate everyone, we request that you ask only one question. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment.

Speaker #2: We'll pause for just a moment to give everyone an opportunity to join the queue. Your first question will go to the line of Joshua Mills with BNP Paribas.

Speaker #2: Joshua, your line is open.

Speaker #3: Hi, guys. Thank you for taking the question. I'll keep it to the UK. Hello? Operator? Hello? Hello? I'm Richard Cardigan. Who's that? Yes. Start over, please.

Joshua Mills: Hi, guys. Thank you for taking the question. I'll keep it to the UK.

Mike Fries: Hello, operator.

Joshua Mills: Hello.

Charlie Bracken: Hello. I'm into Scott again. Who's that?

Mike Fries: Yeah. Start over, please.

Speaker #3: Yeah. Hi there. Yeah, thanks. Hope you can hear me. Can you hear me? Sorry. We can hear you, yeah. You're kind of going in and out.

Joshua Mills: Yeah. Hi there. Yeah. Thanks. Hope you can hear me. Can you hear me, sorry?

Mike Fries: We can hear you. Yeah.

Joshua Mills: Yes.

Mike Fries: You're kind of going in and out.

Joshua Mills: Yeah. Great. Sorry.

Speaker #3: Give it a try. Okay, thanks. So I just want to ask, firstly, on the UK RP trends—I think in the past you’ve talked about the issues faced from declining legacy revenue, things like voice and TV, and today you’re talking more about the declines being related to front-book price competition.

Mike Fries: Give it a try.

Joshua Mills: Okay, thanks. I just want to ask firstly on the UK ARPU trends. I think in the past you've talked about the issues faced from declining legacy revenue, things like voice and TV. Today you're talking more about the declines being related to front book price competition. It sounds to us like it's no longer just a legacy issue, it's more related to market conditions as they stand today. My question on this ARPU trend is, firstly, is that a fair characterization? If so, do you think that we're at trough ARPU declines and trough service revenue declines at the moment? Could things continue to get worse in H2 given the level of competition we see in the market? Secondly, on the volume side of the equation for the UK.

Speaker #3: So it sounds to us like it's no longer just the legacy issue. It's more related to market conditions, the stand today. So my question on this RP trend is, firstly, is that a fair characterization?

Speaker #3: And if so, do you think, look, that we're at trough RP declines and trough service revenue declines at the moment, or could things continue to get worse in the second half given the level of competition we see in the market?

Speaker #3: And then, secondly, on the volume side of the equation for the UK—in the past, when you've had these kind of sub-losses in markets like the Netherlands and Switzerland—you took the quite bold step to rebase customers aggressively and proactively onto cheaper tariffs to try and stabilize the base.

Joshua Mills: In the past when you've had these kind of sub losses in markets like the Netherlands and Switzerland, you took the quite bold step to rebase customers aggressively, proactively onto cheaper tariffs to try and stabilize the base. Is it something you'd consider doing in the UK as well, or do you think that you're going to remain happy with the level of subscriber losses in the near term, as long as you don't take too much of a hit on ARPU? Thank you.

Speaker #3: It looks, from today's strong results on VodafoneZiggo and Netad, that that's had a good effect. So is it something you'd consider doing in the UK as well, or do you think that you're going to remain happy with the level of subscriber losses in the near term, as long as you don't take too much of a hit on RPU?

Speaker #3: Thank you. Go ahead, Liz.

Mike Fries: Go ahead, Liz.

Speaker #4: Yeah. So thank you for the question. So I mean, when we did the guidance for the year '26, we expected to be the market to be very competitive.

[Company Representative] (Virgin Media O2): Thank you for the question. When we did the guidance for the year 2026, we expected the market to be very competitive

[Company Representative] (Virgin Media O2): Remember I said that 70% of the service revenue guidance of -3% and -5% will come from fixed consumer, which exactly is now kicking in. That's number one. Number two, to your point, is the market more competitive? Yes, it is. Just one number, compared to Q2 2025, the average selling price is down 4% in the market. I think your observation is right. Now, where is this 4% or 6% coming from? The biggest driver for it is our own prevention. I think what we are not doing is radically recontracting customers and forget about the ARPU. Remember, we have built a very sophisticated retention machine where we know down to every 60 homes what customers want and offering them that. We have now built the same prevention machine.

Speaker #4: Remember, I said that 70% of the service revenue guidance of minus 3 and minus 5% will come from fixed consumer, which exactly is now kicking in.

Speaker #4: So that's number one. Number two, to your point, is the market more competitive? Yes, it is. So just one number. Compared to Q2 '25, the average selling price is down 4% in the market.

Speaker #4: So I think your observation is right. Now, where is this 4 to 6% coming from? The biggest driver for it is our own prevention.

Speaker #4: And I think what we are not doing is radically re-contracting customers and forget about the RP. We have, remember, we have built a very sophisticated retention machine, where we now down to every 60 homes, what customers want and offer them that.

Speaker #4: And we have now built the same prevention machine. So the biggest driver for the RP down is prevention already, but in a very targeted way. And so we now have more than 80% of our customers on contracts with significant remaining term.

[Company Representative] (Virgin Media O2): The biggest driver for the ARPU down is prevention already, but in a very targeted way. We have now more than 80% of our customers on contracts with significant remaining term. We will keep doing exactly that in the future. Is this now rock bottom or not? That is hard to say because I don't know how the market really evolves. Market is very hot. There are some new promotions announced from Openreach. Ofcom has to accept them. If they will kick in from October this year, the market will be even more competitive. If not, I would expect the same competitive level and then our prevention will help us a bit more in the future. It is hard to predict. I hope that helps.

Speaker #4: And so, we will keep doing exactly that in the future. Is this now a rock bottom or not? That is hard to say, because I don't know how the market will evolve.

Speaker #4: The market is very hot. There are some new promotions announced from Openreach, and Ofcom has to accept them. If they kick in from October this year, the market will be even more competitive.

Speaker #4: If not, I would expect the same competitive level, and then our prevention will help us a bit more in the future. But it is hard to predict.

Speaker #4: I hope that helps.

Speaker #3: This question, operator?

Mike Fries: Next question operator.

Operator 2: Thank you, John. Yes, thank you. Our next question will go to the line of Robert Grindle with Deutsche Bank. Robert, your line is open.

Speaker #2: Thank you, John. Yes, thank you. Our next question will go to the line of Robert Grindle with Deutsche Bank. Robert, your line is open.

Speaker #5: Yeah. Hi, everyone, and thank you. So, well done on getting the BCA approval. I think it's taken a bit longer than you thought, but you've probably been prepping away in the meantime.

Robert Grindle: Yeah. Hi everyone, and thank you. Well done on getting the BCA approval. I think it's taken a bit longer than you thought, but probably been prepping away in the meantime. What's the timeline from here on the fiber collaboration and the separation of Telenet? Alongside that, the monetization of Wyre. Would you hope the monetization announcement is a 2026 one or is that in next year now because things have gone a bit more slowly? Thank you.

Speaker #5: What's the timeline from here on the Flyer collaboration and the separation of Telenet? And alongside that, the monetization of Wire. Would you hope the monetization announcement is a 2026 one, or is that next year now because things have gone a bit more slowly?

Speaker #5: Thank you.

Speaker #3: Thanks, Robert. Listen, it has taken a while to get to this point, but as I tried to articulate in my remarks, it’s a building block.

Mike Fries: Thanks, Robert. Listen, it has taken a while to get to this point. As I tried to articulate in my remarks, it is a building block. It is a foundational piece of the building block. Now that that is done, it is opening up a lot of key next steps. You mentioned one. Telenet is already split out. Wyre and Telenet have been really separate businesses for a while. This is the Q2, I believe, we have actually reported on them separately. That has happened. What the BCA approval allows us to do is essentially rebalance the debt stack on each of those two entities, and proceed importantly with the sale of a stake in Wyre, which is well underway. We have actually, I think six to eight people doing the work, have hired advisors, and we will be diligently proceeding with that transaction through year-end.

Speaker #3: It's a foundational piece of the building block. And now that that's done, it's opening up a lot of key next steps. You mentioned one.

Speaker #3: I mean, Telenet is already split out. Wire and Telenet have been really separate businesses for a while. Since the second quarter, I believe we've actually reported on them separately.

Speaker #3: So that's happened. But what the BCA approval allows us to do is essentially rebalance the debt stack on each of those two entities and proceed, importantly, with the sale of a stake in Wire, which is well underway.

Speaker #3: We've got, actually, I think, six to eight people doing the work. I've hired advisors, and we will be diligently proceeding with that transaction through year-end. It's possible that even as soon as year-end, but perhaps Q1, we will have concluded that transaction.

Mike Fries: It is possible that even as soon as year-end, perhaps Q1, we will have concluded that transaction. That is well underway and just one of many things that the BCA approval unlocks. All of which, in our view, are very positive and helping accelerate our timing on the ultimate Ziggo Group spin.

Speaker #3: But that's well underway, and just one of many things that the BCA approval unlocks—all of which, in our view, are very positive and helping accelerate our timing on the ultimate Ziggo Group spend.

Speaker #2: Thank you.

Operator 2: Thank you.

Mike Fries: The banking process will take place next week, it will access the EUR 4.35 billion of Wyre financing, just for clarity. To fund the dividend.

Speaker #6: The banking process will take place next week, and they will access the $4.35 billion of wire financing, just for clarity.

Speaker #7: The funded dividend.

Speaker #2: Thank you, John. And thank you, Robert, for your question. Our next question will go to the line of Polo Tang with UBS. Hello, your line is open.

Operator 2: Thank you, John, and thank you, Robert, for your question. Our next question will go to the line of Polo Tang with UBS. Polo, your line is open.

Speaker #3: Thanks for taking the question. It's just about VodafoneZiggo and broadband. Can you clarify when you'll be able to start offering broadband in the Delta Fiber footprint?

Polo Tang: Thanks for taking the question. It is just about VodafoneZiggo and broadband. Can you clarify when you will be able to start offering broadband and the Delta Fiber footprint? Also, what do you think has had the biggest impact in terms of helping stabilize the VodafoneZiggo broadband base? Was it the ESPN content offers? Was it pushing harder on recontracting customers? Was there a notable tailwind in terms of the Odido data breach, or was it something else? Do you think that you can see improving or positive net adds going forward or is stable a more likely outcome? Thanks.

Speaker #3: Also, what do you think has had the biggest impact in terms of helping stabilize the VodafoneZiggo broadband base? So, was it the ESPN content offers?

Speaker #3: Was it pushing harder on re-contracting customers? Was there a notable tailwind in terms of the ODDO data breach, or was it something else? And do you think that you can see improving or positive net ads going forward, or is stable a more likely outcome?

Speaker #3: Thanks.

Speaker #6: I don't know if Steven was on and then off. Steven, let me know if you're on.

Mike Fries: I do not know if Stephen was on and then off. Stephen, let me know if you are on.

Speaker #7: Yeah.

[Company Representative] (Virgin Media O2): Hi, Mike, I am on.

Speaker #6: Yeah. Hi, Mike. I'm on.

Speaker #3: Welcome to Take Those.

Mike Fries: Welcome to take those.

Speaker #6: Yeah, great. Hi, fellow. Thanks for the question. Let me deal with the Delta question first. We're planning to roll out in the Delta footprint, where we don't operate, in the second half of the year.

[Company Representative] (Virgin Media O2): Yeah. Great. Hi, Polo. Thanks for the question. Let me deal with the Delta question first. We're planning to roll out in the Delta footprint that we are operating, in H2. We're not far from that now. We expect to see that turn up in our numbers in Q4. In terms of stabilizing, look, as you've seen progressively over the last 6 quarters, it's not one thing that we've done. It's a sequence of a number of things we've done, including bringing our front book pricing in line with the marketplace, investing in the core proposition, increasing our speeds. We're the only ones offering 2Gb across most of the country today.

Speaker #6: Are we not far from that now? So we expect to see that turn up in our numbers in the fourth quarter. And then, in terms of stabilizing—look, as you've seen progressively over the last six quarters, it's not one thing that we've done.

Speaker #6: It's a sequence of a number of things we've done, including bringing our front-book pricing in line with the marketplace, investing in the core proposition, and increasing our speeds.

Speaker #6: We're the only ones offering two gigabit across most of the country today, differentiating both with Wi-Fi guarantee and now laterally with the CSPN bundle.

Stephen van Rooyen: Differentiating both with Wi-Fi guarantee and now latterly with the ESPN bundle. Changing our marketing, focusing more on connectivity, and competing harder than we had previously. I think it's a combination of things that I think have helped us get to this point. As a result, I think it's fair to say that we are pursuing sustainability of that growth. In terms of providing guidance going forward, because we put in, I think, a number of pillars that will help us continue to build the momentum that we've seen. Our expectation is to continue to grow through H2.

Speaker #6: And changing our marketing, focusing more on connectivity, and competing harder than we had previously. So I think it's a combination of things that have helped us get to this point.

Speaker #6: As a result, I think it's fair to say that we are pursuing sustainability of that growth. So, in terms of providing guidance going forward—because we have put in, I think, a number of pillars that will help us continue to build the momentum that we've seen—our expectation is to continue to grow through the second half of the year.

Speaker #3: Thanks.

Nick Lyall: Thanks.

Speaker #2: Thank you.

Operator 2: Thank you.

Stephen van Rooyen: Thanks.

Speaker #3: Thanks.

Operator 2: Our next question will go to the line of Nick Lyall with Berenberg. Nick, your line is open.

Speaker #2: Our next question will go to Nick Lyall with Vandenberg. Nick, your line is open.

Speaker #5: Thanks very much. I hope you can hear me. Hello, guys. Just a quick question again on the UK, to follow up on Josh's, please.

Nick Lyall: Thanks very much. I hope you can hear me. Hello, guys. Just a quick question again on the UK to follow up on Josh's, please. What makes you think this isn't a long-term decline for the UK? I'm just interested. Your pricing is quite a bit above BT's and substantially above the alt still. I take Lutz's point that he's got a lot of customers locked in for now, but why should you be able to sustain this pricing point? What helps you get there? Is it rolling out fiber and completing the fiber footprint or something else? Or is this a problem maybe for the longer term that ARPU just keep on slipping for many quarters? Just a second point, Charlie, can I just clarify on what you said about inorganic options in the UK?

Speaker #5: What makes you think this isn't a long-term decline for the UK? I'm just interested. Your pricing is quite a bit above BT's and substantially above the altnets still.

Speaker #5: So, I take Lucy's point that he's got a lot of customers locked in for now. But why should you be able to sustain this price point?

Speaker #5: What helps you get there? Is it rolling out fiber and completing the fiber footprint, or something else? Or is this a problem, maybe for the longer term, that ARPU just keeps on slipping from quarter to quarter?

Speaker #5: And just a second point, Charlie, can I just clarify what you said about inorganic options in the UK? That sounded like you were thinking about potentially buying assets, not selling to reduce debt.

Nick Lyall: That sounded like you were thinking about potentially buying assets, not selling to reduce debt. Have I got that the right way around, or have I misunderstood that? Thanks very much.

Speaker #5: Have I got that the right way round, or have I misunderstood that? Thanks very much.

Speaker #3: Charlie, do you want to address the first one?

Mike Fries: Charlie, you want to address the first one?

Speaker #5: Yeah. Just sitting on the— I think the point we're trying to make is that both Telephonic and us are firmly behind this company. We're very committed.

Stephen van Rooyen: Yeah. I think the point we're trying to make is both Telefónica and us are firmly behind this company. We're very committed. We're investing at very elevated levels to secure the long-term competitiveness of the business, and we have been ready to do inorganic moves, whether it's buying and indeed selling. As you know, we've sold, take for example, CTIL. Not to be specific about whether we're buying or selling, it's more to say, look, we are right behind this company, and we think the company's in the right direction, performing to the plan we set it for this year. I look forward to giving the update to everybody in February on the next phase of financial development.

Speaker #5: We’re investing at very elevated levels to secure the long-term competitiveness of the business. And we have been ready to do inorganic moves, whether it's buying and indeed selling. As you know, we've sold stakes—for example, CTIL.

Speaker #5: So, it's not to be specific about where we're buying or selling. It's more to say, look, we are right behind this company, and we think the company is headed in the right direction, performing to the plan we set for it this year.

Speaker #5: And I look forward to giving the update to everybody in February on the next phase of financial development.

Mike Fries: I'd just add to that the Netomnia deal would be an example of an inorganic transaction that we think on balance is beneficial to VMO2 from both a credit and equity perspective. For all the reasons we've articulated along the way. Inorganic could include really everything that's not simply driving cost reduction or revenue growth or free cash flow in the operating business. It's a wide definition. Lutz, do you want to address the first question? Yeah. Lutz, you might be on mute.

Speaker #4: I'd just add to that that the Netanya deal would be an example of an inorganic transaction that we think, on balance, is beneficial to VMO2 from both a credit and equity perspective.

Speaker #4: For all the reasons we've articulated along the way. So, inorganic could include really everything that's not simply driving cost reduction, revenue growth, or free cash flow in the operating business.

Speaker #4: So it's a wide definition. Lucy, do you want to address the first question?

Speaker #3: Yeah. Lucy, you might be on mute.

Speaker #7: Sorry for that. Yes, I will. My answer to your question is the following: We have three very strong brands, right? It's not only Virgin Media, it's also O2 and Giffgaff.

[Company Representative] (Virgin Media O2): Sorry for that. Yes, I was. Yeah, my answer to your question is the following. We have three very strong brands, right? It's not only Virgin Media, it's also O2 and Giffgaff. Ultimately, we will be able to sell any product with any of these three brands. We have just launched Giffgaff Broadband, and we are starting to gain traction there. High level, three brands addressing different target groups, and on average, every second household is a customer of ours, but they have only on average one or three products from us. While we have very strong mobile connectivity, very strong broadband connectivity, very strong video products for different segments.

Speaker #7: And ultimately, we will be able to sell any product with any of these three brands. And we have also—well, we have just launched Giffgaff Broadband, and we are starting to gain traction there.

Speaker #7: So, high level: three brands, addressing different target groups. On average, every second household is a customer of ours. But they've only, on average, one to three product trials, while we have very strong mobile connectivity, very strong broadband connectivity, and very strong video products for different segments.

Speaker #7: So therefore, even if you get fiber very cheap, I think the combination across everything to get this at a very good value for money, with good service, this is our strategy, and you will see us progressing in that way.

[Company Representative] (Virgin Media O2): Therefore, even if you get fiber very cheap, I think the combination across everything to get this in a very good value for money with good service, this is our strategy, and you will progressing us in that way. We have to be prepared that the competitiveness stays like it is today.

Speaker #7: And we have to be prepared that the competitiveness stays like it is today.

Speaker #4: I think also the flip side of that equation is, of course, the things I was mentioning around driving transformation in our operating model, our operating costs, and ultimately a declining CapEx profile.

Mike Fries: I think also.

Nick Lyall: Sorry.

Mike Fries: The flip side of that equation is, of course, what things I was mentioning around driving transformation in our operating model, our operating costs, and ultimately a decline in CapEx profile. We're focused, as you should be, on the profitability of these businesses, the ability to generate free cash over the long term. We've just been describing revenue. Certainly, that's a big piece of it, and Lutz didn't mention the business side, enterprise as well as wholesale. There's many levers to drive the top line. Far more levers to drive profitability between there and free cash. A significant part of the company's time, effort, energy, and shareholders is to ensure that we are optimizing the P&L of the business. Lots of levers to pull to drive what we think is the most important metric, and that's long-term free cash flow.

Speaker #4: So we're focused, as you should be, on the profitability of these businesses—the ability to generate free cash over the long term. We've just been describing revenue.

Speaker #4: Certainly, that's a big piece of it. And Lucy didn't mention the business side—enterprise, as well as wholesale. So there are many levers to drive the top line.

Speaker #4: But there are far more levers to drive profitability between there and free cash. And a significant part of the company's time, effort, energy, and the shareholders' is to ensure that we are optimizing the P&L of the business.

Speaker #4: So, lots of levers to pull to drive what we think is the most important metric, and that's long-term free cash flow — only one of which is revenue.

Mike Fries: Only one of which is revenue, and I think Lutz has addressed that pretty well. Thanks, Nick.

Speaker #4: And I think Lucy has addressed that pretty well. Thanks, Nick.

Speaker #5: That's great. Thank you very much.

Nick Lyall: That's great. Thank you very much.

Operator 2: Thank you, Nick. Our next question will go to the line of Ulrich Rathe with Bernstein Societe Generale Group. Ulrich, your line is open.

Speaker #2: Thank you, Nick. Our next question will go to Ulrich Grace with Bernstein Society General Group. Ulrich, your line is open.

Speaker #6: Yeah, thanks very much. I wanted to ask about the quantification of the AI cost benefits—that was quite interesting. I thought, Mike, the question I would have is: How confident are you that you can hold on to these kind of benefits?

Ulrich Rathe: Yeah, thanks very much. I wanted to ask on the quantification of the AI cost benefits. That was quite interesting, I thought, Mike. The question I would have is, how confident are you that you can hold on to these kind of benefits? Point being,

Speaker #6: Point being, cost benefits that are available to the industry have kind of diffused away. You mentioned McKinsey's involvement in those kinds of companies as a mechanism for diffusion—one of them—but there are others.

Ulrich Rathe: Cost benefits that are available to the industry have kind of diffused away. You mentioned McKinsey's involved, those kind of companies are a mechanism for diffusion, one of them, but there are others. What are the reasons why such cost benefits are ultimately good for the bottom line in the longer term? That will be interesting here as well. Thank you.

Speaker #6: So, what are the reasons why such cost benefits are ultimately good for the bottom line in the longer term? That would be interesting here as well.

Speaker #6: Thank you.

Speaker #4: Yeah. If you mean good for the bottom line, or if you mean sustainable—I think you asked both questions—look at that. I'll repeat what I said on the call, which is that it's coming at us from both directions.

Mike Fries: Yeah. If you mean good for the bottom line or if you mean sustainable, I think you asked both questions. Look, I'll repeat what I said on the call, which is that it's coming at us from both directions, sort of self-induced, organically driven efficiencies, improvements, all the things that we know AI can do. You're reading about it every day. We're on that, the list of projects is way too long to put on a slide. Every company in the group, both in the growth and the telecom portfolio, is implementing today solutions that are making them more efficient, faster, better, more profitable. That's happening organically as we speak. I'm really thinking through and addressing the longer-term impact because the trend is only going one way, right? Models are getting smarter.

Speaker #4: So, self-induced, organically driven efficiency improvements—all the things that we know AI can do. You're reading about it every day. We're on that, and the list of projects is way too long to put on a slide.

Speaker #4: But every company in the group, both in the growth and the telecom portfolio, is implementing solutions today that are making them more efficient, faster, better, and more profitable.

Speaker #4: And that's happening organically as we speak. I'm really thinking through and addressing the longer-term impact, because the trend is only going one way—models are getting smarter.

Speaker #4: More and more companies are arriving on the scene, taking advantage of that intelligence and driving solutions at scale for companies like ours and others. And we don't see anything on the horizon that would change that trajectory.

Mike Fries: More and more companies are arriving on the scene, taking advantage of that intelligence, driving solutions at scale for companies like ours and others. We don't see anything on the horizon that would change that trajectory. If you just extrapolate from where intelligence is moving and how costs are evolving in that space for beneficiaries like us, it's just going to get faster and cheaper. As we apply that logic to more and more of our business, we just see nothing but upside. I mean, we're only 20%, 25% in the cloud. I repeat that, 75%, 80% of our business is still on-prem. There's so many things our industry, and we're not different than any other telco, has yet to implement and take advantage of that I think it's almost irresponsible not to be that ambitious.

Speaker #4: If you just extrapolate from where intelligence is moving and how costs are evolving in that space for beneficiaries like us, it's just going to get faster and cheaper.

Speaker #4: And as we apply that logic to more and more of our business, we just see nothing but upside. I mean, we're only 20–25% in the cloud.

Speaker #4: Repeat that. Seventy-five, eighty percent of our business is still on-prem. So there are so many things our industry—and we're not different than any other telco—has yet to implement and take advantage of, that I think it's almost irresponsible not to be that ambitious.

Speaker #4: And I'm pounding the table every day with my team to tell me why we can't be that ambitious. And it's nice to have third parties who are along for that ride with us, whether they're consultants or technology companies.

Mike Fries: I'm pounding the table every day with my team to tell me why we can't be that ambitious. It's nice to have third parties who are along on that ride with us, whether they're consultants or technology companies. I think you have to be thinking that broadly and I think that aggressively over the next, let's say, two to three years. It's moving that fast. That's how we're approaching it. It's great to do the things we're doing. I'm proud of our industry, and I'm proud of my team, but it's just the start. There has to be a rethink of our operating models, how we're managing our businesses, talent, and all the technology and software required to drive these kinds of step change improvements. I think it's real. I think it's sustainable. We're anxiously working to deliver it.

Speaker #4: I think that you have to be thinking that broadly. And I think that, aggressively, over the next—let's say—two to three years, it's moving that fast.

Speaker #4: And so that's how we're approaching it. It's great to do the things we're doing. I'm proud of our industry, and I'm proud of my team.

Speaker #4: But it's just the start. There has to be a rethink of our operating models, how we're managing our businesses, talent, and all the technology and software required to drive these kinds of step-change improvements.

Speaker #4: So, I think it's real. I think it's sustainable. And we're anxiously working to deliver it.

Speaker #2: Thank you, Ulrich. Our next question will go to the line of Matthew Harrigan with Stonex. Matthew, your line is open.

Operator 2: Thank you, Ulrich. Our next question will go to the line of Matthew Harrigan with StoneX. Matthew, your line is open.

Speaker #5: Hello, thank you. On the industrial kind of blocking and tackling, AI kind of answered about 80 percent of my question. But I assume you don’t have the issues with token costs, which are surprising.

Matthew Harrigan: Thank you. On the industrial kind of blocking and tackling AI, you kind of answered about 80% of my question. I assume you don't have the issues with token costs, which are surprising some people in terms of what is being charged now. There's even some talk of a bit of a bait and switch. Talking with some of your US peers, I think they feel like there's a touch of deferrable benefit in 2027 on a net basis. Then after that, you really get an inflection point. I mean, do you think you're going to see a decided inflection point in 2028, 2029, late decade, or is this just kind of a gradual process? Then lastly, you talked on costs, which are very quantifiable and predictable on the revenue side.

Speaker #5: Some people, in terms of what is being charged now, are even talking about a bit of a bait-and-switch. And talking with some of your U.S. peers, I think they feel like there's a touch of durable benefit in '27 on a net basis.

Speaker #5: And then after that, you really get an inflection point. I mean, do you think you're going to see a decided inflection point in '28, '29, late decade, or is this just kind of a gradual process?

Speaker #5: And then lastly, you talked on costs, which are very quantifiable and predictable. On the revenue side, I assume that was also addressed by McKinsey and Google, but you'd rather kind of keep that close to the vest because it's a little harder to realize and you don't want to go too aggressive on it.

Matthew Harrigan: I assume that was also addressed by McKinsey and Google, you'd rather keep that closed kimono because it's a little harder to realize, and you don't want to go too aggressive on it. Thanks.

Speaker #5: Thanks.

Speaker #4: Yeah. And I'll ask Enrique to jump in here, too. Look, on the revenue side and the CapEx side, those numbers generally are not as high as the ones we put on the slide.

Mike Fries: Yeah. I'll ask Enrique to jump in here, too. Look at on the revenue side and the CapEx side, those numbers generally are not as high as the ones we put on the slide, but they're still tangible and significant and worth pursuing. You should not assume that because they weren't on the slide, we're not looking at those things very aggressively. Many of which we're already putting into action, right? In Luch's case his personalization engine is driving churn reduction, driving next best offers, driving all kinds of revenue benefits just today as we speak. We intend and are doing that across the board. We figured one piece at a time. I think it is gradual. I don't think it's in one quarter, all of a sudden everything hits.

Speaker #4: But they're still tangible and significant and worth pursuing. And you should assume that because you should not assume that because they weren't on the slide, we're not looking at those things very aggressively.

Speaker #4: And many of which we're already putting into action, right? So in Luchi's case, his personalization engine is driving churn reduction, driving next best offers, driving all kinds of revenue benefits, just today as we speak.

Speaker #4: So we intend and are doing that across the board. But we figured one piece at a time. I think it is gradual. I don't think it's in one quarter all of a sudden everything hits.

Speaker #4: It will be gradual, and I think for us that's the only way to do it. Why is that? Because, as you hear from others in the industry, it's not simply the technology.

Mike Fries: It will be gradual, and I think it's for us, that's the only way to do it. Why is it? Because as you hear from others in the industry, it's not simply the technology. It's not simply a great partner. It's also your organization, your talent, your operating model. No point in having all this great stuff and you're not able to implement it. You don't have the people, the structures to implement it. It is a journey, but everybody's on it. We're on it, and we're on it from end to end, really. I don't know if, Enrique, you want to talk more about the economics of AI tokens and how we see that progressing?

Speaker #4: It's not simply a great partner. It's also your organization, your talent, your operating model. There's no point in having all this great stuff if you're not able to implement it.

Speaker #4: You don't have the people or the structures to implement it. So, it is a journey, but everybody's on it. We're on it, and we're on it from end to end, really.

Speaker #4: And then, I don't know if Enrique, you want to talk more about the economics of AI, tokens, and how we see that progressing.

Speaker #5: Absolutely. Thank you. First of all, like anybody else in the industry, we're watching the evolution of both token costs and the resulting benefits pretty closely.

Enrique Rodriguez: Absolutely. Thank you. First of all, like anybody else in the industry, we're watching the evolution of both token costs and the resulting benefits pretty closely. I can say categorically, we don't see a major issue with the increase in some cases of token costs because we've been, I think, pretty disciplined in making sure that we're applying those tokens against business cases that do bring us net benefits. I do believe that this will be a continuing story, but I see a significant net benefit even though, like anybody else, we do see an increase in the usage of tokens and the related costs.

Speaker #5: And I can say categorically, we don't see a major issue with the increase, in some cases, of token costs because we've been, I think, pretty disciplined in making sure that we're applying those tokens against business cases that do bring us net benefits.

Speaker #5: And so, I do believe that this will be a continuing story. But I see a significant net benefit, even though—like anybody else—we do see an increase in the usage of tokens and the related costs.

Matthew Harrigan: Great. Thanks, Mike, Enrique. Enjoy the rest of your summers.

Speaker #5: All right. Thanks, Mike. Enrique, enjoy the rest of your summer.

Enrique Rodriguez: Thanks.

Speaker #4: Thanks.

Speaker #2: Thank you, Matthew. Our next question will go to the line of James Raptor with New Street Research. James, your line is open.

Operator 2: Thank you, Matthew. Our next question will go to the line of James Ratzer with New Street Research. James, your line is open.

Speaker #6: Yes. Thank you very much indeed. Yeah. Good afternoon. So I had a question, please, around kind of Virgin Media 02 because if I look at kind of your partner telephonica, they've seen declining revenues in Germany and just two days ago, they announced a major cost restructuring program.

James Ratzer: Yes, thank you very much indeed. Good afternoon. The question, please, around Virgin Media O2 is if I look at your partner, Telefónica, they've seen declining revenues in Germany, and just two days ago, they announced a major cost restructuring program. Obviously, Telefónica has just helped to appoint a new CFO at Virgin Media O2. I'm wondering whether you see the scope to take similar action at Virgin Media O2 and to take on a more radical approach to cost reductions, as we've seen your partner also announce in Germany. You talked about looking to support the business, and at the same time, you've just raised your cash target at the top co now to $2 billion. Would you consider injecting any of that cash back into Virgin Media O2 to help it with its deleveraging? Thank you.

Speaker #6: And obviously, Telefónica has just helped to appoint a new CFO at Virgin Media O2. So I'm wondering whether you see the scope to take similar action at Virgin Media O2 and to kind of take on a more radical approach to cost reductions, as we've seen your partner also announce in Germany.

Speaker #6: And you talked about kind of looking to support the business. I mean, at the same time, you've just raised your cash target at the topco now to $2 billion.

Speaker #6: Would you consider injecting any of that cash back into Virgin Media O2 to help it with its deleveraging? Thank you.

Speaker #4: Thanks, James. Listen, it's premature to discuss capital allocation. We think the business is obviously generating free cash today, and we believe it can generate significantly more free cash tomorrow.

Mike Fries: Thanks, James. Listen, premature to discuss capital allocation. We think the business is obviously generating free cash today, and we think can generate significantly more free cash tomorrow. On your cost reduction question, certainly that is something we are looking at as well. We're in the business planning phase right now. This is when Lutz and the team are sitting down doing the work on our long-range plans. Of course, when we mentioned organic and inorganic tools to continue to drive free cash flow and reduce leverage, that is, as you state, a very realistic one. You should assume that those are the kind of things we'll be looking at as we should. I don't know if Charlie wants to add anything to that.

Speaker #4: On your cost reduction question, certainly that is something we are looking at as well. We're in the business planning phase right now. This is when Luchi and the team are sitting down, doing the work on our long-range plans.

Speaker #4: And, of course, when we mention organic and inorganic tools to continue to drive free cash flow and reduce leverage, that is, as you state, a very realistic one.

Speaker #4: And so you should assume that those are the kinds of things we'll be looking at, as we should. And I don't know if Charlie wants to add anything to that.

Speaker #5: No, I mean, look, the business is on track with the plan that they set out at the beginning of the year. They've reconfirmed guidance.

Charlie Bracken: No, James, I think the business is on track with the plan that they set out at the beginning of the year. They've reconfirmed guidance. We're going through planning exercise. We do understand leverage is outside the range, and we take it seriously. Give us the time to continue the works with the management the right next steps, which could involve cost reductions, and we'll come back to you in February.

Speaker #5: We're going through the planning exercise. We do understand leverage is outside the range, and we take it seriously. Give us the time to continue to work through, with the management, the right next steps, which could involve cost reductions.

Speaker #5: And we'll come back to you in February.

Speaker #6: Could you—I mean, do you see kind of scope there? Sorry. Okay. Thank you very much.

James Ratzer: Do you see?

Mike Fries: James-

James Ratzer: Kind of scope there for Sorry. Okay. Thank you very much.

Speaker #2: Thank you, James. Our next question will go to the line of David Wright with Bank of America. David, your line is open.

Operator 2: Thank you, James. Our next question will go to the line of David Wright with Bank of America. David, your line is open.

Speaker #7: Oh, hi guys. I hope you can hear me. Thank you for the presentation and the opportunity to ask questions. Mine is a little bit around the accounting change in VMO 2.

David Wright: Oh, hi, guys. I hope you can hear me. Thank you for the presentation and opportunity to ask questions. Mine is a little around the accounting change in VMO2. It just seemed a little unintuitive to me to be amortizing the commissions, extending the amortization period, as you are accruing increasing net losses and higher churn. That seems like quite the opposite thing you would do. I'm wondering why you've chosen to do that and on what basis. I guess the second point would be, is it just a one-off impact, or should we now be seeing this run over a period to support the EBITDA line? I guess my final question was, does this adjustment sit within the EBITDA guidance, or is it outside the EBITDA guidance? Was it anticipated when you gave the EBITDA guidance? That would be really interesting to me.

Speaker #7: It just seemed a little unintuitive to me to be amortizing the commissions, extending the amortization period, as you are accruing increasing sort of net losses and higher churn.

Speaker #7: That seems like quite the opposite thing you would do, so I’m wondering why you’ve chosen to do that and on what basis. And I guess the second point would be, is it just a one-off impact, or should we now be seeing this sort of run over a period to support the EBITDA line?

Speaker #7: And I guess my sort of final question was: Does this adjustment sit within the EBITDA guidance, or is it outside the EBITDA guidance? Was it anticipated when you gave the EBITDA guidance?

Speaker #7: That would be really interesting to me. And then Charlie, I sort of have to ask, you kind of mentioned this full year VMO 2 sort of, I don't want to say revisit, but sort of full year update and it seems like that could be sort of a more significant event.

David Wright: Charlie, I have to ask, you mentioned this full year, the VMO2, I don't want to say revisit, but full year update. It seems like that could be a more significant event. Should we think about it that way, or are you just talking about general business planning as usual? Thank you, James.

Speaker #7: Should we think about it that way, or are you just talking about, sort of, James?

Speaker #4: Charlie, both for you.

Mike Fries: Charlie, both for you.

Charlie Bracken: Yeah. Accounting, yeah. First of all, to answer the second question, it is the usual update in February. I don't want to make a big deal about it. It's more just to say we obviously give guidance every year. The guidance for this year, we're on track, and as we always do, it'll be your regular update. There's nothing particularly sinister or magical about next February. In terms of accounting, look, the magic of accounting estimates, we are always revising accounting estimates. It's always based on facts. It's obviously always aligned with our auditor, and it's always based on our real-life experience. I agree with you. Maybe it seems odd in the context of the market competition, but these actually are the facts, and this is the right way we believe to account for it, and it's not just us. It's obviously run through with the auditor.

Speaker #5: Yeah, yeah, accounting, yeah. First of all, the second question—that is the usual update in February. I don't want to make a big deal about it.

Speaker #5: It's more just to say we obviously give guidance every year, that we gave guidance for this year. We're on track, and as we always do, it'll be your regular update.

Speaker #5: There's nothing particularly sinister or magical about next February. It says, "The magic of accounting estimates." We are always revising accounting estimates.

Speaker #5: It's always based on facts. It's always aligned with our auditor, and it's always based on our real-life experience. So I agree with you: maybe it seems odd in the context of market competition, but these actually are the facts, and this is the right way we believe to account for it.

Speaker #5: And it's not just us. It's obviously monthly with the auditor. It's of some impact on EBITDA. Was that anticipated in the original guidance? Probably not.

Charlie Bracken: It has some impact on EBITDA. Was that anticipated in the original guidance? Probably not. On the other hand, it's not that material a number. It's worth pointing out the key metric we're looking at here is free cash flow, and it's obviously a non-cash item, but I do agree it has a short-term benefit on EBITDA. In years past, it's worked against us. I would consider this in the sort of swings and roundabouts of accounting.

Speaker #5: But on the other hand, it's not that material a number. It's worth pointing out that the key metric we're looking at here is free cash flow.

Speaker #5: And it's obviously a non-match item, but I do agree it has a short-term benefit on EBITDA. But in years past, it's worked against us.

Speaker #5: So I would consider this as part of the swings and roundabouts of accounting.

David Wright: Just on the facts.

Speaker #7: Just on the facts.

Speaker #8: Sorry, one thing I can add there. Can I?

Mike Fries: Sorry, one thing I can add.

David Wright: Why wouldn't churn be the.

Mike Fries: Can I-

David Wright: Sorry. Thank you, Lutz, please.

Speaker #7: That they describe as—sorry, thank you. Please continue.

Speaker #8: I think I can help you to answer. When you do a lot of prevention, you bring customers into a new 24-month contract length.

[Company Representative] (Virgin Media O2): I think I can help you to answer what is. When you do a lot of prevention, you bring customers into a new 24-month contract length, and that is impacting accounting the rate up. If you add these two things together, I think what is maybe on the surface counterintuitive makes a lot of sense. A lot of new recontracting, you pay commission for that and you, of course, then accrue them over the new contract or lifetime of the customer. Just one thing. It all makes sense.

Speaker #8: And that is impacting accounting the way it does, right? So, if you add these two things together, I think what is maybe, on the surface, counterintuitive makes a lot of sense.

Speaker #8: So, a lot of new recontracting—you pay commissions for that, and you, of course, then accrue them over the new contract lifetime of the customer.

Speaker #8: That's just one thing, so it all makes sense. And then the other thing—what Charlie said—concrete numbers, right? Last year, we had tons and tens working for us.

Mike Fries: Okay, thank you

[Company Representative] (Virgin Media O2): what Charlie said, concrete numbers. Last year, we had tons and tens working for us. We don't have this. This makes even a higher amount, and now this goes the other way. It's always small items, big companies like ours, but it's not explicit to be outside the guidance. It's more smaller things.

Speaker #8: We don't have this. This makes an even higher amount. And now, this goes the other way. So it's always small items—big companies like ours—but it's not explicit to the outside, the guidance.

Speaker #8: It's smaller.

Speaker #5: Thank you lots.

Mike Fries: Thank you, Lars.

Speaker #2: Thank you. And with that, we will conclude the Q&A session. I would now like to pass the conference back over to you, Mr. Mike Fries, for any closing remarks.

Operator 3: Thank you. With that, we will conclude the Q&A session. I would now like to pass the conference back over to you, Mr. Mike Fries, for any closing remarks.

Mike Fries: Great. I'll keep it brief. Thanks for joining us. We always appreciate that. Lots of information to digest. You know where to find us if you have questions. It will be a busy summer for us, as you can imagine, across the group, particularly in Benelux. Stay tuned for announcements there and stay well. Speak soon. Thanks very much.

Speaker #4: Great, I'll keep it brief. Thanks for joining us—we always appreciate it. There's lots of information to digest, and you know where to find us if you have questions.

Speaker #4: It will be a busy summer for us, as you can imagine. Across the group, particularly in Benelux, so stay tuned for announcements there. And stay well.

Speaker #4: Speak soon. Thanks very much.

Speaker #2: Ladies and gentlemen, this concludes Liberty Global's second quarter 2026 investor call. As a reminder, a replay of the call will be available in the Investor Relations section of Liberty Global's website.

Operator 3: Ladies and gentlemen, this concludes Liberty Global's Q2 2026 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.