Liberty Global Ltd. Class C Common Shares Q2 2026 Earnings Call

Good morning, ladies and gentlemen, 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, 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 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.

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.

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 $22 billion in revenue and $8 billion in 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?

Deregulation, sovereignty, the benefits of AI, they're colliding to change the narrative, 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. 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.

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, four times 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.

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. 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 six years. I'll talk about that. As Charlie will outline, we're confirming all of our 2026 guidance across the board.

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, but 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.

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 billion-€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-$2 billion. Essentially, we will end the year exactly where we started the year from a cash point of view. 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. 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. A fully financed fiber build-out that is off the Ziggo Group balance sheet.

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, and 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.

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 here. Could be even faster. Let's see. As we said in the past, the equity story is built around two things, reducing leverage to 4.5 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.

Of course, the deleveraging is further supported by asset sales of the EUR 1.2 billion-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, though, I'm going to say here, it implies essentially zero equity value attributed to our Liberty Telecom operations. 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, is traded on the Swiss exchange between around 10.5% and 13.5% free cash flow yield or roughly 8 times 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.