Liberty Global Reports Q1 2024 Results

Significant progress against strategy to create and deliver value to shareholders, with Sunrise spin-off anticipated Q4'24

Strong balance sheet, including $3.9 billion⁽ⁱ⁾ of cash and liquid securities; proactively refinanced >$2bn of 2027 maturities at VMO2

Investment in fixed and mobile networks continues, with FTTH programs on track in the U.K., Belgium and Ireland

Q1 financial performance in line with expectations and fully on track to achieve all full-year guidance targets

DENVER, Colorado--Liberty Global Ltd. today announced its Q1 2024 financial results.

CEO Mike Fries stated, “On our extended fourth quarter results call we presented a clear pivot in our strategy which will see us not only focus on maximizing the long-term value of our core FMC assets, but also delivering that value directly to shareholders over time. During Q1 we made significant progress on the initiatives we announced, including our plan to spin-off Sunrise, which is on track for Q4 this year.

Our balance sheet remains in great shape, with $3.9 billion⁽ⁱ⁾ of cash and liquid securities, supported by strong Adjusted FCF generation and the ability to replenish liquidity through asset sales. We recently completed a proactive $2.4 billion VMO2 refinancing where we successfully extended the average life of our total U.K. debt stack with a negligible impact to VMO2's WACD. We remain committed to shareholder remuneration, having already repurchased ~3% of our shares through April 26th against our target of up to 10% of shares by year-end. Meanwhile our Ventures portfolio, valued at $3.4 billion, represents an attractive platform to support our FMC operations, drive returns, and create significant value over time.

We continue to invest in our fiber-rich, fixed and 5G mobile networks and, while this is driving elevated capital intensity today, it remains critical to underpinning the long-term asset values of our OpCos. Our fiber upgrade projects in the U.K., Belgium and Ireland remain on track, and nexfibre recently announced it had reached the milestone of one million premises¹ built in the U.K., as VMO2 fiber build capacity continues to ramp up. Meanwhile, we're continuing to invest in digital and AI initiatives to support commercial momentum and efficiencies.

Our overall financial performance in Q1 was in line with expectations, highlighted by the return to strong Adjusted EBITDA growth in the Netherlands and the return to positive broadband net adds in Switzerland. Fixed ARPU trends in the U.K. and Switzerland improved while our businesses in Belgium and the Netherlands each delivered continued fixed ARPU growth. We are on track to meet our full-year 2024 guidance metrics across all OpCos, with price adjustments recently announced in the U.K., the Netherlands and Belgium to support our financial targets."

Q1 Operating Company Highlights

Sunrise (Consolidated)

Sunrise delivered a return to positive broadband net adds and a solid financial performance in Q1

Operating highlights: During Q1, Sunrise delivered 6,200 broadband net adds, primarily driven by an improved main brand performance from customer loyalty initiatives, as well as continued trading momentum in flanker brands. In mobile, Sunrise continued to drive commercial momentum, delivering 26,000 postpaid net adds. FMC penetration remains high at 59% across the Sunrise broadband base. The spin-off is on track for Q4'24.

Financial highlights: Revenue of $854.0 million in Q1 2024 increased 5.8% YoY on a reported basis and was flat on a rebased² basis. The flat rebased result was mainly due to (i) the positive impact of last year's July price rise and (ii) continued momentum in mobile subscription and B2B, offset by lower handset revenues. Adjusted EBITDA increased 6.2% YoY on a reported basis and 0.4% on a rebased basis to $279.3 million in Q1 2024, including $2 million of costs to capture³. The rebased increase was mainly due to lower costs to capture. Adjusted EBITDA less P&E Additions of $129.4 million in Q1 increased 13.5% YoY on a reported basis and 7.6% on a rebased basis, including $6 million of opex and capex costs to capture.

Telenet (Consolidated)

Telenet has a solid start to 2024, on track to deliver on full-year guidance

Operating highlights: During Q1, Telenet's postpaid mobile base declined by 800 while its broadband base declined by 6,000. The net subscriber trend in the first quarter continued to be impacted by higher annualized churn from the intensely competitive market environment, which more than offset the improved sales performance from Telenet's latest marketing campaigns. Wyre, Telenet's NetCo partnership with Fluvius, in which it holds a majority 66.8% stake, is well on track to achieve its FTTH rollout plan, whilst continuing to explore ways in which it can maximize efficiency of such rollout. FMC penetration remains high at 49% of the broadband base. In April, Telenet extended its digital ecosystem through Blossom, an "all-in-one" digital solution for the installation of charging stations and smart charging for electric cars.

Financial highlights: Revenue of $762.6 million in Q1 2024 increased 1.1% YoY on a reported basis and decreased 0.5% on a rebased basis. The rebased decrease was primarily driven by the net effect of (i) a decrease in B2B wholesale revenue following the expected loss of the VOO MVNO contract, (ii) a decline in the fixed customer base and (iii) lower interconnect revenue, partially offset by the benefit of the June 2023 price rise. Adjusted EBITDA increased 1.8% YoY on a reported basis and 0.2% on a rebased basis to $308.4 million in Q1, primarily due to the net effect of (a) lower programming and interconnect costs and (b) lower energy costs, partially offset by higher staff-related expenses following the mandatory 1.5% wage indexation as of January 2024 and growth in the overall FTE base. Reported and rebased Adjusted EBITDA less P&E Additions decreased 4.0% and 5.9%, respectively, to $124.7 million in Q1.

VMO2 (Non-consolidated Joint Venture)

VMO2 sets up for 2024 execution with focused investments in Q1

Operating highlights: VMO2's fixed customer base declined by 2,000 in Q1, primarily driven by a reduction in gross adds, as a slowdown in customer activity in the fixed market offset growth in nexfibre areas. VMO2's premium fixed ARPU was broadly stable for the second consecutive quarter ahead of price rises being implemented in Q2. The broadband base grew by 5,300 in Q1, while growth in broadband speeds continued, as average download speed increased 17% YoY to 368Mbps. In line with its continued broadband innovation, VMO2 became the first major UK provider to publicly launch a residential 2Gbps service in February, with the new services initially available across the nexfibre network. In mobile, the postpaid base declined by 74,500 in Q1, driven by a reduction in handset sales and disconnections related to the decommissioning of a legacy billing system. During Q1, VMO2 built 194,000 premises, the majority of which were FTTH homes built for the nexfibre JV, representing an increase in build pace of 80% YoY. The milestone of one million nexfibre premises built was achieved in April, highlighting the ramp up of the VMO2 fiber build capacity.

Financial highlights (in U.S. GAAP)⁴: Revenue⁹ of $3,282.8 million in Q1 2024 increased 3.8% YoY on a reported basis and decreased 0.5% YoY on a rebased basis. The rebased decrease was primarily due to the net effect of (i) an increase in other revenue due to low-margin construction revenue from the nexfibre JV, (ii) a decrease in mobile revenue due to lower handset sales and (iii) a decrease in B2B fixed revenue, with each revenue category as defined and reported by the VMO2 JV. Q1 Adjusted EBITDA⁹ increased 4.6% YoY on a reported basis and 0.3% YoY on a rebased basis to $1,073.6 million, including $14 million of opex costs to capture. The YoY increase in Adjusted EBITDA was primarily due to the net effect of (a) a benefit of approximately $15 million during 2024 related to higher capitalized costs by the VMO2 JV due to a change in the terms of a related-party contract and (b) investment in IT and digital efficiency programs. Q1 Adjusted EBITDA less P&E Additions⁹ decreased 10.9% YoY on a reported basis and 14.7% YoY on a rebased basis to $387.8 million, including $39 million of opex and capex costs to capture.

Financial highlights (in IFRS): Revenue of £2,588.8 million ($3,282.8 million) in Q1 2024 decreased 0.5% YoY on a rebased basis. Q1 Adjusted EBITDA of £925.7 million ($1,173.9 million), including costs to capture, decreased 0.2% YoY on a rebased basis. Q1 Adjusted EBITDA less P&E Additions of £278.2 million ($352.8 million), including costs to capture, decreased 29.3% YoY on a rebased basis. The drivers of these IFRS changes are largely consistent with those under U.S. GAAP detailed above.

For more information regarding the VMO2 JV, including full IFRS disclosures, please visit its investor relations page to access the Q1 earnings release.

VodafoneZiggo (Non-consolidated Joint Venture)

VodafoneZiggo delivers a solid financial performance in Q1, confirming 2024 guidance

Operating highlights: During Q1, FMC⁵ net adds increased by 22,700 to almost 2.7 million, delivering significant Net Promoter Scores along with customer loyalty benefits. FMC penetration remained stable at 48%. Mobile postpaid net adds grew 22,300 alongside growth in mobile postpaid ARPU of 3.4% YoY, supported by the price indexation implemented in October. The broadband base contracted by 23,500 in the quarter, a 3,000 improvement compared to Q4, as a 26,600 decline in Consumer was only partially offset by a 3,100 increase in B2B.

Financial highlights: Revenue increased 2.8% YoY on a reported basis and 1.6% YoY on a rebased basis to $1,114.0 million in Q1. The rebased increase was primarily due to continued growth in mobile and B2B fixed revenue, partially offset by a decline in the B2C fixed customer base. Adjusted EBITDA increased 10.1% YoY on a reported basis and 8.8% on a rebased basis to $519.0 million in Q1. The rebased increase was primarily driven by lower energy costs and the phasing of wage increases. Adjusted EBITDA less P&E Additions increased 24.1% YoY on a reported basis and 22.6% on a rebased basis to $274.3 million in Q1.

Q1 ESG Highlights

Since the launch of our ESG strategy "People Planet Progress" in 2023, we have remained steadfast in our commitment to fostering inclusivity, sustainability and responsibility across the business.

With our People agenda we are working towards a high performing, inclusive company for our employees, where everyone is valued and respected, and where we have a positive impact on each other and our communities. We have utilized results from our annual Diversity Equity & Inclusivity survey to focus our work on what matters most for our people. We continue to hold ourselves accountable through our ambitions to progress gender diversity in all areas of the business and empower our people to feel that they can be themselves at work.

Our Planet agenda reflects our commitment to the environment and efforts to be a sustainable company. Recognizing the significant impact of our supply chain emissions, we have taken proactive steps to accelerate our supplier engagement. In Q1, our Liberty Procurement Services introduced a new Responsible Supplier Code of Conduct and supplier assessment procedure, which includes our latest ESG requirements and criteria to advance alignment across carbon emissions reductions and human rights priorities.

On Progress, we have been making further strides to demonstrate our commitment to transparency and responsibility. In Q1 we received the scores of the CDP benchmark (formerly the Carbon Disclosure Project), where we have been upgraded to B grade, reflecting our enhanced focus on our Planet strategy, and upgrade to B- for our work in supplier engagement. CDP is a not-for-profit charity that runs the global disclosure system for investors, companies, cities, states, and regions to manage their environmental impacts.

In April, VodafoneZiggo published its Integrated Annual Report, including company performance across ESG matters. In 2023, VodafoneZiggo conducted its first double materiality analysis to identify the most relevant themes for the company and its stakeholders. They also made progress against their 2025 ambitions, reaching 194,000 people through their social programs, as well as reducing their environmental footprint. VodafoneZiggo aims to reduce its emissions by 50% by 2025 compared to 2018, and as of last year, had achieved a total reduction of 44% compared to 2018. To reduce its environmental impact, the company improved the energy efficiency of its network and products, increased focus on digitization and cloud-based solutions, continued to deploy electric vehicles for use by technicians, and supported sustainable commuting for employees.

We will publish our annual Liberty Global Corporate Responsibility Report, highlighting the successes and progress of our entire business and operations, this summer.

Liberty Global Consolidated Q1 Highlights

• Q1 revenue increased 4.1% YoY on a reported basis and 1.9% on a rebased basis to $1,945.1 million
• Q1 net earnings (loss) increased 173.9% YoY on a reported basis to $527.0 million
• Q1 Adjusted EBITDA decreased 6.9% YoY on a reported basis and 6.8% on a rebased basis to $581.4 million
• Q1 property & equipment additions were 18.8% of revenue, as compared to 20.9% in Q1 2023
• Balance sheet with $4.7 billion of total liquidity⁶
  • Comprised of nearly $1.2 billion of cash, $2.0 billion of investments held under SMAs and $1.5 billion of unused borrowing capacity⁷
• Blended, fully-swapped borrowing cost of 3.4% on a debt balance of $15.7 billion

Net earnings (loss)

Net earnings (loss) was $527.0 million and ($713.5 million) for the three months ended March 31, 2024 and 2023, respectively.

Leverage and Liquidity

• Total principal amount of debt and finance leases: $15.7 billion
• Average debt tenor⁸: 4.6 years, with ~10% not due until 2030 or thereafter
• Borrowing costs: Blended, fully-swapped cost of debt was 3.4%
• Liquidity: $4.7 billion, including (i) nearly $1.2 billion of cash at March 31, 2024, (ii) $2.0 billion of investments held under SMAs and (iii) $1.5 billion of aggregate unused borrowing capacity under our credit facilities