LBTYA
Liberty Global LTD
NASDAQ
8-K: Liberty Global Provides Preliminary Q1 2024 Financials for Sunrise Holding and VM Ireland
Sentiment:
Quarterly Results
1 May 2024 4:26 PM
Liberty Global released preliminary, unaudited financial and operating results for its Sunrise Holding Group and VM Ireland for the first quarter of 2024, showing mixed performance across both segments.
Worse than expected
VM Ireland's revenue and Adjusted EBITDA decreased year-over-year, indicating worse than expected performance.
Sunrise Holding's rebased revenue and Adjusted EBITDA growth was flat, indicating worse than expected performance.
Summary
- Liberty Global has released preliminary Q1 2024 results for its Sunrise Holding Group, which includes operations in Switzerland and Slovakia, and VM Ireland, which operates in Ireland.
- VM Ireland reported a 1.2% year-over-year decrease in revenue to 113.3 million, with a 4.9% decrease in Adjusted EBITDA to 36.8 million.
- VM Ireland experienced a 4.2% YoY decrease in residential fixed revenue, but a 3.9% increase in mobile subscription revenue.
- VM Ireland's net earnings increased by 257.1% YoY to 5.5 million, primarily due to gains on derivative instruments.
- VM Ireland's property and equipment additions increased by 17.5% YoY to 36.3 million, driven by fiber upgrades and off-net programs.
- Sunrise Holding reported a 4.4% YoY increase in revenue to 797.9 million, but a 0.1% decrease on a rebased basis.
- Sunrise Holding's Adjusted EBITDA increased by 4.7% YoY to 261.4 million, or 0.2% on a rebased basis.
- Sunrise Holding's net loss decreased by 90.8% YoY to 130.1 million, mainly due to foreign currency losses and gains on derivatives.
- Sunrise Holding's property and equipment additions were 17.5% of revenue.
- Sunrise Holding's Adjusted EBITDA less P&E Additions increased by 11.7% YoY to 122.1 million, or 7.4% on a rebased basis.
- Both groups have significant debt, with VM Ireland's Net Total Debt to Annualized EBITDA at 5.23x and Sunrise Holding's at 5.13x, both excluding certain credit facility amounts.
- VM Ireland had 100 million of undrawn commitments available, while Sunrise Holding had 707 million available.
Sentiment
Score: 5
Explanation: The sentiment is neutral to slightly negative due to mixed results. While there are some positive aspects like growth in mobile subscribers and fiber upgrades, the overall revenue and EBITDA performance is concerning, especially for VM Ireland. The high debt levels also add a layer of caution.
Positives
- VM Ireland's net earnings saw a significant increase of 257.1% year-over-year, reaching 5.5 million.
- VM Ireland's mobile subscription revenue increased by 3.9% year-over-year.
- VM Ireland made progress on its full fiber upgrade project, with over a third of the network upgraded.
- Sunrise Holding's revenue increased by 4.4% year-over-year.
- Sunrise Holding's Adjusted EBITDA increased by 4.7% year-over-year.
- Sunrise Holding's net loss decreased significantly by 90.8% year-over-year.
- Sunrise Holding achieved strong net growth in broadband driven by increased customer loyalty.
- Sunrise Holding's mobile postpaid net additions were 26,000 in Q1.
- Sunrise Holding's Adjusted EBITDA less P&E Additions increased by 11.7% year-over-year.
Negatives
- VM Ireland's revenue decreased by 1.2% year-over-year.
- VM Ireland's Adjusted EBITDA decreased by 4.9% year-over-year.
- VM Ireland experienced a 4.2% year-over-year decrease in residential fixed revenue.
- VM Ireland's fixed customer net losses were 1,300 in Q1.
- VM Ireland's Adjusted EBITDA less P&E Additions decreased by 93.6% year-over-year.
- Sunrise Holding's revenue decreased by 0.1% year-over-year on a rebased basis.
- Sunrise Holding's Adjusted EBITDA increased by only 0.2% year-over-year on a rebased basis.
- Sunrise Holding's fixed customer relationships decreased by 800 in Q1 2024.
- Sunrise Holding's customer ARPU decreased by 1.0% year-over-year.
Risks
- VM Ireland's elevated capital expenditure spend is impacting financial performance in the short term.
- VM Ireland's revenue is being negatively impacted by lower fixed and handset revenues.
- Sunrise Holding's revenue and Adjusted EBITDA growth is being impacted by a competitive environment and lower handset revenues.
- Both VM Ireland and Sunrise Holding have significant debt levels, with Net Total Debt to Annualized EBITDA ratios above 5x.
- The competitive environment is impacting Sunrise's customer ARPU.
- The spin-off of Sunrise is subject to risks and uncertainties.
Future Outlook
Sunrise Holding confirms its 2024 financial guidance, expecting broadly stable revenue, stable to low-single-digit growth in Segment Adjusted EBITDA, and Adjusted FCF of CHF 360-400 million. VM Ireland's elevated capex spend is expected to continue impacting financial performance through 2024 as they invest in future growth.
Management Comments
- Tony Hanway, CEO of VM Ireland, stated that they continued to make good progress on key growth initiatives and saw improvements across both fixed and mobile acquisition channels.
- Tony Hanway also noted the launch of wholesale network access to Vodafone customers and the upgrade of more than a third of their network to full fiber.
- Andr Krause, CEO of Sunrise, commented that they started 2024 with a strong operational and solid financial result and are well on track to meet their 2024 guidance.
- Andr Krause also mentioned the expectation of positive effects from operational cost optimization in the following quarters and the upcoming listing on the Swiss stock exchange.
Industry Context
The results reflect the ongoing investments in fiber upgrades and network expansion across the telecommunications industry. The competitive environment is impacting pricing and customer acquisition, requiring companies to focus on customer loyalty and cost optimization. The move towards converged services (fixed and mobile) is also evident in both VM Ireland and Sunrise Holding's strategies.
Comparison to Industry Standards
- VM Ireland's revenue decline of 1.2% is not uncommon in the competitive European telecom market, where companies like Vodafone and Telefonica are also facing challenges in fixed-line revenue.
- VM Ireland's fiber upgrade progress is comparable to other European operators investing in next-generation networks, such as Deutsche Telekom and Orange.
- Sunrise Holding's 4.4% revenue growth is solid compared to some of its European peers, but the rebased flat growth indicates underlying challenges.
- Sunrise Holding's mobile postpaid net additions of 26,000 are a positive sign, but the overall fixed customer losses highlight the need for improved customer retention strategies.
- The debt levels of both VM Ireland and Sunrise Holding are relatively high, which is typical for capital-intensive telecom businesses, but the leverage ratios are something to monitor closely compared to peers like Swisscom and Salt.
Stakeholder Impact
- Shareholders may be concerned about the revenue and EBITDA declines at VM Ireland and the high debt levels of both groups.
- Employees at VM Ireland may be impacted by the ongoing cost optimization efforts.
- Customers of VM Ireland will benefit from the fiber upgrades and new service offerings.
- Customers of Sunrise Holding will benefit from improved customer service and new product offerings.
- Suppliers and vendors may be impacted by the capital expenditure plans of both groups.
Next Steps
- VM Ireland will continue its full fiber upgrade project and off-net expansion.
- VM Ireland will launch the Backing Business Community campaign.
- Sunrise Holding will continue to focus on customer loyalty and cost optimization.
- Sunrise Holding is planning for a spin-off and listing on the Swiss stock exchange in Q4.
- Both groups will complete their Q1 compliance reporting requirements.
Key Dates
- May 1, 2024: Date of the press release and 8-K filing, providing preliminary Q1 2024 results.
- March 31, 2024: End of the first quarter, the period for which financial results are reported.
- May 2024: Expected release of unaudited financial statements for the fixed-income borrowing groups.
Keywords
Liberty Global, Sunrise Holding, VM Ireland, Financial Results, Q1 2024, Broadband, Mobile, Fiber Upgrade, EBITDA, Revenue, Net Debt, ARPU
LBTYA
Liberty Global LTD
NASDAQ
Sector: Communication Services
Filings with Classifications
Better than expected
29 May 2025 5:21 PM
Insider Transaction Report
- Director Daniel E. Sanchez increased his direct beneficial ownership of Liberty Global common shares through the vesting of previously granted Restricted Share Units.
- He received substantial new grants of Restricted Share Units and stock options, indicating continued alignment of his interests with the company's long-term performance and growth.
Worse than expected
2 May 2025 7:11 AM
Quarterly Report
- VodafoneZiggo revised its 2025 guidance, projecting a steeper than expected Adjusted EBITDA decline.
Delay expected
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Quarterly Report
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Worse than expected
2 May 2025 7:10 AM
Quarterly Report
- The company reported a net loss attributable to Liberty Global shareholders of $1,337.3 million for Q1 2025, compared to net earnings of $510.0 million for the same period in 2024.
- The company experienced significant foreign currency transaction losses of $1,081.0 million in Q1 2025.
Capital raise
18 February 2025 4:40 PM
Preliminary Results
- Wyre secured commitments for a standalone 500 million capex facility for its roll-out ambitions.
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Worse than expected
18 February 2025 4:38 PM
Preliminary Results
- Overall revenue decreased YoY for both FY 2024 and Q4 2024, indicating underperformance compared to the previous year.
- Residential fixed and mobile revenue decreased YoY in Q4 2024, suggesting challenges in the core business segments.
- Fixed-line customer relationships decreased by 9,500 YoY, reflecting customer losses.
Capital raise
18 February 2025 4:16 PM
Quarterly and Full Year Results
- Liberty Global will focus on the inherent value of its fixed networks and, specifically, seek to raise capital for its fiber NetCos in Belgium and the U.K.
Better than expected
18 February 2025 4:16 PM
Annual Report
- The company reported earnings from continuing operations of $1,869.1 million for 2024, a significant improvement compared to the loss of $3,659.1 million in 2023.
Worse than expected
15 November 2024 5:10 PM
Spin-off Announcement
- The pro forma statements show a loss from continuing operations for the nine months ended September 30, 2024, and the year ended December 31, 2023, indicating a negative impact from the spin-off on the remaining business.
Worse than expected
29 October 2024 6:43 PM
Quarterly Report
- The company reported a net loss of 15.1 million compared to a net profit of 439.2 million in the same quarter last year, primarily due to significant net finance expenses.
- Adjusted Free Cash Flow declined by 61.3% year-over-year, indicating a significant deterioration in cash generation.
Worse than expected
29 October 2024 4:27 PM
Quarterly Results
- VM Ireland's revenue and profitability declined year-over-year, with a significant increase in net loss.
- VM Ireland's adjusted EBITDA decreased by 10.7% year-over-year, indicating weaker operational performance.
Worse than expected
29 October 2024 4:11 PM
Quarterly Report
- The company reported a significant net loss of $1,410.9 million for Q3 2024, a substantial decrease compared to the $822.7 million profit in Q3 2023.
Worse than expected
29 October 2024 4:08 PM
Quarterly Report
- The company reported a significant net loss of $1.41 billion in Q3 2024, compared to a net income of $822.7 million in the same period last year, indicating worse than expected financial performance.
Worse than expected
9 September 2024 9:03 AM
Spin-off Announcement
- The 2024 Adjusted Free Cash Flow guidance was lowered from CHF 360-400 million to CHF 360-370 million due to one-off spin-off related costs.
Worse than expected
25 July 2024 4:32 PM
Quarterly Report
- The company's Adjusted EBITDA decreased by 7.8% year-over-year, indicating a decline in profitability compared to the previous year.
- The Adjusted EBITDA margin contracted from 50.8% to 47.0%, reflecting a decrease in profitability.
- Adjusted EBITDA less P&E Additions declined significantly due to higher CAPEX intensity and lower Adjusted EBITDA.
Worse than expected
25 July 2024 4:29 PM
Quarterly Results
- VM Ireland's net earnings decreased by 32.3% year-over-year, indicating a significant downturn in profitability.
- Sunrise Holding Group's net loss increased by 12.3% year-over-year, suggesting a worsening financial position.
Worse than expected
25 July 2024 4:11 PM
Quarterly Report
- VMO2's full-year revenue guidance was revised down to a 'low to mid-single-digit decline', indicating worse than expected performance in that area.
Better than expected
25 July 2024 4:10 PM
Quarterly Report
- The company's net earnings attributable to shareholders improved significantly compared to the same period last year.
Better than expected
2 May 2024 4:49 PM
Earnings Call Transcript
- The company expects the spin-off to create a fully distributed local valuation for Sunrise, which will represent a meaningful premium to our stock trades.
- Analysts have estimated a preliminary value for Sunrise of approximately $11 per Liberty share, which is significant in relation to the current stock price.
Better than expected
2 May 2024 4:48 PM
Earnings Call Update
- The spin-off is expected to unlock significant value for shareholders by establishing a separate, higher valuation for Sunrise.
- Analysts have estimated a preliminary value for Sunrise at approximately $11 per Liberty Global share, which is a significant premium to the current trading price.
- The company expects a re-rating of the remaining Liberty Global business after the spin-off.
Worse than expected
1 May 2024 4:26 PM
Quarterly Results
- VM Ireland's revenue and Adjusted EBITDA decreased year-over-year, indicating worse than expected performance.
- Sunrise Holding's rebased revenue and Adjusted EBITDA growth was flat, indicating worse than expected performance.
Worse than expected
1 May 2024 4:15 PM
Quarterly Report
- The company's Adjusted EBITDA decreased by 6.9% YoY on a reported basis and 6.8% on a rebased basis, indicating a worse performance than expected in terms of profitability.
Better than expected
1 May 2024 4:14 PM
Quarterly Report
- The company's net earnings were significantly better than the same period last year, moving from a loss to a profit.
Better than expected
16 February 2024 4:43 PM
Strategic Announcement
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- The company is investing $1.7 billion to deleverage Sunrise, increasing its equity value.
- The company is committed to shareholder remuneration through buybacks and distributions.
Worse than expected
15 February 2024 4:32 PM
Quarterly Results
- VM Ireland's full year and Q4 net earnings were significantly worse than the previous year.
- VM Ireland's full year Adjusted EBITDA decreased year-over-year.
- Sunrise Holding's full year Adjusted EBITDA decreased year-over-year.
Delay expected
15 February 2024 4:32 PM
Quarterly Results
- Sunrise Holding experienced a delay in activations which impacted broadband performance.
Worse than expected
15 February 2024 4:16 PM
Quarterly Report
- The consolidated results show a decrease in revenue and Adjusted EBITDA on a rebased basis, indicating worse than expected performance.
- The company also reported a significant loss from continuing operations, further highlighting the worse than expected results.
Delay expected
15 February 2024 4:16 PM
Quarterly Report
- Sunrise experienced a delay in activations, which impacted their broadband performance in Q4.
- Telenet's results were impacted by continued IT platform migration issues throughout 2023.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.