LBTYA
Liberty Global LTD
NASDAQ
8-K: Liberty Global Reports Strong Q4 and Full Year 2023 Results, Exceeds Distributable Cash Flow Guidance Excluding One-Time Tax Payment
Sentiment:
Quarterly Report
15 February 2024 4:16 PM
Liberty Global achieved its full-year 2023 guidance, driven by stable to growing revenue in FMC operations and significant share repurchases, despite facing competitive and economic headwinds.
Worse than expected
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
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.
Summary
- Liberty Global announced its Q4 and full-year 2023 financial results, highlighting a challenging environment with cost of living pressures and increased competition.
- The company achieved its operating company guidance metrics for the full year, as updated at Q3.
- Full Company Distributable Cash Flow exceeded the $1.6 billion guidance, excluding a $315 million unanticipated U.S. litigation-related cash tax payment.
- Liberty Global repurchased 18.5% of its total shares outstanding from the beginning of 2023 through the end of January 2024, reducing the share count to 378 million.
- The company has over $4 billion in cash and liquid securities, maintaining a strong balance sheet.
- Postpaid growth was achieved across all core FMC operations, with over 80,000 aggregate net adds in Q4.
- There was sequential improvement in broadband performance across most markets, supported by speed differentiation and commercial initiatives.
- Quarterly revenue growth was reported at VodafoneZiggo, Telenet, and Sunrise, with stable or improved sequential Adjusted EBITDA performance across all core FMC operations.
- Liberty Global's fixed network now reaches almost 32 million homes capable of delivering gigabit speeds, with plans to expand to 38 million homes by 2026.
- VMO2 passed over 4 million FTTH homes by the end of 2023 and is targeting an additional 2 million FTTH homes in 2024, with nexfibre planning to invest 1 billion over the year.
- Telenet's Wyre NetCo partnership with Fluvius launched in 2023 and will accelerate fiber rollout in 2024, with FMC offerings planned for Wallonia later in the year.
Sentiment
Score: 5
Explanation: The sentiment is neutral to slightly negative. While the company met some targets and showed growth in certain areas, the overall financial results were mixed, with declines in key metrics and a significant loss from continuing operations. The company also faces ongoing challenges and risks.
Positives
- The company successfully managed through a challenging environment, including cost of living and inflationary pressures.
- Price adjustments throughout the year supported stable to growing revenues across FMC markets.
- The balance sheet remains strong with over $4 billion in cash and liquid securities.
- VMO2's average download speed increased 19% YoY to 358Mbps, approximately 5x higher than the national average.
- VodafoneZiggo's FMC penetration increased from 46% to 48% YoY.
- Liberty Global joined the UN Global Compact (UNGC) and became members of the Joint Alliance for CSR (JAC).
- VodafoneZiggo was awarded a gold medal from EcoVadis, placing it among the top 5% of best-performing companies for sustainability.
Negatives
- A $315 million U.S. litigation-related cash tax payment impacted the Full Company Distributable Cash Flow.
- Telenet's overall results were modestly impacted by IT platform migration issues.
- Liberty Global's consolidated Q4 earnings from continuing operations decreased to ($3,471.7 million).
- Liberty Global's consolidated Q4 Adjusted EBITDA decreased 12.0% on a rebased basis.
- Telenet experienced a net loss of 5,200 broadband customers in Q4.
- VodafoneZiggo's broadband base contracted by 26,500 net adds in the quarter.
- VMO2 expects revenue pressure from B2B fixed and opex investment into future growth drivers in 2024.
Risks
- The company faces continued headwinds from competition and cost of living challenges.
- There are potential impacts from macroeconomic dynamics that may be detrimental to the company.
- The company is exposed to risks related to rapid technological change and the ability to maintain or increase rates to subscribers.
- There are risks associated with the ability to obtain regulatory approval and satisfy regulatory conditions for acquisitions and dispositions.
- The company faces risks related to the availability of attractive programming and the costs associated with such programming.
- There are risks related to the ability of operating companies to access the cash of their respective subsidiaries.
- The company is exposed to fluctuations in currency exchange and interest rates.
- There are risks related to the ability of suppliers to deliver quality products and services on time.
- The company faces risks related to the ability to adequately forecast and plan future network requirements.
Future Outlook
VMO2 expects to deliver stable to declining revenue and low to mid-single-digit Adjusted EBITDA decline in 2024, excluding nexfibre. They also expect revenue pressure from B2B fixed and opex investment into future growth drivers. VMO2 expects P&E additions of 2.0 to 2.2 billion (excluding ROU additions) and Adjusted FCF of around 500 million and cash distributions to shareholders of ~850 million, supported by CTIL proceeds.
Management Comments
- CEO Mike Fries stated, 'In 2023 we managed through a challenging environment, including cost of living and inflationary pressures and an increasingly competitive landscape for broadband, mobile and video services.'
- He also noted, 'Despite that, we delivered strong Q4 and full year results with continued postpaid momentum and an improved performance in broadband across most markets.'
Industry Context
The results reflect the ongoing challenges in the telecommunications industry, including increased competition, cost of living pressures, and the need for continuous investment in network infrastructure. The focus on fiber expansion and 5G rollout aligns with broader industry trends, as companies seek to provide faster and more reliable connectivity. The company's focus on ESG also reflects a growing trend in the industry.
Comparison to Industry Standards
- Liberty Global's performance is mixed when compared to industry peers. While the company has shown strong growth in certain areas, such as postpaid mobile adds and fiber expansion, the decline in consolidated revenue and Adjusted EBITDA is concerning.
- For example, companies like Vodafone and Telefonica have also faced similar challenges in Europe, with varying degrees of success in managing revenue and profitability. Vodafone has been focusing on cost-cutting and infrastructure upgrades, while Telefonica has been exploring new revenue streams and partnerships.
- In terms of fiber rollout, Liberty Global's VMO2 is comparable to other European operators like Deutsche Telekom and Orange, which are also investing heavily in fiber infrastructure. However, the pace of rollout and the cost per home passed can vary significantly between operators.
- The share repurchase program is a common strategy among telecommunications companies to return value to shareholders, but the effectiveness of such programs depends on the company's overall financial health and future growth prospects.
- The ESG initiatives are in line with global benchmarks, as many telecom companies are now focusing on sustainability and social responsibility.
Stakeholder Impact
- Shareholders benefited from the share repurchase program, but may be concerned about the decline in revenue and Adjusted EBITDA.
- Employees may be impacted by restructuring and integration activities.
- Customers may benefit from improved network speeds and expanded fiber coverage.
- Suppliers may be impacted by the company's focus on decarbonization and sustainability.
- Creditors may be concerned about the company's debt levels and financial performance.
Next Steps
- Liberty Global will provide a strategic update on value creation and capital allocation during the year-end investor call.
- VMO2 is targeting the addition of approximately 2 million FTTH homes in 2024.
- Telenet's Wyre NetCo partnership will ramp up its fiber rollout in 2024.
- Liberty Global plans to launch FMC offerings in Wallonia later in 2024.
Related Party Transactions
- VMO2 experienced a reduction in costs of $19 million in 2023 due to a change in the contract terms of services provided by a related-party.
Key Dates
- February 15, 2024: Date of the press release announcing Q4 and FY 2023 results.
- January 2024: End of the period for share repurchases, resulting in 18.5% of shares repurchased.
Keywords
Liberty Global, FMC, Broadband, Mobile, Fiber, 5G, Distributable Cash Flow, Share Repurchase, Adjusted EBITDA, VMO2, VodafoneZiggo, Telenet, Sunrise
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
2 May 2025 7:11 AM
Quarterly Report
- VMO2 announced a pause of NetCo stake sale process to align with JV partner's strategic review.
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.
- Telenet implemented a trade receivables securitization program resulting in net proceeds of 189.2 million.
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
- The spin-off of Sunrise is expected to unlock significant value for shareholders.
- 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.
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