Advanced Television

Liberty Global: “Sub growth back on track”

November 6, 2015

Liberty Global has revealed results for the three months (Q3) and nine months (YTD) ended September 30th 2015 for the Liberty Global.

Key highlights for the consolidated operations of Liberty Global:
• Subscriber additions accelerated sequentially to 320,000 in Q3, increasing our total organic  RGU3 additions to 526,000 for the YTD period
• Strong take-up of superior broadband products with 222,000 net additions in Q3
• Quarterly video attrition halved in Q3, as compared to the average of Q1 and Q2
• Project Lightning on track in the U.K.; exploring network extension programmes in Germany, CEE and Chile
•Total opportunity of over 10 million homes across regional footprints
• Rebased revenue increased to 4 per cent in Q3, up from 3 per cent in prior two quarters to $13.7 billion YTD
• Improvement in revenue growth driven by Germany, Belgium, the U.K. and LiLAC
• Rebased OCF5 growth of 3 per cent for both Q3 and YTD, reaching $6.5 billion YTD
• OCF growth adversely impacted by the underperformance of Ziggo
• Excluding Ziggo, rebased OCF growth would have been 4 per cent in Q3
• Operating income of $1.7 billion YTD, including $546 million in Q3
• Free Cash Flow (“FCF”)6  increased 24 per cent to $1.7 billion YTD, including $770 million in Q3, which was more than double Q3 2014

Operating and financial highlights for the Liberty Global Group,  European business:
• Leveraging our superior fiber-rich network to provide customers with best-in-class connectivity and entertainment
• Q3 organic RGU additions rebounded to 296,000, up 3x compared to Q2
• Added 102,000 RGUs in Germany, 68,000 in the U.K. and 26,000 in Belgium
• Speed leadership across our footprint with top tiers of 200 to 500 Mbps across Europe
• Germany and U.K. key contributors to 200,000 new broadband RGUs in Q3
• Introduced new WiFi & Telephony gateway to deliver best-in-class WiFi experience

Operating and financial highlights for the LiLAC (LatAM) Group:
• Customer and RGU gains continue to support robust financial performance
• Third straight quarter of customer growth driven by Chile, up 10,000 in Q3
• Organic RGU additions of 102,000 YTD, including 24,000 in Q3, fueled by 73,000 broadband additions YTD
• Strong financial results across the board
• Q3 rebased revenue growth of 7 per cent, reaching $908 million YTD
• Second consecutive quarter of double-digit rebased OCF growth, including Q3 at 10 per cent
• Net leverage of 3.9x with minimal debt maturities prior to 2022
• Reduced fully-swapped borrowing cost by 230 bps to 6.4 per cent at September 30 following a series of transactions relating to a re-strike of our derivative position

CEO Mike Fries commented, “Subscriber growth is back on track with 320,000 RGU additions in the third quarter, including 220,000 new broadband subscribers. This acceleration in volume growth was fueled by our operations in Germany and the U.K. Continued traction of our cutting-edge Horizon TV platform resulted in a record quarter of almost 250,000 new subscriptions. The execution of our aggressive technology roadmap continues delivering innovative products like our recently launched Replay TV functionality and next-generation WiFi gateway.”

“In the Netherlands, our renewed focus on service quality and product launches since the Ziggo rebrand resulted in better subscriber performance as compared to the first half. With momentum continuing across the rest of our business, we are targeting up to one million organic RGU additions for 2015, and look forward to a strong Q4. On the mobile front, we improved our product portfolio with the launch of data-rich 4G offerings in Switzerland, the Netherlands and Chile. In total, we added over 450,000 postpaid subscribers in the last twelve months and together with our successful split-contract mobile offering, drove our Q3 rebased mobile revenue by 18 per cent year-over-year.”

“From a financial perspective, in Europe we reported 3.5 per cent rebased revenue growth in Q3, our best quarterly performance in two years, led by top-line growth in Germany, Belgium and the U.K. Our YTD rebased OCF growth came in at 3 per cent. As we continue to expect to meet full-year guidance of mid-single-digit rebased growth, we anticipate a higher OCF growth rate in Q4 than the YTD growth rate for our European operations. Finally, we generated Free Cash Flow of $1.7 billion during the first nine months of 2015, a 24 per cent improvement year-over-year.”

“In Latin America and the Caribbean, we reported another strong set of results, including robust subscriber growth, 7 per cent rebased revenue and 10 per cent rebased OCF growth in Q3. Our fast-growing LiLAC operations in Chile and Puerto Rico, together with our scale opportunity and improving demographics in this region of the world, make this an exciting investment vehicle.”

“Our levered-equity approach, which includes targeted gearing in the 4-5x range, remains a core pillar of our value creation strategy. The debt on our balance sheet has an average maturity of nearly eight years and we have no material repayments until 2021. With nearly $5 billion of total liquidity, we have a solid foundation on which to launch our major initiatives such as a ramping Liberty 3.0 programme, which
includes, among other items, our new build Project Lightning in the U.K.”

Categories: Articles, Business, Results