Liberty Global “in great shape”
February 16, 2016
Liberty Global has reported financial and operating results for the three months and year ended December 31st 2015 for the Liberty Global Group and the LiLAC Group.
Key highlights for the consolidated operations of Liberty Global plc for full-year 2015
- Organic RGU additions of 870,000, including 344,000 in Q4, the best quarter of the year
- Broadband net adds of 734,000, fueled by speed leadership
- Video attrition improved materially in H2, as compared to the first half of 2015
- Revenue of $18.3 billion, representing 3 per cent rebased growth, including 4 per cent rebased growth in Q4
- Full-year rebased revenue growth improvements in the UK and Belgium
- Rebased OCF growth of 4 per cent in 2015, reaching $8.7 billion
- Full-year result driven by 6 per cent rebased OCF growth in Q4 2015
- Excluding Dutch business, rebased OCF growth would have been 5 per cent in 2015
- Operating income of $2.3 billion, up 5 per cent year-over-year
- Adjusted Free Cash Flow growth of over 20 per cent in 2015, exceeding our financial guidance
- Repurchased $2.3 billion of equity in 2015, including approximately $900 million in Q4
CEO Mike Fries stated, “The core drivers of value creation and opportunity in our business have never been better than today. Financial and operating growth in the second half of 2015 was stronger than our first six months of the year across the board, and we are guiding towards even higher growth for 2016 and beyond. These trends are supported by our Liberty 3.0 blueprint, which will enhance revenue and operating cash flow by focusing on B2B, mobile, network expansion and cost controls over the next three years.”
“Europe is a rapidly converging market for fixed and mobile services, and in addition to the completion of our BASE mobile acquisition in Belgium, we are excited to announce today a new 50-50 joint venture with Vodafone in the Netherlands. By combining our best-in-class broadband and video network in the Netherlands with Vodafone’s market-leading 4G wireless platform, we are creating a new national champion for Dutch consumers that has the opportunity to realise synergies valued at €3.5 billion. This is a terrific transaction for Liberty Global shareholders. We valued Ziggo at €14 billion or approximately 11 times 2015 OCF15 and will continue to benefit from 50 per cent of the synergies and free cash flow of the combined businesses. Together with expected proceeds from additional leverage and the pre-closing cash generated by Ziggo, we also expect to generate between €2.5 and €3 billion of cash at closing.”
“On the operating front in Europe, we reported 3 per cent rebased revenue growth and 4 per cent rebased OCF growth for 2015. Our revenue ramped in the second half of the year, in large part driven by Virgin Media in the UK and Unitymedia in Germany, with both markets delivering 6 per cent rebased top-line growth in Q4. Underpinned by the continued success of our pricing strategy, footprint expansion and the strong demand for our increasingly converged products, we expect to deliver 5 per cent to 7 per cent rebased OCF growth in Europe in 2016, excluding our Dutch business Ziggo and the recently acquired BASE, and we also plan to deliver over $2 billion of FCF. Over the next three years, we are targeting rebased OCF growth of between 7 per cent and 9 per cent, as we execute our ambitious Liberty 3.0 plans.”
“Our Latin American and Caribbean platform also had an eventful year, as we launched our LiLAC tracking stock in July and announced the Cable & Wireless transaction in November. Cable & Wireless will add substantial scale and unlock significant synergies over the next several years and will enhance the already strong growth prospects for a region that is characterised by low broadband and pay-TV penetration. In 2015, LiLAC achieved strong subscriber growth and delivered robust rebased OCF growth of 8 per cent, above our mid-single-digit OCF guidance for the year. Looking ahead, we expect to deliver 5 per cent to 7 per cent rebased OCF growth and limited FCF at LiLAC in 2016, excluding Cable & Wireless.”
“Our balance sheet remains in great shape, with $4.9 billion of total liquidity, an average tenor of over seven years, and a record low cost of debt of 4.9 per cent. We generated $2.5 billion of FCF in 2015, an adjusted year-over-year improvement of over 20 per cent, which exceeded our guidance of mid-teens growth. This strong FCF generation underpinned a record $2.3 billion of stock repurchases last year, and we are pleased to announce an increase to our buyback target of $2.4 billion, upping our remaining amount authorized for repurchases to $4 billion by year-end 2017.”