During H1 2017, Liberty Global added 406,000 RGUs across its European markets, including a 16 per cent year-over-year improvement in Western Europe, underpinned by the strongest first half video performance since 2006.
Liberty Global’s next-generation video platforms are popular with consumers with the addition of one million subscribers across Europe during the last twelve months. From a financial perspective, second quarter rebased Operating Cash Flow (OCF) in Europe showed both sequential and year-over-year improvement, delivering 6 per cent rebased OCF growth versus the year ago quarter. This result was fuelled by strong performances in Germany, Belgium and CEE, which delivered second quarter rebased OCF growth of 6 per cent, 5 per cent and 7 per cent respectively, and further supported by company-wide indirect cost efficiencies.
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Liberty Global Group (Europe)
The company also announced share repurchase activity in Liberty Global equity during the second quarter totalled $1.2 billion, bringing first half of 2017 shares repurchased to a record $2.2 billion. In addition, the company repurchased $41 million of LiLAC Group equity. Going forward, the company will continue to be opportunistic when stock prices look especially attractive.
Mike Fries, Chief Executive Officer of Liberty Global said: “During the first six months of the year, we added 406,000 RGUs2 across our European markets, including a 16 per cent year-over-year improvement in Western Europe, underpinned by our strongest H1 video performance since 2006 and continued network expansion. Our next-generation video platforms, which include elegant user-interfaces, in-and-out of the home viewing capabilities and robust content line-ups, continue resonating with consumers, as we’ve added 1 million subscribers across Europe during the last twelve months. In the UK, we have been proactively rolling out our new 4k-enabled, Virgin TV V6 set-top box, where we are seeing strong demand from both new and existing customers. In our other markets, we continue expanding the reach of Horizon TV and over 40 per cent of our video base in Europe now subscribes to one of our next-generation TV platforms. On the connectivity front, nearly one-third of our 15 million broadband subscribers enjoy our high-speed Connect Box, which provides an impeccable WiFi user experience throughout the home, and our subscribers can now seamlessly access over 10 million WiFi spots across Europe.”
“From a financial perspective, our Q2 rebased5 OCF6 result in Europe showed both sequential and year-over-year improvement, as we delivered 6 per cent rebased OCF growth. This result was fueled by strong performances in Germany, Belgium and CEE, which delivered Q2 rebased OCF growth of 6 per cent, 5 per cent and 7 per cent, respectively, and was further supported by our company-wide indirect cost efficiencies. On top-line growth, we reported a 2 per cent rebased improvement as our B2B7 business delivered 14 per cent rebased revenue growth in the quarter, partly offset by continued challenges in our mobile business which contracted 6 per cent. As expected, cable ARPU8 and revenue growth at Virgin Media remained soft, as the discounting and mix effects that impacted growth in Q1 continued in the second quarter. At the same time, we are seeing some early signs of progress and expect the ARPU headwind in the UK to lessen in Q4 of this year. We continue to anticipate approximately 5 per cent rebased OCF growth for Liberty Global Group in 2017.”
“With respect to Project Lightning, we’ve made significant strides in solidifying the foundation of the program through the appointment of a dedicated new leadership team9, as well as an overhaul of key processes and procedures. During Q2, we built 127,000 new premises at Virgin Media, including a record monthly build performance in June, and our cumulative total now stands at nearly 800,000 premises since the project’s inception. Meanwhile, on the European continent, the number of new build and upgraded homes in markets like Germany and CEE continue to broadly track our expectations. In these regions, we have added a cumulative total of 1.4 million newly marketable premises over the last 2 years.”
“At LiLAC, we delivered 10.5 per cent rebased OCF growth in Q2 due to double-digit improvements at both VTR and CWC10. In the case of CWC, we’ve taken actions that should help drive organic revenue growth and cost efficiencies in the future. With regard to our planned spin-off of the LiLAC Group, we are pleased to report that we submitted a draft registration statement with the SEC on a confidential basis in July, and we still expect to complete the transaction around the end of the year. We believe the spin-off will benefit LiLAC shareholders by creating a stand-alone, asset-backed equity, while enhancing its potential attractiveness as an acquisition currency for consolidation opportunities in the highly-fragmented Latin American and Caribbean telecommunications markets. In terms of guidance, we continue to anticipate approximately $1.5 billion of OCF for full-year 2017 at LiLAC.”