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Liberty Global: “2020 a transformational year”

February 16, 2021

Liberty Global has announced Full Year financial results. Revenue increased 3.8 per cent on a reported basis and decreased 1.5 pr cent on a rebased basis to $11.9 billion (€9.7bn).

Q4 revenue increased 14.9 per cent on a reported basis and decreased 0.5 per cent on a rebased basis to $3.4 billion.

CEO Mike Fries commented: “2020 was a transformational year in which we announced highly accretive transactions in Switzerland and the UK, creating fixed-mobile champions in two of our core markets and unlocking nearly $11 billion of synergies on an NPV basis. In Switzerland, we have validated the Sunrise UPC synergy plan, announced the executive team and the integration of the business is well underway. Meanwhile, we are making very positive progress with the K regulator on the joint venture between Virgin Media and Telefonica’s O2, and continue to anticipate a mid-21 closing.”

“As we continue to navigate the pandemic, our fibre-rich networks have more than stood up to the challenge, delivering high-speed connectivity which has proven increasingly essential in the lives of our customers and communities. Demand for our broadband and converged products remains strong, and we added 56,000 new customer relationships during Q4 and a total of 81,000 in 2020. We saw substantial churn reduction across all of our markets and achieved a record low at Virgin Media. Moreover, we continued to extend and upgrade our network reach with the construction of 561,000 new homes last year, and are now marketing 1GB broadband services to over 20 million premises across our pan-European footprint.”

“Our convergence strategy continues to gain traction across all of our core markets. During 2020, we added 242,000 broadband subscribers, and the fourth quarter saw both Virgin Media and UPC Switzerland achieve their best broadband adds since 2017. In addition to our robust fixed-line trends, we added 513,000 postpaid mobile subscribers in 2020, with Virgin Media seeing record additions for the full year. FMC penetration rates continue to improve across all operations, a win-win for us and our customers as we share in the benefits of convergence.”

“Despite the impact of the Covid-19 virus, we were able to meet or exceed all guidance metrics in 2020. Rebased revenue declined 1.5 per cent, including adverse Covid impacts of around 2 per cent, primarily driven by lower B2B revenue and the loss of premium sports content. As expected, rebased Adjusted EBITDA declined 4 per cent in the year, including the impact of costs to capture5 of $17 million in Switzerland and the UK, while rebased OFCF increased 5 per cent, reflecting underlying growth in most markets. Our continued efforts to reduce our capital intensity, which remains below 20 per cent excluding Project Lighting, helped us deliver $1.1 billion of Adjusted Free Cash Flow in 2020, modestly ahead of guidance.”

“Throughout the year we were active buyers of our stock, retiring 9 per cent of our outstanding equity at an average price of approximately $19 per share. We will continue our buyback programme via the current $1 billion authorisation, simultaneously shrinking our share count while delivering substantially higher Adjusted Free Cash Flow in 2021. Our balance sheet remains in outstanding shape with $3.3 billion of cash and $6.2 billion of liquidity at year end to drive future value creation.”

“Looking ahead to 2021(ii), we anticipate modest rebased revenue increases in our four largest markets (UK, CH, NL, BE) as customer growth, price increases and B2B services continue the momentum experienced in 2020. As we close the UK transaction and accelerate integration of Sunrise UPC in Switzerland, we will incur substantial costs to capture anticipated synergies which will weigh on our rebased Adjusted EBITDA and rebased OFCF performance. Despite these investments in future growth, we are still forecasting a 25 per cent increase in consolidated Adjusted Free Cash Flow to $1.35 billion for full year 2021 and an even larger increase in Adjusted Free Cash Flow per share as we implement our $1 billion buyback programme.”

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