Liberty Global Reports Q4 and FY 2022 Results

Achieved all 2022 guidance targets across our FMC Champions and exceeded our Full Company¹ Distributable Cash Flow guidance at Liberty Global²

Full Year revenue growth driven by B2B, mobile and broadband including a strong Q4 commercial performance with broadband and postpaid adds across all of our FMC Champions

Repurchased 14% of shares outstanding in 2022 and reiterating our 10% buyback floor for 2023

Guiding to stable Distributable Cash Flow at Liberty Global in 2023³

DENVER, Colorado–(BUSINESS WIRE)–Liberty Global plc today announced its Q4 2022 financial results.

CEO Mike Fries stated, “Our fourth quarter and full year results demonstrate the continued resilience of our business model as we delivered on all guidance metrics, despite challenging macro conditions. There remains ever-increasing demand across our footprint for reliable access to high-quality fixed and mobile connectivity and we continue driving product innovation to ensure superior customer experiences. Financially, while we’re not immune from the impacts of high energy and labor costs across our core FMC businesses, we continue to take actions to maintain strong operating margins while further investing in our market-leading fixed and mobile networks. This leaves us well positioned to deliver for shareholders in 2023, underpinned by our 10% minimum buyback commitment and $6 billion of liquidity⁴, including $3.4 billion of corporate cash⁽ⁱ⁾.

In Q4, we delivered aggregate⁵ broadband and postpaid mobile growth of 197,000 net new subscribers, supported by a return to broadband additions across all of our FMC markets as well as continuing positive postpaid trends. On the financial front, we reported stable rebased⁶ revenue growth in the U.K.⁷, Belgium, and the Netherlands in Q4 while our rebased revenues across the footprint were broadly stable for the full year. Synergy realization and price adjustments helped support 10%⁽ⁱⁱ⁾ rebased Adjusted EBITDA growth in the U.K. and 5%⁽ⁱⁱ⁾ in Belgium in the fourth quarter, along with stable to growing rebased Adjusted EBITDA across all FMC markets for the full year.

We made big strides on our fixed network strategies in 2022, including the formation of our new joint venture in the U.K. (nexfibre), our FTTH agreement with Fluvius in Belgium and the strong start to our FTTH overlay in Ireland. Furthermore, at VMO2 we accelerated our U.K. Lightning build in 2022 as planned while kicking off the FTTH upgrade of our existing HFC network. And it’s worth noting that we already offer gigabit speeds to over 31 million aggregate⁵ homes passed by our fixed networks, which is currently the largest fixed 1Gig footprint in Europe, with a clear roadmap to 10 gigabit broadband speeds for all our FMC Champions.

Financially, we delivered on all of the 2022 guidance targets for our FMC Champions and we exceeded our Full Company Distributable Cash Flow guidance, at guided FX rates. Our FY22 as reported Full Company Distributable Cash Flow of $1.6 billion represented a 17% YoY growth despite FX headwinds during the year. We expect our Distributable Cash Flow to remain broadly stable at $1.6 billion⁽ⁱⁱⁱ⁾ in 2023, supported by shareholder distributions from our joint ventures in the U.K. and the Netherlands and free cash flow from our consolidated operating companies in Switzerland and Belgium.

Our balance sheet remains strong with ~$4.6 billion⁽ⁱ⁾ of total consolidated cash and over $6 billion of total liquidity at year end, providing future optionality. We remain committed to a disciplined capital allocation in our ventures portfolio while driving opportunistic financial investments, such as our recently acquired 5% interest in Vodafone, an undervalued asset with numerous near and mid-term catalysts. Simultaneously, we continue to believe our own shares offer compelling value at current price levels. Supported by our strong cash flow generation, we repurchased 14% of our shares outstanding in 2022, for $1.7 billion, and have retired 50% of our total shares outstanding since 2017. We remain committed to our 10% repurchase floor of shares outstanding in 2023.”

Q4 Operating Company Highlights

Sunrise (Consolidated)

Executed on key integration milestones in 2022; Commercial momentum with strong postpaid mobile intake and return to positive broadband net adds in Q4; Achieved 2022 financial guidance

Operating highlights: Sunrise continues to drive strong commercial momentum despite continued headwinds in fixed as a result of the competitive landscape and UPC migration. In Q4, Sunrise achieved 44,000 mobile postpaid net adds, driven by the Sunrise Up and yallo propositions, and 9,200 broadband net adds, demonstrating positive acquisition activity through promotional periods and strong contributions from yallo offerings. Sunrise also delivered key integration milestones in line with the roadmap, achieving nearly 50% of run-rate synergies in 2022 and remains on track to deliver run-rate synergies of approximately CHF 325 million by 2025. Supported by a strong mobile offering together with the powerful fixed line network, FMC penetration remains high at 57% of Sunrise’s broadband base.

Financial highlights: Revenue of $803.6 million in Q4 2022 decreased 2.5% YoY on a reported basis and 2.2% YoY on a rebased basis. The rebased decrease was largely driven by (i) a decrease in fixed subscription revenue due to ARPU pressure on main brand offerings that was only partially offset by strong trading momentum in yallo and (ii) a decrease in low margin business wholesale revenue. Adjusted EBITDA decreased 13.5% on a reported basis and 8.1% on a rebased basis to $257.6 million in Q4 2022, including $7 million of opex costs to capture⁸. The rebased decline was largely driven by (a) the impact of fixed ARPU decline, (b) an increase in MySports programming costs due to phasing and distribution model changes and (c) weaker B2B wholesale performance. Adjusted EBITDA less P&E Additions of $77.7 million in Q4 decreased 23.1% YoY on a reported basis and 15.1% on a rebased basis, including $37 million of opex and capex costs to capture and integration-related capital spend.

Telenet (Consolidated)

FY 2022 outlook achieved on all metrics despite inflationary headwinds; Continued FMC customer expansion

Operating highlights: Continued growth in Telenet’s FMC customer base in Q4 2022 driven by successful end-of-year campaigns and growth in the mobile customer base of 10,500 postpaid mobile net additions. During 2022, Telenet entered into a binding agreement with Fluvius to develop “the data network of the future” in Flanders, which is expected to close in summer 2023, where both companies will contribute their fixed network assets to incorporate a new infrastructure company “NetCo” that will invest in the evolution of the current HFC network into a FTTH network. Telenet has also recently signed two commercial fixed wholesale agreements with Orange, providing access to each other’s HFC and FTTH networks for a 15-year period.

Financial highlights: Revenue of $728.7 million in Q4 2022 decreased 4.5% YoY on a reported basis and increased 1.7% on a rebased basis. The increase in rebased revenue was primarily due to (i) higher mobile and fixed subscription revenue driven by the June 2022 price rise and (ii) an increase in business wholesale revenue. Adjusted EBITDA decreased 9.3% on a reported basis and increased 4.7% on a rebased basis to $318.7 million in Q4. The increase in rebased Adjusted EBITDA reflects the aforementioned revenue performance as well as continued focus on tight cost control, partially offset by an increase in energy costs and the impact of higher inflation on staff-related expenses. Reported and rebased Adjusted EBITDA less P&E Additions decreased 32.5% and 21.0%, respectively, to $136.6 million in Q4.

VMO2 (Non-consolidated Joint Venture)

VMO2 delivers full year 2022 guidance following strong performance in mobile and synergy development

Operating highlights: Continued customer growth in both fixed and mobile driven by demand for connectivity, resulting in 71,100 postpaid mobile net adds and 22,700 broadband net adds in Q4. Average speed across the broadband base increased 41% YoY to 301 Mbps, approximately 5x higher than the national average. In just over a year since the original launch, VMO2’s flagship converged Volt bundles have continued to perform well with 1.3 million customers now taking a Volt bundle. Meanwhile, Project Lightning passed 519,000 new premises in 2022, meeting the stated full year build target. The 2022 premises passed include 24,000 premises that were subsequently transferred to the nexfibre JV formed by Telefónica, Liberty Global and InfraVia in December. VMO2 is the anchor tenant of this joint venture and will provide build services to nexfibre.

Financial highlights (in U.S. GAAP)⁷: Revenue⁹ of $3,214.5 million in Q4 2022 decreased 13.1% YoY on a reported basis and 0.7% YoY on a rebased basis, primarily due to the net effect of (i) a decline in B2B fixed revenue, (ii) a decline in consumer fixed revenue due to a change in customer mix and (iii) an increase in mobile revenue driven by higher service revenue as a result of price rises and an increased customer base, with each revenue category as defined and reported by the VMO2 JV. Adjusted EBITDA⁹ decreased 7.0% YoY on a reported basis and increased 9.7% YoY on a rebased basis to $1,047.0 million, including $41 million of opex costs to capture. The YoY increase in Adjusted EBITDA was supported by the realization of synergies and cost efficiencies, partially offset by increased energy costs. Adjusted EBITDA less P&E Additions⁹ decreased 0.6% YoY on a reported basis and increased 27.5% YoY on a rebased basis to $315.7 million, including $133 million of opex and capex costs to capture.

2023 Guidance (in IFRS as guided by the VMO2 JV)^(iv): Expect to deliver growth in Revenue and mid-single-digit Adjusted EBITDA growth (each as defined and reported by the VMO2 JV), with the first quarter impacted by phasing. Expect opex and capex costs to capture of approximately £150 million and P&E additions of around £2.0 billion. Cash distribution to shareholders is anticipated to be £1.8 to £2.0 billion, including cash from recapitalizations to maintain leverage at the upper-end of the 4-5x range.

For more information regarding the VMO2 JV, including full IFRS disclosures, please visit their investor relations page to access the Q4 earnings release.

VodafoneZiggo (Non-consolidated Joint Venture)

2022 Guidance Achieved; Broadband Customer Growth in Q4

Operating highlights: VodafoneZiggo continues to improve its commercial momentum despite continued promotional intensity in the Dutch market. FMC households¹⁰ grew 22,800 in Q4, bringing the total to over 1.5 million converged households, and FMC SIMs increased by 31,400 in Q4 to a total of nearly 2.6 million, delivering significant Net Promoter Scores and customer loyalty benefits. VodafoneZiggo delivered 26,200 mobile postpaid additions in Q4 and grew mobile postpaid ARPU. Total broadband RGUs returned to growth, increasing by 6,500 in Q4. Gigabit speeds are now available nationwide across 100% of VodafoneZiggo’s fixed network footprint.

Financial highlights: Revenue decreased 11.7% on a reported basis and 1.1% on a rebased basis to $1,047.3 million in Q4. The decrease in rebased revenue was primarily driven by a lower B2C fixed customer base, partially offset by a 6.3% increase in mobile service revenue driven by customer and ARPU growth. Adjusted EBITDA decreased 11.6% on a reported basis and 1.1% on a rebased basis to $487.9 million in Q4. The rebased decrease was primarily driven by inflation-related increases in energy and wage costs. Reported and rebased Adjusted EBITDA less P&E Additions decreased 35.4% and 26.9%, respectively, to $172.3 million in Q4.

Q4 ESG Highlights

Over the past year, our Environmental, Social and Governance (ESG) agenda continued to gain momentum across our business. Our ambition to create impact for our people, customers and communities without creating impact for our planet remained central to our sustainability commitments and initiatives. With a focus on energy efficiency, we are not only working to improve the energy consumption of our networks and products, we aim to improve upon the 92% of electricity we purchase from renewable energy sources. Over the next few years, our goal is to procure 100% of our electricity from sustainable sources. Across our operations, we also continue to transition our fleet to electric vehicles, which include e-scooters and e-bikes, in efforts to reduce our carbon emissions. With e-waste considered to be the fastest-growing waste stream in the world today, we are also focused on product responsibility. This means we are working to eliminate single-use plastic in our packaging, design fully recyclable products and packaging, and improve circularity to create best end-of-life practices. Our Connect box, for example, is made with 100% recycled plastic and can be fully recycled at its end of life. We continue to invest in our communities, and leverage our networks and products to bring access and the skills needed to help accelerate an inclusive digital world. We recently celebrated the 20-year anniversary of Safer Internet Day, promoting the safe and responsible use of online and mobile technologies across 180 countries. Since our partnership began in 2007, we have reached over 3.4 million young people and their educators in the area of digital safety. As we look to the coming year, we expect only to enhance our ESG agenda and impact. We have established our ESG Committee, including four directors of the Liberty Global board, and are currently refining our new sustainability and social impact strategy and goals.

At Liberty Global we are creating a culture where everyone is valued and respected. Where we have a positive impact on each other and our communities. Creating inclusive connections every day so that we all belong. We have evolved the way in which we talk about DE&I, focusing on the outcome and impact on a culture of belonging. We believe this makes our purpose and strategy all encompassing, by removing complex terminology, ensuring we are speaking to everyone so that no one is left behind on our journey. We have worked even closer with our Employee Resource Groups (ERGs), that focus on gender, race and ethnicity, multigenerational, disability, neurodiversity and LGBTQIA+, now with an additional ERG joining our ERG collective – focusing on a positive impact on society. By working closely with our ERGs, we are ensuring that we are actively listening and co-creating. We have worked collaboratively across the LG group to ensure that we are ideating on big topics and sharing best practice in areas where we are leading the way. This year we have seen an increase in participation in our dedicated DE&I survey and significant improvement across questions on our DE&I strategy and culture compared to 2021. We have used this data to inform our strategic priorities for 2023. We will continue to measure against our ambitions of increasing diverse representation and removing any potential for bias from our recruitment practices, with business area specific actions and reporting.

Liberty Global Consolidated Q4 Highlights

• Q4 revenue decreased 4.1% YoY on a reported basis and increased 0.8% on a rebased basis to $1,841.9 million
• Q4 earnings (loss) from continuing operations decreased 833.9% YoY on a reported basis to ($4,684.3 million)
• Q4 Adjusted EBITDA decreased 13.4% YoY on a reported basis and 4.4% on a rebased basis to $597.3 million
• Q4 property & equipment additions were 27.1% of revenue, as compared to 25.3% in Q4 2021
• Balance sheet with over $6 billion of total liquidity
  • Comprised of $1.7 billion of cash, $2.9 billion of investments held under SMAs and $1.5 billion of unused borrowing capacity¹¹
• Fully-swapped borrowing cost of 3.2% on a debt balance of $13.8 billion

Customer Growth

Earnings (Loss) from Continuing Operations

Earnings (loss) from continuing operations was ($4,684.3 million) and $638.3 million for the three months ended December 31, 2022 and 2021, respectively, and $1,105.3 million and $13,527.5 million for the year ended December 31, 2022 and 2021, respectively.

Financial Highlights

The following tables present (i) Revenue, Adjusted EBITDA and Adjusted EBITDA less P&E Additions for each of our reportable segments, including the non-consolidated VMO2 JV and VodafoneZiggo JV, for the comparative periods and (ii) the percentage change from period to period on both a reported and rebased basis. Consolidated Adjusted EBITDA and Consolidated Adjusted EBITDA less P&E Additions are non-GAAP measures. For additional information on how these measures are defined and why we believe they are meaningful, see the Glossary.

Contacts

Investor Relations
Michael Bishop +44 20 8483 6246

Amy Ocen +1 303 784 4528

Michael Khehra +44 78 9005 0979

Corporate Communications
Bill Myers +1 303 220 6686

Matt Beake +44 20 8483 6428

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