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Liberty Global (LBTYK) Q3 Earnings call transcript Oct 30, 2024

Daily EarningsThursday, Oct 31, 2024 3:59 pm ET

1min read

LBTYA --

In Liberty Global's latest earnings call, the company highlighted its strategic initiatives aimed at enhancing shareholder value and driving growth. The call, led by CEO Michael Fries, detailed the company's progress on several key fronts, including the spinoff of Sunrise and its strategic plans in the U.K., Benelux, and beyond.

Sunrise Spinoff and Valuation

One of the most significant developments discussed was the pending spinoff of Liberty Global's Swiss subsidiary, Sunrise. The transaction, which is now scheduled for November 12, has received overwhelming support from shareholders, with 99% approval at the recent EGM. The anticipated equity value of Sunrise, estimated at $4.2 billion or $12 per Liberty share, underscores the potential upside for Liberty Global shareholders. The valuation is underpinned by factors like the intention to pay a $240 million tax-advantaged dividend in mid-2025 and a progressive dividend policy thereafter. It's important to note that Sunrise, which represents nearly 60% of Liberty Global's stock price, only contributes 20% to the company's proportionate EBITDA. This discrepancy highlights the untapped value that could be recognized post-spinoff.

Strategic Plans in the U.K. and Benelux

In the U.K., Liberty Global continues to advance plans for the creation and financing of the U.K.'s second-largest fixed network company, or NetCo. With an existing footprint of 17.8 million 1-gig homes, 5.6 million of which are already full fiber, Liberty Global is well-positioned to capitalize on the rationalizing fixed and mobile networks market. The company remains optimistic about the merger between Vodafone and Three, believing it will result in a more stable mobile market and yield additional benefits for Virgin Media O2.

In the Benelux region, Liberty Global is exploring strategic partnerships and asset sales to optimize its investment portfolio. The proposed cooperation with Proximus on the fiber rollout in Belgium, if approved, could result in significant market share and operational synergies. The company also emphasized its commitment to exiting lower-growth businesses and reinvesting in more attractive opportunities, such as debt paydowns and strategic investments in telecom businesses.

A Look Ahead

As Liberty Global continues to execute on its strategic initiatives, investors and analysts will closely watch the company's progress, particularly the spinoff of Sunrise and the strategic partnerships in the U.K. and Benelux. With a clear focus on value recognition and strategic partnerships, Liberty Global is well-positioned to navigate the evolving telecommunications landscape and create value for its shareholders.

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