Liberty Global's Q3 2025: Contradictions Emerge on U.K. Regulatory Stance, Dutch Broadband Competition, and ARPU Strategy

Guidance:

• Virgin Media O2: confirming consumer and wholesale revenue growth; Daisy transaction expected to have ~GBP 125 million revenue impact in 2025.
• Liberty Global Services & Corporate: adjusted EBITDA guide improved to $150 million for 2025 (previously ~$175M guidance).
• Corporate outlook: visibility to ~ $100 million net corporate costs in 2026; all other OpCo guidance unchanged.

Business Commentary:

• Strategic Focus and Value Creation:
• Liberty Global is focusing on unlocking value through strategic transactions, similar to the Sunrise spin-off, potentially involving one or more core operating businesses.

• The company aims to emulate the success of the Sunrise transaction, which traded around 8x EBITDA with an 8% dividend yield.

• Financial Performance and Debt Refinancing:

• Liberty Global refinanced over $9 billion of 2028 maturities, reducing leverage and strengthening its balance sheet.

• This was achieved through refinancing across various credit silos, maintaining average debt life and comparable credit spreads.

• Improved Corporate Cost Efficiency:

• The company reduced its guidance for net corporate costs from $200 million at the beginning of the year to $150 million for 2025, with expectations to halve this to $100 million in 2026.

• This improvement is attributed to a significant reshaping exercise in Liberty Corporate and Liberty Tech, resulting in $100 million of annualized cost savings.

• Portfolio Growth and Asset Sales:

• Liberty Growth's portfolio reached $3.4 billion, utilizing proceeds from asset sales like the partial sale of its ITV stake, totaling $300 million year-to-date.
• The company aims for $500 million to $750 million of noncore asset sales, with a focus on long-term value creation rather than rushing deals.

Sentiment Analysis:

Overall Tone: Positive

• Management highlighted successful refinancing of ~ $9B of 2028 maturities, Liberty Growth valued at $3.4B, sequential broadband net-add improvements, and an improved 2025 corporate adjusted EBITDA guide to $150M with visibility to $100M in 2026 — framing the tone as constructive and value-focused.

Q&A:

• Question from Maurice Patrick (Barclays): Thoughts on U.K. fiber strategy — buy vs build, potential NetCo sale resurrection and evolving views ahead of Telefonica CMD?
  Response: Continue upgrading Virgin Media fiber; remain open to consolidation/rationalization opportunities if economics match build; may engage in deals as the market settles over coming months.

• Question from Polo Tang (UBS): Can you discuss Dutch competitive dynamics, confidence in stabilizing broadband in 2026, ARPU pressure and any FWA impact?
  Response: VodafoneZiggo's plan centers on reducing churn to return to broadband growth by late 2026; mobile value segment is well positioned and FWA is viewed as a variable rather than a core headwind.

• Question from Joshua Mills (BNP Paribas): Color on U.K. competitiveness — why fixed ARPU was down after April price increase and what was underlying B2B growth excluding Daisy?
  Response: The market is highly price-driven; management delivered only -28k broadband customers and ~-1% ARPU this quarter; the fixed/mobile B2B connectivity business moved into O2 Daisy and is in decline—separate financials to be provided in Q4.

• Question from Robert Grindle (Deutsche Bank): What are the costs and payback to achieve the ~EUR 100M annualized central savings; any CapEx or one-off charges that offset savings?
  Response: Restructuring costs are minimal with de minimis capex and a payback under 12 months, so the majority of the ~EUR100M annualized savings should flow through to EBITDA.

• Question from Nicholas Lyall (Berenberg): Why prioritize Benelux for value-unlock initiatives versus VMO2 in the U.K.?
  Response: Benelux markets (Belgium & Netherlands) are more advanced toward a Sunrise-like outcome—markets are more rational and the Wyre netco financing in Belgium enables deleveraging of the Telenet servco, making Benelux the most actionable near-term.

• Question from David Wright (BofA Securities): Is there any change in guidance perimeter given Daisy and does Telefónica hold any strategic rights over U.K. decisions?
  Response: U.K. JV decisions are made jointly with Telefónica and managements are aligned; O2 Daisy (70% owned) contains declining B2B connectivity which will be reported separately in Q4, and there are no puts/calls on the remaining 30%.

• Question from Ulrich Rathe (Bernstein): Can you confirm refinancings follow policy — swaps into local currency and fixed-rate hedges restored?
  Response: Yes — financings are matched to local operating currencies, bonds are fixed and swaps/hedges maintained, preserving an approx. 3–5 year fixed-rate profile.

• Question from James Ratzer (New Street Research): How will VMO2 reach 4x–5x leverage — organically or via inorganic steps (dividends, capital injection)?
  Response: Objective is to reach/maintain ~4x–5x leverage primarily via organic EBITDA growth; other options (asset sales, dividends) remain under consideration but are not being specified now.

• Question from Matthew Harrigan (The Benchmark Company): Potential long-term implications of U.K. infrastructure tax and political headwinds?
  Response: Management views regulatory trends as increasingly growth-friendly, is actively engaging policymakers, and sees more tailwinds than headwinds while continuing to oppose measures like broadband taxes.

Contradiction Point 1

Regulatory Environment in the U.K.

It revolves around the company's stance on the regulatory environment in the U.K., which impacts strategic decisions and financial prospects.

What are the long-term implications of U.K. infrastructure tax proposals? - Matthew Harrigan(The Benchmark Company)

2025Q3: We are encouraged by the growth and productivity mindset in Europe. The U.K. government has shown a growth-oriented regulatory approach, with positive changes in M&A and consolidation. We continue to fight regulatory challenges but see more tailwinds than headwinds. - Michael Fries(CEO)

Can you explain the status of the UK NetCo project with Telefónica? - Robert J. Grindle(Deutsche Bank)

2025Q2: We've been at the forefront of the M&A process as well as the regulatory process. Some of the biggest pieces of network consolidation, cable consolidation and fiber, and gigabit network build-out are led by us. We think that the government is at least aligned with us in terms of the regulatory process. - Michael Fries(CEO)

Contradiction Point 2

Broadband Market and Competitive Dynamics in the Netherlands

It involves differing perspectives on the competitive dynamics in the Dutch broadband market and the role of fixed wireless access.

Can you discuss the competitive dynamics in the Dutch broadband and mobile markets and your confidence in stabilizing broadband add rates by 2026? - Polo Tang(UBS Investment Bank)

2025Q3: The market is competitive, but we are working on a plan to stabilize broadband adds. Our focus is on reducing churn and improving mobile performance through value segment strategies. Fixed wireless is a variable in the market, not a major concern for our plans. - Stephen van Rooyen(CEO)

What factors are driving broadband consumption and pricing power, and why is DOCSIS 4.0 cheaper than fiber in the Netherlands? - Matthew Joseph Harrigan(The Benchmark Company)

2025Q2: Fixed wireless access is a new development. It's one of the serendipities in the Netherlands. We've got to be very mindful as we look to grow and invest in 5G in mobile as well as fiber. We think we have a good plan to be able to do that. - Stephen van Rooyen(CEO)

Contradiction Point 3

U.K. Market Competitiveness and ARPU Development

It highlights differing perspectives on the competitiveness of the U.K. market and the impact on ARPU development.

What are you seeing regarding U.K. market competitiveness? How is ARPU for fixed-line services developing? What is the underlying B2B growth? - Joshua Mills(BNP Paribas)

2025Q3: The market is very price-driven, with offers as low as £20 for 1 gig. Despite this, we maintain high ARPU due to our customer base's demand for high speed. We've had success preventing churn with promotional offers. - Lutz Schüler(CEO)

What factors drive broadband consumption and pricing power? Why is DOCSIS 4.0 less expensive than fiber in the Netherlands? - Matthew Joseph Harrigan(The Benchmark Company)

2025Q2: Broadband consumption growth is leveling off, but quality matters more than volume. DOCSIS 4.0 rollout in the Netherlands is straightforward with existing network compatibility. The costs are within existing CapEx allocations. - Michael Thomas Fries(CEO)