LILA - Earnings call transcript Q2 2018 | Liberty Latin America Ltd.

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Operator

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Liberty Global's Second Quarter 2018 Investor Call. This call and the associated webcast are the property of Liberty Global, and any redistribution, retransmission, or rebroadcast of this call or webcast in any form without the expressed written consent of Liberty Global is strictly prohibited. At this time, all participants are in listen-only mode. Today's formal presentation materials can be found under the Investor Relations section of Liberty Global's Web site at www.libertyglobal.com. instructions given presentation, session. a formal today's will for be question-and-answer After

Global's to including XX-K as historical prospects expectations to filed slides Safe a in facts. cause any is Today's meaning in expressed any statements. XXXX. forward-looking Private that its August the implied turn any call outlook differ of this presentation to Page the recorded Litigation and risks Act these update to of Reform these respect As the statements its statements investor Forms from Securities of XX-Q date, statements is involve Global may being include statements reminder, within of forward-looking Statement Securities Harbor forward-looking regarding actual Liberty call and by or future on These statement XXXX, such forward-looking this those X and conditions Exchange with and change reflect now most filings the the details in recently Fries. statements. I Commission, over growth include disclaims company's materially based. the Liberty certain with are could information including obligation not like any the company's that other Mike and amended. risks results would to These or those expectations detailed on to Mr. its which X,

Mike Fries

our And to welcome second Operator. you, everyone investor thank quarter Okay, call.

Q&A questions be get that. of And senior and engaged Charlie your on can performance, during management you through have. whatever rest slide you the and get answering usual, the deck summarizing As and operating the that our sure financial I in Bracken the run I'll may will hands team to follows, then hope

operations, results presentation strategically. for lay people involving upfront, showing the and our OCF, we from notice growth figures you'll So negatively company, businesses full similar results. quarter X% markets which will some And with and from throughout impacted nearly only of we to X% the revenue sale both background operationally used company. on for you're flow financial the around seeing, operating announced a track. cash main OCF some around Vodafone on at businesses or along year, to where for takeaways the and of most the our in plenty begin in operations, by cover on operating to one-offs for the sold. focused we the X% transaction and Slide that continuing XX.X quick Charlie which excludes billion, now approval. on what One call footnote regulatory is Both with closing European are full $XX course prior deal that will times in both generate is believe with surprisingly, what X, growth cases Not condition growth right perspective in that was continuing out and smaller and we're And strong of quarter, our I'll Germany the for Eastern the have what we right be were

obstacles we meetings from commissions fixed course, Austrian T-Mobile, mobile the approval, just or decided This seven the with a will transaction our the seen to with confident merger, As would've in commission deal which place. are business, we and and authority the stage was week will soon. cleared that a signing this that with you approval, not times would billion In several of by And months do formal $X.X also way, the Phase on you see of the we expect, roughly the XX that sale have flow. the be for completion. the mid-XXXX. operating last expect in meantime, filing X Brussels closed cash a this at EU, close And taken the competition by any

net $XXX program, our supplements $X and Media, proceeds back billion allocate months. million own continues the XX we the time that and that over announced of any half Austria last to be As after debt about we repayment our were week, of stock, billion, strong Operationally, results. can repurchase share Virgin $X.X buying that attributed and largest business, our next deliver we'll to used to

right I'm adds. and as couldn't is and on and executive the of Schüler, delivered talent, focused particularly that best detail needless speaking we've for growth to I'm Virgin team course of business In talent of he's excited staying German to of executives the our to excited He'll to Lutz already a more of Chief executive of hit in seasoned telecom QX next few X% in what Lutz family. video team, sectors, become was and quite that Enrique overseeing in new businesses. optimize to driver operating be a was Officer over the which who Tveter moments, bring a and ground strongest an all of Operating evolve Eric that our made broadband, in the and rest generated recently and happier growth seen one our competitive eight we She's ever, who marketing which years, Chairman net done a our month. Media our value for will CEO CEO appointment last position. be to focus level been and search, are to joining worked continue the of announced exactly say, on past outstanding we the investment our digital, with significant is across that And CPE operating energy Severina announce a our whole try our business, off. to then we capital years, it Pascu largest of the is operation most us this a Germany. spend. consistent geographies and Eastern of I Swiss right He's fact number she now. platform, hardware and and the us. over upgrades, before, paying team. operationally. I'll running great CTO revenue Severina we XXX,XXX but provide a bring Eric ensuring who's XX leadership our and are media Rodriguez going sure After you've Enrique also will arguably and for remaining market execute need also the now announcements with And fresh well European perspective the key has are in as I'm software is

the Charlie will walk guidance our those continuing and our confirming are for full numbers we operations, and Lastly, full-year targets company a moment. through in both today

we're happy So with overall. the quarter

with are the Virgin with leading That's continues first moment. net I'll another the from year. M&A the growth, confirming engine market, upped deals which track. the talk be with operating slide With subscriber this the prior about in adds business. XX,XXX solid XXX,XXX starting at subscriber the group. was Our XXX,XXX on guidance. delivered a our second Across on and Switzerland that, business up And we're updates, tough by performer, jump and strong period, quarter five, The in Media as in We've I'll Virgin into operating buyback. way, for some at results, broadband net quarter, experiencing to growth best of far adds, and quarter markets in though Media that our all varied by

XXX by from anything heard time anchored customers a is months, but You've with our added at in the making by and long our in services course, average broadband theme already roadmap, speed per that net XX% the XXX over with XXX,XXX of XX the speed progress in us higher. Today, than our launched more telcos. XX subs new Germany. of advantage our We've for or And megabits bundles triple we're now. last broadband million propelled quad-play second, meg gigabit across base relative great

we're Wi-Fi changer over speed and and customers Now and Wi-Fi game ecosystem in a us, in rollout as of for for and with rolling speak. as This meaningful out home. fast XX% benefit sales, our our MPS has addition our and churn, seeing been we Box, boosters powerful Wi-Fi Connect using a to our app we the broadband broadband

the the was see that losses in Now, quarters. four chart, on and in XX,XXX, were result bottom-left of best the you'll quarter our video that

think discussed out pointing U.S. the we've the doesn't market many face TV and pay it's worth pressure the European as again, As times, of competitive I intensity same

markets base, are audience by prices costs, characterized retail broadly inconsistent and TV programming Our for lower lower large linear penetration. video, OTT a

bundles, In box, subs. with integration, gained we footprint expansion, a of Media, a video just go-apps, working box. our success ecosystem UI. we're XK and doing with content three-play And a new the VX video sophisticated and one common towards broadband, of as fact, we're as result cloud-based OTT Virgin XX,XXX

quarter, a revenue And core particularly BXB, which about us, point one again Switzerland. double-digit SOHO that and in growth the opportunity was the in that's share growth. continue to Now in slide an straight for XX% with U.K. and market, revenue this see to last grow continues to generate and fifth we driver,

I've as quarter sure more detailed and another look be a operationally to at want provide which, delivered Media Now, we said usual, to financially. Virgin as strong

TV meg, new but triple-play month As you'll the and quarters see campaign, ad XXX,XXX attractive as There imagine, on our and UK, actually by fueled successive of of work new including prior materially lots in and best added at XXX adds drivers few quarter here, net quarter net from were RGUs. reduced our new the you a were would ever the QX which XXX at churn. total XXX,XXX, XX third offers, Slide X, bundles

non-Lightning as our We second Hub our And RGU about our also Wi-Fi ARPU discounts, approach execution rise, management adds VX quarter, and in the set-top of X.X% through disciplined as better X saw in and existing routers. all base just retention growth our we've which a about and year, pickup last grew which the in reflecting better of of represented well importantly, price as more to programs acquisition talked like footprint, for the net straight XX% period.

in and On XXX,XXX returns. side, premises, connected opportunities. latest Lightning XXX,XXX Slide million reflects the focus growth at and Ireland, on built continued UK relatively see the attractive to XXX,XXX on deliver right-hand a and the was representing cost-effective update over stable, QX continues X.X and build premises now construction RGUs. which Project new X customers, of volume We've you'll

to with broadband rights, commitments build it's going should target us legislation that I reduce premise in better the network forward. providers more give costs which think access allowing and MDUs, improved our planning pointing UK help together for out worth will new

why just On rates of highlighted our see that. And is the chart. with bottom-right, typical penetration cost, you'll the which type construction side the we've right-hand the with penetration build, of as on box vary

included along, harder that homes indicated are our we've those and upgrades, volume a all are technical XXXX cohorts penetrate. low-cost higher As generally of to

look a fact years numbers lower. the a would our result, reported of strip technical out impact be here over been And you we've as in marketing XX%. bit those penetration three the territories So month for for upgrades, XX if

back metrics returns, So and as to premise, this margin, key namely stand see Lightning, like we penetration, and Project for ARPU, we our we pace. attractive cost general continue consider per and

briefly touch before I'll Charlie, hand our continuing it as base with as Switzerland, JV to with Belgium I well Now Vodafone. and over you our operations, Dutch on

of strong businesses and before, both each reasonably highlighted either mobile country in pressure and to subscriber current each and each which that in flow, companies both. grow we've free or As capital environment cash the competitive of through fixed, And the facing these is you but be operating generates results, in can services, got significant of revenue business these are we've can returns. used or teams managing see deliver who And well. some the form

fourth customers most reaches regulatory in ARPU And headwinds highly to can our accountable the new ensure standards, politicized including definitions So which everything sort before, left FMC over great we've as our Slide and we It's advanced pressure and where of subscribers the let of MVNO discussed most synergies, of the called penetration the environment, XX% XXX,XXX our is converged or we're base. that mobile product, quarter me we've of X. relatively afoul in out of the revenue one facing rolled It's EU migration OCF X% and the fixed back the wholesale WIGO, platform. RGU particular adds, or start despite Telenet our MNO MPS. and Belgium, with market, for them don't and advanced doing of fixed Belgium, market another run operator. to But generates the mobile the we're possible. XX% in growth whenever flat across mobile a they with of commission customers over potential on significant and in now broadband This some also and holds generated and access

proportionately. for recent million In exceptional strong of to of benefit cash in dividend business an Liberty the declare the the will flow course which €XXX fact, outlook supports decision

Moving the times. tough competitive in to Switzerland, I we pretty think a discussed many we environment midst are currently of there,

During two-thirds user product the part launch and us video. quarter, of interface the TV of now we right lost of XX,XXX the big next-gen as A focus were and with as our improving RGUs, best-in-class is EOS upcoming platform DVR. the our which for cloud-based about well on

earlier, CEO will role taking As that am a the Severina record I excited I has us. great track said here. be with She over had

news. a as And for It's of as experience sport in and best which fact our improvement oversaw recent that's well In drive margins. current also highly cash Happy campaign as COO, WiFi the highlights modest rise business Home consolidate help good our and she And that VodafoneZiggo. our and us channel. ARPU provides in to price lastly, in as market which rationalize obviously class with OFCF with looks important you'll UPC some update a quick attractive Switzerland generative to remember extremely strategic be to a optionality see And on continues view. at both

Our joint venture the XX:XX Netherlands. in

of having the name a JV like customers here convergence. here, other the us. nearly with highlights from enhanced mobile XX% bit is of of of again. broadband broadband branded two-thirds taking success is a game taking subs subscription Vodafone customers and video broadband quite Just Few or the or spots we subs Belgium, product fixed mobile And bright adding are and nearly postpaid

abate on base. we customer And the able the been of business the on regulatory some year. take fixed increases to headwinds should mobile see reasonable second price in have half the We

As range. obviously. cash which flow us with to of Switzerland, total the cash Belgium of distributions the significant upper million JV Half €XXX €XXX and expect generates continues end and million at the to accrues to

The recently the Number announced have make larger and highly So the us one, the wrapping are value with demonstrate to they have the up landscape, just is and quick cable and a total By remarks, will deals Deutsche shareholders, always $X.XX Vodafone, way, operating been M&A here. three to has cash here. make which accretive. allow businesses I transaction my to of the our us Telekom JV, we sale Austria they all in and $X.XX of consolidating reposition flow. create for done points sense sale our for European premium goal value and Dutch

Media will continues as see recent consistent Secondly, we OCF the I forward. in operating our cash moving improvement corporations. am lastly, And And profile revenue largest operation and Virgin we management about an free generate then our growth. excited changes flow optimize the CapEx in

We execution of putting to growth initiatives. strategic also the right support positions in people the course, our right but firstly, are

So Charlie, over to you.

Charlie Bracken

I on start with Thanks QX results Mike everyone. financial will an of and overview hello X. Slide our XXXX

more Republic, continuing OCF full revenue X.X% include those company. reducing were we on a the for indirect by growth were able for record the present operations for results to X.X% company. regenerate both billion Romania, $X our moment. the results reiterate, to Media our rebased By I continuing the continuing growth consolidation address of strong for year-over-year, QX And the of $X discontinued Virgin to we rebased operations $X.X growth of or We in and rebased delivered company. the and growth billion OCF billion Telenet, largely billion These growth of in and and for to and $X.X X.X% Here will which revenue X.X% shaped full Czech of cost of of company Hungary, full our operations later. Germany, results our full and operations to the transactions

and now And XX.X% or of of we spent slide, revenue billion were continuing additions flow operations XX.X% the we three bottom $X.X QX full of different to free present company adjusted X.X revenue. billion moving which While the represented basis. P&E left on the cash

Now basis, operations in negative first continuing reported $XXX flow on QX. our cash purely million of a free had adjusted

a flow per reported that operations XXXX. completed continuing disposals supplement free view we aforementioned adjusted on assumes are that of the which January with Second, X, figure from forma cash being

flow we revenue for of But the guidance company from free and to due leverage this allocated On amount Net of QX free annualized from full down free X.Xx consistent respective activities higher largely basis, operations UPC growth higher that's concentrated finally, reported or discontinued agreements value also related buybacks this incorporates XXXX OCF. million. end flow, OCF inter the continuing forma QX estimated current the the impact the which the the not our And is the was for basis we financials. of cash the continuing of operations partial adjusts million. our on compliant than our debt would basis. our XX flow year From cash OCF And I financing figure at free our not of ratios this stood was debt while to cost reflect repayment for purposes. that estimate quarter. Xx the highlight to results then at adjusted in stood of operations. X%. this fully from the And This per vendor At our million specifically our positive a calculate debt. XXXX cash adjusted of the our the And does then $XX And over use transition negative of from these debt last service results on basis business now for full blended of generate to of an XXXX, the leverage flow that estimate with the our we free with was share company mainly negative our adjusted $XX ratio over operations full continuing of And our in a part June our Germany. continuing price a capital. our which $XXX company both of cash contribution methodology to cash net was impact for is due our are of coming Both used quarter meaningful leverage operations expect the the at was attractive full-year in reported That's from to the As slide, XXth, largely flow phasing is beyond. finally impacts. net down gross as X.Xx of we year-on-year consolidated seven ratios our underlying net last at we average months. believe that are company very guidance present full reflect adjusted not perspective, XX% tenure exceeded mainly a the our levels billion. XXXX, and debt $X.X on years borrowing swapped our debt to covenant these our until for result

$XXX nearly this of this the supporting as leaving our we $XXX $XXX repurchased million remainder year-to-date And Now, million to in previous program. for the stock repurchases billion million $X.X our QX conviction, of compared quarter. in takes to this

and additional an committed $XXX of sale million UPC next buybacks XX we've the from Additionally, over earlier, months. Mike as stated the from Austria

XX, and OCF revenue rebased to we continuing our operations. Turning present slide for

growth have QX our from the unfavorably project price revenue line by margin Media contribution revenue strong a certain lower growth which also a material acceleration. regulatory meaningful supported was respectively. X.X% sales. were Virgin on increasingly negative mobile in to XXXX items. Belgium. was Our able OCF in OCF delivered sales as addition network net by was and would QX of and decision from OCF a represent rebased another this and successive revenue Belgium, further lower future the charge and most supported settlements. million annual headwinds $XX revenue stream, to growth of cable driven rise. revenue year-over-year we're however as been to Telenet's impacted handset Top year-over-year demonstrate we an impacted in And impact lining basis largest of of losses, rise mobile was well by by again In operation, by Virgin price and quarter growth fourth these although was the X.X% The seeing of by delay Media our rebased customer declined impact mobile impact, revenues, to quarter exclude X% If

regulatory should through rebased headwinds are of to rise QX these QX. takes the as the OCF in with and and in Telenet's dissipate However, synergies the also begin price X% impacts driver start effect come Base growth main XXXX starting lapping. of of to

to Moving Switzerland, in challenging the market. X.X% revenue declined our

anniversary increases With customer distribution by the losses and the rebased in in past will of effect cost revenue, months over was MySports XX% in when the one-year QX launch OCF begin of the fees, XXXX for mobile the MySports. lap of the competitive contraction MySports QX These from BXB services Switzerland impacted the pass we XX and to offsetting pressures platform. of the costs of revenue

of our flat more expenses additions offset approximately Slide posted whereby for equity in was at principally cash a was reassessment And X.X% net we bonuses. color the senior second due a on rebased in This this The Poland modest our employees our continuing costs On to segment additional in of the an XX, a CEE can quarter to QX provide as our business. contingency. structure in by XX% growth by on Our was DTH lieu attributable basis. in elect receive remuneration CEE for P&E for reduced the in largely operations. revenues segment, operational accrual decline decline of change to were OCF

investments the build upgrade CPE there & in customer Now five main we've as capacity are New commencement baseline. you and this has know, new of Build network that's and capital and in intensity ramped grouped of our our Enablers, and most since program XXXX. And experience. addition to in of categories And would back significant Product spend

initiatives, of large Media has within upgrade mobile and BX completed. the number project is the mobile and a these transformation Belgium modernization of the Virgin which since However, the scale network

also this characterize premises the and for compared XX.X% is as XXXX comparative Mike to of intensity. therefore This to slightly would period showing be for build QX is we so shows XX, sales would a expect as mix XX.X% 'XX CapEx phasing, capital capital is in the to in to the be more which And the no XXXX. lower And the ratio change of volume the of partly year XXXX due peak chart, by first the trend half as to With to we different. than the evidenced which second in half. lightning intensive Half of regards Two, tends the And described year earlier.

So reiterating intensity to not continuing result P&E as year. we're operations. in billion $X a reflects are XXXX of compared a our specific around this position XXXX, guidance still reductions But We're to for additions capital but provide a reduction guidance as yet in targeting next for XXXX. further we

believe capital. uses continue is four build achieved that new and relation for by upgrade build to in total new in sense. over we will However, this we The will drive returns CapEx the build stands build amongst part other be make the at number continue our central sized operations. approximately that the that categories XX% is And to And for time excluding the continuing extent lower. the to to ensuring year-to-date. expect And this our appropriately to we of

the XXXX. Swiss we market, reported record in strategic kicking even the build both sets remain turn customers' page. additional are to things to it the confirm our summary, from successfully And options. Two. invest that, base QX of Media our and months we committing this to continue while Half $XXX we delivered Austrian full-year of over Operator, $X to the questions. buyback deliver Despite expect additions growth while in billion stronger in synergies solid OCF to for our experience also we'd And new Virgin while moving integration the considering both and lead able to also challenging we existing next we're So with conclusion on XX Telenet's our nature target completed are The wrap shown in sale our up, footprints. accelerated to like to committed growth million Having by of results as RGU we've program an we've guidance finally, original slide into over business, with

Operator

session [Operator Jayant Instructions] go will Thank Vijay first we'll you. The electronically. question-and-answer conducted Evercore. be with to And

James Ratcliffe

if and it's color you're Ratcliffe dispute Good with for approaching associated could; Vijay. that about the U.K. first you can how talk morning, sub impact in voice of the any over And the what loss what Can update is strong not for around and around thanks? talk was this has. on OpEx general ongoing are drove economics very having in and what Two with at voice secondly, us I James James of carrying U.K. in that point, this content the services UKTV not Vijay. quarter. all, particularly Ratcliffe the you savings the any and about

Mike Fries

and Clearly, going we're we that we here. since the I'm of will James, been midst Clearly, not say them sure And was I'll ongoing sort has there got tell without pretty too. you to those Tom and ask the conversations subscribers the Robert impact be as minimal. And of much in negotiation. we're on Hi, would the content to in on speak. overpriced think we specific chime I But about UKTV dispute savings. that's being an

Tom, or product, voice, want that? with to of are basically [indiscernible] Margins yes. you terms in that deal Robert In

Tom Mockridge

will Yes, I chip in there.

is couple of quad seen the to what a is back where are And made can into as we a through think and have I things we concerted there. play particularly, the triple numbers seeing I we go effort think play.

complete have and the telephony So bundle. is customers the of more gone part a course we that of for

call areas. that business in of as assisted voiceover in When now the we that we telephony lightning particularly, landline. making home a at digital product, still which it the sell the available significant fact couldn't very we're But quite we marketplace, that cable in found because Virgin the Lightning didn't we customers is much difference, often a want being have we growing segment all Century significant So by that consciously. Media Voice has are or XXst

up so growing we're seeing the the course picking landline And segment And And revenue. a at home we're business. whilst it's decline. declining margin, the of moderate usage of that we are telephony

home in telephony. still a So for very there's significant stream us revenue

Operator

We'll to Jefferies. now move Rathe Ulrich with

Ulrich Rathe

you. strategic Switzerland there intake back what one high blocks and high mentioned broadband intake organically is flat actually back in U.K., I'm are Second was questions, year-on-year. beyond the Switzerland; Thank Two wondering video the to intake. to in the to quarter-on-quarter building question, coming there But growth the the intake; also was was optionality you MySports? telephony

or overall So, intake on of sort I at suggest this level anything is very, down very now broadband MDU on that XQ unusual is there strong settled was intake? an wondering within the would quarter broadband you. going this Thank is

Mike Fries

is that of getting not video many one reliable, box video are EOS driver. is requesting, have business doesn't the these regard. and broadband things, is Needless for driver platform The not Switzerland. that's number not plan in again, on stable Yes, to Tom, some in a plan are platform probably is before, state-of-the-art and out, impact, remarks which In impact, made making think going pretty rationalization a least turnaround going people what we years. say to say, of That's difference for the the growing leadership much stable, listen, happen main I the the But they're team, Switzerland, that's in been Severina It sure but to which multiple the the video an you this. bid rolled getting about the have I've question and main MySports getting strong past. service. thing. you continue Holland. will particular has can And in an guys here. remember we've new positions Romania takes the and or function make overnight, it to that a we're

solid. business market of broadband reaching and the We number have a is is it's a Mobile BXB product; dent, the fastest people. the making great in largest the

really, it's from that function a back -- market. product the much video as as that of perspective, importantly So on in is getting track, our anything and product of quality most about competitive

U.K.? about opportunities turning what sort in broadband done. the organically we're on On think and see front, we'll what some we've give to want so then the there, require The you can rationalization you observer the fundamentally end controlled does and business get arise observation. focused consolidation, the of the talk that But asset around. market same the I Tom, the we're we process. fulcrum in And would any

Tom Mockridge

there, the the ARPU high gone Yes, Look, triples, other bottom extent we our as It focused is that mean of operators might the the of market have. pursuit that. down we're to on U.K. to doesn't on quality haven't issue thanks, Mike. I of the there's flipside think, that broadband and

tended so If you broadband BT, market look at see at the quality there's the more product of fair good market, U.K. the chase. the easy bit been our to Sky to a U.K. by overall and the the around you to transitional, and and end ARPU, broadband lower In the implemented below been churn but of low sell ourselves by out end two low to a other forward being this driving are business our going number. our And some on we can the do -- as this the cheaply other at major, assisted in. these our operators the coming activity Very certainly up each experience did be of getting has right with focused have we want we revenue have additions ARPU a is of in ability in rules see past, of that. new that speed. been We

All speed of go can meg. a that and there high-quality limited has have XXX say at XX, great and other can So BT on the router, network. we stuck only say we for we XXX the top operators the are BT and that that network still to due have actually meg offer we it network the out XXX, can itself availability across now and

prevents rule it you much us in puts more position a advantageous competitors. speed marketing new course can network, your at the least which offer against half unless those So much, to of of you a

So deliberately doing I market end. cheaper on pick broadband think fed very we the that ones. dive to when the up option and we're and some customers, better it just lower always target not fundamentally full But down ARPU got is the being at off we've

Operator

We'll next hear Daniel Barclays, from Morris.

Daniel Morris

the taking for Thanks question. morning. Good

reason And around and on any the in you can around you the alluded little demonstrates UK the changed opening again trends regulation to that, if Just your in the the I different about UK things what's as rate talk to shifts, might XH? on some just much as change a Lightning the bit is related wondered be how there Lightning thinking the another very in disciple would to run And remarks? clearly we around XH, more build saw XH cost. question Lightning

Mike Fries

we and in as stay by driven, importantly, be. it's optimizing the think that my And said pace want this that I like just We them returns the I Yes, capital remarks, to where kind we ensuring build faster. could of building cost now. we're most at

could the market. the a and this cost Tom continue. sit driving easily team one from I premise of penetrating and ensures But that up. that's where areas is attractive most and the think going And we're to think today pace, ramp steady the and per attacking we I lowest

my that probably So no pace giving as on that. push us But I down would that in not know pace. guidance and pace Lightning, see And the remarks, materially. really you to we don't like said increase anything this that would headwinds we're we slow

cost is I the lower to just those get smarter going think gives opportunity premise and we we as build as we per forward look the our commitments markets to own referenced be about an And as trend MDUs, more at aggressively. strategies. legislation us penetrate going

driving way returns, goes, great don't steady it's us. significant as I the think other. change it's I driving a see growth, driving a It's capital one of So she use material EBITDA. for or it's and It's

So changing. that we see don't

Operator

Group. Pivotal with Wlodarczak Research Jeff to now move We'll

Jeff Wlodarczak

of much And aggressively It's offer? triple-quad-play Salt I've far priced being what's I overlap these of rollout related, directly more footprint then gotten wanted as confirm, got more the Salt FTTH for lot And as And just guys is municipalities. competitive. outlook result was materially you then able then that your to to days How to follow-up. XQ about by follow-up on from can to a Switzerland. the obviously expand that with Salt's RGU wholesaling XX%. tell, one

Mike Fries

in the I say don't Severina. I the that impact We know would would on was of quad-play is or rollout can Eric here if he chime and Yes, minimal. say, Salt triple-play or rollout

thing; the if I've not we're talked market it same last And have than say are would is the material appear market. saying same take call, the seeing had twice few much impact. same the product, if that operators to have thing the roughly weeks, everybody doesn't reach. footprint else had asked. an on? Sever are think earnings they thing an to second cheaper in It's in impact. to I want Other they you it of roughly But the much the You you Eric, that question? they know, probably clearly in aggressive say the their

Eric Tveter

which to that ARPU. MySports Yes, said, am. moment. of our I new efforts, planning then September. stabilized seen in year trends platform, us allow we've season through we're Again, in the reverse as as starts will Also, limited early the side. their modestly Mike the good management base And on which impact the rollout ARPU have to said, we EOS improvements believe Mike mentioned, launch I at Charlie the year, as And earlier quarter. in grew And a the we this

new coming in able be the launch TV battle of months So to I'm we'll the with the that product. optimistic

Jeff Wlodarczak

receive $XX to or do VoD wanted you're with expected plan or get your from the $XX just billion on Mike, you so the then, transaction? what latest thoughts to And to billion

Mike Fries

what the quite ways mean said a lot we're we've a not whole off. I which it's of in to color is adding past,

sure the say of can And a though. couple I showing we're to so we're trying prematurely a direction not other. be one or way things

in we'll you at pretty good past, indicator probably do if look the that's the what think a we've in I future. what of done

capital you we're even years, think buyback; pretty last you'll into or five, consistent. back acquisitions. putting the our into our putting capital We're go XX been I find If XX, that over we've either

fact it's In about XX-XX.

that what stock, about returns on just generating have we had of up, generating returns, XX-XX, those we returns numbers are our acquisitions. -- of If kind what you and kind based on called are we and we with do

M&A opportunities think we more in it be, equity. can the some take on and to we'll where where And we finding like our we'll we'll with side, And don't likely shouldn't will probably it's focused to could find see reduce with our where do this, see those which looking market record, will be, We totally On it. that. like try back operations and we're said, But billion the the deals, if turn things to can where valuation interest trading understand off. where we will that. operating other do to a opportunities do be I technical where put I Germany, stock buying we be. work, we'll be I that shoes knowledge, billion, a hand, going our preoccupation is or I keep be, if can deals multiples way get our know transactions It's our options think track were there's quite into and just expertise we open. I it's rates ways €X say or €XX if on don't the market stock If what be you'd surprising. where like

guys. we'll what the going the to And lot stripes a said just outset past. I that's what do a -- to going -- we're lot here, in probably as going we've but we're done here, has our forward And think, at change So looks think the I not like main I point.

Operator

Dann with to RBC. We'll Jonathan move now

Jonathan Dann

Two questions could. I if

how And that's homes just, the the Charlie, much are second-half? of the in first-half of in in incurred could then just is you'd to or Ireland? the change added there drag been vendor sort that secondly, the you Project in in any swing expect rates on The first, material most financing U.K. the is positively Lightning,

Mike Fries

Charlie?

Charlie Bracken

at year back of typically unwinding it's we up as last the Yes, the financing, of In the the backend in on the first-half know, end back for the cyclical. pulled we're year, us of the financing then -- very vendor vendor you and second-half. probably it at

in a low vendor hundreds think I increase should net-net the our financing net in you millions year-on-year. of see

reasonably we're looking significant on that's what see the second-half. on based track in a swing you'll today. I So at And think pretty much

Mike Fries

new to build relatively Yes, or Robert the that. can respond but in is Tom small, and Ireland

Tom Mockridge

of to the that so pay, it's we bit we relatively just add local have for to bit there. off have but authority had the didn't course essentially rate asking tail there. small Ireland we we compared in moderated I'll build have a us tailed But fees begun because a to of U.K., we wish off little governments

both mention and cable business, are very business both the strong our So the business which if in around well. you Ireland would point Ireland we out TVX performance of going

Operator

Swinburne. Morgan now from Stanley's hear We'll Ben

Ben Swinburne

the the and BXB and those Mike particularly the at re-trans looking single low just XX-XX a your the of of or the step under or as mobile BXB Tom on And for do follow-up one to U.K.? view I more service team, the is there; a part a U.K. U.K. fundamentally towards offerings businesses then as Europe, maybe ITV piece different deal, in growth partnership Mike, is Virgin. this obviously kind the differentiate offensive BXB revenues For decent either with in look the of are just of you next ability to are businesses, at sort or hood accelerate mobile because rates on flattish, those digits. think What's and sized in the months, kind this ITV of regime to expectation Virgin's you the sort

Mike Fries

I'll cooperative just a a We either same. really with address quickly the speaking more will us said ITV relationship our we've terms very publically, access reserved done one. about the had and we on of financially, done we've transaction the position them we've with positive -- is us us Tom not on is content. and the rights, question. I BXB think are repeat the let with Well, of of we we've them. Fundamentally re-trans, they've them of but then it more the believe which We're I'll neither issue developed work gives It's deal the question; to mobile what

strong feel not their important our position. the jams that believe content, a we know, all had But and get do linear of have HD, we to you U.K. XK, course in achieved all access both I I think to guess to very want and the reserved ability answer I think we was content market an that. like has it traffic and And we were of pleased for directly, I trending to say, all can the position in if it's SD we're the we've you and towards parties. And is what rights, on outcome, more ITV and relationship. So with

So, helpful. in talk Tom, helps; you to that's do hope about mobile? BXB that want

Tom Mockridge

growth Kelly BXB has the a for and in by earner both and Media on Samsung Peter areas, focus the business been consistently that Mark. Virgin on BXB thanks been Group business. It's strong we continuing well-supported who in product and see has its Liberty SOHO knowledge. very and it. leads Yes, capital in expanded a discipline continued

to are they there that the think acquire which back a we think being able that time paying track of into record Wi-Fi, the small was have by are two business. years I businesses well on I within key to the it integrated

at in market, of is BT, are are own area. in so different competition operators and we continued supplies. businesses expenses, advantage have we looking basically that of as growth and there looking alternative a not a broader area that being the for So course see where But their

we operators. than On mobile some probably look, have think and bigger the pressure, service yes, less the business, revenue had I

I think working to contract transitioning entirely prepay. business we business and are a that out

our so operations to that. better in of service good a getting of people this ongoing we big that element effective and and increasingly their quarter. of on has business but with also is business fact a been increase also sell moved picked a profit which the significant a solid revenue, FMC, significant have contributor, again mobile margin, part part yes, and up we're handset service handsets, and in the IT our better have stack, of We on the And element all

are see to UK Media Virgin in combination a Ireland. be So to we continuing and contributor good in do the overall, that both

Operator

will to We now with move New Ratzer Street James Research.

James Ratzer

got I please. questions two have

German like I the of still mean Musk's I build you positive mentioned transaction so. your and a First I consider your comfortable opinion buyback does have mean then that's lightning, you I have of I footsteps that did M&A on and XX% of on ahead on the that. quite following three quarter, so, around mean, one, another different of this taking responded reacted or X in are years you or thinking seen just disagreements, the private And to Elon that the last up investors, general, the reflecting rate kind to looks million target company kind thoughts you on strategy given that I with intact, remain we project? in given you six past question you've in future of should the way the has be long-term mean by of that a Does that second so, months if just affect you would still view consider kind mean negative the it taken build way market stock pace at level?

Mike Fries

I Well, Yes, will I'm appreciate not take I first to question. on try. going that. bate the

us our approach way managing to buyback think our forward. materially the XX and to XX approach or to last see I over years. going don't consistent has in operating been M&A pretty or a different capital I allocating

we as We we markets the best business in, and think seriously will shareholders. return will we own that couple way. believed go we if great hard say times are rate at in and business. having pretty are. levels as But ability hopefully other the the we to of our growth And I continuing look operations, at optionality a and I'll we operate in strategic particularly underlying of I Media, in, which do look trading I our well of said Virgin now, at see our to sorts who believe think we as own the that how and value for these of creatively honestly create

On know, when businesses, buying terrific and or the when we you finding ways businesses. we consolidating are those of building or create record and have first, to or and operators value I think hand, very other had a track monetizing attractive, from appropriate

So think in And what do. I have we we Europe. that's great experience

as record pretty, continue smart something appropriate have in at will and track we making attractive acquisitions prices. I that's strong We said, to And do.

still of there, out On X the here. build, so to chime can you speak. Tom, pace are in Those million homes

and are it exist. not of high churning for success and we of us And already be would we at having book are realizing we as I growth know long the we return new to investment. capital and foolish think so as look build returns great And are success a having source

So we give on to are guidance that. you going long-term not a

million X.X built homes. have We

in anybody than built the else. more We market have homes UK

So, other done good pretty I in look as but have market these plans game at would operators you who from business be a much. talked haven't cautious the

rest So where understanding of how are to way ahead and in we make on the a both of and terms the build of market homes to them. these return how

if think of So expect give are And great knowledge, we ahead, it's capital. guidance going that X long a not to our we longer-term so to want whether of on say are getting million a it's experience. use to X are smart take that million returns, or as we you advantage I plough we

Operator

We'll to now move Akhil JP Morgan. with Dattani

Akhil Dattani

Obviously something the the other help cost. threats more a the you it infrastructure, just made I governments is guess telecom about skepticism pull take Mike, to said came optimistic expect formalize The you seems I mean some I ambitions and How that maybe just guess have you guess just guess entrants premature broadly And bit the how the guess, to might is reference reduce to first I to future a into talk I your around mentioned this understand so, out would to then And some U.K. market. U.K. comments build is if that U.K. I government your is of the earlier. and what big when landscape? to one that. a if some views it of picture you the competitive now, I have linked guess And might will of second broad it the you together about the but new do bit pretty initiatives question. keen might might build I from guess you later? on to that? you more in around the thinking understand change happen. the around your numbers are thoughts in just

full-year truly to wonder any you us to first-half in Thanks. is the you of of so X, X.X% are key be color and expecting if kind sensitivities. Your growth improve OCF target give might able markets XXXX? key Just around versus trends

Mike Fries

rate have the a strong Maybe backwards in we OCF Virgin Sure. first working growth in quarter.

year. in of second course, was the by prior quarter, The settlement impacted the one-off

OCF were you quarter. If closer X% growth that out, took second growth to or we in settlement the EBITDA

So we trend we are to U.K. where trending need in the

of because Where year tailwind U.K. I we that started your a in both we markets question in to was of second think you of some our I think is there the other half identified. referencing think need U.K. the lot trend, we which the and

So that is course. of our guidance. part a of what view And big of that supports U.K. is

adds In or to homes. that, terms have. press people that's some something I all in there we those to of fiber-to-home and like where build XXXX, they XXXX builds - overlap homes to probably you I shooting have is mean hoping we of pretty build in of And hoping million release go X are X be are up on number same the much all that are to there as for think the by terms million

trending that plan them We is years at case. BUS four competitor. of three, isn't won't That mobile some faster to built market all. towards broadband get say the Not the out. And two, undeniably

have the XX XXX We we into while so most And we competitors we plus/minus. U.K. why speeds our while in across homes expect we money digits are and ahead to And more have everybody are And robust speeds. more curve. already put as that's to MEG capacity fiber, million and much double faster a part. investing our of up in the the else's constantly for bit

aggressive. view, of that won't continue the in now from build, is intend So lead terms there way think I to be doesn't speeds. broadband of point mean we we It more to

to Charlie, some per period have number. of the We build get our very going reference up that have better of think disclose aggressive. significant of differential. speed to to look means of to down, are don't don't cost are our if, it's we quickly know we which But premise been we advantage be I will think kind be try more take that And whether cheaper cost PP&E will coming in going we And was advantage an build. I you to here. to to access actually build amount that to time. likely And for MDUs, if date at a that add or cumulatively jump over we a cost to XXX-XXX improved time to as you I that's in quarterly

that we purpose don't you the last know of three in was that and that want we bit this think if market smarter get as I construction the point? Charlie call as quite last just to about anything to I add learn years. over a

Charlie Bracken

build No, that XXX. time. the trend trend should back better -- our get certainly down minds right. in obviously around no, the around at there're cross we're to the say, the Chile and as in building that I down, in we absolutely also XXX, And time And cross trend saw that reasons mix and higher, we depending think bill in day. saw that's I slightly projects still over on other but over We would build believe actually

Mike Fries

will Yes, at gig. be we one

We the be And have response gig. time capital platform and the Virgin it do to allocation take to it, to entire will some would the probably both choose competition in next years when be to which a decisions. we in to ability the and three right one

Operator

We'll with Murdock-Smith take question you. final Berenberg. our from Carl Thank

Carl Murdock-Smith

again, Project Lightning on Following up I'm afraid.

improving costs exclusivity? push builders Is locations. into about network to something of build kind third possibly what more you'd build in rural party and third rollouts to you extent be improve might partnering builders there, market open share as costs you of a consider, lot talked with You've but and party sacrifice economics that the to to

Mike Fries

the is, try they possibly. the any competitors as are needs or Tom looking intend and number think approached their team have uncovered I capital and needs And and to CapEx of out. Well, been answer build by build clearly, who own at to

answer So think I the is, possibly.

smart reduce but can are to look to concluded We the think as particular who said, haven't it But of I optimal building area. to And ones at anything, and outcome try the most only be that. on this nothing there this haven't to create reduce us the that, we're to cost anything. We we in cost would that opportunities others overbill we certainly pace. they and have look certainly would are likely think disclose disclosed now, have at and if are Right and be than would higher we we overlap, it. we at announced

great. Okay,

I everybody So appreciate in. joined

the M&A regulatory about half been businesses are in by as we we Virgin them. thought more you us. of well the turnaround had going and in And great particular, got think, strategic it part for to great. front received track on performing And second optionality to be importantly, have know, well we a track. Vodafone be never of talked ops, that it, that. performing are the a deals the has great do right really we think we on work all think I stronger. strong think, We've is outcome of but top us some, to have year, a plans quarter the deal on in of in The looks as was All we team we of authorities. And I Media the in continuing and indicated, strong transaction,

we call. talking have the forward So us, appreciate much. summer, great to third a quarter Thanks very on look joining to you you

Operator

XXXX concludes this Global's Second Investor gentlemen, Call. Liberty and Ladies Quarter

the Liberty of Web As in available of find investor Global's can materials. be also the replay will site. a reminder, section call today's presentation a a There, you relations of copy

Liberty Latin America (LILA) 12 Aug 182018 Q2 Earnings call transcript