Liberty Global PLC (NASDAQ:LBTYA) discussed its strategic initiatives and financial performance during the first quarter of 2024 earnings call. The company announced plans to list its Swiss operating business, Sunrise, and spin off its shares to stockholders by the end of 2024.
Liberty Global reported a strong balance sheet with $3.2 billion in consolidated cash and $3.9 billion including liquid securities. The company is investing in fiber expansion, aiming to reach 20 million fiber-to-the-home premises by 2026, and is exploring the potential of 5G and digital investments. Despite challenges in the UK market and a decline in tech valuations impacting their ventures portfolio, Liberty Global is focused on growth and value creation, emphasizing the upcoming Sunrise spin-off and the robust performance of its mobile and B2B sectors.
Key Takeaways
- Liberty Global plans to list its Swiss business, Sunrise, and spin off shares to stockholders, expected to complete in Q4 2024.
- The company has a strong balance sheet with $3.2 billion in consolidated cash and $3.9 billion including liquid securities.
- Investments in fiber upgrades and extensions are ongoing, targeting 20 million fiber-to-the-home premises by 2026.
- Liberty Global expects a minimum annual payout of CHF 240 million from Sunrise, representing a 4% yield on its market cap.
- The company's stock is trading at a significant discount, with plans to close the gap between the current price and average analyst valuation.
- Virgin Media O2's customer base has been successfully migrated to a new CRM system, and the company is maintaining its ARPU premium.
Company Outlook
- Liberty Global confirms 2024 guidance across all operating companies.
- The company is focused on strategic positioning and growth, with the Sunrise transaction being a priority.
- Liberty Global aims to maintain its ARPU premium and is confident in reaching its targets through partnerships like nexfibre.
Bearish Highlights
- Virgin Media O2's growth impacted by a weaker handset market and churn due to a legacy IT migration.
- A decline in tech valuations has affected the fair market value of Liberty Global's ventures portfolio.
- The UK market has weakened, with some impact from alternative network providers (altnets).
Bullish Highlights
- The company's mobile service revenue and B2B sectors are growing every quarter.
- Liberty Global is investing in its fixed business, particularly in broadband and fiber bundling, and sees itself in a better position than U.S. peers.
- The Sunrise spin-off and dividend represent strong value propositions for shareholders.
Misses
- The company experienced a cash outflow of $0.2 billion related to operations, $0.1 billion in venture investments, and $180 million in share buybacks during the quarter.
- There is a significant discount in Liberty Global's stock, which is trading around $16 to $17 per share compared to an average valuation of $26 per share.
Q&A Highlights
- Liberty Global addressed questions about competition and net add trajectory in the UK market, acknowledging the impact of altnets but expecting improvements from fiber network expansion.
- The company discussed the potential interest from external investors in the Benelux holdco and the value creation levers it offers.
- Executives addressed concerns about liquidity post-Sunrise spin-off and the expected re-rating of the RemainCo.
Liberty Global's earnings call provided a comprehensive overview of their strategic plans and financial health. The company is poised for growth through its fiber expansion initiatives and the strategic separation of Sunrise. Despite market challenges, Liberty Global remains confident in its ability to deliver value to shareholders and close the valuation gap in its stock price.
InvestingPro Insights
Liberty Global PLC (LBTYA) has been navigating a complex market environment, yet it remains steadfast in its strategic decisions and investment plans. The company's aggressive share buyback program, as highlighted in one of the InvestingPro Tips, demonstrates management's confidence in the intrinsic value of the stock and its commitment to enhancing shareholder value. This is coupled with a high shareholder yield, indicating that the company is returning substantial value to its shareholders despite not paying dividends.
From a valuation standpoint, Liberty Global is trading at a low Price / Book multiple of 0.34 as of the last twelve months leading into Q1 2024, according to InvestingPro Data. This could suggest that the stock is undervalued, especially when considering the company's impressive gross profit margins of 67.15% during the same period. These metrics are particularly relevant for investors looking for potential value plays in the telecommunications sector.
Investors interested in a deeper dive into Liberty Global's financials and strategic analysis can find additional InvestingPro Tips on the company. There are six more tips available that provide insights into factors such as profitability expectations, revenue growth, and analysts' perspectives on the stock's future performance. These tips can be accessed through the InvestingPro platform at https://www.investing.com/pro/LBTYA.
To further enrich their investment research, readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking a wealth of financial data and expert analysis that can inform their investment decisions.
Full transcript - Liberty Global Inc (LBTYA) Q1 2024:
Operator: Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Liberty Global's First Quarter 2024 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 express written consent of Liberty Global is strictly prohibited. [Operator Instructions]. Today's formal presentation materials can be found under the Investor Relations section of Liberty Global's website at libertyglobal.com. After today's formal presentation, instructions will be given for a question-and-answer session. Page 2 of the slides details the company's safe harbor statement regarding forward-looking statements. Today's presentation may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including the company's expectations with respect to its outlook and future growth prospects and other information and statements that are not historical fact. These forward-looking statements involve certain risks that could cause actual results to differ materially from those expressed or implied by these statements. These risks include those detailed in Liberty Global's filings with the Securities and Exchange Commission, including its most recently filed Forms 10-Q and 10-K as amended. Liberty Global disclaims any obligation to update any of these forward-looking statements to reflect any change in its expectations or in the conditions on which any such statement is based. I would now like to turn the call over to Mr. Mike Fries.
Michael Fries: Hello, everyone, and thanks for joining our first quarter investor call. Charlie and I are going to handle the prepared remarks, as we usually do. And then during the Q&A, I'll get other folks from our management team involved as needed. And to get us started, I going to jump right in on Slide 4 with three key takeaways from Q1. First of all, on our last call, we articulated a strategic plan to both create and deliver value to shareholders. The rationale for that plan was pretty clear. Despite repositioning our operating perimeter over the last 5 to 7 years with timely market exits and end market consolidations, despite purchasing nearly 60% of our shares. And despite successful redomiciling to Bermuda, we continue to trade at a substantial discount to our sum of the parts or net asset value. So as we stated in February from this point forward, we are focused on maximizing the intrinsic value of our core assets and where possible, delivering that value to shareholders over time. Towards that end, we made 5 announcements last quarter. In the last 10 weeks or so, we've actually made some substantial progress on each of them, in particular, our plans to list our Swiss operating business and spin off those shares to our stockholders. More on all of these in just a moment. Second, with continued uncertainty in the macro environment, particularly around interest rates. We think it's smart to keep reminding everyone of how strong our balance sheet is today and tomorrow. Charlie will cover the details, including recent refinancings, but we're sitting on $3.2 billion of consolidated cash, which rises to $3.9 billion if you include liquid securities, and we continue to benefit from a long-term fixed rate credit structure. We also remain extremely disciplined when it comes to capital allocation at the corporate level, whether it's our buyback program or selective deleveraging or strategic venture investments, each of these things will drive returns to the business and to shareholders over time. And then finally, we're investing for growth across our FMC (NYSE:FMC) telco footprint. For example, our fiber upgrade and extension plans in the U.K., in Ireland and Belgium are picking up speed, and we're on track to reach roughly 20 million fiber-to-the-home premises by the end of 2026, and that represents just about 50% of an expanded 40 million home footprint. 5G is the same story, where in addition to consumer and competitive retail benefits, we also are starting to see real B2B opportunities emerge for mobile private networks and network slicing and IoT applications. And then finally, like our peers, we believe the investments we're making in digital NII will be game changers for us. Now let me dive into each of these over the next few slides. Beginning on Slide 5, which recaps the 3 core building blocks of the strategic plan we laid out for you last quarter and the steps we've taken since then. So starting on the left-hand side of the slide, first and foremost, we're focused on maximizing the value of our FMC telco operations in every market. As a reminder, these operations in the aggregate serve 85 million fixed to mobile connections, generate over $25 billion of annual revenue and $9.3 billion of annual EBITDA. They're generally #1 or #2 in just about every product with outstanding brands and outstanding management teams, and we believe they are valued at 0 in our stock price. Now needless to say, these are not easy businesses to manage. I think we make that point every quarter. Markets are competitive, consumers are under pressure and the capital intensity is high. But they are large subscription-based revenue streams with extremely attractive margins, and we're sitting at the center of the most exciting ecosystem on the planet. You name it, AI, digital, edge, metaverse, cloud, streaming all of these innovations driving unstop demand for bandwidth and connectivity. And whether we're driving better retail market share with digital and AI or expanding our B2B business with new 5G and ICT services or delayering to optimize the infrastructure values that are embedded in our operations. We think we have numerous strategic options for value creation in these FMC markets. The second building block is our highly targeted and strategic investments in tech content and infrastructure that both support those core telco operations and provide the opportunity for significant value creation in their own right. It's hard to know how much of this $3 billion portfolio is being valued in our $6 billion market cap today, but we're actively managing these positions and where appropriate, crystallizing value. And then third is our renewed commitment to create and deliver value to shareholders. This will include continuing to shrink our equity, executing on the growth and strategic plans that should improve our trading multiples. And finally, where appropriate, putting value in your hands through spins and dividends and things like that. On the right-hand side of the slide, we provide an update on the 5 key steps we have publicly disclosed. Of course, there are many more initiatives we're not talking about today, but you should assume we're working on. Starting with our FMC champions, our plan is to carve out the fixed network in the U.K. and create a separate net code there are well underway. We've hired Deloitte and BCG to help us with the actual planning, processes and financials and without asking, have received significant inbound interest from infrastructure investors. That's not surprising. And this will be a substantial asset, which, if we were to include our next fiber JV, we'll reach 21 million fiber homes across the U.K. So stay tuned for more information about this. Secondly, we made good progress in the Benelux. Regarding our Benelux holdco, we continue to see the potential synergies across the Dutch and Belgium markets improve and that we're quietly entertaining indications of interest to actually invest in Liberty Global Benelux, at a meaningful premium I might add, to our trading multiple today. On the ventures front, we have now received the approvals required to complete the sale of all 3 media for 12x EBITDA, and we expect that to close May 15. Again, this will result in $400 million of cash proceeds to us, which we then intend to invest in the Sunrise spin transaction. This is just one example of how our ventures portfolio creates valuable assets and then helps us fund our broader strategic initiatives. By the way, last year, we committed to realizing between $500 million and $1 billion in asset sales by the second half of '24. With the partial sell-down of towers in the U.K. and this all 3 media deal, we already surpassed $500 million, actually closer to $600 million. And just to let you know, we have an additional $300 million to $400 million in the pipeline which might be realized by year-end. And finally, we come to the main objective. And that, of course, is creating and delivering value to shareholders. Our stock buyback program remains a key part of that strategy, and we've now purchased approximately 3% of our shares year-to-date. And as you recall, we've authorized up to 10% of shares for 2024. And today, we have 372 million shares outstanding. That's down nearly 60% over 900 million shares at the end of 2017. Now perhaps most important of all is the value we expect to create with the separation and listing of Sunrise in Switzerland and then the subsequent spin-off of those shares in the fourth quarter of this year. And Slide 6 provides an update on where that transaction stands today. And perhaps just to recap the transaction rationale for a moment. I mean by listing Sunrise on the Swiss Exchange, the goal is to create a fully distributed local valuation for the company which will represent, we believe, a meaningful premium toward our stock trades or whatever value we're being attributed today. Now Sunrise equity story is compelling. Switzerland is a stable 3-player market where Sunrise stands out as the only pure-play national champion. Andre and the team have multiple growth levers in front of them. And then perhaps most importantly, significant free cash flow margins, which will underpin an attractive dividend story. We're targeting Q4 this year to complete the transaction, which will entail spinning off again 100% of the shares to Liberty Global shareholders. The current schedule is to file a confidential Form F-4 with the SEC next month. As a reminder, we will be injecting CHF 1.5 billion or about $1.7 billion into Sunrise to delever the company pre-spin. Obviously, this will increase the equity value of the listed vehicle, which accrues directly to you in the form of a higher Sunrise stock price. And Charlie will talk about this math in a moment. And then funding the $1.7 billion will come from a combination of all 3 media proceeds, that's about $400 million. Sunrise free cash flow through the course of 2024, it's about plus or minus $400 million and then approximately $1 billion of corporate cash. Not surprisingly, at JPMorgan and UBS have been approached by both financial and strategic parties interested in potentially participating in this transaction, pre-listing. I'm still being -- going to say, we're in a listening mode, but we do not intend to slow the process down. And we are committed to proceeding either way. This transaction is happening. And many of these groups are attracted to the dividend profile of Sunrise, which we expect will pay out a minimum of CHF 240 million per year, and that would rise over time. Just to put that in perspective for a moment. The dividend from Sunrise alone that I just mentioned would represent a 4% yield on the entire market cap of Liberty Global. Now so far, 11 analysts have figured that out and have published reports on the Sunrise spin which pegged the equity value in the range of $11 per Liberty share. And we're not commenting on these numbers, but it surely looks significant in relation to our $16 stock price. Your opportunity to learn more about this is coming up soon. The management team intends to conduct a Capital Markets Day in due course, followed by a complete roadshow. Now someone asked what happened to the remainder of Liberty Global after the spin-off. Before answering that, I think it's important to put things into context for a second. Sunrise only represents about 12% of our aggregate EBITDA and around 20% of proportionate EBITDA. So the bulk of our fixed mobile converged business remains unchanged for now. And as we've just talked about, we believe we have a lot of really strong opportunities to drive value in those remaining markets. Of course, our cash balance will be reduced by around $1 billion, but we still generate free cash flow of -- that we upstream. And as I mentioned, we continuously look at asset sales to replenish our cash. And then lastly, Sunrise, like all of our operating businesses and even those we've sold, by the way, will still be reliant on Liberty Global for certain technical product and administrative services, which will continue to offset a bunch of our central costs. Now before handing it over to Charlie, I'll hit a couple of operating updates beginning on Slide 7, which shows broadband and postpaid mobile ads for each market over the last 5 quarters, as it's a slide we show every quarter. On the top left, you'll see that Virgin Media O2 delivered 5,000 broadband net adds in the quarter. That's despite a soft overall market with estimated industry sales of 7%. Our share of gross adds continues to rise, and that's supported by our greenfield next fiber expansion, which recently reached 1 million homes. Importantly, you'll notice that we added a blue box for each OpCo showing the evolution of fixed ARPU. VMO2's ARPU performance has improved every quarter with essentially flat ARPU in Q1 even before the benefit of a contractual 9% price rise, which kicks in April. Postpaid mobile sub growth in U.K. was impacted by a weaker handset market in Q1 that impacted O2 primarily. Our flanker brand meanwhile, continues to add customers. O2 was also impacted by churn attributable to a legacy IT migration. Despite that, mobile service revenues were up 4.2% in the quarter. Now Lutz is on the call, he can take questions, but we feel good about the investment he's making in the commercial machine. And we expect to see those benefits build as he returns to growth in 2025 and beyond. Sunrise had a strong quarter across the board, returning to growth in broadband with 6,000 net adds, reflecting strong inflows and improved churn performance on the Sunrise brand and continued momentum on Yallo, the flanker brand. Consumer loyalty programs and a lower impact from the UPC migration drove those term benefits. And as we foreshadowed, fixed ARPU performance has improved every quarter since year-end '22. In mobile, the combination of Sunrise, Yallo and B2B drove another strong quarter of postpaid ads at 26,000. Looking forward, Andre and the team are implementing a number of initiatives to continue the commercial momentum, which bodes well for the second half of 2024 and of course, bodes well for the upcoming transaction. Turning to the Netherlands. VodafoneZiggo saw a slight improvement in broadband net losses versus the last 3 quarters but continue to be impacted by promotions and high levels of fiber overbuild. This is the story there. And the value over volume strategy that Jeroen and the team have been pursuing is, in fact, paying off. And you can see that with fixed ARPU up about 4% in each of the last 3 quarters. Meanwhile, the mobile business is strong with another quarter of postpaid mobile growth and mobile service revenue up 6.5%. The Belgium market remains competitive with Telenet losing 6,000 broadband subscribers despite stronger gross sales and reinvigorated FMC marketing campaigns, the postpaid mobile base was largely stable. On the positive side, churn has improved in the second half of last year when John and the team were managing through some IT migration issues. In fact, they've seen major improvement in resolving those technical problems with customer service time back to normal. Looking forward, in our view and their view more personalized customer experiences, expansion into the south of the country, and the fiber upgrade that's underway with wire should drive better commercial momentum. And now I'll end with a simple slide highlighting several of our active investment programs that will support the long-term growth and competitiveness of our FMC champions. On the top left, we summarize the status of our fixed networks. As you see at the end of 2022, we reached 32 million fixed homes, of which around 12% were on-net fiber homes, but importantly, 100% were capable of 1 gig speed, and that last point is key. We continue to have speed leadership in our markets. Just take the U.K., for example, where the average customer there of ours is getting 350 megabit speeds, and that's exceeding the average fiber customer speed according to Ofcom. Now by 2026, our footprint will have expanded by 25% to 40 million homes, and that's mostly through greenfield network extensions, but also include some wholesale arrangements. And those 8 million homes have and will continue to represent a significant growth opportunity as we've seen at Virgin Media through the last 5 to 6 years. And [ thanking ] the investments we're making in the U.K., Ireland and Belgium, nearly half of those 40 million homes in 2026 will be on net fiber homes. In 2 of those markets, Belgium and the U.K., we will have created NetCos that house, manage and derive revenue from those networks and you're aware of those value-creation opportunities. At the bottom, you can see our 5G coverage ratios in 2024, which range from 100% in Switzerland and Holland to 50% and greater in the U.K. and Belgium. Three of our 4 markets will reach 100% by 2026, with only the U.K. on a slightly slower path. I think it's important to point out that both fixed and mobile CapEx are not far from their peak periods. In fact, mobile CapEx peaks this year and fixed CapEx is not far behind that. And the point here is that we, like other European telcos, will start to benefit from even higher free cash flow margins when these programs either complete or are moved off balance sheet. And then on the right side, we are also beginning to reap the benefits of our considerable investment in digital as well as our more recent AI initiatives. Just a few examples here. Having just completed our IT migrations of the O2 postpaid mobile base in the U.K. and Telenet's residential subs in Belgium, we're now operating nearly fully digital customer experience platforms for those customer bases. On the mobile front, with fully virtualized 5G SA cores under development in Belgium, the U.K. and Switzerland, we're going to be able to provide much greater scale, flexibility and cost benefits to customers. Network as a service is early stage. We talk a lot about it, but we've demonstrated both our technical readiness and the potential benefits of these use cases at Mobile World Congress in Barcelona. And on AI, we're focused on harnessing the power of predictive and generative AI to increase productivity and efficiency at scale across our network, customer and employee platforms, making our customers-facing agents smarter, predicting network outages and reducing power consumption and streamlining internal processes. There are just a few of the applications we're rolling out. Now many of these things are happening under the radar and we're all being careful not to overpromise. But our team is convinced that these, and similar innovations, will provide us and our sector more generally with a much needed source of both revenue growth and operating efficiencies. With that, Charlie, let's take them through the financials.
Charles Bracken: Thanks, Mike. The next slide sets out a summary of the revenue and EBITDA profile in our 4 key markets. We saw broadly stable reported revenues across all our cos in Q1. [indiscernible] reported stable revenue. But excluding the impact of the next fiber construction, a revenue decline of 4%. This was driven by low margin handset and B2B fixed revenue declines, which we highlighted in Q4 as part of the softer revenue guidance. However, underlying service revenue performance did improve even before the Q2 price rises with stable fixed revenues and mobile service revenue growth accelerating versus the fourth quarter. At VodafoneZiggo, revenue was up close to 2% this quarter supported by tailwinds from the 2023 price rises with another record quarter of mobile service revenue growth at over 7%. Fixed over pricing was supported by healthy ARPU growth as we captured the benefit of the mid-2023 price adjustments. And Telenet delivered stable revenue in Q1, supported by consumer mobile revenue underpinned by price adjustments last summer. Sunrise posted stable revenue in Q1, mainly lever the positive impact of the July price increase and continued momentum in B2B, offset by lower handset revenues. Moving on to our Q1 adjusted EBITDA performance. [indiscernible] adjusted EBITDA decreased just under 2%, including next fiber construction as VMO2 invested in the future growth drivers that we laid out in the 2024 guidance. Specifically in Q1, there was a step-up in IT transformation costs and VMO2 has started scaling our marketing efforts in the next fiber areas. VodafoneZiggo delivered close to 9% EBITDA growth driven primarily by the reversal of energy cost headwinds and, of course, the revenue growth. And Telenet delivered stable EBITDA for the quarter due to price increases, lower programming and interconnect costs, along with lower energy costs, which were offset by higher staff-related expenses following the mandatory 1.5% wage indexation increase. And Sunrise posted stable adjusted EBITDA growth, including cost to capture driven by lower OpEx and direct costs, and we expect cost optimization benefits to be more visible from Q2. Turning to the next slide, we give an update on the key metrics underpinning our capital allocation model. Recurring upstream free cash flow from our wholly owned FMC OpCos and cash distributions from our 50% owned JVs, our holdco cash and liquidity and the fair market value of the Ventures portfolio plus listed stakes and finally, the underlying equity values of all our FMC champions. So starting on the top left, with the breakdown of our free cash flow profile for Q1 2024 by operating company along with full year guidance. Now as has been the case in previous years, Q1 is typically a modest cash outflow quarter given the timing of cash interest payments on our debt stack and with limited cash distributions from the JVs, which tend to be back-ended loaded to the second half of the year. Turning to our cash position. Our consolidated cash balance was $3.2 billion at the end of Q1 2024. And in the chart, there is a walk versus the closing Q4 balance, including the modest cash outflow related to operations was about $0.2 billion in Q1, ventures investments, which were primarily in AtlasEdge and EdgeConneX of about $0.1 billion and share buybacks of around $180 million during Q1, which again is consistent with our guidance for up to 10% buyback in 2024. Moving to ventures compared to the fair market value of our ventures portfolio. This increased in the quarter driven by an increase in the value of our stake in EdgeConneX plus our listed stakes including ITB, which was offset by a decline in tech valuations primarily Lacework. We made net investments in debentures in Q1 of approximately $100 million, primarily in AtlasEdge and EdgeConneX, and both assets are within our infra pillar, which is focused on the data center space, where we see strong growth potential and a clear right to play. And finally, to highlight on a per share basis, the key value drivers of our stock, largely speaking, analysts share our view that there's a significant discount in our stock, which is currently trending around $16 to $17 per share versus the average [indiscernible] valuation of $26 a share. But as Mike indicated in our Q4 strategy update, we are keen to close that gap. If we start with our $3.2 billion cash balance, and take out to summarize deleveraging injection of $1.7 billion, which is around $5 per share, we get to a value equivalent to $4 per share. Our venture portfolio regularly valued by an independent third party is worth $2.4 billion or $7 per share, while our listed equity stakes plus the cash we're going to get from the All3Media sale are worth a combined $1 billion or $3 per share. Now moving to the Sunrise spin, I'm assuming -- and only assuming the current average analyst valuation of the company of CHF 8 billion, we arrive at $11 per share pro forma for the cash injection of CHF 1.5 billion committed by Liberty Global. Now if you add all these up without any value attributed to the other FMC champions, the implied value of a Liberty Global share comes out to be around $25 per share, assuming 350 million shares around the time of the Swiss spinoff. Lastly, we highlighted in Q4 on a per comparable basis enterprise value to operational free cash flow. We believe that there's also significant equity value in our remaining proportionate interest in VMO2, VodafoneZiggo, Telenet and Ireland, with cash being upstreamed despite the current elevated investment cycles related to 5G and fiber to the home. Turning to our balance sheet. We continue to have a strong position and continue to do opportunistic refinancings. During March and April, we refinanced nearly all of the remaining 2027 maturities at VMO2. Now as opposed to the usual slide showing our silo debt by OpCo, this chart highlights our aggregate debt position, including the joint ventures where we own 50% by debt instrument. Overall, we have around half our aggregate debt in the form of bank debt and the other half in bonds. And as the chart shows, the bank debt typically has a shorter remaining duration versus our bonds as the latter are typically issued with around a 10-year maturity. Crucially, all of our variable bank debt is fixed using swaps typically until maturity, with the swaps independent, and that's really important, of the underlying bank debt. We would argue that these swaps totaling $23 billion for an average remaining life of 5.25 years are a significant asset. And indeed, in our balance sheet, we recorded an in-the-money valuation for our interest rate swaps of over $1.5 billion. Specifically, we have around $10 billion of notional swaps maturing in 2028 and $9 billion in 2029. This allows us to refinance near-term maturities and push out the tenor of our bank debt while still benefiting from the underlying swaps, which can remain in place until 2028 and beyond. And as a result, we have a limited debt repricing risk apart from any change in what's called the credit spread. So as a case study, we took advantage of this at VMO2, proactively refinancing $2.4 billion across March and April, largely addressing the 2027 maturities with only a 20 basis point increase in spread. So overall, for VMO2, this extended the average life of the debt stack by 0.4 years at less than a 0.1% increase in the overall weighted average cost of debt. And lastly, as a reminder, all our debt is fully siloed and FX matched, and we intend to remain proactive in terms of pushing out our maturities to maintain turnup. Lastly, I wanted just to reconfirm all our 2024 guidance across all the OpCos which we set out in Q4 in February. Now I won't run through all the metrics again. But after a strong start to the year financially in Q1, we remain confident across all the OpCos in terms of hitting the numbers. And that concludes our prepared remarks. And operator, we're now ready to move to Q&A.
Operator: [Operator Instructions]. Our first question comes from the line of Joshua Mills with BNP Paribas (OTC:BNPQY).
Joshua Mills: I had a couple on the Netherlands and then one on the U.K., if that's okay. So I think in the VodafoneZiggo disclosure last night, you talked about improved Net Promoter Scores now related to FMC. It'd be great if you could share some detail about perhaps how your net promoter scores are performing in that business and if there's any green shoots there, which might point to a better net out trend through the course of the year. And then related to that, you mentioned as well in the call that fiber-to-the-home overbuild is 1 of the issues you're seeing in the Netherlands. I'd like to clarify whether that is coming from the altnet survivor from KPN. And then if I just move on to the U.K., my question there is if you could provide a bit more color around how much of the postpaid subscriber losses were related to this change in billing system and give an indication what the underlying surplus in the quarter would be, that would be much appreciated, too.
Michael Fries: Thanks, Joshua. As you know, Jeroen Hoencamp, CEO of VodafoneZiggo for some time, has officially retired as of yesterday. So he's off on vacation. But we have Ritchy Drost, the CFO, you all know quite well on the call with us today. Ritchy, do you want to address the NPS point?
Ritchy Drost: Yes. Sure. Thank you, and thank you for passing on to me. What you do see -- we don't measure a VodafoneZiggo NPS, we do clearly measure it through the brands, Ziggo, Vodafone (NASDAQ:VOD) and [indiscernible], on all 3 brands, we see a gradual step-by-step increase the NPS scores, leading to positive NPS is, for sure, also on the fixed side. And the latter has been one of our challenges in the past to address that. So all 3 brands are positive, which also then leads into, if you combine, let's say, the offer into FMC offers that you see a definitely, for sure, uptake on the NPS based on a couple of things we're doing is the value-add to the entertainment proposition, but also through a constant improved, I would call it, customer service profile. Hopefully, that addresses the question. And if you want, Mike, I can also take the second one...
Michael Fries: And on the [indiscernible] point, Ritchy. Yes, go ahead. Go ahead.
Ritchy Drost: Yes. So by now, both KPN, Odido and ourselves are public. So we have a pretty good feel on how the market is doing. I would always say that if you look at our churn, it's mostly triggered not by fiber, but by the sheer fact that the fiber players actually use price and promotions as 1 of the instruments to actually get traction on the fiber footprint. If you would slice and dice ourselves and compare it for instance to the incumbent KPN, KPN in itself has, on a like-for-like basis, also pretty let's say, moderate performance, I would say, both consumer and B2B, which basically then leads to the Odido results as well as Delta that didn't go public. If you combine Odido and Delta, they take effectively the growth in the market, which is predominantly the growth in new build homes taking broadband services. So that's a long way of saying that it's not the income of KPN and ourselves but the growth cost to the other 2 big players using price a lot as the instrument to gain volume.
Michael Fries: Yes. I think it's also important to point out that those other 2 players are building in discrete geographies. They're not overbuilding each other, and they're not building the entire market, between $1 million to $1.5 million each. So they're sort of -- it's fragmented. But from an outsider's point of view looking in, quite rational overbuild situation. Lutz, do you want to address the postpaid billing question in the U.K.?
Lutz Schu¨ler: Yes, sure. Yes, Joshua. So right, a couple of things here. I mean Q1 is typically a weak postpaid net add quarter. The delta compared to a year ago is 50,000. We have finished the migration of a double-digit million customer base, right, from one CRM system to a new one. And obviously, this has always an effect on some customers, which you are unable to migrate on the new system. We are not disclosing the number for sure. But I mean, you can see maybe similar CRM migrations in the market, and you will be astonished that the number is pretty good. And number three, what I want to iterate is you can look at postpaid net adds, but our strategy going forward is to have with O2, more the value brand and with [indiscernible] they pay monthly brand for value seekers, right? One is premium, one is value. And you see that they start to pay off in our service revenue growth before price rise in mobile of 42%. So I hope that helps.
Michael Fries: I'll just add 1 point, which I think is important to remember. Since we formed this JV, we've grown the mobile contract base every year, and we've had consistent mobile service revenue growth. So I would view this as more of a blip than a long-term trend.
Operator: Our next question comes from the line of Maurice Patrick with Barclays.
Maurice Patrick: If I could ask a question on the U.K. market, please, really relating to the net add trajectory and state of competition. So I'm sort of curious that the U.K. broadband market has grown in size over the last few years. The last 12 months seems to have topped out. Just curious if you think the market can grow maybe in the next 12 months. And just linked to it, if I look at some of the altnet data, it looks like in the last 12 months they've added about 0.5 million customers in the U.K. market. I wonder, you've historically, I think, talked down the impact of altnet. I wondered the extent to which those are now starting to impact your unit adds in your legacy footprint.
Michael Fries: Lutz, why don't you address the net add question?
Lutz Schu¨ler: Yes, sure. So I mean, if you compare the net add development Q1 this year compared to Q1 '23, the data is 20,000. A couple of things here. Obviously, the market is a bit weaker. So according to our data, it's something like 7% less. Number two, we see some more impact on altnets, not incredible, right? I mean look at the delta 2 years ago. So we are not talking big numbers. But I mean, my view is the altnets are not getting to the penetration they want. And therefore, as a fact, they're getting more aggressive in promotions and you see some of this effect. The question is how long will this last? And then, right, we have obviously now added 1 million fiber homes, and we are starting to sell more into our expanded network. But also, this takes some time because it is fiber, right? So I mean, in Lighting, we were used to sell quirks. Fiber is, right, new video product, it's a different technology, and we really started to sell fiber mid of last year. So that machine week-over-week, we are selling more. So we're also confident here, but therefore, expect more impact into net adds out of next fiber. I hope that helps.
Michael Fries: I think the other point is we do talk about altnet every quarter, and we're by no means discounting the capital they've expended and the network they've already built. Typically, what we're describing to you is where we see the next 18 to 36 months and whether they have the capital and the ability to sustain that build and get to their hoped for build-out ambition. And I think the answer we're seeing unlikely. That doesn't mean with the network already constructed, and there's quite a bit as you know, they aren't going to penetrate. They're not weak to our knowledge, they're not reaching penetration levels that are going to sustain their businesses, high single digits, 10%. That is not, for the most part, going to work long term financially. But we don't -- but with -- the network has been built and they're going to do what they can to obviously create a return on that network. So they're active in the market. We -- that's for sure.
Maurice Patrick: And the market growing. So just -- do you think the market will grow -- the U.K. broadband market will grow over the next 12 months?
Michael Fries: Lutz, do you have an impression of that? I mean [indiscernible] generally, there's a lot of swapping happening. There's certainly a lot of flux in the market. So we think our business will grow. The broader market generally does add every year, but we think we are getting more than our fair share. That's for sure.
Lutz Schu¨ler: Yes. But there's not a lot of growth, yes, in the market.
Operator: Our next question comes from the line of Ulrich Rathe with Bernstein Societe Generale (OTC:SCGLY) Group.
Ulrich Rathe: In the prepared remarks, Mike, you talked about the [indiscernible] embedded in the network carve-outs. Now in Belgium, I think you had apartments pretty clear all this might work. In the U.K., it's maybe less clear. You talked about sort of unsolicited interest already. But could you just describe the value creation levers that you see of the carve-out? And if I may, just 1 point of clarification in the Netherlands. The distribution outlook there is up to $300 million available for distribution and nonrecurring investments. Could you narrow that down already at this point in time? Or is this simply something as the investment opportunities unfold that you would clarify how those might split?
Michael Fries: Yes. Charlie or Ritchy, you can address the cash upstream question. listen, I think the value creation levers in the U.K. are many. For starters, we're able to isolate that network construction, network build, network asset into a vehicle that we believe could very well attract interest from strategic and financial parties. The benefits of that interest would be obviously capital raising. We believe at accretive multiples, but more importantly, the ability to potentially accelerate our activities in that marketplace. I mean we're going to already have announced that we expect to be at 5 million homes in nexfibre by 2026, and we would build out the balance of our upgraded network, what we call fiber up by 2028, 2029, but to the extent we can accelerate those builds as well as the migration of customers on to those fiber networks, all the better. So we think, number one, it allows -- it creates financial flexibility and optionality to accelerate our activities in that market. And we all know that there are -- I don't know the exact number, but there's $2 trillion of private equity money flowing around. A big chunk of that is infrastructure capital, and we certainly believe that the infrastructure business is alive and well and that there is an interest certainly in these types of net codes that start life with 35%, 40% utilization, a lot of EBITDA and a clear plan. I mean we think our network, which will ultimately be 21 million homes will be the second network in the marketplace, and it will attract wholesale customers over time, but more importantly, give us a competitive advantage to retain and grow our broadband base. So there's lots of goodness that comes from the -- we're not the first person obviously, to look at delayering our business. We've done it in Belgium. I think John is on the call, he can speak to what we're already seeing there with wire and the opportunities that, that's created for us in the Belgium market, not the least of which is potential cooperation with Proximus there to try to rationalize the construction of fiber so that we're not wasting capital. So there's lots of opportunities that come when you start this process, when you begin this journey that we think could be very accretive for Virgin Media O2.
Charles Bracken: Just on the shareholders, Ritchy, I don't know if you want to answer it. But obviously, one of the -- and obviously, one of the things that goes with telecom, so from time to time, there are spectrum auctions. We're obviously not allowed to comment on specific auctions. But I think we just want to make sure should one of these emerge that we didn't mislead our investors. So it's really related to that. I don't know, Ritchy, if you'd add anything to that.
Ritchy Drost: I think that's well said, Charlie. So we're reconfirming the up to $300 million with the remarks we made at the -- sorry, the year-end results in line with what you just said.
Operator: Our next question comes from the line of Robert Grindle with Deutsche Bank.
Robert Grindle: I'd like to ask about the Benelux holdco. The idea seems to have shaken out interest, as you said, Mike, from external investors. It sounds encouraging given the lower negative implied equity on the OpCos. Is this interest or contingent on fully controlling Ziggo or not necessarily? Is there any movement on Ziggo from your co-shareholder in Paddington? And if I could have a very quick follow-up on the U.K. net point. Do you need to offer more altnet like than VM prices to get customers on to nexfibre? Or so far, at least, do you think the Virgin brand carries the premium to what the other outlets are charging?
Michael Fries: Lutz, you can work up an answer on the U.K. altnet point. Listen, I think the interest that private equity could have in the Odido Benelux asset is clear. You're talking about a defined region with a lot of similarities, $3 billion of EBITDA on a combined basis, potential synergies, if there's further consolidation of ownership interests and obviously undervalued assets that have good cash flow characteristics, et cetera. And I'll add lastly, unrealized value in infrastructure, whether that's through wire, the NetCo in Belgium or from towers, that haven't yet been monetized in Holland. So there's lots of interesting elements there to, I think, attract interest. Would it be contingent on getting control of the underlying asset? Not necessarily. It doesn't appear to us to have to be contingent on that. And I think you'll have to ask our friends in Paddington what their long-term game plan is with the Dutch business. At this moment, there is no -- nothing to report. And I think they've obviously been highly focused on the perimeter that they're building and exiting certain markets and doubling down in others, you have to ask them where Holland sits in that scheme of things, that's for them to answer not us. But obviously, we're good partners. We've been good partners for a while. We're making moves here that we think will add value to our stock price long term but also are strategically accretive, and we're going to make those moves either way. Let's see what they instigate if anything, but we're moving forward.
Lutz Schu¨ler: Yes. On your question is the ARPU -- yes, Robert. So the short answer is we keep the ARPU premium. So we are not selling Virgin Media in areas network expansion cheaper than in other areas. We are getting more and more to regional pricing, but this is then a question how we use this in the future. So we are not doing this. What we have just launched is the ability for customers also to record in with fiber or the TV content. And therefore, before that, we have sold stream and -- which is the low-end video product plus broadband. So if you add that, you get to a little lower ARPU, but this is not because of we don't get the premium for Virgin Media. This is because the 360 product, the box was missing so far and how this will change.
Operator: Our next question comes from the line of Steve Malcolm with Redburn Atlantic.
Steve Malcolm: First of all, just on the sort of status of the retail relationship between VMO2 and nexfibre, obviously, part of the lowered guidance for this year was you're maybe a little slow at the blocks and kind of getting all your marketing ducks lined up for [nex]. Where are you on that journey? Are you kind of up and running? Are you -- the net adds were a little late? This point in the market was a bit weak, but do you feel like you're where you need to be in terms of marketing that footprint? And then secondly, just, Mike, you raised the point on kind of your Liberty post Sunrise spin. Clearly, there's still a lot of interesting aspects of the story. But 1 of the concerns I have is that if the share price doesn't move, the market cap is going to be kind of low, $2.5 billion, $3 billion. Liquidity maybe becomes an issue. Is that something you've thought about at all? And any sort of steps you can take to deal with that in terms of buybacks and things like that? Just curious to make your thoughts on liquidity post spin.
Michael Fries: Yes. Thanks for the question, Steve. Lutz, you can work up on nexfibre, but let me address the first -- the second question first. I want to make sure I understand it. Listen, we obviously believe that the steps we're taking in particular, the steps around Sunrise will force the issue, if you will. And as shareholders, and we're all shareholders here, if we receive a share of stock of Sunrise of a material value and the RemainCo, if you will, doesn't trade, then we'll be looking at what sort of steps we need to take to bridge that gap or shrink that gap with the RemainCo or do other -- take other steps. But it's one step at a time. That's certainly how we're looking at it. We're not anticipating anything but a re-rating, if you will, of Liberty Global as a result of that spin. And as we continue to demonstrate that we're executing on our growth plans and our strategic plans and the assets that we own and control and the ones we're partners with are underlying -- are valuable assets. The $3 billion point, I mean, I'm not sure if I followed that. Maybe Steve, just clarify the question around $3 billion, just so I'm clear on what you're getting at.
Steve Malcolm: I guess, Mike, my sort of -- I think one of the issues you face is you're clearly sort of quite an esoteric company. You're listed in the U.S., you operate over here, market cap is quite full. You're quite complicated. And as the market cap shrinks, it's -- it becomes harder for investors, I guess, to sort of spend the time and liquidity in the shares potentially drives off. I mean, obviously, you had the problem with Telenet, very, very small but slightly different. But are you worried at all that if the market cap doesn't adjust the steps you're taking, that buying back stock becomes more difficult because liquidity is potentially impacted by the small size of the company? And just how you're thinking about that post Sunrise likely as a potentially a much smaller company again?
Michael Fries: Yes. I understand your point. I mean our expectation is that the RemainCo trades up from where it is today because we believe, obviously, depending on how the spin works and the value attributed to the shares, that in the remaining assets are equally undervalued. Now you make a point, hey, they might just continue to trade where they trade. We'll cross that bridge when we get to it. At this point, our expectation is that the RemainCo will be re-rated and that the underlying businesses we continue to own in the U.K., in Belgium and other markets will be valued on a similar basis because we've demonstrated that there is intrinsic value not being recognized in the stock. If that doesn't occur, we'll cross that bridge when we cross it. And at this point, I'm not going to tell you prematurely what we may or may not do, but you raised good points, and let's see how it unfolds. I'm pretty confident that of 2 things. One, that the Swiss transaction is going to be a game changer and is going to happen, and we're all going to be very thankful that it does happen. And that secondly, it will reset how people view the Liberty Global in terms of how we're both approaching value creation as well as value distribution and where our heads are at in terms of the remaining businesses we own and control and how we build value with those businesses. But let's see. I understand your point. I'm not going to guess that -- things prematurely, let's see how things unfold. Lutz, do you want to address the nexfibre point?
Lutz Schu¨ler: Yes. Yes. Yes. So I mean I agree, right? We have 1 million homes built and so therefore, now the sales machine is ramping, and it has to further ramp quarter-over-quarter over quarter. And our relationship with nexfibre is very good because, first, you need to build a network, right? And a year ago, the big question was, hey, you have to double your bill. Is this working, blah, blah, blah. And it did, right? We celebrated 1 million homes. And now the question is, do you get to the penetration we need for this network? And what the nexfibre team is able to see is what I said before that month over month, we are selling more, more and more. And the driver for that first was get the fiber product ready, right? So therefore, we couldn't simply keep doing what we were doing with Lightning because that was Cox. And second now, we have to ramp the sales channels, especially field sales, right? As you can imagine, if you have now much more homes you want to penetrate, you need the field sales channel to target these customers where build is. And so we are ramping month-over-month also our field sales team and train them. And therefore, we are confident that we are getting to the number we have agreed with nexfibre end of this year.
Operator: Our next question comes from the line of Matthew Harrigan with the Benchmark Company.
Matthew Harrigan: I actually have 2 questions. I think I'll do some -- the mundane 1 first. When you look at Liberty Global versus the U.S. and you've got some advantages in terms of greenfield JVs and all that. But if you look at the core business, you're doing better than the U.S. peers on units. Both of you are realizing pricing power, but they've got -- video business is just falling off a cliff. And I do think there's some decent contribution margin there, even though they really downplay it. When you look at your video business, you're losing some units, but certainly no sense if it's going off a cliff. And you really have the benefit from consumers and moving to streaming on the consumption side, you benefit in your broadband business. And I think you probably have a much better contribution margins as well as stability outside the U.K. on the continent on the video business. And it's obviously not something that's terribly planned, you don't talk about it very much. But do you have any thoughts on how that lays in strategically with what else you're doing on your core operations? And then I have a follow-up after that.
Michael Fries: Well, I think you've characterized it accurately, Matt. While we are dealing with many of the same trends that the U.S. operators are dealing with, we're not impacted nearly as severely. So our video losses are a fraction of the U.S. losses, for example. The trend is the same. We're not growing the video base. In some cases, we're trying to remain steady at the video base. We're migrating quickly to IP boxes. We've got every app integrated. So we're doing all the same things to make the video product as part of the bundle attractive to people, including very cheap and careful IP devices and making it easy, even subsidizing a certain streaming services. So we're trying to keep people connected as video customers, but we're not losing customers at the same clip and are unlikely to lose customers at the same clip as a U.S. guy. So that is absolutely the case. And we're not losing broadband subs in the same manner either. In fact, we're generally growing broadband some to the exception of really Holland, which has been a tough market, and we've discussed that every quarter. We're generally growing broadband customers and taking our fair share or more. So I think there's -- and our contribution margins are, my guess, pretty good. I mean relative to the U.S. guys, I don't have their numbers to hand. Broadband margins are 90-plus percent. And our video margins, especially on the continent are probably 75%, 80%. So I think these businesses, while relatively small, the video business for us in the aggregate is more stable. Having said that, we're putting our effort on -- 50% of our revenue is now mobile. So the mobile business for us is not a hobby as it is in the U.S., it's a core revenue stream. And thankfully, it's growing every quarter. Mobile service revenue grows every single quarter. So we have a growth business, along with B2B. B2B and mobile are growing every quarter. And that, to us, is a fantastic accelerant and tailwind. It's the fixed business that we constantly look to improve, whether that's through -- on the broadband side and investments we're making in fiber bundling. And so that's the piece of the puzzle that we're investing a lot of time and energy into as well as capital costs. And I think it's working. If you look at our fixed ARPUs over the last 4 or 5 quarters, they're either improving in every market or nicely positive. So I think we're having -- it's having an impact on us. And so we are in the same industry, of course, but we're not struggling or faced with the same headwinds and obstacles that the U.S. guys are. I think we're in a better position personally. What was your second question, Matt?
Matthew Harrigan: Yes. More conjecturally, when you look at NetCos, I mean, over a period of time, intermediate, it seems like that could be a nice new growth sector and layers that need more complexity when your JVs already have JVs, unfortunately. But it's interesting when you look at NetCo and various consultancy studies, a lot of tech company and tech growth has kind of been almost a free rider phenomenon on your network, 5G as well over a period of time. Is there anything -- when you did NetCos, is there anything that makes the structure -- could make it structurally easier for you to capture growth in new tech businesses other than what you've done with your venture portfolio, which has already made a nice contribution just in terms of how the economics of that could lay out so you get more contribution from that?
Michael Fries: Well, that's a good question. I mean, look, the NetCos that are embedded inside of our OpCos, if you will, are owned by the OpCo. So any benefit to the -- that comes from setting up a NetCo, financing a NetCo, selling a NetCo, partnering with a NetCo bringing in new revenue streams to that NetCo are going to accrue to the owners of the OpCo and that's not really our ventures portfolio as such. Having said that, we certainly are always looking at ways to create additional value in and around those NetCos. We're looking at metro fiber, for example, our investment in data centers and the edge. Those things all relate. The OpCos aren't pursuing those business opportunities, but we at the ventures are pursuing those kinds of business opportunities around the OpCos, if you will. In some cases, we'll work together. There's opportunities for VMO2, too, to do work for us on our charging points what we're trying to build in the U.K. So there will be, I would say, synergies. But I think the ownership of these opportunities are pretty distinct. We have partners in the U.K. and what we do has to be something TEF wants VMO2 to do. So there's quite, I think, an appropriate set of governance rules there. But I think they do fuel each other. There are benefits for sure. And I think you'll see us take advantage of any and every opportunity to invest in infrastructure in and around our OpCos as those OpCos themselves take advantage of the infrastructure they've been sitting on for decades and try to finance those and identify value in those in a new way. I think operator we have time for one more question.
Operator: Our final question comes from the line of Carl Murdock-Smith with Berenberg.
Carl MurdockSmith: On a kind of similar point, I'd like to address your waterfall chart on Slide 10, where you talk about your view that the equity is mispriced and valuing the FMC operations at 0. I think I agree that the equity is mispriced, but I disagree with the component parts of that slightly. And I guess my point would be on the Ventures portfolio and whether the Ventures portfolio is being priced at the value at which you are attributing to it. And I guess my question is, do you think that the share price is giving you a right to play in that market? Or is it being discounted unfairly in the share price? And with your comments that there could be another $300 million, $400 million additional pipeline monetization by the year-end, kind of will that be the start of a longer-term trend to seek to monetize those Ventures portfolios? Or I suppose the flip side is every time I hear talk about AtlasEdge or EdgeConneX, you sound very excitable. So the question is, is that -- should the size of that ventures portfolio go up, down on a longer-term view?
Michael Fries: Yes, it's a good question. I'll just make a couple of points upfront. We're not coming up with that value for the ventures portfolio. That's Deloitte coming up with that value. So we're very conservative and I think very rigorous in how value is ascribed to those assets within the portfolio. It's not like we're making it up. That's point one. Whether or not people are giving us full value for that is a judgment call. It's hard to know. Nobody is giving us their views on a day-to-day basis. I will say, however, that we just demonstrated with All3Media that an asset that was, if you're right, getting no value just we just sold for 12 times. So I think there is -- the truth is the portfolio consists of a number of verticals. Some of those verticals are perhaps at a different stage of development than others. I would say our content vertical, which is our largest has more in it to rationalize and potentially exit or monetize. And so we'll see how that goes. The infrastructure side of things is a bit of both. We've got some things that we could possibly monetize, but we're also excited by the infrastructure opportunities that are right in front of our noses and we have a right to play in those spaces. So that could be a bit of both. And the tech stuff pays for itself. I mean everything we invest in tech is more or less funded by exits that they are creating for themselves annually. And the benefit we get from tech is really accrues to the OpCos as much as anything because we're investing in AI companies, in cloud companies, in security companies, all of which we hope will be customers or partners and suppliers of our OpCos as well. So it's a bit of -- it's not a simple story. I appreciate that. But the 3 verticals have their own unique characteristics. We are where we are. These assets have been built over time, and it's the right question, what will it look like in 1, 2 and 3 years. And then we'll see. I'd say there's going to be a bit of both, a bit of monetization and a bit of investment and 3 could become 4, 3 could become 2. Let's see how it goes. We're not setting a target that it has to be a particular number, but we are very disciplined about it. And we are focused on things that we think investors will understand and appreciate, like infrastructure, for example. And we're making decisions that in light of the broader business we're in. So for example, exiting All3Media and putting that capital into Sunrise, was that accidental? Not really, right? We're thinking about right pocket, left pocket all the time. And I think we'll continue to look at this portfolio of assets as both an opportunity to create value, but an opportunity to redistribute value into other strategic initiatives that we hope will bridge the gap in our stock. So long answer, but I think we're looking at it in a flexible way, not a predetermined way. And that's how we'll focus on it going forward. Operator, I think that's it. So listen, everybody, appreciate you joining us today, as always, and hopefully, you got a lot out of what we had to say in the update in particular on the 5 initiatives and what we've been able to do in a short 10 weeks. In each of those instances, we're -- in the balance of the year, we're focused on growth, on strategic positioning of our OpCos and also trying to find ways to monetize or create value with the embedded assets that those OpCos have. And then ultimately delivering that value to you. So the Sunrise transaction is front and center for us. You should assume we're prioritizing things that we think will create value for shareholders, and we look forward to updating you on the next quarter. So thanks for joining us.
Operator: Ladies and gentlemen, this concludes Liberty Global's First Quarter 2024 Investor Call. As a reminder, a replay of the call will be available in the Investor Relations section of Liberty Global's website. There, you can also find a copy of today's presentation materials.
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