Liberty Global Ltd. (LBTYA) Earnings Call Transcript & Summary

Hello, everyone. I'm Polo Tang, Head of European Telecoms Research at UBS. I'd like to welcome everybody to the Virtual UBS Global TMT Conference this year. Over the next 35, 40 minutes, I'll be hosting a fireside chat with Charlie Bracken, CFO of Liberty Global. Just to flag, due to some technical issues, we've had to switch this to audio-only event. However, if you do want to ask a question, you can still do so via the conference website or by e-mailing me, and I'll aim to work this into the conversation. Okay. So why don't we make a start?

Charlie, as we reach the end of quite an eventful year, can you maybe talk through what you see as the main achievements for the group in 2020? And what are your main priorities as you look into 2021? And can you maybe also reference how COVID-19 has impacted the business? And how you think this will change the industry going forward? For example, do you think macro pressures will lead to consumers spending down into cheaper products? Or do you think people will be spending more on communications as they work from home?

Of course. Yes. Hello, everybody, and I hope you're all safe in these troubled times. It had been quite a year, I think we'd all agree. I think from a Liberty point of view, it's actually gone reasonably well. I think we're very lucky when we went into the year, the year that we had a lot of cash on the balance sheet, as you know, from the sale of our assets in Germany to Vodafone. So we ended -- we started the year with a lot of capital ready to deploy. I think from our point of view, it's been a very good year because we've sold our 2 principal strategic, not issues, but opportunities by completing, of our big 4 countries, the last 2 FMC combinations. So the big news for us, of course, was the Virgin Media, O2 transaction, which was announced and which we expect to close in the middle of next year; and also the combination of Sunrise with UPC Switzerland, which actually has closed and we're off and running. We're very optimistic about the prospects of both transactions based on the success we've seen in Belgium and in Holland. And in particular, I think for us to stand our company and our portfolio this year has been in Holland where VodafoneZiggo has performed incredibly well and shown revenue growth as well as cash flow growth despite the challenges of the pandemic. I think the other big theme for us has been the resilience of our business model. We have seen some top line pressure, particularly around sports and roaming for our mobile companies. But by and large, our business has been very resilient. We're actually ahead of budget in terms of EBITDA and free cash flow and OFCF, the key metrics. And even on the revenue line, where we have lost revenue has been in low-margin, broadly speaking, activities, which means we haven't really seen a lot of impact. I think as you referenced, the resilience of the telecoms or cable model, I think, has been so much as we've probably expected, but it's been very pleasing to see. And as we look at the long-term impacts, I think that's going to play through. I think that the shift to a digital society is accelerating. I think no one can dispute that. And we've seen record NPS, Net Promoter Score or satisfaction, with our customers, which really is underlying the superiority of our cable networks. And we see that the flight to premium, if you like, the desire to have a high-quality broadband connection has never been stronger, and that certainly benefited our portfolio of companies. I think the other big theme, which I think we'll see coming out of this, is an accelerated digitization of the back office and customer interaction. And certainly, from our perspective, we've made quite a bit of accelerated investments in that space during the year, particularly not just in our back office, but also in our customer context. And we're very pleased with how it's held up. We've had to onshore a bunch of stuff, which was actually outsourced to India and the Philippines because of some of the issues around the challenges of COVID. But actually, it's held up very well. And so I think as we go into next year, we feel in very good shape and very positive about the future of our businesses. In terms of how we see the future, I think, strategically, we feel very comfortable with the creation of these FMC champions in the 4 core markets. We still have opportunities to complete that in Ireland and possibly in Poland, depending on what we do. But as always, in Liberty, we remain ready to sell or buy depending on the value creation. And we continue to see value in our stock. I think we purchased -- I may get the number wrong here, just under 30% of our total stock in the last 12 to 15 months. And we continue to buy our stock, which we think is very attractively priced. So that's been another big theme as we complete the year. And we just announced a $1 billion increase in our buyback, which gives us more firepower to continue to buy our stock going forward.

Okay. There's quite a lot of things to kind of cover there and dig deeper into. But why don't we zoom into the U.K. and Virgin Media. Can you remind us how the strategy for the unit has changed over the past 2 years following the arrival of Lutz Schuler? And how do you see the key drivers for the units going forward? Specifically, can you maybe talk about the competitive landscape? So for example, where are we with end-of-contract notification? And how should we think about a number of your U.K. competitors looking to put through mid-single-digit price rises in March 2021? So if you add everything together, what does this mean for Virgin Media?

Yes. I think -- look, the game plan -- Lutz, I think, has done a terrific job. It's very similar to the game plan we've seen elsewhere in Europe. So I think Lutz would say the great news is we know it works. We've seen it work in other markets. So what he's been looking to do is obviously to optimize customer yield, that's a big step forward; grow the B2B opportunity; drive FMC convergence; and then also focus very much on the digitization and optimization of the cost base. And then very specifically, which is not true in other countries, obviously, we have a major opportunity with the Lightning new build. As I sort of grade him at the end of the year in terms of creating successes, I mean, B2B has been a great success, I mean, particularly the SOHO space, which is the natural advantage that the cable company has with its high-speed broadband proposition, pretty good growth in that space despite the challenges of COVID. FMC, again, they had a 2% to 3% increase in FMC penetration, but they're still relatively underpenetrated when you benchmark to markets like the Benelux, where it's 40% to 50% FMC penetration. And good progress on the digitization, which I referenced earlier. I think in terms of Lightning, I think that they've done a great job in building despite the challenges of the pandemic. But the cost per home has come down materially. It's about GBP 600. It looks like it's going to go lower, which is actually a lot better than we've seen in our original business plan. So that's encouraging. In terms of selling into those homes, that has been impacted by the pandemic because we rely a lot on door-to-door sales, which has obviously been quite challenging given the lockdown restrictions. Having said that, Lutz and the team remain very optimistic about the ability to achieve the 30-plus percent penetration on that footprint. I think perhaps the most encouraging thing for him has been the way that they've been able to increase penetration on their existing footprint. I mean that has been the biggest positive in many ways about the Virgin business, that they have now got growth, excluding Lightning, in customers on their customer base. So that's been a very encouraging trend. And obviously, we hope that will continue into next year. Now having said that, we have seen a decline in ARPU in the U.K. Now that's consistent with what you referenced as end-of-contract life. And we have certainly seen impact that's broadly in line with what we expected. And you'll see it annualized probably next year. So we're talking something around the order of GBP 60 million to GBP 80 million annual effect, so 30 million, 40 million this year. And that, as many of you know, is all about best tariff and end-of-contract life notification, which is certainly a factor across the whole industry. We'll see how that accelerates next year, but so far, we're pretty comfortable that we can manage it within the guidance we've given to the market. And I think as you referenced, the most interesting thing that's come out is that there seems to be a willingness on behalf of the industry to raise prices, frankly, to help pay for the investments in the sector. I mean the biggest issue has got to be the broadband build-outs of the U.K., which essentially is about what the BT network does and what the Virgin network does. I think these slightly smaller players like [ City5o ], they're interesting, but they are essentially noise. They're not building at scale, and they're really depend enormously on a retail customer to drive their model. So it's really about how does Virgin and BT build out their network, and it's true across the whole of Europe. And I think that the recent regulatory noise about BT being able to get an appropriate return on that is very encouraging because that actually allows the market to improve profitability and the return on capital, which can only benefit Virgin as much as anybody else.

There's a lot of points, actually, that you mentioned there, which were really interesting. So you talked about the pickup in terms of subscriber momentum, particularly in terms of the existing footprint. But do you think this is maybe a short-term benefit from COVID-19 in terms of temporary kind of lower churn? Or are there other factors at play? And can you give any sense in terms of whether the good subscriber momentum that you saw at Virgin Media in Q2, Q3 has continued into Q4? And is this sustainable going forward?

Well, I can never make any comments about it's sustainable forever, but it certainly continued into Q4, so I can confirm that. Look, I think if Lutz were on call, he'd say, "Look, this is the whole success of the FMC strategy." The bundled sale properly executed is very attractive to existing customers, reduces churn. That's a -- we've seen that, for example, in Holland where churn is essentially half from a broadband customer bundled with mobile and half from mobile customer bundled with broadband. So it is certainly consistent that we -- our consumer proposition is very strong. You're right. Will it survive the COVID downturn? Clearly, sports has been much less important in many of these lockdowns. And we'll see as we move to a fuller sports schedule next year where the Virgin is disadvantaged. But I think, look, certainly, I really -- I think Mike and I would say we're very, very pleased with how Lutz and the team are performing. And look, we're not declaring victory. We've still got the head of -- end-of-contract life headwinds. But it certainly feels like Virgin's on a march, and let's see how they go next year.

Sorry, it was a temporary mute there. Yes, I just wanted to pick up in terms of the comment in terms of guidance. Because you mentioned some specific figures there. You said the end of contract, the impact for this year is 30 million to 40 million. So I think that's a bit less than what you originally outlined at the start of the year. But then if I look at kind of what you've indicated previously, I think you were indicating like year-to-date for Virgin EBITDA minus 3%. But then there could be a step down in terms of Q4, if you look at what's implied in terms of your guidance. So can you maybe just talk a bit more in terms of the moving parts in terms of EBITDA in the U.K. in Q4? And how should we think about this flowing through into 2021?

Yes. Q4, so just to size, everybody, traditionally, Virgin in the last 3 or 4 years has seen a major step-up between Q3 and Q4 in its EBITDA. And we pretty much guided very clearly that it's going to be broadly flat. There are 3 key factors in there. I think the price rise delay is clearly one. And it's obviously [ telling ] which would have normally been a major effect. I think the second issue has been that we've made some quite significant investment in digitization, which is consistent with this idea of accelerating the switch to a digital customer interaction, which is in part response to the COVID, but that should pay back over longer term. And we are incurring some integration costs in relation to the upcoming merger, which have also impacted it. And we tried to detail that in our slides. But I would characterize, the underlying performance is pretty strong, but it is a function predominantly of those 3 factors.

And then you also kind of touched earlier in terms of the people who are really investing in terms of infrastructure in the U.K. or BT Plus yourselves. But then can I just touch on kind of fiber build? Because you've clearly outlined an ambition to expand your footprint by rolling out FTTH to 7 million homes. But can I clarify if this project is starting to go ahead if the Virgin Media, O2 merger is cleared? And what are the factors that would make you more or less likely to go ahead with that fiber build?

Well, look, I think all things being equal, we must be, perhaps along with BT, the most efficient builders of network, if you think about it, because we have an existing core network, we have an existing customer platform, et cetera, et cetera. So the marginal cost to us is always more efficient than it would be for a small stand-alone player. It makes total sense if you can build within 50 to 100 meters of your existing footprint, and that's where the original target build, the numbers came from. And you probably could extrapolate that. If necessary, you can go bigger than that. As your network expands about 50-meter, 100-meter, opportunity gets bigger. But I think that from our perspective, our penetrations can be relatively lower than anybody else and still make a good return to our shareholders, which is why that we're comfortable with anything with a 30 in front of it and hope to do better, of course, like Virgin itself is at around 40% penetration on footprint. So we'll see how that goes. I think in relation to the other competitors, and I'm sure they're doing a terrific job and operating very well. But remember, the key advantage, and we see this in the other end of the telescope in our other markets, is the retail proposition that helps anchor these build-outs. And if you talk to the infrastructure investors looking to invest in these opportunities, clearly, having a baseload customer is really important to generating returns. And if you start and look at the U.K., there are 4 key customers: the Sky, TalkTalk, BT and Virgin itself. So I think that is why we think we have a pretty good model of a good return for our shareholders. And we believe we're getting level of returns in excess of 20%, which is pretty good in this kind of environment -- low-rate environment. Obviously, it does affect our free cash flow metrics. And we tried very hard to illustrate how much of our capital spend is actually on this new build as opposed to the underlying operations because it does distort how you look at the valuation of the U.K. But we still remain very confident in trying to disclose the key metrics to support this, but the Lightning build is a good return on capital and one that we intend to continue.

So can I just clarify, the 7 million FTTH build, is that going to just continue regardless of whether the Virgin Media, O2 deal is cleared because that's where it kind of -- it sounds as if you're saying, look, returns are good. This is a good thing to do regardless. And then can you also -- there's a kind of question that is kind of asked by the audience, which is can you give us an update in terms of how you're thinking about cable wholesale? Is this an option on top of the fiber build? Or is the focus very much kind of mainly fiber build and trying to kind of drive kind of retail revenues?

So I think any time you can make a 20% return on equity, you'll continue to invest capital. I'd be stupid to say that if for whatever reason that those returns start to get depressed either by an increased construction cost, which seems very unlikely but seems to be going down and/or a much lower penetration, which I suppose is possible, but at this stage, we seem pretty confident we can hit that 30% plus, I think there's every reason for us to invest. And I know our potential partners, Telefonica will be very supportive of that. There is a separate question of can you optimize or maximize the return on your networks by opening them up at the right terms and pricing to increase network utilization? And I think that whilst we are not imminently announcing anything, I think we're very open to exploring the best ways to create value around our network infrastructure as opposed to our retail base, and we'll see what happens. I think we'll see some interesting examples that emerge across the continent. And I think the U.K. will be no exception. So we'll see how that plays out. But I think they're certainly not mutually exclusive, the FMC merger and a separate networkco, retailco proposition.

And then just to clarify, if you did do this kind of FTTH expansion to 7 million homes, would this be on balance sheet or off balance sheet? Or by default, is it off balance sheet because, anyway, if the O2 merger goes ahead, you're going to be consolidating that business. But I'm just trying to think from a Virgin kind of...

Well, I think we expect the transaction to close. So by definition, it will be off balance sheet. And we will continue to disclose the underlying free cash flow characteristics of the Virgin business, excluding Lightning and obviously the cash capital we're investing in Lightning. But I guess just to reiterate, we think it makes sense you're going to get a 20%-plus levered IRR, and we believe we are getting that, then we think it makes all the sense in the world to keep investing in that capital.

Okay. That's very clear. Maybe just taking a step back and asking a bigger picture question about the technology road map for cable longer term. So clearly, you have a speed advantage today. You've got DOCSIS 3.1. You can offer 1 gigabit broadband speeds. But on the other side, you've obviously got the incumbents expanding their FTTH footprint, enabling them to offer 1 gig speed, potentially rising to kind of 10 gigabit per second broadband speed. So where can cable get to longer term in terms of broadband speeds? And what are the CapEx implications?

I think -- first of all, I'm not a technologist. So please take my word as somebody who's giving the view of my CTO who is a very impressive guy. Look, I think the next generation of EuroDOCSIS, EuroDOCSIS 4.0 will be able to get us to these 5, 10 gig speed. I wouldn't rule this out of the way, EuroDOCSIS 5 or 6 or 7 or whatever that gets us even further. But based on where we are today, it looks like we can get some very, very fast speeds. And I would agree with you that fiber will be comparable to those speeds. I think the big difference with the cable network is the fact that it's a modular build. Essentially, because it's a much more fiber network by its very initial architecture, it's about splitting those, it's about getting fiber to the curb. And then obviously, it's about that last mile, leveraging the coax cable as opposed to the copper cable. So I do agree that over time, a fully fibered network is probably comparable to a fully cable network, but it costs a lot more to get there, and it takes a lot longer because you have to do a lot more digging because you aren't subdividing an existing network and you're not leveraging that. At least today, the coax is an advantage. Maybe we'll go wireless one day. So I think from our perspective, we still feel that the cable network performs very well against fiber, and we've seen that in markets where there are pretty big fiber builds, for example, markets like Poland and Belgium, where we've done pretty well.

Okay. Clear. Maybe if we switch gears and zoom into Switzerland. Now that the merger with Sunrise is complete, what are key priorities and milestones for the business from here? And there's another question from the audience, which is as you look forward into '21 and '22, would you like to give any color in terms of the potential free cash flow for that business?

Well, I think it's a bit early for us to give guidance on free cash flow. I'm not trying to be -- docking. I mean, obviously, before the merger, you had -- our business is making just under CHF 200 million. So free cash flow there is just making about CHF 200 million. And obviously, we raised a bunch of debt, which will probably be about 160 million of interest. And we articulated full synergies of around CHF 280 million once the transaction had fully integrated, the 2 businesses. So this is going to be a pretty powerful free cash flow platform business. And obviously, Swiss cost of capital is very low and hopefully should achieve a reasonable valuation as and when we list it in 3 or 4 years' time. I would say the key priorities in Switzerland, and I think delighted to have Andre leading the team, and they did a fantastic job in Sunrise. And we're really pleased to have him working with us and driving the business forward, along with Severina, who's obviously one of our finest performers. The real priority is to obviously capture those integration costs and savings. And I think that there's a clear road map and playbook from all the other FMC deals we've done, particularly Holland and Belgium from our perspective, but obviously learning from our peers, Vodafone in Germany and Spain and other markets. So we're pretty confident there's a road map. And obviously, that's got to be done. I think it's launching the FMC offer. We've seen terrific success of the reduction in churn and the cross-sell, particularly in Holland and Belgium. And there's also lessons there to learn, and so that will be a second key priority. There's a big B2B opportunity. I think that when you put a fixed number of our business together, it's a much more powerful, particularly to that important SOHO segment. And we've seen that particularly in Holland and Belgium, where we're through 35%, 40% market shares on footprint. So I think in Switzerland, they're in the low teens today. So that's a big opportunity for growth. And then both companies had made some progress on digitization, but there's a big opportunity in the -- in getting the cost base optimized aside from the synergies, which is just to go through that digital space. So I think there's lots of good things ahead of us in Switzerland, a good management. And I think we're very optimistic about the prospects for the combination.

Maybe just sticking with Switzerland. Can you touch on what you're seeing in terms of the competitive environment? And how confident are you that you can stabilize the subscriber declines that you're seeing on a stand-alone UPC base? And maybe could you also touch on Swisscom and what you're seeing in terms of its progress, whether it's FTTH expansion? And is this impacting UPC in any way?

Yes. It's a great question. Look, I think -- look, first of all, Switzerland had the highest ARPU in Europe, certainly in fixed and particularly perhaps, in part, thanks to Salt and Sunrise where there were some lower-priced [ attackers ]. There has been a repricing of that market. And I think Swisscom losing their numbers, and you've obviously seen that in the UPC numbers. And UPC in particular has been harder hit because the traditional analog cable business has been accelerating in its move towards a digital platform. So yes, we've certainly been under pressure, has the highest ARPU pretty much in the market, and that has certainly impacted us. And I think there's lots of interesting statistics starting to emerge from our core business ex Sunrise about how we're starting to stabilize. We're actually seeing growth the first time again in broadband, et cetera. So I wouldn't want to kind of declare victory. But I certainly think that there's some very encouraging underlying trends in our core business or the financials have yet to follow. Obviously, combined with the Sunrise fixed mobile proposition and the bigger scale in the market, and obviously their retail shop network will be interesting as well, we're very hopeful. But let's not overpromise and underdeliver. Let's just see how that plays out. I think Switzerland's also an interesting market where we have had to compete with a much denser fiber network. Swisscom has done a very good job of building out fiber. And the question will be is, is the fact that we have been struggling to add customer as a function of our high price or has it been a function of the superiority of fiber? Look, I don't think we can be definitive. But I think our view would be, I think it's less about the [indiscernible] much more about the fact that we had to reprice our front book. And I think you've seen that a lot more with the recent trends. I mean we're starting to grow broadband market share on footprint. So Switzerland still remains a very attractive market, a very profitable market for all competitors in the market. And we think it's a rational market. So we'll see how that plays out. But certainly, the benefit of the combination with Sunrise, particularly the synergies and the [ clout ] that it gives you and the market position it gives you should make us a very significant competitor to Swisscom.

Okay. That's clear. Maybe if we switch to Belgium. Can you maybe just talk through how you see the fiber landscape in Belgium evolving? So on one side, you obviously have Proximus partnering with DELTA Fiber to roll out in Flanders. And at the same time, there are talks between Fluvius and Telenet on a joint venture. So can you maybe give some perspective on how extensive the venture with Fluvius could be? Also rather than having 2 fiber networks in Flanders, is co-investment between Telenet, Fluvius and Proximus an option?

I think John would have to comment. There are obviously regulatory considerations. I think that we're certainly aware of the opportunities to optimize return on capital by having -- optimizing fiber investment in the country, whether it be through partnering with other people or whether cooperating around a more useful way to drive the utilization and the benefit of Belgian consumers and obviously getting Belgium towards the best quality network. I mean the one thing I would say, though, remember, the Telenet is -- back to our earlier point, if you're building a network, Telenet is a very, very powerful retail brand. Arguably, it has the highest market share of footprint of any of our companies. And so any new-build platform, whether it's DELTA Fiber or not, is going to need the support of a strong retail partner. And I think there's no stronger partner in that market than Telenet. So no, I think Telenet is absolutely, as you can tell, thinking about the best way to optimize returns to its shareholders. But I think that it starts with a very strong hand given what a great job that John and before him, Duco Sickinghe, and the team have done in building up the strength of that company.

Clear. And then maybe just sticking with Belgium. As we look forward into 2021, what do you see as the risks and opportunities for Telenet? So can you maybe just talk about potential implications in terms of the sale of the Voo cable business and how you think about [ scoop ] for price rises in the Belgium market? Also, we heard news last week about Orange Belgium being acquired by its parent, Orange. Does this change the landscape at all? And then do you think -- in terms of the 5G spectrum auction, how do you think about maybe the risk of a new mobile entrant in the market?

Well, look, no one can be definitive about the future. But I think John is very optimistic that there will be not -- and it wouldn't make sense, frankly, in the market, the size of Belgium to have another entrant on the mobile side. So never say never, but I think we think that's less likely. I think the second thing would be that, clearly, Voo is very attractive. And Telenet, all things being equal, should be the most attractive owner of those assets. So I think we'll certainly see how that plays out. And that's one of the reasons why we [ flawed ] the dividend payout at 70% or 2 70, but clearly the scope to increase that should the strategic alternatives not materialize. And I don't know a lot about the Orange -- the implications on Orange. I would have thought that, that wouldn't particularly change how it would operate in the market. I would have thought that they continue to compete in that market, but the change of ownership shouldn't make a material difference.

Okay. Maybe if we switch to neighboring Netherlands. It's obviously been 4 years since the business was created from the merger of Vodafone and Ziggo. And as you look back over that time frame, what went better than expected in terms of the integration and what went worse? And also, can you maybe just talk about the outlook for the business in terms of -- it was recently upgraded to 4% to 5% EBITDA growth from stable to modest growth previously. So is this new level of 4% to 5% EBITDA growth, does that represent a sustainable level of growth going forward?

Well, I'm not going to give guidance for the future. But what I would say is that the team have done an absolutely fantastic job. Perhaps the most interesting thing is they've got good revenue growth. And as you know, in our sector as a whole, it would be more like flat, 0 to 1%-type revenue growth. This is a company that's over-indexing and delivering better as well as monetizing significant cost efficiencies through the combination of the 2 assets. So it's ahead on its synergy plan and continues to have opportunities to drive more cost out of the business. So we see the free cash flow, which is around EUR 400 million, accelerating from here. So it's a pretty, pretty strong cash flow-generating assets. So that makes it, in our minds, a very impressive performance. I think the thing they've done very well is -- they've done a great job on the cost side, but it's on the revenue side. I think if you look at the fixed mobile proposition, they've managed to leverage Ziggo Sport very effectively. I think I referenced earlier on, the churn reduction has gone from, I think it's 18 to 9 on our mobile customers, and I think it's 9 to 4 or 5 on fixed customers. And they've increased their market share. I think they're the leading consumer player in the market, and they're closing the gap in B2B very well against KPN, which is represented in the recent results. So it's certainly a company with a lot of momentum and a lot of growth ahead of it, not least because there's still lots of costs to take out. So we're absolutely delighted with how it's performed.

Okay. Well, just you touched on Ziggo Sport, so maybe a bigger picture question in terms of TV. How important a role does TV play in your longer-term strategy? And does the approach vary depending on the market?

Well, I think it does vary for market to market. I think in the U.K., clearly, we have been more of a price taker. So we've had limited margin, which is one of the reasons why whilst the top line of the sports has been an impact on the revenue, Virgin's underlying cash flow hasn't been that impacted materially. So I think the U.K. -- for the time being, television is not obviously a big driver of profitability. More so in the Benelux, where we have some interesting TV assets. We have Ziggo Sport. We have obviously a free web broadcast, Vodafone media in Belgium, and we also have some sports assets there. So it seems to me that we are in a good position to have that differentiation against the global players, the Netflixes and the Amazon Primes, which we can live with very comfortably because we do have that local proposition. But I think, look, the core of our business and the core value of our business are the broadband networks. And the broadband business is a business which has got a lot of growth ahead of it. We're seeing 30%, 40% annual demand in broadband bandwidth a year. And that -- as we've seen this shift to a digital society, accelerated in many ways by COVID, should give us a strong foundation from which to build over the next 5 to 10 years.

Okay. That's clear. Maybe in terms of use of cash, post the Swiss deal and adjusting for your new $1 billion buyback, I think you'll have something like about $3 billion of gross cash available by the end of 2020. But by the time the U.K. deal completes and you relever up that business, I think your gross cash available will be about $5 billion. So can you maybe just outline the priorities of use of cash from here? And how do you weigh up buying back your own stock versus, for example, investing in things like a fiber JV in the U.K. or becoming a fixed mobile converged champion in Ireland or Poland?

Yes. I mean, look, just to confirm, I think your numbers are broadly right, a little bit less than 5, about 4.7%, I think, we said on our last results presentation. But yes, we have got excess capital. And it's also what's underlying the core businesses are very cash flow generative. I think the consolidated guidance for this year is $1 billion, and you would expect that to grow from here for next year. So we've got a very strong cash profile, and it should be good for many years given the upcoming synergies, particularly in the U.K. and also in Switzerland. So the free cash flow generation -- as John would say, how, Charlie, do you get the best price of that free cash flow because it's very strong on free cash flow generation? So when you're sitting on 5 billion of cash on, say, a 15 billion market cap and we're only, broadly speaking, 0 on that cash, we've got a pretty strong free cash flow yield on the underlying equity. In terms of deploying the capital, I guess, there's 3 big options. One is to deleverage, one is to buy a stock and one is to make strategic acquisitions. I think just to take the kind of the leverage point first. As a result, particularly of the U.K. and the Swiss transactions, we're very comfortable with the leverage of all our assets. We have very long-term capital structures, fixed rates, still making massive free cash flow in all markets. And both those assets will be around 5x levered upon the closing of the deals, which is fine with us. [ Telenet ] has a little lower leverage, as you know, under U.S. capital in the low 4s. But Holland is a little bit higher, but it's deleveraging fast. So we're very comfortable there. And obviously, we have some great partner there in Vodafone. So I think the need to pay down debt is extremely unlikely, so I think we can rule that out. In terms of the other 2 alternatives, there's always a trade-off. When you can make an accretive acquisition, should you do it? And how much of your stock can you buy at an accretive and attractive price? I think we've obviously voted pretty hard that we've spent about half the money to date on buying our stock and, obviously, done okay. I mean, obviously, we've had, like all the sector, the rerating. But we've obviously bought pretty accretively, I think I mentioned just under 30% in the last 12 to 15 months. And we've also spent about half of it on acquisitions, predominantly on Sunrise. I don't see any kind of key strategic holes in our portfolio that would require us to commit material strategic cash, but never say never. So I think you'll probably see us continuing to look at trying to deploy that capital in a measured way to make the highest return. And certainly, the stock looks very attractive today, and we'll see how that goes.

Okay. Maybe if we just talk about local listings. Can you give us an update on where you stand with local listings of your different units? So has the strategy changed given that you undertaken M&A in the U.K. and Switzerland? Or is the longer-term objective still to list all your units over time? And can you maybe give an update on where you and Vodafone stands on the joint venture in the Netherlands? And what are the key considerations on whether you would or would not IPO the Dutch business?

Well, I think from a Liberty point of view, Look, we recognize that our equity story has transitioned from being an EBITDA growth story in the years when broadband penetration was very low and rising to a free cash flow yield story. And in our minds, a free cash flow story has a different price depending on different markets. So clearly, the cost of capital is much lower in Switzerland than it is, for example, in Poland. So you'd expect, all things being equal, Swiss free cash flow to trade at a lower yield than, say, a Polish-listed entity. And I think for that reason that we think the Telenet template is an interesting template, but we don't know with these listed national champions. So you're driving towards a Swiss-listed champion; a U.K.-listed champion; a Dutch-listed champion; possibly even combined with Telenet, a Benelux-listed champion, who knows? So -- and we think that was -- it's certainly the right strategy to optimize value for our shareholders. You'd always have the flexibility to distribute those shares once listed tax free to our shareholders given our structure -- tax structure. So that gives us optionality to hopefully create the best long-term value. In terms of timing and execution, I think Steve Malcolm makes this point whenever he goes on our results call. Clearly, we're a little disappointed like everybody else in how that trades. It's trading a little there, but I think we obviously recognize firming up the dividend payout policy and possibly raising it from here even. We underscore the strong cash flow generation of that asset, and it still seems to us a very cheap stock when it's trading, what, a 7.5%, 8% dividend yield, which must be one of the higher yields around, particularly for a business with that kind of strength and security of free cash flow generation. And in relation to Holland, there is obviously provisions in the shareholder agreement that will allow both shareholders to trigger an IPO. I think it's too early for us to comment on that. As I said, Vodafone, I mean, wonderful partners. So I don't want to kind of get ourselves out a step with them. But we certainly recognize that VodafoneZiggo, if it were listed, would be a very significant national champion and obviously would achieve a pretty premium valuation, particularly when benchmarked against KPN.

Okay. I'm just conscious of time. So this will be the last question. But in terms of other assets that you have in your ventures portfolio, I mean, I think the market's probably giving you limited credit to some of these assets such as your stake in Formula E or stake in All3Media or your stake in ITV. So can you remind us why these assets are in the portfolio? And would you consider divesting them to crystallize value?

Yes. So look, I think we have looked to make investments in what we call adjacencies. So where we think that we have the ability to add incremental value because of our core assets and we can deploy capital in an attractive way, we will do it. So Formula E is an interesting example of that. We obviously are massive purchasers of content, sports content across Europe. So we have insight that unique sports content is probably an asset that's going to go up in value over the next 10 to 15 years. We were lucky enough to be able to get involved with a very, very impressive management team and entrepreneur in Alejandro, when they were obviously a little bit short of capital. So we were able to buy into Formula E with our partners, it's got a relatively low valuation then. Clearly, there's lots of disruption from COVID, but the underlying performance of that asset is fantastic and we would argue it has been a very good return on capital. We'll continue to look to deploy limited amounts of money where we think we can add value and a cross-sell, either by getting paid in kind or, for example, by adding value, by giving access to our key assets of scale or customers or even passive infrastructure. So I'm not going to give you 1 example not because it's material, not because it's going to move the stock price, just because I think it illustrates the point, which is I think we'd all agree on this call, there's going to be a massive transition across the U.K. and across Europe to electric vehicles. And there's going to be a shift of assets in the home and obviously in cars to be run on clean energy. As we dig up all the roads of the U.K. under the Lightning project, we are clearly already in the game of digging up roads and working on similar works. And we have actually set up a vehicle called Liberty Charge, which is basically looking to deploy electric vehicle charging points in certain boroughs in the U.K. And we'd argue, what's the synergy? Well, we're digging up roads anyway. We have good relationships with the local counsels. The local counsels, actually, when you bundle up a broadband dig with a fiber -- a Liberty Charge dig, it's actually beneficial to both sides. And we're not putting any money up. We're JV-ing where they -- probably not going to be able to do capital. They're putting up a capital. We're putting up the opportunity. And it's a 50-50. That, I think, is an adjacency where Liberty is able to deploy its scale or its know-how, but in a way that doesn't cost our shareholders any capital and obviously hopefully starts to build a high-growth company in the future.

Okay. Great. That was quite interesting. So on that note, I think we've hit time. So I'd just like to say, Charlie, thank you very much for your time. And thank you, everybody.

Thanks a lot, Polo.

For the audience as well. Goodbye.

Yes. Thank you, guys. Stay safe.