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

Okay. Hopefully, we're live, and thank you very much to everyone for attending the Bank of America Telecom and Media Conference this year, unfortunately another virtual event. I think we were hoping to be back face-to-face. Alas, not, but we're all missing those meetings and maybe those little covert conversations in the -- just to see what's going on. But as ever, it does afford us some luxuries, one of which is to be able to have very easy conversations across the pond. And I'm thrilled to be joined by Mike Fries, CEO of Liberty Global, who joins us again this year.

And Mike, I'm actually going to start the conversation by taking you back not to last year, but actually not to the conference last year but to last January, and it was a call that you and I had. And at the time, we've just gone through the new year. The stock was at $18, $19. I know you guys are very upset with the buyback at $28 the summer before. I really felt like there was almost criminal value in the equity, but it just didn't seem like there was really a kind of business momentum to unlock that. And when we spoke, our sense that there was a real change in tone from yourself in terms of how you are approaching the business to really start unlocking that value. And you're accelerating some of the thinking on FMC, accelerating some of the thinking on some of the noncore assets. Now obviously, since then, we've had incredible momentum over the last 18 months with the big deals in the U.K. We've had the big deal in Switzerland. We've got, obviously, a lot more visibility now of the Ventures portfolio. So the momentum has been really rapid. So if you could maybe just begin, as an introduction, with how you look to the business, how you brought the business to where it is today. And even if I could add you to put a -- ask you to put another 12 months on to where we could see the business evolving in the next year or 2.

Sure, David, and thanks for having me again. I think you've captured it well. And anyone who's been following us would have seen this inflection in our platform and in our business. Over the last 3 to 4 years, really, it's been almost a complete pivot. And I've said this many times, from a European cable operator, that was pretty widely dispersed to a very focused national fixed-mobile champion in a handful of markets. So as I look at our business today, that transformation has resulted in a bigger, more concentrated, more balanced company, where we now reach 85 million fixed and mobile subs. We've got aggregate revenue of $25 billion. And I think most importantly, we're the #1 or 2 in every market. So whereas before, our scale was mixed, and we were trying to consolidate or thinking about how to compete. Today, we're the #1 or 2 in every market in every product, and we're able to shape the ecosystem of the markets that we're in and I think, most importantly, drive the variables that will result in free cash flow, as you pointed out. One of those variables, obviously, first and foremost, are synergies, right? I mean it's not a news to anybody here that when we put these businesses together, we create massive synergies. We've already banked EUR 5 billion of synergies in the Belgium and Dutch deals. We're looking at another EUR 12 billion of synergies in the U.K. and Swiss deals. I think our share of that EUR 12 billion was about EUR 8 billion. And our track record, as you know very well, is good on achieving those synergies. And we also put these companies, these national champions in a position to really grow, fueled by synergies, of course, but also the benefits of convergence, the benefits of digital, the fact that we have best-in-class networks. And that allows us to drive what we think is a great free cash flow profile. So free cash flow was up 40% in 2020. We've guided to 25% growth in 2021. And so we think the organic story which matters -- should matter most to investors is what's the organic story? What's the underlying operating story? It's good. Now having said that, we don't stop there. As you also indicated, we're focused on closing the value gap, and there's some good accelerators for us to do that. First and foremost is strategic exits. I mean we've shown that we're not really empire builders. We're trying to create value here. We routinely sell assets or trade assets at or near double-digit multiples. Of course, we trade at a mid-single-digit multiple. We've already sold $30 billion of assets to big, smart strategic buyers. Secondly, our buybacks, as you've indicated and written about in the past, we bought back $4 billion of stock just in the last few years or so, and we're on track to another $1 billion or more this year. And that, of course, allows us to drive a free cash flow per share figure, which will even exceed that free cash flow growth profile that I've just mentioned. We've got Ventures. The accountants value it at $2.7 billion. We don't value it. We have to get third parties to value that. That's over $4.50 a share, maybe $4.75 a share. That's surely not in our stock. And those are smart investments, investments in tech that drives our business and content that we think has got tailwinds and infrastructure that's either monetizing our own investments in property and networks or investing with smart people who are doing the same. And then lastly, we have the opportunity, the last accelerator here on the organic growth story is listings, if and when they make sense. I think -- and you write about this every day. I think there's some real tailwinds in European telco sector, one of which is regulatory, of course. It seems to be easing. If you've looked at the last 10 years, it's easing. Consolidation looks more likely and is certainly easier to get done. The consumption and demand curve is really looking strong, and we're undervalued. I mean Patrick is a smart guy. He thinks BT is cheap at this price, even though it's up 90%, 100% from where it was. I think something that we all know, too, which is there's huge value in these champions, in these national franchises, if you will. It's just about being willing, able and agile to drive that value and ensure that shareholders see that value. So that's what we're focused on. And next 12 months will be more of the same. Maybe we'll see some other assets that could possibly -- there's only a couple left, Ireland and Poland, that we're thinking about. And do they fit the mold? Do these 2 markets fit the mold of a fixed-mobile champion? If not, what we do? And lots of other moving parts I'm sure we'll talk about over the course of the next hour.

Okay. Well, let's -- why don't we just start with the big deal in the U.K. And obviously, I feel like what was also quite different was the change in organic momentum in the U.K. as well. And obviously, Lutz came in. There was a real sense of dynamism about his appointment. And obviously, the KPIs have told their own story. I also do feel like the U.K. market has eased. You've now got some healthy price indexation coming in, and the regulatory environment has obviously gone 180 degrees, I think it's fair to say. I think when we looked at that U.K. deal, let's call it, 12 months or so, give or take, you announced the first synergy number. I think it was just over GBP 6 billion of synergies, which is very much OpEx, CapEx, with the GBP 540 million run rate. And I remember at the time, I'm talking to Charlie and saying, "Where is the fiscal synergy here, Charlie? There's a ton of tax NOLs in the U.K." And he kind of said, "Well, I don't really want to shout about that right now but feels like there could be some opportunity there to add on to the free cash flow growth profile of the U.K." So maybe just an update on the kind of synergy outlook in general. I know you can't give us any new numbers, but you've certainly talked very bullishly about the B2B opportunity of the FMC, about the cross-sell opportunity. So maybe just your thoughts on that.

Well, listen, the transaction, we're really pleased to have this deal done. Telefonica is going to be a great partner for us. We've had a year to get to know each other really well in the context of the approval process and working as close as we are allowed to work on planning and strategy. Listen, I think the synergy numbers are reasonable. We have embedded six ways to Sunday. We have done this before. They have done this before. And so the GBP 540 million looks to us to be pretty solid and not something that we're too concerned about. In fact, we feel pretty positive about it. It did not include any tax synergies, as you indicated. There are tax synergies, obviously. We have GBP 13 billion of capital allowances and tax loss carryforwards at Virgin. We have restrictions on how much of those can be used in any one year, but there will clearly be tax synergies, the MPV, which will be sizable. We just didn't bother with those because it's -- we have some planning to do to determine how best to utilize those, but they will be there. And that will be additive to the synergy numbers we've already shown. And those synergies are about -- only about 85% of that GBP 540 million would be EBITDA, so we're levered at around 5x today. Our debt is really efficient. It's mid-4s cost of capital, hedged in pounds, fixed rate, 7.5-year average life. So we have the opportunity down the road, depending on what the strategic platform looks like to do recap and create further liquidity at that local level, should we want to. So I think there's a lot of exciting things around the edges, but the core business opportunity is the most critical piece. We estimate there's about 1.7 million customers on the -- on our footprint that are not taking -- O2 customers that are not taking a Virgin product, and there's 0.5 million Virgin mobile customers that aren't taking a Virgin broadband product. So we've got a built-in cross-sell opportunity to drive what will be at closing or was at closing about 44% convergence to 60%, 65% convergence. And we've done that in other markets, right? In Holland, we took the convergence ratio from low 30s to mid-40s. We did that with the basic FMC playbook we'll use here, which is essentially providing benefits to customers who want to have connectivity from one provider across fixed and wireless. So with synergies, I think with the built-in cross-sell opportunity, with the size and scale of the business that we'll own there, we're pretty excited about it. I mean the B2B space, in particular, I think, is really interesting. We've talked about that from time to time, but it's a great opportunity. The addressable market we estimate is about GBP 7 billion, plus or minus, so we should be the leading challenger there given our size and scale. SOHO jumps out at you is obvious, right? I mean we're the second-largest fixed network but only about 10% share of the SOHO space but growing fast. I mean we added a 28% -- added customer base up 28% last year, and revenue was up double digit. So lots of opportunity in the SOHO space. We've been -- Lutz has been doing a great job in wholesale, you might have noticed, doing dark -- backhaul and dark fiber deals with pretty much everybody in the market. We're the provider of choice in that space. I think something like GBP 300 million of revenue over the next several years. And we've been -- done some large-scale deals. So we're building the fiber network for Greater Manchester, so lots of opportunities. Then the last interesting thing for me is it's not just cross-sell in consumer. It's cross-sell in business. So we'll be sure to sell O2 mobile and digital workplace products to our Virgin Media business customers, and we're going to sell Virgin SD-WAN and cloud and connectivity product to the O2 mobile customers. So big revenue synergies across consumer and business, and it's just exciting to get started. We're thrilled to be going.

And I think that a number was floated around, but I don't know whether it's still accurate. But of the GBP 540 million, only around -- is it around 20% of the GBP 540 million was it revenue-based synergy and the rest is...

Something like that. Something like that. And that's not atypical. That's typical, our synergy. That's about right, yes.

Yes. Okay. Well, I guess the obvious sort of follow-on from this, and it's a debate that, again, we actually had 18 months ago, was about the future network coverage, not just the Virgin Media stand-alone, which we had at the time, but now, of course, with the joint venture. You obviously have the 15 million homes passed today, which is a combo of mostly coax, and I think it's 2.5 million Lightning or something it is. And then I think on the commitments you've kind of given, you've talked about the 7 million, which I understand is a net figure, which is more likely sort of fiber build. Is that what we should be thinking about? And I guess my follow-on question would be, it looks like Lightning is kind of running about 450,000, 500,000 a year lines. Is that also the run rate you should carry into that ambition? Or can Lightning double up like BT seems to be able to do?

Well, listen, I mean, let's go back a minute and paint a picture for you about the market because there's a lot of activity, a lot of people obviously involved and engaged in the broadband market there and the fiber market. As we sit today, let's be sure we understand, Virgin Media is the speed leader across something like 85% of our footprint. And that's not because there's not big ambition on behalf of -- on the part of BT or altnet. It's just that they haven't got around doing much of it yet. So there's only 2 million fiber homes in our footprint of 15 million. And our footprint of 15 million is plus -- almost fully 1 gig by the end of this year. So we're in really good shape on footprint today and I think for the foreseeable future, but it's clear the market is heating up. You know this as well as anyone. BT Openreach is going to work faster and hopefully, in their minds, add more fiber homes, 25 million by 2026. So we see this coming. It's a heavy lift for them, but we don't wait around for that. Now we've been building fiber for a long time. I mean Project Lightning, as you mentioned, we built 2.6 million homes today. Half of those are fiber. And at our current run rate, 75% are fiber-to-the-premise homes. And I think if you look at Lightning, almost by any measure, it's been a great success for us. Our build costs are now below GBP 600. We're using more and more PIA. Penetration rates in the 30s. ARPUs are in line with the business as a whole. We added almost 600,000 customers and as we estimated great return on capital. So why wouldn't we expand? It makes total sense. We've been doing it for 4 or 5 years. And if we did added 7 million homes, would take us to 22 million, and that's a pretty good national franchise, which opens up more opportunity for Lightning, of course, bigger footprint to sell, but also national reach for fixed-mobile convergence since O2 is national, expands our market for B2B and gives us new revenue opportunities, if we decide to wholesale. If we were to build that out, and I'd just caution that this is still work in progress, we would absolutely use fiber because we're already using fiber today. It's cost-efficient. It's easier if we do go to the wholesale route, and we will consider partners there. And we've talked about that. People have written about that. Why wouldn't we? A strategic partner would bring wholesale revenue and greater network utilization. A financial partner would bring financing and, hopefully, accretive multiples and good valuations. I think as we step back and look at the broader U.K. market, we have some big advantages here, right? Number one, we have 2 strong brands that bring -- and we bring capital customers and expertise to what is going to be an increasingly competitive fight, right? We've been building for years, so we have the resources, the relationships and the knowledge. And I think importantly, this is an important point, unlike BT Openreach, we're pretty flexible when it comes to financing, ownership structures, value creation. We're not -- we're open to almost anything, and that's a really big advantage when you're thinking about how the musical chairs end up here, if you follow me. Now we'll talk to BT if it makes sense on co-build or new markets, if it makes sense. And as I said, we'll be super agile and opportunistic about other partners, financial and strategic. It's early days. So I'll just caution by saying we've only had one Board meeting at the JV, so we haven't made any final decisions. But I think we see eye to eye on this, we and Telefonica do, on the opportunities that all look to me to be upside.

So BT has obviously introduced the incremental 5 million as a potential joint venture opportunity. I mean, I guess, the U.K. regulator, look, they've -- I said they've softened. They weren't happy with me for that, but I kind of think they did. Would they be so happy to see you guys pairing up? And ultimately, the regulation is designed to encourage infrastructure-based competition.

It depends on where the networks are. Remember, we're already kind of pairing up, right? When we use BT's infrastructure and their ducts, we are pairing up, right? We're utilizing existing. It brings down our cost to build almost 1/3. So in a sense, we're already kind of partnering. 1 or 2 levels of beyond that, whether it's digging together or -- I think that's doable. Would investing together might be tougher? We'll find out. But listen, one thing you know about us at Liberty, and I think Telefonica feels the same, is we're going to be opportunistic. We feel like there's lots of positive things happening here for us, and we'll go the best route that creates value, focused, really, on free cash flow and understanding value creation of the decision. So that will always be that we're focused on. What's the free cash flow impact? What's the long-term value creation impact?

Got you. And we've obviously got -- we've talked about the plus 7 million net, but do you need to bring any investment back into the 15 million? Is the -- you've said it's a gig network, but is some part of that cable needs to be maybe ripped out? And there's legacy, some of the -- everyone's got the weaker parts of the network. Do you have to put some fiber back into the 15 million?

Well, that's -- we're evaluating that right now. I mean the beauty of the HFC network is it's super flexible. It's worked forever, 60 years. It's done nothing but grow and become faster and more valuable to us. On the other hand, we do have some advantages in the U.K. we don't have in other markets, which is we -- massive -- we own our own infrastructure. We're in ducts everywhere. So interestingly, the cost to go XGS-PON in the U.K. is not meaningfully higher than DOCSIS 4. So as we look at 10 gig on the 15 million, we will absolutely consider the right technical solution based upon a couple of things, most importantly cost and cash flows. But also what's -- if we wanted to open up that 15 million homes to wholesale, what would be the best solution for that? We know HFC works. Telenet's doing it every day with Orange, and no problem. But what would be the right solution? So we're looking at all options in that marketplace. And I think that's the right thing to do is to be flexible. So let's see. But there are some advantages to wholesale revenue. It helps provide fuel to expand and upgrade. There's some negatives. You're eliminating some of your advantages, footprint, so to speak, but there's a lot of positives, too. So I think we're going to be opportunistic on that, and let's see how things unfold. But I would be surprised if we just stood still on the 15 million homes, doesn't make a lot of sense. I think you'll see us make some decisions there.

And then when the regulator looks at your network, I mean, it is an unregulated network today. But will you be able to do some of the things that BT can't? For instance, BT is very restricted on -- or it's controlled on the volume-based discounts. It can't do geographic pricing. If you build your extra 7 million and you're running at 9 million, 10 million fiber lines in total, can you do what you want with those? Can you price...

That's our assumption. That's our assumption. I don't see CityFibre essentially being regulated in any way, shape or form, and we're all challengers here. We're all challengers. So I would be highly surprised if regulators would step in and say, "Oh, well, look at you. You're so successful now." But who knows? But I don't see that being an impediment, certainly not in the early days. And I think we -- unlike -- I don't have a big Board. And Telefonica is pretty well run, too. It's just a couple of us making a decision. It's not as if we have to go back and appease pension funds and unions and all that stuff, so I think we can be much more agile than they'll be in these types of creative solutions to the market.

Right. And why don't we just pivot straight into VodafoneZiggo? And the reason I say that is you mentioned you've got the 2 guys. You work with them. They work with you. You've also got a partner in VodafoneZiggo. I think, historically, and you've got a lot of expertise in this, but joint ventures, it's dogs with 2 tails, et cetera. They don't necessarily always work so well. But VODZiggo looks like it's been a good story.

It's been a great story. I mean what have they done right? They hit all the numbers, right? So we hit the synergies. I think we hit a year early, something like that, and probably exceeded the original target. I believe we did exceed the original target. We're now the #1 broadband video voice company in Holland with a national network, so we've really put KPN on the run, which is what should happen in a competitive market. We've got a great mobile network. Towers unmonetized and launched 5G. We've got a great fixed network, pretty much 1 gig everywhere by the end of '22 or early '22. Lots of fiber-rich HFC. And it's a pretty rational market with 3 players. So I think if you step back and look at the VodafoneZiggo opportunities, it delivered exactly what we thought it would deliver, right? 6% EBITDA last year, great free cash flow. They've got some issues in terms of thinking through the longer-term network implications of more fiber build but also lots of options to do that, whether it's DOCSIS or other strategies. And I have great confidence in that management team. So what we have to decide really with Vodafone because they've been really good partners of ours is what's the end game here? Do we just travel forward and continue to take cash out of the business, which is what we've been doing, quite a bit of cash? Or do we list it and try to create some transparent value for each of us? Does one of us want to exit? If so, when and how? So it's -- I would stay tuned on that. It's an interesting moment. We've got IPO rights and soft put rights as we speak today, but it's a good relationship. And I think it's -- we've got some strategic questions to sort out before a listing makes imminent sense, but it's not far off, I think, in my mind. And I think it would trade well relative to peers. If you look at the scale of the opportunity, the size relative to, say, Telenet, it's 50% more EBITDA than Telenet. So it's a bigger business with 2 strong strategic investors. So I think there's a lot of good opportunity there, and they've executed the playbook, which was what we asked them to do. And it gives us comfort and confidence in the other FMC markets, for sure.

You mentioned about the size relative to Telenet. I know Telenet. I know it frustrates a lot of investors. I'm sure it frustrates you guys that a company that seems to get as close as you can to printing cash seems to trade at such a discount, especially with the dividend now firm in terms of distribution. Do you think it's just a little bit too small? It doesn't kind of get out of Belgium as an investment, and that's what's holding the multiple back. What -- or what other reason could there be?

Well, look, I think there's a couple of things. I think it is undervalued, in our mind. It trades at pretty low EBITDA, and OFCF multiple and a very high dividend yield. But I think investors perhaps are being patient, right? There are some questions, and you'll talk to John later, so you know what these questions are. What will the capital allocation decisions be around a network partnership with Fluvius or Orange or something like that? Will the Voo transaction come to pass? And how much capital does that require? What will the impact on dividends be? So I think John is at a very interesting inflection point, but I have complete confidence, as I said earlier, in decisions he's making. He's got massive market share, and he's building on that. He's growing in mobile. He's rationalizing a fixed market, which I think will happen here when these discussions come to fruition. And he's looking to expand. He's -- unlike VodafoneZiggo, it's not a national business, right? It's still a business in plan. So I think the Voo transaction makes a lot of sense, but I think it will all happen. And he's got lots of options, lots of liquidity. And we're a believer, obviously, in that business, him and his management team. So -- but I think the market is probably waiting. Let's just see what the outcome is of these big strategic decisions you're teasing us with.

Yes. I mean waiting for Voo, I mean, goodness me, that feels like a waiting game we've played for some time.

Well, it's finally happening.

It looks like it. It looks like it.

Some of the offers are due next month, so it's all happening.

Okay. So then a question that I think has been maybe -- I wouldn't say dreamt of a little more by the capital markets than necessarily contrary from yourselves, but we've looked. Could you put the Telenet VODZiggo go together? I think John said you've got consistency of convergent markets. Maybe there's a little cultural overlap. I think capital markets and telco may be a little more pessimistic on cross-border synergies historically, but what there is, of course, is the fiscal synergy now that Telenet is paying a full tax bill. Do you guys have a look at that and say, "Hey, now we could create something even bigger." I'm aware that Vodafone is a big player in this decision, but do you think about this?

Sure. We think about a lot of things. As you can imagine, at Liberty, we're always thinking about these types of opportunities. I think it's a little premature. I think the questions I just raised with you around the Fluvius conversation and Voo and other types of things really need to settle down. That's point one. But it all starts with our partners in Holland, what's Vodafone's appetite for something bigger and more interesting. And we don't -- we haven't had that conversation in a concrete way. I'm not sure we're ready to have that conversation in a concrete way, but it will be interesting to see what opportunities might exist. So I -- and Telenet is a public company, too, so I don't want investors to get excited about something that I can't quite, frankly, handicap for you today. But is it theoretically possible? Sure. The synergies are okay. We looked at it theoretically. Synergies are not massive. There are some tax benefits perhaps. So I would prefer to see Telenet really become a true national fixed-mobile champion in Belgium first. I think that makes a lot of sense. It's the best use of their capital and management resources. And I think they have a pathway to doing that. And then let's see what they might look like.

Okay. Let's go on to the next FMC Champion, which is in the Swiss market. It was a business that was troublesome for you guys for a couple of years. It was negative double-digit EBITDA growth. It looked like it was turning a corner organically. I think you guys have a fairly long-dated recovery plan, but then the Sunrise opportunity came, obviously, in one form and then another. But it feels like that's started well. Maybe you could give us a little update on how you think that's progressing and where the real wins have come and how maybe it surprised you.

I think it's off to a great start. I'm really excited with the management team. André is doing a fantastic job. The integration is on track, at least what we've been able to achieve in a relatively short period of time. And I think the synergy plan is very reasonable. It's -- this is not a stretch. It's CHF 275 million run rate, I think at $3.2 billion on an NPV basis. And we're giving ourselves 5 years to get there. We got there in 4 in Holland. And 85% is also cost CapEx, so not a difference -- a very similar profile of synergies. Now there are some cost to capture, and we've made a point of that, CHF 300 million cost to capture mostly in the first 2 years and a big chunk of it this year. So it's still a bit of -- you're not seeing positive synergies yet, but they will come. And everything looks pretty straightforward. And look, the playbook has been straight. It's just right out of every other market that we're an FMC operator. Hit the synergies, stabilize the consumer business and drive the FMC cross-sell opportunity. Today, we're at 30% FMC convergence, I believe. But there's at least 1 million customers out there that are either fixed only or mobile only. And obviously, we're going after them immediately today. And we know the benefits to churn and ARPU when we do that. The B2B opportunity is sizable. I think our market share in that in Switzerland is less than 10%, and we have been growing in all those segments. So that's really exciting to me. And as you pointed out, they have a strong Q1, adding customers of both broadband and postpaid. I think we even grew video customers in the first quarter. Both the brands are starting to pick up some momentum, and that turnaround plan has worked. I know it's been a long time coming, and we got distracted a bit with, as you already indicated, multiple transactions, but that turnaround plan has worked. We are the speed leader in that market. We've got 1 gigabit across 100% of that footprint, either with our own HFC network or access to Swisscom. I think 20% of our customers are 1 gig today. So the television product is stronger. Something like 80% of our TV base is on our new TV platform, which has been really positive. FMC is off to the races, and that's been really good. And the investments we made in digital are paying off. So I see a lot of positive things when I look at the brands, customer reaction to the brands, where churn is. The momentum seems to be on our side, and so I'm pretty actually pleased and excited about what's going on there. And I think it should deliver what we said it would.

And your competitors are looking at -- are obviously doing a joint fiber build. Do you feel the need at all to think about infrastructure or even participating in, again, in the joint build that you've discussed in the U.K., whether it be -- what kind of infrastructure partnering may be?

Yes. I think you're going to find in Switzerland that it's very much a hybrid approach for us. Some DOCSIS 4s utilizing some Swisscom network, maybe some -- using our own 5G for fixed wireless access, building some fiber, co-building some fiber. So I think it's a rational market. There's only 3 of us for the most part, and I think we'll find good outcomes there when it comes to the network itself. We have a deal with Swisscom. We have access to their fiber-to-the-home G.fast product when and where we need it or want it because, of course, Sunrise brought that into the partnership, into the deal. So we have opportunities there to, I'd say, come up with the optimal solution for getting to 10 gig, if and when we think that's critical. It's too soon to reveal that for competitive reasons. We want to make sure we understand it clearly. But cooperation with Swisscom would factor into that in my opinion. The deal they've done with Salt, it looks like a good deal for Swisscom. I would say an iffy deal for Salt. I mean they don't -- they're kind of paying for owner economics but not getting it. It's still really a wholesale deal with front-loaded, so to be determined how impactful that is on the market as a whole. But our dialogue is with everybody. And I think you should assume that we'll in this market really have a nice mix of technologies that get us to the outcome we need.

Okay. Sure. And then maybe on to Ventures. You brought that into the analyst presentations and the earnings calls as an opportunity. You've obviously talked about the fact that it's valued independently. How should we think about the monetization of Ventures. Is Ventures -- can Ventures go on its own? Or is Ventures just a pool of assets that you think you're just going to kind of -- as the opportunities come along, you could just sell one piece now?

Well, that's the strategy thus far. So if you look at the tech side of the Ventures portfolio, which has been our greatest success so far, we have 8 to 10 unicorns. When they go public, we sell. So we've been -- we're at $15 million in Skillz. I can't tell you how much we've taken on already, but it's bordering on $50 million to $60 million, and we'll probably get another $150 million in value. I mean when we can, we will because we're in it to create value for shareholders and not to be heroes. And Skillz is something we could utilize in some instances, but we're still building the relationship there. So I would -- I think you'll see some real -- you'll see exits in the Venture portfolio regularly, which makes it kind of self-funding, number one, and some home runs there. And remember, the strategy with Ventures is to create or invest in businesses that have products or services we can utilize as a customer, and that's worked for us. I mean you look at Plume, where we were an early investor in Plume. And now we're rolling out Plume everywhere and have great business and strategic relationship with them and also making a lot of money on the stock. So those are deals -- heck, I mean, the U.S. cable industry, John Malone has been doing this forever. It's not new technology, so to speak, but it does work. And I think, in that case, you'll see us be very focused on banking value in that. The infrastructure side will take a little longer. We're an investor in EdgeConneX. We've just launched a great new business called AtlasEdge with Digital Colony, seeking to look at the property and facilities we own around Europe and other operators and pushing data centers to the edge of the network. And so if we have power and space closer to the edge of the network, we believe, longer term, that's where the opportunity lies. So as we -- what we've done is take our property and put it into a separate entity and lease back to the opco, and we'll bring other operators in and create what we think is the next generation of infrastructure, which is edge-based, edge-driven data centers and infrastructure. So lots are happening there that may be longer-term investments in infrastructure but exciting nonetheless. And then the stuff in content. Formula E has worked great for us. We're a happy shareholder of ITV. We've brought the hedge down, so now we're in it. I think our average cost is 80p or something, so we've made money on ITV. Hard to know exactly how the content piece becomes hugely strategic. So I think there, we don't have a whole lot committed or a whole lot of deal flow, and we'll see what happens. But in the round, these are smart investments. We've made money in pretty much all of them, and you should assume we are always going to be looking at them from a -- both a tactical and a financial point of view. We don't need to own it. For legal reasons, if it doesn't fit or doesn't create value for us, we exit. And I think we'll do more of that over time.

So just on that content debate, and I was talking to Telefonica about this, this morning there and the football rights in Spain, it feels like content is increasingly coming out of the service providers. You've now got these big, global sort of the zone-like operations. And obviously, it's about taking content to more eyeballs, right? It's a pretty simple equation. Do you feel like if the ITV stay, I mean, the Formula E, are they things that really should sit in Liberty Global? Or maybe they succeed and create value better elsewhere?

Well, we're open to that. There is no religion at this point. I think if we've seen anything in the last 4 to 5 years, whether it's the AT&T WarnerMedia experience or others, it doesn't always make sense to be vertically integrated. It can make sense in some instances, and we've done it successfully in Belgium and Ireland, and we've done it successfully in Holland with VodafoneZiggo with the Ziggo Sport platform. But on the other hand, we're not likely to take huge bets on vertical integration, unless there are clear benefits that we believe -- given the business we're trying to combine or merge with really creates value long term for us that we wouldn't otherwise be able to create on our own. So -- and we never say never, but it feels to me like we'll be more opportunistic about that, not religious, in the sense that fixed-mobile convergence, we were religious. In every market, we're either combining with a mobile operator or we're getting out. I don't see the same kind of -- we don't have the same conviction around content nor should we. We should stay more agile and more opportunistic.

And I guess just returning to the U.K. and the infrastructure side, the one as well as finding financial partners, that does look like there's a source of finance within the new VMO 2 group, which is the cornerstone asset, the CTIL asset. I think it probably wasn't easy to sell that. I know Vantage very clearly wants it. Wasn't easy to sell that when you were putting the 2 businesses together, I'm sure. But now that together, is there a sense that at the right price, that's an asset that you guys don't need to own?

Well, that's a decision that will make as partners at the Board level. I think you should assume we will evaluate that. And as a source of cash, either for a fiber expansion or some kind of upgrade/wholesale relationship, that obviously looks to be an opportunity. So we'll see.

Yes. I have to ask one question that's down here, just because it has some amusement value, which was, did you get a call from Altice on potential U.K. investment?

You mean prior to the announcement?

Yes. Any interest in investing with you guys?

They did not, but I have talked to them, of course, since then. And I think among many interesting points made, I think they like the fact that we were the other operator because we know each other well, and they understand that we're rational operators. And so among many things they like about the BT stock, they like the fact that we were on the other side and would fundamentally be rational operators. And I think, listen, we have great respect for Altice and Patrick and Dexter, and the team know them well. And I think it's good. A lot of people coming back. Dana is strong now running Sky, worked for us for 20 years; Patrick. There's a lot of Liberty DNA in the U.K. market, and I like that. I think that's a net positive for us.

There you go. One other question that I think just gets asked all the time is -- and it's almost a challenge to our investment case that I think you guys are so aware of. But I always think of the Liberty Global share price, you've got a kind of Venn diagram, one circle, which is European investors who can't buy U.S. stock. The other circle is U.S. investors who go on a European telco, and actually overlapping that for the real Liberty Global shareholders is -- can be quite a sort of narrow intersect. Do you feel that, that holds the share price back, the fact that you're essentially Euro telco listed in the U.S.?

Well, I think there's pros and cons. What do I mean by that? If we move forward on a listing strategy with any one of our business businesses, you can assume, and you would know better than anyone, David, that the majority of the appetite for that stock will come from local investors, Swiss institutions, Dutch pension funds, whatever it might be. And so there's a -- I think a reservoir of demand for great telco businesses like ours in those local countries. And to a large degree, that will support and drive valuation of those listings, if we were to pursue them. It certainly did in Sunrise. Seems to be doing that to a large degree in Telenet but a smaller market, as you say. The flip side is we're a NASDAQ-listed stock, largely U.S. investors, not all, but largely U.S. investors. And what the opportunity we provide them is, a -- I think a simple ownership play on this European market. Now will there be holdco discounts and these sort of things? Maybe. I mean it's hard to say exactly. Holdco discounts are generally driven by complexity, sometimes concerns around capital allocation and incentives. Maybe there are some tax issues built in. But to be honest with you, if we were to pursue listings in these markets, it's only a handful of markets, start with that. The governance is straightforward. These are already joint ventures or something of that nature. And I think you've got different demand. It isn't as if a shareholder in the U.S. say, "Or should I buy the Sunrise? Or should I buy Liberty?" They could, but most of the demand for Sunrise will be local demand. There's not a lot of overlap in the shareholder base, which is different than some of the other Liberty complex businesses, not complicated, but in the Liberty complex, where you've got U.S. investors deciding which one of these. There, we've got a different shareholder base looking at different stocks. To me, that's a big positive. There aren't big capital allocation issues. There's no management conflict. We don't own shares directly as management in any of these opcos nor would we. And there's no real tax issues because we'll always -- we're working to tax out of things pretty regularly. So I think there's -- I think it can be compelling. And I think your point about investors on both sides of the ocean. On the other hand, I think we present different opportunities for each of those, and we're thankful for analysts like yourself who really bridge that gap because you get our business from a European context, and you are helping our investors really understand that context. That's critical for us, so we're very thankful that we've got analysts like yourself who really lean in and do the work to make that story more compelling for our U.S.-based investors.

And I guess the general theory is that you welcome the conglomerate discount because you're buying back your stock, right?

Well, we don't like to say that out loud, but that certainly hasn't hurt. Historically, that has been a value creation tool. But all things being equal, you'd like that gap to not be there. We want -- we don't -- there's a gap between public and private market values, right? We're selling assets at or around double digit. We've traded mid-single digit. There's a gap in our sum of the parts relative to our stock price, and there could be a gap between transparent valuation, whether it's Telenet or other businesses. And so we'll work to minimize that gap. I mean I fundamentally believe our goal as stewards of your capital should be to make it simpler, to make it more compelling, to make it less complex. And we're focused on that. We don't want this to be all about financial engineering. That won't be any fun for anybody. And we're good at that, but that shouldn't be the story.

Okay. Very good. Well, I guess we're probably sort of finishing, coming full circle, which is the strategic outlook. It's about the FMC champions. It's about potential listings over time. It's about monetizing the venture portfolios as and when. And ultimately, it's about generating that strong free cash flow per share progression at the topco. That's what the real Liberty investment case is right now.

I think that's right. You've said it well, and we like your price target.

Yes.

It's good to hear you say it.

Yes. Okay. Well, listen, I'm aware of your tight schedule. And as ever, Mike, we really appreciate your time.

Thanks, David.

Thank you on behalf of myself and investors, and we'll leave it at that. Thanks so much.

We'll speak soon. Take care, David. Thank you.

Thank you.