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

Excellent. Hello, everyone. Thank you very much for attending this session. For relevant legal disclaimers and disclosures, please check www.morganstanley.com. Our next session is with Liberty Global CEO and Vice Chairman, Mike Fries. Mike, thank you very much for coming to Barcelona.

Of course.

Really excited to have this chat with you.

The last conversation we had last year was in an interesting time where still in the pandemic, et cetera. But since a lot has changed -- of course, with the war in Europe and a number of macro challenges, so businesses are operating in challenging times, a lot of new challenges but also opportunities. So there's a lot of ground for us to cover today. But maybe a good place for us to start this conversation is to come back to your results, you reported Q3 recently, so if you can talk about how the business has performed. And going into 2023, what are the main priorities for the business?

Sure. Well, it's great to be here. You already hit the high points, which is that we are all facing challenging times, no question about it. This is a macro environment that nobody could have necessarily predicted and certainly one we haven't seen, and I've been at this for 4 decades. So having said that, generally speaking, while we don't have -- and I say this all the time, while we're not perfectly immune to these types of moments, we have a lot of antibodies, as I say, and we're highly resilient to, our business. You probably heard that from multiple telcos here. It's nice to have a product that is considered to be essential, to be in a business where demand is robust and, quite frankly, doesn't fluctuate unlike, say, advertising or other revenue streams with these kinds of macro challenges. I'll tell you that this is the third year in a row that we have not only hit guidance or will hit guidance, which hasn't happened yet, in this year, but actually hit our internal budgets. So a lot of people had to reset during COVID or reset during this last 12 months, we have not reset. So I think that's an indication of how stable and strong our business is. And our third quarter results, we thought were good. We had really good revenue growth in broadband and mobile and B2B. We still suffer from a little pressure on the fixed side, fixed ARPU. I'm sure we'll talk about that. Good growth, particularly in mobile on the subscriber side. And our -- we reiterated our free cash flow guidance for the year, which I think most investors are principally concerned about. And going into next year, listen, for us, it's all about execution. It's execution on our operating growth plans, which consists of a whole range of things and nothing particularly novel or new, but that's, of course, driving market share. We've got massive convergence opportunities. Synergy plans that are still yet to be fully realized, which is a nice tailwind to our growth story. We've got network strategies in place. I'm sure we'll talk about those in every market. So we have a lot of work to do on the fixed and mobile network side. And then just staying really focused on our stock. I mean we'll talk about that, I'm sure, but we're committed to our stock. The value gap is massive, and so we put our capital to work principally in our own equity. And so those are the main priorities. I'm sure we'll get into some of those in the course of the conversation.

Absolutely. So coming back to the topic of the current macro, which has a wide range of implications on pretty much every business. Could you talk about where you see most of the impact today in a big picture sort of view, and then we'll dig into some of the topics like inflation, energy costs, et cetera.

I mean, this is going to sound redundant to everybody who's already spoken before me. Obviously, energy and wages are things that we're watching closely and mostly concerned about, we can talk about that. We're either hedged or we've anticipated some of these challenges. I guess one aspect of the crisis that maybe not everybody is talking about is clearly the consumer is feeling a little bit of fatigue. There's no question about that. While our business and our product are massively in demand, we are finding that some consumers are starting to rightsize their bundles or reshape their expenditures, even though they're very low in comparison to what they're normally spending on other things, still we're seeing a little bit of that. It's putting a little pressure on fixed ARPU and on fixed growth, principally in video and voice to some extent, less so in broadband and hardly at all in mobile, maybe some issues around devices, fewer devices that are being sold. So really, it's some fixed ARPU and some handset revenue that we -- a little bit of headwind. But we've got lots of plans to address that. And fortunately, our margins are high and our EBITDA is soaring. I mean in the third quarter, we had pretty substantial acceleration in EBITDA in 3 of our 4 core markets because we've got price increases, cost controls and synergies, and a lot of things driving the profitability of the business despite some -- a few challenges on the top line.

Right. And on topic of energy costs. I know that you guys have been working on hedging the exposure. Could you talk about your exposure to energy costs and also the work you've been doing to manage the cost both from a pricing perspective, but also from a consumption perspective, which I guess is also relevant for an ESG standpoint?

Well, listen, energy for us is a very small percentage of our OpEx. I think you would have heard that from pretty much everybody at this conference. I think in '21, it was 2%, maybe slightly higher in '22. Obviously, as energy prices rose, we were fully hedged through most of the year, this year, and we're almost fully hedged already for next year. So clearly, that's a headwind which we've been able, we think, to manage pretty well, and taking the volatility and the unpredictability of it out of the equation and then build your business around that. On consumption, listen, we're doing what you'd expect us to do. All the new network build that we have underway, whether it's fiber or 5G, these are more efficient technologies. That's point one. But I guess, point two is we're doing everything we can to reduce our reliability on energy. So I think the numbers today are 92% of our energy comes from renewable sources today. That was 25% 5 years ago. So you've got investment in new networks. You've got a real concerted effort to focus on renewables. And then you've got a lot of investment in devices, where a lot of the energy is consumed, it's in broadband modems and set-top boxes. And so a lot of the effort that we're putting into on our road map is to develop devices that are less -- consume less energy. So a lot of things positively happening there.

Okay. Moving to the topic of technology and innovation. I had really a great conversation with your CTO, Enrique Rodriguez, last month.

Okay.

So we talked about a long list of fascinating topics of technology upgrades, not only on fixed actually, where we talk a lot, but also in mobile, in B2C, but also in B2B, where losses happened. And of course, we discussed the cable upgrade, the road map between DOCSIS 4.0 and between FTTH. Before chatting on that road map, it would be good if we could zoom a little bit on DOCSIS 4.0. If you could explain to the audience what are the benefits that you are expecting from DOCSIS 4.0? What is its time to market? But also maybe tell us as well, if you could -- a bit more about costs, where we hear different numbers. I guess, maybe it's like fiber, it depends whether you have gig or not, et cetera, but any flavor on the cost element will be helpful?

Sure. Well, I mean, I'll say what I think most people already know, which is DOCSIS is an extremely robust technology. Even though -- and I'll bear the punchline here, even though we're pursuing both strategies in Europe, fiber in some cases, DOCSIS in others. There's no question that DOCSIS is a very robust technology. It's been around decades. There is massive scale and capital being put into the innovation cycle for DOCSIS. And remember, today, if you look across Europe, the reason that we're the speed leader in our markets is DOCSIS 3.1. So we're 1 gig across 30 million homes. That's twice as many 1-gig homes as anybody in Europe. Incumbents today, now they're all attempting to build more fiber. And our speeds and the offers that we make today are much faster. 2 to 5x faster than most of the telcos or most of the broadband providers. So DOCSIS 3.1 is the horse that took us right to the front. And people wonder, is it going to run out of energy? Is there enough left to get to the finish line and the fact is there is. There's multiple approaches to DOCSIS 4.0. DOCSIS 3.1 itself is scalable. So Enrique would have told you, we're going to go to 2 and 2.5 gig just on the basis of the existing plant, virtually no investment required to get to 2 and 2.5 gig on the DOCSIS 3.1 network, it's just reallocating spectrum essentially. And DOCSIS 4.0, of course, takes you to 10 gig. Now DOCSIS 4.0 is a bit more of an investment than just reallocating spectrum, there is you have to generally take your network up to 1.8 to 1.2 gig depending on the approach you're taking. You need new silicon, you need new CPE. So there is a hurdle to get to DOCSIS 4.0. I think time frame, late '24, '25, be rolling it out. And costs vary. I mean in Holland, we think it's EUR 150 to EUR 200 a home, probably, to get there. In the U.K., it's less than that. But the reason we're focused on fiber in the U.K. is that the cost of fiber is pretty close to DOCSIS. And all things being equal, if you can build fiber or build DOCSIS 4 at roughly the same cost, based on other factors, we're probably going to lean into fiber. And we can talk about why that is market by market. So DOCSIS 4.0 is legit. We're pursuing that almost exclusively in Holland. I don't know what Vodafone said about it. They're clearly -- they're heavily dependent on DOCSIS as well. I would not write it off. It's a technology that we'll get to 10 gig. It will have a robust upstream and fairly inexpensive innovation curve or cost curve.

Right. You have touched upon how to find the right path between DOCSIS [indiscernible] 2.5 on the DOCSIS 3.1, and of course, DOCSIS 4.0 and FTTH. So could you explain to the audience what is the thinking framework when you make that decision between the two.

Yes. Well, I hit the biggest one, which is cost, obviously. So there are some markets where fiber is just prohibitively expensive, and it's not -- there are no economic models that will necessarily justify that. And there are markets, like the U.K., for example, where fiber is only marginally more expensive than, say, DOCSIS 4.0, but has real advantages. Number one, it gets us to 10 gig faster because we're actually building fiber today, not in '04 -- '24, '25. Number two, it has clearly some symmetrical benefits. We think B2B has some greater opportunities in B2B. So there are some benefits to fiber when you have the cost characteristics to justify it. In the U.K., for example, we have a 100% underground network. It's very cost effective to pull fiber through there, really fiber to the last cabinet, if you were already fiber rich in the U.K. To set ourselves up for an XGS-PON network, it's not meaningfully more expensive. We've given the numbers, GBP 100 a home versus, say, GBP 75, GBP 80 for DOCSIS. So that small increment in fiber costs, which [indiscernible] increases in the U.K. This year, we took a discretionary price increase on fixed of around 6.5%. And historically, because we don't have contractual price increases, unlike BT, for example, we give our consumers a 30-day out. And as a result of that -- and this is what we've always done, I stand up here every year and say the same thing, we get about half of that price increase to our EBITDA line after retention discounts, churn, et cetera. And that's the way we've always more or less managed the price increase on the fixed side. On the mobile side, it's slightly different. On the O2 base, it is contractual. We have an RPI plus 3.9%, like BT. So our price increases there were quite substantial, but we only took them on service revenue, not on handsets. And then on the Virgin Mobile base, we took a small amount. It's about 6.5 and 9 were the price increases last in this year, and we're going to drop a lot of that, especially in mobile, to the bottom line. And as we look out to '23 -- I mean, I'm not going to tell you what our price activity will be. But clearly, we, BT, others, are investing a ton of money into 5G, fiber, all the things that the government wants us to do. So we have to balance very carefully, both cost of living issues along with our own economic needs. And so we'll see. I'm not going to announce today what we'll do there, but we think certainly there's good reason to consider continued price increases. On the operating side, you have to look at the revenue, I think, by segment. So B2B revenue had a little bit of a year-over-year issue because last quarter, in '01, was so strong with backhaul revenues. But generally, that's trending positively. Mobile revenue, service and handset revenue, positive for the period. Broadband revenue, which we don't break out, but I was just -- well, we did break out actually in our quarterly results, now for the first time, very positive. It's really around video and voice that we have to be thoughtful in the fixed business, and a little bit of ARPU pressure for the reasons you just described. But I think as we look out, I just spent the whole day in Madrid yesterday going through our budget, I'm not going to give you the numbers, I'll just say there won't be another telco with a stronger budget than Virgin Media-O2 next year. It's ambitious. But synergies are kicking in as you -- we're only about 1/3 of the way on synergies there to a very substantial number, $500 million plus that we've published. We've got a lot of positive developments around the Volt product. So Volt is our converged product there. So we've got over 1 million Volt customers. What does that mean? That means when we put O2 and Virgin together, about 45% of the customers overlapped just by accident, if you will, kind of overlapped. And now we're converting those customers, knowingly, purposely, into these converged products. The more we do that, the customer lifetime value goes up, churn goes down. So we're driving that aggressively. And that's a real positive out of the U.K. market. So very optimistic about that asset. Great partnership and great management team. So nothing but I think tailwinds there for the most part.

That's great to hear. Moving to Switzerland, which is a very interesting market at this point. Very unique from an inflation perspective, so you provide a nice inflation shield. And also, the market is quite concentrated and has concentrated further after the UPC-Sunrise deal. Could you talk a little bit about the business performance there? And also about what you see in the marketplace, do we see any signs of market repair or market leading? It's not an extremely competitive market, but given the level of concentration, maybe the recent outlook for a better pricing environment.

Yes, you hit the nail on the head, Switzerland is a bit of an outlier in Europe, no inflation, 3% GDP growth, relatively stable. So it really sits among none with no peers, as far as I can tell, in Europe from a macro point of view. We have historically not taken price increases in Switzerland, partially that's competitive. Partially, it's because of the nature of the macro market. So I wouldn't anticipate us taking meaningful, if any, price increases in '23. But we'll look at it. We'll look at it carefully. I'm not signaling anything, but if markets -- if the rest of the market looked at it differently, we might look at it differently. But at this point, as you say, it's a relatively healthy market but a competitive one. We sit in a #2 position, so we've got 25%, 30% market share. Of course, Swisscom would be twice that, and so we'll have the balance, relatively small. So it's a rational market and one that I think we've got a lot of positives. A single -- strong single brand, premium brand -- not that it matters, but Roger Federer has been promoting us, Swiss gig. I mean the Sunrise brand is gold in that marketplace. And we've got a great network and great network optionality. So we've got 1 gig across 75% of the country and access to the fiber network from Swisscom and the balance where we need it. So great network option. The best 5G network in the market, we think, all 100% 5G. So we've got a lot of real positives. Integration synergies are more or less on track. We're halfway through. We've already peaked on cost of capture, so a lot of that should start rolling in. We have one headwind that we're dealing with, which is as we rebranded the Sunrise, some of our UPC customers, quite frankly -- so we looked at the Sunrise offer, the Sunrise bundle , and said, well, we've kind of like that. So we're managing what we call sort of rotational churn. Out of a higher ARPU UPC base into a Sunrise product base, and that's having -- putting a little pressure on the fixed business in particular, we'll manage through that. But that's the only issue I see that isn't very positive. This business is going to do largely what we said it would do, generate meaningful free cash flow in a relatively stable market.

Right. Moving to the Netherlands, which is a very good FMC integration story, a lot of cash generating in that asset. What is the next step for that partnership with Vodafone?

Did you ask Nick that question today?

I should have. But it's not too late.

No, I'm kidding. Listen, we have a good partnership with Vodafone there, really solid. Both parties look at the asset in the same way. There's long-term value creation here. We'll remain agile, if you will, but long-term value creation. And we couldn't be happier with the performance. This is a business that has done everything we asked it to do. One out of every 2 broadband customers is taking a Vodafone product. I think 7 out of every 10 Dutch consumers have something from us. It's really neck and neck with KPN. It's really a 2-player market, for the most part, in convergence. We added more mobile subs than they did in the quarter. We lost a few fixed subs, but fixed ARPU is strong. Mobile service revenue, I think it was record growth or something. So a lot of positives there in the core business, and it's returned to us EUR 3 billion. It's generated dividends to the parent of EUR 3 billion since we put it together. So it's done everything we've asked it to do. We have to keep pivoting in that market to high speed, driving the DOCSIS 4.0 long-term fiber response strategy. We've been dealing with fiber in that market for 10 years, this isn't new for us. In fact, nobody has been competing against fiber longer than we have. And I think we've got the model down there. First 6 months, perhaps a little bit rocky, but then we win customers back in broadband. So a lot of positive things and we're excited by the future. I think next year, they've got to put a little more energy into 5G, a little bit more energy into the fixed network for sure. But fundamentally, I think it's a solid business that will generate meaningful free cash flow for a very, very long time, and that's why we own it.

And is that a business that you would like to own more of? Less of?

We're very happy where we are. Yes.

Right. Moving to Belgium. So Telenet has been going through some challenging times, how to sort of -- to solve this?

Well, look, we like Telenet. We like the stock price. I think Telenet is a business that's a little misunderstood today, partially by their own -- for their own doing because of their own steps. This might be news for some of you, but this decision to create a Flanders-wide NetCo with their partner there certainly creates a different financial picture for the company in the next 2 to 3 years, where they're investing a lot of free cash into fiber and creating a NetCo-ServCo model. So really structurally -- not just structurally, but legally separate NetCo-ServCo. We've never done that before. It hasn't happened very often in Europe, despite a lot of talk about it. Now BT is not legally separated. It's just structurally separated from Openreach. So a lot of heavy lifting coming in the next 12, 18 months there. A lot of capital that has to be invested in that network. But one of the reasons that makes sense is they will have -- they already have 60% of the market in broadband. So day 1, that NetCo starts with a massive broadband share. which is the magic of wholesale and NetCo. Everybody understands that anybody with even a toe in the infrastructure business knows, you can start out life with 60% utilization, you are already there. That's Nirvana. So I think there's a lot of benefits to the NetCo asset once it gets up and running. And I think it starts out live with 500 million in EBITDA, something like that. You put any in from multiple on that, you're getting the ServCo for free. So I think he's got challenges, no question about it. Fourth entrant coming, a lot of CapEx in front of them. But there's some interesting upside to expansion in the South, the sort of NetCo-ServCo strategy. So I think he's making the moves that need to be made there -- I'm referring to John, of course, and we're supporting him.

And if with all the above, the stock price of Telenet continues to be challenging, how do you think about the minority listing?

No, it is what it is. I'm not sure there's much I think about this point. I think minority -- we're all in this boat together. If the stock price is up and down for them, it's up and down for us. So we're in it together.

That's fair. Moving to the ventures portfolio, which is a key value driver as well. Could you talk about the vision strategy here?

Yes, I think it's simple. It's -- why are we in this space at all, people who like what are you messing around with this for? And I think it's a few things. First of all, for the last 30-some-odd years, we have been buying, building and exiting businesses. We are in -- we've owned over the years I've been doing this, I don't know, 25 markets, now we're in 5. So do the math, right? We've exited quite a few, and generally 99% of the time, we exited the massive premiums to our invested capital. So we're pretty good, we think, at investing, building, buying and, at times, exiting businesses. That's point one. Point two is we have a treasury team, a tax team, an M&A team that's, I think, world-class. And number three, we're in the technology business. So it makes sense for us with a little bit of excess capital to look at opportunities that come at us that are strategic, but also highly accretive and can generate a good return. So in the tech portfolio, which we've been doing for 14 years, today it's about $1 billion value. We've got 70 investments in -- small investments in tech companies, software companies. Most of which, if not all of which are -- can be basically suppliers to us. In the content portfolio, about 1.5 billion, it's some assets we've owned for a while, like our stake in ITV or Lionsgate. But also All3Media, for with sports, media content and streaming. And then we've got a newer pillar, which is infrastructure. We're in the infrastructure business, and there are opportunities adjacent to or right there in front of us where we can be putting some capital to work in infrastructure deals to about $500 million. So I think it makes sense for us to be doing. I think we're doing it well. And it's more $3 billion and $6 a share, you can put whatever you want on it. But if you add our cash and you add our ventures business on top of that, I think you're getting something like $13, $14 a share. So we don't talk a lot about those 2 things. We do a little bit, but that's before you get to any of the assets we just described.

Right. And related to that, so if you can spend some time on your sum of the part story. There is a lot of optionality in pretty much every business in the portfolio, a lot of strategic optionality. And at the same time, as you said, you guys have a strong track record in monetizing assets at some very attractive multiples. How to highlight and/or crystallize value in this current environment.

Well, I think it comes down to a few things. Number one, the one we've talked about quite a bit today, is our operating businesses are in the 4 key markets, even Ireland. These 5 markets are hugely valuable businesses. So number one, we execute on the core strategies of those markets. FMC champions, long-term free cash flow growth, #1 or #2 in everything. And those kind of golden assets, if you will, each have their own interest in, as you just described it, optionality or catalysts. Can we consolidate, should we list, should we spend. The good news is that we're open to anything. And I don't mean to say we're just tossing stuff in the air, but we are about creating value. And if the right way to create value in any particular market is to take step B instead of step C or D, we're going to take that step. We're not shy about it, and we're not building empires here. So I think as you point out, we've got a lot of optionality in these core markets to build, buy, grow, exit, whatever we think makes the most sense, and we will always be agile about that. But underneath it, and fundamentally, we have to grow the businesses. Make sure. Long term, we're building incredibly powerful champions, and that's what we're doing. The second main thing we're doing is buying our own stock. I mean it doesn't matter what methodology you use, I don't care if you look at DCFs, I don't care if you look at private market multiples, public comps, it doesn't matter. The reason 90% of our analysts have a $30 price target on us as they're doing that math, too, and there's a lot of upside in our stock. And so we've repurchased something like 14 billion of it in the last 5 or 6 years at half the market cap. We're down to 460 million shares outstanding. It wasn't long ago, we were at 1 billion. So we're just going to keep buying it. And the way we look at it is we're delivering a 10%, 11% yield to investors. It's not a dividend yield, but when you take 100% of your free cash flow and you buy back shares versus 50% of your free cash flow in a dividend that's taxable, we think it's a better way to remunerate shareholders and we're going to keep doing it. So we guarantee -- not guarantee -- we've committed to 10% of our shares next year funded through free cash flow, and we'll just keep at that. So people say, why don't you take the company private? Well, we are kind of taking it private. Slowly at a much lower price, and if that's what the market gives us, that's what we'll take. So fundamentally, that's, we think, the most important catalyst over time, is just to be -- stay committed to buying our own stock and see no reason why we wouldn't do that.

All right. And moving to the topic of leverage, you guys believe on a levered equity story is a key part of the strategy. Could you perhaps explain to the audience why is that the right strategy? And why does it work in a low rate environment, but also any high rate environment?

Yes. Well, I mean, listen, everybody who's on the stage has leverage. So we're not the only company that has leverage. We just have a bit more than other people. We have a bit more because, perhaps, we have greater risk tolerance, I don't know. But fundamentally, our businesses, we think, more than support a 4 to 5x levered model and have forever. I mean I say forever, for a very long time. And the thing about our balance sheet, which I think is maybe not too dissimilar from others, but I think perhaps puts us best-in-class, it's fixed rate at around 4%. We don't have any floating rate debt. It's long term, about 7-plus years. It's all siloed. So we don't have any TopCo debt. No debt at Liberty Global, 0. It all sits within operating companies, hedged in local currencies, supported by local cash flows. That is somewhat unique. And I think all those things, together with our cash balance of $4 billion, gives us a fair amount of comfort that we have a good capital structure, and see no reason to change that. We don't have to go out and refinance anything. There aren't any huge M&A transactions. Nobody is doing those deals right now anyway. So we're patient on the balance sheet, and we think derisked on the balance sheet. So for us, the volatility that we're all feeling or seeing in capital markets isn't impacting us in any direct way. It not be a perception issue, I appreciate that, but not -- certainly not a fundamental issue in our balance sheet.

Right. And looking at the different silos, do you see any reason for the leverage profile of the different silos to be adapted or to be different from silo A to silo B?

No, they're all pretty close. I mean VodafoneZiggo because it's a private company, 50-50 owned by us and Vodafone. We don't consolidate it. Slightly higher leverage. Telenet, public company, publicly listed, a little more pressure from minority shareholders, it's got a little less leverage. But it's all in the zone. And I don't -- there might -- there will always be some variation a little bit. But nothing, I think, material.

Okay. And moving to some industry topics. I wanted to ask you about net neutrality, which is a big topic at the moment in Europe. It looks like there are some ongoing conversations at the moment with the European Commission. It would be good to have your take on the topic and also your take on what is a fair contribution?

Yes. Well, our partner at Telefonica is quite focused on this issue as he's the Chairman of GSMA right now. And so we get a very good understanding of it from him. Look, the issue is as old as the Internet, how do you share the wealth of this network, this platform. And are there arguments for telcos in any market to perhaps have a larger piece of this ecosystem. When revenues and mobile or fixed, have been flat to down for decades in Europe and big tech growing 35% a year consistently every year? Sure. I can see that argument. I'm not going to weigh in from a regulatory point of view. We'll let the politicians figure that out together with big tech. I think we have a good relationship with big tech, right? We need each other. Will there be opportunities to share revenue differently? Perhaps. Would we support that? Sure, we would. As long as it's a win-win if we can develop that. What's more interesting to me is this next evolution of the Internet, which also Jose Maria talks about quite a bit. And that is the open verse or this network-as-a-service concept where, okay, what's happened in the past has happened. But going forward, whatever you think about the metaverse, whatever you think about Web3, what we know is this, you've got to have superfast networks with super low latency, way down to the edge. And everything has to evolve, materially evolve from a network point of view for any of this to work. That's point one. Point two, we know that as applications develop, as service providers develop new experiences, new content, that their ability to integrate with those networks is critical. You have to do it quickly and rapidly. So there's an opportunity here to create this open verse, I think is how it's been branded lately, where there's a series of APIs that application providers and network providers, the cloud and the earth he likes to say, meet. And the revenue model, the economic sharing of this future could be different. But also better, faster, more efficient. That's interesting. That's sort of everything -- everybody should be leading into that, both on the big tech side and the network side. So we're anxious to see how that evolves.

Excellent. So let's wrap up with the last question on ESG. If you can maybe say a few words about the Liberty Global ESG strategy.

Well, we'll take it very seriously. Obviously, how do I -- there's many components to this. On the environmental side, we have net zero targets in every market that we publicized. We are nearly there on scope 3 targets. So I'd say we're not best-in-class, but we're at or near best-in-class on our ambition for net zero in all of our core markets, scope 3 being the real heavy lift, because that's where all the energy is consumed. If you -- I'm sure you can understand that. We are taking pretty bold initiative. I mentioned some things already, electric fleets, 92% renewable energy. We're doing all the things we think to do in sort of the blocking and tackling element of it to reduce the carbon footprint. On the social side, we view that -- we take that very seriously. We're a company that operates in multiple countries, multiple languages, multiple nationalities. We're not a single market players. And it varies everywhere we go. We take the topic in every market seriously. So for us, gender equity, gender -- percentages matter a lot, and so we're coming out with some, I think, pretty bold plans around that. Certainly, we want to be an inclusive company and from top to bottom, we are really focused on creating an environment where people can bring themselves to work, be confident. I take that seriously. And I'm a parent. If my kid goes to school comes home, feels bullied, I'm going right down to that school to find out what happened. So what -- we can't tolerate that in our workplace. We have to be completely open about this. So I think we're doing all the right things. Our Board is increasingly diverse. We've had 2 new members. So I think on the ESG front, I'm not particularly interested in what other people think. I don't care if we get the gold star. I don't care if we're in that index. And my team is always pushing, we're going to publish that and get on to that thing. I can't give a s***. Let's do what matters. Let's do what matters to us. And if we get credit for fine. But to do it to get the credit, not a good idea. So it's a journey that we're all on, but I feel pretty good about where we are.

Makes sense. Thank you so much, Mike. A great conversation, and thank you for coming to Barcelona.

My pleasure. Good to see everybody. Thank you.