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

Everyone, thank you very much. We ran a minute over there as I was talking to Charlie about fixed wireless access, but...

We can talk about that as well if you want.

We can go into that one in some detail. I am delighted to be able to present to you today, and thank you, everyone, for attending. My name is David Wright. I'm on the Telecoms Equity Research team here at Bank of America, delighted once again this year to be presenting Liberty Global, represented by Charlie Bracken, CFO, as I'm sure many of you know; and perhaps less well known, but soon to be better known, if I might, is the CFO of Sunrise, Jany Fruytier.

Correct.

Okay. Thank you. My...

Try to say that fast.

Yes, exactly. But -- and I say that, of course, because one of the recent strategic announcements of Liberty Global was to spin off Sunrise. So we can look forward to having full coverage of that later on this year. And with your presence, we will, of course, zero in a little more on Switzerland. But I just wanted to begin with you, Charlie. Earlier this year, you came to market with your strategic review, so to speak, with your sort of four or five big strategic, I guess, announcements or reviews across your operations, one of which was to spin Sunrise, and we'll come to that shortly. In terms of those other big shifts that you talked about, why don't we just begin with the U.K., for instance. The creation of a NetCo, can you just talk around the theory of that, the advantages that can bring and where that kind of sits within the whole network evolution in the U.K.?

So I think the [indiscernible] is the deconglomeratization. We are -- we bought back 650 million shares over the past few years. We're down to 350 million. Our stock price hasn't performed, and we believe there's something -- we're greater than the sum of the parts. Now to that end, you're going to hear a lot about Jany that we think is a very valuable asset. But also in the U.K., we think creating a NetCo provides the optionality to roll up the AltNets, but also to bring in partners like Sky and also to create separate funding vehicles. And really, with all our assets, trying to position them for independent IPOs or spins. And the NetCo is an important part of the U.K. jigsaw puzzle because the U.K. has a lot of strategic moves to make, whether it's AltNets, what's the future of ITV? What happens to the resellers like TalkTalk and Lebara. And we need to create vehicles, which allow us to consolidate, rationalize and finance. And so as I think about our story, I am sorry, I am going to interrupt you there. What we're looking to do is create a series of separately listed vehicles over the next 3 to 5 years, start with Sunrise this year, which we think will be value accretive, and we'll talk about that. The second move would be to [indiscernible] the Benelux in the next couple of years and then in 3 to 5 years, it's time to start thinking about a U.K.-listed champion as well.

Interesting. So I feel like that narrative from you guys has evolved a little. We obviously had the announcement to overbuild the U.K. coax network a couple of years back in the summer, and there was the separate $7 million fiber build that was announced, too. It's now kind of within the narrative that NetCo could be used to consolidate the outlets. It does seem like the AltNet business model has been questioned a lot, I think, by the market as one that's maybe less sustainable in a higher rate environment. Do you feel like this is almost an opportunity that's come to you guys to move faster on the fiber overlay and take advantage maybe of some of these opportunities?

Well, I think our view is that there probably is only room for 1.5 to 2 networks per market. We can debate that. The rural areas probably makes sense to only have one network. Just to remind you, the economics of a fiber build. At 100,000 foot view, our maths would say, if you have an existing network, you can make money at, say, 25%, 30% penetration. That was the rationale for our Lightning build, which is our own expansion. For an AltNet, it's more like 50%, 55%. And the reason is they have to build a core network, they have a build a basic product proposition, billing platforms, depending on what model they go for. They go for their wholesale model, and of course, they have to rent it. So -- and the truth is that, in era of low interest rates, at a time when BT wasn't building fiber, they felt that they had a chance to get in their own Yorkshire or the West of England or whatever, and then they could flip it. I think the evidence has been that BT has been relentlessly ready to build this fiber network, and therefore, they have to get a 50% market share. And if you look at the market as a whole, 25% is BT Retail, 25%, actually 40% on footprint is VMO2, 25% is Sky and then it's TalkTalk and Vodafone. So to make a success don't need to basically get not Virgin, not BT onto their network and have to get in. And that's obviously been a challenge. And you see these companies with 10% penetration and together, they've had to go very low prices. So from our perspective, particularly with the rising in interest rates, it feels like now is the time to take advantage of the consolidation, and are you sitting comfortably. There's 100 of these players out there. So we've already bought one at the debt value. We don't necessarily think these things are worth par. And we have to create vehicles to facilitate that consolidation. So we have 2 vehicles. One is obviously an off footprint. So just to remind everybody, in the U.K., there's 28 million homes and we have about 16 million, so there's 12 million to go. We created a company with InfraVia called nexfibre, which basically is looking to build, leveraging our marginal economics and anchored by the anchor tenancy of VMO2. So that's really Lightning, as we used to call it, off balance sheet. And the second thing is if we separate out the network of VMO2, which has some dissynergies, there's two benefits. One is, obviously, that allows us to have an acquisition currency to buy other network assets, possibly nexfibre. And secondly, it makes it easy for wholesale partners to come in. And the obvious one is Sky. In terms of the decision to go to fiber as opposed to coax, in the U.K., the big definition across Europe, when you can upgrade your network is really about whether you're ducted or not. And Jany will talk a bit about Switzerland. But in much of Continental Europe, it's not ducted, the Benelux being a very good example. So when you actually have to put in fiber, if they dig up the road, which is the labor, and that's a pretty high cost. And depending on how long the -- to the rural areas, it can be as much as [ $2,000 ] a home. I think in America, it's [ $7,000 ] a home. But if you've got the conduit or the pipe, it's only $100 and so our view was that it's probably worth it for a net $100 to take our existing homes and do what we call fiber up and upgrade that. And one of the benefits of the NetCo structure is we could possibly take some of that CapEx and financing into that vehicle where we think we get more attractive pricing.

So I sat on a -- sorry, I observed [indiscernible] at a conference last week where BT, CityFibre and I see VMO2, your CFO there were present along with Sky's Director of Broadband Acquisition Strategy, who I referred to in my question as kingmaker.

I think they have a very strong position [indiscernible].

They're in a heck of a position actually. But one of the things that CityFibre, it was Greg, the CEO, who mentioned was that consolidation was not straightforward because of different standards, different levels, qualities of installation. Is that something that you guys are observing, is that something that's...

Yes. We -- look, I mean, I think not every build is the same. Not every construction cost per home is the same. But we had that experience. As you may recall, at least Virgin O2 arises from the cable build-out of the 1990s and that was everything. Those who have been around long enough know that we had Comcast U.K., which built very well. And then there were companies that built less, well, I won't mention their names. BT and Westminster Cable, sorry [indiscernible].

You've still got the tax losses though.

You've still got the tax loss of $25 billion. So I think that figuring out how to upgrade aligning the networks is something we've done before, and I think it's fixable. But your point is well taken. I think we've been naive to say that every build is the same.

And then I guess the final question around this is that it was a question put to the Sky representative, which is if you are a wholesale -- if you're an ISP taking a wholesale product, do you want to have multiple wholesalers? If I'm Sky, do I want to have some of my customers on BT, some on VMO2, some on CItyFibre, where I've got three wholesale interfaces, three routes to customer service, if something goes wrong. Is that bringing me a complexity that I don't need as Sky and I just say, screw it, I'll go with BT? Is -- do you think that the wholesale -- the multiple wholesale option is seamless?

Well, I think there are -- look, I think all things being equal, you want one wholesale partner, right? So the question is do Sky want to go with rental economics or does it want to go with ownership economics? And question mark is ownership economics on the table with NetCo, one of the creative name. I suspect it probably is. I think it's probably harder with BT, Openreach. But remember, for us, this wholesale revenue is all found revenue. I think it's also fair to say that it's not beyond the wit of man to -- at a price because I agree with you, I mean, two wholesale partners, complicated whatever, at a price to figure that out. I think the other thing you should remember is, over time, we're seeing increasingly the rise of what's called the flanker brand. We saw that a lot in the mobile sector. I thought that the most successful mobile brand probably in the U.K. is Giffgaff, which is an O2 brand. And that's a business that's growing 7%, 8%, 9%, pretty consistently for the past few years. And what that business is doing is just leveraging the O2 network. So I think that this idea of creating in-house flanker brands, which you'll certainly see more of, I think, is the way. But I think it's very hard to see how ownership economics on a network works beyond 1 to 2 players, 1.5 to 2. But again, that's a trust-me statement rather than a show-me statement.

Let's jump over to the Benelux. So you set up the Benelux HoldCo. I'm assuming the idea is that the Telenet equity just drops straight into that. It's hard not to look at that and think you've got Vodafone as they go as well. Is there something to be done here? I don't know if that's anything you can really elaborate?

Look, I think we -- listen, we're very clearly signaling that in 2 to 3 years' time, as I said at the beginning, we see a listed Benelux champion as something worth driving towards. And the combined VodafoneZiggo, Telenet will be a [ GBP 3 billion ] EBITDA business. It's a little bit [indiscernible] today, but there are noncore assets, which you could dispose of towers, properties, noncore media assets, which will probably get it back down to around 5x at a very attractive cost of capital that is fixed for at least another 5, 6 years. And I think VodafoneZiggo is borrowing around 3%, Telenet is borrowing around the same, which is pretty attractive capital. And it's our view that there are potential synergies from combining the two entities, both financing synergies, tax, but there are also some operational synergies. And frankly, there's just scale synergies. If you look at the Liberty Global's stock price and maybe we'll get on to this, our view would be, there's a question of how much value we're getting for any of our Benelux assets in there. So that's what we're driving towards. Now you rightly point out what does that mean for Vodafone? Vodafone, to those who don't know, is a 50% shareholder Dutch business. But I think by creating the optionality for them to either roll up or for other people to come in and offer to finance a purchase of their stake or I think that it's something which at least sets a clear direction to our shareholders. And again, we recognize realizing that value is going to take time, but that is the direction of travel.

Okay. And then just, I guess, the -- they're slightly less operational. I mean it's very operational, of course, in terms of how those businesses are run, but from your own perspective, the ventures portfolio. You had a very successful sale of All3Media in terms of the multiple, let's say, the arbitrage versus the Liberty share price. Is that something that you could just see over time, assets within ventures mature a little, get sold off, is that the...

I think there's two trees. Look, we are basically -- we're in it for the long haul. We've been lucky enough to be in this sector for 25 years. It's been a tough sector for the last 7 years, particularly since the end of the broadband [ wave ]. But we have a track record. We hope we're creating value. We made a big bet in the last 7 years in which we've been buying our stock. We had 900 million shares in 2017. We now have -- we expect 350 million-ish when we spin Switzerland. So we bought back over 60% of the stock at what we hope is an accretive price, while blended average stock price over that period has been around the mid-20s. We clearly believe that we can create value and position value, but we're not going to do that through the conglomerate. And part of the value creation is not just positioning these FMC assets. They're separate entities, and we'll talk a bit about Jany's company in a minute. But you can make a case that Jany's company alone is worth very near the Liberty Global stock price today. But also the ability to grow businesses on the side with marginal economics. And we believe that if you look at the telecom sector as with iliad on Friday in Paris, they're some very interesting growth sectors. The shift to cloud is a very big growth area. I could make you the case, the rise of live events, sports rights is a very interesting growth area. The role of AI and services and tech services and financial services is a big growth area. And so what we've tried to do is take a portfolio of our investments and rationalize them around these key thematics. One of our key thematics, which I did back in 2017 was, when we got out of the channel business, which we thought was a dying business, we went into TV production, which was always a growth business. And we invested in All3Media. We made a series of acquisitions. We positioned it possibly to merge with other assets. I think our view was it got to a point where the growth of that sector, the best days are probably behind us. And I hope I'm wrong for RedBird's sake, but it feels like the streamers have probably hit peak streaming, peak purchasing, and therefore, there's less demand. So it was for that reason that we were ready to sell at 12x. But if we'd felt it had long-term growth prospects and could become what we call a unicorn asset that we could spin to our shareholders, we might have looked at that.

Okay. Very good. We're going to come back on some of the implied share price dynamics, which is always a full-on conversation, but I did want to move over to Sunrise a little. The basic justification for the spend, I'm assuming, is that you bring it out of the conglomerate and the conglomerate discount that is undoubtedly present.

Thank you. I'm glad you said that.

You'd probably say it's in the high 10s of percentages, is to bring it out, obviously, if the Liberty conglomerate, but also it being a Swiss asset. They do tend to trade a little bit more on dividend, it's a different cost of capital market. We've seen this dynamic with Swisscom. I'm assuming that's the basic theory around this apart from the fact that it's...

Well let me give you the sort of rational from a Liberty point of view. Jany can give you the story. But we've announced that Sunrise will pay a CHF 240 million dividend, and that's a dividend floor, which implies a progressive dividend. And it will be levered in the 3.5x to 4.5x range. It will go out at 4.5x, which is a little bit top of the end of the range, but you can assume there was some growth and some deleveraging. And you can assume it's announced a free cash flow this year of CHF 360 million to CHF 400 million. So that CHF 240 million is pretty well cut. And you can assume excess capital is going to be available for deleveraging. So if you take that CHF 240 million and you apply a reasonable dividend yield, a reasonable [indiscernible] about this. But I think Swisscom is at [ 4 ]. Swisscom bonds are at [ 1 ]. Let's just hypothetically use 6%, you're probably around the CHF 4 billion market cap and CHF 4 billion is about $4.5 billion. Liberty Global stock price yesterday implied a market cap of [ GBP 6.5 ] billion. And pro forma for this spin, aside from everything else, Liberty Global will have at least [ GPB 2 billion ] plus of cash and additionally [ GBP 500 million ] of liquid investments. So we think that this is a very, very key step to unlock that valuation. And I'm sure it will trade in a very choppy way when it goes out. But ultimately, it should settle around that dividend, which we think will also be largely tax-free to Swiss investors. And if that is the case, the pitch to a Liberty Global shareholder is come on this journey with us, your first shareholder remuneration, if you like, will be the Swiss spin. We are then going to hopefully create value in our core FMCs in the U.K., We started -- we're announcing NetCo, which should probably get done next year. Obviously, we've got the Benelux coming up. We've obviously got the possibility of a U.K. spin at some point, but also the ability to create value in these ventures and whether we can create that value by monetizing for cash or we can do it by spinning off, that is the road map.

Okay. So there you go, there's your dividend commitment.

Don't f*** it up.

That yet says that on your...

We know each other for a while...

Exactly. So look, first things first, obviously, you have Sunrise, but it is a reasonably recent merger of Sunrise and UPC. How is that integration progressing? Are you now towards the closing stages? Or is there still more to come?

I think most of the integration has been done. We have some last deal bits left, so mostly on the core network integration, some of the legacy IT systems switch-offs. But for all intents and purposes, and I think also if you look it from a cost to capture perspective, which is the integration cost, we have more than 90% behind us. So it is really sort of cleaning up the last bit that typically take a bit longer that you don't want to force because it has customer impacts and sometimes, especially on the network side, it just doesn't make sense to accelerate that from a payback perspective. So that we will have. We'll have some minor efforts left. I think also what everybody is aware of is the integration of those two customer bases that is ongoing that has created some tension over the last 2 years. We're also getting towards the end of that. So I think if you look at it, and I heard all of the stories about the U.K. and the Benelux, in Switzerland, you have an asset where most of the integration is done. We have a clear network strategy that is different than the rest. Happy to elaborate a little bit on that afterwards. We have a growth plan in front of us, and we believe that there is some -- in the setup of the asset with adjacent services in B2B, there's also some new areas that we can go after. So from that perspective, you have a clean story with growth potential, with the integration behind us, with limited CapEx intensity given the 5G rollout that is there, given the hybrid strategy, given the integration, and therefore, also the IT harmonization and transformation behind us, so it's a natural point to start the journey on and to sort of bring investors on board to benefit from that.

Absolutely. Okay. So lots to unpack there, but essentially, it's a pretty tough environment, the Swiss market. And you've got this very -- sort of very high-level service level operator and incumbent in Swisscom. You've got this very aggressive guy in Salt. And the price points are quite remarkably different, but we are seeing that in the KPIs. Where is Sunrise positioned? If they're the extremes, are you guys in the middle? I've always been quite nervous about operators in the middle. I like to think operators perform when they're the best or they're the cheapest. So I'm interested in your view.

Yes, sure. Look, I think there's a couple of points to be made. It's a tough market on the one hand. I think it's a stable market on the other hand. And what do I mean with that? I think Internet pricing has been stable, perhaps aggressive, especially if you see what you get for that internet price, but it hasn't moved. So you can, from there, play in a field that is at least stable, first. Mobile, perhaps slightly different. But what we would argue is that actually intensity, promotional intensity levels have gone down a bit over time. So there, again, from an inflow ARPU perspective, it has stabilized. Now that inflow is sometimes still higher than the back book. So that is something to play around with. But I think again, tough market, but stable, which helps to sort of then define a right strategy to compete in first. I think secondly, perhaps different than some other markets, the Swiss market is very quality focused. So I think, yes, you have, especially in Salt, an aggressive attacker. At the same time, I think we can debate on how those shares are, but we would say 50% to 60% of the Swiss market is very value driven, but with that quality angle. So they are ready to pay a bit more for a good service. Now this is where I think our strategy comes in because you have Swisscom, which is very high priced in comparison to us and to Salt and they can continue to demand that premium. Now what our strategy is, is on the one hand, with Sunrise to move close to Swisscom, acknowledging that there is some price discount to that, but we can play in that market, and I think we have done well. I think we have done a number of plays to support that, like the Swisskey sponsorship, which is a big thing in Switzerland, getting that, making sure that people recognize us as a quality brand. We have set up some loyalty programs like O2 has here in the U.K. We have added additional services. So effectively, what we're doing with the main brand is creating this very rich offering with good service, with good loyalty programs with additional services so that we can play in that. Now that is a trajectory that we're on. I would say we're not fully there, but we're seeing good traction. I think brand recognition, brand awareness, that is all trending up. So there is a big part of the market that we can play with some discount, but significantly higher pricing than on that more price-sensitive segment where you have Salt playing, where you have Yallo play, where you have Wingo playing. Those are the second brands of us and of Swisscom. So I think you'll see the market going into extremes where a large chunk sits on the premium segments. We play with Swisscom, Salt and our second brands play in that lower segment. I think what's interesting in that as well as that Salt recently come out is that -- and have said that they see Yallo, our second brand, and Wingo as their main competitor. Also letting go, if you will, wanting to compete on that, of course, at a lower price, and we'll see if the market wants to go there, but we feel strong that with that dual brand strategy, we can play effectively in those two different segments.

Okay. Very good. And let's talk network. You are predominantly cable today. I'm not sure whether you've got any fiber, it's very, very small. Predominantly cable operator. You have a fairly slow-moving Swisscom, and that's a function of some regulatory issues, but either way there fiber has lagged, but their ambitions are high in terms of their coverage. And the risk that could perhaps be perceived is that Salt has access to that fiber. So they have access to this...

We, as well, by the way.

You have access to it, too. I agree with that. But in terms of how do you think about the migration of your cable or the evolution, I should say, of your cable strategy over time?

Yes. Good question. And I think...

Charlie gets this one always from for me...

No, I think it's a key element to get right in our story and sort of why -- let me try to explain simply why we feel so strongly that this hybrid network strategy that we're on is the right way to go. I think a couple of things to note. Swisscom has indeed 40% coverage now. They have said they go to 70% to 80%. They have approximately 5 to 10 percentage points of that country ready to deploy once, as you say, and that is now more or less done. That regulatory issue is behind them. So we expect it to go up, but that's the fiber element of it. Now we are only 3 real in-home players in the market. As you say, Salt has access, we have access as well. So therefore, I think we are all playing in that network, and we have all access to it. I think then also important to note, as we got into the merger, we had 50% of the customers approximately [indiscernible] of Swisscom, partially fiber, partially DSL, and 50% on our own network. We have 70%, 75%, if you add our partners' coverage in there as well. So that was the starting point. Now over the last 3 years, we have migrated some of those DSL customers onto our HFC footprint. And on the other hand, we have increased a bit of fiber customer as we sold those. Three years down the line, the distribution of that customer base, of course, has changed between fiber and DSL, but overall, whole versus rented is still more or less the same, both from a total base, but also from an inflow perspective. So -- and that is also on the fiber-only footprint. So HFC is still a meaningful product for our customers. I don't know if you've seen, but we last week announced that we're going to upgrade our network to 2.5 gig, whereas fiber is on 10-gig, all to say that, in Switzerland, I think we have the opportunity to always offer to our customers at the moment the best speed available. And what we see in the Swiss market is that fiber or HFC is not a theme as such. So right now they are market sometimes, people are actively marketing fiber or the legacy technology. For us, it's about speed and customers don't really care. So that is the current point. I think given that, we, at the moment, have a base that is 50% approximately still owned and bought. And so that also sits in our cost base. Now fast forward for the next years, what we have forecasted and what we believe and I mean if we take a 5-, 7- or perhaps a 10-year forecast, we see perhaps a slight erosion of that base going to fiber, whereas the rest will still be on our own network. And so for us, the question very much is, Charlie first talked about a 30% penetration that you need in order to do. We have a total 30% market share, i.e., our fiber at the moment is at 15%. So to -- for us to deploy the capital, given that we have the access already, that we have a good wholesale -- whole buy economics, that is not a customer point. What we're saying is we don't see the erosion quickly in our margin. We already have a large chunk in that. So therefore, we can play with that DSL versus fiber distribution to offset some of that. We have good cooperation with them. Our customers don't care. So therefore, to then now go out and say we want to deploy all of that CapEx to, in the future, perhaps get to that payback, it just doesn't make sense from a capital perspective. And I think what is also interesting, of course, let us play out 5 to 7 years. We are, at the moment, the biggest whole buy customer of Swisscom, so the moment we decide to potentially build our own network, I think they will come and talk to us to say, what are you intending to do and perhaps there is another way to think about this. So therefore, we feel strongly that from a cash flow perspective, if you take the dividend perspective into consideration, this is by far the most economical thing to continue on that hybrid strategy.

Okay. So essentially, there's an element of -- there's a very good network. There's a kind of sweat the asset element at the moment until maybe the obligation is there to really move forward. And then you have options whether you invest or whether you...

Well, put it another way, I think it's 50-50 coax-fiber, and we don't really think it's materially going to change. So the benefit of buying, whole buying the fiber is already embedded in the cash flows. Now the exam question is, will there be an imperative to go to 100% fiber and he's making a point that if, at a certain point, canton by canton, village by village at some point is an economic case to build or buy from somebody else. So we don't think there's a big risk to the cash flows.

Okay. Fair enough. I think that's very, very credible. Okay. So if we then think about the growth and the cash flow growth, can you just walk us through the parts a little. So for instance, I think, on pricing, you guys are having to look at a much lower -- in fact, I don't think you're raising prices this year. Is that right, across the portfolio? So if we think about how you're actually going to grow your cash flows, whether that be market share growth through to OpEx synergies, lower CapEx, et cetera, if you could just give us a simple walk-through?

Sure. I think we typically start with saying that we believe we have 3 growth engines, the main brand, Sunrise, Yallo as a second brand, and B2B as a third growth engine. I think if you look at it over the last 3 years, what we have seen is that Yallo and B2B have grown well. And that in the main brand, as part of the integration of the two brands, as part of the repricing of that UPC base, we have had a drag. And so therefore, if you look at it combined, there was this flattish line, I think some quarters, some growth, but in general, flattish. Now what we believe fast forward is that on the main brand, given that some of that pricing tension is behind us, given the fact that we have launched a number of adjacent services, given that we expect churn to come down as we get out of this repricing integration, I think we'd like to think that we're fantastic integrators, and we are, but operationally customers, of course, in that process, have some tensions. And so therefore, churn has been elevated over the past 2 years on the back of that. So all to say that the dynamics that we saw in the main brand, we see easing. We believe, technically, as the integration of those two brands is done, there's further easing. And then with some adjacent services further penetrating of FMC, a multi-mobile, there is a changing dynamics. But the other thing happens is Yallo in that market still continuing to grow. We have only been a fixed provider in that second brand for 1.5 years. Whereas on mobile, it's been 6 years. So therefore, there is quite some growth left there we feel and then B2B, as we have integrated the 2 brands, we now have a meaningful competitor to Swisscom. By the way, Swisscom has 80% market share, we have 20%. So there is that under penetration. So all of that to say that I think different dynamics in those 3 engines, but we believe that in the combined of those 3, there is revenue growth. Now I don't say mid-single-digit percentages, but there is some growth that is different than what we have seen so far. Now of course, there is some margin erosion in that to offset that growth, in part, a little bit of that whole buy of owner to whole bought economics on the one hand, some of those services, especially in which we have slightly lower margins, but all in all, still a meaningful margin growth, we believe, over the coming years. And then how we think about OpEx is there is still some of those synergies left on the one hand that I was talking about, not meaningful, but still some as a tailwind. We see inflation coming down. So also that normalizing a bit. What we have done as part of the integration over the last 3 years is we invested in the Swisskey partnership, in the loyalty program to set the company up to sort of harvest those 3 growth engines. So again, those costs are now normalizing out and then with some efficiencies from a digitization, from an AI that we talked about before, I think there is some left. So all in all, we believe that OpEx is flattish in that so that, again, that falls nicely down to EBITDA, right? Having the integration behind us, having the 5G rollouts behind us, the IT transformation, again, you can take an assumption on what CapEx is, definitely not growing. So that organically then all drives nice free cash flow growth, we believe, in the coming period. But then interest being -- I mean, we need to see where that goes. But as Charlie said, we started 4.5x excess cash flow used to...

And you're fixed until 2028 base.

At least '28, '29 and '31, but yes. So having that and then with some delevering coming from the excess cash flow, we believe there is a free cash flow growth in there.

Okay. It's a very exciting story. With -- that might be [indiscernible].

No, I see what that is. That is the bloke from Scotiabank.

Okay. But we have literally a minute or 2 left. That's a super [ intro ] of Sunrise. We've talked about NetCo, Benelux ventures. If you just wanted to lay out, Charlie, very simply the kind of -- let's think about an 18-month road map of kind of where all of these things start to execute, occur, however that might be. I guess, first of all, we get the Sunrise spin. Maybe you could talk us through how all those other strategic...

Yes. I mean, look, I think -- one step at a time. So if my CEO were here, here will be going, let's just get one step done. What I've tried today [indiscernible] is the narrative has been, for the last 6, 7 years, we have shrunk our equity down. So we believe we've created value by buying undervalued stock, undervalued assets at a discount. And in doing so, we've reduced the number of shares from 900 million to 350 million. Now we're going to try and unlock that value. So there's a pivot that's going on that we announced in March. And I should have said the key driver of that was we managed to be domiciled to Bermuda last year, which was not about tax. But it was like giving us the corporate flexibility for spends, trackers, all those kind of things. So our existing shareholder base, which is long-only U.S. shareholder base, we're inviting them to come on this journey with us. And the first step will be we are going to unlock the value of our most sort of ready asset. So the strategic M&A has largely been done in this market. The network strategy is very clear. They've got the tailwinds of synergies to come through because, as Jany said, the cost to capture has been hitting the P&L, and then that's going to drop away. So there's a pretty good growth story, pretty clear road map for them to grow free cash flow and with it dividends. And we believe that we can position that with Swiss retail, Swiss index funds and European funds on the Swiss Exchange such that you'll get [ virtually ] today's stock price as a dividend. That's our hope. That's going to be happening in Capital Markets Day in November -- sorry, in September, and we will be doing the spin itself in November. And then in 2025, we'll have to see, but the road map is clearly to do something around U.K. NetCo. But that would be realizing for our investors company as our because we've got some strategic moves and continuing to work on trying to position our Benelux assets for a spin, let's say, in 2026. You'll also see us consolidating control of certain ventures and selling out of other ventures. So we've sold out of all 3. You might see us taking control. And again, with a view to positioning those with public investors or indeed in control transactions.

Okay. Well, looks like we've got a very exciting let's go beyond 18 months for Liberty Global. So goes for me to say thank you for everyone attending.

Thank you very much. Thank you for your interest.