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

Okay. Good morning, everyone. Let's begin the next session. My name is Terence Tsui. I'm an equity analyst at Morgan Stanley, and I'm very pleased to be on the stage with Liberty Global and the company's CEO and Co-Founder, Mike Fries. Mike, welcome. Really good to see you in Barcelona. Thank you for supporting this conference.

Year after year.

So let's get right to it. Lots has changed at Liberty Global over the past years. You've now established 3 core platforms in Liberty Telecom, Liberty Growth and Liberty Services and Corporate. Please, can you walk us through the strategic goals in each of these core pillars? And what you've -- and the progress you've achieved over the year?

Sure. Great to be here, as usual. We are like all the telco folks you'll listen to this week, in that we maintain very strenuously that we're undervalued on pretty much any metric, whether it's a net asset value, discounted cash flows, some of the parts. We're unlike the other telcos, though, in that I think we have really 3 unique pillars to create value. We have, of course, the telecom assets, which you know and love and so do we. We've been doing this for 3 decades, buying and building telcos, broadband, mobile, throughout Europe. I think at one point, we're in 20 different countries across Europe, typically exiting at really good values and prices and remain today in a pretty sizable platform, $22 billion of revenue for core markets. And these are great assets. I mean, these are businesses that we'll talk about, I'm sure, have a lot of opportunity, probably getting 0 value in our stock today for those assets given that we're levered 5.5x and people are putting pretty low multiples these days on those cash flows for whatever reason, we can argue that. Then we have a Liberty Growth platform, which is relatively unique. It's probably $8 to $9 a share. We're an $11 stock. So $8 to $9 a share just in our media-sports infrastructure assets, which we can talk about. And then we have embedded in our business, like a lot of telcos, we're carving out some service platforms. So we have one in particular called Blume, which we can discuss. But these tech and financial services platforms generate over $600 million a year of revenue and positive OFCF. So that, in our view, is another pillar of opportunity and growth. And then lastly, we are heavily focused on our corporate spend. There's a reason for that. Again, $10, $11 stock a year ago, not even a year ago, 6 months ago. The average analyst put a negative $10 a share, negative $10 a share on our corporate, negative $10 on a $10 stock. Well, we got the message. We started the year with guidance of $200 million. We lowered it in Q2 to $175 million. We lowered it in Q3 to $150 million. We told you next year it will be $100 million. So at a minimum, our stock should be at $5. If you're being honest, and straight with your math, it should be up by $5 just on that announcement in our Q3 call alone. We talk about how we've done it and what that means. So in each of those 3 pillars, we know there are opportunities to unlock value, and we are focused on them in each instance, and we can talk about them through the course of this conversation, I suppose.

Yes. Thanks very much, Mike, and that's very interesting. And lots of topics to follow up on. If I can begin with a discussion around the opportunity to separate some of your operating businesses, you've said that's important to help unlock the conglomerate discount in your stock. Please, can you update us on how you managed to create value at Sunrise, some of the progress that you've initiated this year as well? And what could you see coming up in the future?

Sure, sure. So for those -- I'm sure most people have followed it, our Swiss operation spun out in November of last year. We announced it in February '24. We spun it out tax-free in November, trading today at about 8x EBITDA, 8% dividend yield. Interestingly, when we spun it out, it was roughly 20% of our proportionate telecom EBITDA, 20%. The market cap is bigger than our market cap today. So that's a pretty good value unlock, but it says more about what remains in the business, in my opinion, than anything else. What are the things that made that work, 4 things really. Number one, it's a great market, a highly rational market in Switzerland. Number two, we delevered the business from 6x to 4.5x. JPMorgan was adamant. UBS was adamant. Nobody is interested in 4.5x levered companies. Well, it turns out they are. Stock is trading brilliantly in the Swiss -- on the Swiss Exchange. Third, we had a very clear network strategy, a hybrid network strategy, where half the market was covered with 2-gig broadband on HFC. The 100% of the market was covered on a fiber whole buy by deal with Swisscom. So we had an excellent network strategy, 5G behind us, CapEx at 50% of revs. And then lastly, we are generating great free cash. And that free cash, we're dividending 70% of it out. And we just raised the dividend for this year. So a progressive dividend strategy. By the way, the dividend is tax free if you're a Swiss institution. So it's not an 8% dividend yield. It's a 12% or 13% dividend yield because the dividend itself, because it's a return of capital in Switzerland, is tax-free. So that transaction obviously made it clear to us that there's real value in these businesses under the right circumstances. So we will look to rinse and repeat where we can in some markets. We can talk about those. Not every market is going to fit that mold, but much of what we operate today does fit that mold.

Okay. And you also mentioned some ECM opportunities in the Benelux.

Yes.

I wonder if we can explore that in a bit more detail. Do you see any potential for any cross-border synergies?

Well, let's start with Belgium. I mean, let's look at Belgium and line it up to Switzerland. For starters, Belgium is a pretty rational market, 3 operators today. There's a fourth entrant, Digi, but struggling. So we have a market in Belgium with 3 core operators. We have really good share, really good brands, strong, almost incumbency type position in that market. Secondly, we've already fixed the network story in Belgium. We have carved out our fixed network. We are building fiber off balance sheet, fully financed. And that netco is a source of deleveraging, so we just announced $4.35 billion underwritten commitment that will fund the fiber build in Belgium as well as delever the netco -- the servco, pardon me, Telenet itself, because when you divide these things, the netco has different margins, different characteristics or more leverage on the netco, less leverage on the servco. So -- and the third thing we're doing is going to sell down a stake of that netco called Wyre, which will take Telenet leverage probably down to 4.5x. So you've got a rational market. You've got a rational fiber market. We've announced this deal with Proximus, where each of us will basically agree not to overbuild each other. And we'll have 100% wholebuy -- wholesale market share in some portions of the country. They'll have it elsewhere. So highly rational fixed network market, fully financed off balance sheet, a source of capital to delever the servco, feels to us like that asset. And by the way, an inflection point coming on free cash flow as the mobile CapEx has declined. So all the ducks are lining up, so to speak, on that asset. In terms of the Dutch asset, listen, we have a partner there going on, I think, 9 years. I was thinking about that this morning, 9 years. At 63 years in dog years, it's a long time. But we're good partners, and we -- the business is doing well. We'll talk about it, I guess. Whether or not we bring that together, merge things together, hard to say. But we can do any -- whatever we want with our 50% for the most part. So if we said, hey, we're going to spin off Telenet. We think it's right. It was a public company. KPN trades at 9x and a 5% dividend yield. It's a good comp. We could put our portion of Vodafone to go into that trade if we tracked it. Spinning might require some approvals. But nonetheless, there's lots of optionality. The nice thing about our portfolio is we have dozens of tools in the toolbox, because of how we're structured, because of our tax position. We can spin track list really efficiently across the board in multiple combinations. So stay tuned. I think we said -- I said on the call, decisions are pending there. I think that's right. We'll make some decisions relatively quickly.

Great. That's very clear and lots to look forward to. Let's stay on the Liberty Telecom and talk about 2025 business performance so far and some of the growth initiatives that you've implemented. What are you pleased about? And what work still needs to be done?

Well, look, we're in a competitive market across the board. What's impacting that competitive position? Listen, we've got MVNOs that are getting quite aggressive, almost everywhere, flanker brands, budget brands, no matter where we operate and any operator up here, they're not telling you this or not telling you the truth. Wherever we operate, MVNOs are getting more aggressive. In some cases, like the U.K., we have altnets that are also getting quite aggressive with pricing. So if you take the U.K. as an example, which is a bit of an outlier for us, I'd say it's highly competitive in the U.K. today, you've got MVNOs. Now, we have a flanker brand, too. So we're getting our fair share with giffgaff, but nonetheless, pricing on mobile -- even though our ARPU is up, pricing on mobile is tough. And, of course, broadband net adds are also tough because altnets are quite aggressive. What are we doing about that in the U.K.? We've launched Netflix across all of our broadband and entertainment bundles the most part. We're doing a much better job proactively recontracting people dealing with this One Touch Switch challenge. We're doubling speeds where we can. We're, I think, doing a great job on retention. So there's a lot of tools that we're using in that marketplace to grow, doing reasonably well on postpaid. I think we're flat in the third quarter if you exclude B2B on postpaid, but we lost mobile sub -- broadband subs in the third quarter. Now, fewer than we did in Q1 and Q2. So trajectory is good, but it's a competitive marketplace. And all the markets are, I think -- can be characterized similarly. We can all cut costs. We're doing that really well. We can reduce CapEx. We're all doing that really well. The topline is where you need to put your attention. What can we do? What can we each of us do? What can the industry do to drive top line growth in a competitive environment?

Okay. And that's kind of a nice segue to looking at the regulatory and the antitrust environment. Investors have hoped for a more favorable regulatory environment throughout the year. Can you highlight some of the changes that you've seen? And what you think still needs to be done?

Well, I think we're -- I think if you look at that, I've been up here many, many years, I would say this feels like a good moment. We're not there yet, but the Draghi report, combined with, well, say, what's happening in the U.K. around merger control, I think there's a nice tailwind here on regulatory, but it's not done. What do I mean? The EU has done nothing really about the Draghi report. You saw the letter that all the mobile operators sent out. We signed that letter. Really done very little to be honest around spectrum, merger controls, prioritizing growth. These are things that they haven't really done anything tangible. The Digital Networks Act hasn't come out. It's been delayed. So I think we have to raise the temperature in Brussels. This is -- we are critical infrastructure. You've had your foot on our neck for 20 years. AI infrastructure is really cool too, but none of it works unless it all works. And so I think that message is getting through. I hope it is getting through. Some markets, like the U.K., where they've made significant changes at the CMA, and -- that's positive. So I think in principle, this consolidation message, and I know my peers talk about it all the time as well, this in-market consolidation message is starting to resonate. And I'm hopeful that we'll see more of that.

And in the U.K. specifically, there's a lot of noise around the upcoming budget, future tax changes. From a Liberty Global perspective, what are you pushing towards in the U.K.?

Well, fewer taxes. That's pretty straightforward. Look, if you want to tax the big tech guys on their AI infrastructure, have at it, but stay away from the small tech guys. We're small tech, right? We are trying to build fiber, build 5G, give the market a shot and the idea that they would tax us in that process, anybody in that process, altnets, incumbents, competitors, is crazy. So let's hope that's not in the budget. Let's hope that -- we're already paying taxes that I think are excessive, so let's hope that's not the case.

Okay. Let's drill in a bit more detail into some of the countries. Let's touch on the Netherlands, new management team at the start of the year. You've guided to mid- to high-single-digit decline in EBITDA for 2025. How do you envisage the turnaround taking place?

Well, it's already happening, right? I mean, we talk about it on our quarterly calls. You can see it in the numbers. Q3 was better than Q2. October was better than September. This week was better than last week. The trend has kind of been reversed. So Stephen has done a great job in getting the business turned around. That's number one. And how has he done that? Well, it's straightforward stuff, invest in the brands, number one, Vodafone is a good brand in that market, invest in it. We have done that, get the front book back to where it needs to be, and that's -- it happened pretty aggressively. We've launched 2 gig pretty much everywhere in that market, committed to DOCSIS 4.0 in that market. So I think we've got the tools, and we've got the methods in place to drive continued improved performance there. I'm not going to give you guidance on what that's going to look like, except that we're patient. Why are we patient? Because it's also a 3-player market that's highly rational. Talking about KPN trades at 9x EBITDA, a great comp there. We are going to generate free cash. We do generate free cash, and we will continue to generate good free cash in this market. So we're patient in the Dutch market. I think Stephen is doing a great job. I think the turnaround is working. He's created a winning spirit, sort of an edge that the company needed. We've got content differentiation. We've got a lot of real advantages to push in the Dutch market, and we're starting to do that, and the numbers are showing that.

Yes. And then on the U.K., you mentioned it's highly competitive. Do you think this level of competitive intensity can be sustained in the medium term?

It all depends. I mean, Simon is here from CityFibre. He will disagree with me, but most -- or maybe not, most altnets are going to struggle in this market and need to be either consolidated or shut down. Not all of them, but certainly most. So there's a lot of noise in the fixed marketplace today. And whether that's sustainable, I think, is a big question mark. We've got 4 big brands in that market, 3 networks plus altnets, plus 4 real brands, right, us, Vodafone 3, BT and Sky. Sky is sizable. They don't own network, but they've got a lot of customers. So there's 4 brands kind of punching it out. And then MVNOs and altnets on either side, grabbing share. So it's a highly competitive market. As I said, I think it's an outlier for us in terms of the level and intensity of competition. But as I mentioned, we've got the right things, in that Lutz and the team are doing the right things. And there are some green shoots in terms of quarter-by-quarter and where we see the business going long term. It's growing. EBITDA is growing. There's no question about that. We think we can modulate CapEx. We've got a fiber strategy. It's largely off balance sheet, but we have a fiber strategy, both on balance sheet and off balance sheet, that's reasonable. We're building -- upgrading fiber at GBP 100 a home. And that's like Latin American numbers, and we operate in Latin America. I know those numbers. So we're upgrading at very low prices at very low costs. And we reached almost 6 million, 7 million fiber homes today of our footprint are already fiber. So we're on that journey, and I think we're on it cost effectively. That's the key.

And then this highly competitive market, how do you balance price versus volume?

It's value. It's value. I mean, look at our ARPU in mobile is up, ARPU in fixed is stable, so we're prioritizing value over volume. That should be clear, and it's the right thing to do. Now, we have multiple brands. So we have giffgaff. We have Virgin Media. We have O2. So we have multiple brands. We have a multi-brand strategy like everybody in the telco business today. So we're attacking every segment, but I think we're trying to drive value.

Okay. And then switching back to Belgium. So you mentioned some of the strengths of Telenet compared to the competition. How do you see the competitive landscape evolving over time? I didn't think Digi have had that big an impact so far this year, but they could be a bit stronger next year. How things are looking like?

I mean, Telenet has a lot of advantages in the mobile space, the best 5G network. We've got a kind of real greenfield opportunity in the South, so I think -- and 3 quarters of improved performance. So Telenet is on a good run. Digi has struggled, but we don't count these guys out, ever, ever. And those who operate in Spain can speak to that. You can't count these guys out, and we don't. Now, they've had a tough time of it, and this is not Spain or Portugal. This is a different market, Belgium, for all kinds of reasons. But I think one thing for sure that we've done, which has been a real positive, is at least we've rationalized the infrastructure side of the market. It will be one thing to have 3 competitors, maybe a fourth, and also massive disruption and chaos in infrastructure. But what we've agreed with Proximus, which is now being market tested, is essentially a rational approach to fiber build. We build here, you use our networks, everybody uses our network. You build there, we'll use your network, everybody uses your network, a very rational approach to spending because it's an expensive build in Belgium. And that, I think, will lead to a more rational market long term.

Okay. Very clear. I'm just going to pause for a short moment to see if there's any questions from the audience on Liberty Telecom or I switch to the other core pillars. Anyone got a question about the U.K., Holland, Belgium or Ireland? Okay. Let's turn to Liberty Growth. So actually, let's just begin with an overview of this division, let's familiarize investors.

Sure. Well, it's a -- okay, I'm sure most of you have some basic appreciation for it. It's about $3.5 billion of assets, principally in media, in digital infrastructure and tech. This is stuff we've been doing for quite a while, building over time. And so that's $8 to $9 a share, something like that, that sits in this business. We can talk about each one of those if you want. But it's -- so we're looking for scale-based opportunities. We think we have real capability to do that in many instances. It's also a source of cash for us. And we've talked about what our goals are in terms of re-rotating capital out of this bundle of assets into opportunities to unlock value, whether it's in telecom or elsewhere. I think 6 investments in that group account for 80% of the value. So if anyone is interested in doing the work, here's the good news, you don't have to look at 70 things. You have to look at 6 assets that account for 80% of that value. Two of those are in infrastructure, digital infrastructure. We were very early as a telco, I think, to the data center game. Now, we're not in it as big as we would like to be in it, but we definitely saw early on that data centers and this need for this infrastructure will be growing and important. So we have 2 businesses there. We have a small stake in a global data center company called EdgeConneX. We invested 10 years ago in this business. I think our IRR so far is 30%. We've got a net $150 million in it today. It's worth $600. And if anybody wants to buy it, come see me afterwards, we would monetize it just because it's a 5% stake, but it's real value creation. So if anybody is wondering like what are you doing with all these things? What makes you think you know what you're doing? Just look at that one, put in $150 million, it's worth $600 million. We've already taken $50 million out. We built it. We started another one, more of a homegrown play called AtlasEdge, where we seeded some property assets in together with DigitalBridge. And we are a Tier 2 data center player looking to get to about 200 megawatts, something like that. And maybe about $350 million in that, we market conservatively at $500 million. And this piece of the ecosystem is pretty vibrant right now. So we're in a good spot with those 2 businesses. But that's over $1 billion of value that another $3 a share, we don't get credit for. So what will we do with that? Watch. We'll exit, we'll use the cash. We'll maybe create a digital infrastructure spin-off of some sort, combine other assets. So it's a real opportunity for us. The tech space is traditional venture capital, where we've got about $400 million net in today in AI, cyber, cloud, real smart investments. And then, the media space is mostly sports. But out of that $3.4 billion, we've exited about $300 million this year. There's another $1 billion we can exit there. So it's a source of cash to do some of the things I described earlier in the telecom platform that's yet to be utilized. I'm not giving you a time frame on the $1 billion. I'm simply saying that we think as we look at the portfolio, a lot of these things that don't fit or we had for a long time, we can turn into cash. So it's a source of cash, it's a source of growth. Many of these things are big assets, Formula E. These are big assets that are worth hundreds of millions or billions and will over time be what we're talking about up here. So I'm pretty sure of that.

Yes. And you've got the target of $500 million to $750 million in noncore disposals within that. Can you just highlight some of the progress that you've done, like on ITV, for instance?

You had to go there. Well, we said $500 million to $750 million. We've done $300 million exits this year. In every call, I'm saying we're going to be patient. We're going to be smart. We felt a little pressure. We sold half of our ITV stake, and then, the Sky rumor. So it's a good example of we shouldn't -- on things like this, it's not guidance, it's sort of an aspiration. And so we'll see. We don't have the need, but we're sitting on $2.2 billion of cash by year-end. Assuming no more asset sales, we will have $2.2 billion of cash at year-end, arguably no use of proceeds today. We can talk about the various things we'd like to do, but we're sitting on quite a bit of cash as we sit here, $5, $6 of cash or more. And we've got to figure out what we're going to do with that, but we can replenish that cash, and we'll continue to do it in a smart way at the right time.

And then a word on Formula E.

Okay. Get me started. Listen, I think you zoom out, no question that Formula One and certainly a lot of other sports have thrived post-COVID. This experience, economy is -- in our view, I think many people share this view, is really strong and vibrant and probably going nowhere but up. It's difficult to own anything in sports that's global, that has global reach. And we think motorsports, in particular, is pretty exciting. Now, add on top of that, we're starting our 12th season, so it's early days. But if you look at it, what makes it interesting? Why are we reaching this tipping point that's got me excited? It's awareness, it's excitement, but it's speed. This car is doing -- I mean, we're all Formula One experts now, so I'm not going to pretend I know more than anybody else. But Formula One car inches faster changes, sometimes it's slower depending on the season. This car is doing this. When we first started, the thing was lucky to go 140 miles an hour. We are testing the Gen 4 car now. You can go online, check it out. It's awesome looking, well over 200 miles an hour, 0 to 60 in 1.8 seconds. It is physics. I don't care if you ever buy electric vehicle or if you give a cred about electric vehicles, electric motors kick-a**, and they are going nowhere but up. And I'm excited to see Gen 5, Gen 6. We put some slicks on this thing. So the racing is what's got me excited. The speed of the racing. We got to do a better job of getting noisy, being noisy, getting celebrity, you see, well, that's all going to happen. We're in our 12th season. But to me, we pretty much break even. So it generates $0.25 billion of revenue, breaks even. We're not putting a lot of money into it in this season. But it's exciting. And so -- we're racing in China, in Tokyo, in Brazil, in Mexico, in the U.S., in Europe. It's got all the ingredients to be, I think -- and I talk to people in and around F1 all the time, right? And they don't disagree. It's got all the ingredients to be, I think, super important in motorsports. Put the sustainability stuff aside, it is a net zero since day 0. That's awesome, but it's fast. And that's what's got me excited.

Very clear. Let's turn to Liberty Services and Corporate. So this is an area where you had the improved EBITDA guidance actually throughout the year. So what savings have you made in this area? How sustainable are these?

Well, as I said, we started the year saying we're going to spend $200 million net corporate spend. Again, remember, at our topco, we have no debt. We just have people and expertise and relationships with our opcos and service agreements and these types of things. So we said we would spend $200 million. That's now down to $150 million for the full year, just in-year reduction of spend. And that run rates to $100 million next year. So it's in the bag, sort of $200 million to $100 million. This is what we are getting a $10 ding on our stock book. How did we do that? Got more efficient in some of our tech service platforms, but mostly headcount reduction. So we've reduced the headcount at the topco by 40% by year-end year-over-year. We went to 4 days a week and gave people an option to voluntarily leave and 20% did, which is by book, just fine. And then, we had another 20% of involuntary departures. So we were much leaner. We reshaped the operating model, and we go into '26, spending 50% less at that corporate. And we think there's opportunities to bring that down further, not necessarily with further headcount, but that's always in the possibility, but also reallocating some of that corporate to certain of these growth assets where we're providing services, getting better at how we're charging the opcos for services. So there's ways of generating incremental revenue to the topco. That would bring that down -- that number down further. I might give you an estimate of what that might be, but meaningfully less. That's upside, that's definitely not in our stock. And maybe we have to prove it to get there, but we already demonstrated $200 million to $150 million and run rate is $100 million next year. So at some point, a couple of analysts have started doing the work. The rest will do it when they get around to it. But that's a pretty significant adjustment in the corporate operating model that I think is -- we have room to grow, room to do more.

And then the value creation opportunities in this unit around Liberty Blume?

Well, I think Blume is interesting. I mean, everybody -- I don't know how many of our peers have done this, but Blume is -- essentially was a department that we've carved out, right? Service carve-outs are happening right and left. In this case, we do about GBP 100 million of revenue, mostly to the opcos. Back-office solutions is about 2/3 of that, procurement, insurance, energy management, not really sexy stuff. But we generate a margin on this. So we decided to pull this out, call it, Liberty Blume. And now we've got Virgin, Atlantic, Zayo, Canal+. We're starting to build a third-party revenue stream. We'll partner with people in this space. We've made acquisitions. So it's a separate unit. It's got its own brand, its own team, its own P&L. We'll probably create a segment around it. And these types of businesses trade at much higher multiples than we trade at. And if some -- if it's doing GBP 100 million of revenue today and that goes to GBP 200 million or GBP 300 million, and they stick with their reasonable margin, $1 billion business. So as far as we're concerned, all the pressure is on the management team. You want to go give this a shot, we will carve it out and give it a shot. So it's -- but it feels like it could be something substantial. Again, when you're trading at $10 a share, $1 here, $4 there, it all adds up. And these are things not really -- nobody is doing the work on this. Fair enough. We're doing the work on it. And in time, we'll demonstrate the value.

And then turning to share buybacks. I mean, consistently bought back shares. I think you're trending towards 5% of shares being bought back since the start of the year. Given the share price where it is, is there scope to do more do you think over time?

Listen, I mean, just a little bit of history for those who may not know it. I think in the last 8 or 9 years, we went from 900 million shares to 335 million shares by the end of the year. So that's 65% reduction, something like that, in our share count since 2017. By the way, it cost us $15 billion. So I think we've done a substantial amount of shrink on a relatively small company to begin with. If you own 1% of Liberty Global in 2017, when we spun off Sunrise, you owned 2.5% of Sunrise. That's a good trade. So it's worked, right? I mean, you already multiplied your ownership stake through our buybacks. And, well, buy back, as you said, trending towards 5%. We'll do that next year, too. Let's see. But we have multiple uses of capital. I've talked about a few of them, deleveraging to unlock value, potentially some things in the growth area, buybacks. So we'll be opportunistic about it, and we'll give you a heads-up in February, where we're trending and what we're seeing. But I think we want to -- the value unlocks, like Sunrise, these are the things that are really going to move the stock. So you're saying you should walk out of this room and say, I should buy the stock. Okay, we're a telco, we're doing all the same things everybody is doing, trying to drive revenue, be efficient, use AI, et cetera, et cetera, et cetera. But I think it's -- what makes us unique is this commitment to unlocking value. We're not resting. We're not -- I'm not an empire builder. This commitment to unlocking value is an urgency that I have that John shares, that our Board shares. And we will be using all the things we have at our disposal to do that. And we've talked about a lot of them today, that will be value creation right there. And this is something we know how to do.

Okay. Very clear. Let's just pause once again to see any questions from the audience, anything has come up. [ Shawn ] at the front. Please, can we have a microphone brought to the front?

We can repeat the question, I guess.

I was hoping you could comment on John Malone's kind of movement to less involved on your Board and kind of across the portfolio of all the Liberty companies. Does that change anything functionally? What's kind of your thought process there? And then, for the first time in a long time, European cable and telco is in a better position than U.S. Maybe, how would you assess the competitive landscape kind of across the globe? And how it affects Liberty Global specifically?

Sure. Let me start with John. I think I've worked with him half my life, this guy. And I won't ever work with anybody as impactful, as unique as him. Now, here's the good news. I'm still working with him. He may not be on the Board Jan 1 and have a Board vote, but he's my first phone call. So I would not overestimate the news. I wouldn't now address the impact of the news. I think he's going to be 85. He's certainly looking to be less tied down, and he wants to have time to do lots of things, but he has tons of energy, and he's definitely focused as a significant shareholder on what we're doing, on what everybody in his ecosystem is doing. And we've had a relationship for 25, 30 years that we will continue to have one, and he's my go-to. So I wouldn't overestimate the change there. He's always given us the bandwidth and the freedom to do the things we want to do. He's been a great coach, a great mentor, a great cheerleader, and he'll always be that for us. So I think it's -- I guess, it's an interesting news, it's important news. But I think from my point of view, we're -- it's business as usual. In terms of Europe versus U.S., I couldn't agree more. I think the U.S. has hit a rough patch, at least in the fixed space, partially because I don't think the CapEx window looks as interesting. In Europe, what's clear is 5G nearly done, depending on the market. Fiber and/or upgrade fixed networks, nearly done depending on the market. So there's light at the end of the tunnel. And that light at the end of the tunnel means one thing, free cash flow. You can drive free cash, you're seeing it in our peers and to some extent in our markets. If you can drive free cash, pay dividends or you allocate capital effectively, there's a value creation story there. There's this -- also this tailwind that the U.S. doesn't have, this idea that, quite frankly, not only is this critical infrastructure to consumers, it's critical infrastructure to governments. With AI, we can talk about that all day long, but this notion of sovereignty in Europe is quite strong. And governments are looking at their players, incumbents and otherwise and saying, wow, this is really -- we got to get this right. This is not something to mess around with. Yes, we need cheap products and consumers have to be happy, but this is much more. It's a bigger game we're playing now with $1 trillion -- coming up with $1 trillion of annual spend on AI infrastructure, all the changes that are going to happen, good and bad in this space. So I think Europe has some tailwinds that the U.S. doesn't have. It has this CapEx window, I think, starting to look better. There's light at the end of the tunnel. It has, I think, as we talked about, some regulatory support, political support for investments and consolidation, which is critical. We've already lowered prices. I mean, 85% of our customers in the U.K. are already at the front book price. So we don't have this massive back book to front book erosion that the U.S. might encounter if it continues on that path. Pricing has been established here. It's cheap. Let's just be clear. It is dirt cheap to do -- to have mobile and broadband in Europe compared to the U.S. or almost anywhere else. So we've been there, have done that. It's behind us. So I think there's lots of things to be positive about. And quite frankly, you don't need a big move in multiples. Let's be clear. Give me half a turn, give me a turn. It's like $8. Give me half a turn, just half a turn. Walk out here and say, you know what, I like Mike, I'm going to give him half a turn today. You watch my stock go up 50%. I don't need complete reinvention of the business model. You just need sentiment to be more aligned with what we think is reality. So that -- you don't have that in the U.S., I don't think right now. And so a good place to invest. Yes.

Another question here, please.

You guys have always been great at clearly leverage, tax. Is it inconceivable that Liberty needs to be a listed stock?

Does it need to be or it needs to be?

Well, in your view, to do everything you want to do, does it need to be listed?

Not necessarily. Not necessarily. No, I don't think so. Now, there are advantages when you have public shareholders who you can spin things off to tax-free, that's an advantage, right? The shareholders who hung on to Sunrise did well and got the stock tax-free in a dividend -- sorry, in a corporate dividend to them. So there are some advantages, and then, there are disadvantages. I got to get up on stage like this and whine and whinge. But I think in the end, it doesn't change what we do. It does open up the aperture a bit for value unlock opportunities, although we could take something public just as easily as we spin it, and there's opportunities to do that. And then, you can -- so I think there's -- you can achieve a lot of the things we achieve on a private basis. There's -- permanent capital is a positive thing. The reason why private equity shops want to go public. There's this idea of having permanent capital gives you longer-term horizons. When you rent money and you rent assets, you have a different approach. I'm renting money and I'm renting the asset because the money has got to go back to somebody in 5 years. And quite frankly, I got to sell the asset to give it back to them. That kind of -- that's a difficult -- it's doable, of course, but at a public company, you don't have to think that way. You mean a rights offering, something like that? I think it would be going quite a ways back, Rick. I'm going to test your memory here. It would be -- yes, maybe so 10 years ago, if we did it then. But we did a couple ways back. Listen, this is John's favorite tool. He loves these things, rights offerings because he's always in. And if you're not in, he'll happily buy your rights. I'll happily buy your rights. So depending on how you structure it. But we're sitting on over $2 billion of cash. And I just told you, I think I can raise another $1 billion from my portfolio. So let's say we've got $3 billion of cash. Cash isn't my biggest issue. It's putting that cash to work to unlock value and whether that's delevering an asset in Belgium to get it out to the public and I've traded 7, 8x and not 5, whether that's other businesses within the growth portfolio that are needle-mover businesses, not small thing or whether that's buying stock. So I've got some uses of capital, but I don't think cash is the biggest concern as we sit here. But yes, those are the right questions that you're asking.

Very good. And if I was to follow up on that and just thinking very long time, maybe into next decade, assuming that you are still a public company, and you've completed all of the value unlock and various spinoffs in Liberty Telecom, how do you see your equity story? What will Liberty Global be in the very long term?

Well, look, that's the existential question. To me, it's less relevant than how much wealth have I created for these people? I don't really care what it looks like to be honest with you. As long as getting to that point has resulted in more things like Sunrise, more value-creation moments, that we'll figure that part out. That isn't what drives me or John, if it disappears because it doesn't need to be around anymore, that's okay. I'll find out something else to do. It's more about we delevering value, returning value. That's really what it's about for me and for him and for you. So I'm not as stressed about the existential endgame and what it all looks like. I'm much more focused on today, tomorrow and next year, how are we delivering on the promise to create value for shareholders who have been in the stock a long time or those who have just gotten it and believe that there's an opportunity for real upside here.

Okay. And I wanted to end with a question about Dr. John Malone. That's been partly asked. But I wanted to ask you about the highlights working with him.

Goodness. I mean, I don't know if you've read the book, you should read it. It's pretty interesting. It's definitely, to steal a line from Hamilton, it brings you in the room. There are some red threads in there that I think are absolutely right. The people that he's done business with in his life, myself included, I think, are what has been the highlight for him. There's a lot about Rupert and Barry and Ted Turner and other people that he's worked closely with or mentored. So a lot of really good lessons in there. He talks about his first mentor who said to him, "Okay, just focus on one question. What's the worst thing that could happen? And if you can live with that, take the risk". What's the worst thing that could happen? If the worst thing that could happen is acceptable, then you absolutely take the risk. He learned that at mid-20s or something like that. You have to adapt. He has one chapter called Adapt or Die, and he's right. If you look at how -- we're a case study in that. When I started this business, we were 100% cable television. Now, that's less than 15% of my revenue. We're 50% mobile, B2B, broadband is the third. So I mean, we're very much about adapting, and he certainly makes that case clear. I'll tell you an interesting bit, though, which I tell people, we did this book launch for him. I was on stage with Barry Diller and David Zaslav with John. And it occurred to me as I was arriving for that, he sold TCI in -- when he was about 60 years old in 1999-2000 for $58 billion. And it was an okay deal because the AT&T stock didn't work up or whatever, it was the first big thing. Almost everything he's done that you know about, he's done since the age of 60. So I don't know how old you are, it looks like some of you are young out there. But it's certainly encouraging for a 62-year-old like me, he's 84 and still going at it and most of what he's done in the last 24 years. This guy has endless, endless energy. And so I would encourage you to read the book. I've got lots of copies. If you want one, give your e-mail, give your business card to Rick or Michael or Louis, and we'll get you a copy. But anyway, it's fantastic to work with him.

Okay. Thank you very much, Mike.

Thank you.

Great to have you.

Nice to see you, all.