Liberty Global Reports Q1 2021 Results
Liberty Global plc reported Q1 2021 financial results with a 25.7% increase in revenue to $3,615.3 million, and a net earnings rise of 41.5% to $1,440.3 million. The EBITDA adjusted figure was $1,367.3 million, a decline of 1.7% YoY. The company added 38,000 new customer relationships, and broadband growth boosted customer net adds by 79,600. The FMC penetration rate improved to 29.3%. Cash provided by operating activities surged 82.6% to $821.2 million. The firm aims for $1.35 billion in adjusted free cash flow for the year, reflecting a 26% increase YoY.
- Revenue increased by 25.7% YoY to $3,615.3 million.
- Net earnings rose by 41.5% YoY to $1,440.3 million.
- Customer relationships grew by 38,000, reversing previous losses.
- Strong cash flow with cash provided by operating activities at $821.2 million, an 82.6% increase.
- Rebased adjusted EBITDA declined by 1.7% to $1,367.3 million.
- Adverse COVID impacts reduced revenue by approximately $21.2 million.
Liberty Global plc today announced its Q1 2021 financial results.
CEO Mike Fries stated, “As we continue to execute through the challenges of COVID-19, we're hopeful that better and safer times lie ahead for our employees and our customers. While the well-being of our people and our customers' connectivity experience remain our most important priorities, we're encouraged by the operational progress made during the first quarter of 2021, allowing us to carry forward the momentum we built last year.
Continued execution of our convergence strategy fueled a
Liberty Global |
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Q1 2021 |
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YoY |
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Operations |
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Organic Customer additions |
|
38,000 |
|
+56,900 |
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Organic Broadband net adds |
|
79,600 |
|
+57,600 |
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Organic Mobile Postpaid net adds |
|
145,600 |
|
+30,300 |
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Fixed Mobile Convergence(a) |
|
29.3 |
% |
|
3.0 |
% |
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|
|
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Financial (in millions, except percentages) |
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Revenue as reported |
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|
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25.7 |
% |
|
Rebased revenue1 |
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|
|
0.2 |
% |
|
COVID impact on revenue2 |
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~ |
|
(0.6 |
%) |
|
Net earnings |
|
|
|
41.5 |
% |
|
Rebased Adjusted EBITDA1 |
|
|
|
(1.7 |
%) |
|
P&E additions |
|
|
|
14.1 |
% |
|
Rebased OFCF1 |
|
|
|
5.0 |
% |
|
Cash provided by operating activities(b) |
|
|
|
82.6 |
% |
|
Adjusted FCF |
|
|
|
129.4 |
% |
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|
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| (a) | YoY FMC growth shown on a rebased basis. |
| (b) |
As reported cash flows used by investing and financing activities for the three months ended March 31, 2021 were ( |
During the quarter, rebased 1 revenue increased
In Switzerland, commercial "Day 1" launched in March, a watershed moment which marked the beginning of Sunrise UPC operating as one company while best-in-market offerings helped create customer awareness of the merger. Operational momentum continues to strengthen with broadband and postpaid mobile growth of 56,000 subscribers in Q1 as we execute our convergence strategy, prioritize B2B growth and begin to generate synergies.
In the U.K., Virgin Media demonstrated solid operational execution. We successfully landed a
Looking ahead to the VM-O2 joint venture4, the U.K. regulator provisionally approved the combination in April and, subject to their final approval, it's expected to close in June. We recently confirmed our intention to appoint Lutz Schüler of Virgin Media as CEO, and Patrica Cobian of O2 as CFO, once regulatory approval is granted. Together they are building a strong, diverse and dynamic team that will bring more choice, more value and world-class innovation to over 46 million5 fixed and mobile connections across the U.K.
We are reaffirming all of our original, full-year guidance metrics, including
I would also like to take this opportunity to note that we demonstrated our continued dedication to sustainability in Q1 by becoming a founding member of the European Green Digital Coalition. As a result, we've committed to establishing science-based targets to reduce greenhouse gas emissions by 2030 and becoming climate neutral no later than 2040. Digital technologies have a huge role to play in the fight against climate change, and we look forward to utilizing our networks and expertise to help deliver a greener, more sustainable future."
(i) |
Adjusted Free Cash Flow is a non-GAAP measure, see the Glossary for definitions. Quantitative reconciliations to cash flow from operating activities for our Adjusted FCF guidance cannot be provided without unreasonable efforts as we do not forecast specific changes in working capital that impact cash flows from operating activities. The items we do not forecast may vary significantly from period to period. Absolute full-year U.S. dollar guidance figures are based on FX rates of EUR/USD 1.23, GBP/USD 1.36 and CHF/USD 1.12. |
(ii) |
Including amounts held under separately managed accounts (SMAs). |
Q1 Highlights
-
Q1 revenue increased
25.7% YoY on a reported basis and increased0.2% on a rebased1 basis to$3,615.3 million -
Q1 net earnings increased
41.5% YoY to$1,440.3 million -
Q1 Adjusted EBITDA increased
18.9% YoY on a reported basis and decreased1.7% on a rebased basis to$1,367.3 million -
Q1 property & equipment additions were
20.7% of revenue, as compared to22.8% in Q1 2020 -
FMC penetration increased to
29% from23% in Q1 2020 - Built 113,000 new premises during Q1, including 80,000 in the U.K. & Ireland
-
Solid balance sheet with
$5.8 billion of liquidity6 for the Full Company7-
Comprised of
$0.9 billion of cash,$2.0 billion of investments held under SMAs and$2.9 billion of unused borrowing capacity8
-
Comprised of
- Gross and net leverage9 of 5.6x and 5.1x, respectively, on a Full Company basis
-
Fully-swapped borrowing cost of
4.2% on a debt balance of$30.9 billion for the Full Company -
Repurchased
$447 million of stock through April 30
Liberty Global |
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Q1 2021 |
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Q1 2020 |
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YoY Change (reported) |
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YoY Change (rebased) |
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Customers |
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Organic customer additions |
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38,000 |
|
|
|
(18,900 |
) |
|
|
301.1 |
% |
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|
|
|||
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Financial (in millions, except percentages) |
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Revenue |
|
$ |
3,615.3 |
|
|
|
$ |
2,875.8 |
|
|
|
25.7 |
% |
|
0.2 |
% |
|
Net earnings |
|
$ |
1,440.3 |
|
|
|
$ |
1,017.7 |
|
|
|
41.5 |
% |
|
|
|
|
Adjusted EBITDA |
|
$ |
1,367.3 |
|
|
|
$ |
1,150.3 |
|
|
|
18.9 |
% |
|
(1.7 |
%) |
|
P&E additions |
|
$ |
746.6 |
|
|
|
$ |
654.4 |
|
|
|
14.1 |
% |
|
(6.5 |
%) |
|
OFCF |
|
$ |
620.7 |
|
|
|
$ |
495.9 |
|
|
|
25.2 |
% |
|
5.0 |
% |
|
|
|
|
|
|
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|
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Cash provided by operating activities |
|
$ |
821.2 |
|
|
|
$ |
449.8 |
|
|
|
82.6 |
% |
|
|
|
|
Cash used by investing activities |
|
$ |
(509.4 |
) |
|
|
$ |
(2,349.2 |
) |
|
|
78.3 |
% |
|
|
|
|
Cash used by financing activities |
|
$ |
(699.7 |
) |
|
|
$ |
(783.2 |
) |
|
|
10.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Adjusted FCF |
|
$ |
93.1 |
|
|
|
$ |
(317.0 |
) |
|
|
129.4 |
% |
|
|
|
|
Customer Growth
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|
Three months ended |
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|
March 31, |
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|
2021 |
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2020 |
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Organic customer net additions (losses) by market |
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|
|
|
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U.K./Ireland |
|
31,000 |
|
|
|
(1,100 |
) |
|
Belgium |
|
(4,500 |
) |
|
|
(7,500 |
) |
|
Switzerland |
|
4,400 |
|
|
|
(16,400 |
) |
|
CEE (Poland and Slovakia) |
|
7,100 |
|
|
|
6,100 |
|
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Total |
|
38,000 |
|
|
|
(18,900 |
) |
|
- Customer Relationships: During Q1, we gained 38,000 customer relationships, as compared to a loss of 19,000 in the prior-year period, primarily driven by strong commercial momentum with FMC penetration up across all markets
- U.K./Ireland: Virgin Media gained 31,000 customer relationships in Q1, as compared to a loss of 1,000 in Q1 2020. We added 24,000 customers in our Lightning footprint and 7,000 in our BAU footprint, representing our fourth consecutive quarter of BAU growth
- Belgium: Telenet lost 5,000 customer relationships in Q1, which was an improvement compared to a loss of 8,000 in Q1 2020, primarily driven by continued commercial momentum
- Switzerland: Sunrise UPC gained 4,000 customer relationships in Q1, as broadband growth was partially offset by legacy video losses
- CEE (Poland and Slovakia): CEE added 7,000 customer relationships in Q1 2021 and 6,000 in Q1 2020, primarily drivenby the cross sell of converged family offers and growth in new build areas in Poland
Revenue Highlights
The following table presents (i) revenue of each of our reportable segments, including the non-consolidated VodafoneZiggo JV, for the comparative periods and (ii) the percentage change from period to period on both a reported and rebased basis:
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|
Three months ended |
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Increase/(decrease) |
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|
March 31, |
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Revenue |
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2021 |
|
2020 |
|
Reported % |
|
Rebased % |
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|
in millions, except % amounts |
||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
U.K./Ireland |
|
$ |
1,770.7 |
|
|
|
$ |
1,620.6 |
|
|
9.3 |
|
|
1.4 |
|
|
Belgium. |
|
772.7 |
|
|
|
718.1 |
|
|
7.6 |
|
|
(1.3 |
) |
|
||
Switzerland |
|
841.8 |
|
|
|
316.8 |
|
|
165.7 |
|
|
(0.3 |
) |
|
||
CEE |
|
128.6 |
|
|
|
119.1 |
|
|
8.0 |
|
|
3.2 |
|
|
||
Central and Corporate |
|
102.7 |
|
|
|
101.2 |
|
|
1.5 |
|
|
(1.9 |
) |
|
||
Intersegment eliminations |
|
(1.2 |
) |
|
|
— |
|
|
N.M. |
|
N.M. |
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Total |
|
$ |
3,615.3 |
|
|
|
$ |
2,875.8 |
|
|
25.7 |
|
|
0.2 |
|
|
|
|
|
|
|
|
|
|
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VodafoneZiggo JV(i) |
|
$ |
1,217.0 |
|
|
|
$ |
1,097.1 |
|
|
10.9 |
|
|
1.8 |
|
|
______________________
(i) Amounts reflect
N.M. - Not Meaningful |
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-
Reported revenue for the three months ended March 31, 2021 increased
25.7% YoY- The increase was primarily driven by the impact of (i) the acquisition of Sunrise, (ii) positive foreign exchange ("FX") movements, mainly related to the strengthening of the British Pound, Euro and Swiss Franc against the U.S. dollar and (iii) organic revenue contraction
-
Rebased revenue increased
0.2% YoY in Q1, including:-
Adverse COVID impacts of around
0.6% , primarily stemming from lower mobile roaming and usage revenue - Lower revenue related to regulated contract notifications in the U.K.
-
Unfavorable decrease of
$1.8 million in Switzerland due to the Q1 2020 acceleration of revenue from our distribution partner for the broadcast of ice hockey. Switzerland's ice hockey league was cancelled in 2020 as a result of the COVID-19 pandemic, which resulted in the prepaid amounts for the associated sports rights that were previously scheduled to be expensed during the second quarter of 2020 to be recognized during the first quarter of 2020. Accordingly,$1.8 million of associated revenue that would have been recorded in April 2020 was recognized during the first quarter of 2020
-
Adverse COVID impacts of around
Q1 2021 Rebased Revenue Growth - Segment Highlights
-
U.K./Ireland: Rebased revenue increased
1.4% YoY in Q1, primarily due to higher B2B and mobile revenue, including the effect of (i) an increase in handset sales, (ii) higher wholesale revenue and continued growth in SOHO customers and (iii) an increase in fixed-line customers offset by a decrease in fixed-line customer ARPU -
Belgium: Rebased revenue declined
1.3% YoY in Q1, driven by the net effect of (i) lower interconnect and roaming revenue and (ii) higher B2B subscription revenue due to an increase in SOHO customers -
Switzerland: Rebased revenue declined
0.3% YoY in Q1, primarily due to the net effect of (i) lower B2B wholesale and mobile roaming revenue related to COVID-19, (ii) higher mobile subscription revenue driven by a larger subscriber base and (iii) an increase in handset sales -
CEE (Poland and Slovakia): Rebased revenue grew
3.2% YoY in Q1, primarily due to an increase in residential cable subscription revenue driven by higher customer volume -
Central and Corporate: Rebased revenue decreased
1.9% YoY in Q1, primarily due to lower CPE sales to the VodafoneZiggo JV
Net earnings
-
Net earnings was
$1,440.3 million and$1,017.7 million for the three months ended March 31, 2021 and 2020, respectively - The increase in our net earnings is primarily due to the net effect of (i) a change in realized and unrealized gains (losses) due to changes in fair values of certain investments and debt, net, (ii) a decrease in realized and unrealized gains on derivative instruments, net, (iii) an increase in Adjusted EBITDA, as further described below, and (iv) a decrease in depreciation and amortization
Adjusted EBITDA Highlights
The following table presents (i) Adjusted EBITDA(*) of each of our reportable segments, including the non-consolidated VodafoneZiggo JV, for the comparative periods and (ii) the percentage change from period to period on both a reported and rebased basis:
|
|
Three months ended |
|
Increase/(decrease) |
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|
|
March 31, |
|
|||||||||||||||
Adjusted EBITDA |
|
2021 |
|
2020 |
|
Reported % |
|
Rebased % |
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|
|
in millions, except % amounts |
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||
U.K./Ireland |
|
$ |
692.6 |
|
|
|
$ |
655.4 |
|
|
|
5.7 |
|
|
|
(1.9 |
) |
|
Belgium |
|
371.8 |
|
|
|
331.6 |
|
|
|
12.1 |
|
|
|
3.2 |
|
|
||
Switzerland |
|
281.6 |
|
|
|
134.1 |
|
|
|
110.0 |
|
|
|
(7.3 |
) |
|
||
CEE |
|
57.0 |
|
|
|
54.3 |
|
|
|
5.0 |
|
|
|
0.3 |
|
|
||
Central and Corporate |
|
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