Liberty Global (LBTYA) Q4 2015 earnings summary

Executive summary

• 2015 financial targets were achieved; subscriber growth, broadband demand and stronger operating momentum supported rebased revenue growth of 3% and rebased OCF growth of 4%.

• Liberty GO targets rebased OCF growth of 7%–9% CAGR over the next three years, with network expansion, mobile, B2B and operating efficiencies as growth drivers.

Financial highlights

• Revenue was $18.28B in 2015, up 0.2% reported and 3.6% organically excluding acquisitions, disposals and FX; Adjusted OIBDA was $8.67B, up 4.3% organically.

• Operating income was $2.35B; loss from continuing operations was $1.05B and net loss attributable to shareholders was $1.15B.

• Free cash flow reached $2.52B; net cash from operating activities was $5.71B and capital expenditures were $2.50B.

• Broadband internet subscription revenue grew 9.4% organically; B2B revenue including SOHO increased 11.4% organically.

Outlook and guidance

• Rebased OCF is targeted to grow at a 7%–9% CAGR over the next three years under Liberty GO; meaningful acceleration in organic revenue and Adjusted OIBDA growth is expected beginning in 2017.

• Network Extensions are planned to reach up to 10M additional homes and businesses by 2019, including up to 4M in the U.K.; 1.5M premises are targeted for connection during 2016.

• Excluding BASE and CWC, 2016 property and equipment additions are forecast at 25%–27% of revenue; the three-year 2016–2018 range is 25%–28%.

• The proposed Ziggo–Vodafone Netherlands joint venture is expected to generate approximately €3.5B in net present value synergies.