Liberty Global (LBTYA) Q2 2016 Earnings Call

posted in: Earnings Call, Notes | 0

Liberty Global (LBTYA) CEO Mike Fries said they added a decent amount of subscribers during the quarter

“We added nearly 280,000 new RGUs in the three-month period that’s double what we did last year in the second quarter and up 80% from just the first few months of the year. And it brings year-to-date net adds to 430,000 with material improvement across all our products and essentially all our markets too.”

Liberty Global (LBTYA) CEO Mike Fries on what the implications of Brexit means to their business

“Now, I just want to address Brexit quickly. We have been asked many times what it means to us. And while we didn’t support Brexit on a corporate level or do we respect the voters’ decision. And while we favor stability and regulatory certainty, we’re not actually that worried at all about the future here. We’ve seen no slowdown in our sales levels in UK. Consumers are the ones that matter. Actually we’re up year-over-year. Across all of our markets, consumers are looking for fast, reliable, and seamless connectivity, and a wide range of high quality content, UK is no different. Consumers want world-class communications of content and we’re delivering that to them. And then one last point, there is very little risk of currency fluctuations in the UK. Of course our borrowings are all hedged and substantially all of our OpEx and CapEx is in sterling, we’re feeling very positive about.”

Bought back $300MM worth of their company’s stock in the few days after Brexit

“And since closing the Cable & Wireless deal in May, we reignited our share repurchase program as we told you we would. In just the last week of June, we bought back $300 million of the stock, bringing total buybacks in the second quarter to $700 million. And that for those who are keeping the math would leave $3 billion on our buyback authorization through the end of 2017.”

The UK is their strongest performing region

“Virgin Media in UK continues to be our engine of growth, not just today but certainly over the next two years. Our product enhancements, strong marketing campaigns, great bundles are driving higher sales and lower churn. In fact Virgin had a record customer additions, so actually new homes connected of 31,000 in the UK and 56,000 RGU adds. That’s the best second quarter since 2008.”

Liberty Global (LBTYA) CEO Mike Fries on why they’ve stepped up their investments in producing content 

“On the content question, I think we’ve been pretty clear about that. We’re starting to see some things pay off. We will be announcing some production activity with All3Media across our foot print. So, we have decided to produce and cooperate with them on four scripted series that will find the way into our networks exclusively, at least the outset. We are doing some great work between All3Media and our Irish broadcast networks. The Lionsgate relationship’s off to a great start. I think there is going to be some interesting cooperation there. Just renewed our Discovery deal which we think is going to be very positive from the point of view of sports and Olympics and all the rights that we need to get our customers happy. So, I don’t think the content investment strategy has changed materially. We’re looking at smart opportunistic investments, not investments that significantly change the weighting of our balance sheet or cash flows, but where we can get inside and make some important strategic moves with that partner. And thus far that’s paying off. So, I think you should expect more of that.”