Despite a difficult financial climate, Liberty Global is still bullish on its planned mergers and acquisitions.
Announcing its financial results, Liberty Global confirmed that it has been impacted by the pandemic, with revenues down by 1.3% on an organic basis including US$40 million in “low margin Covid-19 related factors.” Adjusted EBITDA also saw a dip of 5%, including 3% and 10% revenue drops at Virgin Media and UPC Switzerland respectively.
In spite of this, the investors note from CEO Mike Fries was keen to reaffirm Liberty’s original full-year guidance metrics with a balance sheet of over US$9 billion of total liquidity.
This confidence is backed by an impressive increase in subscribers, with the group adding 37,000 new customer relationships and over 70,000 broadband subscribers which Fries said was the company’s “best quarterly result in over three years.”
Overall, the UK and Ireland proved to be the driving force, gaining 37,300 customer relationships compared to a loss of 3,000 in Q3 2019. CEE in Poland and Slovakia also added 8,600 subs, while Belgium and Switzerland lost 3,100 and 6,300 subs respectively. To date in 2020 Liberty Global has added 25,300 subscribers – a marked improvement from the first nine months of 2019 during which time it lost 48,400 subscribers.
The company also added 127,000 post-paid mobile subscribers in the quarter, driving Liberty’s fixed-mobile convergence (FMC) strategy. As of the end of September, FMC penetration increased to 25%, including 23% at Virgin and UPC. Liberty is confident in upping that to the “mid-40% levels over time” following the pending mobile transactions in each of these markets.
Providing an update on these deals, Liberty said that it is “making progress” in regards to the 50-50 merger of Virgin Media and Telefónica’s mobile business O2. The deal is currently being reviewed by regulators, but Fries said that the company expects “a mid-2021” completion.
Meanwhile, the acquisition of Sunrise – announced in August – is set to close later this month after over 96% of shares were tendered and the deal was approved by Swiss regulators. The combined company will have 2.1 million mobile post-paid subscribers, 1.2 million broadband subscribers and 1.3 million TV subscribers, giving it approximately 30% market share in each segment.
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