Virgin Media expects EBITDA hit as it ups investment

Virgin Media O2, Liberty Global’s UK joint venture with Telefónica, expects stable or declining revenue and a low-to-mid single-digit decline in EBITDA this year as it invests between £2-£2.2 billion across networks and services.

Lutz Schüler (Source: Virgin Media O2)

“Looking ahead, the 2024 outlook will be impacted by incremental investment in key initiatives to drive future growth, including increased marketing across our rapidly expanding fixed footprint, new commercial initiatives, and wider digital and IT efficiency programmes. We remain focused on delivering against our core strategy and these key investments will help us to lay down strong foundations for future success,” said CEO Lutz Schüler.

Schüler said that VMO2 had ended 2023 with stable revenues in line with guidance and had achieved at the low end of EBITDA growth guidance, with “accelerated synergy execution” offsetting tough economic conditions (or what he described as “the impacts of consumer spend optimisation”.

At the end of 2023, VMO2’s total fixed customer base stood at 5.8m with 31,300 customer additions across the year.

The company added 63,800 broadband connections in 2023. Total mobile connections stood at 24 million, with 46,600 contract customers adds across the year. Some 1.9 million customers now take the company’s converged fixed-mobile Volt bundles.

Over the course of the year, fibre was built out to an additional 833,100 premises, described by the company as a record, with most new homes part of the nexfibre joint venture, of which VMO2 is the anchor tenant.

Adjusted revenue for the full year was £10.9 billion, up 5.2%, or down 0.2% excluding the nexfibre construction. Adjusted EBITDA was £4.1 billion, up 5% or up 3.7% when nexfibre is excluded.