Liberty Global : VodafoneZiggo Reports Preliminary Q1 2024 Results

VodafoneZiggo Reports Preliminary Q1 2024 Results

Solid Financial Performance, Confirming 2024 Guidance

Utrecht, May 1, 2024 VodafoneZiggo1 announces its unaudited consolidated results for the threemonths ("Q1") ended March 31, 2024.

Highlights for Q1 2024:

• Sustaining commercial momentum in convergence, mobile and B2B:
• • Mobile postpaid SIMs2 grew by 22,300, and mobile postpaid ARPU3 grew by 3.4% YoY, supported by our price actions
  • Fixed Mobile Convergence ("FMC")4 broadband households penetration remained stable in the quarter at 48%. FMC SIMs increased by 22,700 to almost 2.7 million, driving improved Net Promoter Scores and customer loyalty
  • Consumer broadband subscribers5 declined by 26,600, partially offset by a growth of 3,100 in B2B. Total broadband subscribers declined by 23,500, a 3,000 improvement compared to Q4 2023. Fixed ARPU grew by 4.2% YoY, also supported by price actions
• Delivering solid financial results:
• • Revenue grew 1.6% YoY, with growth in both fixed and mobile revenue. Mobile subscription revenue grew by 7.5% YoY, representing our highest quarterly growth since the formation of the JV, driven by customer and ARPU growth
  • Reported a net loss of €12.5 million, compared to a net loss of €82.0 million in the prior year period, as derivative portfolio gains and higher operating income were partially offset by foreign currency exchange losses, higher third-party interest expense and lower income tax benefits
  • Adjusted EBITDA6 returned to growth, with an 8.8% YoY increase to €478.1 million, reflecting a growth in sales margin and higher cost inflation of €17.7 million in the prior year period
  • Generated €252.7 million of Adjusted EBITDA less P&E Additions7, representing 24.6% of revenue
• Confirming FY 2024 guidance8:
• • Low single digit growth in Adjusted EBITDA, supported by revenue growth
  • 21 - 23% P&E additions9 as % of revenue
  • Up to €300 million total cash8 available for potential shareholder cash distributions and non- recurring investments

Ritchy Drost, CFO VodafoneZiggo, commented:

"We maintained customer growth in mobile and B2B in the first quarter of the year and our broadband performance continued to show improvement quarter-on-quarter, underpinning our belief that we are executing the right strategy to provide the best network and entertainment experience for our customers. Preparations are well underway for broadcasting all UEFA club football matches exclusively through our Ziggo Sport channel and Ziggo Go app this summer. Adjusted EBITDA has returned to growth, underpinning Q1 financial performance and our 2024 guidance which we remain on track to deliver. On behalf of the company, I would also like to thank Jeroen Hoencamp who has stepped down as the CEO of VodafoneZiggo from May 1, 2024. Through his strong leadership, Jeroen leaves VodafoneZiggo in a

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good shape, with a strong position in the Dutch telecom market and a solid financial foundation, including its balance sheet."

Consumer performance for Q1 2024:

Total consumer revenue increased by 1.6% YoY in Q1 2024

Fixed:

Consumer fixed revenue10 declined by 0.6% in Q1 2024

• The revenue decline was primarily driven by the decline in the customer base, partially offset by the average price indexation of 8.5% implemented in July 2023
• • ARPU grew by 4.4% YoY to €55
• Consumer broadband subscribers decreased by 26,600 in the quarter, amidst the continued competitive environment. This represents a 4,600 improvement compared to the previous quarter, supported by lower churn
• We continue to execute our strategy by providing high-speed, reliable and secure connectivity and the best entertainment to our customers through our Hybrid Fiber Coax network
• • During the quarter we delivered SmartWiFi pods to 41,000 customers, bringing the total to more than 1.8 million customers, and reaching a broadband customer penetration of 57%
  • By the end of Q1, almost 2.1 million customers had a Mediabox Next, Next Mini or the upgraded Mediabox XL in their homes, representing a 59% video customer penetration
  • The Apple TV+ streaming service has been fully integrated in our video platform, joining other popular streaming services that have been previously integrated, and enabling our customers direct access and easy search to all their content using our voice control function
  • We extended the broadcasting deals for the Italian Serie A, Coppa Italia and Supercoppa Italiana football matches until 2029, and together with the upcoming UEFA club football exclusive broadcasting rights, further solidified our Ziggo Sport channel as the premier sport channel for our customers

Mobile:

Consumer mobile revenue11 grew by 6.4% YoY in Q1 2024

• The revenue growth was primarily driven by (i) the average price indexation of 10.0% implemented in October 2023, (ii) customer base growth and (iii) higher handset sales, partially offset by lower interconnect revenue
• • Postpaid ARPU grew by 4.5% YoY to €19
• 13,000 consumer mobile postpaid net additions in Q1, supported by a low churn level

Business performance for Q1 2024:

Total B2B revenue increased by 1.4% YoY in Q1 2024

Fixed:

B2B fixed revenue12 increased by 5.5% YoY in Q1 2024

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• The revenue growth was primarily driven by growth in SOHO ("Small Office Home Office") and small segments and our Unified Communication13 portfolio
• • SOHO fixed ARPU remained stable YoY at €62 and small business fixed ARPU increased by 6.0% YoY to €91
• 3,100 B2B broadband subscribers and 4,100 Unified Communication seats13 were added in the quarter

Mobile:

B2B mobile revenue14 decreased by 2.6% YoY in Q1 2024

• The revenue decline was primarily driven by lower handset sales, partially offset by price indexation and customer base growth. Mobile subscription revenue grew by 6.9% YoY in the quarter
• • Postpaid ARPU grew 1.4% YoY to €15 driven by a net effect of price indexation partially offsetting pricing pressure in the large corporate segment
• 9,300 B2B mobile postpaid net additions in Q1

Financial highlights for Q1 2024:

• Revenue grew by 1.6% YoY, supported by continued growth in mobile and B2B fixed revenue, partially offset by a decline in B2C fixed customer base
• • Mobile subscription revenue grew 7.5% YoY, marking our twelfth consecutive quarterly growth and highest quarterly growth since the formation of the JV. The revenue growth was supported by growth in mobile postpaid customer base and price indexation
• Reported a net loss of €12.5 million, compared to net loss of €82.0 million in the prior year period, driven by (i) derivative portfolio gains and (ii) higher operating income, partially offset by (a) foreign currency exchange losses, (b) higher third-party interest expense and (c) lower income tax benefits
• Adjusted EBITDA increased 8.8% YoY to €478.1 million, reflecting a 3.0% YoY growth in sales margin and higher cost inflation of €17.7 million in the prior year period, driven predominantly by lower energy costs and the phasing of wage increases
• Property and equipment additions were 22.0% of revenue in Q1 2024
• • Q1 additions were €8.0 million lower YoY, reflecting the net effect of higher spend on IT transformation projects in the prior year period, partially offset by (i) higher capacity and coverage expansion in both mobile and fixed networks and (ii) higher customer premises equipment
• Generated €252.7 million of Adjusted EBITDA less P&E Additions, representing 24.6% of revenue and 22.6% YoY growth. The growth was primarily driven by Adjusted EBITDA growth
• During the quarter, we made interest payments on the Shareholder Notes of €25.5 million
• At March 31, 2024, our fully-swappedthird-party debt borrowing cost15 was 3.9% and average tenor of our third-party debt (excluding vendor and handset financing obligations) was 5.5 years
• At March 31, 2024, total third-party debt (excluding vendor financing, handset financing and lease obligations) was €10.1 billion, an increase of €0.1 billion compared to December 31, 2023. Furthermore, when taking into consideration the projected principal-related cash flows associated with our cross-currency derivative instruments, the total covenant amount of third-party gross debt

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remained stable at €9.1 billion at March 31, 2024. For information concerning the debt balances used in our covenant calculations, see Covenant Debt Information below

• At March 31, 2024, and subject to the completion of our corresponding compliance reporting requirements, (i) the ratio of Senior Net Debt to Annualized EBITDA (last two quarters annualized) was 3.66x and (ii) the ratio of Total Net Debt to Annualized EBITDA (last two quarters annualized) was 4.62x, each as calculated in accordance with our most restrictive covenants, and reflecting the Credit Facility Excluded Amount as defined in the respective credit agreements
• • Vendor and handset financing obligations are not included in the calculation of our leverage covenants. If we were to include these obligations in our leverage ratio calculation, and not reflect the Credit Facility Excluded Amount, the ratio of Total Net Debt to Annualized EBITDA would have been 5.48x at March 31, 2024
• In March 2024, the maximum borrowing capacity of our Revolving Facility G1 has been reduced by €50 million to €75 million. At March 31, 2024, we had maximum undrawn commitments of €800 million under our Revolving Facilities. When our Q1 compliance reporting requirements have been completed and assuming no changes from March 31, 2024 borrowing levels, we anticipate that we will have €800 million of our unused Revolving Facilities commitments available to be drawn

ESG highlights:

• In 2023, our CO2 footprint encompassing scope 1, 2 and 3 emissions reduced by 44% as compared to 2018 baseline. We are on track to achieve our environmental target of reducing our CO2 footprint by 50% against our 2018 baseline by 2025
• In January 2024, we were again awarded a gold medal from EcoVadis, an authority in business sustainability ratings. This positions us among the top 5% of best-performing companies in the field of sustainability. The outcome underscores our ongoing commitment to a fair and sustainable supply chain, achieved through close collaboration with our suppliers
• In February 2024, we launched a new Vodafone offer especially for young adults, aged between 18 and 28, to support their journey in the digital age. They can benefit from the Vodafone Young discount and gain access to all the extras offered by Vodafone through our Priority program
• In March 2024, we successfully linked three ESG related KPIs to our Revolving Facilities, expanding our effort to build a sustainable capital structure. The three KPIs further support our ambition to reduce our scope 1 and 2 CO2 emissions (KPI 1), reduce our scope 3 CO2 emissions (KPI 2) and increase the number of women in people leader roles (KPI 3). Each KPI will have its proposed annual target set until 2028 with a total margin adjustment of up to +/- 5 bps
• In April 2024, we published our second integrated annual report. In the 2023 report, titled Connection in Action, we provide, in addition to financial results, extensive insight into our efforts in the areas of sustainability, digital inclusion and governance. With this, we are taking action towards compliance with the Corporate Sustainability Reporting Directive ("CSRD"), which is effective for VodafoneZiggo as of January 1, 2025
• In April 2024, we launched Digital Tuesday, an initiative to help older people navigate the challenges of the digital society. These weekly drop-in sessions at select VodafoneZiggo shops provide older members of society with personal and practical help with all their digital queries

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Operating Statistics Summary

As of and for the three months

ended March 31,

		2024			2023
Footprint
Homes Passed16		7,533,200			7,380,100
Q1 organic Homes Passed net additions		16,600			6,800
Fixed-LineCustomer Relationships17
Fixed-LineCustomers		3,517,800			3,672,200
Q1 organic Fixed-LineCustomer net losses		(35,200)			(3,500)
RGUs per Fixed-LineCustomer		2.31			2.36
Q1 Monthly ARPU3 per Fixed-LineCustomer	€	54		€	52
Mobile SIMs2
Postpaid		5,324,100			5,195,400
Prepaid		327,500			364,100
Total Mobile		5,651,600			5,559,500
Q1 organic Postpaid net additions
	22,300			38,500
Q1 organic Prepaid net losses		(12,700)			(6,600)
Total organic Mobile net additions		9,600			31,900
Q1 Monthly Mobile ARPU3
Postpaid (including interconnect revenue)	€	17		€	17
Prepaid (including interconnect revenue)	€	3		€	3
Convergence4, including SOHO
Converged Households		1,531,200			1,510,900
Converged SIMs		2,682,000			2,576,000
Converged Households as % of Broadband RGUs		48%			46%
Subscribers (RGUs)5
Video18		3,491,700			3,644,600
Broadband19		3,183,600			3,298,500
Telephony20		1,434,700			1,710,300
Total RGUs		8,110,000			8,653,400
Q1 Organic RGU Net Losses
Video		(33,000)			(20,100)
Broadband		(23,500)			(8,500)
Telephony		(86,400)			(76,300)
Total organic RGU net losses		(142,900)			(104,900)

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Financial Results, Adjusted EBITDA Reconciliation & Property and Equipment Additions

The following table reflects preliminary unaudited selected financial results for the three months ended March 31, 2024 and 2023:

		Three months ended
		March 31,
		2024			2023*		Change
		in millions, except % amounts
Total revenue
Consumer fixed revenue10
Subscription revenue	€	491.7		€	494.9	(0.6)%
Non-subscriptionrevenue		3.1			2.9		6.9%
Total consumer fixed revenue		494.8			497.8		(0.6%)
Consumer mobile revenue11		183.6			170.3	7.8%
Subscription revenue
Non-subscriptionrevenue		64.0			62.5		2.4%
Total consumer mobile revenue		247.6			232.8		6.4%
Total consumer revenue		742.4			730.6		1.6%
B2B fixed revenue12		139.9			132.6	5.5%
Subscription revenue
Non-subscriptionrevenue		3.1			3.0		3.3%
Total B2B fixed revenue		143.0			135.6		5.5%
B2B mobile revenue14		103.5			96.8	6.9%
Subscription revenue
Non-subscriptionrevenue		30.0			40.3		(25.6%)
Total B2B mobile revenue		133.5			137.1		(2.6%)
Total B2B revenue		276.5			272.7		1.4%
...........................................................................................................Other revenue21		7.2			6.5		10.8%
Total revenue	€	1,026.1		€	1,009.8		1.6 %
Adjusted EBITDA6	€	478.1		€	439.6	8.8%
Adjusted EBITDA as a percentage of revenue		46.6 %			43.5 %

* Certain revenue amounts have been reclassified to conform to our 2024 presentation.

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The following table provides a reconciliation of net loss to Adjusted EBITDA:

Three months ended

March 31,

		2024			2023
		in millions
Net loss	€	(12.5)		€	(82.0)
Income tax benefit		(11.0)			(19.4)
Other expense, net		0.1			-
Foreign currency transaction losses (gains), net		140.3			(85.6)
Realized and unrealized losses (gains) on derivative instruments, net		(211.0)			74.4
Interest expense:
Third-party		164.6			143.3
Related-party		25.5			25.2
Operating income		96.0			55.9
Impairment, restructuring and other operating items, net		(0.1)			2.7
Depreciation and amortization		382.2			381.0
Adjusted EBITDA	€	478.1		€	439.6

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The table below highlights the categories of our property and equipment additions for the indicated periods and reconciles those additions to the capital expenditures that we present in our condensed consolidated statements of cash flows:

Three months ended

March 31,

		2024			2023
		in millions,		except %
		amounts
Customer premises equipment	€	65.8		€	64.8
New build and upgrade		33.1			27.0
Capacity		53.8			49.4
Baseline		44.2			52.1
Product and enablers		28.5			40.1
.........................................................................................Property and equipment additions9		225.4			233.4
Assets acquired under capital-related vendor financing arrangements		(70.7)			(92.9)
Assets acquired under finance leases		(2.7)			(1.4)
Changes in liabilities related to capital expenditures		38.0			68.8
...................................................................................................Total capital expenditures22	€	190.0		€	207.9
Property and equipment additions as a percentage of revenue		22.0 %			23.1 %
Adjusted EBITDA less P&E Additions7 Reconciliation
Adjusted EBITDA	€	478.1		€	439.6
Property and equipment additions		(225.4)			(233.4)
Adjusted EBITDA less P&E Additions	€	252.7		€	206.2
as a percentage of revenue
	24.6 %			20.4 %

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Third-Party Debt, Finance Lease Obligations and Cash and Cash Equivalents

The following table details the borrowing currency and euro equivalent of the nominal amount outstanding of VodafoneZiggo's consolidated third-party debt, finance lease obligations and cash and cash equivalents.

		March 31,			December 31,
		2024				2023
		Borrowing
		currency			€ equivalent
				in millions
Credit Facilities
Term Loan H (EURIBOR + 3.00%) EUR due 2029	€	2,250.0		€	2,250.0		€	2,250.0
Term Loan I (SOFR + 2.50%) USD due 2028	$	2,525.0			2,338.7			2,282.1
Financing Facility					2.3			2.3
€75.0 million Ziggo Revolving Facility G1 EUR due 2026				-			-
€725.0 million Ziggo Revolving Facility G2 EUR due 2029				-			-
Total Credit Facilities				4,591.0			4,534.4
Senior Secured Notes
5.00% USD Senior Secured Notes due 2032	$	1,525.0			1,412.5			1,378.3
4.875% USD Senior Secured Notes due 2030	$	991.0			917.9			895.7
3.50% EUR Senior Secured Notes due 2032	€	750.0			750.0			750.0
2.875% EUR Senior Secured Notes due 2030	€	502.5			502.5			502.5
Total Senior Secured Notes				3,582.9			3,526.5
Senior Notes
3.375% EUR Senior Notes due 2030	€	900.0			900.0			900.0
6.00% USD Senior Notes due 2027	$	625.0			578.9			564.9
5.125% USD Senior Notes due 2030	$	500.0			463.1			451.9
Total Senior Notes				1,942.0			1,916.8
Vendor financing				1,003.5			999.6
Other debt23				186.8			177.4
Finance lease obligations				25.7			25.3
Total third-party debt and finance lease obligations				11,331.9			11,180.0
Unamortized premiums, discounts and deferred financing costs, net			(28.9)			(29.9)
..Total carrying amount of third-party debt and finance lease obligations			11,303.0			11,150.1
Less: cash and cash equivalents				39.6			116.6
Net carrying amount of third-party debt and finance lease obligations24....		€	11,263.4		€	11,033.5
Exchange rate ($ to €)				1.07965			1.10645

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Covenant Debt Information

The following table details the euro equivalent of the reconciliation from VodafoneZiggo's consolidated third-party debt to the total covenant amount of third-party gross and net debt24 and includes information regarding the projected principal-related cash flows of our cross-currency derivative instruments. The euro equivalents presented below are based on exchange rates that were in effect as of March 31, 2024 and December 31, 2023. These amounts are presented for illustrative purposes only and will likely differ from the actual cash receipts in future periods.

		March 31,		December 31,
		2024			2023
		in millions
Total third-party debt and finance lease obligations (€ equivalent)	€	11,331.9		€	11,180.0
Vendor financing		(1,003.5)			(999.6)
Finance lease obligations		(25.7)			(25.3)
Other debt23		(186.7)			(177.4)
Credit Facility excluded amount		(493.0)			(496.1)
Projected principal-related cash receipts associated with our cross-currency		(486.6)			(348.3)
derivative instruments
Total covenant amount of third-partygross debt		9,136.4			9,133.3
Less: cash and cash equivalents*		(23.3)			(22.0)
....................................................Total covenant amount of third-partynet debt24	€	9,113.1		€	9,111.3

• This excludes the cash that is related to the unutilized portion of the Vendor Finance Note facility of €15.9 million and €6.1 million as of March 31, 2024 and December 31, 2023, respectively, as well as the cash that is outside the covenant group, amounting to €0.4 million and €88.5 million as of March 31, 2024 and December 31, 2023, respectively.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, including statements with respect to our strategies, future financial and operational growth prospects and opportunities; expectations with respect to our financial performance, including revenue, Adjusted EBITDA, Adjusted EBITDA less P&E Additions and cash returns to our shareholders, as well as our 2024 financial guidance; expectations of any macroeconomic dynamics that may be beneficial or detrimental to the company; expectations with respect to the development, enhancement and expansion of our networks and innovative and advanced products and services; expectations regarding the availability of mobile devices with 1 Gbps+ download speeds; expectations with respect to our service offerings, such as our UEFA club football broadcast, including the benefits to be derived therefrom; our ability to improve broadband speed and performance using our Hybrid Fiber Coax infrastructure; the strength of our balance sheet, our borrowing capacity and tenor of our third-party debt; and other information and statements that are not historical fact. These forward-looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these statements. These risks and uncertainties include events that are outside of our control, such as the current political and economic environment; geopolitical tensions; the impact of inflation on consumer disposable income; the continued use by subscribers and potential subscribers of our services and their willingness to upgrade to our more advanced offerings; our ability to maintain commercial momentum in mobile and B2B; our ability to grow FMC households; our ability to meet challenges from competition, to manage rapid technological change or to maintain or increase rates to our subscribers or to pass through increased costs to our subscribers; the effects of changes in laws or regulation; general economic factors; our ability to obtain regulatory approval and satisfy regulatory conditions associated with acquisitions and dispositions; the availability of attractive programming for our

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