Scale, Organic Growth, Levered Equity Driving Liberty Global by Greg Speicher.
Notes from Liberty Global Annual General Meeting of Shareholders – Thursday, June 26, 2014
- Value creation drivers (all thriving in Europe)
- 1.) scale in core markets
- benefiting from fragmented market
- favorable regulatory environment
- winning share from larger telco incumbents
- scale aids technology procurement (set top boxes), content acquisition, leveraging services & human resources
- Virgin Media and Ziggo acquisitions were based on building scale
- substantial synergies to be realized
- 2.) organic growth
- targeting mid-single digit growth in revenue and operating income
- Europe has low penetration of advanced services
- Liberty Global’s bundles are attractively priced and over best-of-breed offerings in video, broadband
- 1ooMbps broadband speeds anchor bundles and organic growth
- declining video losses from advanced digital platform
- growth will require continued innovation
- Horizon TV
- Horizon generates 30% more ARPU
- 20% less churn (vs. avg. digital customer)
- mobile and B2B businesses
- expects increased demand for quad plays
- Wi-Fi hot spots and Wi-Fi calling technology
- SOHO segment growing over 20% annually
- Horizon TV
- content
- with large video and broadband base makes sense to evaluate how select investments in content can help maintain and grow customers
- All3Media JV partnership with Discovery Communications
- 50% stake in De Vijver Media, Belgian free-to-air station
- More content deal/investments to come, particularly in the OTT space
- SVOD services, such as MyPrime, designed to get ahead of rising OTT threat (Malone is on record as thinking U.S. cable industry was slow to respond to SVOD threat.)
- 3.) Committed to growing FCF per share (levered equity capital structure)
- managing capital intensity
- optimizing balance sheet
- using excess cash to repurchase shares
- asset they know the best (circle of competence)
- best way to drive equity returns for shareholder
- 1.) scale in core markets