Operator: Good morning, ladies and gentlemen. And thank you for standing by. Welcome to Liberty Global's Second Quarter 26 Investor Call. This call and the associated webcast are the property of Liberty Global in any read or retransmission or rebroadcast of this call or webcast. In any form without the expressed written consent of Liberty Global is strictly prohibited. At this time, all participants are in a listen only mode. Today's formal presentation materials can be found under the Investor Relations section Liberty Global's website at libertyglobal.com. After today's formal presentation, instructions will be given for our question and-answer session. Page 2 of the slides details the company's safe harbor statement. Regarding forward looking statements. Today's presentation may include forward looking statements within the meaning of the Private Securities Litigation Reform Act of 2 thousand. Including the company's expectations with respect to its outlook and future growth prospects and other information and statements that are not historical fact. These forward looking statements involve certain risks that could cause actual results to differ materially from those expressed or implied by these statements. These risks include those detailed in Liberty Global's filings with the Securities and Exchange Commission. Including its most recently filed forms 10 q and 10 k as amended. Liberty Global disclaims any obligation to update any of these 4 looking statements to reflect any change in its expectations or in the conditions on which any such statement is based I would now like to turn the call over to mister Mike Fries.
Michael Thomas Fries: Alright. Welcome, everyone. Thanks for joining us. We have got plenty to share with you today. So I am just going to jump right in and then hand it over to Charles. Of course, got the whole team here with me, so get your questions ready. And we are speaking from slides today. I am going to kick it off on slide 5. I really like to start with this graphic. I think it demonstrates pretty clearly how we operate, how we allocate capital. How we create value for Liberty Global. Our story is, of course, anchored by world class telecom assets in Europe, that generate 22 billion of revenue and 8 billion of EBITDA in the aggregate. You know that. And while each of these markets has its own unique operating characteristics, Europe as a whole, in my opinion, is catching a bit of a tailwind. Right? Deregulation, sovereignty, the benefits of AI, they are colliding to change the narrative. And I think we will benefit from those trends. Now you know what I am going to say next despite the size and scale and growth prospects of our businesses, we believe our stock today reflects no value for these assets. And I will show you how I get to that conclusion in a moment. That belief is what is driving us to unlock the intrinsic value of our telecom businesses. And fortunately for us, unlike many of our peers, we are lucky to have both the financial and structural flexibility to achieve transactions like the spin off of Sunrise, which by any measure, created meaningful value for all of us, And as we will discuss in a moment, we are making outstanding progress on our plan to do the exact same thing in the Benelux with the Ziggo Group next year. At the same time, as we reshape Liberty Global, we have pivoted resources towards our Liberty Growth portfolio. Where we have demonstrated again and again our ability to create significant value in media, sports, infrastructure, and tech. The recent sale of our stake in EdgeConneX, which we talk about in this press release and in these slides, where we took out $750 million, 4x our investment over about 10 years is just the latest example of that. And finally, we have reshaped our corporate, or central, structure To be both more agile, more efficient, more focused. on these 2 core platforms. As a reminder, we are generating today hundreds of millions of annual revenue into Liberty Global, the corporate group, from tech financial and management services that we provide to both our telecom and growth operating companies. And when you factor in the recent restructuring, our operating model and reduction of our headcount, we have effectively brought down our net corporate cost by nearly 75% over the last 2 years. And we believe we are on our way to a breakeven position as early as next year. So that is the broad picture. So let me jump into the 3 key highlights I think are most critical for you. To know about this quarter. that is on the next slide. Number 1, it was a strong quarter commercially, and particularly in The Netherlands, where VodafoneZiggo continues to execute brilliantly, in fact, on its turnaround plan, This was our best consumer broadband performance in 6 years. I will talk about that. And as Charles will outline, we are confirming all of our 2026 guidance across the board. Second, our plan to spin off the newly formed Ziggo Group, which, of course, consists of our Dutch and Belgian operations, is right on track. I will go through this in some detail, but importantly, our fiber sharing arrangement with Proximus that will result in a single fixed network across 75% of Flanders was approved by the Belgian regulator yesterday. This is a big milestone. For both our operational and balance sheet initiatives in this market. And I am pleased to report that we will be closing on the acquisition of Vodafone and their 50% interest in the Dutch business at the end of this month. Then lastly, we have the only way to describe it, overachieved in our plans to monetize assets and generate cash from our Liberty Growth portfolio. Year to date, we have raised 1.2 billion well in excess of what we might have indicated, including $900 million from disposals of Liberty Growth and $3 million from an asset backed loan on our Wyre stake in Belgium. I think it is important to point out that this $1.2 billion is above and beyond the €1.2 to €1.4 billion we intend to raise from asset sales in Belgium and Holland to reduce debt in those markets. As a result, we are increasing our year end corporate cash forecast for the Vodafone acquisition from $1.5 billion to $2 billion So, essentially, we will end the year exactly where we started the year from a cash point of view. Now the next slide goes deeper. on our announced plans to spin off the newly formed Ziggo group. The key takeaway here is that we are making substantial progress on all the key building blocks required to achieve this major milestone for shareholders. You will see on the left side where we are on the 3 strategic and financial pillars that underpin the listing of Ziggo Group, and the tangible progress we have made across each of them, As I mentioned, we have all the approvals we need and are on track to close on Vodafone's 50% stake in the Netherlands by the end of the month. This is obviously foundational for the creation of the Ziggo Group, and it unlocks multiple other benefits, including the realization of financial and cross market synergies. The completion of our NetCo/ServCo split, in Belgium into wire and Telenet was another landmark achievement. This gave us 4 key things. Right? A fully financed fiber build out that is off the Ziggo Group balance sheet, Secondly, the rationalization of the fiber market in Flanders through our cooperation agreement with Proximus, I just referenced. Third, the opportunity to raise capital and reduce debt through the sale of a portion of our Wyre stake. And the rebalancing of debt between wire and Telenet, which will result in a less levered Telenet with a declining CapEx profile that goes into our Ziggo Group structure. And then finally, we have, of course, announced Stephen van Rooyen as the CEO of Ziggo Group and Jeroen Hoencamp as the incoming CFO. And you should know we are making significant progress to round out the balance of the team, which we will let you know about in September. Final piece of good news here, we have already increased in our own minds. Have not publicly increased it, internally increased our estimate of the synergies from this transaction and expect to be meaningfully higher than the $1 billion NPV we announced previously. So stay tuned for more details on that. As a result of this progress, we are a bit more ambitious on the timing of the spin off. And we are currently saying mid-2027 versus H2 2027. Now let's see how things transpire. Could be even faster. Let's see. As we said in the past, the equity story is built around 2 things, reducing leverage to 4.5x, and driving free cash flow to €500 million in the 2028 time frame. The bridge to 500 million of free cash we talked about on our last call and, of course, the deleveraging is further supported by asset sales of the €1.2 billion to €1.4 billion I just mentioned, all of which are underway and we are making substantial progress on, and you will probably learn about before our next call. Now the right hand side of the slide is the money shot here, as they say. So I will take a moment to walk through these valuation metrics. They break down into 3 main components. On the bottom right, you will see our current stock price, roughly $11 in the orange bar. We believe this represents a 20% discount to the fair market value of our cash and our Liberty Growth assets alone, and those are valued by independent appraisers, of course. Perhaps even more importantly, know I am gonna say here, it implies essentially zero equity value attributed to our Liberty Telecom operations. Now we do not need to debate that conclusion. Everyone's some of the parts may look a bit different. it is not the main point of the slide. Moving up the scale, about 19 months ago, we spun off Sunrise, which we now believe represents $12 per Liberty Global share. that is the red bar. Sunrise, as you know, is traded on the Swiss exchange between around 10.5% and 13.5% free cash flow yield or roughly 8x EBITDA and has really unlocked substantial value. And we believe over time, on a fully distributed basis, the Ziggo Group itself should trade on the Euronext at a value of up to $14 per Liberty share Assuming your Jeroen can confidently guide the $500 million free cash flow target and the 4.5x leverage, and the market applies similar free cash flow yields to Sunrise. So that is what we are playing for here. It means that from an $18 stock when we announce the Sunrise spin off, we have a clear opportunity to create $37 to $40 of value for shareholders, and you should assume we are squarely focused on just that, delivering that value, and we are making great progress on that goal every day. Now our confidence in that goal for the Ziggo Group is bolstered, of course, by the great turnaround story at VodafoneZiggo. Which we will highlight on the next slide. Essentially, I am just going to go right to the chart on the right hand side of that slide. You can see in the second quarter, last year, 2025, lost 26 thousand broadband subs and 5 thousand mobile subs. And quite frankly, that was after quite a long period of declining performance. Through a combination of commercial strategies, including new pricing structures, new broadband bundles, converged propositions, new premium sports content, importantly, a strong campaign promoting the quality of our broadband network Stephen and the team have delivered quarter after quarter of improved results since then, culminating in our first positive broadband quarter in Q2 since, I think, Q4 2022, and as I said, the best performance in 6 years. And that goes along with 32 thousand new postpaid mobile subs. So great progress on the operating performance there. The next slide shows you that performance. And I have just discussed it, so I will just jump to the ARPU stats here for VodafoneZiggo. Fixed ARPU was stable, both sequentially and year over year around €56, and that is despite new front book pricing and you can attribute that to both price indexation and some moves around content. We saw more or less the same outcome in mobile ARPUs, which were largely flat sequentially. at €17.60 and down 2% year over year. On the bottom, you will see operating results for Telenet, in Belgium, which continued its recent commercial turnaround with improved broadband and mobile net adds versus last year, Lots of commercial drivers at work here, including new campaigns, promoting our base brand, and a revamped FMC offering, allowing customers to tailor really their own packages like an à la carte menu. Which is well received. And broadband mobile ARPUs are both sequentially in Belgium and stable year over year. Now moving to The UK. Before I jump into the operating results for VMO2, let me just spend a minute highlighting where we see this business today and the core drivers of value tomorrow. First of all, it is important to remember that Virgin Media O2 is the only scaled challenger in the UK, 1 of Europe's largest markets. With the number 1 mobile network, by connections and the number 2 and most reliable broadband network according to recently released research. Which we agree with. By the way, our fixed network currently reaches just under 19 million homes, nearly half of which are already fiber today. Now you can add to that incredibly strong brands like Virgin Media, O2, Giffgaff, which support over £10 billion of annual revenue, and facilitate regularly the launch of new services like O2 Satellite, which we were the first to do, or broadband up with Giffgaff, or Volt, our new FMC product. And a host of other commercial initiatives. So that is a strong foundation we have in the UK. Now as we speak, about every quarter, this is a highly competitive market. it is becoming a street fight. The consumer retail sector, particularly with Alt Nets and MVNOs, which means we have to continue getting sharper, becoming more agile and more innovative, And I like the moves we are making to achieve that. I have listed just a few of them on the right hand side here. First and foremost, we have just hired Lutz Schuler, our new CEO of Consumer, now has the entire consumer division reporting to her. She spent 10 years at Sky launching broadband, mobile, Sky Glass, and in 2 weeks is already making a difference in our commercial strategy. So stay tuned for her keen eye and her strategic perspective on our consumer business. We have great potential in wholesale. First in mobile, where we generate today 800 million of extremely profitable revenue, and we will shortly launch Monzo to our list of MVNO customers. And in fixed wholesale, we are striving every day to capitalize on our scale and our growing fiber footprint which the Netomnia acquisition will only advance once that is approved. And Lutz and the team are well underway with their AI driven efficiency and growth programs. I will talk about that in a minute. You are already aware of our commitment to advancing our networks. For example, our 5G reach is now 88%, And even before fiber, we have 1 gig broadband available across the market. Now these commitments will pay dividends both in our B2C and B2B business. Finally, just a word on our capital structure in the UK, and Charles is going to address this more specifically. Important message I want you to hear from me that both Liberty and Telefonica are completely aligned on our commitment to this business long term. We appreciate that leverage today exceeds our original targets and as a result of slower growth and our decision to reinvest more in our networks, I would urge you to remember, that we have many tools at our disposal if necessary, both organic and inorganic, to drive greater free cash flow, stronger operating performance, and lower leverage over time. So more on that with Charles in Q&A if you like. Now turning to VMO2's quarterly operating results on the next slide, you can see that while our broadband and mobile net losses were better than a year ago, we are still encountering significant competitive activity and increased churn. I believe that the initiatives I just referenced and discussed on the prior slide as well as the new consumer management team and structure will address these challenges. Meanwhile, mobile ARPUs are up sequentially and flat year over year as we focus on retention efforts there. Primarily maintaining value over volume. And fixed ARPUs were flat sequentially but down 4.6% year over year, and that is largely in line with overall pricing in the market. Now Lutz is on, and of course, we can dig into these results further during the Q&A. Turning to Virgin Media Ireland, you will see that broadband net adds have been steady over the last 5 quarters, and that is supported principally by our wholesale fiber business. Good example of what we can do with wholesale. it is worth mentioning that our fiber rollout is on track to be substantially complete at the end of the year, and we will be expanding our retail footprint off-footprint, both of which will help our business moving forward, particularly the reduction in fiber CapEx Fixed ARPUs have been very steady at €61 and mobile postpaid net adds remained positive. Those are supported by a 15-year offer and retention strategies. Now I will end with just a bit of commentary on AI. I need the headline is the message here. Right? The telco sector in my view is ready made. To realize AI benefits, over time should be transformational for us and our peers. For starters, we sit on the assets--the very assets AI needs most to succeed. Am I referring to? Largely, large amounts of data that cannot be replicated. Massive cost structures like call centers, field ops, and networks that are built for automation, millions of daily touch points with consumers, and the infrastructure, like connectivity and data centers that support the distribution layer for AI And not surprisingly, we are looking to benefit from the very same opportunities that our peers are attacking. Namely driving margins through cost efficiencies, driving customer revenue growth through hyper personalization, driving demand for our infrastructure, including power, space, and cooling, and driving interest in our stock, as investors rotate into sectors that are net beneficiaries of AI and not candidates for disruption. And we learned a lot of lessons like everybody. Right? A big 1 for me has been finding the right balance between building and buying solutions. Increasingly, we are finding that partners, many of them listed here on this slide, are able to help us integrate faster, launch sooner, and scale much more effectively. On the top right of the slide, we have shown some examples of what we are doing today and the results we are generating in things like reaching 65% of our VMO2 customer base with our personalization engine, generating 75% call containment rates through our generative AI pilots in The Netherlands, reducing fraud, optimizing CapEx, and lowering truck rolls and technician cost, And to be candid, these initiatives have, to be honest, are table stakes for every telco. Do not get me wrong. I am proud of it. We are proud of it. On balance, we are realizing strong. Marginal improvements to our economics. Customer interactions and our network quality, And as we have said publicly here, you know, we expect to generate annual savings in the hundreds of millions. But everyone on this call knows certainly I know, we are just scratching the surface here. Based on some work we did with McKinsey and Google. We analyzed some of our core operating expenses across the group. To assess both the proportion of that cost, which could be addressed by AI over time, and what some more ambitious savings targets might look like. And you can see this on the bottom right of the chart. Show savings of between 20% to 40%, even as high as 70% at things like customer care, and we are not providing guidance here. These are just indications of what we think could and should be achievable over time. These are not fanciful numbers in my view. They look more realistic to me every day. Why is that? Okay. A lot of things are working in our favor here. On 1 hand, of course, we are implementing our own AI solutions. With sophisticated and scale partners to drive benefits, but equally important. On the other hand, we are seeing our largest suppliers, typically software and outsourcing partners, looking for early renewals in exchange for passing along to us the significant AI savings they themselves are realizing and must realize to stay relevant. So we are getting it on both ends. Obviously, as we develop these initiatives more fully, we will share more detail. Remember, this example just covers OpEx. Right? There are significant revenue and CapEx benefits to be realized as well. And then finally, my last slide, we are not only taking advantage of AI in our telecom and growth businesses, We are also prioritizing opportunities to invest in AI companies, through our existing tech portfolio as part of Liberty Growth. And we discussed this you know, on and off in the past, but let me get into a bit more detail here. As a reminder, we have had a pretty good track record investing in tech. Typically, companies in their scale up phase and where we see some strategic value to our existing businesses. Good examples would be Plume or Aviatrix or Samba TV. Our track record has been good. Since inception, we have invested a total of 700 million into our tech portfolio and taken out around 600 million through distributions and exits. So we are funding our investments with proceeds And with about net 100 million in today, we are sitting on a market valuation of 400 million, so in a good spot. Now recently, we pivoted to AI driven investments where it makes sense. I am not talking about OpenAI or SpaceX. Good examples would be ElevenLabs. Maybe some of you know this company, a leader in voice AI, with advanced automated customer service solutions that we are actually using today. Expo and cybersecurity and Skale AI and data and automation are 2 good examples of companies directly addressing the operational backbone of a telco. So we are enhancing network security, optimizing processes, and driving efficiency there. Arrcus is optimizing the next generation of network infrastructure a perfect fit for the rest of our infrastructure businesses like AtlasEdge, And if you look at these businesses, you look them up, you will see that we are typically investing with the smartest VC firms and tech companies. We are not alone here. We are partnering with smart money on these things. And going forward, we will remain focused on AI infrastructure, models, invoice and video, cybersecurity, AI applications. Things like customer care, sales, and financing. Things that we think could be useful to us and also very successful. And lastly, I will just point out that our infrastructure vertical within Liberty Growth is playing the AI space as well. Through our data center investments in AtlasEdge, of course, We have hundreds of millions committed there, and there are alternative energy investments. So we are taking a 360-degree view of the AI opportunity, which we believe is the best way to innovate and transform our business over the long term. Think it is gonna be 1 hell of a ride. Excited about the stuff we are doing and happy to get into any questions you may have. In the meantime, Charles, over to you.
Charles Henry Rowland Bracken: Thanks, Mike. Turning to our Q2 financial highlights, our OpCo performance continues to track against 2026 guidance, as I will get into starting on the next slide. We closed the quarter with $2.4 billion of corporate cash, supported by proceeds from our EdgeConneX disposal and additional corporate liquidity provided by a new Wyre stake asset backed loan. And we have completed $4.1 billion of financings year to date. Including the imminent separation of the Turner and Wire capital structures following the recent approval of the fiber sharing agreement. The next slide sets out the Q2 financial results for our Benelux companies. And as a reminder, we now present Telenet's financial performance excluding wire to provide greater clarity given the full separation of the 2 companies and their capital structures. Which as Mike just presented, is set to happen following BCA approval of the fiber sharing agreement in Belgium. Turning to the financials. Revenue trends of VodafoneZiggo sequentially improved during the quarter, supported by fixed customer volumes returning to growth in line with the how we win plan. Whilst repricing remains a headwind today, we anticipate that impact to reduce as we move into 2027. Adjusted EBITDA declined in line with our guidance, reflecting the in year impact of the how we win plan and some 1 off investments in network resilience, which we identified when we gave guidance. Cost reduction initiatives remained firmly on track and continue to support our expectation of returning the business to EBITDA growth from 2027. Adjusted EBITDA less P&E additions were lower year on year, primarily reflecting higher CapEx in the quarter related to the network resilience investments. At Telenet, revenue continued to be impacted by our strategic decision not to renew Belgium football rights for a season and a 1 off adjustment related to a VAT dispute. Partly offset by higher revenue from the new wire management services agreement. EBITDA growth was driven by the wire management services agreement, and lower wire wholesale fees. Looking ahead, we will see adjusted EBITDA impacted by the return of costs associated with the new Jupiler League contract in the second half. Turning to the UK and Ireland Virgin Media O2 service revenue was broadly in line with our expectations. Competitive intensity in the fixed market remained elevated, whilst the O2 business continued to rationalize parts of its portfolio to support long term growth, resulting in a reduction in headline revenues. This was partially offset by wholesale revenue growth in our market leading MVNO business. There was also an improvement in mobile service revenue trends sequentially. Adjusted EBITDA declined by 2.9%, driven by lower revenue but supported by further cost efficiency measures. At Virgin Media Ireland, service revenues modestly declined, impacted by continued competition in the consumer fixed markets, But because of this, adjusted EBITDA declined by 4.7%. Turning to the next slide. We remain committed to our disciplined capital allocation model, rotating capital into high growth investments and strategic opportunities that drive long term value creation. Capital intensity at our key opcos remains elevated, but all within guidance ranges for the full year. Virgin Media O2 continues to see elevated CapEx, driven by higher investments in mobile capacity, including spectrum integration from Vodafone, the ongoing fiber upgrade program, and IT digital spend. To put us in better position in terms of seamless FMC offerings. VodafoneZiggo CapEx was driven by network upgrades, including the DOCSIS 4.0 digitization efforts, and 1 off investments in network resilience and service reliability in 2026. CapEx has meaningfully stepped down at Telenet as the 5G network up upgrades are now largely complete, and as we complete much of our investment in our digital platforms. We expect this to continue to trend down further next year. And Virgin Media Ireland CapEx continues to step down in 2026 as we largely complete the fiber upgrade of around 1 million premises. We expect Ireland to be free cash flow positive because of this in Q4, for the first time since the beginning of the upgrade program. Moving to the Liberty Growth Walk in the top right, fair market value of our growth portfolio decreased to $2.9 billion in Q2. This was mainly driven by the successful sale of EdgeConneX, which I will detail more in the next slide, and UPC Slovakia, partially offset by modest investments in Formula E, Nexfibre, and the AI/RAN tech pillar. Within the growth portfolio. The key fair market value adjustments were an increased value for edge connects on sale and an increase in the Lions Gate stock price. Turning to our cash walk on the bottom right, we ended the quarter with a consolidated cash balance of $2.4 billion. This was mainly driven by the proceeds received from EdgeConneX and UPC Slovakia transactions. And this excludes the $340 million of additional liquidity provided by our loan facility by our Wyre stake, half of which resides outside the Ziggo Group according to the terms of the Vodafone transaction. Next, I wanna spend a moment on EdgeConnect. Which was an excellent outcome for our growth portfolio and a clear of our strategy working as intended. First invested back in 2015, taking a minority stake in what was then a relative early stage data center business. Over the following 11 years, we funded its growth consistently and rationally, with around a $177 million of gross equity in total. We supported the company as it scaled without overcommitting capital. And today, EdgeConnect is a truly global platform. With over 50 data centers across more than 40 markets and 4 continents. Spanning the full spectrum of edge and hyperscale developments. Our exit strategy reflected the same discipline that characterized our investment approach, We monetized the position in stages, crystallizing value while maintaining upside exposure. We achieved a full exit in Q2 26, with $604 million of proceeds from the final stake, top of a $122 million from earlier sales. And the headline numbers speak for themselves. A $177 million invested, 726 million of total proceeds, and roughly a 30% IRR and a 4x multiple of money. Now beyond the financial terms, the outcome of our EdgeConneX's investment validates our right to plan digital infrastructure and data centers. We now have more than 10 years of hands on experience in this space, we are applying that playbook to our AtlasEdge investment. Moving to the treasury slide, we have been proactively dealing with our 2028 and 2029 maturities, And overall, we have successfully refinanced more than $4 billion across our credit silos year to date. In Belgium, we are now formally separating the capital structures between Telenet and Wyre, following BCA approval of Wyre's fiber sharing agreement with Proximus. Wyre now can draw down the $5 billion fully underwritten facility to repay $2.3 billion intercompany loan with Telenet and a $400 million Wyre dividend as part of the wider debt rebalancing. Telenet will use the proceeds received to repay $2.5 billion of 28 maturities. At VodafoneZiggo, we were able to refinance $1.3 billion leaving us with no 28 maturities, reducing 29 maturities. We remain opportunistic here ahead of the spin off, and as Mike noted, are on track to execute a number of deleveraging steps pre spin. A Virgin Media O2 remain opportunistic in the debt market as we look to continue to push out our 29 maturities, but we acknowledge recent trading levels. Now as Mike discussed, we are committed to a stable long term capital structure of VMO2. We in Telefonica recognize that leverage is above our 4 to 5x target, and that credit spreads are currently elevated, but we both believe that we are making the investments that today that will deliver EBITDA growth to deleverage our company back towards our target range. We are investing CapEx at 22% of sales. it is actually 25% of sales if you exclude hardware sales. Which is significantly above the average through the cycle for a telecom company to support this strategy, including significant near term investments in the mobile and fixed networks, to improve customer experience and competitiveness, as well as in digital IT transformation to realize the cost reduction opportunities presented by AI. The small dividend projected to be paid to the shareholders will be reinvested into the Netomnia transaction, which is a key transaction for Virgin Media O2 to keep investing in its fiber plan which we believe will further strengthen the product offering for VMO2 and help establish a credible second fiber network to compete with BT and unlock wholesale revenues. Both shareholders continue to look at inorganic opportunities to further strengthen the competitive position and financial performance of Virgin Media O2. As we did with both o 2 Daisy and the Netomnia transactions. Both shareholders recognize the importance of credit providers, which is why they are making these investments and acquisitions to support the long term future of the company. Now we remain on track to deliver against this strategy, and we will update investors as we always do in February of next year. And finally, turning to our full-year guidance for 2026. We are reconfirming all guidance metrics at VMO2 VodafoneZiggo, and Telenet, as well as our guidance for corporate adjusted EBITDA. And in addition, we are upgrading our full year corporate cash target from $1.5 billion to $2 billion supported by the EdgeConnect proceeds and wire asset by loan. And that concludes our prepared remarks for Q2, and over to you for questions.
Operator: The and answer session will be conducted electronically. If you would like to ask a question, please do so by pressing the star or asterisk key followed by the digit 1 on your phone. In order to accommodate everyone, we request that you ask only 1 question. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. We will pause for just a moment to give everyone an opportunity to join the queue. Your first question will go to the line of Joshua Mills with BNP Paribas. Joshua? Your line is open.
Joshua Mills: Hi, guys. Thank you for taking the question. I will keep it to The UK. Hello? Operator? Hello? Hello? I must have gotten cut off again. who is that? Yeah. Start over, please. Yeah. I bet. Yep. Thanks. Hello? Hope you can hear me. Can you hear me? Sorry. We can hear you. Yeah. You are kind of going in and out? Give it a try. Okay. Thanks. I just want to ask, firstly, on The UK ARPU trends. I think in the past, you have talked about the issues faced from declining legacy revenue, things like voice and TV. And today, you are talking more about the declines being related to front book price competition. So it sounds to us like it is no longer just a legacy issue. it is more related to market conditions as they stand today. So my question on this ARPU trend is firstly, is that a fair characterization? And if so, do you think that we are at trough ARPU declines and trough service revenue declines at the moment? Or could things continue to get worse in the second half given level of competition we see in the market? And then secondly, on the volume side of the equation for The UK, in the past, when you have had these kind of sub losses in markets like The Netherlands and Switzerland, you took the quite bold step to rebase customers aggressively proactively onto cheaper tariffs to try and stabilize the base. It looks from today's strong results on VodafoneZiggo net adds that is had a good effect. Is it something you would consider doing in The UK as well, or do you think that you are you are gonna remain happy with the level of subscriber losses in the near term as long as you do not take too much of a hit on ARPU. Thank you.
Michael Thomas Fries: Go ahead, Lutz.
Lutz Schuler: Yeah. So thank you for the question. So, I mean, when we did the guidance for the year 2026, we expected to be the market to be very competitive. Remember, I said that 70% of the service revenue guidance of minus 3 and minus 5% will come from fixed consumer. Which exactly is now kicking in. So that is number 1. Number 2, to your point, is the market more competitive? Yes. It is. So just 1 number. Compared to Q2 25, the average selling price is down 4% in the market. So I think your observation is right. Now where is this 4.6% coming from? The biggest driver for it is our own prevention. And I think what we are not doing is radically recontracting customers and forget about the ARPU. We have, remember, we have built a very sophisticated retention machine where we know down to every 60 homes, what customers want and offer them that. And we have now built the same prevention machine. So the biggest driver for the ARPU down is prevention already. But in a very targeted way, And so we have now 80 more than 80% of our customers on contracts with significant remaining term. And so we are we will keep doing exactly that in the future. Is this now the worst-button or not? That is hard to say because I do not know how the market really evolves. Market is very hot. There are some new promotions announced from Openreach. Ofcom has to accept them. If they will kick in, from October this year, the market will be even more competitive. If not, I would expect the same competitive level, and then our prevention will help us a bit more. Future. But it is hard to predict. I hope I hope that helps.
Michael Thomas Fries: Next question, operator?
Operator: Thank you. Yes. Thank you. Our next question will go to the line of Robert Grindle with Deutsche Bank. Robert, your line is open.
Robert Grindle: Yeah. Hi, everyone, and thank you. So well done on getting the BCA approval. I think it is taken a bit longer than you thought. But probably been prepping away in the meantime. what is the timeline from here on the fiber collaboration and the separation of Telenet? And alongside that, the monetization of Wyre. Would you hope the monetization announcement is a 2021, or is that in next year now because things have gone a bit more slowly? Thank you.
Michael Thomas Fries: Thanks, Robert. Listen. It has taken a while to get to this point. But as I tried to articulate in my remarks, you know, it is a building block. it is a foundational piece of the building block. And now that is done, it is opening up a lot of key next steps. You mentioned 1. I mean, Telenet is already split out. Wyre and Telenet have been really separate businesses for a while. The second quarter. I believe we have actually reported on them separately. So that is happened. What the BCA approval allows us to do is essentially rebalance the stack on each of those 2 entities. And proceed, importantly, with the sale of a stake in Wyre which is well underway. You know, we have got actually, I think, 6 to 8 people doing the work. I have hired advisers. And we will be, you know, diligently proceeding with that transaction through year end. And it is possible that even as soon as year end, but perhaps Q1, we will have concluded that transaction. But that is well underway. And just 1 of many things that the BCA approval unlocks, all of which in our view, are very positive and helping, you know, accelerate our timing on the ultimate Ziggo Group spin. Thank you.
Charles Henry Rowland Bracken: The banking process was supposed to take place next week. And then it will access the 4.35 billion of Wyre financing just for clarity. Put on the dividend. Thank you.
Operator: Thank you, Robert, for your question. Our next question will go to the line of Polo Tang with UBS. Polo, your line is open.
Polo Tang: Thanks for taking the question. it is about VodafoneZiggo and broadband. Can you clarify when you will be able to start offering broadband in the Delta fiber footprint? Also, what do you think has had the biggest impact in terms of helping stabilize the VodafoneZiggo broadband base? So was it the ESPN content offers? Was it pushing harder on recontracting customers? Was there a notable tailwind in terms of the Odido data breach? Or was it something else? And do you think that you can see improving or positive net adds going forward or is stable a more likely outcome? Thanks.
Michael Thomas Fries: I do not know if Steven was on and then off. Stephen, let me know if you are on.
Stephen van Rooyen: Yeah. Yeah. Hi, Mike. I am on. Welcome to take those. Yeah. Great. Hi, Polo. Thanks for the question. Let me deal with the Delta question. First, we are planning to roll out in the Delta footprint that we are operating in the second half of the year. We are not far from that now. So we expect to see that turn up in our numbers in the fourth quarter. And then in terms of stabilizing, look, as you have seen progressively over the last 6 quarters, it is not 1 thing that we have done. it is a sequence of a number of things we have done including bringing our front book pricing in line with the marketplace, investing in the core proposition, increasing our speeds, We are the only ones offering 2 gigabit across most of the country today. Differentiating both with Wi Fi guarantee and now laterally with the ESPN bundle and changing our marketing focusing more on connectivity and competing harder than we had previously So I think it is a it is a combination of things that I think have helped us get to this point. As a result, I think it is I think it is it is fair to say that we are pursuing sustainability of that growth. So in terms of providing guidance going forward because we put in, I think, a number of pillars that will help us continue to build the momentum that we have seen Our expectation is to continue to grow through the second half of the year. Thanks.
Operator: Thanks, Polo. Our next question will go to the line of Nick Lyall with Berenberg. Nick, your line is open.
Nicholas Lyall: Very much. Hello. I hope you can hear me. guys. Just a quick question again on The UK to follow-up on Joshua's, please. What makes you think this is not a long term decline for The UK? I am just interested. Your pricing is quite a bit above BTs and substantially above the altnets still. So I take Lutz's point that he is got a lot of customers locked in for now. But why should you be able to sustain this pricing point? You know, what helps you get there? Is it rolling out fiber and completing the fiber footprint or something else? Or is this a problem maybe for the longer term, the ARPUs just keep on slipping for many quarters? And just a second point, Charles, can I just clarify on what you said about inorganic options in The UK? That sounded like you were thinking about potentially buying assets, not selling to reduce debt. Have I got that the right way around or have I misunderstood that? Thanks very much.
Charles Henry Rowland Bracken: Lutz, wanna address the first 1? Yeah. Just ring on the I think the point we are trying to make is both Telefonica and us. Are firmly behind this company. We are very committed. We are investing at very elevated levels to secure the long term competitiveness of the business. And we have been ready to do inorganic moves, whether it is buying and selling. As you know, we have sold, you know, stakes, for example, CTIL. So not to be specific about what we are buying or selling. it is more to say, look. We are right behind this company. And we think the company's in the right direction, performing to the plan we set it for this year. I look forward to giving the update to everybody in February on the next phase of financial development.
Michael Thomas Fries: I would just add to that the Netomnia deal would be an example of an inorganic transaction that we think on balance is beneficial to, VMO2 from both a credit and an equity perspective. For all the reasons we have articulated along the way. So inorganic could include really, everything that is not simply driving cost reduction or revenue growth or free cash flow in the operating business. So it is a wide definition. Lutz, do you wanna address the first question?
Lutz Schuler: Yeah. Yeah. I was-- sorry for that, yes, I was on mute. My answer to your question is the following. We have 3 very strong brands. Right? And it is not only Virgin Media. it is also O2 and Giffgaff. And, ultimately, we will be able to sell any product with any of these 3 brands. And we have also and we have just launched Giffgaff Broadband, and we are starting to gain traction there. So high level, 3 brands, addressing different target groups. And on average, every second household is a customer of ours, but there is only on average 1 of 3 products for us. While we have very strong mobile connectivity, very strong broadband connectivity, very strong video products for different segments. So, therefore, even if you get fiber very cheap, I think the combination across everything to get this in a very good value for money, with good service, this is our strategy, and you will be progressing us in that way. And we have to be prepared that the competitiveness stays like it is today.
Michael Thomas Fries: I think also Understood. Flip side of that equation is, of course, what Lutz was mentioning around driving in our operating model, our operating cost, and, you know, ultimately, declining CapEx profile. So we are focused, you should be, on the profitability of these businesses, the ability to generate free cash over the long term. You know, we just been describing revenue. Certainly, that is a big piece of it, and Lutz did not mention the business side, enter enterprise as well as wholesale. So there is many levers to drive the top line. But far more levers to drive profitability between there and free cash. And significant part of the company's time, effort, energy, and shareholders is to ensure that we are optimizing the p and l of the business. So lots of levers to pull to drive, you know, what we think is the most important metric, and that is long term free cash flow. Only 1 of which is revenue, and I think Lutz addressed that pretty well. Thanks, Nicholas.
Operator: that is great. Thank you very much. Thank you, Nicholas. Our next question will go to the line of Ulrich Grace with Bernstein Society General Group. Ulrich, your line is open.
Ulrich Rathe: Yeah. Thanks very much. I wanted to ask on the quantification of the AI cost benefits. That was quite interesting. My thought, Mike, the question I would have is how confident are you that you can hold on to these kind of benefits? Point being, cost benefits that are available to the industry have kind of diffused away. You mentioned McKinsey is involved, and those kind of companies are a mechanism for diffusion, 1 of them, but there are others. So what are the reasons why such cost benefits are ultimately good for the bottom line in the longer term? That will be interesting here as well. Thank you.
Michael Thomas Fries: Yeah. If you mean good for the bottom line or if you mean sustainable, I think you asked both questions. Look at that. I will repeat what I said on the call, which is that it is coming at us from both directions. So self induced organic organically driven efficiencies, improvements, all the things that we know AI can do. You are reading about it every day. We are on that. And the list of projects is way too long to put on a slide. But every company in the group both in the growth and the telecom portfolio, is implementing today solutions that are making them more efficient faster, better, more profitable. And that is happening organically as we speak. I am really thinking through and addressing the longer term impact because the trend is only going 1 way. Right? Models are getting smarter. More and more companies are you know, arriving on the scene taking advantage of that intelligence, driving solutions at scale for companies like ours and others. And we do not see anything on the horizon that would change that trajectory. If you just extrapolate from, you know, where intelligence is moving and how costs are evolving in that space, for beneficiaries like us, it is just gonna get faster and cheaper. And as we apply that logic to more and more of our business, we just see nothing but upside. I mean, we are only 20-25% in the cloud. I repeat that. 75-80% of our business is still on prem. So there is so many things our industry, and we are not different than any other telco, has yet to implement and take advantage of that. I think it is almost irresponsible not to be that ambitious. I am pounding the table every day with my team to tell me why. We cannot be that ambitious. And it is nice to have, you know, third parties who are along for that ride and on that ride with whether they are, you know, consultants or technology companies. I think that is you have to be thinking that broadly, and I think that aggressively over the next, let's say, 2 to 3 years, it is moving that fast. And so, you know, that is how we are approaching it. it is it is great to do the things we are doing. I am proud of our industry. And I am proud of my team. But it is just the start. There has to be a rethink of our operating models, you know, how we are managing our businesses, talent, and all the technology and software required to drive these kinds of you know, step change improvements. So I think it is real. I think it is sustainable. And, you know, we are we are we are we are anxiously working to deliver it.
Operator: Thank you, Ulrich. Our next question will go to the line of Matthew Harrigan with Stonix. Matthew, your line is open.
Matthew Harrigan: Thank you. On the industrial kind of blocking and tackling AI, you kinda answered about 80% of my question, but I assume you do not have the issues with token cost, which you are surprising some people in terms of what is being charged now. there is even some talk of a bit of a bait and switch. Talking with some of your US peers, I think they feel like there is a touch of discernible benefit in 2027 on a net basis. And then after that, you really get an inflection point. I mean, do you think you are going to see a decided inflection point in 2028-2029 late decade, or is this just kind of a gradual process? And then lastly, you talked on costs, which are very quantifiable and predictable. On the revenue side, you I assume that was also addressed by McKinsey and Google, but you would rather kinda keep that closed kimono because it is a little harder to realize, and you do not wanna go to aggressive on it. Effects.
Michael Thomas Fries: Yeah. And I will ask Enrique to jump in here to look at on the revenue side and the CapEx side, those numbers generally are not as high as the ones we put on the slide. But they are still tangible and significant and worth pursuing. And you should assume that because that you should not assume that because were not on the slide, we are not looking at those things very aggressively. And many of which we are already putting into action. Right? So in Lutz's case, you know, his personalization engine is driving churn reduction, driving, you know, best next best offers, driving all kinds of revenue benefits just today as we speak. So we intend and are doing that across the board. But we figured 1 piece at a time. I think it is gradual. I do not think it is you know, in 1 quarter, all of a sudden, everything hits. It will be gradual, and I think it is for us, that is the only way to do it. Why is it? Because you hear from others in the industry, it is not simply the technology. it is simply a great partner. it is also your organization, your talent, your operating model. No point in having, you know, all this great stuff. And not you are not able to implement it. You do not have the people, the structures to implement it. So it is a journey, but it is everybody's on it. We are on it, and our and our and we are on it from end to end, really. And then I do not know if, Enrique, you wanna talk more about the economics of AI tokens and how we see that progressing.
Enrique Rodriguez: Absolutely. Thank you. You know, first of all, like anybody else in the industry, we are watching the evolution of both talking costs and the resulting benefits pretty closely And I can say categorically, we do not see a major issue with the with the increase in some cases of token cost, because we have been, I think, pretty disciplined in making sure that we are applying those tokens against business cases that do bring us net benefits. And since so, you know, I do believe that this will be a continuing story. But I see a significant net benefit even though, like anybody else, we do see an increase in the usage of tokens and the related cost. Great.
Michael Thomas Fries: But thanks, Enrique. Enjoy the rest of your summers. Thanks.
Operator: Thank you, Matthew. Our next question will go to the line of James Ratzer with New Street Research. James, your line is open.
James Ratzer: Yes. Thank you very much indeed. Yeah. Good afternoon. So I would question, around kind of Virgin Media O2. If I look at kind of your partner Telefonica, they have seen declining revenues in Germany. And just 2 days ago, they announced a major cost restructuring program and, obviously, Telefonica has just helped to appoint a new CFO at Virgin Media O2. So I am wondering whether you see the scope to take similar action at Virgin Media O2 and to kind of take on a more radical approach to cost reductions as we have seen your partner also announce in Germany. And you talked about kind of looking to support the business And at the same time, you have just raised your cash target at the Topco now to $2 billion Would you consider injecting any of that cash back into Virgin Media O2 to help it with its deleveraging? Thank you.
Michael Thomas Fries: Thanks, James. Listen. Premature to discuss capital allocation. We think the business is obviously generating free cash today. And we think can generate significantly more free cash tomorrow. On your cost reduction question, certainly, that is something we are looking at as well. We are in the business planning phase right now. This is when Lutz and the team are sitting down doing the work on our long range plans. And, of course, when we mentioned organic and inorganic tools to continue to drive free cash flow and reduce leverage, that is, as you state, a very realistic 1. And so you should assume that, you know, those are the kind of things we will be looking at as we should. And I do not know if Charles or wants to add anything to that.
Charles Henry Rowland Bracken: No. I am trying to come out with you. I mean, I think look. You know, the business is on track with the plan that they set out at the beginning of the year. They have reconfirmed guidance. We are going through planning exercise. We do understand leverage is outside the range, and we take it seriously. You know, give us the time to, you know, continue to work with the with the management the right next step, which could involve cost reductions. And we will come back to you in February.
James Ratzer: Could you I mean, do you see I mean, kind of scope there for sorry.
Operator: Okay. Thank you very much. Thank you, James. Our next question will go to the line of David Wright with Bank of America. David, your line is open.
David Wright: Oh, hi, guys. I hope you can hear me. Thank you for the presentation. And opportunity to ask questions. Mine is a little around the accounting change in VMO2. It just seemed a little unintuitive to me to be amortizing the commissions extending the amortization period, as you are accruing increasing sort of net losses and higher churn, that seems like quite the opposite thing you would do So I am wondering why you have chosen to do that and on what basis. And I guess the second point would be is it just a 1 off impact or should we now be seeing this sort of run over a period? To sort of support the EBITDA line? And I guess my sort of final question was does this adjustment sit within the EBITDA guidance, or is it outside the EBITDA guidance? Was it anticipated when you gave the EBITDA guidance? That would be really interesting to me. And then Charles, I sort of have to ask, you know, you kinda mentioned this full year the m o 2 sort of do not wanna say revisit, but sort of, you know, full year, update And it seems like, you know, that could be sort of a more significant event. Should we think about it that way, or are you just talking about sort general business planning as usual? Thank you, please.
Charles Henry Rowland Bracken: Charles, both for you. Yeah. Accounting. Yep. First of also a second question that is the usual update in February. I do not wanna make a big deal about it. it is more just to say we obviously get guidance every year. We got into this year. We are on track, and as we always do, it will be irregular. So it is nothing particular sinister or magical about next February. It says the accounting look you know, the magic of accounting estimates we are always revising accounting estimates. You know? it is always based on facts. it is always aligned with our auditor and it is always based on our real life experience. So, you know, maybe it seems odd in the context of the market competition, but these actually are the facts, and this is the right way we believe, to account for it. And it is not just us. it is obviously we have run through with the auditor. It has some impact on EBITDA, Was that anticipated in the original guidance Probably not. But to that on the other hand, it is not that material number. it is worth pointing out the key metric we are looking at here is free cash flow. And it is obviously a noncash item, but I do agree it has a short term benefit on EBITDA. But in years past, it is worked against us. So I would consider this in the sort of swings and roundabouts of accounting. But just on the fact Sorry.
Lutz Schuler: 1 thing I can share, Lutz, can I Can I just add-- sorry? Add, please? Can help you to answer what is when you do a lot of prevention, you bring customers into a new 24 months contract plan. And that is impacting accounting. Right? So if you add these 2 things together, I think what is maybe on the surface counterintuitive makes a lot of sense. So lot of new recontracting, you paid commissions for that. And you, of course, then, right, accrue them over the new contract lifetime of the customer. Just 1 thing. So it all makes sense. And then the other thing, what, right, Charles said, concrete numbers. Right? Last year, we had headwinds. Working for us. We do not have this. This makes even a higher amount. Now this goes the other way. So it is always small items. Big companies like ours but it is it is not explicit outside the guidance. it is it is more smaller. Thank you, Lutz.
Operator: Thank you. And with that, we will conclude the Q&A session. I would now like to pass the conference back over to you, mister Mike Fries, for any closing remarks.
Michael Thomas Fries: Great. I will keep it brief. Thanks for joining us. We always appreciate that. Lots of information to digest. You know where to find us if you have questions. Be a busy summer for us, as you can imagine, across the group, particularly in Benelux. So stay tuned for announcements there, and stay well. Speak soon. Thanks very much.
Operator: Ladies and gentlemen, this concludes Liberty Global's second quarter 26 investor call. As a reminder, a replay of the call will be available in the Investor Relations section of Liberty Global's website. There, you can also find a copy of today's presentation materials.
