Liberty Global - Q4 2022
February 23, 2023
Transcript
Operator (participant)
Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Liberty Global fourth quarter 2022 investor call. This call and the associated webcast are the property of Liberty Global and any redistribution, retransmission, or rebroadcast of this call or webcast in any form without the express written consent Liberty Global is strictly prohibited. At this time, all participants are in listen-only mode. Today's formal presentation materials can be found under the Investor Relations session of Liberty Global's website at libertyglobal.com. After today's formal presentation, instructions will be given for a 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 1995, including the company's expectations with respect to its outlook and future growth prospects and other information and statements that are not historical facts. These forward-looking statements involve certain risks that could cause actual results to defer materially from those expressed or implied by these statements. The risks include those detailed in Liberty Global's filings with Securities and Exchange Commission, including its most recent filed forms 10-K and 10-Q, as amended. Liberty Global disclaims any obligation to update any of these forward-looking statements to reflect any change in expectations or in the conditions of which any such statement is based. I would now like to turn the call over to Mike Fries. You may now proceed.
Mike Fries (Executive Chairman and CEO)
Okay. Welcome, everyone, and thanks for joining our year-end results call. I hope you're all doing well. As usual, we have some prepared remarks that Charlie and I will manage, and then we'll get right to your questions. For that, I'll bring in my key leaders who will be ready to respond as needed. We're working off slides as we usually do, and they contain quite a bit of good information this time, so we'll assume you've got those in front of you or you'll access them at some point. Just a warning, this is our year-end call, so there's a bit more information than usual, but bear with us, we'll try to keep it crisp. I'll begin on slide 3 with some highlights for the quarter and the full year.
I have to start by saying that I'm extremely proud of my team and each of our operating businesses for how they executed through a challenging year. Just when we thought things were getting better, Europe was hit with a war in Ukraine, rising energy costs, record inflation, and a cost of living crisis that impacted customers really across the region. Despite these headwinds, we hit or exceeded all 16 guidance metrics for our big FMC operating companies that we established a year ago. We beat our forecast for distributable cash flow at the Liberty Global level by $100 million, and that's using guidance FX. This is the third year in a row that we were faced with external uncertainty, but still managed to deliver on our public targets. Second, perhaps not surprisingly, Q4 was a very strong quarter for us across the board.
We delivered positive broadband and postpaid additions in every market, fueled by convergence offerings and Black Friday campaigns. Our largest operation, Virgin Media O2, delivered their best financial result yet with a double-digit EBITDA growth figure supported by price adjustments, synergies, and net adds. Third, we continue to benefit from consistent and steady revenue growth in our three most important segments, which are B2B, broadband, and mobile. Just as importantly, we're actively addressing headwinds in our B2C fixed businesses more broadly with smart network and product innovation, and I'll dig into both of these topics in a moment. Fourth, we've maintained a clear and consistent approach to capital allocation.
In 2022, we bought back 40% more stock than we guided to, a total of $1.7 billion, or 14% of the shares outstanding, and we're on track for at least another 10% this year. In a few slides, I'll expand a bit on how we see our capital allocation framework going forward. Finally, I'll let Charlie cover the details of our guidance, but I'll just highlight up front that despite continued investment in fiber, 5G, and digital, this year we expect to generate another $1.6 billion in distributable cash flow in 2023. A strong year for us operationally and financially, and as we'll discuss in a moment, we're well positioned to drive value for shareholders moving forward. Slide 4 is our standard schedule showing connectivity trends for our 4 large FMC telcos over the last 5 quarters.
One quick observation is that for the first time in over five years, every market experienced positive broadband and postpaid mobile adds in the fourth quarter. The top left shows VMO2, which has delivered three straight quarters of sequential growth in both broadband and postpaid net adds, despite intense competition and cost of living pressures in the U.K. Broadband speed upgrades, together with strong momentum from our Volt bundle, drove our best broadband quarter of the year. By the way, we outperformed BT again, and we garnered an even higher share of national gross adds than we did a year ago. Q4 also saw strong pickup in postpaid net adds in what is always an important trading period for mobile. The O2 brand continues to perform very well, especially at the top end of the market, with sector-leading churn well below 1%.
Sunrise in Switzerland also had a strong fourth quarter with 53,000 broadband and postpaid adds. Importantly, after 2 quarters of losses in Switzerland, we delivered positive broadband growth, helped by a strong Black Friday period, a focus on 1 gigabit offers, and a new Netflix bundle we put into the market. This was particularly good performance given the continued higher churn we've experienced related to the UPC brand migration that we flagged really mid-year last year. In postpaid, Sunrise delivered another strong quarter with 34,000 adds supported by the Sunrise brand refresh and interestingly, our Swiss-Ski sponsorship, which is off to a great start, now that the ski season is fully underway. After 9 quarters of broadband losses, VodafoneZiggo delivered 7,000 net adds in Q4, in part supported by its Ziggo Sprinter and Black Friday campaigns.
Look at the Dutch market remains highly competitive, with price and quality of service now becoming more important than fiber when you look at customer churn. Incidentally, KPN lost broadband subs in the quarter. VodafoneZiggo's 26,000 postpaid adds were negatively impacted by the loss of some corporate accounts, but were still higher than KPN in the quarter. It's also interesting that T-Mobile took some pricing in January up 9%. Finally, Telenet added 13,000 broadband and postpaid adds, which was largely consistent with prior periods. Postpaid mobile adds were steady, supported by their bundles and its really strong performance from the base brand. Solid execution across all of our markets in broadband and mobile. Slide 5 is also becoming a standard chart for us, showing revenue growth across the 4 main FMC opcos and then broken down by revenue segment.
There's five key takeaways here. First, if you look at the total revenue growth for each FMC opco, you'll see that revenue remained resilient with broadly stable to positive trends across the group. As you move down the chart, however, you'll see that consumer fixed revenue as a whole is consistently negative from negative 1% to negative 4%. That's impacted by losses in video and voice RGU, something you're well aware of, as well as pressure on ARPUs and mix during this cost of living crisis. Interestingly, while we continue to lose video subs, you know, at a rate, you know, a third of what's happening in the U.S., video is now only about 15% of our revenue. I'll spend a moment on how we're addressing the headwinds in fixed on the next slide.
Embedded in this fixed B2C result are broadband revenues, which continue to grow, albeit modestly, and will increasingly become a larger and larger part of the fixed consumer story in every market. Third, revenue growth in consumer mobile is all green across the board, driven largely by service revenue, which is growing 2%-4% across the group. This is a function of strong postpaid additions, of course, and price adjustments through the year. Fourth, B2B remains a growth engine across all assets, with revenue increasing 1.5%-4% and significant upside as we expand our reach and market share.
Finally, as the pie charts at the bottom make clear, we have a highly diverse and arguably defensive revenue mix, with mobile, both B2C and B2B, now representing almost half our turnover and B2B itself comprising 20%-25% of revenue. Slide 6 dives a bit deeper into our fixed consumer business and how we're addressing some of the headwinds today. I'll start by showing fixed ARPU trends on the top left, which as you can see, have been relatively stable in Belgium and Holland, even slightly up, with both markets bedding down price rise as well and dealing with limited front book, back book dynamics.
In the U.K. and Switzerland, however, we've seen around a 3% decline in fixed ARPU related partly to the fact that we start with fairly higher ARPUs in each market, then that's compounded in the U.K. by declining video voice and cost of living pressures. In Switzerland, as we discussed, we're managing through a migration from UPC to Sunrise, which has impacted ARPU. What are we doing here? First of all, we're taking price increases on fixed. You know that. Around 14% in the U.K. and mid-single digit in Belgium and Holland, and those are outlined on the bottom left. You can see what we've done. Secondly, we're implementing a number of commercial initiatives that are critical here. By far, the most important is our broad convergence strategy, which, as we've demonstrated, helps improve churn, NPS and cross-sell opportunities.
We've talked about it before. In Holland, FMC households have on average 20 points higher NPS and 50% less churn. These are real, not theoretical benefits to the fixed base as we converge. We've also invested significant effort into integrating streaming apps into our video platforms. Netflix, for example, is bundled in just about every market, and we're increasingly able to add these subscriptions to our bill. We're also focused on rolling out all IP and app-first video devices across our markets. In the U.K., for example, we're now adding video subscribers. Not losing video subscribers, actually adding video subscribers in January as a result of our Stream launch. Our investments in digital are reducing friction and cost in the fixed consumer business. The tools we're rolling out are driving more online sales, reducing call center interactions, improving self-install rates, and driving cross-sell opportunities.
Then finally, we're making good progress on new revenue streams. These include things like home security or telehealth and energy. We've rolled out products just like this in most markets, and we intend to continue to take advantage of our customer relationships and digital platforms to widen our revenue lens and find new areas of growth. Now, certainly a significant part of our plans to keep growing broadband and improving our fixed consumer business relates to our fixed network investment strategies in every market, which we provide an update on in slide 7. It's also important to remind folks that we are the broadband leader today in Europe with over 31 million gigabit homes ready for service.
Just as importantly, we have a clear path to 10 Gigabit speeds in every market with mostly creative structures, really creative structures that will ensure we're optimizing CapEx intensity. The chart on the bottom left shows you that by 2028, we'll be 70% fiber to the home across what will then be a 36 million home footprint. That excludes whole buy arrangements in markets like Switzerland and Ireland that add another 4 million fiber homes, takes us to 40 million and brings that fiber percentage to 75%. We could be as many as 40 million homes by 2028. That's good organic greenfield growth. Our plans to get there are summarized on the right. You're familiar with our approach in the U.K..
We added or upgraded 1 million fiber homes in 2022, that will accelerate by at least 50% in 2023. Again, most of that CapEx, especially the new build CapEx, is being invested through our JV with Telefónica and InfraVia, so off balance sheet. In Belgium, we've announced the deal with Fluvius, you're aware of that, to build fiber across Flanders in a NetCo/ServCo structure. That should close this summer. In the meantime, we've agreed a reciprocal wholesale access deal with Orange that ensures that Telenet is the undisputed leader in the north, with 70% plus utilization and also capable of entering the south. We completed our 1 Gig upgrade in Holland last year. In Switzerland, as you know, we're going to use a hybrid approach with DOCSIS Fiber and Holbai.
Finally, in Ireland, will be our first market to launch Wholesale services on our own fiber network in 2023, and that's after announcing a Wholesale agreement with Vodafone. We have a sound, and we think, efficient set of plans in every market to remain the speed and quality leader in fixed connectivity, and you should expect that we'll keep you posted on progress here every quarter. Moving to slide 8. We decided to hit the valuation question head on this quarter. If you back off and squint your eyes a little bit, this might look like a complicated slide, but it's really quite simple. The purpose here is to help decipher the valuation gap in our stock a bit and focusing on our FMC OpCo.
One way to look at our current market valuation is to break it down into three parts, as we've done on the left side of the chart. Assuming full value for our cash balance and our ventures portfolio, the implied valuation of our FMC OpCos at the $21 price level is roughly 5.5 times EBITDA and around 13 times operating free cash flow, using our actual and reported figures for 2022. By the way, cash is cash, and our venture investments are conservatively marked. They're held in very tax efficient structures, and we've already returned over $500 million to the parent. Interestingly, the free cash flow yield at $21 once you reduce to market cap by ventures and cash, is well over 30%.
Moving to the middle of the slide, the analyst community has an average price target on our stock of $30. That implies a 40% premium to our current market price of $21. Running the same math and attributing all of that premium to the FMC Telcos results in an EBITDA multiple of around 6.5x and an operating free cash flow multiple of about 14.5x. By the way, our peer group trades between 6.5x and 7.5x, and some as high as 8.5x EBITDA. The free cash flow yield at $30, by the way, is still compelling at around 15%. While our peers would be really mid to high single digits, the analysts correctly cite, in our view, a handful of narratives to support their price targets, right?
This includes things like telco sector tailwinds in Europe, where we can now have pricing power, market rationalization and mobile revenue growth and regulatory relief. We agree with that. Their arguments also typically include three other drivers, like the benefits we're realizing from a sub-base that is now 50% converged, or the expectation of continued and on target synergy realization in the U.K. and Switzerland, and the inherent free cash flow profile of our businesses, especially given that we believe we're in a peak CapEx period right now. I guess the message is that $30 doesn't seem like a big stretch to us. One of the reasons is that we don't believe analysts have captured all of the drivers that, in our view, support a premium market valuation. We don't specifically quantify what a premium market price looks like.
Our lawyers wouldn't let us do that. We do identify the key elements that should support values well above our stock price and perhaps even twice the analyst price target. Those are summarized on the right-hand side of the slide. To begin with, we have been on the receiving end, as most of you know, of 6 private market transactions in the last 6 years, where EBITDA multiples were as high as 12 and OFCF multiples exceeded 20. Now, admittedly, synergies did factor into some of those valuations, but these were subscale cable TV operations, not fully converged FMC champions. You can run your own numbers, but in today's environment, we believe 8-10x EBITDA and 18-20x operating free cash flow are not unrealistic multiples and are based if you look at historical transactions for high quality FMC businesses in Europe.
There are a handful of other value drivers that we believe would support a premium valuation that analysts don't cover. First, we've gone to great lengths to every country we operate in. Secondly, we have embedded infrastructure upside in the form of towers as well as our fiber networks that's not recognized. Third, we're only beginning to realize now the benefits from new revenue streams like security, gaming, and telehealth, all of which we've launched. Finally, we are arguably at peak CapEx levels this year, which will result, obviously, in even greater long term cash conversion. We add to this equation our unique approach to value creation that relies on agile capital allocation, a leveraged but de-risked balance sheet, and a commitment to buybacks. You've got a winning combination.
Building on that last point about our levered equity model, slide 9 digs a bit deeper into our capital allocation framework. We know this differentiates us from our peers. It all begins with shareholder remuneration, which we show graphically on the left-hand side of the slide. As you know, we've now retired over 50% of the shares in the last six years, averaging 11% per year. In 2022, we exceeded our initial buyback authorization, as I mentioned, by 40%, buying 14% of the shares and returning all distributable cash flow, $1.7 billion, to shareholders. For 2023, we remain committed to the 10% buyback floor again, and we are well underway there. On the right-hand side, we try to put the buyback into context.
If you look at our overall capital allocation framework, we have three principal sources of cash, right? Of course, we start with our existing cash balance at the corporate level of $3.4 billion and the modest interest we earn on that before investments. You add the $1.6 billion of distributable cash flow that we receive from our operating companies that we just guided to, which includes recaps. Finally, we expect cash proceeds, that's the bottom line, from the sale of venture investments in non-core assets over time. We're clearly a cash generative business. Where do we invest that capital? First. As you would expect, we do prioritize our networks. Our fiber and 5G investments are important to us at the company level.
None of that PP&E is funded out of our cash balance since we generate free cash flow at the opco level. We mention it since it does impact the amount of distributable cash flow we receive, and therefore it is a capital allocation decision. As I mentioned on the previous slide, we see ourselves right now at peak levels of capital intensity. By far, the largest use of cash is directed towards our buyback programs, where we've allocated over $12 billion since January 17, and we are committed to this strategy again this year. From time to time, we will allocate capital to our FMC opcos for strategic transactions that create value. A good example of this is the nexfibre JV in the U.K. or even the acquisition of Sunrise.
Finally, we have been building a sizable portfolio of strategically aligned assets in tech, media, and infrastructure. Building on this last point of investing capital into strategically aligned assets, we thought it would make sense to provide a bit more background on our current portfolio of investments and how we intend to manage this part of our business growing forward. If you look at the top of slide 10 on the left-hand side of my last slide, you'll see a familiar chart that breaks down the $3.1 billion ventures portfolio into principally tech, content, and infrastructure. A few notes beneath that on how that value moved modestly in the fourth quarter. As a reminder, we're not coming up with these values on our own. We use a Big Four accounting firm to provide an independent assessment of value on an annual basis.
In the 3 boxes in the top right, we highlight some really important updates that we thought you should be aware of. First, while we have 60+ investments in our tech portfolio, 5 of those investments, 5 companies today represent about 75% of the value, and we've listed them here for your reference. 3 of these are companies that provide innovative cloud-based solutions. Plume you know well, and BitSight is a cybersecurity business. Our net investment in these 5 companies is about $100 million, and they are conservatively valued today at $700 million. Importantly, each of these companies is currently doing or planning to do business with our FMC opcos, and that's part of the flywheel we provide investee companies and quite frankly, why our pipeline of deals is so robust.
The bottom line is that our tech ventures team has an eight-year track record of making money in strategically aligned product service and technology companies and has already returned $500 million to the parent. Next, you'll also see our three largest infrastructure investments. AtlasEdge, our 50/50 JV with DigitalBridge, the EdgeConneX data center business, where we are a 5% shareholder with EQT, and nexfibre, the JV I've discussed already with Telefónica and InfraVia. That's gonna build 5 million-7 million fiber homes in the U.K.. In each case here, we are using either existing OpCo assets or our strategic position in a market to create and benefit from these infrastructure platforms. It's also important to point out that these figures do not include our tower assets in markets like the U.K. and NL, which we own through joint ventures.
On the far right, we've provided just a few bullets on the announced Vodafone investment. I'm not sure there's much to add to what we've said publicly. We do think the stock is undervalued and there are a handful of near-term catalysts that should be beneficial. We've also put in place a very clever structure which minimized the amount of equity we had to put up while protecting our downside. There is no scenario where we would have to invest further capital beyond the relatively low cost of borrowing, which is partially offset by dividends. We also intend to replenish that equity investment, as we said in the press release, with asset sales, and there are more than a handful that we're focused on presently. I suppose it's good to see that the Vodafone stock is up since our announcement.
We don't take credit for that, obviously that's a positive. Finally, on the bottom right, we've provided a few points in how we see this part of our business evolving. You'll see that the three main verticals, tech, content, and infrastructure, are targeting technology services or platforms that are right up our alley, as they say. We have expertise, history or unique synergies in each of these areas. We've added a fourth pillar that we simply call financial, for lack of a better word, which captures existing and potential investments in the debt or equity of situations that we feel are strategic, distressed, or provide a unique opportunity to put capital to work. Now, across the first three pillars, our investing principles are straightforward. We're looking for businesses that provide significant growth opportunities.
This typically means businesses with scale, sector tailwinds, and strategic benefits to both our OpCos or perhaps other portfolio investments. We're also interested in companies built around new or disruptive innovation that either diversify or amplify our core businesses. Lastly, we intend to be extremely disciplined here with exits and what we refer to as capital rotation. We've already begun to evaluate every position and believe there are more than a handful of assets that could be monetized, both in the ventures group and outside the portfolio, like towers, for example. Those are the core building blocks of value creation. First, we're gonna continue to drive growth and free cash flow in our FMC champions and optimize our ownership positions in these businesses over time. This may include capital investment in M&A or strategic growth in some of those markets.
We'll be very flexible and agile about, as we've said in the past, listings or spins and things like that. Secondly, we're gonna continue to put our capital to work in an efficient buyback program, as we've consistently done. Then third, we're gonna remain opportunistic about investments that we feel are strategically aligned with our core mission and within our capability set. This last one is not easy, right? We've surely earned the credibility to work here given our history of building, buying, and exiting assets in our sector over time. I don't wanna be on this call in three years' time, sitting on three and a half billion of corporate cash and $6 billion of liquidity. I don't think you want that either. We're focused on value creation first and foremost, and I think we're in a great position to do that.
Charlie, over to you.
Charlie Bracken (CFO)
Thanks, Mike. On the next page, we've provided a summary of the revenue profile in our four key markets. 2022 saw stable revenues in three of our four markets and slight growth in Belgium despite the challenging macroeconomic environment. Fixed consumer revenue pressures across our markets were softened by sensible price adjustments in Benelux and in the U.K., and we saw strong mobile and B2B growth across our portfolio. Virgin Media O2 delivered stable revenues in Q4 and across 2022, with continued pressures on fixed consumer ARPU and challenges in B2B being offset by strong mobile subscription revenue growth. Switzerland saw Q4 revenue growth decline as continued strong mobile growth was offset by weaker B2B wholesale revenues and continued pressure on the consumer ARPU mix as the business resets the pricing of its UPC customers in the migration to the Sunrise brand.
In the Netherlands, despite a strong net add performance, we saw a slight decline in revenue growth due to weakness in the consumer fixed business, partially offset by price adjustments, which we implemented in July. We delivered mobile service revenue growth of 6.3% in Q4, which was supported by a mobile price adjustment in October. Belgium delivered Q4 revenue growth of 1.7% and 1.5% across 2022, as the mid-June price adjustment continued to support top line fixed ARPU growth in the second half of the year. The next slide sets out our adjusted EBITDA performance in the quarter. The standout performance in Q4 was delivered by Virgin Media O2, posting full-year adjusted EBITDA growth of 6%.
In Q4, Virgin Media O2 delivered accelerated EBITDA growth of 10%, driven by synergies from the merger, and the continued impact of price rises earlier in the year. This was despite $40 million of cost to capture, which hit the OpEx line this quarter. Versus the exceptional EBITDA growth in Q4, we do expect Q1 growth to be much more muted, and this is impacted by the phasing of a delayed fixed price rise and tougher synergy comparison versus the prior year. Sunrise saw an EBITDA decline of 8.1% in Q4 as tailwinds from the MVNO synergies faded, combined with a continued weaker fixed ARPU mix. This continues to be as a result of the rotational churn challenge associated with the UPC migration to the Sunrise brand.
We expect headwinds from this migration to continue to impact EBITDA trends in 2023, and in particular, impact the Q1 numbers. VodafoneZiggo saw a slight decline in EBITDA growth in Q4, driven by cost inflation headwinds, which offset the impact of price adjustments. We expect cost inflation headwinds, in particular in energy, to impact our 2023 outlook, with an estimated EBITDA hit of over EUR 100 million from energy and wages. Telenet reported EBITDA growth at around 5% for the second consecutive quarter, driven by price adjustments. The business anticipates ongoing headwinds from energy inflation, as well as mandatory wage increases of 11%, which will hit from the start of 2023. The next slide provides a more detailed update on our energy costs.
Before the Ukraine invasion, energy typically accounted for a low single-digit % of operating costs. Historically, our policy was to hedge those costs forward on a rolling 12-month basis. This hedging policy helped soften the impact of rising energy costs in our 2022 results, and we were able to absorb the impact of the unhedged costs and still meet our EBITDA guidance in our opcos. However, in 2023, you will see a full impact of the increased energy costs resulting from the invasion. As you can see from these slides, we have broadly hedged the energy costs in each of our markets for 2023, but this has been at significantly higher rates than 2021 and 2022.
We've highlighted the impact on each of our markets, if you were to add them all up and use today's dollar exchange rates, broadly, our 2021 energy costs are around $280 million, increased to around $410 million in 2022, and will be around $600 million in 2023, representing a hit to free cash flow across our portfolio of around $330 million as a result of the invasion. Like everyone else, we don't know where energy prices will settle out, in the meantime, we continue to execute our rolling 12-month hedging program and have started on the 2024 hedges, which, thanks to recent price declines, are at lower prices than we've locked in for 2023. We're also investigating longer-term fixed rate deals through PPA agreements.
The next slide gives an update on our progress on the U.K. and Swiss synergies resulting from the O2 merger and Sunrise acquisition. We remain on track in both the U.K. and Switzerland with our overall synergy targets, with a very strong finish to the year in the U.K.. Just to remind you, at Virgin Media O2, we expect to deliver GBP 6.2 billion of MPV synergies or an annualized run rate target of GBP 540 million from the O2 merger. In 2022, we comfortably delivered over 30% of our synergies in the first 18 months of the combined business and are on track to deliver over 50% by the end of 2023. Costs to capture peaked in 2022, with over GBP 300 million recorded out of the total GBP 700 million cost to capture envelope.
Costs to capture are expected to roughly halve in 2023, falling to around GBP 150 million, as investment in mobile capacity to support the MVNO migration took place in 2022. In 2023, trends are expected to benefit from the continued flow-through of MVNO synergies, along with the unlocking of further synergy streams, including labor and commercial. Moving to Switzerland, we reaffirm our target to deliver CHF 3.7 billion MPV Swiss francs of synergies and incur CHF 400 million Swiss francs of overall cost to capture. 2022 represented a peak year for cost to capture, as approximately CHF 140 million Swiss francs of cost to capture supported the business in achieving nearly 50% of our synergy run rate target, including the early benefit of MVNO synergies supporting H1 trends in 2022.
The business aims to deliver around 60% of the synergy run rate target by the end of 2023, with key focus areas being the buildup of the DSL migration and headcount synergies. Delivery of these synergy projects will be supported by an expected CHF 50 million of cost to capture spend in 2023. Turning to capital allocation, Q4 saw a step-up in capital intensity across our key operations. This is as we expected and was consistent with our full year capital intensity guidance to the group. Moving to distributable cash flow, we achieved our distributable cash flow guidance for the year, delivering over $1.7 billion of full company distributable cash flow in 2022 based on the FX rates at the time of our 2022 guidance.
On a reported basis for the full year, distributable cash flow was around $1.6 billion, including $455 million of dividends from Virgin Media O2, along with $478 million coming from our share of the recapitalization of that company, and $321 million from VodafoneZiggo. Finally, our outlook for 2023. Now, I appreciate there's a lot on this slide, but to help you understand our current view on the 2023 key financial drivers and ultimately the free cash flow and cash flow distributions of our key assets, we've added our view on some of the drivers behind those assumptions.
Starting with VMO2, on an IFRS basis, we expect to achieve revenue growth, mid-single digit adjusted EBITDA growth supported by synergy execution and inflation-linked price rise adjustments, with headwinds from inflationary pressures impacting our cost base, including energy. These numbers are excluding cost to capture for the year, where we expect OpEx and CapEx cost to capture of around GBP 100 million, which is still within our multi-year expectation of GBP 700 million. We also guide to property and equipment additions of around GBP 2 billion, benefiting from Project Lightning moving off balance sheet, this is offset somewhat by the fiber upgrade accelerating and the 5G mobile investments. On cash distributions to shareholders, Virgin Media O2 is guiding to around GBP 1.8 billion-GBP 2 billion versus GBP 1.6 billion distributed in 2022.
Turning to Sunrise, we expect low single-digit revenue decline for the year, along with low to mid-single digit adjusted EBITDA decline, including cost to capture, as the business continues to navigate the impact of the UPC brand migration and lower tailwinds from the synergies in 2023. We guide to property and equipment additions as a percentage of sales to be around 15%-17%, also including cost to capture. Cost to capture spend will drop this year, falling to around CHF 50 million, of which CHF 10 million is expected to be attributed to OpEx. VodafoneZiggo is guiding to an improved revenue profile supported by pricing actions and low to mid-single digit adjusted EBITDA decline as the business will be impacted by cost inflation headwinds of around EUR 100 million from energy and wages.
Property and equipment additions as a percentage of sales is expected to be 21%-23%. The Dutch JV is guiding to shareholder distributions of EUR 300 million-EUR 400 million of cash, which is impacted by higher cash taxes and a tougher EBITDA outlook. This is versus cash distributions of EUR 602 million in 2022. Finally, on an IFRS basis, Telenet are guiding to revenue growth of 1%-2%, supported by price adjustments and broadly stable adjusted EBITDA, impacted by wage and energy inflation headwinds. Property and equipment additions as a proportion of sales are expected to be around 26%, with an adjusted free cash flow outlook of EUR 250 million for the year.
This is lower versus the EUR 409 million delivered in 2022, as free cash flow will be impacted by higher CapEx on 5G fiber build. Finally, on group distributable cash flow guidance, we're guiding to EUR 1.6 billion of distributable cash flow in 2023 at guidance FX rates. We reiterate our commitment to buy back 10% of our shares outstanding in 2023. With that, operator, let's turn to questions.
Operator (participant)
The question 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 one on your phone. In order to accommodate everyone, we request that you ask only one 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'll pause for just a moment to give everyone an opportunity to join the queue. The first question comes from the line of Sam McHugh with Exane. You may now proceed.
Sam McHugh (Research Analyst)
Thanks very much for the question. I'm just trying to wrap my head around slide 21 and the central cost update. It's kind of a two-part question. The first bit is just I see that there's some changes happening with the P&E allocations. Just to confirm, that's all already captured in the OpCo guidance that you gave separately? For example, like the Switzerland OpEx charge shift, that's already in the Swiss guidance. Secondly, how should we think about the cash burn in Central in 2023 relative to what looks like maybe $200 million loss in 2022? Thanks very much.
Mike Fries (Executive Chairman and CEO)
Charlie?
Charlie Bracken (CFO)
Yes. Yes, I confirm. Just so everyone understands what goes on, we do this with our joint ventures as well as our wholly owned companies. We have what we call technical service agreements to really support the tech spend, which has been coming consistently down actually over the years. That's baked in at the OpCo level. We've actually got a renegotiation with one of them pending, but broadly speaking, it's all fully baked in. At the center, as you know, we've been running around this EUR 200 million type number. You know, there's gives and takes on that, depending a little bit on how much money we spend on, you know, development in the new areas.
I think, you know, you should assume it's gonna be broadly consistent around that number for the upcoming years.
Sam McHugh (Research Analyst)
Very easy. Thanks very much. Cheers, Charlie.
Operator (participant)
Thank you, Mr. McHugh. The next question comes from the line of James Ratcliffe with Evercore. You may now proceed.
James Ratcliffe (Managing Director, of Telecom and Cable/Satellite Equity Research)
Thank you. Two, if I could, one sort of big picture and one more specific. You talked about, you're seeing for converged customers, you know, higher NPS scores, lower churn, et cetera. What's the comparison to that? Because I, you know, certainly imagine that, you know, if somebody isn't happy with their broadband service, they're probably not gonna add the mobile service as well. Can you talk about what sort of the comparison set and for specific customers who do add on broadband, what you're seeing versus customers who don't go the converged route? Secondly, just on the Vodafone investment, you're now a meaningful holder of a, you know, a core partner of yours.
Can you talk about anything that would facilitate or anything it would make more difficult or limit in terms of your relationships around the JVs in particular? Thanks.
Mike Fries (Executive Chairman and CEO)
Thanks, James. Listen, on the convergence figures, Jeroen is on the call. I can let him chime in a little bit too, but in the case of Holland, which we cite regularly, I think we're simply comparing FMC converged customers to non-converged customers. Fair point, if that's one you're making, there could be some sort of self-selection there. If you are happy with us, then you're likely to buy more products, which means, you know, you become happier. Whereas people who are not happy with us generally may not buy more products, in which case you might say, well, clearly they're not happy customers. There's no other way to do it. I mean, you're either converged or you're not.
When you can drive 20 points of NPS and halve your churn, that's a big enough gap, so to speak, to support the premise that convergence works. Now we can maybe endeavor to provide a bit more color and detail around that going forward, but that is the basic set of statistics. On the Vodafone stake, we are good partners with Vodafone. We do business together, quite frankly, in 3 countries. You know, we own a power network together through this Beacon arrangement in the U.K.. We just signed a wholesale deal to provide them fiber access in Ireland and of course, we're partners in Holland. Our touchpoints with Vodafone are many. You know, this may or may not change that dialogue. We'll see.
It's certainly not the reason we did it, not a direct reason we did it, but I think it doesn't hurt to have, you know, to ensure that our conversations with them going forward about all of these business arrangements are, you know, open and direct. That's really all I'd say there.
James Ratcliffe (Managing Director, of Telecom and Cable/Satellite Equity Research)
Great. Thank you.
Mike Fries (Executive Chairman and CEO)
You got it.
Operator (participant)
Thank you, Mr. Ratcliffe. The next question comes from the line of Maurice Patrick with Barclays. You may now proceed.
Maurice Patrick (Managing Director)
Thanks, guys. Thanks for taking the question. If I could ask a question on the U.K. ARPU trends. I think the U.K. ARPU, the fixed line ARPU is down about 3% or so this quarter, despite the 6.5% price increase you put through early in the year. Just curious to your thoughts in terms of how you think the next pricing increase lands. Obviously, you've communicated the increase. I wondered how much of that you thought would flow through into better ARPU, and therefore what's baked into your guidance would be helpful. Just linked to it, if I can, be curious to know your thoughts around front book and back book pricing in the U.K.. Clearly a lot of back book pricing increases, but the front book's still very promotional. Where do you think that's set to narrow? Thank you.
Mike Fries (Executive Chairman and CEO)
Yeah, I'll take the first one. Lutz, you take the second one. I think on the pricing, all we'll say is that we anticipate our mobile and fixed pricing to behave, the impact of that pricing to be similar to prior years. We said in the past, I think, you know, what we believe generally happens in fixed pricing, where we get roughly half that, if not more, in mobile pricing, a larger percentage. For sure, you know, we expect to either do as good or better. It's a larger increase, that's certain. In which case you might argue, hey, it's gonna be harder. On the other hand, we have a lot more tools in place to manage, you know, customers in this particular go-around.
As you would have read, going forward, we have put into the T's and C's of contracts in the fixed side of our business, in RPI plus 3.9% moving forward. Now you'll know next year what that price rise is based on January's RPI. It won't be something we're making. It won't be a decision we're making on a discretionary basis. It'll look like BT's. Lutz, you wanna handle the front book, back book question?
Lutz Schüler (CEO)
Yeah. Maybe the only thing I would add on the pricing is, right, Mike said it, we have much more tools in place. We are a month into it, and we know exactly how many customers of which cohorts have reacted in whatever way or form. We also therefore understand exactly how much of the retained revenue we got. I won't disclose any number, but so far we are fully on plan, right? The last year you've referred to that, there are two things, right? One thing is you do a general price increase and you get a certain reaction.
Second, during the entire year, customers have been optimizing their bill irrespective of price rise because they don't want to keep using their landline or they want to get rid of mid-tier video content to simply optimize their bill. Therefore, you're right. Last year, the net of the parts have been negative. We are not giving a guidance for this year, but we are guiding an overall revenue growth, and so we are much more confident on this piece of it as well. Front book, back book. In general, you're right. This is the strategic challenge, right? You see price increases now across most of the operators. You still see high competition in the acquisition market.
The way we are dealing with it in a positive way is twofold. One, we are not offering promotions on broadband. We're not offering promotions on broadband around GBP 21-GBP 22. We are staying more closer to GBP 30, leveraging our speed advantage. The promotions you've seen from us the last 3 months are selling more 350 meg, close to GBP 30. We have less of a backbook, front book issue. The second thing is we are also, with our digital capabilities, we now can test different ways of selling. Instead of an end of offer promotion step-up, we are also offering within the minimum contract length that customers are paying half of it.
In the minimum contract length then, they pay a higher price, so there's less of a churn. There's a lot of optimization going on and stay tuned.
Maurice Patrick (Managing Director)
Great. Thank you so much.
Operator (participant)
Thank you, Mr. Patrick. The next question comes from the line of Robert Grindle with Deutsche Bank. You may now proceed.
Robert Grindle (Analyst)
Yeah. Hi there. Hope you can hear me. On the U.K. cable upgrade and new fiber JV, 1.5 million new fiber homes for the combination in 2023 doesn't appear massive versus 1 million achieved in full year 2022. Are you being cautious here? Perhaps it takes a while to get to run rate. Perhaps related to the question is, the press has you looking at Altnet acquisitions. Are you tilting away from build to buy? How quickly can VMO2 sell off the new build once it's happened? Thanks.
Mike Fries (Executive Chairman and CEO)
Yeah. There's a handful of good questions there. I would simply say that we've got till 2028. We've never given numbers or time frames that we believe, you know, would imply this is gonna happen overnight. We think that it does take a bit of time to get the machine moving, and the 50% uptick is reasonable but could be exceeded. Let's see. It's not saying it's a marathon, but it's not a sprint either. We're hoping to have 80% of homes covered by fiber here by 2028. We think that is a, you know, the right long-term strategy, but it's a long-term strategy. We'll do it at the pace that makes sense for us.
You know, as Lutz would say, we sit today with a 1 Gb network that reaches 16 million homes, offering an average speed of 300 Mbps, which is 5x or 6x faster than the average British household receives from other providers. We're in a great position even while we build out. It's not as if, you know, we have to convert a network from copper to fiber or we're in some sort of other foot race. Quite frankly, we are already leading the race, we're just fortifying the long-term position. Lutz, you wanna take the second part?
Lutz Schüler (CEO)
Yeah. Can you repeat the question, Robert? What was it again?
Robert Grindle (Analyst)
How long does it take VMO2 to sell off the new JV once homes are passed? Are you tilting more to buy than build in the JV homes?
Lutz Schüler (CEO)
Okay. The first one, we are, as you know, very experienced to get to the penetration on the Lightning network. With now nexfibre, there's no change there, right? Virgin Media O2 is building the network for nexfibre, and Virgin Media is also the anchor tenant of it. We are selling into it. You know that we are getting to a far higher penetration than any altnet got to. And you know also how quickly we ramp up, don't expect any changes here in the future. We plan exactly with the same. Obviously, Virgin Media O2 is not a shareholder of nexfibre, this is more Liberty Global, Telefónica, and InfraVia. Altnets are getting under stress.
This is our perception. The reason is, they don't get to the penetration they need to. According to our numbers, there is 7.6 million fiber homes in the U.K. from altnets, and the penetration is around 15%. From a pure wholesale perspective, we all know you need 40%, and cost of capitals are increasing. Opportunistically, we will look at it and we will take the opportunities then as they come.
Operator (participant)
Thank you, Mr. Grindle.
Mike Fries (Executive Chairman and CEO)
Next question, operator.
Operator (participant)
The next question comes from the line of Luis Sanchez-Lecaroz with Credit Suisse. You may now proceed.
Luis Sanchez-Lecaroz (Analyst)
Hi. Thank you for taking my questions. I wanted to follow up on the previous question and specifically looking a little bit deeper on the $1.5 million for next year. Can you give us the split between upgrade and greenfield rollout? Looking into the U.K. guidance, can you let us know if you are factoring in the construction revenues from the new fiber JV and the retail business that you would get from greenfield area? Thank you.
Mike Fries (Executive Chairman and CEO)
Yeah. I mean, I think, Lutz, we've said the split's roughly 50/50, but I don't know, and Charlie, this is a question for you, whether we've identified the revenues from nexfibre we'll call them out, but there will be revenue, modest revenues, not material revenues.
Jeroen Hoencamp (CEO)
I think that's the correct answer. Look, the answer is-
Mike Fries (Executive Chairman and CEO)
I mean on-
Jeroen Hoencamp (CEO)
This is not a massive number, but there is some modest revenue baked into our numbers.
Mike Fries (Executive Chairman and CEO)
Yeah.
Lutz Schüler (CEO)
Yeah. I mean, nexfibre, right, we are building the network. For that, we are getting paid. On the other hand side, we are selling the network, for that we are now paying wholesale revenue, right? This is the changes in the P&L. I think we haven't disclosed any number of the split between expansion and upgrade. I think we don't want to do that. The only thing I'm saying is, right, these are two completely different activities. Expanding obviously is much more heavy lifting, takes more work. I think what we have said is that in 2022, we have expanded faster than in 2021, and in 2023, we have the ambition to expand faster than in 2022.
On the upgrade, right, what we have to do, just to remind everybody, is we have to pull fiber through our existing ducts. This is much less of heavy lifting. We have also guided that we are spending around 100 GBP per homes passed, so which also explains that the work is significantly less. I want to simply reiterate the point Mike has made earlier, right. We first leverage our coax network as much as we can, and selling fiber too early doesn't have really a commercial benefit for us at that point in time. We have time.
Mike Fries (Executive Chairman and CEO)
Okay. Thanks, Lutz. Next question, operator.
Luis Sanchez-Lecaroz (Analyst)
Thanks.
Operator (participant)
Thank you, Mr. Lecaroz. The next question comes from the line of Polo Tang with UBS. You may now proceed.
Polo Tang (Analyst)
Hi. Thanks for taking the questions. I have two. The first one's on Switzerland, a question for Andre. Can you talk through the competitive dynamics in the Swiss market and maybe talk in a bit more detail about the issues that you're facing with the retirement of the UPC brand? Going forward, should we expect maybe a relatively stable broadband performance in terms of net adds for Switzerland? Maybe it's just a case of repricing, taking its time to work its way through. Alternatively, where are the other moving parts that are driving the Swiss EBITDA declines in 2023? The second question is really just about fiber wholesale in the U.K..
I appreciate that you're still in the process of upgrading your cable network to fiber, but have you had any discussions with other communication providers about wholesaling on the VMO2 network? Do you think that this could be a meaningful revenue stream going forward? Alternatively, is the Equinox 2 pricing from Openreach now an unstoppable train, meaning you have no chance?
Mike Fries (Executive Chairman and CEO)
Well, let me take the second one first, and Andre, you can work up an answer to the first one. As I just mentioned, Polo, you know, we're building a network we think will reach 80% of the market. It's going to happen over a extended period of time. It's not happening tomorrow. What any investor in a telecom market requires or would like to see is some long-term certainty and a level playing field. Equinox 2, from our point of view, is unlikely to make a long-term impact on our plans, but in the short term, feels to us to be a bit desperate and premature by BT, reflecting, I would say, an overreaction to the market more broadly, for whatever reason they felt that was necessary.
On the other hand, we think Ofcom gets the larger picture here and is likely to, you know, look at Equinox 2 in a hopefully comprehensive way, and we look forward to the consultation process. You know, from our point of view, you know, whether we are providing wholesale services tomorrow or next year or the year after, remember that in the upgrade of our fiber homes, which we announced, you know, some time ago, upgrade of the 16 million homes. We did not say at that point in time that that decision to spend GBP 100 per home was based upon the need to realize wholesale revenue. In fact, we said the exact opposite, which was we believe this makes sense relative to DOCSIS 4 regardless of wholesale revenue.
That doesn't mean we don't have ambition. It just means to say that our economics are sound either way. The nexfibre JV clearly would love to expand wholesale revenue beyond Virgin Media O2 as its anchor tenant. In that instance, that particular joint venture will make the arguments it needs to make and pursue the strategic ambition it needs to pursue. Hopefully that puts a little bit of context around how we see the market. This is a long-term process here. This isn't something that, you know, any one move by any one operator is going to derail, in our opinion, and we remain committed. Andre?
Andre Krause (CEO)
Yeah. In regards to competitive dynamics, I would say Q4 has seen a lot of liquidity in the market. Also seasonally, Black Friday was probably the biggest sales event in the last year. As such, we have also seen a very high level of promotional activity. We were benefiting from that from a customer perspective, as you've seen, and not only us, but also competitors gained quite a lot of new customers in the market. The pricing levels or the discount levels on those promotions are not really sustainable and are also causing some of the pressure that we have with the migrations and customers that are looking at the front book prices
Are migrated at back book prices. That is of course, a tension that is not making our life easy with all of the customers that we want to migrate over to the new Sunrise portfolio. As a result of that, we have started now already in Q1 to reduce our promotional aggressiveness mainly on the main brand. Our Flanker brand will not be, yeah, addressed by that, mainly because the Flanker brand has a different role and needs to play also the role of being more price aggressive. On the main brand, we want to protect the back book better with lower promotional aggressiveness, in particular with promotions that do no longer offer a discount over the first contract term, but at maximum only half of the first contract term, so that customers get again used to actually pay the normal list price.
In terms of dynamics for next year, clearly, the main driver for next year is those right pricing of the mainly fixed customers coming from UPC. That is roughly less than a third of our total customers, and not all of those customers will be necessarily a drag to ARPU and a drag to our revenues. Some of those are. If you think about it, I mean, there are of course, certain customers that are sitting on one or two products where we still have good opportunity to cross and upsell products, provide more for same, for example, or more for more. While there is a certain segment of customers that has already maxed out the product range and is sitting on an outpriced price point that no longer exists on the new front book.
In order to maintain those customer relations healthy and to continue working with them, we are doing this right pricing exercise. That's the main drag, I would say, also on the top line for next year. On top of that, I would say on the EBITDA guidance, we of course continue to actually prep the business to capture growth going forward. We continue to actually do OpEx investments on the digital side. We also do have some increase in OpEx that is coming from cloudification, things moving from CapEx to OpEx. We have a number of other, I would say, marketing activities that for the first time will hit a full year range. Like for example, the Swiss-Ski sponsorship, which we only started in 2022, but we'll see for the full extent only in 2023.
The major driver, I would say, of the headache is really this right pricing in that relatively small fixed customer segment. All other growth engines, if you look at mobile, if you look at B2B, if you look at flanker brand, maintain healthy. We are accelerating this exercise now to actually create a growth platform that we can start from going forward.
Mike Fries (Executive Chairman and CEO)
I'll just add that, you know, I have confidence in Andre and the team to manage through this. There's a deep knowledge and understanding of the market, and this is a blip, not a change in direction. On the other hand, I would also point out that Charlie skipped over in his guidance slide, the fact that Switzerland is guiding to CHF 320 million-CHF 350 million of free cash flow in 2023, which I'm gonna guess here, Andre, I think is up 30%-40% over 2022.
Andre Krause (CEO)
That's correct, yeah.
Mike Fries (Executive Chairman and CEO)
Despite the challenges that Andre is working through at the revenue and customer level, which I'm sure we will get through, the business is generating significant free cash flow and on pace for the kinds of free cash flow results we had initially anticipated when we made the acquisition.
Polo Tang (Analyst)
Clear. Thanks.
Operator (participant)
Thank you, Mr. Tang. The next question comes from the line of Stephen Malcolm with Redburn. You may now proceed.
Stephen Malcolm (Senior Analyst)
Yeah. Good afternoon, guys. I'll go for about 1.5 questions. One on the U.K., just a quick follow-up to an earlier question. First, just going back to the U.K. and the price moves, Lutz, that you're enacting at the moment. I guess if I look at 2022, looking from the outside in, my perception would be that the fixed-line price rises didn't land probably quite as well as you'd hoped, and the mobile price rises maybe landed a bit better. I don't know if that's right or wrong, but that's my impression. As you go into 2023, Lutz, you say you've got more tools at your disposal, but obviously it's a very, very big price rise. I guess the instinctive reaction would be that you're gonna see more churn, you're gonna see more promotional activity.
Could you just elaborate maybe on those actions that you can take to prevent that and give us sort of a bit more confidence that we don't see, you know, the ARPU reactions that we saw following the price rise last year? That'd be great. Just coming back to the point on Vodafone. Mike, you said that, you know, the reason for the investment was not to sort of, you know, create more touch points with Vodafone. What was it exactly? Was it just because you thought the shares were cheap? If that is the case, you know, can you maybe give us some sort of guidelines as to what is sort of in and out your scope?
Is it just sort of contiguous sector, telco, media, anything that you think is opportunistic, or does there have to be some kind of existing relationship for you to invest shareholders money in stocks like Vodafone? Thank you.
Mike Fries (Executive Chairman and CEO)
Mm-hmm. Lutz, you wanna start with that?
Lutz Schüler (CEO)
I mean, your high level observation is right for last year, but I think the reasons are a bit different. If you park the price rise for a second, right? On the fixed side, customers are optimizing their bill because simply, right, the average ARPU is GBP 50. If you want to optimize household spend, you look more at the fixed side, at the mobile side. Irrespective of price rise, customers are canceling their landline because they use their mobile, and customers are optimizing and picking more the video content they really need. This is what we have been seeing.
The mobile side, you don't see that. What you see on the mobile side instead is they keep using their old phone for longer, right? If you these are developments that would have been happening with price rise or without price rise due to the cost and living crisis. The price rise itself, and this is then the question, how do you define that? Last year, I think this is what Mike said earlier on, if you would say, well, everything you take into account two months after customers have seen the first bill, you can say that also on the fixed side, we landed something like 50% of the price rise.
On the mobile side, because it's only on airtime, not on hardware, the overall number of the price rise is much lower, and it is embedded in the T's and C's. You see barely zero or very little reaction to it. What does this mean for this year? We are not guiding on fixed ARPU, we have been, we are doing a lot of things different. Number one, we are sending out the letters to customers over a period of 2 months and in a staggered approach. This is number one. That has 2 benefits. One, we always can ensure we have enough agents dealing with it, which weren't the case 100% last year.
Second, we have really real-time data, so we can see how many customers are calling and what is the best possible retention for them in terms of customer and ARPU. Then we see within 24 hours delay what is actually happening. When you take this all into account, there's a lot of room for optimization. We can leverage convergence. For fixed-fixed customers, we can sell mobile, we can sell in interesting content, we can sell in hardware. I'm not disclosing anything, but so far, as I said early on, we are on plan with the fixed price rise. On the mobile side, we have landed it also now, right? It is communicated and out, and the reactions so far we have been seeing are not higher than a year ago. Hope that helps.
Mike Fries (Executive Chairman and CEO)
Thanks.
Stephen Malcolm (Senior Analyst)
That's great. Thank you.
Mike Fries (Executive Chairman and CEO)
On Vodafone, which people we've said publicly, yes, the stock seems undervalued to us. There's a lot of undervalued stocks out there, by the way, ours included, that's why we spent $1.7 billion last year buying it. Certainly, this one also looks undervalued with some near-term catalysts that, you know, should play out here, we think, in a positive way. It was a relatively small investment if you see through how we financed the position. We have a lot of touch points with Vodafone, as I just mentioned, and I look forward to a very constructive dialogue with the current and future CEO, whoever that will be, around all of those particular issues, and if necessary, with the board.
As I mentioned, you know, we're not an activist here, but we certainly hope to be engaged and understanding of what their strategy is and to perhaps even influence that if it makes sense. We're not doing this to create tension or stress. We're not trying to rattle the cages here. We thought it was an opportunistic transaction that was financed, we thought very effectively with relatively small amounts of capital we could put to risk, you know, in a stock that was at or near a 25-year low. That's really the way to think about it. Are we going to do 10 more of these? No. We will always be opportunistic in situations that we think are strategically and financially aligned.
Stephen Malcolm (Senior Analyst)
I-
Mike Fries (Executive Chairman and CEO)
Rick, do we have time for one more, or are we calling it?
Stephen Malcolm (Senior Analyst)
Could-
Mike Fries (Executive Chairman and CEO)
Go ahead.
Stephen Malcolm (Senior Analyst)
Sorry. It was just, when you say catalysts, I mean, can you elaborate on what they may be?
Mike Fries (Executive Chairman and CEO)
Oh, I can't give you anything that hasn't been talked about 100 times publicly. U.K. mobile consolidation, rationalization, Spain and Italy, pending Vantage deal, towers in the U.K. and NL, a German strategy, evolution, et cetera. I mean, there's a, you know, Africa. You just have to read the press. There's a handful for you right there.
Stephen Malcolm (Senior Analyst)
Okay. Thanks a lot.
Mike Fries (Executive Chairman and CEO)
You got it. Yeah. Rick, I don't know if we have time for one more. We're six minutes past. Should I close it off?
Rick Westerman (SVP of Investor Relations)
Let's take one more, Mike, and then shut it down.
Mike Fries (Executive Chairman and CEO)
Okay. All right. Thanks for hanging in, guys. We'll take one more.
Operator (participant)
We'll take the last question from Carl Murdock-Smith with Berenberg. You may now proceed.
Carl Murdock-Smith (Equity Analyst)
Hi. Thank you very much for the question and for taking the time for one last one. I'll just ask one. I think slide nine is a very powerful one on the long-term buyback commitments over time. Obviously, you've committed to a floor of 10% of buyback this year. That commitment was first actually made 2.5 years ago at the Q2 2021 results. Kind of, I think that long-term commitment, as also shown on slide nine, is very, very important. Did you at all think about giving a longer-term buyback commitment, rather than just committing to the 2023 buyback? How should we be thinking about your ongoing commitments in future years? Thanks.
Mike Fries (Executive Chairman and CEO)
That's a good question, Carl. Appreciate you asking that. We're not today providing any additional long-term guidance, but you don't have to do much reading between the lines to conclude based on everything I said in my remarks that we're committed to shareholder remuneration. You know, you should expect over time we'll continue to provide updates on that long-term strategy and, you know, I think past is prologue. Hope that helps.
Carl Murdock-Smith (Equity Analyst)
Okay. That's great.
Mike Fries (Executive Chairman and CEO)
Listen.
Carl Murdock-Smith (Equity Analyst)
Thanks very much.
Mike Fries (Executive Chairman and CEO)
You got it. Listen, thanks. You got it. Thanks, everybody, for hanging in. Appreciate you enduring the long remarks, if you're still on. We had a lot of info and a lot of talk about, you know, a very strong 2022. I think all the building blocks in place for a strong 2023 and most importantly for value creation. Appreciate your support, and we're always around for questions if you have any as follow-up. Thanks, everyone.
Operator (participant)
Ladies and gentlemen, this concludes Liberty Global's fourth quarter 2022 investor call. As a reminder, a replay of the call will be available in the investor relations session of Liberty Global's website. There, you can also find a copy of today's presentation material. Have a good day.