Hello, everyone. Thank you very much for joining us today. For our next session, I'm delighted to host Liberty Global CEO and Vice Chairman, Mike Fries. Mike, welcome to Barcelona.
Thank you. Good to be here. Yeah.
Thank you.
First session, I think, right?
First session for me.
Yeah, first session.
I thought that a good place for us to start our chat today is with the business performance overview. If you could perhaps tell us how the business has performed this year versus your initial expectations. In particular, it would be helpful if you could flag the areas where you are pleased with the performance and perhaps some areas where you see more work to do.
Sure, sure. Well, good morning, everyone. It's great to see you. Good to be back in Barcelona. This is the first time I've done this conference, and I'm not jet-lagged since I now live in London, so it's great to be here every year. Listen, I think we had, we have had, and are continuing to have a pretty solid year. Give you a couple examples. We provide 20 guidance metrics. I think we lead the pack, 20 guidance metrics. We're going to hit 19 of them. The only one we're gonna miss is our U.K. revenue target, and if you factored back out of that, our handset guidance, handset revenue guidance, which is always volatile, we would hit that too.
So that's a pretty good outcome, and if you look at the most important metric for you all, which is our Distributable Cash Flow, $1.6 billion, we're gonna hit that as well. So I think from that point of view, all of the OpCos are hitting their free cash flow targets, so operationally, it's hard to say we've done anything but execute. Synergies are going well on our two core big mergers, Switzerland and in the U.K. Mobile service revenue, you're hearing this trend from a lot of telcos. Mobile service revenue continues to grow well. That's a big positive. We're seeing B2B, steady growth in B2B. And I think, look, strategically, we're doing all the things that we said we would do, right?
We bought back a bunch more stock, twice the amount of stock that we said we would, you know. Our fixed network strategies are, we'll talk about those, I'm sure, are evolving really well. But let me just pause there and say that if anyone thinks this is an easy business, you know, get back to reality. We are grinding in this industry. We are grinding. I will tell you that, and you all know that. You're watching it. There's too many operators. I was just in Brussels the other day. I mean, just give you a quick stat. In China, there are 450 million subscribers per operator. In America, it's 110. In Europe, it's 5 million. There's 110 MNOs in this country.
So we have a lot of work to do on regulatory pressure, in my opinion, to get this market further consolidated, further rationalized. You know, the macro headwinds have been tough, whether that's energy costs or cost of living. You know, we're finding that in our business, particularly in fixed B2C. I mentioned that on our call. You know, whether it's household spend optimization or, you know, general pressure, you know, lower front book pricing, we're finding that the fixed B2C business is the one area where we have work to do. Now, there are tailwinds, too, in our business. Good tailwinds, strong tailwinds. Number one, pricing. This pricing action that we're all taking is working, right? We had our ARPUs up in the third quarter. It's working.
I think we're able to, you know, I mentioned already the B2B and mobile service revenue, that's steady and it's a really important piece of the puzzle for us. Mobile and B2B are about 70% of our revenue today. Just let that sink in for a second. 70% of our revenue is mobile and B2B. So though, that's a positive, you know, trend for sure. I think AI is gonna be a game changer. Sounds trite, everybody's saying it, but when you look at what the way we manage our customers, the way we manage our operating platforms, productivity, going to make a big difference for us for sure. So there's a handful of tailwinds that I think will make a difference, and, you know, we're operating and executing against those tailwinds. But overall, I'm pretty, I'm pretty happy.
Very good. With your Q3 results, Mike, you have flagged that you will be holding a more extensive strategy update-
Right.
With Q4. Could you talk about the main objectives of this strategy update?
Yeah. Well, I think it's a, it's a handful of things, really. You know, we have spent quite a bit of time simplifying our business, we think, and we're at an inflection point where, you know, we want to be able to set-really give you three bits of information, three really important pieces of information. Number one, how do we value these operating companies that we own or not? We think that we're in the best markets. We think we have the best brands. We think we have the best teams. But as I said, it's a grind. How do we value these operating businesses? And then secondly, how do we intend to crystallize that value? What are the things we're thinking about? What are the things we might be doing?
I think people, you know, right now, we generally, we've been talking about that theoretically, but I think we are going to talk about it more concretely. And then thirdly, we want to talk about capital allocation, which is a hot topic for everybody these days. But how do we generate cash? Where do we put that cash? How do we see leverage, these types of things. So I think it'll be very helpful. It's, it's not a capital markets day. We're not going to bore you for three or four hours. We're gonna be sharp and short and try to give you some concrete, you know, appreciation. I think you'll come away feeling like we, we are well-positioned, we are motivated, and nothing's off the table.
I'm not sure what else you could ask for from a management team that's trying to bridge a value gap, so.
That's helpful. There are a lot of important topics there, and we'll go through them and dig deeper into them. But first, let's do a tour-
Okay.
-over the different operations across your footprint, starting with the U.K. The delivery on the Virgin Media O2 synergies is excellent, but the top line seems to be struggling a little bit on fixed B2C in particular.
Yeah.
Could you talk about why Virgin Media O2 is struggling to yield its fixed price increases into more top-line growth?
... Sure. Well, we did see ARPU growth in the third quarter, so that's a positive, modest ARPU growth. But listen, I think it's three things, and it's the same three things whenever we take price increases. Number one, and we give you this guidance. We say, generally, we keep 50% of the price increase. That's something we've said regularly and historically, and that's the case. Because when you have price increases, and in our case, when you don't have contracts, and we do now, but didn't have contracts that let people out if they didn't like the price increase, you're gonna lose about 50% of that price increase through churn. That's happened. But secondly, there are two other factors here that I think are unique to this moment.
Number one, we've had this household spend optimization, we call it, for lack of a better word, where people through this cost-of-living crisis are saying, "Hey, maybe I don't need high-priced video. Maybe I don't need that fixed voice service." And then thirdly, we're finding that people are—we're selling more products at that lower end, lower front book pricing. So that's flowing through. So the combination of those three things is making it more difficult. But thank God, we took the price increase because, you know, and I think we will take the price increase in 2024. All of our operating companies today operate on contracts that require us essentially to take that price increase, RPI plus 3.9% in the U.K. All indications we receive informally are that everybody else will be doing it.
Next year, it's gonna be a different outcome. One, we have. There's no way out of a contract if we take a price increase. That's not the case this year. Two, we'll do a better job of segmentation and understanding, you know, the implications of each customer base and base management. I feel more optimistic. We'll be a lot smarter, and we'll have advantages in the price increase next year, which we fully intend to take at this point.
I wanted also to ask you about your fiber strategy in the U.K. Could you update us on the fiber rollout or cable overlay with fiber in the brownfield areas?
Yeah, sure.
Virgin Media also, but also the greenfield, the areas with nexfibre.
Yeah.
Related to that, could you discuss how do you find the right path between buying or rolling out fiber a year?
Sure. So I'll start with this, and just I always start with this. We reach about 16 million homes in the U.K. Today, every one of those homes, we can sell 1 gig products to. So like the U.S., we have a superior network today, and we are able and willing and are marketing 1 gig products across more than half the country. However, we have two big programs underway. Number 1 is what we call a fiber up, which is an upgrade of those 16+ million homes to XGS-PON or fiber. Why are we doing this versus DOCSIS 4.0?
The way Comcast and Charter are moving is because the cost to upgrade to fiber is only marginally higher than the cost for to upgrade via DOCSIS, and it makes more sense to us to do fiber for all kinds of strategic and competitive reasons. So we're doing that. We'll have about 10% of the homes upgraded by the end of the year on track, on pace, on cost. So that's one program. The second program is what we call greenfield extension. Our goal is to reach more of the U.K. than we already do with fixed networks. So we're building 5-7 million homes in what we... In a JV with a French infrastructure provider, 50/50, off balance sheet, but fully financed, GBP 4 billion+ of financing, and we will build 5-7 million fiber homes. We're on track there as well.
I think we'll have 1.5 million, you know, well, about 1 million homes by year-end here. So overall, you know, 2-2.5 million fiber homes by year-end, and if you add the homes we'd already built years ago in fiber, closer to 4 million. So we're on our way, and I think, you know, from our perspective, it's going really well. The U.K. market, if you pay attention to it, is unlike many markets in Europe. There are probably 40 people trying to build fiber as we sit here this morning. Sadly, most of them aren't gonna make it. Cost of capital, interest rates, competition, no penetration. It's a dream. And so the M&A market for altnets is heating up. We've already bought one. We're looking at another 6 or 7.
For us, if they're off footprint, not overbuilding us, highly attractive. So the one we bought was 175,000 homes in the East of England, where we didn't have footprint. So I think there's gonna be a pretty, healthy rationalization of that market there, and probably just two networks in the end, us and BT, which is the way it should be.
That makes sense. My last question on the U.K. is on the dividends and recaps from Virgin Media O2, which have been very significant.
Yeah.
How sustainable is that mix, given the current, rate environment?
Well, just for people who may not follow, in the last 2.5 years since that joint venture was created with Telefónica, we distributed GBP 4 billion of cash to the shareholders. We get half, they got half. So it's been highly profitable, highly successful, I would say. Half of that was free cash flow, half of that was recaps because we were growing EBITDA. We're gonna recap to 5x, which we've been doing. So far it's worked brilliantly. Going forward, we'll make that decision together as partners. I mean, they just had their capital markets day. I'm not gonna step on what they said, which is we'll make that decision when we need to make that decision. But I will add one point.
I think we're the only operators in this market, or one of a handful, that have already refinanced $2 billion in debt this year at the same interest rate. Now let that sink in. We haven't-- we've pushed out maturities, and we haven't increased the cost of capital in the U.K. because we've had fixed base rates that we're able to roll into new financing. So we're very satisfied with that balance sheet. I think that we're very lucky, I think, in the U.K., to have a strong balance sheet, levered 5x with, you know, fixed rate, long-term capital. So we're in a good place.
Very good. Moving to Switzerland, the rebound into Sunrise has been challenging. Could you update us when you see this surprising impact being behind you? And when do you see the business starting to grow, in particular, given that there is a market tailwind now in Switzerland, given that prices have started to increase in the market?
... Sure. So, first I'll say, Switzerland's a pretty rational market as European markets go. There's two and a half operators, really, Swisscom, us, and Salt, which is much smaller. And lately, you know, we took a 4% price rise, Salt took a 3% price rise on mobile, and Sunrise didn't take a price rise, but added indexing to their contracts and discontinued some of their term, you know, their discounting and shortened the duration of their discounting. So we think there's quite a bit of rational behavior in that market, which is a positive. Now, what you had mentioned, the migration, just I'm not sure how closely you followed this, but we, when we merged Sunrise and UPC, obviously we had two subscriber bases. The UPC base was on a higher rate generally.
When we went to one brand, you're always going to have migration friction to try to get everyone to one brand, and so, in our case, we saw some of that when you try to bring people down, when people see a lower front book and they want to get down to one brand. I think the good news is we're about halfway through that migration, number one. Number two, we've already migrated most, if not all, of the price-sensitive, value-sensitive customers. So I think there's light at the end of the tunnel. Every month, it's a little bit better, so we'll be through that soon enough. We're not the first operating company conducting mergers that has this brand migration issue. It's pretty typical, but I think we see light at the end of the tunnel and the business is solid.
Should grow next year.
My last question on Switzerland is on the network strategy, fixed network strategy.
Yeah.
Today, you are addressing the fiber access through a wholesale agreement with Swisscom.
Right.
What is the future of the cable network in Switzerland? Is it a DOCSIS 4.0? Is it fiber? Is it a mix of both? Is it something else that I don't know?
Yeah. Well, we're in a really lucky position in Switzerland. Number one, we have a HFC network that reaches 70% of the country with a gig. That's a positive. Number two, we have long-term access agreements with Swisscom and Swiss Fibre Net that get us to 90% of the market with 10 gig. So we have this hybrid approach that, quite frankly, is perfect. So I don't see us building or really rebuilding in the Swiss market, which is why you see CapEx intensity much lower than other countries, because we've got access to fiber through Swisscom and Swiss Fibre Net, and we've got our own HFC network. So we're in a pretty good position there. I don't see us having any sort of existential questions around network in Switzerland.
Moving to Belgium, there are a number of exciting opportunities, for your Belgian business. First, on the CapEx side, perhaps some CapEx optimization, given the recent news flow from the BIPT, given that they seem to be open to see some co-investment coming-
Yeah
to the market. So that's the first opportunity. The other opportunity is in Wallonia, with the Telenet project to,
Right
... to launch into the broadband business in Wallonia. Could you talk about these opportunities for your Belgian business?
Sure. So in Belgium, we operate in Flanders, with basically incumbent market share. I think, you know, 50+% broadband market share. We have been an open network in that market for broadband with Orange. We've had a long-term relationship with Orange, where they've accessed our HFC network. Recently, if you're paying attention, if you, if you're following us, you would have noticed that we, launched, fully launched and separated a new NetCo in the Belgian market. We took the entire network, listed it out, put it into a new company called Wyre, W-Y-R-E, with a 30% partner, which was the power company there, essentially, because they already own parts of our network. That NetCo is already has world-class economics. It's going to have roughly 70% utilization rate. For example, you know, I'm trying to think of what...
Only Openreach would have something of that nature. So it has 70% utilization rate because Orange is a long-term partner accessing our network and a fully funded program to build fiber. So EUR 2 billion set aside to essentially build 80% of the Flemish market fiber. So it's a, it's a winner for sure. And recently, the government, as you point out, said that they're open-minded about consolidating or collaboration in fiber builds. Why have two networks? Why don't we share infrastructure? Why don't we share, you know, we divide and conquer? Now, we don't know what that means just yet, but it's very positive, and that would obviously optimize that spend for us but doesn't change our relatively dominant position in that market. So very excited about what's happening up there. We could bring in network partners.
We could bring in financing partners. It's a pretty strong asset. And then in the south, just quickly, there's 2 million homes down there. We will launch nationally down there and maybe get 10%-15% market share. So it's an exciting opportunity to take Telenet and make it a national footprint on the fixed side. We're already national and mobile. To be national and fixed is what we're trying to do everywhere, so it's a net positive.
Moving to the Netherlands, you've been conducting some trials on DOCSIS 4-
Yeah
-with VodafoneZiggo. Could you tell us more about some of the takeaways from these trials?
Yeah.
Perhaps update us, Mike, on the time to market in the Netherlands, and any color about the cost of deployment as well would be helpful.
Yeah. So I think, listen, in Holland, because it's so expensive to build fiber for us anyway, and we have 1 gig available across 7 million homes in the country, we are looking at 1 market where we are really seriously looking at DOCSIS 4.0. And let me just back it up and give you some comfort. You know, DOCSIS 4.0 isn't a maybe, it's already rolled out in the U.S., where 80% of broadband homes use cable. In the U.S., 80%, and the entire industry is rolling out DOCSIS 4.0. It's already rolled out in Colorado. Comcast has already rolled it out. So this isn't sort of a maybe it'll work. It's just not something that we're hoping is technologically sound. It's real, it's happening, it's a no-brainer.
It's happening. So we are looking at it seriously in Holland, obviously, because it allows us to upgrade to 10 gig, perhaps, 8-10 for sure, in with a much lower cost of capital or cost per home. So we'll look at that. We have trials. We did a live trial, got 15 gigabits out of our cable network. So there's a nice roadmap for HFC, and in that market, it could very well make sense. So we're evaluating it seriously. I can't give you updates on timing because we're working on that right now with our partners, but the cost will be a fraction of what it's going to cost us to build fiber if we, you know, in that market, if we go that direction. So it's a positive indicator for sure.
Right. And then I wanted to ask about the partnership with Vodafone.
Yeah.
In the Netherlands, it's been a great integration story between fixed and mobile. It's a 50/50 some JV.
Yeah.
What is the next step for this partnership?
Well, listen, as you say, it's a good partnership. It's a great asset. I mean, this is a market where we are neck and neck with the incumbents, reach the entire country. You know, we're bigger than them, and some things are bigger than us and others. We have high margins, a great team. So it's a strong asset, highly profitable. We're lucky to have such a strong asset. But I have to tell, I'm on my third CEO as a partner at Vodafone, so we started with Vittorio, then Nick, and now Margherita. So priorities change, but I would say... There's a renewed focus, I would say, thankfully, on this particular marketplace. So, you know, I've had good conversations with the chairman, with Margherita.
I think, you know, we've all kind of amped up the energy level on what's the right outcome for this particular marketplace. More to say, perhaps in February, but I will just say the conversations are much more strategic than they were in the past.
Right. Looking forward to hear more.
Yeah.
There. Moving to the Ventures portfolio, which is a key pillar of your value creation strategy. Could you update us on the capital allocation there?
Yeah. So this is for people who may not be following it, we've got about $3 billion into what we call our ventures portfolio. About $750 million in a tech vertical, where we've been investing for 8-10 years, essentially, in things that are only strategic to us. So what do I mean by that? Products, services, software, hardware that we can be a customer of. And we've had great success. I mean, most companies do this. Tech does, is Comcast. Most people have a venture portfolio that gives them visibility to the technologies that will matter over time. And so we've done really well there. We've made great, you know, best-in-class kind of IRRs. That's a winner and largely pays for itself because we have exits every year, and then we invest every year.
We have an infrastructure vertical, which has grown from zero to about $750 million. And honestly, this is just us doing what we do well. We understand the infrastructure space, we understand Europe, we understand how to build, buy, finance, structure. And so we've got some really exciting opportunities in the infrastructure space already. In particular, a company called AtlasEdge, which is focused on edge data centers, edge compute, utilizing our properties, our facilities, our power as a starting point, so in partnership with DigitalBridge. So we've got some really exciting opportunities in the infrastructure space. And then lastly, the biggest piece is what we call our media content portfolio. And quite frankly, that's one where we're looking very hard at whether there is or are strategic adjacencies with those businesses. So we'll be looking at those closely.
We're already in the midst of exiting one called All3Media. We own together with Warner Bros., you know, GBP 100 million of EBITDA. We're hoping for double-digit multiples. So we're going to, you know, definitely entertain disposals when it makes sense. And I think I said on the call between ventures and non-core assets, between $500 million and $1 billion of disposals before mid-next year, that should be easy to achieve. So I think that's the way we look at ventures. I mean, I mean, if you step back and look at our... I mentioned this on the call, if you were listening. Not if you were listening, if you were on the call. I'm sure you were listening if you were on the call.
But anyway, if you look at our business today, you look at our cash, and you look at our Ventures portfolio, it's about our stock price today. So all this good stuff we're talking about, all these incredible businesses that we really think are valuable, you know, $25 billion of EBITDA, 885 million fixed and mobile subs. I'm using dollars now, $9.5 billion of EBITDA. $25 billion in revenue, $9 billion of EBITDA, massive free cash flow, all of that valued at zero. So I think from our point of view, you know, whether you believe in Ventures or not, it's anchoring, potentially anchoring a big chunk of our valuation today. And these are assets that we think have great strategic value to us as well.
Vodafone has been a new investment today, not today, this year-
Yeah.
—for you guys. How is your appetite to do more on the telecom side?
I don't know if we'll do more or not. I mean, the Vodafone stake, for those who may not know, we own 5%. We're the second largest shareholder in Vodafone, which, you know, we're not an activist, but we intend to be active, you know, and we're partners with them in three countries, right? We're partners in Holland. We just signed a wholesale deal with them in Ireland, where we're building fiber. And of course, we own networks together in the U.K., the entire wireless network we own together. So we have strong relationship with Vodafone, and we felt at the time, listen, there are catalysts here. It's largely undervalued, and, you know, we think new management team has generally the right approach to things.
Remember, our investment is fully hedged, you know, so while their stock might be off X%, we're off a fraction of that because we are hedged. But let's see. I don't, we don't have any current plans to make any other investments in the region, although there's quite a bit of activity. I mean, it's entertaining, to say the least. You got BT, you got Drahi and Deutsche Telekom, you know, in Vodafone, you got us, Etisalat, Xavier Niel. Xavier just bought a piece of Proximus. So what does all this mean? You know, you'll write a report on it at some point, and you'll tell us what it means. But, I think what it means is smart money is looking at assets that are undervalued.
That's what it means to me... We never say never, but it's not something that's on our radar right now.
Very good. I wanted to talk about complexity with you, Mike. The transformation of the business into a fixed mobile convergent asset-
Yeah.
-made a lot of, strategic, industrial, and financial sense, but it was done through, JVs, which add a layer of complexity to the Liberty Global story. So my first question is, do you see this as a, challenge for the equity story? And if so, how to solve it?
Well, boy, if you think we're complex today, you should have seen this 5 years ago. I mean, I think we've done a lot to simplify the story. What did we do? We spun off our Latin American business entirely. We reduced from 12, really, to 5 countries, got rid of all of our subscale markets at double-digit multiples. You know, we focused on FMC, and of the 5 countries we're in, we own 100% of three of them, to be fair, two JVs, U.K. and in Holland. But, you know, JVs have some benefits, too. What, what do I mean? We're getting a lot of expertise, each of us contributing and getting expertise. Number two, there are time-limited exit provisions in those deals. So they won't be JVs forever, that I can promise you.
So there will be moments where the JV is no longer a JV. We'll own it, they'll own it, somebody else will own it, we'll find out. But for sure, it won't be a JV forever, and that, you know, has at least an end date to it, an expiration date at some point. And that's a healthy thing in these markets. I mean, we didn't set out to form JVs, but in the U.K. and in Holland, they weren't a seller, and we weren't a seller, or we couldn't agree on value, so we formed these companies together. And the convergence benefits of these businesses is real, and the convergence value is real. I mean, you can't be successful today without a broadband product. You can't be successful today without 5G.
You can't be successful today, you know, without a converged bundle that, that reduces churn and drives NPS. So we're in the right spot. I'll say one last thing, which is each of those individual OpCos are not complex. So you would never ask KPN, "How are you dealing with this complexity thing," right? Because it's just KPN and all, right? You wouldn't ask Swisscom, your next, your next company here. You're not going to say to Swisscom: You're so complex. How do you deal with that? Well, you know what? Sunrise isn't complex either, and VodafoneZiggo is not complex, and Virgin Media O2 is not complex. And so our job is to find analysts, investors, structures that allow that lack of complexity in this single market to be fruitful and valuable.
So think about it that way, you know, which is why we talk regularly about maybe spins or listings or things of this nature to create transparency on that single market, which in and of itself is not complex. So take your point and we're working hard, but, you know, we're the things that we're thinking of doing, we think will solve that.
That's an excellent transition to my next question about Bermuda.
Yeah.
So why Bermuda, and how will it facilitate this transaction?
Well, I mean, I don't know how many people here are experts on PLC, public, you know, U.K. law, U.K. process, but we found it pretty cumbersome on a handful of levels. And for a company like ours, with the DNA we have at Liberty, to do things quickly, to do things creatively, to do things that we think are value-creating, it was very challenging. So we move, you know, redomicile into Bermuda, has no tax benefits to us, doesn't change our listing, doesn't change anything. It just means that now we're operating under a U.S.-style corporate governance structure, which is gonna allow us to do things, M&A, spins, listings, buybacks, everything much more simply, less costly and quicker.
The board can do more, fewer shareholder votes, which you might think sounds odd, but not really, because even though we have three classes of stock, every class of stock, you know, had to approve certain things, so there were blocking stakes building up in classes of stock. So for all of us, it's a better outcome, I think. You know, now that closes, I think, later this month, something like that, and we'll have more to say in February.
You have a strong track record in monetizing assets. Should we expect imminent action after the Bermuda move?
Well, I mean, I don't want to say imminent action because that, I can't control the timing of things, but you should expect some concrete, concrete expectations. So, you know, the narrative is understood. You all understand the narrative, but what you're waiting for, and I get that, you're waiting for, you know, concrete examples. Let's get going. So that's what I think we'll provide greater detail on.
In the list of options, you have mentioned listings there. I have two, two questions. The first one, which assets in the portfolio you see as ripe for listing? And secondly, how do you find the right path between a listing or a disposal, given the gap between public and private multiples for telco assets?
Listen, we're open-minded. I said just a moment ago, nothing's off the table. So let's take Switzerland, for example, was a public company when we bought Sunrise and might be a candidate for a listing or a spin-off. You know, I mean, if nobody—if the people are giving us zero credit for these opcos, let's just hypothetically, which I think you could make an argument for, and we dividend out, I'm not going to give a number, but if we dividend out a sizable, you know, per share price, per share value on one or more assets, that's value accretive. So we close the gap in lots of ways, or we'll close the gap in lots of ways, and we need to be open-minded about things, and, you know, that's one market where we could possibly do something.
Then my next question is on leverage. You have a strong balance sheet, and yet you get the leverage question quite, often-
Right.
From the market. Could you explain to the audience why a levered equity story is the right way to create value for Liberty Global?
Listen, I understand the concern you may have, I mean, about leverage. I think fundamentally in our case, we think 4-5x is the right level, because we have businesses with high margins, with, you know, with long-term free cash flow characteristics. So we think it's the right way to drive equity. But more importantly, if you look at our balance sheet compared to other maybe even less levered balance sheets, we are religious about de-risking the balance sheet. We don't, you know, we are siloed. There's no corporate debt. We only borrow at operating companies, no corporate debt. We're long-term. We don't owe really anything for 5 years, more or less, no material maturities till 2028. We are fixed rate, so we don't have any floating rate debt anywhere. We're currency hedged everywhere.
You know, and so, you know, in our opinion, we've got a balance sheet that's super strong. We've got $3.5 billion of cash, $5 billion of liquidity. We don't feel that there's an issue in any of our operating companies around leverage, and neither does Telefónica in the U.K., neither does Vodafone in Holland, which are our two most levered assets. So I think we feel really good about our balance sheet. And as I said earlier, we're tapping the markets, and, you know, that's one thing you, you may think we're- You may rate us differently on different things, but when it comes to balance sheet and leverage and treasury, nobody does it... We don't think anybody does it better than we do, so we feel really good about where we are.
There's not gonna be any issues to be concerned about there, and we've worked hard to be able to say something like that.
Wanted to ask you also about the cash build related to that. One of the core initiatives that you presented in Q3 results that I think you'll be discussing also in the strategic update is selling assets and increasing the cash position. So what is the rationale there, and what is the best use of cash today?
Yeah, great question. So, we're sitting on a lot of cash, right? We started the year with about $4.5 billion of consolidated cash. We added $1.6 billion of what we call Distributable Cash Flow to the top of that. So, we arguably started the year with a lot more cash than we needed. We bought back $1.6 billion of stock, or we'll be buying back $1.6 billion of stock. We made some investments in Ventures. We had some other aspects. We'll end the year ±$4 billion of consolidated cash, let's say. So it's a fair question: Why do we need more cash? Well, you know, I'm not saying we need more cash, but we need to show discipline in some of the assets that we own.
If they're not providing value, if we think they've capped, let's sell them. That's the right thing to do, and then we put that cash into, number one, buybacks. So you haven't asked me about buybacks, but historically, for those who may not know, we bought back 60% of the company since 2017. This year, we're gonna buy back close to 18%. 18% of the company we'll be buying back this year, and we spent almost $14 billion doing that. So that's a lot of cash. Cash has to come from somewhere. I'm not saying we're doing $14 billion in the next five years. Well, it wouldn't be possible because the market cap's too small. So my point is that we think having cash, first of all, having cash at moments like this is really valuable.
Secondly, being able to allocate that cash to the highest returns, namely buybacks, when our stock trades were trades, you can assume we're piling in, and we will continue to do that into next year as well. So having cash for that's super important. By the way, we've used cash in the past to, for example, buy the Sunrise asset here or in Switzerland. So there might be needs in some of these OpCos. And then lastly, while we don't feel we're over-levered, if we're gonna execute on some of these strategic opportunities to shrink the gap, we might need to de-lever. So if we're gonna list an asset, we might have to de-lever into a value-creative transaction. So that could be another use of cash. So I think it's great to have cash at this moment.
We don't wanna sit on it forever. We wanna put it to work, but it's certainly a net positive. And it, for a company of our size, to have that kind of cash balance is a net positive.
My last question is on the share buyback.
Okay.
You've been buying a lot of stock. Just this year, the first target was for 10%, then 15%, and now 18%-19%. What is the end game? Is taking the company private is the end game?
We're doing that slowly. It's happening at a... You know, so listen, I am not happy with the stock price. Don't get me wrong. I own a lot of stock. I've got tons and tons of options are all underwater, so nobody in our shop is happy at all about this. And, you know, we're all, that sense of urgency, perhaps, that you, that you're picking up on is, is because we're not happy. Having said that, there's a silver lining to some extent for long-term investors, which is we're able to slowly take the company private at pretty, at pretty attractive valuations. So, you know, you can, you can do two things to return capital to shareholders. You can pay dividends, which has its, has its moment, has its value, or you can buy back your stock.
Quite frankly, I think some of the telcos on stage here this week should be buying stock. I'll start with Vodafone. Why wouldn't you buy stock if you're trading at 5x or 4x, 4.5x, whatever your multiple is? If you believe in your equity story, you should put your money where your mouth is. So certainly we're doing that, you know, and we will continue to do that. And if that, if in two or three years' time, the market cap... That's okay. I mean, it's not a- For us, the fundamental logic of that makes great sense, especially if you're sitting on businesses you think are undervalued. If you've got cash, strong balance sheet, and strategic opportunity, then you should be, you should be doing that. And that's, that's how we see it. So there's no end game per se.
We're not... But there's also no, no end point to it. You know, we'll continue to do it as long as the value gap is there.
Very good. Thank you, very much-
Yeah
Mike, for the helpful conversation.
Thank you. Yeah.
I look forward to seeing you next year as well.
Great.
Thank you all.
Good to be here. Thanks, everybody. Have a good week.