We Are Skeptical About VMO2's Decision to Expand FTTH in the U.K.; Maintaining Liberty Global's FVE

Liberty Global's consolidated revenue was stable in the second quarter, increasing 1% in local currencies, while EBITDA declined by 3.6% due to energy and other inflationary pressures in the cost base, mainly in Belgium (Telenet). In the reported currency (U.S. dollars), adjusted revenue and EBITDA declined by 7% and 14% respectively, due to the recent appreciation of the U.S. dollar against the euro. Liberty Global subsidiaries operate in an autonomous way and each manages its own resources, meaning currency fluctuations affect reported numbers, but are not real cash gains/losses. We maintain our $32 fair value estimate for Liberty Global and see the shares as undervalued currently.