ITV Interim results for the period ending 30 June 2022
ITV Studios and M&E ahead of expectations, ITVX on track to launch in Q4
Carolyn McCall, ITV Chief Executive, said:
"ITV has recorded a strong performance across the business with both our Studios and Media & Entertainment divisions performing better in the first half than we expected at the beginning of the year. Revenues in both divisions were up year on year and as a result total external revenue rose 8%.
"ITV Studios revenue was up 16%, growing ahead of the wider market, as we continue to diversify the
business. High end scripted hours grew 82% and revenue from streaming platforms grew strongly, now accounting for 19% of total revenues, up 3% points.
"In M&E our investment in content, data and technology is already bearing fruit with digital advertising revenue up 20% driven by record levels of streaming on the ITV Hub, up 8% with 814 million streams in H1.
"Despite the tough comparators of last summer, when the Euros and a rebounding economy drove record advertising revenues, TAR is expected to be broadly flat in the nine months to the end of September. We are mindful of the macro economic uncertainty, however we have for the first time ever in Q4, the football World Cup to look forward to.
"We are on track against all the new KPIs and targets we announced earlier this year as part of the second phase of our More Than TV Strategy and we are very focussed on successfully launching ITVX, our new free ad-funded streaming service, in Q4 this year."
Group Financial highlights - significant revenue growth
- Significant revenue growth with total external revenue up 8% at £1,679 million
- Total ITV Studios revenue up 16% at £927 million with growth across the business
- Media & Entertainment (M&E) revenue up 4% at £1,065 million with total advertising revenue (TAR) up 5% and within this digital advertising revenue was up 20%
- Adjusted group EBITA was down 3% at £318 million. This reflects strong underlying performance offset in M&E by additional disciplined investment of £58 million in content and £20 million in data and technology ahead of the launch of ITVX. Additional content investment, as previously guided, relates to a combination of the return of key shows disrupted last year by COVID and front-footed investment. Adjusted EPS was up 2% at 6.0p
- EBITA was £228 million. Statutory profit before tax was £219 million (30 June 2021: £133 million) and
statutory EPS was 4.8p (30 June 2021: 2.4p) - The Board has declared an interim dividend of 1.7p and remains committed to paying a total dividend of at least 5p for the full year
ITV Studios - driving growth ahead of market and increasing diversification
- Number of high-end scripted hours produced up 82%
- Formats sold in three or more countries in H1 has increased from 7 to 9
- Percentage of total Studios revenue from streaming platforms in H1 grew from 16% to 19% with commissions or development deals with most of the major platforms
- Continuing to strengthen our creative talent with the acquisition of Plimsoll (subsequent to the half year), a leading natural history producer and the arrival of Ben Stephenson, the renowned drama producer, who has joined ITV to set up a transatlantic scripted label
Media & Entertainment (M&E) - Best ever digital viewing; ITVX, our free, ad-funded streaming service, on track to launch in Q4
- Strengthened streaming offering has helped drive the best ever digital viewing with 814 million streams in H1 on ITV Hub, up 8% year on year
- Planet V now has 1,500 professional users (1,200 at 31 March 2022) and in H1 attracted 192 new digital- only advertisers to ITV
- M&E KPIs demonstrate good strategic progress with total digital revenues up 22% in H1; total streaming hours up 6%; and monthly active users flat at 9.7 million against tough comparatives in H1 2021 driven by 'Oprah With Meghan and Harry' and the Euro Football Championships. Total UK subscribers are up 16% to 1.45 million compared to 31st December 2021 and BritBox International subscribers are up 13% to 2.7 million over that period. At the same time we maintained our strength in linear with 33.7% share of commercial viewing (SOCV) (2021: 33.6%) and 94% of top 1,000 commercial broadcast TV programmes (2021: 93%)
Outlook
2022 financial outlook:
- ITV Studios is on track to exceed 2019 revenues over the full year with an exciting pipeline of scripted and unscripted programmes. We will continue to grow ahead of the market, which we expect to grow at around 3% over the medium term
- As expected, the TAR comparatives are tough in Q3 against the Euro Football championships in 2021 and we are mindful of the macroeconomic and geopolitical uncertainty. However in Q4 ITV will broadcast the FIFA World Cup which will benefit TAR in November and December
- Compared to the same period in 2021, TAR in July 2022 is expected to be down 9%, better than we expected and August down 18%, broadly in line with our expectations. Compared to 2019, July is expected to be up 17% and August up 5%
- It is too early to give a detailed forecast for September but for the nine months to the end of September TAR is expected to be broadly flat compared to the same period in 2021. Compared to 2019, the 9 months are anticipated to be up 8%
- ITV will redeem the 2.125% €335 million Eurobond which matures in September 2022 using available cash, in order to reduce gross cash and gross debt. This will improve the efficiency of the balance sheet and
strengthen our credit metrics Strategic delivery outlook:
- ITV is well positioned to deliver Phase 2 of the More Than TV strategy and create long-term value for shareholders
- ITV's balance sheet is robust enabling it to invest in digital acceleration and deliver returns to shareholders in line with its capital allocation policy.
- We remain committed to our ITV Studios adjusted EBITA margin guidance of 13% to 15% from 2023. We continue to drive efficiencies through advancing our digital innovations and as we have previously guided, given current inflation in the production market, we expect the margin to be at the lower end of the range in the shorter term
- With the launch of ITVX we are confident in delivering at least £750 million of digital revenues by 2026 and delivering attractive returns to shareholders
Virtual Results presentation webcast and Q&A:
ITV's virtual results presentation and Q&A session will be held for investors and analysts at 9.00am today via the following link: https://www.investis-live.com/itv/62b9b126d9438014000381d7/prmna.You are now able to pre- register to join.
If you would like to ask a question, you will be able to do so via the following Conference Call details:
- United Kingdom: 0800 640 6441
- United Kingdom (Local): 020 3936 2999
- All other locations: +44 203 936 2999
- Participant access code: 663263 - Participants will be greeted by an operator who will register their details.
Notes to editors
1. Unless otherwise stated, all financial figures refer to the 6 months ended 30 June 2022, with the change compared to the same period in 2021.
2. Group financial performance
6 months to 30 June | 2022 | 2021 | Change | Change |
£m | £m | £m | % | |
ITV Studios total revenue | 927 | 798 | 129 | 16 |
Total advertising revenue | 910 | 866 | 44 | 5 |
M&E non-advertising revenue | 155 | 162 | (7) | (4) |
M&E total revenue | 1,065 | 1,028 | 37 | 4 |
Total group revenue | 1,992 | 1,826 | 166 | 9 |
Internal supply | (313) | (278) | (35) | (13) |
Group external revenue | 1,679 | 1,548 | 131 | 8 |
Group adjusted EBITA | 318 | 327 | (9) | (3) |
ITV Studios adjusted EBITA | 124 | 95 | 29 | 31 |
M&E adjusted EBITA | 194 | 232 | (38) | (16) |
Group adjusted EBITA margin | 19% | 21% | - | - |
Statutory operating profit | 228 | 156 | 72 | 46 |
Profit before tax (adjusted) | 301 | 301 | 0 | 0 |
Adjusted EPS | 6.0p | 5.9p | 0.1p | 2% |
Statutory EPS | 4.8p | 2.4p | 2.4p | 100% |
Net debt as at 30 June | (615) | (467) | (148) | (32%) |
Reported net debt to adjusted EBITDA leverage (on | 0.7x | 0.5x* | - | - |
a 12-month rolling basis) | ||||
Profit to cash conversion (on rolling 12 month basis) | 81% | 72% | - | 9ppt |
*At 31 Dec 2021
3. Total advertising revenue (TAR), which includes ITV Family NAR, AVOD and sponsorship was down 9% in May, down 13% in June, down 5% in Q2 and up 5% in H1. Compared to 2019, Q2 was up 2%. Going forward, TAR is forecast to be down 9% in July and down 18% in August. It is too early to give a detailed forecast for September but for the nine months to the end of September TAR is expected to be broadly flat compared to the same period in 2021. Compared to 2019, the 9 months to the end of September are anticipated to be up 8%. Figures for ITV plc are based on ITV estimates and current forecasts.
4. Key performance indicators
6 months to 30 June | 2022 | 2021 | Change |
% | |||
Group adjusted EPS | 6.0p | 5.9p | 2% |
Cost savings | £11m | £21m | - |
Profit to cash conversion | 81% | 72% | 9ppt |
ITV Studios total revenue growth | 16% | 26% | (10ppt) |
ITV Studios adjusted EBITA margin % | 13% | 12% | 1ppt |
Total high-end scripted hours | 133 hrs | 73 hrs | 82% |
Number of formats sold in 3 or more countries | 9 | 7 | 29% |
% of ITV Studios total revenue from streaming platforms | 19% | 16% | 3 ppt |
Total digital revenue | 176m | 144m | 22% |
UK subscribers | 1.45m | 1.25m* | 16% |
Total streaming hours | 523m | 494m | 6% |
Monthly active users | 9.7m | 9.7m | - |
Share of top 1,000 commercial broadcast TV programmes | 94% | 93% | 1ppt |
Share of commercial viewing (SOCV) | 33.7% | 33.6% | 0.1ppt |
Total BritBox International subscribers | 2.7m | 2.4m* | 13% |
* As at 31 Dec 2021
- Total digital revenue includes online advertising revenue and subscription revenue as well as linear addressable revenue, digital sponsorship and partnership revenue, ITV Win and any other revenues from digital business ventures.
- UK subscribers captures total UK subscriptions to ITV streaming platforms and services (including free trials).
- Total streaming hours measures the total number of hours viewers spent watching ITV across all streaming platforms. This figure includes viewing funded by digital advertising and subscriptions.
- Monthly active users captures the average number of registered users throughout the period who accessed our owned and operated on demand platforms each month.
- The share of top 1,000 commercial broadcast TV programmes KPI includes TV viewing from transmission and seven days post-transmission on catch up, as well as six weeks prior to the transmission window. It excludes programmes with a duration of
- ITV Family share of commercial viewing is the total viewing of audiences over the period achieved by ITV's family of channels as a proportion of all ad-supported commercial broadcaster viewing in the UK. ITV Family includes ITV, ITV2, ITV3, ITV4, ITV Encore, ITVBe, CITV, ITV Breakfast, CITV Breakfast and associated "HD" and "+1" channels.
- % change for performance indicators is calculated on rounded numbers.
5. This announcement contains certain statements that are or may be forward looking statements. Words such as "targets", "expects", "aim", "anticipate", "intend", or the negative of these terms and other similar expressions of future performance or results, and their negatives, are intended to identify such forward-looking statements.
These forward-looking statements are based upon current expectations and assumptions regarding anticipated developments and other factors affecting ITV. Although ITV believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. By their nature forward looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. They are not historical facts, nor are they guarantees of future performance; actual results may differ materially from those expressed or implied by these forward-looking statements. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward looking statements. These factors include, but are not limited to (i) the general economic, business, political, regulatory and social conditions in the key markets in which the Group operates, including the duration and severity of COVID-19 impacts on ITV's colleagues, business, partners and customers, (ii) a significant event impacting ITV's liquidity or ability to operate and deliver effectively in any area of our business, (iii) a major change in the UK advertising market or consumer demand, (iv) significant change in regulation or legislation, (v) a significant change in demand for global content, and iv) a material change in the Group strategy to respond to these and other factors. Certain of these factors are
discussed in more detail elsewhere in this announcement and in ITV's 2021 Annual Report and Accounts including, without limitation, in ITV's approach to risk management.
Forward-looking statements speak only as of the date they are made and, except as required by applicable law or regulation, ITV undertakes no obligation to update any forward-looking statements, whether written or oral that may be made from time to time, whether as a result of new information, future events or otherwise. Nothing in this statement should be construed as a profit forecast.
6. The financial information set out above does not constitute the Company's statutory accounts for the period ended 30 June 2022. Statutory accounts for 2021 have been delivered to the registrar of companies, and those for 2022 will be delivered in due course. KPMG has reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
For further enquiries please contact:
Investor Relations | |
Pippa Foulds | +44 7778 031097 |
Sarah Comfort | +44 7551 798668 |
Media Relations | |
Paul Moore | +44 7860 794444 |
Jenny Cummins | +44 7595 106670 |
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ITV plc published this content on 28 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 July 2022 06:07:09 UTC.