REG - ITV PLC - Half-year Report
28/07/2022 07:17
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RNS Number : 9973T ITV PLC 28 July 2022
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
o Total ITV Studios revenue up 16% at £927 million with growth across the
business
o 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
(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 a 12-month rolling basis) 0.7x 0.5x* - -
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
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