REG - ITV PLC - ITV plc Full Year Results 2024
06/03/2025 07:15
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RNS Number : 5459Z ITV PLC 06 March 2025
ITV Plc Full year results for twelve months ended 31 December 2024
STRONG EXECUTION DELIVERING PROFIT GROWTH
Highlights
· Successful financial, operating and creative performance, driven
by strong strategic execution
· Group adjusted EBITA up 11% in 2024, reflecting record profits in
ITV Studios and growth in M&E profits and margin
· ITVX continued to perform strongly: digital viewing up 12% and
digital advertising revenue up 15% in 2024, delivering attractive returns. By
the end of 2025, we will have recouped the cumulative investment in ITVX, much
earlier than anticipated
· Delivered £60 million of permanent efficiencies in 2024, £10
million ahead of plan; programme continues into 2025 delivering a further £30
million of non-content savings
Carolyn McCall, ITV Chief Executive, said:
"Three years ago we announced the second phase of our More than TV strategy
and today's results show our significant progress and success in navigating
the rapidly changing media industry.
"ITV Studios has delivered record profits this year, despite the one off
impact of the writers and actors strike and a softer demand from free-to-air
broadcasters, which reflects the strength, scale, diversification and
creativity of ITV Studios production companies across the world.
"ITVX has been the UK's fastest growing streaming platform over the last two
years and coupled with our programmatic advertising platform, Planet V, has
delivered significant growth in both digital viewing and revenues and is
providing attractive returns.
"Our efficiency programme has delivered savings which have funded growth
investments, offset inflation and improved our margins. The programme is
ongoing and will continue to be viewer led - driving efficiencies and
prioritising our investment to best reflect viewer dynamics and attract both
mass reach audiences on linear and targetable audiences on ITVX.
"Our significant competitive advantages give us confidence that we will
continue to deliver good growth in both ITV Studios and digital revenues,
underpinned by the powerful reach and strong cash generation of Broadcast.
"And we are becoming a more resilient business with content production and
digital now accounting for close to two thirds of our revenue. Our ongoing
transformation ensures we are an adaptable and agile company, well positioned
to deliver good profitable growth, strong cash generation and attractive
returns to shareholders."
Full Year 2024 Group Financial Highlights(1) - Strong profitability and
shareholder returns
· Group total revenue was down 3% at £4,140 million, with growth
in total advertising revenue (TAR) offset by the expected decline in ITV
Studios revenue
· Group external revenue was down 4% at £3,488 million
· Group adjusted EBITA(2) was up 11% at £542 million reflecting
record profits in ITV Studios, higher profits and increased margin in Media
& Entertainment (M&E) and £60 million of efficiencies delivered
across the Group. Adjusted EPS was up 23% at 9.6p
· EBITA(3) was £526 million (2023: £404 million). Statutory
operating profit was £318 million (2023: £238 million), statutory profit
before tax was £521 million (2023: £193 million), and statutory EPS was
10.4p (2023: 5.2p)
· Profit to cash conversion(1) of 83% and a robust balance sheet,
with net debt of £431(4) million (31 December 2023: £553 million) and net
debt to adjusted EBITDA leverage of 0.7x (31 December 2023: 1.0x)
· £198 million of the £235 million share buyback programme was
completed by 31 December 2024
· In line with ITV's dividend policy, the Board has proposed a
final dividend of 3.3p (2023: 3.3p), giving an ordinary dividend of 5.0p per
share for the full year 2024 (2023: 5.0p), a total of £190 million.
1. Our APMs are defined within the APMs section of this report. It
also includes a full reconciliation between adjusted and statutory results
2. ITV Studios adjusted EBITA includes a £13 million impact from the
change in legislation on Audio-Visual Expenditure Credits (AVEC), effective on
expenditure incurred from 1 January 2024. Expenditure credits on qualifying
expenditure is included within operating profit rather than within the
consolidated tax charge. As a result, our EBITA, adjusted EBITA, adjusted
EBITA margin, profit before tax and tax charge increase, but profit after tax
and EPS is unchanged, compared to the previous High-End TV accounting
treatment. Excluding the impact of AVEC, ITV Studios adjusted EBITA was flat
year-on-year and Group adjusted EBITA increased by 8% to £529 million
3. Statutory operating profit before amortisation and exceptional
items and excludes interest, tax, share of losses of joint ventures, and
associated undertakings and profit on disposal of associates, joint ventures
and subsidiary undertakings
4. Excluding the net proceeds that had been designated to fund the
remainder of the buyback, net debt at 31 Dec 2024 was: £468 million and net
debt to adjusted EBITDA leverage is 0.8x
ITV Studios - Industry leading creativity, scale and diversified business
model helping to drive record profits
· ITV Studios adjusted EBITA was up 5% to £299 million, with a
margin of 14.7% (2023: 13.2%) benefiting from high-margin format and catalogue
sales, and £25 million of efficiencies in the year
· Total Studios revenue was down 6% to £2,038(5) million, in line
with guidance, impacted by the 2023 US actors and writers strikes, a softer
demand from free-to-air broadcasters and the phasing of deliveries
year-on-year. Total organic revenue was down 5%. Total external revenue was
down 10%
· Internal revenue was up 3%, which includes the benefit of the
transfer of ITV sports production from M&E
· ITV Studios delivered many creative successes in the year
including: Mr Bates, the biggest drama in the UK in 2024; Fool Me Once - one
of Netflix's most-watched shows of all time; The Voice - the number one
franchise of the year; Love Island USA - the number one reality series in the
US(6); and Rivals - Disney+'s breakout hit
Media & Entertainment (M&E) - ITVX continued to perform strongly, with
significant improvement in M&E profitability
· M&E revenue was up 1% to £2,102 million, with TAR up 2%, in
line with guidance and ahead of the market
o Within this, digital advertising revenue (the largest component of digital
revenue) grew 15%
o M&E non-advertising revenue was down 10% as expected
· M&E adjusted EBITA was up 22% to £250 million reflecting the
growth in TAR and £35 million of efficiencies delivered in the year
· ITVX continued to perform strongly building on its momentum
during the year
o Streaming hours were up 12% and monthly active users were up 14% driven by
the strong performance of programmes such as the Euros, Love Island and Until
I Kill You
o Digital revenues (refer to Note 5) grew 12% with strong growth in digital
advertising revenue partly offset by the actions we have taken to consolidate
subscriptions into ITVX
o During 2024, in-year incremental digital revenues exceeded incremental
ITVX costs, two years earlier than expected as we have optimised investment in
content and technology. By the end of 2025, we will have recouped the
cumulative incremental investment in ITVX, much earlier than expected
· ITV maintained its strength in delivering mass reach with a
breadth of successful programmes across the key genres of entertainment,
reality, drama and sport with ITV1 named 'Channel of the Year' at the
Edinburgh TV Festival and Broadcast Awards.
Outlook: Continued focus on delivering good growth in ITV Studios and ITVX and
tight cost management
· ITV's significant competitive advantages and growth opportunities
give us confidence that we will continue to deliver good growth in the coming
years
· ITV is becoming a more resilient business as it continues to grow
ITV Studios and digital revenues, underpinned by the powerful reach and strong
cash generation of Broadcast
· Transformation and efficiency programme expected to deliver a
further £30 million of savings in 2025
· Ongoing transformation ensures ITV is an adaptable and agile
company, well positioned to deliver future profitable growth, continued strong
cash generation and attractive returns to shareholders
ITV Studios:
· Expect to deliver good revenue growth in 2025, ahead of the
market, with revenue and profit weighted to the second half of the year.
· As expected, the margin in 2025 will be lower than in 2024, but
remain within our target range of 13 to 15%. This reflects the change in sales
mix as the market recovers following the US strikes, with a lower proportion
of high-margin catalogue sales, and a higher proportion of lower-margin
scripted deliveries. With cost savings and high margin deliveries weighted to
H2, the margin will be higher in H2 than H1
· On track to deliver total organic revenue growth of 5% on average
per annum from 2021 to 2026 - ahead of the market, and at a margin of 13 to
15%
· Expect revenue and profit growth momentum to accelerate in the
medium term driven by:
o Zoo 55 - our digital studios label launched in January 2025, to drive high
margin growth from the rapidly expanding global digital distribution market,
as we distribute content to more platforms and audiences globally
o Healthy scripted pipeline including Rivals S2 for Disney+, Run Away for
Netflix and After The Flood S2 for ITV
o Number of large format deliveries including the return of Hell's Kitchen
US and The Voice across multiple countries
5. Total ITV Studios revenue includes a £55 million revenue benefit
from the transfer of ITV sports production from M&E, effective from 1
January 2024. £53 million is eliminated in intersegment revenue. Excluding
the revenue benefit, ITV Studios revenue was down 9%
6. Season 6 was the number one reality series in the U.S. across all
streaming platforms
Media & Entertainment:
· TAR outlook and shape for 2025:
o TAR will be impacted by tough comparatives against the Euros in June/July
and the introduction of tighter advertising restrictions on less healthy foods
(LHF) in October 2025
o The four months to the end of April is forecast to be broadly flat
year-on-year
· Remain on track to deliver at least £750 million of digital
revenues in 2026:
o we will deliver good growth in digital viewing and revenue by focusing on
key value drivers of content, marketing, product, distribution and
monetisation
o we will drive new digital streams including
§ a new distribution and commercial partnership agreement with YouTube,
making more ITV content available on YouTube and ITV Commercial selling
advertising, and
§ developing new profitable digital revenue streams beyond advertising,
leveraging our scaled platform, our powerful brand and IP and first party
data
Ongoing transformation and efficiency programme
· Delivered £60 million of savings in 2024, £10 million higher
than previously guided
· £60 million savings comprised:
o £20 million of initial £150 million plan - now fully completed, one year
early
o £40 million of savings as part of the ongoing transformation and
efficiency programme as we reprioritise our resource allocation to better
align with our strategy
· Our efficiency programme has delivered savings which have funded
growth investments, offset inflation and improved our margins
· Delivering savings through reductions in transmission costs,
technology and operational efficiencies, organisational redesign, simplifying
ways of working and permanent reductions in discretionary spend
· In 2025 we expect to deliver a further £30 million of permanent
non-content cost savings which is a combination of new initiatives and
annualised benefits from the 2024 savings. These savings will fund investments
and offset inflation. Expect costs to deliver savings to be around £25
million.
Planning assumptions for the full year 2025
The following planning assumptions are based on our current best view but may
change over the year.
Profit and Loss Impact:
1. Total content costs are expected to be around £1.250 billion, with
lower sports costs year-on-year. H1 content costs will be broadly flat on the
prior year
2. In total, we expect to deliver £30 million of non-content savings a
combination of new initiatives and annualised benefits from the 2024 savings
3. Adjusted financing costs are expected to be around £40 million
4. The adjusted effective tax rate is expected to be around 27% over the
medium-term
5. Exceptional items are expected to be around £45 million mainly due to
costs associated with our ongoing transformation and efficiency programme (c.
£25m) and our digital transformation costs (c. £10m). Cash impact is
expected to be similar
Cash impact:
· Profit to cash conversion is expected to be around 80% on average
over the three years from 2023 to 2025
· Total capex is expected to be around £65 million as we continue
to invest in our digital capabilities
· The Board has proposed a final dividend of 3.3p, which will be
paid in May 2025. This gives a full year dividend of 5.0p, a total of around
£190 million
Virtual Results presentation webcast and Q&A:
ITV's virtual results presentation and Q&A session will be held for
investors and analysts at 9.30 am today (UK time) via the following link:
https://www.investis-live.com/itv/67a201dc8a9b7a001265becb/lanetr
(https://www.investis-live.com/itv/67a201dc8a9b7a001265becb/lanetr)
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:
Conference Call Dial-In:
United Kingdom (Local): +44 20 3936 2999
United Kingdom (Toll-Free): +44 800 358 1035
Global Dial-In Numbers
(https://www.netroadshow.com/conferencing/global-numbers?confId=60300)
Access Code: 100986
Press *1 to ask a question, *2 to withdraw your question, or *0 for operator
assistance.
Please refer to the Global Dial-In Numbers hyperlink above for alternate phone
numbers.
Notes to editors
1. Unless otherwise stated, all financial figures refer to the 12
months ended 31 December 2024, with the change compared to the same period in
2023.
2. Group financial performance
We measure performance through a range of metrics, particularly through our
alternative performance measures and KPIs, as well as statutory results, all
of which are set out and defined in this report. Please refer to the APMs for
a reconciliation between adjusted and statutory results.
Twelve Months to 31 December 2024 2023 Change Change
£m £m £m %
ITV Studios total revenue 2,038 2,170 (132) (6)
Total advertising revenue 1,820 1,778 42 2
M&E non-advertising revenue 282 312 (30) (10)
M&E total revenue 2,102 2,090 12 1
Total group revenue 4,140 4,260 (120) (3)
Internal revenue (652) (636) (16) 3
Group external revenue 3,488 3,624 (136) (4)
Total non-advertising revenue 2,320 2,482 (162) (7)
ITV Studios adjusted EBITA 299 286 13 5
M&E adjusted EBITA 250 205 45 22
Adjusted EBITA 549 491 58 12
Unrealised profit in stock adjustment (7) (2) (5) 250
Group adjusted EBITA 542 489 53 11
Group adjusted EBITA margin 16% 13% - 3% points
Statutory operating profit 318 238 80 34
Profit before tax (adjusted) 472 396 76 19
Adjusted EPS 9.6p 7.8p 1.8p 23
Statutory EPS 10.4p 5.2p 5.2p 100
Net debt as at 31 December (431) (553) 122 22
Reported net debt to adjusted EBITDA leverage 0.7x 1.0x
Profit to cash conversion 83% 102%
3. Total advertising revenue (TAR), which includes ITV Family NAR, digital
advertising and sponsorship, is expected to be broadly flat for the four
months to the end of April 2025 compared to the same period in 2024. TAR is
expected to be down around 2% in Q1 compared to the same period in 2024.
4. Key performance indicators
Twelve months to 31 December 2023 Change
2024
Group adjusted EPS 9.6p 7.8p 23%
Cost savings £60m £24m £36m
Profit to cash conversion 83% 102% (19)% pts
ITV Studios total organic revenue (decline)/growth (5)% 3% (8)% pts
ITV Studios adjusted EBITA margin % (inc AVEC) 14.7% 13.2% 1.4% pts
Total high-end scripted hours 296 hrs 316 hrs (6)%
Number of formats sold in 3 or more countries 20 19 5%
% of ITV Studios total revenue from streaming platforms 25% 32% (7)% pts
Total digital revenue £556m £498m 12%
Total streaming hours 1,686m 1,506m 12%
Monthly active users 14.3m 12.5m 14%
Share of top 1,000 commercial broadcast TV programmes 92% 91% 1% pt
Share of commercial viewing (SOCV) 32.2% 32.6% (0.4)% pts
UK subscribers as at 31 December 1.0m 1.3m (23)%
· Our definition of total organic revenue excludes the impact of
any acquisitions made during the current or prior period. It also excludes the
year-on-year movement in foreign exchange. In 2024, the unfavourable
translation impact of foreign exchange on total revenue was £30 million.
· Total digital revenue includes digital 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. In addition, digital advertising revenue now
includes previously omitted revenue streams such as commission from STV for
ITV selling their video-on-demand inventory and social media advertising
revenue, which qualify under the definition. The prior years have been
restated to reflect the change in categorisation. Given the nature of digital
revenue, it will evolve over time. 2023 was previously reported as £490
million.
· Total streaming hours measures the total number of hours viewers
spent watching ITV across all streaming platforms. This figure includes both
ad-funded and subscription streaming. In H1 2023, total streaming hours were
reported as 737 million hours, which included some estimates of total
streaming viewing from third-party data providers. This has since been updated
to reflect more recently available and accurate data.
· Monthly active users captures the average number of identifiable
users throughout the period who accessed our owned, operated, and IP-delivered
content and services 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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