REG - ITV PLC - Q3 Trading Update
09/11/2022 07:01
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RNS Number : 7479F ITV PLC 09 November 2022
ITV plc Q3 Trading Update for the 9 months to 30 September 2022
Carolyn McCall, ITV Chief Executive, said:
"ITV has performed strongly delivering a 6% increase in total revenue for the
first nine months of the year, driven by double digit growth in both digital
revenue and revenue from ITV Studios.
ITV Studios continues to outperform the growing content market and will exceed
2019 revenues in 2022. It's on track to deliver on all of its KPI targets
and has a formidable slate to power it into 2023 as we further diversify the
business by genre, geography and customer.
We are making good progress on our new, free, ad-funded streaming service
ITVX, which will be rolled out across devices and platforms in the coming
weeks with the full launch of new and exclusive content on 8th December, in
time to reach millions of viewers who will come to ITV for the FIFA World Cup.
ITVX will supercharge our streaming business providing viewers with a
content-rich destination rather than a catch up service and advertisers with
valuable addressable audiences at scale. This will drive significant digital
viewing and revenue growth, enabling ITV to deliver at least £750 million
digital revenues by 2026.
While we remain mindful of the macroeconomic and geopolitical uncertainty
there's strong operational momentum across both our Studios and Media &
Entertainment divisions, as we continue to build a resilient, diversified
business that can take advantage of the global growth in the demand for
quality content and the desire of advertisers for both mass reach and data-led
addressable advertising, targeting millions of UK viewers."
Financial and operating performance for the nine months to 30 September as
expected
● Total external revenue up 6% at £2,523 million (2021: £2,381
million)
● Total non-advertising revenue up 13% at £1,619 million (2021:
£1,432 million), representing over 50% of total revenue, as we continue to
grow and diversify the business
ITV Studios
● Total ITV Studios revenue up 16% at £1,387 million (2021: £1,193
million), growing ahead of the market
● ITV Studios delivered a wide range of new and returning programmes
and formats in the UK and internationally, including A Spy Among Friends,
Hell's Kitchen USA, Let The Right One In and The Voice Germany
ITV Media & Entertainment (M&E)
● M&E revenue was down 2% at £1,561 million (2021: £1,594
million), with total advertising revenue (TAR) down 2%, broadly as expected,
against tough comparatives. Against 2019 TAR was up 6%
● Within this digital advertising revenue remains strong, up 13% at
£227 million to the end of September, compared to the same period in 2021
● Total M&E non-advertising revenue for the nine months to the end
of September 2022 was down 3% with good growth in subscription revenue offset
by the expected decline in SDN revenue and interactive revenues against tough
comparatives in 2021
● M&E's KPIs demonstrate good strategic progress with total
digital revenues up 15% and total streaming hours broadly flat as we
prioritise content on our own platforms to drive effective monetisation.
Monetisable streaming hours on ITV Hub, ITV Hub+ and BritBox UK were up 10% in
the nine months to 30 September 2022. At the same time, we maintained our
strength in delivering mass reach with 93% of the top 1,000 commercially
broadcast TV programmes and by maintaining our share of commercial viewing on
our channels
Outlook
ITV Studios
● ITV Studios will exceed 2019 revenues in 2022 with an
exciting pipeline of scripted and unscripted programmes as we further
diversify the business by genre, by geography and by customer and grow ahead
of the market
● With our strong position in a growing market, we expect ITV
Studios to deliver revenue growth in excess of our 5% medium-term target in
2023
● We remain committed to delivering our ITV Studios adjusted
EBITA margin guidance of 13% to 15% from 2023. As we have previously guided,
we expect the margin to be at the lower end of the range in the shorter term
as a result of the current inflation in the production market
Media & Entertainment
● ITVX, will be rolled out across devices and platforms in the
coming weeks with the full launch of new and exclusive content on 8th
December. It will launch with over 10,000 hours of free content available
including:
● exclusive weekly premieres aimed at attracting young and light
viewers, such as:
○ Litvinenko starring David Tennant; A Spy Among Friends with Damian
Lewis and Guy Pearce; natural history series, A Year on Planet Earth; teen
drama Tell Me Everything; and reality game show Loaded in Paradise - all
produced by ITV Studios labels
● one of the UK's largest free film libraries with over 250 titles and
over 200 series available at launch
● 20 FAST (free ad-supported TV) channels and ITV's 6 linear channels
● ITVX will enable ITV to continue to provide the largest free
ad-funded premium streaming service in Europe by revenue
● ITV TAR for the full year 2022 is expected to be down
between 1% and 1.5% on 2021's record year and this will represent high single
digit revenue growth compared to 2019. In Q4, ITV will broadcast the FIFA
World Cup, which will benefit TAR in November and December. There however
remains a high degree of economic uncertainty
In 2022, given the nature of ITV's cost base and mitigations already in place,
we expect to be able to manage inflation. For 2023, continued higher rates of
inflation will impact our cost base although we are looking carefully at
further mitigation measures.
Overall, despite the current macro and geopolitical uncertainty we are making
significant strategic progress and are well positioned to deliver Phase 2 of
the More Than TV strategy, through growing ITV Studios and delivering at least
£750 million of digital revenues in M&E by 2026 and creating long-term
value for shareholders.
ITV's balance sheet is robust enabling us to invest in digital acceleration
and deliver returns to shareholders in line with our capital allocation
policy.
NOTES TO EDITORS
1. Unless otherwise stated, all financial and operating figures refer to the
9 months ended 30 September 2022, with growth compared to the same period in
2021.
2. Group financial performance
Revenue for nine months to 30 September (£m) 2022 2021 Change Change
£m %
Media and Entertainment 1,561 1,594 (33) (2%)
ITV Studios 1,387 1,193 194 16%
Total revenue 2,948 2,787 161 6%
Internal supply (425) (406) (19) (5%)
Total external revenue 2,523 2,381 142 6%
Revenue for nine months to 30 September (£m) 2022 2021 Change Change
£m %
Total advertising revenue 1,329 1,355 (26) (2%)
Non-advertising revenue 1,619 1,432 187 13%
Internal supply (425) (406) (19) (5%)
Total external revenue 2,523 2,381 142 6%
3. Total advertising revenue (TAR), which includes ITV Family NAR, digital
advertising and sponsorship, was down 2% over the 9 months to the end of
September. Q3 was down 14% against tough comparatives, with July down 9%,
August down 21% and September down 14% compared to the same periods in 2021.
TAR is forecast to be down between 1% and 1.5% over the full year with October
down 9%, November expected to be up around 3% and December expected to be up
around 5% to 10% compared to the same periods in 2021. Figures for ITV plc for
November and December are based on ITV estimates and current forecasts.
4. Media and Entertainment key performance indicators
Nine months to 30 September 2022 2021 Absolute change Change
%
Total digital revenue (£m) £276m £239m £37m 15%
Total streaming hours (hrs)* 813m 812m 1m 0%
Share of commercial viewing (SOCV) 33.2% 33.4% - (0.2%pts)
Share of top 1,000 commercial broadcast TV programmes 93% 93% - -
● 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.
● 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.
● 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.
● 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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