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RNS Number : 7126I  ITV PLC  15 May 2025

ITV plc Q1 Trading Update for the three months to 31 March 2025

 

Q1 2025 Key Messages - Q1 in line with expectations, demonstrating the
continued successful implementation of our strategy

●     Total ITV Studios revenue was up 1% in Q1, with significant growth
in external revenue

●     ITVX's strong momentum continued with 15% growth in digital
advertising revenue in Q1, ahead of the market

●     Total advertising revenue in Q1 was in line with guidance

●     On track to deliver £30 million of non-content cost savings over
the full year

 

Carolyn McCall, ITV Chief Executive, said:

"Our Q1 performance was in line with our expectations, demonstrating the
continued successful implementation of our strategic priorities.

 

"ITV Studios returned to growth following the impact of the US strikes and is
on course to achieve good growth in total revenues over the full year,
weighted towards H2 as previously guided.

 

"M&E's solid performance demonstrates ITV's market leading position in UK
Streaming and Broadcast. ITVX continues to perform well, and we expect
sustained strong growth in digital revenues. This is underpinned by the
powerful reach and strong cash generation of M&E. As previously guided,
the year-on-year Q2 TAR outlook reflects the benefit in 2024 of the men's
Euros which drove substantial advertising revenues. Compared to the same
period in 2023, Q2 and H1 2025 TAR are expected to be broadly flat year on
year.

 

"We are continuing to make good progress in implementing our cost and
efficiency programme and are on track to deliver significant non-content cost
savings while optimising our content spend to best reflect viewer dynamics.

 

"While the macroeconomic environment is uncertain, we remain confident that
our strategic initiatives, our focus on financial and cost discipline and our
diversified revenue and customer base will enable us to successfully navigate
an evolving market landscape and deliver long-term value to our shareholders."

 

Financial and operating performance for the three months to 31 March 2025

●     Total external Group revenue was up 4% at £756 million (2024:
£727 million), with growth in external Studios revenue more than offsetting
the decline in total advertising revenue (TAR)

●     Total Group revenue was down 1% at £875 million (2024: £887
million), reflecting a decline in internal ITV Studios revenues

 

ITV Studios

●     Total ITV Studios revenue was up 1% at £386 million (2024: £382
million)

○     External revenue was up 20% reflecting strong demand from, and the
timing of deliveries to, global streaming platforms

○     Internal revenue declined by 26%, impacted by the non-return of
Saturday Night Takeaway and The Tower, and the year-on-year difference in
phasing of production of programmes such as The Bay and Grace

●     During the period, ITV Studios delivered a wide range of new and
returning programmes and formats in the UK and internationally to a
diversified portfolio of customers, including

○     Scripted programmes - Run Away for Netflix, The Better Sister and
The Devil's Hour for Amazon Prime Video, and Malpractice for ITV

○     Unscripted programmes - Squid Game: The Challenge and Sneaky Links
for Netflix, and I Kissed A Boy for the BBC

 

Media & Entertainment (M&E)

●     Total M&E revenue declined 3% to £489 million (2024: £505
million), with TAR down 2% as previously guided. Within this, digital
advertising revenue (a component of digital revenue) grew strongly, up 15%

●     ITVX's impressive performance continued in Q1, with total
streaming hours up 12%, and monthly active users continuing to grow in line
with our expectations

●     Digital revenues increased by 10% (refer to Note 4)

●     Non-advertising revenue decreased by 10% as expected

●     In addition to the impressive digital growth, ITV maintained its
strength in delivering mass reach for advertisers, with 91% of the top 1,000
commercially broadcast TV programmes and 34.0% share of commercial viewing on
our linear television channels

 

Outlook

ITV Studios

●     Our 2025 ITV Studios outlook remains unchanged:

○     We expect good revenue growth, faster than the global content
market, driven by external revenue

○     Revenue, profit and margin will be weighted to H2, with the H2
margin being higher than H1, due to the timing of cost savings and high-margin
deliveries

○     Full year margin will be lower than 2024 (reflecting the change in
sales mix, as the market recovers following the US strikes), but still within
the 13-15% target range

○     We continue to assess the possibility of trade tariffs in the US.
ITV Studios only produces TV programming and therefore do not anticipate any
direct impact from the imposition of tariffs on films

●     We remain on track to deliver our target of 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%

 

Media & Entertainment

●    Compared to the same period in 2024, TAR is expected to be down
around 14% in Q2 2025 and down around 8% in H1 2025 against the strong
comparatives resulting from the Men's Euros in 2024. Compared to 2023, Q2 and
H1 2025 TAR are expected to be broadly flat. As guided, the first four months
to the end of April 2025 were flat year on year

●     ITV has a strong upcoming schedule. This includes the increasingly
popular Women's Euros, new entertainment series Shark: Celebrity Infested
Waters, and new and returning dramas such as Code of Silence, I Fought The Law
and Ridley

●    We expect to see continued strong growth in digital advertising
revenues and remain on track to deliver at least £750 million of digital
revenues by 2026

 

Notes to editors

1.   Unless otherwise stated, all financial and operating figures refer to
the three months ended 31 March 2025, with growth compared to the same period
in 2024.

 

2.   Group financial performance

 Revenue for three months to 31 March (£m)   2025   2024   Change  Change

                                                           £m      %
 Media and Entertainment                     489    505    (16)    (3)
 ITV Studios                                 386    382    4       1
 Total revenue                               875    887    (12)    (1)
 Internal supply                             (119)  (160)  41      26
 Total external revenue                      756    727    29      4

 

 Revenue for three months to 31 March (£m)   2025   2024   Change  Change

                                                           £m      %
 Total advertising revenue                   423    432    (9)     (2)
 Non-advertising revenue                     452    455    (3)     (1)
 Internal supply                             (119)  (160)  41      26
 Total external revenue                      756    727    29      4

 

3.   Total advertising revenue (TAR), which includes ITV Family NAR, digital
advertising and sponsorship, was down 2% in Q1 and flat over 4 months to end
April 2025 as guided. TAR is expected to be down around 14% in Q2 and down
around 8% for the first half of 2025 against the comparatives that benefited
from the 2024 men's Euros. We expect to see continued strong growth in digital
advertising revenues. Figures for ITV plc are based on ITV estimates and
current forecasts.

4.   Key performance indicators

 Three months to 31 March                               2025    2024    Change
 ITV Studios total organic revenue growth               (1%)    (15%)   14% pts
 Total digital revenue                                  £133m   £121m   10%
 Total streaming hours (hrs)                            507m    451m    12%
 Share of commercial viewing                            34.0%   33.7%   0.3% pts
 Share of top 1,000 commercial broadcast TV programmes  91%     91%     -

●      Our definition of total organic revenue excludes the impact of
any acquisitions made during the current or prior period and the year-on-year
movement in foreign exchange. In the first quarter of 2025, the unfavourable
translation impact of foreign exchange on total revenue was £4 million, with
an £11 million impact from acquisitions.

●      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 year has been restated
to reflect the change in categorisation. Given the nature of digital revenue,
it will evolve over time. 2024 was previously reported as £118 million.

●      Total streaming hours measure the total number of hours viewers
spend watching ITV across all streaming platforms.  This figure includes both
ad-funded and subscription streaming. For Q1 2024, total streaming hours were
reported as 449 million hours, which included some estimates of total
streaming viewing from third-party data providers. This has since been updated
to reflect the final data.

●      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 less than ten minutes. This metric is calculated
as a 12-month rolling average to normalise seasonal scheduling.

●      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 commercial broadcast TV viewing in the UK, from transmission and seven
days post transmission on catch up. ITV Family includes ITV1, ITV2, ITV3,
ITV4, ITVBe, and associated "HD" and "+1" channels.

●      % change for performance indicators is calculated on rounded
numbers.

 

5.   ITV continues to have good access to liquidity, with total liquidity of
£1,431 million, comprising total cash of £406 million and committed undrawn
facilities of £1,025 million at 31 March 2025. Net debt was £455 million (31
December 2024: £431 million) at 31 March 2025.

 

6.   On 1 April, we announced that ITV Studios acquired a majority stake in
Moonage Pictures, one of the UK's fastest growing independent producers of
high-end drama, including global hit The Gentlemen.

 

7.   ITV's £235 million share buyback was completed on 4 April 2025 with
322,719,975 shares bought back, of which 193,740,698 have been cancelled and
128,979,277 have been held in Treasury.

8.   The changes to National Insurance contributions from April 2025, will
increase staff costs by around £6 million in 2025.

9.   Figures presented in this Trading Statement are not audited. 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, (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 2024 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.

 

 

For further enquiries, please contact:

Investor Relations

Pippa Foulds                    +44 7778 031097

Faye Dipnarine                +44 20 7157 6581

 

Media Relations

Paul Moore                       +44 7860 794444

Laura Wootton                  +44 7917 862293

LEI for ITV plc: ZLECI7ED2QMWFGYCXZ59

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