ITV 2018 interim results
Strong operating performance in an uncertain economic environment
• Total external revenue up 8% at £1,593 million (2017: £1,469 million) with non-advertising revenues up 14% at £958m (2017: £837 million)
• Total ITV Studios revenue up 16% at £803 million (2017: £692 million), including £12 million of unfavourable currency impact
• ITV total advertising revenue up 2% as expected, with 48% growth in Online
• ITV Studios adjusted EBITA up 7% at £118 million (2017: £110 million)
• Broadcast & Online EBITA down 12% to £257 million (2017: £293 million) reflecting the timing of the Football World Cup as previously guided
• Adjusted EBITA down 7% at £375 million (2017: £403 million)
• Adjusted EPS down 8% at 7.1p (2017: 7.7p)
• Statutory EPS up 4% at 5.3p (2017: 5.1p)
Exceptional viewing performance and strong creative pipeline
• Strong on-screen and online viewing performance
- ITV Family SOV up 9%, ITV2 SOCI for 16 to 34's up 19% and online viewing up 33%
• ITV Studios has a healthy pipeline of new and returning programmes
Refreshed strategy for the future
• Building on strong foundations
• Strategy to address the opportunities and challenges of the competitive media landscape
• Clear vision to deliver growth and make ITV more resilient:
- Strengthen the integrated producer broadcaster
- Grow UK and Global Productions
- Create Direct to Consumer business
• Focus on brand, data, creativity and capabilities
• Highlighted £60 million of investments over the period to 2021, with no change in 2018 guidance and £40 million of investment in 2019
• Targeting £35 to £40 million cost savings from 2019 to 2021, with £15 million in 2019
• Over the three years to the end of 2021 we will deliver:
- Double digit online revenue growth per annum
- Total ITV Studios revenues of at least 5% average CAGR at an EBITA margin of 14% to 16%
- Growth in Direct to Consumer revenues to at least £100m
Strong balance sheet and healthy liquidity
• Strong profit to cash conversion of 94%
• Flexibility and capacity to continue to invest across the business
• Reflecting strong cash flows and the Board's confidence in the business, it has declared a 2.6p interim dividend, up 3%
• Committed to at least 8p full year dividend in 2018 and 2019, through the period of investment
Outlook for 2018
• Confident that ITV Studios will deliver good organic revenue growth
• Strong double digit online revenue growth
• Total advertising forecast to be up 1% for the nine months to the end of September, with Q3 broadly flat against a backdrop of continued economic uncertainty
