Carolyn McCall, ITV plc (LON:ITV) Chief Executive, said:
“ITV delivered another good viewing performance in the first half of the year. Online revenues grew strongly up 18% despite tough comparatives, with Love Island providing a strong finish to the half. This was reflected in better than expected total advertising revenue.
“The economic and political environment remains uncertain but we are very focused on delivering our strategy and creating a stronger, more diversified and structurally sound business to enable ITV to take advantage of evolving viewing and advertising opportunities.
“We are making good progress in each area of our strategy as we become an increasingly digital entertainment company. BritBox is set to launch in Q4, as is our new programmatic addressable advertising platform, and we are accelerating our digital and data capabilities.
“ITV Studios has a solid pipeline of new and returning shows this year – from I’m A Celebrity… Get Me Out of Here! to World on Fire to Snowpiercer – and is firmly on track to deliver our full year guidance.
“We continue to deliver strongly on our cost savings where we are targeting, in addition to the original £35m to £40m, a further £5m this year and £15m between 2020 to 2022, totalling £55m to £60m over 2019 to 2022.
“We have a solid balance sheet which enables us to make the right decisions to build a robust and growing business and deliver returns to shareholders in line with our guidance.”
H1 modestly better than expected
• Total external revenue down 7% at £1,476 million (2018: £1,593 million)
• ITV total advertising revenue down 5%, better than previously guided
• Strong growth in online revenue, up 18%, against tough comparatives
• Total ITV Studios revenue down 6% at £758 million (2018: £803 million) as expected, with deliveries weighted to the second half. ITV Studios external revenue was down 11% at £487 million (2018: £549 million)
• Broadcast & Online adjusted EBITA was down 18% at £211 million (2018: £257 million)
• ITV Studios adjusted EBITA down 2% at £116 million (2018: £118 million)
• Adjusted EBITA down 13% at £327 million (2018: £375 million)
• Adjusted EPS down 13% at 6.2p (2018: 7.1p)
• Statutory EBITA down 16% at £310 million (2018: £367 million)
• Statutory EPS down 9% at 4.8p (2018: 5.3p)
Strong performance in areas we can control
• Good on-screen and online viewing
– ITV Family SOV flat against tough comparatives and ITV2 16-34 SOV up 7%
– 99% of all commercial audiences over 5m delivered by ITV
– Online viewing up 13%, with monthly active users (MAU) up 37%
• ITV Studios has a strong pipeline of new and returning shows
• Over 500,000 Hub+ subscribers and over 650,000 BritBox US subscribers
Continue to successfully execute our strategy
• Britbox is due to launch in the UK in Q4, following formal agreement with the BBC
• We will begin the roll out of our new programmatic addressable advertising platform for the ITV Hub in Q4
• Identified a further £5m of cost savings in 2019 and £15m over 2020 to 2022, in addition to £35m to £40m announced previously
• Strengthened our capabilities in advertising, data and technology
Solid balance sheet and healthy liquidity
• Strong profit to cash conversion of 89% on a 12-month rolling basis
• 1.3x reported net debt to adjusted EBITDA on a 12-month rolling basis
• Interim dividend of 2.6p, in line with our stated policy
On track to deliver full year guidance
• Over the full year we are confident that
– We will deliver £20m of cost savings
– We will continue to execute well on the strategy, building on our market leadership in linear TV and in premium AVOD
– We will deliver double digit online revenue growth
– ITV Studios will deliver at least 5% revenue growth at a 14% to 16% margin, with £130m more revenue for the full year secured at this point than last year, and
– We will maintain a robust balance sheet and deliver on our full year dividend commitment of at least 8.0p per share
• Economic and political uncertainty continues to impact the demand for advertising as we expected, with total advertising forecast to be in a range of -1% to +1% in Q3
• We remain focused on delivering in the areas of the business which are under our control whilst actively mitigating the impact of exogenous factors.