TIDMITV
RNS Number : 0386T
ITV PLC
12 November 2019
ITV plc Q3 Trading Update - 9 months to 30 September 2019
ITV on track to deliver full year guidance
Carolyn McCall, ITV Chief Executive, said:
"ITV's overall performance for the first nine months of 2019 was
as we expected, and although the economic environment continues to
be uncertain, we are making good progress in executing our
strategy. We have successfully launched BritBox and are encouraged
by the positive feedback received on the service so far. We have
also agreed a distribution and marketing deal with BT and EE and a
content partnership with Channel 4. Development of our addressable
advertising platform is on track for a roll out to media agencies
in Q1 2020.
"ITV Studios' performance in 2019 will benefit from a very
strong second half delivery schedule and our Q3 performance
reflects this, with good growth across the business, particularly
from ITV America with Love Island US and the part delivery of
Hell's Kitchen and Snowpiercer. We expect this performance to
continue in Q4, and over the full year we are confident that we
will deliver at least 5% growth in ITV Studios' total revenues at a
margin of 14% to 16%.
"The phasing of deliveries in the second half of 2019 will
adversely impact ITV Studios' performance in 2020 although we
continue to expect that over the medium term ITV Studios revenues
will grow by at least 5% CAGR with a 14% to 16% margin. We continue
to build our creative pipeline and have a strong slate of new and
returning programmes in the UK and internationally for both
broadcasters and OTT platforms, including The Serpent, Zero Zero
Zero, Suburra, Crank Yankers, Queer Eye, Saturday Night Takeaway,
and Love Island globally.
"On screen and online viewing performed well with highlights
including four of the five highest rating new dramas so far this
year and the Rugby World Cup which saw a peak audience of 12.8m
viewers during the final. We have reached our 2021 target of 30m
registered users on ITV Hub ahead of plan. We have an exciting
schedule for the remainder of the year and into next year,
including I'm A Celebrity... Get Me Out of Here!, Sticks and
Stones, England qualifiers for the 2020 European Football
Championships, The Masked Singer, Flesh and Blood, and the return
of Saturday Night Takeaway and Liar.
"Online revenues continue to grow strongly, up 23% for the first
nine months. Total advertising revenue was up 1% in Q3, at the top
end of our guidance. We expect Q4 to be flat to up 1%, and as a
result to be down around 2% across the full year.
"Our cost programme is on track to deliver GBP20m of savings
this year and GBP55m to GBP60m over the four years to 2022. We are
confident in delivering our 2019 full year guidance.
"We remain very focused on building a digitally led media and
entertainment company to create a stronger, more diversified and
structurally sound business. We have a solid balance sheet which
enables us to make the right investment decisions and deliver
returns to shareholders in line with our guidance of at least an 8p
dividend for 2019."
Performance for the 9 months in line with our expectations
-- Total external revenues down 2% at GBP2,209m (2018: GBP2,257m)
-- Total ITV Studios revenue up 1% at GBP1,116m with organic growth flat, at constant currency
-- Broadcast & Online revenue down 3% at GBP1,464m (2018:
GBP1,509m) with ITV total advertising down 3% as guided and online
revenues up 23%
Continued good performance
-- ITV Studios delivered a successful slate of new and returning
programmes in Q3, with a strong Q4 expected, particularly in the
US
-- Continued good viewing onscreen and online, with ITV Family
share of viewing maintained and online viewing up 10% against tough
comparators of the Football World Cup last year
-- Strategy progressing well;
o BritBox successfully launched and we have agreed a
distribution and marketing deal with BT and EE and a content
partnership with C4.
o Currently in the testing phase of the programmatic addressable
advertising platform, Planet V
o ITV Hub has reached its target of 30m registered users two
years early
On track to deliver our full year guidance
-- Confident that ITV Studios will deliver revenue growth of at least 5% at a 14% to 16% margin
-- The phasing of deliveries in the second half of 2019 will
adversely impact ITV Studios' performance in 2020 although we
continue to expect that over the medium term ITV Studios revenues
will grow by at least 5% CAGR with a 14% to 16% margin
-- Total advertising revenue forecast to be down around 2% for the full year
-- Will deliver double-digit revenue growth in Online, and revenue growth in Direct to Consumer
-- Network programme budget (NPB) will be GBP1,090m in 2019,
GBP10m lower than previous guidance due to the timing of European
qualifier games, some of which will broadcast in 2020 and therefore
the NPB in 2020 will be GBP1,110m
-- Cost programme on track to deliver GBP20m of savings in 2019
-- We will maintain a solid balance sheet and deliver on our
full year dividend guidance of at least 8.0p per share
NOTES TO EDITORS
1. Unless otherwise stated, all financial and operating figures
refer to the 9 months ended 30 September 2019, with growth compared
to the same period in 2018.
2.
Revenue for 9 months ended 30 September
(GBPm) 2019 2018 %
======================================== ===== ===== ===========
ITV Broadcast & Online 1,464 1,509 (3)
======================================== ===== ===== ===========
ITV Studios 1,116 1,107 1
======================================== ===== ===== ===========
Total revenue 2,580 2,616 (1)
======================================== ===== ===== ===========
Internal supply (371) (359) (3)
======================================== ===== ===== ===========
Total external revenue 2,209 2,257 (2)
======================================== ===== ===== ===========
Revenue for 9 months ended 30 September
(GBPm) 2019 2018 %
======================================== ===== ===== ===
Total advertising revenue 1,249 1,285 (3)
======================================== ===== ===== ===
Non-advertising revenue 1,331 1,331 -
======================================== ===== ===== ===
Internal supply (371) (359) (3)
======================================== ===== ===== ===
Total external revenue 2,209 2,257 (2)
======================================== ===== ===== ===
3. Total advertising, which includes ITV Family NAR, online VOD
and sponsorship, was down 3% over the 9 months to end of September
and was up 1% in Q3, with July down 5%, August up 3%, and September
up 6%. Total advertising is forecast to be flat to up 1% in Q4 with
October up 5%, November flat to down 1% and December flat to down
3%. Over the full year we expect total advertising to be down
around 2%. Figures for ITV plc are based on ITV estimates and
current forecasts.
4. Operational summary
Broadcast & Online performance indicators
- 9 months ended 30 September 2019 2018 %
========================================== ====== ====== ===
ITV Total viewing (hrs) 12.0bn 12.7bn (6)
========================================== ====== ====== ===
ITV Family SOV 23.2% 23.3% -
========================================== ====== ====== ===
Long form online viewing (hrs) 378m 346m 10
========================================== ====== ====== ===
ITV Hub registered users 30.1m 26.9m 12
------------------------------------------ ====== ====== ===
-- Total viewing is the total number of hours spent watching ITV
channels live, recorded broadcast channels within 28 days, third
party VOD platforms, ITV Hub on owned and operated ad funded
platforms, and managed YouTube channels.
-- SOV data based on BARB/AdvantEdge. SOV data is for
individuals and is based on 7 days (C7). ITV Family includes: ITV,
ITV2, ITV3, ITV4, ITV Encore, ITVBe, CITV, ITV Breakfast, CITV
Breakfast and associated "HD" and "+1" channels. All viewing on TV
set, therefore includes catch up and Hub on television.
-- Long form online viewing is the total number of hours ITV VOD
content is viewed on owned and operated ad funded platforms, and
Hub+ viewing on owned and operated platforms, based on data from
Crocus.
-- A registered user is an individual viewer who has signed up
to the ITV Hub. The individual has to have been active within the
last 3 years to remain a registered user.
-- % change for performance indicators is calculated on
unrounded numbers.
5. Total external ITV Studios revenues were flat at GBP747m
(2018: GBP749m]. Total Studios organic revenue at constant currency
was flat at GBP1,099m for the first 9 months of 2019 (2018:
GBP1,103m). The favourable translation impact of foreign exchange
on revenue was GBP10m over that period. Our definition of constant
currency assumes exchange rates remain consistent with 2018. The
translation impact of foreign exchange, assuming rates remain at
current levels, could favourably impact revenues by around GBP15m
to GBP20m and adjusted EBITA by around GBP2m over the full
year.
6. Net debt at 30 September 2019 was GBP1,167m (30 June 2019:
GBP1,082m). In September ITV issued a new EUR600m 7 year Eurobond
at a coupon of 1.375% which was swapped into sterling using a
number of cross currency swaps. The net sterling interest rate
payable on these swaps is 2.94%. The proceeds of the bond were used
to partly refinance the existing notes which expire in 2022 and
2023 to extend ITV's debt maturity, and to pay down part of the
Revolving Credit Facility.
7. The net pension deficit of the defined benefit schemes at 30
September 2019 was GBP2m (30 June 2019: GBP105m). The decrease in
the deficit was driven by our deficit funding contribution and an
increase in asset values more than offsetting the increase in
liabilities arising from a fall in corporate bond yields.
8. On 8 November 2019, ITV exchanged contracts for the sale of
the London Television Centre on the South Bank to Mitsubishi Estate
London Limited in an all-cash transaction for GBP145.6m. Completion
is expected to occur by the end of November. In 2014, ITV
established a Pension Funding Partnership with the Trustees backed
by The London Television Centre which resulted in the assets of
Section A of the defined benefit pension scheme being increased by
GBP50m. Part of proceeds of the sale of the South Bank site, net of
tax and fees, will be used to replace the asset security, and the
remaining sale proceeds used to reduce ITV's net debt. The
accounting profit on the sale of the South Bank will be treated as
exceptional.
9. Figures presented in this Trading Statement are not audited.
This announcement contains certain statements that are or may be
forward looking with respect to the financial condition, results or
operations and business of ITV. 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.
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) significant change in regulation or legislation,
(ii) the impact of a financial crisis or macroeconomic change,
(iii) a faster than expected shift towards non-linear viewing, (iv)
a major deterioration in the current outlook for UK advertising and
consumer demand, (v) failure to identify and obtain, or significant
loss of, optimal programme rights.
Undue reliance should not be placed on forward looking
statements which speak only as of the date of this document. The
Group accepts no obligation to revise publicly or update these
forward looking statements or adjust them to future events or
developments, whether as a result of new information, future events
or otherwise, except to the extent legally required.
For further enquiries please contact:
Investor Relations
Pippa Foulds +44 20 7157 6555 or +44 7778 031097
Faye Dipnarine +44 20 7157 6581
Media Relations
Paul Moore +44 7860 794444
Grant Cunningham +44 20 7157 3023 or +44 7764 210742
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of this information may apply. For further information, please
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END
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