TIDMITV
RNS Number : 0373M
ITV PLC
06 May 2020
ITV plc Q1 Trading Update - 3 months to 31 March 2020
Carolyn McCall, ITV Chief Executive, said:
" ITV has taken swift and decisive action to manage and mitigate
the impact of COVID-19, by focusing on our people and their safety,
and by continuing to reduce costs and tightly manage our cashflow
and liquidity. We are also ensuring that we continue to inform and
entertain our viewers and stay close to our advertisers. Everyone
at ITV has responded extremely well to the challenges we are
facing. We are now very focused on emerging from this crisis in a
strong position, continuing to offer advertisers effective
marketing opportunities and making preparations to restart
productions safely."
Performance for the three months to 31 March
-- Total external revenue was down 7% at GBP694m (2019: GBP743m)
-- Total ITV Studios revenue was down 11% at GBP342m (2019:
GBP385m), impacted by the phasing of deliveries and restrictions on
working practices due to COVID-19
-- Broadcast revenue was up 2% at GBP500m (2019: GBP489m) with
ITV total advertising up 2% as originally guided, and online
revenues up 26%
-- ITV total viewing was up 2% with very strong growth in online
viewing up 75%, simulcast viewing up 112% and reach up 40% on the
ITV Hub
-- ITV main channel's share of viewing (SOV) was marginally up
at 17.9%, its best quarter since 2009 while ITV Family SOV was down
2% at 23.6%, partly impacted by the volume of the BBC's news
output
Operational and financial performance significantly impacted by
COVID-19
Negative:
-- Since mid-March ITV Studios has had to pause the majority of
its productions globally as a result of the restrictions on working
practices
-- Significant impact on the demand for advertising across most
advertising categories, particularly from April which was down
42%
Positive:
-- ITV Studios Global Distribution is seeing good demand for library content internationally
-- ITV Commercial is working very closely with advertisers and
agencies to create relevant and innovative marketing and
advertising opportunities
-- ITV is seeing good growth for BritBox free trial starts and subscriptions
-- Interactive revenues are growing well with increased demand for ITV's competitions
Continuing to implement significant measures to reduce costs in
2020
-- In total we will reduce overhead costs by GBP60m in 2020
o GBP30m previously announced and well underway
o A further GBP30m of savings has been identified
-- GBP30m of capex savings, as previously announced, being
implemented with the delay in non-business critical investments
-- At least GBP100m reduction in the programme budget to around GBP1bn, as previously guided
-- We have furloughed around 800 colleagues, broadly 15% of our
UK workforce, the majority of whom work in ITV Studios.
Internationally we are taking part in other schemes where
appropriate
-- We have put in place a recruitment and salary freeze and
taken action on Plc Board and Management Board level
remuneration
Action taken to tightly manage cashflow in 2020
-- Withdrawal of the 2019 final dividend
-- Agreements with ITV pension trustees and tax authorities to
delay at least GBP150m of payments out of H1 and into H2 and
2021
ITV has good access to liquidity
-- Over GBP100m of unrestricted cash
-- GBP630m undrawn Revolving Credit Facility (RCF) expiring in December 2023
-- GBP300m bilateral facility expiring in June 2026 of which GBP199m is available
Operational update
-- Throughout the crisis our News and Daytime teams have
continued to keep the public informed with over ten hours of live
programming every weekday. The majority of ITV staff moved
seamlessly to home working and enabled ITV to continue to broadcast
our six channels, offering hundreds of hours of content each week,
together with ITV Hub and BritBox
-- ITV is planning a phased approach to office re-entry in
consultation with external medical advisers to align with how the
Government plans to approach relaxing restrictions
-- ITV is in the final stages of working with others across the
industry on a return-to-production protocol and we are in active
discussions with Government on this
-- Thanks to the innovation of our production teams we have
resumed production of Loose Women this week and have broadcast the
first of the acclaimed new Isolation Stories dramas on ITV. Across
our international markets we have announced the resumption of
filming of The Chase and The Voice in Australia and The Chase in
Germany
Continuing to deliver our strategic priorities
-- Continuing to implement the ITV Hub acceleration plan which
delivered a very strong viewing performance in Q1
-- Further roll out of Planet V, our programmatic addressable
advertising platform, to media agencies, with 30% of VOD inventory
delivered through the platform in March
-- BritBox distribution deal with EE has launched, C4 content is
now available on the platform and we will shortly be extending
BritBox's availability on YouView and Freeview Play
Outlook
-- The outlook remains uncertain and is changing rapidly and
therefore we are not giving guidance for Q2 or for the remainder of
the year
-- We are using rigorous internal and external analysis and
scenario planning to continue to monitor the COVID-19 situation and
its impact on the business. This is informing our planning and
decision making and we will take further action as necessary to
manage our costs and cash tightly
NOTES TO EDITORS
1. Unless otherwise stated, all financial and operating figures
refer to the 3 months ended 31 March 2020, with growth compared to
the same period in 2019.
2.
Revenue for 3 months to 31 March (GBPm) 2020 2019 %
======================================== ===== ===== ====
ITV Broadcast 500 489 2
======================================== ===== ===== ====
ITV Studios 342 385 (11)
======================================== ===== ===== ====
Total revenue 842 874 (4)
======================================== ===== ===== ====
Internal supply (148) (131) (13)
======================================== ===== ===== ====
Total external revenue 694 743 (7)
======================================== ===== ===== ====
Revenue for 3 months to 31 March (GBPm) 2020 2019 %
======================================== ===== ===== ====
Total advertising revenue 426 417 2
======================================== ===== ===== ====
Non-advertising revenue 416 457 (9)
======================================== ===== ===== ====
Internal supply (148) (131) (13)
======================================== ===== ===== ====
Total external revenue 694 743 (7)
======================================== ===== ===== ====
3. Total advertising, which includes ITV Family NAR, online VOD
and sponsorship, was up 2% over the 3 months to end of March with
January down 1%, February up 8% and March flat. In April total
advertising was down 42% impacted by COVID-19. The situation
remains uncertain and therefore we are not in a position today to
give guidance for May and June. Total advertising for the four
months to the end of April was down 9%.
4. Broadcast key performance indicators
Three months to 31 March 2020 2019 %
================================== ====== ====== ===
ITV Total viewing (hrs) 4.43bn 4.36bn 2
================================== ====== ====== ===
ITV Family Share of Viewing (SOV) 23.6% 24.0% (2)
================================== ====== ====== ===
Long form online viewing (hrs) 169.4m 96.8m 75
================================== ====== ====== ===
ITV Hub registered user accounts 32.0 28.4m 13
---------------------------------- ====== ====== ===
-- ITV 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, ITV Hub+, 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 account is an individual viewer who has
signed up to the ITV Hub using one email address. 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 Studios organic revenue at constant currency was down
10% at GBP346m for the first 3 months of 2020. The unfavourable
translation impact of foreign exchange on revenue was GBP4m over
that period. Our definition of constant currency assumes exchange
rates remain consistent with 2019.
6. Net debt at 31 March 2020 was GBP851m (31 December 2019:
GBP804m) .
In March 2020, the Group extended the maturity of its existing
GBP300m bilateral loan facility by 5 years to 30 June 2026. The
facility remains free of financial covenants and GBP101m of the
facility was utilised as at 31 March 2020. At the Group's option
drawdowns under the facility can be refinanced under the same
economic terms in bond format. Both formats will be deliverable by
the lender under market standard credit hedging contracts.
The RCF has leverage and interest cover covenants. The leverage
covenant requires us to maintain a net debt to EBITDA ratio of
below 3.5x and interest cover (EBITDA to net finance charges) at
above 3.0x.
7. The net pension surplus of the defined benefit schemes at 31
March 2020 on an IAS 19 basis was GBP285m (31 December 2019: GBP87m
deficit). The movement was driven by the increase in the discount
rate resulting from the increase in corporate bond yields and the
reduction in inflation assumptions.
8. 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. 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. 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 our
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.
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 these forward-looking
statements. 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
Grant Cunningham +44 7764 210742
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END
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