- Total Group Revenue: Down 3%, with growth in advertising and digital revenues offset by a decline in ITV Studios revenues.
- Adjusted EPS: Up 23% to 9.6p.
- Final Dividend: Proposed at 3.3p, with a full year dividend of 5p, totaling around GBP190 million.
- ITV Studios Revenue: Down 6%, impacted by US strikes and slower FTA commissions.
- US Revenue: Up 2% year on year at constant currency.
- Global Partnerships Revenue Growth: Up 8% driven by strong catalog sales.
- Studios Adjusted EBITA: Grew 5% with a margin of 14.7%.
- Digital Advertising Revenue: Up 15%, now 26% of total ad revenue.
- Overall Digital Revenues: Up 12% to GBP556 million.
- M&E EBITA Margin: Increased by 2.1 percentage points to 11.9%.
- Adjusted EBITA: Increased by 22% to GBP250 million.
- Cash Conversion: Returned to a typical level of 83%.
- Net Debt: GBP431 million, with a leverage of 0.7 times.
- Pension Scheme Surplus: GBP182 million, with no expected pension contributions for 2025.
- Free Cash Flow Since 2018: Over GBP2.8 billion generated.
- Cost Savings in 2024: GBP60 million, GBP10 million higher than expected.
- Digital Revenue Growth Since 2021: 60% increase.
- Streaming Hours Growth Since 2021: 61% increase.
- Monthly Active Users Growth Since 2021: 44% increase.
- ITVX Digital Revenue: Exceeded incremental costs by 2024, earlier than expected.
- Zoo 55 Digital Revenue: GBP60 million in 2024, up 30% year on year.
Release Date: March 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- ITV PLC (ITVPF, Financial) reported double-digit earnings growth across the group, with record profits in Studios and increased profits and margins in Media & Entertainment (M&E).
- ITVX has driven strong growth in digital viewing and revenue, with the company expecting to recoup cumulative incremental investment in ITVX earlier than planned by the end of 2025.
- The company achieved GBP60 million in non-content savings, surpassing expectations, and has a robust cost-saving program in place for future efficiencies.
- ITV Studios delivered record profits despite challenges such as US strikes, showcasing resilience and diversification in its business model.
- The company maintains a strong balance sheet with a net debt to adjusted EBITA ratio of 0.7 times, and has extended the maturity of its debt, ensuring financial stability.
Negative Points
- Total group revenue was down 3%, with growth in advertising and digital revenues offset by a decline in ITV Studios revenues.
- Revenue in the UK international and US scripted businesses was lower, impacted by factors such as US strikes and softer demand from European broadcasters.
- The anticipated implementation of advertising restrictions on less healthy food from October 2025 could impact future advertising revenue.
- ITV PLC (ITVPF) faces increased competition in the ad market, particularly with the introduction of ad tiers by streamers.
- The company expects content costs to be around GBP1.25 billion in 2025, which could pressure margins if not offset by revenue growth.
Q & A Highlights
Q: Can you provide details on the advertising environment and how conversations with advertisers have developed this year?
A: Carolyn McCall, Chief Executive, explained that despite a challenging market, the advertising revenue profile has shifted significantly, with digital revenue now accounting for 26% of overall revenue, up from 8% in 2018. Post-budget, businesses are stabilizing, and categories like auto and travel are performing well. The company remains cautiously optimistic, emphasizing the effectiveness of TV advertising with a 5.6 times ROI.
Q: What are the current tailwinds and headwinds in the content market for ITV Studios?
A: Chris Kennedy, COO & CFO, highlighted three growth areas: digital expansion through ZOO 55, streamers discovering cost-effective UK productions, and increased demand for unscripted content. Streamers are moving into reality TV, and ITV is well-positioned with strong formats. The market remains fragmented, allowing ITV to capture share from various competitors.
Q: Can you elaborate on the multi-year cost-saving program and its future impact?
A: Chris Kennedy stated that the program is designed to deliver material savings over multiple years, with 65 initiatives contributing to GBP30 million in savings for 2025. The organization is focused on driving efficiency through technology and AI, ensuring continuous cost management to support margin improvement and profitable growth.
Q: How did digital revenue grow by 15% in 2024, and what are the expectations for 2025?
A: Chris Kennedy attributed the growth to ITVX's audience delivery and strong commercial demand. The platform attracted 173 new advertisers in 2024, with a mix of VOD-only and combined linear and VOD advertisers. The focus remains on demonstrating TV's ROI and expanding digital reach.
Q: What is the strategy behind the Auto Match product for targeted advertising, and are there plans for similar initiatives in other sectors?
A: Carolyn McCall explained that Auto Match extends ITV's data matching capabilities, already successful in retail with partners like Tesco and Boots. The initiative aims to enhance targeted advertising, with potential applications in sectors like travel, leveraging ITV's extensive first-party data.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
