TIDMITV
RNS Number : 3654W
ITV PLC
14 November 2017
ITV plc Q3 Trading Update - 9 months to 30 September 2017
ITV remains on track to deliver
Performance in line with our expectations
-- Total external revenue down 1% to GBP2,132m (2016:
GBP2,157m), with the decline in NAR largely offset by continued
good growth in Non-NAR up 8%
-- Total ITV Studios revenue up 9% at GBP1,009m (2016: GBP923m), with good organic growth
-- Broadcast & Online revenues down 4% to GBP1,470m (2016:
GBP1,537m), with ITV Family NAR down 7% in line with our previous
guidance
-- Online, Pay & Interactive revenues up 8% with continued
double digit growth in Online and Pay
Confident in the underlying strength of the business
-- Broadcast business remains robust
- ITV Family share of viewing up 2%, ITV2 SOCI for 16 to 34's up 20%, ITV4 male SOCI up 10%
- Online viewing up 41% and long form video requests up 36%
- Further building our digital business as we invest in ITV Hub,
ITV Hub+, Britbox US and Cirkus
-- ITV Studios has a healthy pipeline of new and returning programmes into 2018
- Continuing to invest in our creative capability with a number
of investments and acquisitions including Italian scripted producer
Cattleya and UK entertainment start-up Koska
On track to deliver our full year commitments for 2017
-- Confident that ITV Studios will deliver good organic revenue
growth with profit broadly in line with last year
-- ITV Family NAR forecast to be down around 5% over the full
year and we again expect to outperform the TV ad market in 2017
-- Online, Pay & Interactive will deliver good revenue
growth driven by a strong performance in Online and Pay
-- We will deliver GBP25m of overhead savings
-- The programme investment will be GBP25m lower as previously
announced due to the absence of a major sports tournament
-- Strong balance sheet and healthy liquidity to continue to invest across the business
Sir Peter Bazalgette, ITV Executive Chairman, said:
"ITV's performance in the first nine months of 2017 is very much
as we anticipated. We've seen improving trends in all our key
revenue lines in the quarter and we're on track to deliver on the
commitments we set out at the start of the year.
Total external revenue was down 1% to GBP2,132m with strong
growth in non-advertising revenue largely offsetting the decline in
NAR. This is clear evidence of the benefit of rebalancing the
business and generating new revenue streams. We are currently
seeing a return to TV advertising from some of the FMCGs and
grocers although wider corporate confidence in the UK continues to
be impacted by political and economic uncertainty.
We have performed strongly both online and onscreen with ITV
Family share of viewing up 2%. ITV has maintained its spend on
original commissions and continues to deliver the mass audiences
demanded by advertisers, with 99% of all commercial audiences over
5m, as well as delivering the key target demographics.
Online and Pay achieved double digit revenue growth, helped by a
41% increase in online viewing. We continue to invest in growing
our digital businesses including ITV Hub and Britbox US. ITV Hub
has 21m registered viewers, including around 75% of the UK's 16 to
24 year olds, and is the fastest growing PSB online service.
Britbox US, our SVOD joint venture with the BBC, was launched
earlier this year and is performing well. Over time we are planning
to roll the service out to other territories.
ITV Studios delivered a strong performance with good underlying
growth across all parts of the business and particularly strong
growth in ITV America. We are making real progress in building a
European scripted business with the recent acquisition of Italian
producer Cattleya. This, along with our investment in Tetra in
France and our existing European drama businesses, will enable us
to benefit from the increasing demand for locally produced content
with global appeal.
We will enter 2018 in good shape with a strong operating
performance underpinned by a robust balance sheet, and we look
forward to the arrival of our new CEO, Carolyn McCall, early in the
New Year."
NOTES TO EDITORS
1. Unless otherwise stated, all financial figures refer to the 9
months ended 30 September 2017, with growth compared to the same
period in 2016. All operating figures refer to the latest available
period, with growth compared to the same period in 2016.
2.
Revenue for 9 months ended
30 September (GBPm) 2017 2016 %
=========================== ===== ===== ===
ITV Broadcast & Online 1,470 1,537 (4)
=========================== ===== ===== ===
ITV Studios 1,009 923 9
=========================== ===== ===== ===
Total revenue 2,479 2,460 1
=========================== ===== ===== ===
Internal supply (347) (303) 15
=========================== ===== ===== ===
Total external revenue 2,132 2,157 (1)
=========================== ===== ===== ===
Revenue for 9 months ended
30 September (GBPm) 2017 2016 %
=========================== ===== ===== ===
ITV Family NAR 1,124 1,208 (7)
=========================== ===== ===== ===
Non-NAR revenue 1,355 1,252 8
=========================== ===== ===== ===
Internal supply (347) (303) 15
=========================== ===== ===== ===
Total external revenue 2,132 2,157 (1)
=========================== ===== ===== ===
3. ITV Family NAR was down 7% over the 9 months to end of
September and down 4% in Q3 as expected, with July down 5%, August
down 5%, September down 3%. ITV Family NAR is forecast to be up 1%
in Q4 with October down 1%, November up 2% and December up 1%. Over
the full year we expect ITV Family NAR to be down around 5%, again
outperforming the total TV ad market.
These revenues are pure NAR, excluding the benefit of
sponsorship, online revenue and self promotion. From March 2016,
ITV Family NAR includes advertising revenue from the UTV Channel 3
licence (excluding UTV Ireland). Figures for ITV plc and TV market
NAR are based on ITV estimates and current forecasts.
4. Operational summary
Broadcast & Online performance
indicators 2017 2016 %
==================================== ====== =====
ITV SOV - weeks 1 to 42 15.3 15.2 1
==================================== ====== =====
ITV Family SOV - weeks 1 to 42 21.5 21.2 2
==================================== ====== =====
ITV adult impacts - weeks 1 to
42 166bn 166bn -
==================================== ====== =====
ITV SOCI - weeks 1 to 42 23.9 23.9 -
==================================== ====== =====
ITV Family SOCI - weeks 1 to 42 34.2 34.2 -
==================================== ====== =====
Long form online viewing - 9 months
to 30 September (hrs) 243m 173m 41
==================================== ====== =====
Total long form video requests
- 9 months to 30 September 1,063m 780m 36
==================================== ====== =====
SOV data based on BARB/AdvantEdge data and Share of Commercial
Impacts (SOCI) data based on BARB/DDS data. SOV data is for
individuals and SOCI data is for adults. ITV Family includes: ITV,
ITV2, ITV3, ITV4, ITV Encore, ITVBe, CITV, ITV Breakfast, CITV
Breakfast and associated "HD" and "+1" channels. Total long form
video requests is measured across all platforms, based on data from
comScore Digital Analytix, Virgin, BT, iTunes, Amazon Video,
Netflix and Sky and include simulcast. Long form online viewing is
the total number of hours ITV VOD content is viewed on ad funded
platforms, based on data from comScore Digital Analytix. % change
for performance indicators is calculated on unrounded figures.
5. Total Studios organic revenue at constant currency was up 3%
at GBP948m for the first 9 months of 2017. Our definition of
constant currency assumes exchange rates remain consistent with
2016. The translation impact of foreign exchange, assuming rates
remain at their current levels, could benefit revenues by around
GBP50m and profit by around GBP10m over the full year.
6. Net debt at 30 September 2017 was GBP1,112m (30 June 2017: GBP1,074m).
7. The net pension deficit of the defined benefit schemes at 30
September 2017 was GBP339m (30 June 2017: GBP343m).
An actuarial valuation is currently being undertaken as at 1
January 2017.
8. In October, ITV acquired a majority stake in Cattleya, the
Italian scripted production company behind Gomorrah and Suburra and
invested in a UK entertainment start up Koska.
9. Exceptional items are expected to be around GBP130m in 2017.
This largely relates to employment linked contingent consideration
and includes the costs relating to ITV's planned move out of the
South Bank building. The cash cost of exceptional items will be
around GBP150m, a significant proportion of which is acquisition
related contingent consideration.
10. Ongoing property costs will increase by around GBP10m in
2018 which will not be exceptional.
11. In 2016 Talpa agreed a four year licensing deal for The
Voice of China with Talent Television and Film Co. Ltd. Talpa has
taken back the licence for The Voice of China as Talent is in
breach of its agreement. ITV plc has credit insurance in place and
does not currently believe there is any material financial
impact.
12. IFRS 15 (Revenue from Contracts with Customers) is effective
from 1 January 2018. An initial assessment of the impact on the
Group's performance has been performed and is not expected to be
material.
13. 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) a major deterioration in the current outlook for
UK advertising and consumer demand, (ii) significant change in
regulation or legislation, (iii) failure to identify and obtain, or
significant loss of, optimal programme rights, (iv) the loss or
failure of transmission facilities or core systems and (v) a
significant change in demand for global content.
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
Mary Fagan +44 20 7157 3965 or +44 7736 786448
Mike Large +44 20 7157 3021 or +44 7768 261528
This information is provided by RNS
The company news service from the London Stock Exchange
END
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