ITV ‘aware of uncertainty’ as revenue rises 6%

ITV, the UK’s largest commercial broadcaster, recorded revenues of £2.52bn (€2.8bn) for the first nine months of 2022, a 6% year-on-year increase . Ad revenue fell 14% in the third quarter, but with the World Cup on the horizon, ITV said it expected ad revenue to fall 1-1.5% for the year .

Carolyn McCall, Chief Executive of ITV, said: “ITV recorded a strong 6% increase in total revenue for the first nine months of the year, driven by double-digit growth in digital revenue and streaming revenue. ‘ITV Studios. ITV Studios continues to outperform the growing content market and will top 2019 revenue in 2022. It is on track to meet all of its KPI targets and has a formidable roster to propel it into 2023 as we further diversify the business by gender, geography and customer.”

“We are making good progress on our new ad-supported free streaming service ITVX, which will be rolling out to all devices and platforms in the coming weeks with the full launch of exclusive new content on December 8, in time to reach million viewers who will come to ITV for the FIFA World Cup.

“ITVX will energize our streaming business by providing viewers with a content-rich destination rather than a catch-up service and valuable addressable audiences at scale for advertisers. This will drive significant growth in digital viewing and revenue, enabling ITV to generate at least £750m in digital revenue by 2026.”

“While we remain mindful of macroeconomic and geopolitical uncertainty, there is strong operating momentum across our Studios and Media & Entertainment divisions as we continue to build a resilient and diverse business that can capitalize on the global growth of the demand for quality content and advertisers’ desire to achieve both mass reach and data-driven addressable advertising, targeting millions of UK viewers,” she concluded.

Financial and operational performance for the nine months to September 30 as expected

  • Total external revenue up 6% to £2,523m (2021: £2,381m)
  • Total non-advertising revenue up 13% to £1,619m (2021: £1,432m), representing over 50% of total revenue, as ITV continues to grow and diversify the business

ITV studios

  • ITV Studios total revenue up 16% to £1,387m (2021: £1,193m), growing above market
  • ITV Studios offered a wide range of new and old programs and formats in the UK and overseas, including A spy among friends, Hell’s Kitchen USA, let the good in and The Voice Germany

ITV Media & Entertainment (M&E)

  • M&E revenue was down 2% to £1,561m (2021: £1,594m), with total advertising revenue (TAR) down 2%, broadly as expected, compared to benchmarks difficult. Compared to 2019, ART increased by 6%
  • Against this backdrop, digital advertising revenue remains strong, up 13% to £227m at the end of September, compared to the same period in 2021.
  • Total non-advertising M&E revenue for the nine months ending September 2022 was down 3% as good subscription revenue growth was offset by expected declines in SDN revenue and interactive revenue vs. tough comparisons in 2021.
  • M&E’s KPIs demonstrate good strategic progress with total digital revenue up 15% and total streaming hours broadly stable, with ITV prioritizing content on its own platforms to drive effective monetization. Monetizable streaming hours on ITV Hub, ITV Hub+ and BritBox UK increased by 10% in the nine months to September 30, 2022. At the same time, ITV maintained its strength delivering mass reach with 93% of the top 1,000 commercially broadcast television channels. programs and maintaining its commercial audience share on its channels

Outlook

ITV studios

  • ITV Studios will top 2019 revenues in 2022 with an exciting pipeline of scripted and unscripted programs as it further diversifies the business by genre, geography and customer and grows ahead of the market
  • With its strong position in a growing market, ITV expects ITV Studios to deliver revenue growth above its medium-term target of 5% in 2023.
  • ITV remains committed to delivering its ITV Studios Adjusted EBITA margin forecast of 13% to 15% from 2023. As previously reported, ITV expects the margin to be at the lower end of the range in the near term. due to the current inflationary situation in the production market

Media and entertainment

  • ITVX will be rolling out to all devices and platforms in the coming weeks with the full launch of exclusive new content on December 8th. It will launch with over 10,000 hours of free content.
  • ITVX will allow ITV to continue to provide Europe’s largest free premium ad-supported streaming service by revenue
  • ITV TAR for the full year 2022 is expected to be down 1% to 1.5% from the record year of 2021, which will represent high single-digit revenue growth compared to 2019. fourth quarter, ITV will broadcast the FIFA World Cup, which will benefit from the TAR in November and December. However, there remains a high degree of economic uncertainty

In 2022, given the nature of ITV’s cost base and the mitigation measures already in place, the broadcaster expects to be able to manage inflation. For 2023, continued higher inflation rates will impact the cost base, although ITV says it is carefully considering other mitigating measures.

Overall, despite the current macroeconomic and geopolitical uncertainty, ITV claims to be making significant strategic progress and is well positioned to deliver phase 2 of the More Than TV strategy, expanding ITV Studios and generating at least 750 million pounds of digital M&E revenue by 2026. and create long-term shareholder value.

ITV says it has a strong balance sheet, enabling it to invest in digital acceleration and generate shareholder returns in line with capital allocation policy.

Karl M. Bailey