In This Article:
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Group Adjusted EBITA: Increased by 40%.
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Total External Revenue: Down 2%.
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M&E Revenue: Up 7%, with total advertising revenue increasing by 10%.
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Digital Revenue: Up 12% to GBP244 million.
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Studios Adjusted EBITA: Grew 5% with a margin of 15.7%.
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Cost Savings: On track to deliver GBP40 million in 2024, with GBP23 million delivered in the first half.
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Net Debt: GBP515 million, excluding buyback proceeds, GBP697 million.
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Cash Conversion: 73% on a rolling 12-month basis.
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Interim Dividend: Declared at 1.7p per share.
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Digital Advertising Revenue: Up 17%.
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Streaming Hours: Up 15%, with monthly active users up 17%.
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Net Debt to Adjusted EBITDA: 0.9 times.
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Adjusted Effective Tax Rate: Expected at around 26%.
Release Date: July 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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ITV PLC (ITVPF) reported a 40% increase in group adjusted EBITA, indicating strong financial performance.
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ITV Studios is forecasted to deliver record profits for the full year, despite challenges such as strikes and slower FTA commissions.
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Digital revenues grew by 12%, driven by a 17% increase in digital advertising revenue, showcasing the success of ITVX.
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The company is on track to deliver GBP40 million in cost savings for 2024, demonstrating effective cost management.
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ITV PLC (ITVPF) declared an interim dividend of 1.7p, reflecting a commitment to shareholder returns.
Negative Points
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Total external revenue was down by 2%, with ITV Studios affected by short-term factors.
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UK revenues declined due to fewer ITVX premieres and the absence of popular shows like The Voice Kids.
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International revenues decreased due to lower demand from free-to-air broadcasters in Europe.
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Subscriber numbers for ITVX fell by 36% in H1, attributed to strategic changes and migration issues.
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The company expects Q3 total ad revenue to be flat, partly due to the impact of the Olympics being broadcast elsewhere.
Q & A Highlights
Q: How does the performance of ITVX in the first half relate to sports events, and should we expect a drop-off in viewing and monetization in the second half without major events? A: Carolyn McCall, CEO, explained that while live sports like the Euros contribute to spikes in viewing and ad revenue, strong dramas and reality shows also drive significant ITVX engagement. Chris Kennedy, CFO, added that the focus should be on overall trends rather than quarterly fluctuations, as ITVX continues to perform well even without major sports events.
Q: Can you elaborate on the strong growth in catalog sales at ITV Studios and whether it indicates broadcasters are becoming more cautious? A: Carolyn McCall noted that catalog sales have offset challenges in the ad revenue market, highlighting the diversification within ITV Studios. Despite a challenging backdrop, ITV Studios is expected to deliver record profits, with positive signs from European broadcasters as ad markets improve.