ITV PLC 2015 Results

Wed 2 Mar 2016



Delivering strong growth and building scale

Full year results for the year ended 31st December 2015

Revenue growth across all parts of the business

·         Total external revenue up 15% at £2,972m (2014: £2,590m)

·         6% growth in Net Advertising Revenue to £1,719m (2014: £1,629m)

·         Online, Pay & Interactive up 23% to £188m (2014: £153m)

·         Total ITV Studios revenue up 33% to £1,237m (2014: £933m)

·         25% growth in Non-NAR to £1,664m (2014: £1,327m)


Sixth consecutive year of double digit profit growth

·         Adjusted EBITA up 18% to £865m (2014: £730m)

·         Broadcast & Online adjusted EBITA up 16% to £659m (2014: £568m)

·         Studios adjusted EBITA up 27% to £206m (2014: £162m)

·         Adjusted PBT up 18% to £843m (2014: £712m)

·         Adjusted EPS up 20% to 16.5p (2014: 13.8p)


Strong cash flows funding investment and increased shareholder returns

·         International content business strengthened by further acquisitions including Talpa Media, Twofour Group and Mammoth Screen

·         Given our strong performance the Board is proposing a final dividend of 4.1p, giving a full year dividend of 6.0p per share, ahead of our previous guidance

·         Reflecting ITV’s strong cash generation and the Board’s confidence in the business, it is also proposing a 10.0p special dividend, equivalent to £400m


Positive outlook for 2016

·         Expect another good year in 2016 with continued revenue growth across both businesses

·         Over the full year we expect to outperform the television advertising market

·         Euros football will impact phasing of ITV Family NAR, with Q1 flat while Q2 should be positive

·         Online, Pay & Interactive will again deliver double-digit revenue growth

·         ITV Studios will deliver double-digit revenue and profit growth, driven primarily by recent acquisitions

·         We continue to see opportunities to invest across the business, organically and through acquisitions


Adam Crozier, ITV plc Chief Executive, said:


“ITV delivered another strong year as we continue to grow and strengthen the business in the UK and internationally. Revenues were up 15% to just under £3bn and for the sixth consecutive year we achieved double digit profit growth, as adjusted EBITA grew 18% to £865m, with all parts of the business performing well.

Our Broadcast and Online business remains strong with advertising revenue up 6% and Online, Pay & Interactive up 23%.  While our Family Share of Viewing was down 3% for 2015 we have started this year well with SOV on our main channel up 5% and ITV Family SOV up 2%. We have a strong programme slate for 2016, with 50 hours more drama as well as major rugby and football tournaments. ITV uniquely delivers the mass audiences demanded by advertisers. Continuing to deliver this scale and reach, as well as further strengthening our onscreen performance, remains a key focus for the company and particularly for the new creative leadership in the Broadcast business.

ITV Studios continues to perform strongly both organically and from our recent acquisitions, particularly Talpa. Through our ongoing investment ITV Studios has become a global production business with total revenue up 33% to £1.2bn and with 53% of revenues now coming from outside the UK.

We have a very strong international pipeline of new and returning drama including Victoria, Tutankhamun, Houdini and Doyle, Cold Feet, Poldark, Shetland, Aquarius, Endeavour and Vera as well as entertainment formats The Voice, The Voice Kids, Dance Dance Dance, I’m a Celebrity… Get Me Out Of Here!, The Chase, Hell’s Kitchen and Saturday Night Takeaway. ITVS has already secured a higher proportion of 2016 revenue at this point in the year than in previous years and our good drama slate gives us confidence into 2017.

We’ll continue to build scale and to capitalise on the strong demand for high quality content that travels, with a particular focus on investing in creative talent and scripted projects, and working with more channels and platforms in the UK and internationally.

In November we launched the ITV Hub, which is now the digital home for all our channels and services both live and on demand, with live viewing at centre stage. The Hub, which is available on 27 platforms, marks a major step forward in the quality, innovation and ease of use of ITV’s online service and has had a really encouraging start. Online demand for our content is growing strongly with people spending 42% more time watching ITV online in 2015 than the previous year. Overall, our Online, Pay & Interactive business is rapidly growing and profitable and is on track to deliver double-digit revenue growth again in 2016.

We will continue to build our expertise in digital media to drive closer engagement with online audiences, develop more targeted and innovative advertising with new initiatives including AdSync+ and ITV AdVentures, and maximise our ability to monetise our content online as well as on pay channels.

For this year we anticipate that the phasing of our television advertising will be very different to 2015 due to the timing of major sporting events. We expect ITV NAR to be flat in Q1, marginally behind the market, against 12% growth in Q1 last year. Q2, which will benefit from the Euros, should be positive. For the full year we again expect to outperform our estimate of the TV ad market. 

ITV’s strong performance in 2015 builds on the consistently good results we have delivered since we launched our strategy six years ago. Given these results the Board has proposed a final dividend of 4.1p bringing the full year dividend to 6.0p, up 28%, which is ahead of previous guidance.

As we look to 2016 and beyond we see further significant opportunities for growth across the company organically and through acquisitions and partnerships. Reflecting ITV’s ongoing strength and confidence for future growth the Board is proposing a £400m special dividend, equivalent to 10.0p per share. Our strong cash generation and robust financial position gives us the flexibility to invest in growing the business while at the same time delivering returns to our shareholders.”


Full year results

Twelve months to 31 December – on an adjusted basis









Broadcast & Online revenue





ITV Studios revenue





Total revenue





Internal supply





Group external revenue










Broadcast & Online EBITA




















Group EBITA margin





Profit before tax










Ordinary dividend per share





Special dividend per share






Management look at adjusted results as they reflect the way the business is managed and measured on a day-to-day basis. Adjusted EBITA is before exceptional items and includes the benefit of production tax credits (‘adjusted EBITA’). Adjusted profit before tax and EPS primarily remove the effect of amortisation of intangible assets acquired through business combinations and acquisition related costs. A full reconciliation between the adjusted and statutory results is provided in the financial review.   

The statutory profit before tax and EPS from the Consolidated Income Statement are as follows:

Twelve months to 31 December









Profit before tax










Diluted EPS






Statutory EPS grew 7% to 12.4p (2014: 11.6p), which is at a slower rate than adjusted EPS primarily because operating exceptional items of £109 million were significantly higher than in 2014. This is as a result of the treatment of employment linked consideration for our acquisitions, primarily for Talpa, which is included within statutory EPS, but excluded from adjusted EPS as in our view these costs are part of capital consideration. 


Financial performance

We delivered another strong performance in 2015, with revenue growth across the group as we continue to strengthen the business creatively, commercially and financially.  Group external revenues increased 15% to £2,972 million (2014: £2,590 million), reflecting 6% growth in NAR to £1,719 million (2014: £1,629 million) and over £300 million increase in non-NAR to £1,664 million (2014: £1,327 million), up 25%. Broadcast & Online revenues grew 6% to £2,146 million (2014: £2,023 million) and ITV Studios total revenues grew 33% to £1,237 million (2014: £933 million).

Together with our continued focus on cash and costs we delivered another year of double digit profit growth with total adjusted EBITA up 18% to £865 million (2014: £730 million), corresponding to an improved adjusted EBITA margin of 29% (2014: 28%). Adjusted EPS in the year increased 20% to 16.5p (2014: 13.8p) and statutory EPS increased 7% to 12.4p (2014: 11.6p).

The business remains highly cash generative and profit to cash conversion was 91%, even after increased investment in our scripted business. Free cash flow was up 18% to £562 million. We ended the year with net debt of £319 million (2014: net cash £41 million) after acquisitions of £406 million (net of cash acquired) including Talpa Media, dividend payments of £459 million and pension deficit contributions of £90 million. At 31st December our reported net debt to adjusted EBITDA was 0.4x.

Reflecting ITV’s strong performance in 2015 and in line with its policy, the Board has proposed a final dividend of 4.1p. This equates to a full year dividend of 6.0p, up 28%, which is well ahead of earnings growth.


Broadcast & Online

Broadcast & Online delivered another strong performance, with total revenue up 6% to £2,146 million (2014: £2,023 million) driven by 6% growth in NAR and 23% growth in Online, Pay & Interactive.

There was continued good growth across all the major advertising categories and as expected the phasing of UK television advertising was different in 2015 reflecting the timing of major sporting events. Over the full year we increased our estimated share of broadcast to 46.1% (2014: 45.9%) as we once again outperformed our estimate of the UK television advertising market. It is becoming increasingly difficult to measure the pure spot advertising market as all broadcasters use different definitions, which may include additional sources of revenue such as sponsorship and VOD in their estimates of television advertising.

ITV Family SOV declined 3% in 2015. This reflects a 4% decline in the ITV main channel SOV which was impacted by more competition from the launch of new digital channels in the year, some of our shows not performing as well as we had expected and the relatively strong performance of the BBC. Going forward we remain focused on strengthening our viewing performance and continuing to deliver mass audiences.

Online, Pay & Interactive revenue continued to show strong growth, up 23% to £188 million (2014: £153 million) reflecting further growth in both our online advertising and pay businesses. In November we successfully launched the ITV Hub, the new digital home for our online services, which has had a very encouraging start. Audience demand for VOD continues to grow strongly which helped drive a 14% increase in long form video requests and 42% increase in consumption. There remains strong demand for online advertising which helped drive significant growth in Online revenue. We continue to develop our pay services with Pay revenue benefitting from a full twelve months of revenue from ITV Encore and strong demand for ITV video on demand services.

Schedule costs were up 3% predominantly due to the full year costs of ITVBe and ITV Encore. We maintain a tight control on costs and aim to continue to deliver savings to mitigate inflationary pressure.

Overall Broadcast & Online adjusted EBITA was up 16% to £659 million (2014: £568 million). The continued growth in our highly geared advertising revenue, together with high margin revenue growth in Online, Pay & Interactive, resulted in the adjusted EBITA margin increasing 3% to 31% (2014: 28%).

On 29th February 2016, ITV completed its acquisition of 100% of UTV Ltd, which owns the televisions assets of UTV Plc, for £100 million. This will further strengthen ITV’s free to air business and enable it to run a more efficient network.


ITV Studios

ITV Studios total revenue grew strongly in 2015, exceeding £1 billion for the first time as we continue to build scale in creative content markets and strengthen our international portfolio of programmes that return and travel. ITV Studios is becoming increasingly international with 53% of ITV Studios total revenue in the year generated outside the UK (2014: 47%).

Total organic revenue, which excludes our current and prior year acquisitions as well as foreign exchange movements, was up 8% with growth across the business and a particularly strong performance from ITV America and Global Entertainment. Our acquisitions continue to come through, with twelve months of Leftfield Entertainment and Talpa Media from 30 April 2015. The foreign exchange impact was immaterial in the year as the stronger US dollar was offset by our greater exposure to a weakening Euro following the Talpa acquisition.

Studios UK revenue was up 19% to £547 million (2014: £459 million) reflecting 13% growth in internal revenue and 39% growth in external revenue. Organic revenue was up 5%.

ITV America grew strongly in 2015, with revenue up 36% to £320 million (2014: £235 million) as we benefitted from good organic growth, up 15% driven by the delivery of our three US dramas, Best Time Ever and two series of Hell’s Kitchen USA, as well as the first full year of Leftfield Entertainment, acquired in May 2014.

Studios Rest of World (RoW) also showed strong growth, up 124% to £213 million (2014: £95 million), with organic revenue up 4%. We have benefitted from Talpa Media which we acquired on 30 April 2015, significantly strengthening our position as a leading international producer.

Global Entertainment revenue increased 9% in the year to £157 million (2014: £144 million). Revenue growth was supported by our strong programme slate including new titles Poldark and Schitt’s Creek, as well as US drama Aquarius and the launch of Thunderbirds Are Go!

Overall, we have delivered many creative successes in the year, including two of our US dramas – Aquarius and The Good Witch - being recommissioned. Due to the nature of our business, not all our programmes will return for another series in 2016 but we have a strong portfolio of programmes and formats to distribute internationally and we will continue to invest in our creative pipeline to build upon this.

Reflecting the strong revenue growth across ITV Studios, adjusted EBITA increased 27% to £206 million (2014: £162 million).



We made a number of acquisitions in 2015. In April we completed the acquisition of Talpa Media in the Netherlands, the creator of worldwide entertainment formats, including The Voice, The Voice Kids, I Love My Country, Dating In The Dark and Dance Dance Dance. We paid an initial cash consideration of €500 million (£362 million) for 100% of Talpa's fully diluted share capital with further payments dependent on Talpa's future performance as well as John de Mol's continued commitment to the business during this time. The total maximum consideration, including the initial payment, is €1.1 billion which is contingent on Talpa continuing to deliver significant profit growth to 2022.

In the UK we made a number of smaller acquisitions. In May we acquired the remaining 75% of Mammoth Screen, one of the UK’s leading scripted production companies, whose successful slate of high end drama includes Poldark, Endeavour and the forthcoming Victoria. In June we completed the acquisition of Boom Supervisory Limited, the holding company of UK based Twofour Group which produces factual entertainment and drama programmes. Also in June we acquired a new label, Cats on the Roof Media which owns a number of creative labels focused on developing entertainment and scripted comedy programmes.

In December Brent Montgomery, the founder of Leftfield, became CEO of ITV America and in order to facilitate the integration of Leftfield within the US business we acquired the outstanding 20% which we did not own.  

The cash cost of all of these acquisitions was £406 million (net of cash acquired).



Adjusted profit before tax, after financing costs, was up 18% at £843 million (2014: £712 million). The total adjusted tax charge for 2015 was £177 million (2014: £151 million), corresponding to an effective tax rate on adjusted PBT of 21% (2014: 21%) which is broadly in line with the standard UK corporation tax rate of 20.25% (2014: 21.5%).

Overall, adjusted profit after tax was up 19% at £666 million (2014: £561 million). After non-controlling interests of £7 million (2014: £7 million), adjusted basic earnings per share was 16.5p (2014: 13.8p), up 20%.

Statutory EPS is adjusted to reflect the underlying performance of the business providing a more meaningful comparison of how the business is managed and measured on a day-to-day basis. Adjustments include: all operating and non-operating exceptional items primarily acquisition-related costs such as employment linked consideration and professional fees for due diligence; impairment of intangible assets; amortisation of intangible assets acquired through business combinations including formats and customer contracts; net financing cost adjustments; and tax adjustments relating to these items. Amortisation of intangible assets that are required to run our business, including software licences, is not adjusted for.  The most significant adjustment relates to the treatment of employment linked consideration for Talpa.


Balance sheet and cash flow

ITV remains highly cash generative reflecting our continued focus on cash and costs. In the period we generated £788 million (2014: £665 million) of cash from adjusted EBITA of £865 million (2014: £730 million), which equates to a strong profit to cash ratio of 91%. This ratio has remained the same despite our increased investment in scripted content and demonstrates our continued disciplined approach. 

After payments for interest, tax and pension funding, our free cash flow also remained strong in the period, up 18% to £562 million (2014: £478 million). Overall, after dividends, acquisitions and debt repayments we ended the year with net debt of £319 million, compared to net debt of £540 million at 30 June 2015 and £41 million net cash at 31 December 2014.

We have a £525 million Revolving Credit Facility in place until 2019 provided by a number of core relationship banks. We also have a £175 million bilateral financing facility and a £75 million invoice discounting facility, both of which are free of financial covenants. At 31 December 2015 these facilities were all undrawn.

In 2015, to fund the acquisition of Talpa Media, we entered into a 12 month €500 million bridge loan facility provided by five of our relationship banks. This was repaid and cancelled in September 2015 when we issued a seven-year €600 million Eurobond at a fixed coupon of 2.125%. The bond will mature on 21 September 2022. The proceeds from the bond were also used to fund the maturing £78 million Eurobond in October 2015.

As we enter the next phase of our strategy our balance sheet strength together with our continued strong free cash flow will enable us to invest in opportunities to grow the business and enhance shareholder value. To preserve our financial flexibility, our policy is to maintain at least £250 million of available liquidity at any point.

Our objective is to run an efficient balance sheet, and to balance investment for further growth with attractive returns to shareholders. Over time we will continue to look to increase our balance sheet leverage and we believe maintaining leverage below 1.5x reported net debt to adjusted EBITDA will optimise our cost of capital, allow us to sustain a progressive dividend policy and enable us to retain flexibility to continue to invest for further growth. As at 31 December 2015 reported net debt to adjusted EBITDA was 0.4x.


Dividend per share

The Board has committed to growing the full year ordinary dividend by at least 20% per annum for three years to 2016, by which time we will achieve a dividend cover of between 2.0 and 2.5x adjusted earnings per share. Reflecting ITV’s strong performance in 2015 and in line with its policy, the Board has proposed a final dividend of 4.1p. This equates to a full year dividend of 6.0p, up 28%, which is well ahead of earnings growth and is a significant step forward in taking ITV’s dividend cover closer to its policy range.

The Board is also proposing a 10.0p special dividend, worth just over £400 million, which comes after a year of significant investment and reflects ITV’s strong cash generation and the Board’s confidence in the business. Adjusted for this special distribution ITV’s pro forma leverage would be 0.8x reported net debt to EBITDA, which provides flexibility to continue to invest in the business for further growth.



The aggregate IAS 19 deficit of the defined benefit scheme at 31 December 2015 was £176 million (31 December 2014: £346 million). The reduction reflects lower pension liabilities as a result of rising bond yields over the year, deficit funding contributions of £90 million and the difference between the actual inflation experienced in the period compared to the expected rate. Pensions continue to be paid from the Scheme based on actual requirements.

The last actuarial valuation was undertaken in 2014. On the basis adopted by the Trustee, the combined deficits as at 1 January 2014 amounted to £540 million.

Following completion of the actuarial valuations, the Group has agreed to make deficit funding contributions in order to eliminate the deficits in each section. From 2016 ITV will pay deficit funding contributions of around £80 million, a £10 million reduction on 2015. Going forward these payments will be paid more evenly throughout the year.


2016 full year planning assumptions (including UTV)

·         Total network programme budget is expected to be around £1,050 million, weighted to the first half due to the timing of sport, including the Euro Football Championship

·         Adjusted interest is expected to be around £25 million, reflecting a full year of the €600 million Eurobond

·         Adjusted effective tax rate is expected to be similar to 2015

·         Capex is expected to be £50 to £55 million

·         Profit to cash conversion is expected to be around 85-90%, reflecting our continued strong cash generation and  investment in scripted content

·         Total pension deficit funding will be £80 million and will be paid more evenly over the year

·         Ordinary dividend will move in line with our cover policy of 2 to 2.5x adjusted EPS

·         The translation impact of foreign exchange if rates stay as they currently are, could be £50 million more revenue and £9 million more profit

·         Exceptional items are expected to be around £110 million in 2016, again as a result of the treatment of employment linked consideration for our acquisitions which is included within statutory EPS, but excluded from adjusted EPS as in our view it is part of capital consideration



We expect to deliver another good performance in 2016 with continued revenue growth across both businesses.

Over the full year we expect to outperform our estimate of the television advertising market but the shape of the market is expected to be different in 2016, driven by the timing of major sporting events. ITV Family NAR is expected to be flat in Q1, marginally behind the market, against 12% growth in Q1 last year. Q2, which will benefit from the Euros, should be positive.

We remain focused on strengthening our viewing performance and we have started 2016 well, with ITV SOV up 5% and ITV Family SOV up 2%. Online, Pay & Interactive will deliver double-digit revenue growth, driven particularly by Online and Pay as we continue to invest in the ITV Hub and further develop our international pay model. ITV Studios is on track to report double-digit revenue and profit growth, primarily driven by our recent acquisitions.

Overall, we see clear opportunities for investment in all parts of the business, and because of our strong financial position and cash conversion, we are confident in delivering both continued growth and shareholder returns.


Notes to editors

1.     Unless otherwise stated, all financial figures refer to the 12 month period ended 31 December 2015, with growth compared to the same period in 2014.

2.     Group external revenue

Twelve months to 31 December









ITV Family NAR





Non-NAR revenue





Internal Supply





Group external revenue






3.     ITV Family NAR is expected to be flat in Q1, marginally behind the market, against 12% growth in Q1 last year. Q2, which will benefit from the Euros, should be positive. January was down 1%, February down 4%, March up around 5% and April down around 5%. This revenue is pure NAR, excluding the benefit of sponsorship and online revenue. From March 2016, ITV Family NAR includes advertising revenue from the UTV Channel 3 licence.  For the full year we again expect to outperform our estimate of the TV advertising market.


4.     Broadcast & Online performance indicators

Twelve months to 31 December





ITV Family SOV
















ITV adult impacts




Total long form video requests (all platforms)




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.

% change is calculated on unrounded SOV and SOCI figures. Total long form video requests across all platforms are based on data from ComScore Digital Analytix, Virgin, BT, iTunes, Amazon Prime Instant Video, Netflix, Sky and Hospedia and include simulcast.


5.     The 2015 final and special dividend will be paid on 27 May 2016. The ex-dividend date is 28 April 2016 and the record date is 29 April 2016.


6.     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, and (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

Media Relations

Mary Fagan                           +44 20 7157 3965 or +44 7736 786448

Mike Large                            +44 20 7157 3021 or +44 7768 261528