News Releases

Financial summary

* before exceptional items, amortisation, impairment of intangible assets, gain on bond exchange and amortised cost and tax adjustments

Summary

UK television advertising suffered its worst year-on-year decline on record over the first half, with net television advertising revenues (”NAR”) falling by £277m or 17% for the overall market. ITV outperformed the market, with ITV NAR down £108m or 15%.

The rate of market decline has eased slightly in the second half and ITV continues to outperform the market. ITV NAR is currently forecast to be down 12% for the third quarter and down 7% for September.

ITV is implementing the plan detailed in March to mitigate the impact of market weakness. With substantial cost savings offsetting NAR decline, operating EBITA declined by £75m to £46m. Notwithstanding the reduction in earnings, through working capital improvements and capex reductions, operating cash flows were increased by £51m to £168m.

ITV remains focused on improving the operational performance of its core business, on delivering significant cost savings and on managing cash and the balance sheet.

· ITV has held its peak audience across its family of channels and delivered record online user numbers and video views. In Global Content, with a strong performance in international production, ITV has continued to deliver revenue growth.

· ITV has delivered £57m of cost savings across programming and off-screen over the first half. ITV is on course to deliver at least £155m of total savings over the full year, rising to £215m in 2010 and £285m in 2011.

· ITV has held its net debt flat at £728m (2008 year end: £730m). The recent bond exchange has improved ITV’s debt maturity profile, reducing the 2011 repayment by nearly £200m and extending £126m of bonds to 2014 (post currency swaps).

Broadcasting

During the period, ITV1 broadcast the UK’s highest-rating new drama (Whitechapel), comedy series (Harry Hill’s TV Burp) and new factual programme (Dancing On Ice: The Story of Bolero). ITV2 has overtaken five in terms of 16-34 year old viewing. With a peak audience of nearly 20m viewers, Britain’s Got Talent was the highest rating non-sports programme on UK television in six years.

Across the ITV family, peak viewing share was held at 27.8% (2008: 27.9%). ITV Family share of commercial impacts (”SOCI”) was 39.7% (2008: 41.4%) and ITV1 SOCI was 28.4% (2008: 30.5%).

Online

Online revenues were £18m, up 6%, with itv.com revenues increasing by 100% to £10m. itv.com delivered 116m online video views over the period (2008: 31m), including 50m during May. itv.com unique users averaged 8.7m per month (2008: 6.0m), peaking at 12.8m in May.

Global Content

Global Content revenues (including internal) were up 4% to £296m with EBITA of £40m (2008: £39m). External revenues increased 13% to £168m, with significant increases in production in the US and Germany, including local versions of I’m A Celebrity.

Across the period, foreign exchange movements benefited revenues by £14m and EBITA by £3m. The new contract for Coronation Street and Emmerdale positively impacted total revenues and EBITA by £5m compared to H1 2008.

Pension

On an IAS 19 basis, the deficit on ITV’s defined benefit pension schemes was estimated at £538m at the end of June, compared to £178m at the year end. The increase reflects a decline in the value of scheme assets and the impact on liabilities of a higher inflation assumption, partly offset by £30m of regular deficit funding.

The company is consulting over changes to the scheme, including capping the growth of pensionable salary. ITV estimates that, had such proposals been confirmed at the half year, the deficit would have been £75m-£100m lower than the reported level.

CEO appointment

The Board’s process to identify the next Chief Executive for ITV is proceeding in accordance with the timetable set out in the Company’s statement of 23 April 2009.

Dividend

Given the continuing economic uncertainty and in line with the decision at the year end, the Board has determined that no interim dividend will be paid.

Michael Grade, Executive Chairman of ITV, said:

“Our financial results for the half year reflect the impact of the unprecedented downturn in television advertising, offset by the comprehensive action we are taking in mitigation. The rate of market decline has eased slightly in the second half and ITV continues to outperform the market. We are maintaining our peak audience share across our channel family and are growing our share of television advertising, while delivering our targeted cost-savings.

“On-screen, we are demonstrating the enduring power of ITV content with hugely successful shows such as Britain’s Got Talent, Dancing On Ice, Whitechapel and Lewis, plus top quality free-to-air football. On-line we have delivered more video views in the first half than in the whole of the previous 18 months. With strong international production growth, such as our production of I’m a Celebrity in five countries, our Global Content business continues to grow its revenues.

“Across the company we are on course to deliver £155m of savings over the year, with the full benefit weighted to the second half. By 2011, total savings from regional and network programming and off-screen efficiencies will reach £285m.

“We have taken further steps to strengthen our balance sheet. Despite pressure on our earnings, we have delivered a 44% increase in operating cash flows and held our net debt flat. The success of the recent exchange offer means our next bond repayment has been halved. We are making good progress in the sales processes for Friends Reunited, SDN and Screenvision US.

“We are moving towards greater regulatory clarity, with the review of CRR expected to complete ahead of the 2010 deal round and the Government consulting on independently-financed consortia to take on delivery of ITV regional news.

“Economic conditions remain uncertain and, in line with the approach taken at the year end, the Board’s view is that it is appropriate to suspend the interim dividend.

“Into the second half, we have a strong autumn schedule and will deliver further substantial cost savings. Whilst UK television advertising remains down year-on-year, the rate of decline has eased and ITV continues to outperform the market. With a lower cost base and high gearing to UK television advertising, ITV is well placed to capitalise on any stabilisation in the market and to exploit fully the content we create and broadcast as and when economic conditions improve.”

Enquiries

Analysts

Christy Swords Investor Relations 020 7156 7022

Pippa Foulds 020 7156 7039

Media

Ruth Settle Media Relations 020 7156 7358

Louise Evans

Tulchan

Susanna Voyle 020 7353 4200

Tom Rayner

Notes:

1. ITV family includes ITV1, ITV2, ITV3, ITV4, CITV, Men & Motors, GMTV, GMTV2 and associated “+1” channels

2. All viewing figures based on BARB / Infosys data and all commercial impact figures based on BARB / DDS data for January-June 2009 and 2008. Viewing share figures are for all individuals; commercial impact figures are for all adults.

3. NAR forecasts and market estimates are based on ITV estimates. itv.com revenues include all Online revenues, excluding potential disposals.