ITV (ITV) H1 2024 earnings summary

Executive summary

• Group adjusted EBITA/EBITDA rose 40% year-over-year, driven by strong M&E and digital growth, higher Studios margin, and cost savings, despite a 2% decline in external revenue.

• ITV Studios expects record full-year profits, with margin improvement and strong catalogue sales, despite revenue declines from US strikes and delivery phasing.

• Digital revenues and viewing grew strongly, with ITVX and Planet V driving a 17% increase in digital advertising revenue and 12% growth in total digital revenues.

• Cost savings and efficiency improvements are on track, with £23 million delivered in H1 and £40 million targeted for 2024.

• Interim dividend of 1.7p declared, with a full-year dividend of at least 5p per share reaffirmed.

Financial highlights

• Group adjusted EBITA rose to £213m (up 40%), with margin up to 13% from 9%; statutory operating profit doubled to £136m.

• External group revenue was £1,599m, down 2% year-over-year; total group revenue was £1,903m, down 3%.

• Adjusted EPS increased to 3.3p (up 43%); statutory EPS rose to 6.6p from 1.0p.

• Net debt reduced to £515m (down from £724m in H1 2023); leverage at 0.9x adjusted EBITDA.

• Profit to cash conversion at 73% on a rolling 12-month basis, but only 17% in H1 due to working capital build.

Outlook and guidance

• On track to deliver 2026 KPI targets, including at least £750m digital revenues.

• ITV Studios full-year margin expected within 13%-15% range, with revenues now forecast to be down low single digits.

• Q3 total ad revenue expected to be broadly flat, with digital advertising growth continuing.

• Adjusted effective tax rate expected at 26% for 2024 and medium term; exceptional items for 2024 expected at £65m.

• No further pension deficit contributions expected while scheme is in surplus.