24 ITV plc Annual Report and Accounts 2023 ITV plc Annual Report and Accounts 2023 25 S OPERATING AND FINANCIAL PERFORMANCE REVIEW CONTINUED T R A T E G I ITV Studios delivered its highest-ever Within ITV Studios America (scripted), 2023 ITV Studios International Deliveries expected in the first half of 2024 C R revenues and profits in 2023. Total revenue deliveries included Franklin for Apple TV+ include Comedy Camp in France, as well as E ITV Studios International produces original P was up 4%, and external revenue was up 4% which is ITV Studios America’s biggest key formats such as I’m A Celebrity…Get Me O scripted and unscripted content across our R driven predominantly by growth in the UK. scripted production to date, Physical S3 for production bases, as well as local versions of Out Of Here!, The Voice and The Chase being T Sales from ITV Studios to M&E were up 3%, AppleTV+, as well as executive producing key formats developed through our Global delivered across multiple countries. with several new dramas for ITV1 and ITVX. One Piece for Netflix – which was one of the Partnerships business. Growing our Total organic revenue at constant currency platform’s most-watched original scripted European scripted business allows us to Global Partnerships was up 3%, impacted by a £15 million productions globally in 2023. ITV America benefit from the demand for Global Partnerships saw good revenue unfavourable foreign exchange movement (unscripted) saw the delivery of new and locally-produced content with global appeal, growth in 2023, up 8% year-on-year to in the year and a £65 million inorganic returning titles such as Love Island and Love and we have scripted projects in production £368 million (2022: £342 million) and 8% to contribution from Plimsoll Productions Island Games for Peacock, The Prank Panel and development with Amazon, Netflix, £369 million on an organic basis when and Lingo Pictures which were both for ABC and Twin Love for Amazon.Paramount+, and Disney+, as well as local adjusted for the unfavourable impact of acquired in 2022. streaming platforms, such as Videoland in foreign currency. The business benefited In 2024, ITV Studios America will be the Netherlands, and Stan in Australia. from the international distribution of Reflecting our presence in key global impacted by the US writers’ and actors’ returning titles such as World On Fire and production markets, 58% of ITV Studios strikes in 2023 which delayed the Revenue within ITV Studios International Vigil, and has leveraged the breadth and revenue was generated outside the UK development of several projects which decreased by 4% to £445 million depth of its extensive catalogue with sales to (2022: 60%). were due for delivery in 2024. This will delay (2022: £465 million) in 2023, and by 8% to other broadcasters and streaming platforms around £80 million of revenue from 2024 £428 million on an organic basis when globally – which are a growth area for Global ITV Studios adjusted EBITA was up 10% QUEER EYE is a reality series to 2025.adjusted for the unfavourable impact of Partnerships. Finished programming sales of year-on-year, with our adjusted EBITA margin produced by ITV Studios foreign currency and the acquisition of Lingo unscripted formats were also good, including of 13.2% (2022: 12.4%) restored to within our America for Netflix and is in its In the first half of 2024, unscripted 13% to 15% target range. There was a £3 eighth season. Image courtesy deliveries from ITV America are expected Pictures in 2022. This decline reflects lower The Voice, Love Island and The Graham of Netflix. deliveries year-on-year, mainly in Italy and Norton Show, all delivering across multiple million unfavourable impact from foreign to include Queer Eye for Netflix and Alone Germany and some scripted deliveries being different territories. exchange. During the year, £13 million of MY MUM, YOUR DAD is an for History Channel. permanent cost savings were delivered unscripted format originating delayed to 2024. Deliveries in 2023 included in ITV America. It had its first I’m A Celebrity... Get Me Out Of Here! in 2024 and beyond should see an increased relating to operational efficiencies, our US series in the UK in 2023 and Germany and Australia, Love Island in pipeline of new content for Global property move and a permanent reduction has been sold to ten countries. in discretionary spend. Australia, as well as Diana and Partnerships . New titles expected to sell SUBURRÆTERNA from Cattleya in Italy, and internationally in 2024 include A Cruel Love: We continue to look at ways to drive Prosper from Lingo Pictures in Australia. The Ruth Ellis Story and After The Flood. efficiencies and improve margins over the medium term, including rationalising our property footprint, using technology and OUTLOOK data to drive cost and revenue efficiencies, ITV Studios remains on track to deliver utilising our production hubs for our key total organic revenue growth of 5% on global formats, taking further steps to average per annum from 2021 to 2026 digitise our production processes, as well as – ahead of the market, at an adjusted using remote editing more routinely and the EBITA margin of 13% to 15%. operational use of AI where possible. We remain committed to our adjusted EBITA ITV Studios UK saw strong revenue growth in ITV Studios US Going forward we expect to see growth margin guidance of 13% to 15%.2023, up 17% to £962 million (2022: £822 ITV Studios US provides content to all the in key segments in which we operate – million) and up 16% to £920 million on an major networks and cable channels in the content licensing, demand from ITV Studios UKorganic basis, which adjusts for the US, along with every major streaming streaming platforms for unscripted ITV Studios UK has a diverse range of acquisition of Plimsoll Productions in 2022. platform. It has a good foundation of core content and cost effective premium scripted and unscripted titles for It had an impressive slate of deliveries for a programmes, including unscripted titles with scripted content which we are well broadcasters and streaming platforms. The broad customer base, which included a Love multiple seasons and a high volume of positioned to take advantage of. business is built upon many long-running and Island winter and summer series, I’m a episodes, along with premium scripted recurring titles, the majority of which are sold Celebrity…Get Me Out Of Here! South Africa, content, which has enabled the business to We are confident that we will to the M&E business for transmission on After the Flood, and Grace, all for ITV; as well grow its presence significantly and develop continue to grow our market share ITV’s family of linear TV channels and ITVX. as The Completely Made-Up Adventures of deep client relationships, in a highly to 2026 driven by our scale; our The core portfolio includes daytime Dick Turpin for AppleTV+, Squid Game: The competitive market. diversification by customer; geography programmes such as Good Morning Britain, Challenge for Netflix – which was one of their and genre; a strong track record of This Morning, Loose Women, and Lorraine; most watched unscripted original In 2023, ITV Studios US total revenue high-quality content; a very strong the soaps: Coronation Street and productions globally in 2023, Vigil, World On declined by 15% to £395 million (2022: £467 slate for 2024 and beyond; and our Emmerdale; and entertainment programmes Fire, The Outlaws, and Shetland for the BBC, million) and by 13% to £405 million on an leading creative talent. such as The Voice, The Chase, Love Island and Dinner With The Parents for FreeVee. organic basis when adjusted for the and I’m A Celebrity…Get Me Out Of Here!61% of revenue was derived from sales to the unfavourable foreign exchange impact. The LOOSE WOMEN is a As previously guided, 2024 will be M&E business (2022: 65%). decrease in revenue year-on-year reflects daytime panel programme impacted by the 2023 US writers’ and produced by ITV Studios actors’ strikes which will delay around Deliveries expected in the first half of 2024 the phasing of large, unrepeated scripted Daytime. It has been on and unscripted deliveries year-on-year, ITV since 1999. £80 million revenue from 2024 to 2025. include internal sales to M&E of new and including Snowpiercer, Let The Right One In In addition, we are seeing weaker returning entertainment programmes such CORONATION STREET demand from FTA broadcasters in as Love Island All Stars, Saturday Night and Hell’s Kitchen, combined with lower is the UK’s largest Soap demand from networks. and has been on ITV Europe who are holding back spend Takeaway, and the Chase, and returning since 1960. until there is more certainty in the dramas, The Bay and Vera. External sales advertising market. include The Reluctant Traveller for Apple TV+, Missing You for Netflix and The Gathering for Channel 4.