4 ITV plc Annual Report and Accounts 2023 ITV plc Annual Report and Accounts 2023 5 S T INVESTOR PROPOSITION CHAIR’S STATEMENT R A T E G I ITV is delivering long-term value for shareholders through: C R E P O R T Driving significant benefits Growing its leading, scaled 1 from our unique position: 2and diversified global • As a vertically integrated producer, Studios business: 2023 WAS A broadcaster and streamer • ITV will grow faster than the global content Refer to the Chief Executive’s Statement on market, at a margin of 13-15% CHALLENGING BUT page 8 for further details on these benefits Refer to Our More than TV Strategy on page 10 and Operating and Financial Performance PRODUCTIVE YEAR Review on page 18 for further details Driving strong momentum 3in streaming: Reasons • Delivering significant growth in digital viewing and digital advertising, providing data-driven targeted advertising at scale through Planet V (ITV’s addressable In a nutshell, 2023 was a challenging but have a clear strategy that is future focused ITV is a special organisation to be a part of advertising platform) in a trusted, brand productive year. Economic headwinds were and plays to our strengths. and it’s clear from the frequent engagement safe environment present throughout the year impacting our surveys we run and our high levels of financial performance but we made good Our ‘More Than TV’ strategy has three main colleague retention, that people like to work to INVEST Refer to our KPIs on page 14 and Operating and progress strengthening the internal objectives: here. They are proud of what we do, of the capabilities of the organisation and hitting lead we show on important issues whether Financial Performance Review on page 18 for • Expand Studios further details a number of key milestones on our strategic it’s mental health; diversity, equity and journey to be ‘More Than TV’, evolving from • Supercharge Streaming inclusion; or of the open and respectful way a legacy broadcaster to a more sustainable • Optimise Broadcast we try to treat each other. Nothing is ever media and entertainment business. perfect and we are eager to find opportunities Optimising Broadcast as we Increasing profit over the During the year we made good progress on to improve, but the values of this Company Taking the financials first. Total external each of the three. are sound. 4continue to attract mass 5 medium term: revenues were down 3% on the prior year as linear TV audiences: cost of living pressures affected household Studios grew revenue and profit to record There have been a number of changes to our • As we continue to rebalance the business demand for goods and services and led levels deploying its global scale and strength Board during the year. Anna Manz, Mary Harris • Which remain highly valuable to towards the growth drivers of ITV Studios advertisers to trim their marketing budgets. to win business across all major genres and and Duncan Painter stepped down and I would and advertiser funded streaming and 1 geographies. advertisers as they grow their businesses Adjusted EBITA declined 32% reflecting like to thank them sincerely for their efforts. and drives cash generation for the Group deliver further efficiencies both the drop in revenues and planned The Board and the wider Company have Refer to Our More than TV Strategy on page 10 investment in ITVX. Free cash flow was £361 In streaming, ITVX had a successful launch benefited enormously from their time with Refer to our KPIs on page 14 and Operating and million, up 29% vs 2022. The balance sheet year, proving technically robust and attracting us. In their place I am pleased to welcome Financial Performance Review on page 18 for and KPIs on page 14 for further details remains strong and the Board has proposed large cohorts of new viewers with the quality Dawn Allen and Marjorie Kaplan. Two highly further details a final dividend of 3.3p taking the dividend for and depth of its content. accomplished leaders who bring different the full year to 5.0p, in line with the prior year. experiences to the Board table and from This is a total return of around £200 million. And our linear broadcast business continued whom I am sure we will learn much. to demonstrate its extraordinary, continuing Delivering against our KPIs Maintaining a robust The Board has also announced a £235 million ability to generate mass, simultaneous 6across the Group: 7balance sheet, strong cash share buyback which will be completed audiences. In addition, innovations such as Finally my thanks to within the next 18 months. the upgraded iteration of Planet V reinforced C • On track to deliver our KPI targets in 2026 generation and disciplined ITV’s position as the clear leader for arolyn and the capital allocation framework: The media and entertainment industry advertisers in UK commercial television. leadership team for Refer to our KPIs on page 14 for further details continues to evolve rapidly. Technology their exceptional e orts • Invest organically in line with strategic advances are dramatically increasing the It is the blending of these three strategic priorities; manage financial metrics choices available, not just in terms of elements that makes ITV unique. Together during some challenging consistent with investment grade metrics content, but also how, when and where it can they form an integrated model that allows us times and to all my over the medium term; sustain a full year be consumed. The emergence of generative to consistently secure world-class content, ordinary dividend of at least 5.0p, which AI is a potential game changer in the world of provides outstanding flexibility and reach for ITV colleagues for will grow over the medium term; consider production while the competitor set is UK advertisers and attracts the best writers their continuing value-creating inorganic investment shifting, from national TV broadcasters to and producers to work with us. The model is against strict criteria when appropriate; international streamers and global tech strengthened by our long-standing status as commitment and and any surplus capital will be returned to corporations who are increasingly the a Public Service Broadcaster (PSB). A Media passion for the cause. shareholders gatekeepers to our audience. These Bill is progressing well through Parliament • £235 million share buyback to be structural shifts are material and require and its final adoption into law will completed within the next 18 months us to be on our mettle and take appropriate fundamentally update the current regulatory ANDREW COSSLETT CBE action. We need to ensure our internal ways framework and provide enhanced, welcome CHAIR OF THE BOARD See the Finance Review on page 45 for of working are as sharp and agile as they support to PSBs whose objective voice at a can be, that we are ready to take difficult time of such dynamic change has never been further details decisions to keep our cost base down and more important. 1. Refer to APMs section for the reconciliation between our adjusted and statutory numbers.