ITV plc

Good morning everyone and welcome to ITV's 2025 full year results. As always, I'm here with Chris Kennedy, our CFO and COO. I'm going to start this morning with a brief summary of the 2025 highlights and then Chris will talk you through our financial and operating performance in a bit more detail. ITV delivered a good performance in 2025, outperforming market expectations despite the challenging market backdrop. We have transformed ITV and are demonstrably a much leaner and more agile business with a strong digital platform. We have capitalised on numerous growth opportunities as a result and are generating strong levels of cash. We've created two attractive and resilient businesses in ITV studios and media and entertainment. We have successfully changed the shape of ITV and achieved a key strategic target. Two-thirds of our total revenue now comes from studios and M&E Digital. And that really demonstrates the scale of ITV's transformation. Before discussing our results, I wanted to mention the leak in November about potential transaction. As you know, we confirmed that we were in preliminary discussions with Sky regarding the possible sale of our M&E business. We are actively engaged with Sky and we will provide an update to you when we can. The effectiveness of our strategy to diversify ITV's revenue streams is clear in our results with the growth in ITV Studios and our digital M&E business combined with our disciplined cost management largely offsetting a difficult linear advertising segment. In line with our dividend policy, the Board has proposed a final dividend of 3.3p, giving an unchanged full-year dividend of 5p, a total payment of around £190 million. I'll now hand over to Chris to go through the numbers in more detail.

Thank you, Carolyn. Good morning, everyone. ITV Studios continues to demonstrate strong momentum, with total revenue climbing 5% to 2.13 billion. This performance highlights our ability to consistently outperform the broader market. Notably, external revenue rose by 10%, reflecting our successful move toward global streaming partners and the rapid scaling of our digital distribution via Zoo55. The US unscripted business had a good year with a strong slate of deliveries, Love Island US was the most watched streaming TV original season of 2025 in America, greatly increasing the value of the format. Overall performance in the US was down year on year due to the phasing of deliveries and some short-term market softness. We're already seeing good momentum in 2026 and are confident that this year will be much stronger. Our UK and international arms saw 14% revenue growth driven by high demand from both streamers and broadcasters. Adjusted EBITR for studios was 297 million and EBITR margin was 13.9%. The year-on-year change in the margin reflects a lower proportion of catalogue sales in our revenue mix as we previously guided. We remain highly efficient. We delivered £31 million in cost savings this year and continue to leverage our world-class talent and unique IP to drive recurring value. Turning to media and entertainment, the highlight is the continued evolution of our digital business. Digital advertising revenue grew 12% to £540 million and total digital revenues were up 10% to £614 million. This strong trajectory is a testament to the success of ITVX, Planet V, and our data-driven ad products. Total advertising revenue fell 5%, better than guidance, with our digital growth providing an important and profitable hedge against double-digit linear advertising decline. We've been incredibly disciplined on costs within M&E. Content costs were down 5%, reflecting an ever more optimised investment strategy. Non-content costs fell by 6%, with permanent cost savings of £32 million and temporary savings of £15 million. This ensured that our M&E adjusted EBITDA margin remained steady at 11.8%, despite the decline in advertising revenue. The balance sheet remains robust. We ended the year with net debt of £566 million and a leverage ratio of one times. Our cash generation remains good with a profit to cash conversion of 65% as expected. And over the three years from 2023 to 2025, cash conversion averaged around 80% in line with our target. This provides us with the flexibility to reinvest in our growth drivers and provide meaningful cash returns to shareholders. Our capital allocation is clear. We reinvest for profitable growth, maintain an investment-grade balance sheet and return surplus cash to shareholders. We've maintained an ordinary dividend of five pence and continue to keep our capital structure under review. A core pillar of our strategy is reshaping our cost base to better reflect viewer dynamics and enhance productivity and profitability. In 2025, we accelerated our efficiency efforts, delivering £63 million in permanent non-content savings across the business. This brings our cumulative permanent savings since 2019 to £253 million. Looking forward to 2026, taking the year as a whole, studios will show good revenue growth, with margin at the lower end of our target range. As is usual, revenue, profit and margin will be weighted to the second half, with momentum continuing into 2027. In M&E, digital revenue is predicted to continue its strong trajectory in 2026. We anticipate Q1 tar to be down around 2%, which is better than we expected. And looking forward to the rest of the year, we have a strong schedule of sports, being the only commercial broadcaster of the expanded FIFA Men's Football World Cup and the new Men's Rugby Nations Championship, both of which will boost ad revenue from Q2 onwards. Finally, you can find detailed planning assumptions in the appendices in the slide deck. Thank you. Carolyn, back to you.

Thank you, Chris. As you know, our strategic vision is to be a leader in UK advertiser-funded streaming and a diversified and expanding global force in content. Our strategy is familiar to you, just to summarise it in three key pillars, expanding studios, supercharging streaming and optimising broadcast. So let's turn first to expanding studios. ITV Studios has built a unique and leading position in the global content market. It has three core competitive advantages and value drivers. Its world-class talent, who are producing some of the most successful shows around the world. Second, its global scale and diversification are creating a strong platform for further growth. And three, its unique and valuable IP library, which combined with Zoo55, its digital studio, maximizes the monetization of our IP globally. And this is underpinned by a culture of cost discipline. All of this ensures the business is well positioned to continue to grow ahead of the market and drive attractive margins. So let's take these value drivers in turn. First, ITV Studios culture. It's entrepreneurial and offers creative autonomy and it's backed by global distribution and resource. And that attracts and retains industry-leading talent. This is a position we continue to enhance through strategic acquisitions, talent deals and partnerships, and that delivers both creative scale and revenue synergies. Most recently in 2025, we acquired Moon Age Pictures in the UK. They're the producers of The Gentleman for Netflix and also Plano in Spain, the producers of Suspicious Minds for Disney+. So the success of this strategy is really clear, I think, from the creative output. And other recently acquired labels also demonstrate the success of this strategy. So Rivals by Happy Prince for Disney+, it's returning for a season two. Skyscraper, live for Netflix by Plimsoll, which saw Alex Honnold's free, solo, quite terrifying ascent of one of the world's largest, tallest skyscrapers in Taipei. Our track record on retention is really, really strong. In the UK, where we do the majority of talent deals, about 75% of our label MDs and creative leaders stay with the business post-earnout. ITV Studios also has a formidable portfolio of world-leading brands and formats through our established scripted and unscripted labels. Love Island is now in 28 markets. It continues to expand with successful spin-offs such as Love Island Games and Beyond the Villa. Squid Games, the challenge, was Netflix's biggest reality competition and has been recommissioned for a third series. ITV Studios is constantly refreshing its portfolio with new formats like Nobody's Fool and Celebrity Sabotage, both of which launch on ITV this year and have already started to sell really well internationally. They're original shows. ITV Studios also has a strong slate of high-quality, returnable, scripted brands that demonstrate incredible longevity. Line of Duty is an example. Gamora is another example. And there are newer brands like Ludwig and Vigil, which have all been recommissioned. So the global content market remains large and attractive. It's expected to grow about 1.5% to 2% this year. ITV's resilience, though, comes from having a diversified portfolio by geography, with 59% of revenue generated internationally, by genre, with 32% of revenue from the scripted, and by customer, with 28% of revenue from the growing streamers, where we have a proven track record of success now. We have deep strategic relationships with every major global content buyer, which combined with a very strong pipeline of new and returning hits ensures that we capture a further share of the key growth areas, which are scripted and unscripted commissions for streamers and IP distribution. Now, a significant driver of our long-term value is our unique IP library, which now exceeds 100,000 hours of content. ITV Studios adds thousands of hours of content every single year and licenses this to over 350 customers globally. That scale allows ITV Studios to maximize the monetization of its IP, and we already generate £400 million of high-margin revenue through our global partnerships business. Most recently, this is through Zoo55, a key area of incremental growth. Zoo55 distributes ITV Studios IP across three areas. Social video, where we had over 24 billion views across 200 plus social channels globally last year. Fast and abled platforms, where we have partnerships with multiple partners such as Samsung, Tubi, Zumo. And viewing here has been up 28% year on year. And the third is games and gaming, where we've got 40 games live at the moment across 19 of our brands, and that is going to continue to expand. And some of the key brands we distribute include Hell's Kitchen, River Monsters, The Graham Norton Show, Come Dine With Me, Love Island, and there are hundreds more. So as you'd expect, we are leveraging AI to deliver content more effectively and efficiently. For example, using it for subtitling, content selection, and curation. Overall in 2025, Zoo55 generated over 47 billion global views, which was up over 30% year-on-year, and that drives double-digit revenue growth. ITV Studios is on track to achieve £120 million of high margin digital revenue from ZOO55 by the end of 2027. So the combination, this particular combination of talent, scale and quality IP ensures that ITV Studios remains a very attractive and resilient business and it delivers high quality earnings. As a creator, owner, producer and distributor of IP, ITV Studios captures the full value of its world-class content from initial idea to global delivery. Around 60% of its revenues are recurring. This is coupled with studios diversified revenue streams and low risk production model. Remember where we only produce programmes once they have actually been commissioned. Together this ensures ITV Studios drives growth ahead of the market at attractive margins and delivers strong cash flow. I'm now going to turn to media and entertainment which includes our pillars of supercharged streaming and optimised broadcast. We have completely transformed M&E into a strong and resilient streamer and broadcaster with a very disciplined cost base, well positioned to deliver profitable digital revenue growth and strong cash generation. It leverages its compelling position and value drivers, which include wide reach in the UK, leading platforms in ITVX and Planet V, an extensive first-party data set, and deep and established relationships with advertisers and commercial partners. We are really pleased with the success of ITVX and Planet V. Since its launch in 2022, ITVX has built incredible momentum, delivering 25% CAGR in total streaming hours and 16% CAGR in digital advertising revenues. PlanetV, our first-class addressable advertising platform, allows brands to target audiences by leveraging an extensive first-party data set of over 40 million registered users. Now, that can be augmented, of course, with third-party data from our partners like Tesco and Mastercard for really granular targeting. It is a powerful engine for growth, bringing in over 1,500 new advertisers to ITV since its launch. Digital advertising now represents 31% of our total advertising revenues. With this momentum, digital advertising revenue is outperforming our original plan when we launched ITVX, which is fantastic news. And given the strong performance of ad-funded streaming and our focus on profitable growth, we have, as you know, pivoted our digital strategy by doubling down on AVOD and deprioritizing subscription video on demand. Therefore, it's going to take slightly longer than initially anticipated to reach the overall £750 million digital revenue target. Importantly, this has saved significant incremental content and marketing spend. As a result, as this slide shows, we reached break-even two years earlier than planned, recouping our entire investment in ITVX four years earlier than projected. In doing so, we've created a profitable ITVX platform with attractive growth prospects. So building on the foundations of our strategic investments in ITVX and Planet V, we are now competing effectively for a greater share of the 9.5 billion online video advertising segment and attracting new to ITV advertisers. We're expanding our digital reach through strategic partnerships, the SME strategy and through commercial innovations. Our YouTube partnership, for example, is successfully extending reach with over 40% of ITV's content viewed on the platform coming from under 35s. Our YouTube sales team continues to grow from partnering with eight brands at launch to 800 today. We've recently agreed a major deal with BannerJ to sell all their advertising around their YouTube content. We've also added new partnerships with TikTok and expanded our relationship with Disney Plus to include their content on ITV1's peak schedule. With our SME strategy, we're removing barriers to entry for TV advertising, simplifying the buying process and leveraging AI to produce cost-effective advertising. We're making good progress towards the launch of our self-server advertising platform in collaboration with Sky, Channel 4 and Comcast Universal Ads, which we will be testing later this year. And in a first of its kind in the UK, we launched picture-in-picture ads, which you might have seen in the Six Nations. This drives incremental reach and value with sensitivity to the viewer experience. We're also increasing our inventory and can now do targeted advertising on our linear channels on the Sky and Freely platforms. And if that weren't enough, in addition, we're leveraging our brand, IP and first party data to drive profitable non-advertising digital revenue. We've just launched the birthday draw. You might have heard the ads for that all across global radio. And it's a partnership with Global for one million cash prize. We're also evolving ITV WIN into a premium destination, bringing scaled competitions to audiences with new games. So it's early days for both of those, but we expect these two initiatives to drive double-digit growth and interactive revenues. Now, finally, to our third pillar, which is optimised broadcast. We continue to demonstrate our strength and resilience in delivering mass audiences. In 2025, ITV delivered 91% of the top 1,000 commercial audiences. To reinforce this value, we're collaborating with Channel 4 and Sky on Lantern, an outcomes program to clearly measure the effectiveness of TV advertising. We have a fantastic slate for the year. focusing on drama, entertainment, reality and sport, and we optimise our spend and deliver the most valuable audiences for advertisers. We're significantly increasing live sports. We're the only commercial broadcaster with the rights to the Men's Football World Cup, as Chris said, which includes 19 more matches on ITV, a 60% increase. In addition, we have the rights to all England men's rugby games this year. In summary, we're really confident we will continue to create value for shareholders. With the profitable growth of ITV Studios and the M&E digital business underpinned by strong cash generation, we will continue to deliver attractive returns to shareholders. None of this, of course, would be possible without ITV's unique blend of creativity and commercialism, which is fueled by the talent and commitment of our people. And I just want to take a minute to say how proud we all are of what we do, the work that's done in ITV, but especially how proud we are of our colleagues. And we're incredibly grateful to them for their hard work and achievements. Thank you. We're now ready to take your questions.