ITV plc Full Year Results 2024

ITV Plc Full year results for twelve months ended 31 December 2024

STRONG EXECUTION DELIVERING PROFIT GROWTH 

Highlights

· Successful financial, operating and creative performance, driven by strong strategic execution

· Group adjusted EBITA up 11% in 2024, reflecting record profits in ITV Studios and growth in M&E profits and margin

· ITVX continued to perform strongly: digital viewing up 12% and digital advertising revenue up 15% in 2024, delivering attractive returns. By the end of 2025, we will have recouped the cumulative investment in ITVX, much earlier than anticipated

· Delivered £60 million of permanent efficiencies in 2024, £10 million ahead of plan; programme continues into 2025 delivering a further £30 million of non-content savings

Carolyn McCall, ITV Chief Executive, said:

"Three years ago we announced the second phase of our More than TV strategy and today's results show our significant progress and success in navigating the rapidly changing media industry. 

"ITV Studios has delivered record profits this year, despite the one off impact of the writers and actors strike and a softer demand from free-to-air broadcasters, which reflects the strength, scale, diversification and creativity of ITV Studios production companies across the world. 

"ITVX has been the UK's fastest growing streaming platform over the last two years and coupled with our programmatic advertising platform, Planet V, has delivered significant growth in both digital viewing and revenues and is providing attractive returns. 

"Our efficiency programme has delivered savings which have funded growth investments, offset inflation and improved our margins. The programme is ongoing and will continue to be viewer led - driving efficiencies and prioritising our investment to best reflect viewer dynamics and attract both mass reach audiences on linear and targetable audiences on ITVX.

"Our significant competitive advantages give us confidence that we will continue to deliver good growth in both ITV Studios and digital revenues, underpinned by the powerful reach and strong cash generation of Broadcast. 

"And we are becoming a more resilient business with content production and digital now accounting for close to two thirds of our revenue. Our ongoing transformation ensures we are an adaptable and agile company, well positioned to deliver good profitable growth, strong cash generation and attractive returns to shareholders."

Full Year 2024 Group Financial Highlights1 - Strong profitability and shareholder returns

· Group total revenue was down 3% at £4,140 million, with growth in total advertising revenue (TAR) offset by the expected decline in ITV Studios revenue 

· Group external revenue was down 4% at £3,488 million

· Group adjusted EBITA2 was up 11% at £542 million reflecting record profits in ITV Studios, higher profits and increased margin in Media & Entertainment (M&E) and £60 million of efficiencies delivered across the Group. Adjusted EPS was up 23% at 9.6p

· EBITA3 was £526 million (2023: £404 million). Statutory operating profit was £318 million (2023: £238 million), statutory profit before tax was £521 million (2023: £193 million), and statutory EPS was 10.4p (2023: 5.2p)

· Profit to cash conversion1 of 83% and a robust balance sheet, with net debt of £4314 million (31 December 2023: £553 million) and net debt to adjusted EBITDA leverage of 0.7x (31 December 2023: 1.0x)

· £198 million of the £235 million share buyback programme was completed by 31 December 2024

· In line with ITV's dividend policy, the Board has proposed a final dividend of 3.3p (2023: 3.3p), giving an ordinary dividend of 5.0p per share for the full year 2024 (2023: 5.0p), a total of £190 million. 

1. Our APMs are defined within the APMs section of this report. It also includes a full reconciliation between adjusted and statutory results

2. ITV Studios adjusted EBITA includes a £13 million impact from the change in legislation on Audio-Visual Expenditure Credits (AVEC), effective on expenditure incurred from 1 January 2024. Expenditure credits on qualifying expenditure is included within operating profit rather than within the consolidated tax charge. As a result, our EBITA, adjusted EBITA, adjusted EBITA margin, profit before tax and tax charge increase, but profit after tax and EPS is unchanged, compared to the previous High-End TV accounting treatment. Excluding the impact of AVEC, ITV Studios adjusted EBITA was flat year-on-year and Group adjusted EBITA increased by 8% to £529 million

3. Statutory operating profit before amortisation and exceptional items and excludes interest, tax, share of losses of joint ventures, and associated undertakings and profit on disposal of associates, joint ventures and subsidiary undertakings

4. Excluding the net proceeds that had been designated to fund the remainder of the buyback, net debt at 31 Dec 2024 was: £468 million and net debt to adjusted EBITDA leverage is 0.8x

ITV Studios - Industry leading creativity, scale and diversified business model helping to drive record profits 

· ITV Studios adjusted EBITA was up 5% to £299 million, with a margin of 14.7% (2023: 13.2%) benefiting from high-margin format and catalogue sales, and £25 million of efficiencies in the year

· Total Studios revenue was down 6% to £2,0385 million, in line with guidance, impacted by the 2023 US actors and writers strikes, a softer demand from free-to-air broadcasters and the phasing of deliveries year-on-year. Total organic revenue was down 5%. Total external revenue was down 10%

· Internal revenue was up 3%, which includes the benefit of the transfer of ITV sports production from M&E

· ITV Studios delivered many creative successes in the year including: Mr Bates, the biggest drama in the UK in 2024; Fool Me Once - one of Netflix's most-watched shows of all time; The Voice - the number one franchise of the year; Love Island USA - the number one reality series in the US6; and Rivals - Disney+'s breakout hit

Media & Entertainment (M&E) - ITVX continued to perform strongly, with significant improvement in M&E profitability 

· M&E revenue was up 1% to £2,102 million, with TAR up 2%, in line with guidance and ahead of the market

o  Within this, digital advertising revenue (the largest component of digital revenue) grew 15%

o  M&E non-advertising revenue was down 10% as expected

· M&E adjusted EBITA was up 22% to £250 million reflecting the growth in TAR and £35 million of efficiencies delivered in the year

· ITVX continued to perform strongly building on its momentum during the year

o  Streaming hours were up 12% and monthly active users were up 14% driven by the strong performance of programmes such as the Euros, Love Island and Until I Kill You

o  Digital revenues (refer to Note 5) grew 12% with strong growth in digital advertising revenue partly offset by the actions we have taken to consolidate subscriptions into ITVX

o  During 2024, in-year incremental digital revenues exceeded incremental ITVX costs, two years earlier than expected as we have optimised investment in content and technology. By the end of 2025, we will have recouped the cumulative incremental investment in ITVX, much earlier than expected

· ITV maintained its strength in delivering mass reach with a breadth of successful programmes across the key genres of entertainment, reality, drama and sport with ITV1 named 'Channel of the Year' at the Edinburgh TV Festival and Broadcast Awards. 

Outlook: Continued focus on delivering good growth in ITV Studios and ITVX and tight cost management

· ITV's significant competitive advantages and growth opportunities give us confidence that we will continue to deliver good growth in the coming years

· ITV is becoming a more resilient business as it continues to grow ITV Studios and digital revenues, underpinned by the powerful reach and strong cash generation of Broadcast

· Transformation and efficiency programme expected to deliver a further £30 million of savings in 2025

· Ongoing transformation ensures ITV is an adaptable and agile company, well positioned to deliver future profitable growth, continued strong cash generation and attractive returns to shareholders

ITV Studios:

· Expect to deliver good revenue growth in 2025, ahead of the market, with revenue and profit weighted to the second half of the year.

· As expected, the margin in 2025 will be lower than in 2024, but remain within our target range of 13 to 15%. This reflects the change in sales mix as the market recovers following the US strikes, with a lower proportion of high-margin catalogue sales, and a higher proportion of lower-margin scripted deliveries. With cost savings and high margin deliveries weighted to H2, the margin will be higher in H2 than H1 

· On track to deliver total organic revenue growth of 5% on average per annum from 2021 to 2026 - ahead of the market, and at a margin of 13 to 15%

· Expect revenue and profit growth momentum to accelerate in the medium term driven by:

o  Zoo 55 - our digital studios label launched in January 2025, to drive high margin growth from the rapidly expanding global digital distribution market, as we distribute content to more platforms and audiences globally

o  Healthy scripted pipeline including Rivals S2 for Disney+, Run Away for Netflix and After The Flood S2 for ITV

o  Number of large format deliveries including the return of Hell's Kitchen US and The Voice across multiple countries

5. Total ITV Studios revenue includes a £55 million revenue benefit from the transfer of ITV sports production from M&E, effective from 1 January 2024. £53 million is eliminated in intersegment revenue. Excluding the revenue benefit, ITV Studios revenue was down 9%

6. Season 6 was the number one reality series in the U.S. across all streaming platforms

Media & Entertainment:

· TAR outlook and shape for 2025: 

o  TAR will be impacted by tough comparatives against the Euros in June/July and the introduction of tighter advertising restrictions on less healthy foods (LHF) in October 2025

o  The four months to the end of April is forecast to be broadly flat year-on-year

· Remain on track to deliver at least £750 million of digital revenues in 2026:

o  we will deliver good growth in digital viewing and revenue by focusing on key value drivers of content, marketing, product, distribution and monetisation

o  we will drive new digital streams including

§ a new distribution and commercial partnership agreement with YouTube, making more ITV content available on YouTube and ITV Commercial selling advertising, and 

§ developing new profitable digital revenue streams beyond advertising, leveraging our scaled platform, our powerful brand and IP and first party data 

Ongoing transformation and efficiency programme

· Delivered £60 million of savings in 2024, £10 million higher than previously guided

· £60 million savings comprised:

o  £20 million of initial £150 million plan - now fully completed, one year early

o  £40 million of savings as part of the ongoing transformation and efficiency programme as we reprioritise our resource allocation to better align with our strategy

· Our efficiency programme has delivered savings which have funded growth investments, offset inflation and improved our margins

· Delivering savings through reductions in transmission costs, technology and operational efficiencies, organisational redesign, simplifying ways of working and permanent reductions in discretionary spend

· In 2025 we expect to deliver a further £30 million of permanent non-content cost savings which is a combination of new initiatives and annualised benefits from the 2024 savings. These savings will fund investments and offset inflation. Expect costs to deliver savings to be around £25 million. 

Planning assumptions for the full year 2025

The following planning assumptions are based on our current best view but may change over the year. 

Profit and Loss Impact:

1. Total content costs are expected to be around £1.250 billion, with lower sports costs year-on-year. H1 content costs will be broadly flat on the prior year

2. In total, we expect to deliver £30 million of non-content savings a combination of new initiatives and annualised benefits from the 2024 savings

3. Adjusted financing costs are expected to be around £40 million

4. The adjusted effective tax rate is expected to be around 27% over the medium-term 

5. Exceptional items are expected to be around £45 million mainly due to costs associated with our ongoing transformation and efficiency programme (c. £25m) and our digital transformation costs (c. £10m). Cash impact is expected to be similar

Cash impact:

· Profit to cash conversion is expected to be around 80% on average over the three years from 2023 to 2025

· Total capex is expected to be around £65 million as we continue to invest in our digital capabilities

· The Board has proposed a final dividend of 3.3p, which will be paid in May 2025. This gives a full year dividend of 5.0p, a total of around £190 million

Virtual Results presentation webcast and Q&A:

ITV's virtual results presentation and Q&A session will be held for investors and analysts at 9.30 am today (UK time) via the following link: https://www.investis-live.com/itv/67a201dc8a9b7a001265becb/lanetr

You are now able to pre-register to join.

If you would like to ask a question, you will be able to do so via the following Conference Call details:

Conference Call Dial-In: 

United Kingdom (Local): +44 20 3936 2999United Kingdom (Toll-Free): +44 800 358 1035 Global Dial-In Numbers 

Access Code: 100986

Press *1 to ask a question, *2 to withdraw your question, or *0 for operator assistance.

Please refer to the Global Dial-In Numbers hyperlink above for alternate phone numbers.

Notes to editors

1. Unless otherwise stated, all financial figures refer to the 12 months ended 31 December 2024, with the change compared to the same period in 2023.

2. Group financial performance

We measure performance through a range of metrics, particularly through our alternative performance measures and KPIs, as well as statutory results, all of which are set out and defined in this report. Please refer to the APMs for a reconciliation between adjusted and statutory results. 

3. Total advertising revenue (TAR), which includes ITV Family NAR, digital advertising and sponsorship, is expected to be broadly flat for the four months to the end of April 2025 compared to the same period in 2024. TAR is expected to be down around 2% in Q1 compared to the same period in 2024.

4. Key performance indicators

· Our definition of total organic revenue excludes the impact of any acquisitions made during the current or prior period. It also excludes the year-on-year movement in foreign exchange. In 2024, the unfavourable translation impact of foreign exchange on total revenue was £30 million. 

· Total digital revenue includes digital advertising revenue and subscription revenue as well as linear addressable revenue, digital sponsorship and partnership revenue, ITV Win and any other revenues from digital business ventures. In addition, digital advertising revenue now includes previously omitted revenue streams such as commission from STV for ITV selling their video-on-demand inventory and social media advertising revenue, which qualify under the definition. The prior years have been restated to reflect the change in categorisation. Given the nature of digital revenue, it will evolve over time. 2023 was previously reported as £490 million.

· Total streaming hours measures the total number of hours viewers spent watching ITV across all streaming platforms. This figure includes both ad-funded and subscription streaming. In H1 2023, total streaming hours were reported as 737 million hours, which included some estimates of total streaming viewing from third-party data providers. This has since been updated to reflect more recently available and accurate data.

· Monthly active users captures the average number of identifiable users throughout the period who accessed our owned, operated, and IP-delivered content and services each month.

· The share of top 1,000 commercial broadcast TV programmes KPI includes TV viewing from transmission and seven days post-transmission on catch up, as well as six weeks prior to the transmission window. It excludes programmes with a duration of

· ITV Family share of commercial viewing is the total viewing of audiences over the period achieved by ITV's family of channels as a proportion of all commercial broadcast TV viewing in the UK, from transmission and seven days post transmission on catch up. ITV Family includes ITV1, ITV2, ITV3, ITV4, ITVBe, CITV and CITV Breakfast in 2023 only, ITV Breakfast and associated "HD" and "+1" channels. Note that CITV closed down and became a fully on demand service on ITVX in September 2023.

· UK subscribers captures total UK subscriptions to ITV streaming platforms and services (including free trials). Going forward as we focus on delivering at least £750 million by 2026, we will prioritise our ad-funded proposition over our pay proposition to deliver the best return.

· % change for performance indicators is calculated on rounded numbers.

· KPIs for the six months to June 2024 and 2023 are unaudited.

5. Digital revenue breakdown

* Digital advertising revenue (a component of digital revenue) now includes previously omitted revenue streams such as commission from STV for ITV selling their video-on-demand inventory and social media advertising revenue, which qualify under the definition. 2023 digital advertising revenue was previously reported at £415 million and has been restated to reflect the change in categorisation. 

6. We have recently agreed non-binding heads of terms to resolve the long running Box Clever pension dispute. Should the dispute be resolved in line with the proposed agreement, all current Scheme members will be transferred into the ITV Pension Scheme and will receive their full Scheme benefits. We would also expect to make a one-off cash payment of around £25m into the ITV Pension Scheme in 2025.

7. This announcement contains certain statements that are or may be forward looking statements. Words such as "targets", "expects", "aim", "anticipate", "intend", or the negative of these terms and other similar expressions of future performance or results, and their negatives, are intended to identify such forward-looking statements. These forward-looking statements are based upon current expectations and assumptions regarding anticipated developments and other factors affecting ITV. Although ITV believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. By their nature forward looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. They are not historical facts, nor are they guarantees of future performance; actual results may differ materially from those expressed or implied by these forward-looking statements. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward looking statements. These factors include, but are not limited to (i) the general economic, business, political, regulatory and social conditions in the key markets in which the Group operates, (ii) a significant event impacting ITV's liquidity or ability to operate and deliver effectively in any area of our business, (iii) a major change in the UK advertising market or consumer demand, (iv) significant change in regulation or legislation, (v) a significant change in demand for global content, and iv) a material change in the Group strategy to respond to these and other factors. Certain of these factors are discussed in more detail elsewhere in this announcement and in ITV's 2024 Annual Report and Accounts including, without limitation, in ITV's approach to risk management. 

Forward-looking statements speak only as of the date they are made and, except as required by applicable law or regulation, ITV undertakes no obligation to update any forward-looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future events or otherwise. Nothing in this statement should be construed as a profit forecast.

8. The financial information set out above does not constitute the Company's statutory accounts for the year ended 31 December 2024. Statutory accounts for 2003 have been delivered to the registrar of companies, and those for 2024 will be delivered in due course. PwC has reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006. 

For further enquiries please contact: 

Investor Relations

Pippa Foulds +44 7778 031097

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Media Relations

Paul Moore +44 7860 794444

Laura Wootton +44 7917 862293

Strategic Report

Chief Executive's statement

2024 has been a successful year - financially, operationally and creatively, driven by strong execution. This reflects ITV's significant strategic progress despite the rapidly changing market in which we operate.

Carolyn McCall

Chief Executive

ITV delivered double-digit earnings growth across the Group, with record profits in Studios, and an increase in the profits and margin of M&E. ITV Studios performed well despite the expected one-off impact of US strikes and softer demand from free-to-air broadcasters, which reflects the scale, quality, diversification and resilience of the business.

ITVX continued to drive strong growth in digital viewing and revenue and is delivering attractive returns. ITVX viewing has grown faster than all the other major video-on-demand services and streaming platforms since its launch. Broadcast has maintained its strength in delivering mass reach and continued strong cash generation.

Creatively, we have had a standout year producing and distributing critically acclaimed content globally that continues to set us apart in the market, and 2024 has demonstrated that the programmes we produce and distribute can change attitudes, outcomes, and even the law.

Financial Highlights

ITV's transformation has made it more agile and resilient, which have been key to its success over the years, and this is evident in its 2024 financial performance.

Group adjusted EBITA1, grew 11% to £542 million following our year of peak net investment in 2023 and adjusted EPS was up 23% at 9.6p. 

Total ITV Group revenue was down 3% and total external revenue declined by 4%, with 2% growth in total advertising revenue offset by the expected decline in ITV Studios revenue. Within M&E, ITVX continued to drive strong growth in digital viewing, which was up 12%, and in digital advertising revenue, which grew 15% year-on-year. Digital advertising now makes up 26% of total advertising revenues.

Our statutory results benefited from the profit on the sale of BritBox International in March 2024, with statutory profit before tax up 170% to £521 million and statutory EPS increasing by 100% to 10.4p.

Cash generation was strong with 83% profit to cash conversion and £325 million of free cash flow. ITV has a robust balance sheet with net debt of £431 million, and net debt to adjusted EBITDA leverage of 0.7x at 31 December 2024.

In line with ITV's dividend policy, the Board has proposed a final dividend of 3.3p (2023: 3.3p), giving an ordinary dividend of 5.0p per share for the full year 2024 (2023: 5.0p) - a total payment of around £190 million. Since 2018, we have returned over £1.4 billion to shareholders, which includes £198 million of our £235 million share buyback programme as at 31 December 2024.

Our Progress in Delivering Our Purpose, Vision and More Than TV Strategy

Our purpose is Making What Matters, entertaining and connecting with millions of people in the UK and globally, reflecting and shaping culture and building brands, with brilliant content and creativity.

We announced Phase Two of our More Than TV strategy three years ago with the vision that by 2026, ITV will be a leader in UK advertiser-funded streaming, and an expanding global force in content.

To deliver our vision and strategy, we are focused on three pillars:

• Expand our UK and global production business

• Supercharge our Streaming business

• Optimise our Broadcast business

These pillars are underpinned by a number of priorities (detailed further below), for which we have key performance indicator (KPI) targets to deliver by 2026. ITV has made strong strategic progress and the 2024 results demonstrate the significant achievements we have made.

We have transformed ITV into a much leaner, digital, more diversified and adaptable business, fit for the future with good opportunities for profitable growth, strong cash generation and attractive returns to shareholders.

1. Group adjusted EBITA includes £13 million of Audio- Visual Expenditure Credits, refer to APMs for further details

Expand ITV Studios

In ITV Studios we have built a scaled, global, diversified and resilient business, driven by very strong creative output, and being focused on delivering good growth and taking market share, benefitting from our significant competitive advantages.

ITV Studios is the largest commercial producer in the UK, one of the largest unscripted producers in the US, and in the top three producers in the key creative markets in which it operates. We produce a broad range of content for a diversified customer base. Over the last two years, around 35% of ITV Studios' revenue has come from the expanding scripted market and around 30% from growing streaming platforms.

In 2024 we saw creative successes with programmes such as Mr Bates vs The Post Office, ITV's biggest drama in over 20 years; Fool Me Once, one of Netflix's most watched shows of all time; Season 6 of Love Island US, the number one reality series across all streaming platforms in the US; and Citadel Diana, Amazon Prime Video's biggest global launch for an Italian original ever.

We continue to successfully attract and retain talent. Our unique blend of creative independence, an entrepreneurial culture, and the resources of a global studio allows our talent to thrive. Recent acquisitions include Hartswood Films in the UK, the producer of Sherlock, and one of the fastest-growing producers Eagle Eye Drama, the producer of Professor T.

The global content market is large and attractive and we anticipate growth in the key segments of the market in which we operate. This includes premium scripted content and unscripted formats driven by the strong demand from streaming platforms, and catalogue sales, particularly with strong growth in digital distribution.

We have an exciting pipeline of new and returning programmes across scripted and unscripted for a broad range of customers, such as One Piece S2 for Netflix, Rivals S2 for Disney+ and Destination X for the BBC and NBC.

In addition, we have a catalogue of over 95,000 hours, including world-class unscripted IP, and a leading drama library. Having a scaled quality catalogue, gives us really exciting new revenue opportunities as distribution becomes increasingly digital with continuous technological change.

In January 2025, ITV Studios launched Zoo 55, a new digital studios label. Through Zoo 55, we digitally publish ITV content and third party content, globally into social channels, direct to the consumer. This is through social video, free ad supported or FAST channels and through games. Zoo 55 centralises all these activities and supercharges our ability to distribute and monetise it much more effectively. In 2024, Zoo 55 delivered around £60 million of high-margin digital revenue, up c.30% year-on-year, and we expect to double this by the end of 2027, as we launch more channels and games in more territories.

ITV Studios is on track to deliver its key financial targets of total organic revenue growth of 5% on average per annum from 2021 to 2026 - ahead of the market, and at a margin of 13 to 15%. We remain focused on the four strategic priorities (as detailed below) and are confident in our ability to continue growing our market share and deliver exceptional content globally.

Media & Entertainment (M&E)

ITV M&E is the UK's largest commercial broadcaster and BVOD streamer, delivering unrivalled audience scale and reach. It is underpinned by two strategic pillars; Supercharge Streaming and Optimise Broadcast, both of which are critical to our continued success in a rapidly changing market.

The media landscape has changed profoundly since we launched our strategy. Declining linear TV viewing coupled with growth in digital viewing, the proliferation of streaming services (19 new entrants in the UK since 2018 with five having ad-tiers), and the growing influence of platforms like YouTube (viewing up nearly 20% since 2022), have dramatically reshaped the competitive environment.

ITV's strategy recognises these rapid changes and has been laser focused on capitalising on the opportunities and managing and mitigating the risks. Our priority was to transform our streaming and addressable advertising proposition to enable us to retain our existing viewers and advertisers while attracting new ones, and growing our addressable market to drive digital revenues. Through ITVX and Planet V, we've established a formidable position in the UK ad-funded streaming market.

ITVX has transformed the viewer experience, offering over 22,000 hours of free content, up from around 1,000 hours in 2019. It has a sophisticated personalisation and recommendations engine, and is on nearly 100% of all platforms. This has driven significant growth in digital viewing and in 2024, streaming hours and MAUs were up 12% and 14% year-on-year respectively.

Planet V has been critical to the success of ITVX. The platform has over 2,000 users in the UK who have access to data from over 40 million ITVX registered users, one of the UK's largest first-party data sets, and over 20,000 addressable targeting options. This has enabled us to attract over 1,000 new advertisers since launch and deliver double-digit growth in CPMs. And as its wholly owned, we keep 100% of the revenue.

When we launched ITVX we expected the point when in-year incremental digital revenues would exceed in-year incremental costs of ITVX, to be in 2026. We achieved this milestone in 2024, delivering strong growth in viewing and revenues in line with our plan, but with less investment than initially planned. We did this by optimising our content and tech spend, adapting to the changing market and taking advantage of opportunities to reduce spend. By the end of 2025, we will have recouped the cumulative investment in ITX, , much earlier than expected.

We will continue to drive strong growth in digital viewing and revenue in ITX by focusing on our key value drivers - content, marketing, distribution, product and monetisation.

In addition to ITVX, we are actively developing new digital revenue streams to drive profitable growth. We are making hundreds more hours of long and short form ITV content available on YouTube, with ITV Commercial selling the advertising around it. This offers advertisers the opportunity to engage with ITV's unparalleled premium brand safe content on YouTube, and for ITV this increases our addressable market.

We are also developing opportunities for organic growth, beyond advertising, by reshaping our business unit, Interactive, to drive revenue through high value partnerships that leverage our scaled platform, our powerful brand and IP and our first party data. By moving beyond advertising, we aim to create innovative collaborations that deliver value, enhance customer experiences and unlock new digital revenue streams. For example, we are further developing ITV Win as a premium destination for competitions and gaming. We now have the capability and culture to deliver a more entrepreneurial approach.

These revenues will contribute to our key M&E financial target of at least £750 million of digital revenues by 2026, which we are on track to deliver.

Alongside ITVX we are focused on maintaining our strength in delivering mass audiences which are highly valuable for advertisers. In 2024, we delivered 92% of the top 1,000 commercial audiences across key genres of sport, entertainment, reality, and drama. This robust performance cements ITV's unique market-leading position in UK broadcast.

Across M&E we have significant competitive advantages. We are the commercial leader in scale and reach on the TV set where the majority of all viewing still takes place. Our share of commercial big screen adult viewing is 22%, bigger than Netflix, Amazon Prime and Disney+ combined. We have a trusted brand and a strong track record for producing and distributing content which appeals to UK audiences. We have a unique commercial proposition offering mass reach, and commercial and creative partnerships all in a brand-safe and measured environment. Our extensive first-party data provides valuable insights for commissioning and windowing, driving viewing, it also improves marketing effectiveness. By augmenting our data with other first-party data, we can deliver highly valuable targeted advertising at scale, which is even more effective for advertisers.

We are focused on delivering profitable growth and expanding the margin, benefitting from these significant competitive advantages, developing new revenue opportunities and driving efficiencies.

Our More Than TV strategy

Vertically Integrated Producer Broadcaster and Streamer

Expand studios

Further expanding by genre, geography and customer and growing faster than market

2026 STUDIOS TARGET

Grow total organic revenues by 5% on average per annum to 2026 - which is ahead of the market at a margin of 13% to 15%

Optimise BROADCAST

Digitally transforming as we continue to attract commercial broadcast audiences of unparalleled scale

Supercharge STREAMING

Driving digital viewing and revenue through ITVX and Planet V, ITV's leading addressable advertising platform

2026 M&E TARGET

Grow digital revenues to at least £750m across M&E

ITV Studios - Strategic priorities and KPI targets

Expanding UK and global productions is central to ITV's strategy. ITV Studios' ambition is to be a leading force in the creation and ownership of intellectual property (IP), global content production and distribution. We are achieving this by focusing on our four strategic priorities to drive revenue and profit growth.

2. Average annual growth rate from 2021

3. Refer to APMs for detail on our adjusted measures

Media & Entertainment - Strategic priorities and KPI targets

ITV's M&E strategy is based on two core pillars: Supercharge Streaming and Optimise Broadcast, with strategic priorities to drive growth in digital revenues and maintain strength in linear.

Refer to our KPIs section further details of our KPIs and their performance year-on-year.

Cost and Efficiency programme

We continue to focus on reducing costs and driving efficiencies through our ongoing transformation and cost efficiency programme as we reprioritise our resource allocation to better align with our strategy and viewer dynamics. 

We delivered £60 million of savings in 2024 which is £10 million ahead of plan, and we have now completed our initial £150 million savings plan - one year early. Savings during the year were achieved through reductions in transmission costs, technology and operational efficiencies, organisational redesign across the business and simplifying ways of working. These savings have funded investments, increased margins and more than offset inflation in both businesses.

In 2025, we expect £30 million of new savings which is a combination of new initiatives and the annualised benefits from 2024 savings.

Regulation

The Media Act 2024, which was passed into law in July 2024, updates the legal and regulatory framework for television, particularly how it is delivered online. This should help ensure that content from PSBs, including ITV, will be included and easily discoverable on all major streaming platforms, on fair commercial terms. We remain fully engaged with Ofcom and the Government throughout the processes necessary for its full implementation.

In September 2024, the new Government confirmed its intention to implement advertising restrictions on less healthy foods (LHF) from October 2025. Advertising of LHF products will be restricted pre-9pm on Ofcom-regulated TV and streaming services, and at all times online.

The Advertising Standards Authority (ASA) is currently consulting on how it intends to implement the forthcoming restrictions on LHF advertising, which may include restricting brand advertising in some circumstances. We will engage with the consultation.

Our Social Purpose

ITV aims to inspire positive change and shape culture for good through its linear TV channels ITVX, and its prominent position as a Public Service Broadcaster in the UK. Our social purpose is focused on four areas: Mental Wellbeing, Better Futures, Climate Action, and Diversity, Equity and Inclusion (DEI).

In 2024, our Mental Wellbeing campaigns, which included the iconic Britain Get Talking, led to over 47 million people taking positive action for their mental health. World Wide Fund for Nature won our Head First award of £1 million of airtime to promote mental wellbeing in advertising with their campaign launched in Q4 2024. Within Better Futures, Soccer Aid for UNICEF surpassed an incredible milestone of over £100 million raised since it started. 

ITV is committed to integrating climate action within all areas of the business. We have championed new production methods to cut our emissions such as remote production and using electric vehicles on set. We are also driving change on-screen, embedding climate-related content across all genres. Our recently published Climate Transition Plan will guide our efforts to prioritise impactful climate actions while driving value for the business and our stakeholders.

We continue to implement our global DEI strategy, championing diversity through our mainstream content, creating equitable opportunities at ITV and across the industry, and creating an inclusive culture at ITV. Our newly established Diversity Development Fund has led to the commissioning of programmes such as Romesh Ranganathan's Parents' Evening.

Duty of Care

ITV takes its responsibilities related to Duty of Care and Speaking Up very seriously, with significant focus from the Board and Executive Committee. We have robust and established processes in place to support the physical and mental health of everyone working for and with ITV, including those who help produce our shows and those who take part in them. We also provide confidential and anonymous channels through which concerns can be reported, and we ensure that we look into all complaints raised.

In 2024, we continued to prioritise awareness and engagement with our Speaking Up programme. This included launching a dedicated Complaints Handling Unit and Framework. A review by Dr Paul Litchfield during the year concluded that we provide a very high level of duty of care to participants of our shows.

Our Chief People Officer, Ade Rawcliffe, now chairs the Duty of Care Operating Board and we ensure the continuous evolution of our care practices. Duty of Care also remains a principal risk that the Board monitors regularly. Further details can be found in the Risks and Uncertainties section .

Colleagues

Over the 70 years of ITV's history, our people have been the bedrock of the business and fundamental to ITV's success. This remains true to this day, and I am incredibly grateful to all our colleagues for their hard work, resilience, and professionalism, particularly given the uncertainty in a rapidly changing environment, which has resulted in restructuring and a focus on efficiency and productivity.

We've achieved a huge amount in 2024 in continuing to deliver our strategy effectively, and everyone should feel really proud of what we have accomplished together.

Our Ambassador network has grown stronger and is a vital part of how the Board and I engage with our colleagues. During the year, we also ran a series of Roadshows across ITV globally, and I thoroughly enjoyed meeting many of our colleagues from all areas of the business.

We recently launched 'Making What Matters' internally, which captures what sets us apart and makes ITV a special place to work. I am pleased that in our 2024 Pulse Engagement survey, 75% of colleagues who responded feel they belong at ITV.

In 2025, we will continue to prioritise and invest in our colleagues by further driving a culture of open communication and collaboration, providing learning and development opportunities, and championing diversity and inclusion to ensure that ITV is a workplace where everyone feels welcome and respected.

It is through our collective efforts that we will continue to execute our More Than TV strategy and ensure that ITV thrives in the industry for the next 70 years.

Outlook

We are really proud of the strategic progress we have made to date. We have transformed ITV from an analogue business to a successful digital business where we have built the capability and created an adaptable and agile culture while nurturing and growing our creative power.

As we continue to grow ITV Studios and our digital revenues, ITV is becoming a more resilient business with production and digital now accounting for close to two-thirds of our revenue. This is underpinned by the powerful reach and strong cash generation of Broadcast.

We see lots of opportunities for further organic growth, and with our significant competitive advantages and clear strategic pillars, we are in a really strong position to deliver profitable growth, strong cash generation and attractive returns to shareholders.

Carolyn McCall

Chief Executive

Key Performance Indicators

Our KPIs and related targets for 2026 align our performance and accountability with our strategic priorities. This is detailed further in the Strategy section of the Chief Executive's Statement.

All KPIs are reported on a six‑month basis. The following are reported quarterly: ITV Studios total revenue growth, total digital revenue, total streaming hours, share of commercial viewing and share of top 1,000 commercial broadcast TV programmes.

For further details on the performance of our KPIs, see the Operating and Financial Performance Review.

ITV Group

Expand STUDIOS UK and global production

1. A full reconciliation between our adjusted and statutory results is provided in the APMs section

2. Our APMs are defined within the APMs section of this report. It also includes a full reconciliation between our adjusted and statutory results

M&E SUPERCHARGE STREAMING

2. Our APMs are defined within the APMs section of this report. It also includes a full reconciliation between our adjusted and statutory results

3. Spin-offs such as Love Island Games, are considered distinct from the original format (i.e. Love Island) for the purpose of this indicator

4. Total digital revenue includes revenue from digital advertising, subscriptions, linear addressable advertising, digital sponsorship and partnerships, ITV Win and any other revenues from digital business ventures. In addition, digital advertising revenue now includes previously omitted revenue streams such as commission from STV for ITV selling their video-on-demand inventory and social media advertising revenue, which qualify under the definition. The prior years have been restated to reflect the change in categorisation. Given the nature of digital revenue it will evolve over time. 2023 was previously reported as £490 million and 2022 as £411 million

5. Total streaming hours is the total number of hours viewers spent watching ITV across all streaming platforms, reported at a device level. This figure includes both ad-funded and subscription streaming. In 2023, full year results, total streaming hours were reported as 1,505 million hours, which included some estimates of total streaming viewing from third-party data providers. This figure has since been updated to reflect the final data

6. Monthly active users captures the average number of identifiable users throughout the period who accessed our owned, operated, and IP-delivered content and services each month

7. UK subscribers are users of ITVX's premium tier. It includes those who pay ITV directly, those who are paid for by an operator, and free trialists. Prior to the closure in 2024, it also included subscribers to the BritBox UK service on Amazon Prime Video Channels along with the BritBox UK standalone app. Before the launch of ITVX in December 2022, this also included ITV Hub+ subscriptions

M&E OPTIMISE BROADCAST

8. The share of top 1,000 commercial broadcast TV programmes is measured by BARB based on viewing figures. This includes TV viewing from transmission and seven days post-transmission on catch up, as well as six weeks prior to the transmission window. It excludes programmes with a duration of

9. Share of commercial viewing is the total viewing of audiences over the period achieved by ITV's family of channels as a proportion of all ad-supported commercial broadcaster viewing in the UK. ITV Family includes ITV, ITV2, ITV3, ITV4, ITVBe, CITV, ITV Breakfast, CITV Breakfast and associated 'HD' and '+1' channels. Note that CITV closed down and became a fully on demand service on ITVX in September 2023

Operating and financial performance review

ITV made good strategic progress during 2024, driven by strong execution and industry-leading creativity.

Group financial overview1

ITV delivered a strong financial, operating and creative performance with an 11% increase in group adjusted EBITA2. ITV Studios delivered record profits, with an increase in the Media & Entertainment (M&E) margin. ITVX continued its strong revenue and viewing performance, delivering 15% growth in digital advertising revenue in the year.

In 2024, total ITV revenue decreased by 3%, mainly driven by the expected decline in ITV Studios from the impact of the 2023 US writers' and actors' strike, a softer market from free-to-air broadcasters (FTA), and strong comparatives from high-value deliveries in 2023. This offset growth in TAR, which was up 2% year-on-year, in line with expectations. Total external revenue was down 4%.

Both ITV Studios and M&E delivered improved margins year-on-year. ITV Studios adjusted EBITA, including Audio-Visual Expenditure Credits (AVEC), increased by 5% at a margin of 14.7%3. M&E adjusted EBITA increased by 22% reflecting the growth in TAR, lower content costs, and significant cost savings delivered across the Group.

Financial highlights

Key financials

1. We measure performance through a range of metrics, particularly through our APMs and KPIs, as well as statutory results, all of which are set out and defined in the APMs and KPIs section

2. Refer to APMs for key adjustments to EBITA and adjusted EBITA

3. ITV Studios adjusted EBITA includes a £13 million impact from the change in legislation on Audio-Visual Expenditure Credits (AVEC), effective on expenditure incurred from 1 January 2024. Expenditure credits on qualifying expenditure is included within operating profit rather than within the consolidated tax charge. As a result, our EBITA, adjusted EBITA, adjusted EBITA margin, profit before tax and tax charge increase, but profit after tax and EPS is unchanged, compared to the previous High-End TV accounting treatment. Excluding the impact of AVEC, ITV Studios adjusted EBITA was flat year-on-year and Group adjusted EBITA increased by 8% to £529 million

We continue to transform and restructure the way we operate in response to changing viewer behaviour and reflecting the dynamics of the industry in which we operate. We are reshaping our cost base, enhancing profitability and investing in the growth drivers of ITV Studios and streaming. We have delivered £60 million of incremental in-year cost savings which have come from across the business, including technology and operational efficiencies, permanent reductions in discretionary spend, and organisational redesign. This comprises £20 million from our existing £150 million cost-saving target, which has now been fully delivered, and £40 million of additional savings as part of our ongoing transformation and efficiency programme, which we announced in March 2024 as we continue to digitally transform the business.

Profit in stock of £7 million (2023: £2m) increased year-on-year reflecting the renewal of several multi-year deals between Global Partnerships and M&E for content on ITVX.

Total operating exceptional items were £65 million (2023: £77 million) as guided. It includes £50 million of restructuring and transformation costs to reduce the cost base and deliver our new programme rights, finance and HR systems (see note 2.2 of the Financial information for further detail).

Adjusted financing costs were down in the year at £25 million (2023: £29 million), largely due to interest received on the BritBox International sale proceeds, which were held on deposit during the year in a higher interest rate environment. This offset the financing costs attributable to our loans and bonds. Statutory net financing costs were £nil compared to £45 million in 2023, with the decline driven by the fair value gains on bonds that were repaid in the year, interest accrued on acquisition-related exceptional expenses, unrealised foreign exchange losses, imputed pension interest income and fair value adjustments on financial assets and acquisition-related put option liabilities.

Our adjusted effective tax rate was 20.8% (2023: 21.5%) and the statutory effective tax rate was 22.1% (2023: (8.3)%). The higher statutory tax rate in the year was due to the change in the UK regime for tax credits on productions, which increased the effective tax rate.

Adjusted EPS for the year was 9.6p (2023: 7.8p), with statutory EPS increasing from 5.2p to 10.4p. See the Finance Review for further detail.

Our profit to cash conversion (which is an APM) was 83% (31 December 2023: 102%). In 2024, we had free cash flow of £325 million (31 December 2023: £361 million), reflecting a significant outflow of working capital as a result of the resumption of productions in the US following the strikes in 2023.

In addition, our net debt at 31 December 2024 was £431 million (2023: £553 million) and our net debt to adjusted EBITDA was 0.7x (2023: 1.0x). Net debt includes net proceeds from the sale of BritBox International, which was funding the £235 million share buyback. Refer to the Finance Review for further detail.

We have good access to liquidity. At 31 December 2024, we had cash and committed undrawn facilities totalling £1,377 million, including total cash of £427 million (2023: £1,240 million, including total cash of £340 million).

During 2024, we extended the maturity profile of ITV's debt through the issuance of a €500 million Eurobond to June 2032. The proceeds were used to repay the £230 million term loan (maturing in 2027), and retire €240 million of the €600 million Eurobond (due in 2026).

We have a clear capital allocation policy, and our priorities remain unchanged (see the Finance Review for further details).

The Board recognises the importance of the ordinary dividend to ITV shareholders. Reflecting its confidence in the business and its strategy, as well as the continued strong cash generation and share buyback during 2024, the Board has proposed a final dividend of 3.3p (2023: 3.3p), giving a full year ordinary dividend of 5.0p per share for 2024 (2023: 5.0p).

The Board remains committed to paying a full year ordinary dividend of at least 5.0p in 2025, which it expects to grow over the medium term.

Following the sale of ITV's 50% shareholding in BritBox International to BBC Studios on 1 March 2024 for a cash consideration of £255 million, the Board returned the entire net proceeds to shareholders through a £235 million share buyback. At 31 December 2024, £198 million (270 million shares) had been bought back.

We remain focused on managing our cash and costs while continuing to invest in delivering our strategic priorities. Our robust balance sheet allows us to do this while delivering returns to shareholders.

A range of downside scenarios reflecting ITV's principal risks has been modelled and considered in the assessment of ITV's longer term viability, refer to the Long term Viability section.

ITV Studios

ITV Studios is a scaled and global creator, owner and distributor of high quality TV content, diversified by genre, geography and customer, with 60+ labels in 13 of the key creative markets around the world.

ITV Studios benefits from scale, being the largest commercial producer in the UK, one of the largest unscripted producers in the US and one of the top three in the majority of the remaining international markets in which it operates. ITV Studios is a trusted supplier with well established relationships with key content buyers and leading creative talent in those markets. With a combined content library of over 95,000 hours, it is also one of the pre‑eminent global distributors.

The global content market is large and attractive (c.$233 billion in 2024, Source: Ampere Analysis Feb 2025, ex film studios), with all platforms requiring a diverse mix of content to succeed in a very competitive market. While overall market growth has slowed compared to historical levels, we expect to see growth in the key segments in which ITV Studios operates, including content licensing (especially digital and FAST4 channels), and continued demand from streaming platforms for unscripted content and premium scripted content.

ITV Studios is well-positioned to capitalise on these growth opportunities, and we are confident in our ability to continue to grow our market share, benefiting from our significant competitive advantages. This includes the creative excellence of our talent, our strong IP, our strong track record and relationships with key buyers, and our exciting creative pipeline for 2025 and beyond.

Since 2021, ITV Studios revenue on a like-for-like basis (excluding acquisitions and adjusting for FX) has grown by around 4.2% CAGR, faster than the market of around 3.4% CAGR (Source: Ampere Analysis Feb 2025 - based on the ITVS addressable market).

4. FAST = Free ad-supported streaming TV

Expand Studios

ITV Studios Strategy

ITV Studios' ambition is to be a leading force in the creation and ownership of intellectual property (IP), global content production and distribution. We are achieving this by focusing on our four strategic priorities to drive revenue and profit growth:

1. Growing our scripted business to meet the growth in global demand

2. Growing our global formats business to maximise the monetisation of high‑value formats

3. Diversifying our customer base to capture the growth in content spend from local and global streaming platforms

4. All of which is underpinned by our ability to attract and retain leading creative talent.

Each priority is underpinned by a KPI target for 2026, which reflects the key drivers of growth and value. See the Strategy section within the CEO Report for more details on our KPIs, why they are important, and how they will enable us to deliver total organic revenue growth of 5% on average per annum over the five years from 2021 to 2026 - ahead of the market, at an adjusted EBITA margin of 13% to 15%.

Growing our scripted business

Scripted content plays a key role in attracting and retaining viewers and subscribers. This, together with the increase in the number of streaming platforms, has led to a rise in original scripted commissions in the UK, US, Australia and Europe in recent years. With our global production presence and a strong track record for delivering high-quality scripted content, ITV Studios is well-positioned to cater to this demand, and importantly grow our share of the market.

ITV has a portfolio of scripted labels in the UK and internationally, which creates and produces high-quality content with global appeal for both FTA and streaming platforms.

Our Global Partnerships business also invests in the funding of scripted content produced by ITV Studios and selective third parties.

We continue to see good momentum in our scripted pipeline into 2025 and beyond, with several scripted titles that performed well on their respective platforms being recommissioned. This includes: Rivals for Disney+, One Piece S2 and Suburra for Netflix, After The Flood for ITV and Ludwig for the BBC.

In 2024, ITV Studios' high‑end scripted hours decreased by 6% year-on-year to 296 hours (2023: 316 hours), impacted by strong comparatives from the phasing of high-value scripted deliveries year-on-year, particularly to streaming platforms in the UK and US, as well as the US writers' and actors' strikes. Scripted deliveries of titles in 2023 such as Fool Me Once, Rivals, Franklin and Suburra, were partly offset by 2024 deliveries such as Lazarus, Sanctuary and The Better Sister.

Growing our Global Formats business

Unscripted content also remains important to ITV Studios. Through our Global Partnerships business, we monetise our portfolio of some of the world's most successful travelling entertainment formats, as well as maximise commercial opportunities from our brands. We are focused on driving growth across our unscripted offering by monetising our existing high‑value formats effectively, as well as supporting the creation of new global formats.

Our portfolio of world‑class brands includes our established formats such as The Voice (one of the most successful unscripted format brands in the world), Love Island, The Chase, and I'm A Celebrity… Get Me Out Of Here! These formats and spin-offs continue to sell in new territories, and attract mass audiences for our clients. They are highly sought after by both traditional broadcasters and streaming platforms, offering cost-effective content with a proven track record of audience success. We also have several new formats with the potential to be global hits. These include I Kissed A Boy/Girl; Shark! Celebrity Infested Waters, A Party to Die For, and Celebrity Sabotage.

During the year, across our Global Partnerships business, we sold 65 unique formats internationally (2023: 63), 20 of which were sold to three or more countries (2023: 19). 

Further diversifying our customer base

Demand from streaming platforms for unscripted content and premium scripted content presents a significant opportunity for ITV Studios to further diversify its customer base, and continue to grow its overall market share. Over the last few years, ITV has grown its market share from streaming platforms, who we have built strong relationships with. Since 2021, and despite the decline in revenue in 2024, ITV Studios has grown its scripted and unscripted revenues from streaming platforms by 26% CAGR and 45% CAGR respectively, which is ahead of market growth of around 11% for both genres (Source: Ampere Analysis ex. film studios - Feb 2025).

In 2024, the percentage of ITV Studios total revenues from streaming platforms decreased by seven percentage points to 25% (2023: 32%). This was impacted by the US actors' and writers' strikes, and strong comparatives from the delivery of high-value scripted and unscripted titles in 2023, particularly in the UK and US. This included Franklin, Physical and Big Beasts for Apple TV+, Fool Me Once for Netflix, and Fifteen Love for Amazon Prime Video. Offsetting some of this year-on-year decline were deliveries in 2024 of scripted and unscripted titles including: Queer Eye, Missing You and Love Is Blind France all for Netflix, The Better Sister and Lazarus for Amazon Prime Video and Virgin Island for Hulu.

ITV Studios has a strong creative pipeline of scripted and unscripted titles for streaming platforms in 2025 and beyond, reflecting the trust they have in our creativity and the strength of our ideas. Future titles include: Squid Game: The Challenge S2, Sneaky Links: Dating After Dark, and Run Away all for Netflix; The Devil's Hour for Amazon Prime Video and Love Island Games USA for Peacock.

2024 PROGRAMME HIGHLIGHTS

Digital Studio - Zoo 55

Our Global Partnerships business focuses on leveraging our extensive content library of 95,000+ hours, and maximising the value of ITV Studios IP. In early 2025, ITV Studios launched a new digital content label, Zoo 55, to drive high-margin growth from the global digital distribution market, as we distribute content to more platforms and audiences globally. This is a growing area of the content market, with the global online video advertising market expected to grow by nearly 50% by 2029.

Zoo 55 will encapsulate our existing portfolio of 160+ owned and operated social video channels (e.g. YouTube, Meta and TikTok), which had over 25 billion views in 2024, 100+ ad-supported channels, and 20 branded and thematic FAST channels (e.g., Pluto and Roku) in 18 territories. We also have 18 active mobile games (e.g. Love Island and The Chase) where we license our IP to third-party games producers.

Zoo 55 is also using digital innovation and AI to deliver data-backed content creation and automated clipping.

Zoo 55 delivered around £60 million of high margin digital revenue in 2024, up c.30% year on year, and we expect to double this by the end of 2027, as we launch more channels and games in more territories.

Attracting and retaining leading talent

A key part of ITV Studios' investment strategy and its overall success is its ability to attract and retain the best creative talent. ITV Studios offers talent a unique combination of creative independence, an entrepreneurial culture, a label structure, and the resources of a global studio business. This includes access to ITV Studios' global distribution network, and in the UK, the benefit of being part of a vertically integrated producer broadcaster and streamer.

ITV has successfully integrated its new labels, many of which were established through recent talent deals, delivering an impressive slate of programmes with many more commissions in development. Recent and upcoming include: Virgin Island, a co-production between ITV America and Plimsoll Productions in the UK; Fool Me Once, After The Flood and Run Away from Quay Street Productions; as well as Rivals from Happy Prince, and 113 from Windlight Pictures in Germany. This strong pipeline demonstrates ITV Studios' commitment and success in nurturing and leveraging top creative talent to produce engaging, high-quality content.

We continuously manage our portfolio of labels to strengthen our creativity. During the year, we acquired the UK-based scripted independent studios, Hartswood Films, producer of Sherlock. We also acquired a majority stake in UK scripted producer Eagle Eye Drama, the producer of Professor T and Hotel Portofino. As part of the deal, ITV Studios also acquired a majority stake in Belgium-based production company Happy Duck Films, the production services partner on Eagle Eye's slate.

In the US, ITV Studios sold back its minority shareholding in Blumhouse TV to Blumhouse Holdings. Blumhouse and ITV America continue their unscripted partnership delivering the series Worst Roommate Ever, which achieved success on Netflix and has secured a series spin-off.

ITV Studios financial performance

1. The organic change assumes exchange rates remain consistent with the comparative period and removes the impact of acquisitions in the current or comparative period

2. Excluding the revenue benefit from the transfer of ITV Sports Production from M&E, effective from 1 January 2024, total ITV Studios revenue was down 9% and ITV Studios UK revenue was down 15%

3. ITV Studios adjusted EBITA also includes a £13 million impact from the change in legislation on AVEC. Excluding the impact of AVEC, ITV Studios adjusted EBITA was flat year-on-year with a 14% margin. Refer to Alternative Performance Measures for key adjustments to EBITA and adjusted EBITA

ITV Studios performed well, despite the expected difficult market backdrop in 2024. Total ITV Studios revenue was down 6% due to the expected impact from the 2023 US writers' and actors' strikes, a softer market from FTA broadcasters, and strong comparatives from the phasing of deliveries year-on-year.

Total ITV Studios revenue includes a £55 million revenue benefit from the transfer of ITV sports production from M&E in 2024, of which £53 million is eliminated in intersegment revenue. This transfer means all production labels are now within ITV Studios, and it creates production and digital opportunities, enabling Zoo 55 to leverage the sports archive.

Internal revenue was up 3%, which includes the benefit of the transfer of ITV sports production from M&E. Total Studios external revenue was down 10%.

Total organic revenue at constant currency was down 5%, adjusting for a £30 million unfavourable foreign exchange movement and £20 million of acquisitions and disposals.

Reflecting our presence in key global production markets, 59% of ITV Studios revenue was generated outside the UK (2023: 58%).

ITV Studios adjusted EBITA (including AVEC)3 was up 5%, with an adjusted EBITA margin of 14.7%, reflecting an increase in the mix of higher-margin catalogue sales and the actions we have taken on cost. During 2024, £25 million of permanent cost savings were delivered relating to production efficiencies, permanent reductions in discretionary spend, and organisational redesign savings.

There was a £5 million unfavourable impact from foreign exchange on adjusted EBITA in the year.

We continue to look at ways to drive efficiencies and improve margins over the medium term. This includes rationalising our property footprint, using technology and data to drive cost and revenue efficiencies, utilising our production hubs for our key global formats, taking further steps to digitise our production processes, as well as using remote editing more routinely, and the operational use of AI to optimise production processes where possible. We remain committed to our adjusted EBITA margin guidance of 13% to 15%.

ITV Studios UK

ITV Studios UK produces a diverse range of new and established scripted and unscripted titles for global streaming platforms and FTA broadcasters. 

In 2024, ITV Studios UK saw a decline in revenue of 10% to £868 million 2 (2023: £962 million). Excluding acquisitions made during the year, ITV Studios revenue was down 12% at £848 million. The decline was driven by strong comparatives from the phasing of a number of high-value deliveries in 2023. This included Fool Me Once and Squid Game: The Challenge for Netflix, Vigil for the BBC, The Stolen Girl and Rivals for Disney+ and I'm A Celebrity... Get Me Out Of Here! South Africa for ITV.

Offsetting some of this decline in 2024 were deliveries including Code of Silence and Until I Kill You for ITV, Missing You for Netflix, Lazarus for Amazon, Ludwig for the BBC and Sanctuary for AMC.

ITV Studios US

ITV Studios US provides scripted and unscripted content to all the major networks and cable channels in the US, along with every major streaming platform.

During the year, ITV Studios US total revenue declined by only 1% to £391 million (2023: £395 million), and was up 2% to £402 million, when adjusted for the unfavourable foreign exchange impact. This was in spite of the impact of the 2023 US writers' and actors' strikes, which delayed around £80 million of revenue from 2024 to 2025. ITV America (unscripted) had a strong performance in the year, with the delivery of shows such as The Voice for NBC, Love Island for Peacock, Hell's Kitchen for Fox, and Worst Roommate Ever for Netflix. This was combined with the delivery of Snowpiercer for AMC and The Better Sister for Amazon Prime Video by ITV Studios America (scripted).

Overall, ITV Studios America revenue declined, reflecting delayed productions from the impact of the strikes and the phasing of large, unrepeated scripted deliveries year-on-year, including Franklin and Physical for Apple TV+ and Ten Year Old Tom for Max.

4. Includes high-end scripted and other scripted revenues

5. Core ITV includes the soaps and Daytime shows produced by ITV Studios for ITV1

ITV Studios International

ITV Studios International produces original scripted and unscripted content across our non-UK and non-US production bases.

Growing our International scripted business allows us to benefit from the demand for locally produced content with global appeal, and we have scripted projects in production and development with many global and local streaming platforms.

Revenue within ITV Studios International decreased by 15% to £380 million in 2024 (2023: £445 million), and by 10% to £400 million when adjusted for acquisitions and disposals and the unfavourable impact of foreign currency. Deliveries in 2024 included ACAB in Italy, Inganno (the Italian adaptation of Gold Digger from the UK), My Kitchen Rules Australia and Scared of the Dark in Germany, based on the UK format. This was offset by fewer deliveries across the portfolio year-on-year, due to lower demand from free-to-air broadcasters in Europe.

Global Partnerships

Global Partnerships saw strong revenue growth in 2024, up 8% year-on-year to £399 million (2023: £368 million) and 10% to £406 million when adjusted for the unfavourable impact of foreign currency.

The business benefited from growth in catalogue sales, leveraging the breadth and depth of its extensive catalogue with sales to other broadcasters and streaming platforms globally, including the renewal of multi-year deals with customers such as ITVX and BritBox International (owned by the BBC). It also benefited from the international distribution of scripted titles, such as Ludwig, Snowpiercer and After The Flood. Finished programme sales of unscripted titles including Love Island, Hell's Kitchen and The Graham Norton Show have all sold well to streaming platforms, ad-funded video on demand platforms and FAST channels globally.

Outlook

·  ITV Studios remains on track to deliver total organic revenue growth of 5% on average per annum from 2021 to 2026, ahead of the market, at a margin of 13-15%

· In 2025 we expect to see good revenue growth, ahead of the market. Revenue, profit and margin will be weighted to H2, with the H2 margin being higher than H1, due to the weighting of cost savings and high-margin deliveries

·  The 2025 full year margin will be lower than 2024 and still within the 13-15% range. This reflects the change in sales mix, as the market recovers following the US strikes, with a lower proportion of high-margin catalogue sales, and a higher proportion of lower-margin scripted deliveries

·  We have very strong creative output and an exciting pipeline of productions for 2025 and beyond. This is expected to include:

- In the UK, Destination X for the BBC and NBC in the US, Run Away for Netflix, Rivals S2 for Disney+, and The Reluctant Traveller for Apple TV+

- In the US, Sneaky Links: Dating After Dark and One Piece S2 for Netflix, What Drives You for Roku, and Love Island Games for Peacock

- Internationally, Paris Police 3 for Canal+, Gomorrah Le Origine for Sky Italia, and key formats such as The Voice and Love Island delivering across multiple countries

- Global Partnerships will see an increased pipeline of new content produced by ITV Studios, with titles including The Hack, Cold Water and Code of Silence, along with new formats Celebrity Sabotage and Shark! Celebrity Infested Waters

Media & Entertainment

ITV is the UK's largest commercial broadcaster and streamer, delivering unrivalled audience scale and reach. Through M&E, we make content available to viewers through ITVX - our free advertiser-funded streaming service, our free-to-air linear TV channels and our third-party partners, enabling them to watch however and wherever they choose.

M&E Strategy

ITV's M&E strategy is designed to respond to changing viewer behaviour and the evolving needs of advertisers. It is based on two strategic pillars: Supercharge Streaming and Optimise Broadcast.

Across ITVX and our linear TV channels, ITV M&E offers viewers unparalleled choice in how and when they watch, combined with a strong reputation for brilliant content suited to British audiences.

This has led to ITV M&E being a commercial leader in scale and reach, with a 22% share of commercial big screen viewing, bigger than Netflix, Amazon Prime and Disney+ combined (Source: BARB, Adults 16+), and a weekly reach of nearly 40 million across linear TV and ITVX. This is an invaluable proposition for advertisers, providing them with a unique combination of mass reach, targeted advertising at scale, and commercial and creative partnerships in a brand-safe and reliably measured environment.

Our strategic pillars have KPIs and 2026 targets, which measure the key drivers of growth and value. See the Strategy section within the CEO Statement for more details on these KPIs, why they are important, and how they will enable us to grow digital revenues to at least £750 million by 2026, as well as drive non-digital revenues.

Supercharge Streaming

Growing and enhancing our streaming proposition, ITVX

ITVX continued to perform very strongly during 2024. It:

·  Attracted more users - Monthly active users (MAUs) increased by 14% to 14.3 million year-on-year (2023: 12.5 million)

·  Increased viewing - Total streaming hours grew by 12% to 1,686 million (2023: 1,506 million6)

·  Attracted harder-to-reach audiences - Streaming hours amongst the 25-54 demographic increased by 22%, and among men increased by 26%. Over 50% of ITVX's audience is under 55, compared to 33% for total television

·  Increased engagement and content discovery - We have seen the power of our key programmes bringing viewers to ITVX, who then go on to watch other content. For example, 77% of those Love Island viewers and 61% of Euro 2024 viewers went on to watch additional content on ITVX

This increased reach and viewing of ITVX, provide advertisers with valuable addressable and scaled audiences, in a brand-safe and measured environment. Our robust data and analytics capabilities enable us to offer high-value, highly targeted inventory and this contributed to a 15% increase in digital advertising revenue, and helped drive 12% growth in digital revenues year-on-year.

In 2024, incremental digital revenues exceeded ITVX incremental costs, two years earlier than expected. By the end of 2025, will have recouped the cumulative incremental investment in ITVX, much earlier than anticipated. We have grown digital revenues in line with our plan, with lower investment in content and technology than originally planned.

This was achieved by optimising spend through having one content budget across linear TV and streaming, enabling us to reach audiences more efficiently, wherever they choose to watch. We reduced the number of ITVX exclusives, and tested different windowing and release patterns to maximise viewing across both linear TV and streaming. We also acquired more content and boxsets for ITVX, which deliver a high volume of hours at a lower cost. Contract renegotiations and the rationalisation of technology partners have led to efficiency gains and reduced costs over time.

To sustain and build on ITVX's performance, we will focus our ITVX investment, which is fully embedded in our cost base, on our key value drivers - content, marketing, distribution, product and monetisation. Data is key to optimising these. We have over 40 million registered users, one of the largest first-party data sets in the UK. Data helps improve our commissioning decisions, maximise the effectiveness of marketing, enhance our distribution and prioritise our product developments. In addition, augmenting our scaled data sets with other first-party data sets has allowed us to deliver targeted advertising at scale. Refer to our recent ITVX webinar for further insight on how we use data to enhance our ITVX key value drivers, available at www.itvplc.com/investors/presentations-and-events/2024.

We have focused our efforts on attracting 25 to 54-year-old viewers to ITVX, as they present the biggest growth and advertising opportunities, with over 26 million in the UK. This age group increasingly turns to streaming first, with a strong preference for Reality, Sport, Drama and Entertainment - genres that closely align with ITV's strengths. They are also commercially valuable, enhancing our monetisation potential.

Content

There are over 27,000 hours of content available on ITVX (including over 5,000 hours exclusively on the premium ad-free tier), curated to attract and retain commercially valuable audiences. This includes live and on-demand content from our five linear TV channels, FAST channels, exclusive ITVX content (including spin-off shows from our linear TV channels, live sport, comedy, true crime and US box sets), ITVX Kids, and over 250 films, creating one of the UK's largest free film libraries.

Since ITVX's launch in 2022, we have dramatically improved the content offering, constantly testing, learning and adapting our content proposition and windowing strategy alongside our linear TV channels, using our data to optimise our content spend and viewing. 

2024 PROGRAMME HIGHLIGHTS

ITVX News is an integral part of ITVX and an important driver of viewing, with News streaming hours up 34% year-on-year. ITVX News has proved valuable in delivering public service content to broader audiences, and has recently been named the most influential voice in UK journalism on TikTok.

In 2024, ITVX benefitted from the strong linear TV schedule of drama, sport, entertainment and reality along with a number of Hollywood film franchises and US boxsets, which contributed to the strong growth in viewing metrics during the year.

ITVX's content strategy over the next two years will focus on increasing viewing through a regular cadence of new content, improving viewer retention through the windowing of our new drama releases and our deep and broad content catalogue, as well as optimising scheduling to increase reach, delivering content to viewers wherever and however they choose to watch.

6. In 2023, total streaming hours were reported as 1,505 million hours, which included some estimates from third-party data providers. This figure has since been updated to reflect the final data.

Marketing

Marketing is an important tool to attract more commercially valuable viewers and getting them to engage with ITVX for longer.

We increased our marketing investment by around £15 million in 2024 to drive both streaming and linear viewing.

During the year, we focused our marketing investment on ITVX brand campaigns and around our high-profile, flagship programmes, while enhancing digital and reactive marketing to promote shows gaining traction through news or social media trends. With improved data capabilities and using generative AI tools, we now target viewers more effectively - especially across social media channels where we have reduced our cost per acquisition by 70%. We also launched ITV Insiders, collaborating with over 120 top UK digital influencers to promote our shows. These efforts have boosted our spontaneous consideration - which measures how many viewers, unprompted, consider ITVX as a viewing destination. We are the only broadcaster to achieve double-digit growth, while some key streaming competitors have declined.

In 2025 we will refresh our brand to attract more 25 to 54-year-old viewers, and continue investing in marketing to increase awareness and engagement of the service. We will also focus on the measurement and effectiveness of our marketing investment, using third-party econometric modelling, to ensure we optimise the efficiency of our spend, and maximise our return on investment.

Distribution

ITVX is available in nearly all UK homes through broad distribution including Sky Q, PlayStation 4 and 5, Apple Vision Pro and Freely - a new TV streaming service which combines live TV and on-demand services of the FTA broadcasters.

We partner with third-party platforms to drive the prominence and discoverability of ITV content with improved data integration. Making it easier for viewers to find and access our content on other platforms plays a key role in driving additional viewing to ITVX. For example, one of our top dramas being supported editorially by Sky led to a 70% increase in viewing performance versus other comparable dramas.

There remains an opportunity for further integration with third-party platforms as we look to introduce new continue-watching features on these platforms, and embed more of our content to drive viewer growth.

Product

In 2024, we focused on enhancing the user journey and personalisation on ITVX to keep viewers engaged for longer. We integrated an industry-leading recommendations engine which drove over 20 million incremental streaming hours since implementation. 

Building on this momentum, in 2025, we will leverage our extensive viewing data to further refine the personalisation and recommendations offering, to drive even greater growth in viewing and retention.

Monetisation

To increase the monetisation of our inventory on ITVX, during 2024, we introduced Pause Ads, which seamlessly plays static ads when a user pauses content; on our FAST channels, we rolled out ad replacement to almost 80% of users; and we also launched linear addressable advertising on YouView and Virgin Media. We were also the first UK broadcaster to introduce subtitles on adverts, something that is extremely important to our advertising clients.

In 2025, we will continue to innovate for our advertisers creating more monetisable digital inventory. We will launch digital ad insertion on simulcast viewing for our family of channels7 and linear addressable on Sky Glass and Sky Stream.

ITVX Premium

ITVX Premium offers users the opportunity to enjoy all ITVX programming ad-free, in addition to exclusive content and access to BritBox UK (content from the ITV and BBC libraries).

As previously announced, during 2024 we simplified our ITVX Premium offering by closing the BritBox UK service on Amazon Prime Video Channels along with the BritBox UK standalone app. This has allowed us to improve the overall user experience for those subscribers who migrated to ITVX Premium. The actions we have taken have had a short-term impact on subscriptions and our subscription revenue. At 31 December 2024, UK streaming subscriptions declined to 1.0 million from 1.3 million at 31 December 2023.

Since ITVX's launch, our priority has been the ad-funded service to deliver the best return and drive digital revenues. While this will continue, we will also focus on driving profitable subscription revenue growth by minimising churn and maximising value from new and existing subscribers.

Optimise Broadcast

Continuing to deliver unrivalled audiences with high‑quality programming

We operate the largest family of free‑to‑air commercial television channels in the UK. These channels provide unparalleled audience scale and reach, as well as targeted demographics demanded by advertisers. Despite the growth in streaming viewing, linear TV remains important for both our viewers and advertisers.

To optimise Broadcast and maintain our USP of delivering mass audiences for advertisers, we continue to invest in live content, such as sports and large entertainment shows, as well as drama, factual and news. In 2024, we invested £1.268 billion in our content budget across all our linear TV channels and ITVX in order to drive these mass audiences on our linear TV channels, and live and on demand viewing on ITVX. We saw good performances from programmes such as Mr Bates vs The Post Office, which was the UK's biggest drama in 2024, I'm A Celebrity… Get Me Out Of Here!, which was the UK's biggest entertainment show, and England vs Netherlands Euros semi-final, the biggest peak audience on any channel.

We have maintained our significant share of the top 1,000 commercial broadcast TV programmes, delivering 92% in 2024 (2023: 91%). Our share of commercial viewing was 32.2% (2023: 32.6%) and we continue to have the largest share of commercial viewing versus our commercial competitors.

7. Excluding ITV1

Over the last few years, linear TV audiences in the UK have gradually declined, with audiences spending an increasing amount of time on streaming platforms, both ad-funded and paid. In 2024, total ITV viewing (which includes viewing of all ITV content, across all devices) was down 6% to 12.3 billion hours8. Total broadcaster viewing (broadcaster viewing across all devices) declined by 2%, and total broadcaster and subscription streaming service viewing (viewing of all broadcaster and subscription streaming service content across all devices) was down 1% year-on-year (Source: BARB). ITV's decline was greater than the market, due to a stronger viewing performance year on year from other broadcasters, who saw an increase in the volume of sport in their schedule. This included the Paralympics on Channel 4 and the Olympics on the BBC which significantly boosted their viewing hours.

ITV has prioritised its content investment on driving valuable mass commercial audiences and digital viewing, this has impacted total viewing to our off-peak linear TV schedule.

We have an exciting schedule for 2025 to engage, inform and entertain our audiences. This includes new and returning entertainment and reality programmes such as Shark! Celebrity Infested Waters (made by ITV Studios) and The Fortune Hotel, new and returning dramas including Code of Silence and Unforgotten, along with sporting events including the women's Euros, the FA Cup and Carabao Cup.

Strong linear and online advertising proposition

While the advertising market is becoming more competitive, ITV is in a good position to be able to compete for advertising in a long-term growing advertising market with its unique combination of mass reach, targeted advertising and commercial and creative partnerships. ITV has deep relationships with agencies and advertisers; provides brand-safe and measured advertising and has a strong track record of commissioning and producing content which appeals to UK audiences.

Mass reach

As the viewing and advertising landscape becomes increasingly fragmented, the mass scale and reach offered by television, and particularly ITV, becomes even more valuable to advertisers. To support this, we have built, and continue to invest in, a range of measurement tools focused on measuring and demonstrating the outcome and effectiveness of advertising, which is key to growing our advertising revenues. Additionally, we have recently partnered with Sky and Channel 4 to launch a pilot joint measurement panel, called Lantern, aimed at tracking the short-term impact of TV advertising on sales. Recent research9 confirms that TV advertising remains the most effective advertising channel for brands, with the return on investment being 1.5x higher than digital.

With global streaming platforms entering the advertising market and introducing ad-supported tiers to their subscription plans, ITV's USP as the largest commercial public service broadcaster in the UK remains incredibly important and the advertising proposition ITV offers clients is unparalleled, and something that no streamer can match.

Targeted advertising - Planet V

Planet V is ITV's wholly owned programmatic addressable advertising platform. It is a self-service platform allowing agencies and advertisers to seamlessly and cost-effectively buy highly targeted video advertising on ITVX. Planet V utilises ITV's extensive data assets and capabilities to provide compelling advertising products for advertisers, which it augmented with other first-party data sets. Being wholly owned ensures that all the returns generated by the platform go directly to ITV without any value leakage through third-party commissions.

The platform is used by over 2,000 users in the UK and offers agencies and advertisers access to over 20,000 data-targeting options to create sophisticated audience segments. Advertisers can also incorporate their own first-party data in a GDPR-compliant environment using our data provider, InfoSum (an identity infrastructure provider) and monitor their campaigns through a custom‑built user interface. We are able to drive higher-value CPMs through this increasingly sophisticated and valuable ad inventory.

With the expansion of ITVX's online inventory and reach, ITV is well positioned to meet the increasing demand for targeted advertising. Planet V has attracted over 1,000 new advertisers to ITV since its launch, delivered double-digit growth in our CPMs and we have booked nearly £1.5 billion in revenue through the platform.

Planet V provides access to our growing range of innovative addressable products (ITV Ad Labs Products). This includes:

·  Automated Contextual Targeting, which is an AI-powered solution to analyse scenes in our shows to identify the most perfect content environment for advertisers to sit adjacent to

·  Retail Match (previously Matchmaker), which securely matches ITV's existing registered first-party audience, with profiles from Boots' Advantage Card and Tesco's Dunnhumby Clubcard databases, creating category shopper audience segments for targeting in ITVX (e.g. ice cream buyers)

·  Proximity Shopper, which identifies optimal postcodes to target your ITVX advertising using Circana sales data from all major supermarkets, convenience stores and service stations. Advertisers can utilise a range of variables to optimise their campaign, including brand and competitor sales, targeting the areas with the greatest opportunity.

Commercial and creative partnerships

ITV's Commercial team delivers strategic commercial and creative partnerships to advertisers, who want to use ITV's unrivalled scale, reach and targeting capabilities to establish and grow their own brands. This includes product placement, and ad‑funded programming that leverage the strength of our programme brands to help advertisers connect with audiences in unique ways. As a vertically integrated producer broadcaster and streamer, we have the advantage of owning the IP of programming, and having editorial, commercial, creative, and production teams working together, creating valuable opportunities for advertisers.

Advertising partnerships

In Q4 2024, ITV entered into a new distribution and commercial partnership with YouTube, bringing hundreds more hours of long and short-form ITV content to the platform. This is aligned with our strategy to maximise reach and offer viewers greater choice, ensuring our content is accessible to all audiences wherever they choose to watch. ITV Studios' Zoo 55 will manage the content on these channels (refer to the earlier ITV Studios section for further details).

8. In 2024, total ITV viewing was measured exclusively using BARB data. Previously, this data was not available and total ITV viewing was measured using a combination of BARB data and ITV's internal data. BARB data for total ITV viewing has now been made available for 2023 and 2022. The 2023 base has been restated to 13.0 billion hours versus 13.1 billion hours previously reported. 2022 is 13.6 billion hours versus 13.8 billion hours previously reported.

9. Profitability 2: The New Business Case for Advertisers

ITV Commercial will sell advertising around ITV's content on YouTube and has launched a dedicated YouTube sales team. For advertisers this offers the opportunity to engage with ITV's unparalleled premium brand safe content on YouTube and for ITV this increases our addressable market. 

To date on YouTube, ITV Commercial has:

·  Extended our reach to key valuable demographics with younger and more male audiences

·  Attracted new to TV advertisers

·  Secured budgets that would have otherwise been invested directly with YouTube

We are also developing opportunities beyond advertising. Using our brand, IP, marketing capabilities, first-party data, talent, and partnerships, we see opportunities to drive engagement and profitable revenue growth. This includes accelerating our strategy within our Interactive business by further developing ITV Win as a premium destination for competitions and gaming, and Kerching, a consumer-facing affiliate marketing brand in partnership with Kindred, which we launched last year, designed to save online shoppers money.

Refer to our recent ITV Commercial webinar for further insight on our commercial proposition, available at: www.itvplc.com/investors/presentations-and-events/2024.

M&E financial performance 

Total M&E revenue was up 1% in 2024 with total advertising revenue (TAR) up 2% and broadly in line with expectations. Digital revenue was up 12% in the year to £556 million (2023: £498 million). Within this, digital advertising revenue saw strong growth, up 15% year-on-year. M&E non-advertising revenues were down 10%, driven by the expected decline in subscription and partnership revenues, as we improved the viewer proposition and monetisation of ITVX. Further detail on the year-on-year movement in revenue is detailed below.

Total M&E costs were down 2% in 2024. Within this, content costs were down 2%, as we have optimised our spend and windowing strategy across linear TV and ITVX with one content budget. 

Variable costs were flat year-on-year, with the planned increase in marketing and an increase in our variable costs of streaming, offset by cost savings.

M&E infrastructure and overhead costs decreased by 2%, with staff and linear supply chain inflation and investments in our Commercial outcome proposition, being more than offset by the delivery of permanent cost savings. Across M&E, we delivered £35 million of savings which relate to operational efficiencies associated with our transponders, organisational redesign and a reduction in discretionary spend.

As a result of the revenue growth and reduction in costs, M&E adjusted EBITA grew 22% and the margin increased from 9.8% to 11.9%.

10. Refer to APMs for key adjustments to EBITA and adjusted EBITA

11. Digital advertising revenue (a component of digital revenue) now includes previously omitted revenue streams such as commission from STV for ITV selling their video-on-demand inventory and social media advertising revenue, which qualify under the definition. The prior years have been restated to reflect the change in categorisation. Given the nature of digital revenue it will evolve over time. 2023 digital advertising revenue was previously reported as £415 million and digital revenue was reported as £490 million.

Total advertising revenue (TAR)

TAR was up 3% in Q1 and up 17% in Q2 with strong advertiser demand for the Euros. Q3 was flat and Q4 was down 7%, impacted by the 2023 Rugby World Cup comparative, which gave ITV1 and ITVX their biggest audiences of the year. In addition, Q4 2024 advertising bookings were impacted by the uncertainty in the lead-up to and post the UK budget.

Most TAR categories were up year-on-year. FMCG-related categories were up, with Household Stores up 32% and Food up 5%. Entertainment and Leisure was up 13% and within that, gambling was up 22% with increased spend around the Euros. Retail was up 15%, with increased spend from the supermarkets, which was up 11%, and Cars grew by 7% with increased spend by electric vehicle brands.

Categories which saw a decrease in spend year-on-year include Telecommunications, down 28% with lower spend from some mobile operators. Finance was down 3% with a decline in spend from some insurance companies and retail banks. After seeing annual growth in advertising spend since the COVID-19 pandemic, Airlines and Travel was down 4% year-on-year. E-commerce companies, excluding gambling, decreased 8% in the year with the largest declines from online holiday companies.

Subscription revenue

Subscription revenue is generated directly from the premium tier of ITVX, and prior to their closure in 2024, revenue also came from the standalone BritBox UK app, and BritBox UK and ITV catch-up services on Amazon Prime Video Channels.

We took the decision to close these services to simplify the paid streaming proposition for customers, which impacted our subscription revenue in 2024, decreasing by 19% to £48 million (2023: £59 million).

SDN

SDN generates revenue by licensing multiplex capacity to broadcast channels, radio stations and data providers on digital terrestrial television (DTT) or Freeview. SDN customers include ITV and third parties. SDN's current multiplex licence has been renewed until 2034.

In 2024, external revenue (non-ITV) declined by 10% to £43 million (2023: £48 million), as expected. This decrease is primarily due to long-term contracts with third parties coming to an end and being renewed at current market rates. This trend is expected to continue, with additional long-term contracts set to end during 2026.

Partnerships and other revenue

Partnerships and other revenue includes revenue from platforms, such as Sky and Virgin Media O2, competition revenue, third‑party commission, e.g. for services we provide to STV.

As expected, Partnerships and other revenues declined by 7% to £191 million (2023: £205 million), following our decision to revise our partnership agreements to enable us to deliver digital advertising to a larger proportion of ITVX viewers through Planet V. In addition, competition revenue was lower year-on-year. 2024 also included some one-off net payments from Global Partnerships for content broadcast on our channels; this is not expected to repeat at the same level in 2025.

BritBox International

On 1 March 2024, ITV announced the sale of its 50% shareholding in BritBox International to the BBC Studios for £255 million. ITV Studios will continue to receive an ongoing revenue stream from BritBox International similar to 2023 levels for the use of ITV-owned content under new extended licensing agreements.

Prior to its sale, BritBox International was ITV's joint venture with the BBC. It provided an ad‑free subscription streaming service offering the most comprehensive collection of British content available in the US, Canada, Australia, South Africa and the Nordics (made up of Sweden, Finland, Denmark and Norway).

Outlook

·  We will continue to deliver good growth in digital viewing and revenue and remain on track to deliver at least £750 million of digital revenues by 2026

·  TAR is expected to be broadly flat year-on-year for the four months to the end of April 2025, with Q1 down around 2% year-on-year. TAR will be impacted by tough comparatives against the Euros in June/July and the introduction of tighter advertising restrictions on less healthy foods (LHF) in October 2025 

·  We expect content costs to be around £1.250 billion in 2025, down £15 million year-on-year, as we further optimise our content spend across our linear TV channels and ITVX, with lower sports costs following the men's Euros in 2024. First half content costs will be broadly flat year on year.

Alternative Performance Measures

The Annual Report and Accounts include both statutory and adjusted measures (Alternative Performance Measures or APMs), the latter of which, in management's view, reflect the underlying performance of the business and provide a more meaningful comparison of how the business is managed and measured on a day‑to‑day basis.

Our APMs and KPIs are aligned with our strategy and business divisions and together are used to measure the performance of our business and form the basis of the performance measures for remuneration. Adjusted results exclude certain items because, if included, they could distort the understanding of our performance for the period and the comparability between periods. APMs are not defined terms under IFRS and may not be comparable with similarly titled measures reported by other companies.

As adjusted results exclude certain items (such as significant legal, major restructuring and transaction items), they should not be regarded as a complete picture of the Group's financial performance. The exclusion of adjusting items may result in adjusted earnings being materially higher or lower than statutory earnings. In particular, when significant impairments, restructuring charges and legal costs are excluded, adjusted earnings will be higher than statutory earnings.

The Audit and Risk Committee has oversight of ITV's APMs and actively reviews, challenges, revises and approves the policy for classifying adjustments and exceptional items. Further detail is included in the following section.

Key adjustments for EBITA, adjusted EBITA, profit before tax and EPS

EBITA is calculated by adjusting statutory operating profit for operating exceptional items and amortisation and impairment.

Adjusted EBITA is calculated by adding back high‑end production tax credits to EBITA. Further adjustments, which include the gain/loss on the sale of non‑current assets, amortisation and impairment of assets acquired through business combinations and investments, and certain net financing costs, are made to remove their effect from adjusted profit before tax and adjusted EPS. The tax effects of all these adjustments are reflected in the adjusted tax charge. These adjustments are detailed below.

Adjusted EBITDA, which is used to calculate the Group's leverage, is calculated by adding back depreciation to adjusted EBITA.

Production tax credits

The ability to access tax credits, which are rebates based on production spend, is fundamental to our ITV Studios business across the world when assessing the viability of investment decisions, especially with regard to drama and comedy. ITV reports tax credits generated in the US and other countries (e.g., Italy, Canada and Spain) within cost of sales, whereas in the UK, tax credits claimed under the High-End TV (HETV) regime must be classified as a corporation tax item. In 2024, following the changes to Audio-Visual Expenditure Credits (AVEC) adopted by ITV (see below), tax credits claimed under this regime are also reported within cost of sales. In our view, all tax credits relate directly to the production of programmes. Therefore, to align treatment, regardless of production location, and to reflect the way the business is managed and measured on a day‑to‑day basis, UK HETV tax credits have been recognised in adjusted EBITA. Our cash measures, including profit to cash conversion and free cashflow are also adjusted for the impact of production tax credits.

Changes to the current UK system of Creative Industry tax credits

On 29 November 2023, the UK government issued final legislation to reform the current system of Creative Industry tax credits to merge the four existing schemes (Film, High-End Television (HETV), Children's Television and Animation) into a single Audio-Visual Expenditure Credit (AVEC) scheme and has reviewed the qualifying criteria. The AVEC legislation was substantively enacted on 5 February 2024 and can be claimed on expenditure incurred from 1 January 2024.

The new scheme is one of expenditure credits as opposed to corporate tax relief, requiring a change to the accounting treatment to include them within statutory operating profit rather than within the consolidated tax charge.

Under the HETV regime the tax credits are treated as a credit to the tax line which results in the Group in the UK generally having a reported effective tax rate below the OECD Pillar Two minimum tax rate of 15%. The new AVEC regime treats the credits as a taxable EBITA amount and has been designed to ensure that entities are in the same post-tax position as under the old regime.

The new AVEC regime has been utilised by ITV on production expenditure incurred in 2024 at the earliest opportunity possible. See the tax section of the Finance Review and note 2.3 for further details.

Exceptional items

These items are excluded to reflect performance in a consistent manner and in line with how the business is managed and measured on a day‑to‑day basis. They are typically material amounts related to costs, gains or losses arising from events that are not considered part of the core operations of the business, though they may cross several accounting periods. These include, but are not limited to, costs directly related to acquisition activity, costs related to major reorganisation and restructuring programmes, material onerous contracts, significant impairments, employee‑related tax provisions related to earlier financial periods (IR35) and other items such as legal settlements and non‑routine legal costs (e.g. legal costs related to items which are themselves considered to be exceptional items). We also adjust for the tax effect of these items.

See note 2.2 to the financial information for further detail.

Acquisition‑related costs

We structure our acquisitions with earnouts or put and call options, to allow part of the consideration to be based on the future performance of the business as well as to lock in and incentivise creative talent. Where consideration paid or contingent consideration payable in the future is employment‑linked, it is treated as an expense (under accounting rules) and therefore part of our statutory results. However, we exclude all consideration of this type from adjusted EBITA, adjusted profit after tax and adjusted EPS as, in our view, these items are part of the capital transaction and do not form part of the Group's core operations. The Finance Review explains this further. Acquisition‑related costs, including legal and advisory fees on completed deals or significant deals that do not complete, are also treated as an expense (under accounting rules) and therefore on a statutory basis form part of our statutory results. In our view, these items also form part of the capital transaction or are one‑off and material in nature and are therefore excluded from our adjusted measures.

Restructuring and reorganisation costs

Where there has been a material change in the organisational structure of a business area or a material initiative, these costs are highlighted and are excluded from our adjusted measures. These costs arise from significant initiatives (likely to span more than one year) to reduce the ongoing cost base and improve efficiency in the business to enable the delivery of our strategic priorities. We consider each project individually to determine whether its size and nature warrant separate treatment and disclosure.

Amortisation and impairment

Amortisation and any initial impairment of assets acquired through business combinations and investments are not included within adjusted earnings. As these costs are acquisition‑related, and in line with our treatment of other acquisition‑related costs, we consider them to be capital in nature as they do not reflect the underlying trading performance of the Group. Amortisation of software licences and development is included within our adjusted profit before tax as management consider these assets to be core to supporting the operations of the business.

Net financing costs

Net financing costs are adjusted to reflect the underlying cash cost of interest for the business, providing a more meaningful comparison of how the business is managed and funded on a day‑to‑day basis. The adjustments made remove the impact of mark‑to‑market gains or losses on swaps and foreign exchange, one‑off fees and premiums relating to the buyback of bonds, exceptional interest and other finance costs on acquisitions, imputed pension interest and other financial gains and losses that do not reflect the relevant interest cash cost to the business and are not yet realised balances.

Reconciliation between statutory and adjusted results

1. The £16 million (2023: £85 million) adjustment relates to production tax credits which we consider to be a contribution to production costs and working capital in nature rather than a corporate tax item. EBITA is not a statutory measure

2. Exceptional items of £65 million (2023: £77 million) largely relate to acquisition-related expenses and restructuring and transformation costs. Refer to the Finance Review

3. £107 million (2023: £25 million) adjustment relates to amortisation and impairment of assets acquired through business combinations and investments. We include only amortisation on purchased intangibles, such as software within adjusted profit before tax

4. £25 million adjustment is for non-cash interest income (2023: £16 million non-cash interest cost). This provides a more meaningful comparison of how the business is managed and funded on a day-to-day basis

5. Tax adjustments are the tax effects of the adjustments made to reconcile profit before tax and adjusted profit before tax. A full reconciliation is included in the Finance Review

6. Weighted average diluted number of shares in the year was 3,977 million (2023: 4,059 million)

Other Alternative Performance Measures

Total revenue

As a vertically integrated producer broadcaster and streamer, we look at the total revenue generated by the business including internal revenue, which is predominantly made up of sales from ITV Studios to M&E. ITV Studios selling programmes to the M&E business is an important part of our strategy as a vertically integrated business and it ensures we own all the rights to the content.

A reconciliation between external revenue and total revenue is provided below.

ITV Studios organic revenue growth

ITV Studios organic revenue growth adjusts revenue growth for the impacts of foreign currency and acquisitions in the current or comparative period. Current period revenues are measured at constant currency which assumes exchange rates remain consistent with the comparative period. The table below shows the calculation of our organic revenue growth within ITV Studios:

* Included within ITV Studios total organic revenue for 2024 is a £55 million revenue benefit following the transfer of ITV sports production from Media & Entertainment to ITV Studios UK with effect from 1 January 2024. £53 million is eliminated in intersegment revenue.

Net pension surplus/deficit

This is our defined benefit pension scheme surplus or deficit under IAS 19 adjusted for other pension assets, mainly gilts, which are held by the Group as security for future unfunded pension payments for four Granada executives and over which the unfunded pension scheme holds a charge. See note 3.8 to the financial information.

Profit to cash conversion

This is the measure of our effectiveness at working capital management. It is calculated as our adjusted cash flow as a proportion of adjusted EBITA. Adjusted cash flow, which reflects the cash generation of our underlying business, is calculated on our statutory cash generated from operations and adjusted for exceptional items, net of capex on property, plant and equipment and intangible assets, and including the cash impact of high‑end production tax credits.

Covenant net debt and covenant liquidity

Covenant net debt is our leverage as defined in our Revolving Credit Facility (RCF) agreement. This calculation is materially different to how net debt is defined on a statutory and APM basis and is relevant in demonstrating we have met the required RCF financial covenants at our reporting date and as part of the Board's viability statement assessment.

Covenant adjusted EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) is used to calculate our covenant compliance and our leverage, and is defined in the RCF agreement. The calculations of covenant adjusted EBITDA, covenant net debt and covenant liquidity are detailed in the tables below:

* Covenant adjusted EBITDA is defined per the facility agreement. The Finance Review includes further detail on our covenant ratios

** Covenant liquidity is defined as cash and cash equivalents plus undrawn committed facilities

Finance review

This Finance Review focuses on the more technical aspects of our financial results while the operating and financial performance of the Group, M&E and ITV Studios has been discussed within the Operating and Financial Performance Review.

Chris Kennedy

Group Chief Financial Officer and Chief Operating Officer

Our Alternative Performance Measures (APMs) section, explains the adjustments we make to our statutory results. This enables focus on the key measures that we report on and use as KPIs across the business. See earlier sections for further details.

* ITV sports production transferred from M&E to ITV Studios UK with effect from 1 January 2024. Revenue of £55 million relating to sports production for M&E has been recognised in ITV Studios total revenue for the year, of which £53 million is eliminated in intersegment revenue.

Exceptional items

Total exceptional items in the year were £65 million (2023: £77 million), in line with previous guidance.

Acquisition-related expenses of £8 million (2023: £24 million) are predominantly performance-based, employment-linked consideration to former owners, and professional fees related to acquisitions and potential acquisitions.

Restructuring and transformation costs of £50 million (2023: £25 million) include restructuring and other costs associated with our ongoing transformation and efficiency programme announced in March 2024 to reshape the cost base and enhance profitability across the Group. During the year, there were also transformation programme costs associated with delivering our strategy, including our new programme rights, finance and HR systems. In 2025, we expect a further £35 million of costs associated with delivering our digital transformation (c.£10 million) and ongoing transformation and efficiency programme (c.£25 million).

In the prior year, Property costs related to the London office move to Broadcast Centre and the insured trade receivable related to an exceptional credit resulting from the settlement of the remaining claim in relation to The Voice of China.

Transponder onerous contract relates to the recognition of an onerous contract provision for transponder capacity that is no longer generating revenue.

Employee tax provision is the release of £1 million of a provision that is no longer required.

Legal settlements of £13 million in 2023, related to settlements or proposed settlements on a number of significant legal cases which were considered to be outside the normal course of business.

Legal and other costs relate primarily to legal costs for matters considered to be outside the normal course of business, including Box Clever and the UK Competition and Markets Authority (CMA) investigation.

Net financing costs

Adjusted financing costs were £25 million (2023: £29 million) largely due to financing costs attributable to loans and bonds. Statutory net financing costs were £nil (2023: £45 million) mainly driven by fair value gains on bonds that were repaid in the year, interest accrued on acquisition-related exceptional expenses, unrealised foreign exchange losses, imputed pension interest income and fair value adjustments on financial assets and acquisition-related put option liabilities.

JVs and associates

Our share of losses from JVs and associates in the year was £9 million (2023: £nil). This was our share of the net profits and losses arising from our investments, such as Blumhouse Television and BritBox International prior to their sale and our investment in Bedrock Entertainment. The increase in losses year-on-year primarily results from BritBox International which was profitable in the prior year, and the phasing of the delivery of productions for Blumhouse Television and Bedrock Entertainment.

Profit before tax

Statutory profit before tax increased year-on-year to £521 million (2023: £193 million) as a result of the growth in total advertising, cost savings across the Group, and a £212 million profit on disposal of joint ventures and subsidiary undertakings.

* Amortisation and impairment of £107 million arises in respect of assets from business combinations and investments. In 2024, the Group recognised an impairment of £76 million in relation to the goodwill allocated to the SDN cash generating unit ('CGU'). The impairment charge arose as a result of the downturn in the long-term outlook for the digital terrestrial television market. See note 3.3 to the Financial information for further details.

Tax

Adjusted tax charge

The total adjusted tax charge for the year was £98 million (2023: £85 million), corresponding to an effective tax rate on adjusted PBT of 20.8% (2023: 21.5%), which is lower than the standard UK corporation tax rate of 25% (2023: 23.5%) due to the repayment of £12 million of corporation tax that became recoverable following the successful case against the European Commission in respect of State Aid. We expect the adjusted effective tax rate to be around 26% in 2025 as previously guided, and it will remain slightly above the UK statutory rate of 25% in the medium term.

On a statutory basis, there is a tax charge of £115 million (2023: £16 million credit) which corresponds to an effective tax rate of 22.1% (2023: (8.3)%). This rate is higher in 2024 than in previous years due to the impact of Audio-Visual Expenditure Credits (AVEC) being claimed on new productions with expenditure credits in 2024, which are accounted for as a reduction to cost of sales compared to HETV tax credits, which are accounted for in the tax line and depress the effective tax rate. The reported effective tax rate of 22.1% is lower than the UK statutory rate of 25% due to residual HETV tax credits included in the tax line on productions where AVEC was not available due to the timing of production spend.

The adjustments made to reconcile the statutory tax charge with the adjusted tax charge are the tax effects of the adjustments made to reconcile PBT and adjusted PBT, as detailed in the previous table.

* In respect of intangible assets arising from business combinations and investments. Also reflects the cash tax benefit of tax deductions for US goodwill.

** As a percentage of adjusted profit before tax.

Cash tax

Cash tax paid in the year was £27 million (2023: £32 million) and is net of £78 million of production tax credits received (2023: £38 million). The majority of the cash tax payments were made in the UK. The cash tax paid is lower compared to the previous year due to the large volume of tax credits received during the year. A reconciliation between the tax charge for the year and the cash tax paid in the year is shown below.

* Further detail is included within Note 2.3 of the financial information.

Changes to the current UK system of Creative Industry tax credits

ITV has chosen to opt into the new expenditure credit regime, on production expenditure incurred in 2024, at the earliest opportunity where possible. Due to the timing of when expenditure occurred on productions, we will be claiming under both the HETV and AVEC regime for a period of time. The impact on statutory and adjusted results is shown in the following table.

* Pro-forma statutory result shows the statutory result if the new AVEC treatment had not been implemented.

In 2024, total tax credits of £56 million were claimed, of which £16 million were claimed under the old HETV regime and £40 million (£53 million gross) were claimed under the AVEC regime. The impact of this has been to increase statutory EBITA by £53 million and statutory tax charge by £13 million, whilst increasing adjusted EBITA by a further £16 million where HETV tax credits continue to be reclassed from the tax charge to EBITA. Adjusted EBITA has increased by £13 million compared to the old HETV regime due to the AVEC claim being grossed up from £40 million to £53 million.

Base Erosion and Profit Shifting (BEPS) Pillar Two

On 20 June 2023, Finance (No.2) Act 2023 was substantively enacted in the UK, introducing a global minimum effective tax rate of 15% for large groups and for financial years beginning on or after 31 December 2023.

Based on analysis of the current year financial data, most territories in which the Group operates are expected to qualify for one of the safe harbour exemptions such that top-up taxes should not apply. In territories where this is not the case there is the potential for Pillar Two taxes to apply, but these are not expected to be material. Of the £115 million reported tax charge, less than £2 million is in respect of Pillar Two top-up taxes.

Tax strategy

ITV is a responsible business, and we take a responsible attitude to tax, recognising that it affects all of our stakeholders. To allow those stakeholders to understand our approach to tax, we have published our Global Tax Strategy, which is available on our corporate website.

www.itvplc.com/investors/governance/policies

We have four key strategic tax objectives:

1. Engage with tax authorities in an open and transparent way to minimise uncertainty

2. Proactively partner with the business to provide clear, timely, relevant and business focused advice across all aspects of tax

3. Take an appropriate and balanced approach when considering how to structure tax-sensitive transactions

4. Manage ITV's tax risk by operating effective tax governance and understanding our tax control framework with a view to continuously adjusting our approach to be compliant with our tax obligations.

Our tax strategy is aligned with that of the business and its commercial activities and establishes a clear Group‑wide approach based on openness and transparency in all aspects of tax reporting and compliance, wherever the Company and its subsidiaries operate. The strategy confirms that ITV does not engage in or condone tax evasion or the facilitation of tax evasion in any form and that we have in place reasonable procedures to prevent the facilitation of tax evasion. Within our overall governance structure, the governance of tax and tax risk is given a high priority by the Board, and Audit and Risk Committee (ARC). The ITV Global Tax Strategy, approved by the Board and ARC in September 2024, and as published on the ITV plc website, is compliant with the UK tax strategy publication requirement set out in Part 2 Schedule 19 of the Finance Act 2016.

EPS - adjusted and statutory

Adjusted profit after tax was £374 million (2023: £311 million). Non-controlling interest, which is the net result from the non-ITV owned share in entities such as Plimsoll and Tomorrow Studios, was a share of losses of £2 million (2023: share of losses of £1 million).

Adjusted basic EPS was up 23% to 9.6p in the year (2023: 7.8p). The weighted average number of shares decreased year-on-year to 3,935 million (2023: 4,023 million) due to the share buyback programme (see further detail below). Diluted adjusted EPS in the year was 9.5p (2023: 7.7p), reflecting a weighted average diluted number of shares of 3,977 million (2023: 4,059 million).

Statutory EPS increased by 100% to 10.4p (2023: 5.2p).

A full reconciliation between statutory and adjusted EPS is included in the Alternative Performance Measures section.

Dividend per share

The Board recognises the importance of the ordinary dividend to ITV shareholders. Reflecting its confidence in the business and its strategy, as well as the continued strong cash generation, in line with ITV's dividend policy, the Board has proposed a final dividend of 3.3p per share (2023: 3.3p), giving an ordinary dividend of 5.0p per share for the full year 2024, which it expects to grow over the medium term, whilst balancing further investment to support our strategy and our commitment to investment grade metrics over the medium term.

Dividends are distributed based on the realised distributable reserves (within retained earnings) of ITV plc (the Company) and not based on the Group's retained earnings.

The dividend timetable is as follows:

Share repurchase programme

On 7 March 2024 ITV commenced a share buyback programme to repurchase its ordinary shares up to a maximum consideration of £235 million and thereby returning the entire net proceeds from the sale of BritBox International to shareholders.

As of market close on 31 December 2024, ITV had completed £198 million of buyback, purchasing 270 million shares. Of these shares, 118 million were cancelled, thereby reducing the Group's share capital. In May 2024, 8.5 million shares were transferred to the Group's Employee Benefit Trust, and the remaining shares repurchased remain held in Treasury. The repurchased shares held in Treasury and the shares held by EBT are excluded in calculating the weighted average number of shares in issue used in Earnings per share.

Acquisitions

As part of our strategy to expand Studios, we consider selective value-creating M&A and talent deals in both scripted and unscripted to obtain further creative talent and IP.

We have strict criteria for evaluating potential acquisitions. Financially, we assess ownership of IP, earnings growth and valuation based on return on capital employed and discounted cash flow. Strategically, we ensure an acquisition target has a strong creative track record and pipeline in content genres that return and travel, namely drama, entertainment and factual, as well as retention and succession planning for key individuals in the business.

We have generally structured our deals with earnouts or with put and call options in place for the remainder of the equity, capping the maximum consideration payable by basing a significant part of the consideration on future performance. This has allowed us to lock in creative talent and ensure our incentives are aligned, and also reduce our risk by only paying for the actual, not expected, performance delivered over time.

The majority of earnouts or put and call options are dependent on the seller remaining within the business. Where future payments are directly related to the seller remaining with the business, these payments are treated as employment costs and, therefore, are part of our statutory results. However, we exclude these payments from adjusted profits and adjusted EPS as an exceptional item, as in our view, for the reasons set out above, these items are part of the capital consideration reflecting how we structure our transactions and do not form part of the core operations.

The Group made two acquisitions in the current year. On 25 July 2024, the Group completed the acquisition of a majority shareholding of the scripted independent production company Hartswood Films in the UK, producer of Sherlock, for total consideration of £37 million. Put and call options are in place over the remaining shareholding. The acquisition of Hartswood will further enhance ITV Studios' strength in high quality, UK scripted drama, and provide for further exposure to streamers and future distribution opportunities for ITV Global Partnerships.

On 30 October 2024, the Group completed the acquisition of a majority shareholding in Eagle Eye Drama Limited and its subsidiaries, one of the UK's fastest-growing drama producers, for total consideration of £16 million. As part of the deal, the Group also acquired a majority stake in the Belgium-based production services company Happy Duck Film BV, which services Eagle Eye's global slate.

Acquisition-related liabilities or performance-based employment-linked earnouts are amounts estimated to be payable to previous owners. The estimated undiscounted future payments as at 31 December 2024 are £105 million and are sensitive to forecast profits as they are based on a multiple of earnings. The range of reasonably possible outcomes for the liability is between £85 million and £193 million. The estimated future payments, treated as employment costs, are accrued over the years the sellers are required to remain with the business. Those payments not linked to employment are recognised on acquisition at their time discounted value.

We closely monitor the forecast performance of each acquisition and, where there has been a change in expectations, we adjust our view of potential future commitments. At 31 December 2024, expected future payments were £105 million (2023: £105 million), which includes £60 million for acquisitions made in the year, offset by payments made to previous owners of £54 million, and changes in forecasts.

At 31 December 2024, £34 million of expected future payments had been recorded on the balance sheet, with the balance of £71 million to be accrued over the period in which the sellers are required to remain with the business.

Disposals

During the year, the Group recognised a net profit on disposal of associates, joint ventures and subsidiary undertakings of £212 million from proceeds of £303 million. The carrying value of net assets disposed and related costs was £91 million. On 1 March 2024, the Group announced the sale of its entire 50% interest in BritBox International to its joint venture partner BBC Studios for a cash consideration of £255 million. On 25 July 2024, the Group announced that ITV Studios had sold back its minority shareholding in Blumhouse TV to Blumhouse Holdings, for a consideration of US$60 million. Blumhouse TV and ITV America will continue their unscripted partnership.

Cash generation

Profit to cash conversion

* Depreciation of £47 million (2023: £46 million) includes £32 million (2023: £28 million) which relates to ITV Studios and £15 million (2023: £18 million) relating to M&E

** Except where disclosed, management views the acquisition of property, plant and equipment and intangibles as business as usual capex, necessary to the ongoing investment in the business.

Cash generated from operations is reconciled to the adjusted cash flow as follows:

One of ITV's strengths is its cash generation, reflecting our ongoing tight management of working capital balances. We manage risk when making all investment decisions, particularly in scripted content and ITVX, through having a disciplined approach to cash and costs. Remaining focused on cash and costs means we are in a good position to continue to invest across the business in line with our strategic priorities.

In the year, we generated £451 million of operational cash (2023: £498 million) from £542 million of adjusted EBITA (2023: £489 million), resulting in a profit to cash ratio of 83% (2023: 102%). The decrease in our profit to cash ratio year-on-year reflects a significant increase in working capital during the year as a result of the resumption of productions in the US following the strikes in 2023.

Free cash flow

* Adjusted cash tax of £105 million (2023: £70 million) is the total net cash tax paid of £27 million (2023: £32 million) plus receipt of production tax credits of £78 million (2023: £38 million), which are included within adjusted cash flow from operations, as these production tax credits relate directly to the production of programmes

Our free cash flow after payments for interest, cash tax and pension funding was £325 million (2023: £361 million).

Funding and liquidity

Debt structure and liquidity

The Group's financing policy is to manage its liquidity and funding risk for the medium to long term. ITV uses debt instruments with a range of maturities, has access to appropriate short-term borrowing facilities and has a policy to maintain a minimum of £250 million of cash and undrawn committed facilities available at all times. We have four committed facilities in place to maintain our financial flexibility, which includes a £500 million multilateral Revolving Credit Facility (RCF). During the year, counterparties to the syndicated £500 million RCF were changed. The new counterparty has acceded to the RCF with a January 2029 maturity, which is in line with all other RCF counterparties. The Group has £100 million of committed funding via a bilateral RCF, which matures in December 2028. The two RCFs are subject to leverage and interest cover semi-annual covenant tests that require the Group to maintain a leverage ratio of below 3.5x and interest cover above 3.0x (measures as defined in the RCF documentation). At 31 December 2024, ITV's financial position was well within its covenants.

In October 2024, the Group entered into a new £200 million bilateral loan facility which matures in December 2030. Utilisation of this facility is also subject to the lender's ability to source ITV Credit Default Swaps (CDS). The new facility has a committed accreting profile which means the full £200 million will be available by 1 January 2026. At 31 December 2024, the Group had £50 million of the facility available.

The Group also has a bilateral financing facility of £300 million, which is free of financial covenants and matures on 30 June 2026.

At 31 December 2024, all facilities were undrawn (31 December 2023: undrawn), which together with cash and cash equivalents of £427 million, provided total liquidity of £1,377 million (31 December 2023: £1,240 million). This provides the Group with sufficient liquidity to meet the requirements of the business in the short to medium term under a variety of severe but plausible downside scenarios reflecting the Group's principal risks.

After acquisition-related costs, pension and tax payments, we ended the year with reported net debt of £431 million (31 December 2023: £553 million).

Net debt includes net proceeds from the sale of BritBox International which funded the £235 million share buyback. Excluding the net proceeds that had been designated to fund the remainder of the buyback, net debt is £468 million at 31 December 2024.

Reported net debt

Financing - gross debt

The Group is financed using debt instruments and facilities with a range of maturities.

During the year the Group has extended the maturity profile of ITV's debt through the issuance of a €500 million Eurobond to June 2032. The proceeds have been used to repay the £230 million term loan (that was due to mature in 2027) and retire €240 million of the Group's €600 million Eurobond (due in 2026).

Borrowings at 31 December 2024 were repayable as follows:

* Includes £20 million currency component liability of swaps held against euro-denominated bonds

** Excludes £105 million of IFRS16 Lease Liabilities

Capital allocation and leverage

In line with our capital allocation policy, our priorities remain as follows: to invest organically in line with our strategic priorities; manage our financial metrics consistent with our commitment to investment grade metrics over the medium term; sustain a regular ordinary dividend which can grow over the medium term; continue to consider value-creating inorganic investment against strict financial and strategic criteria; and any surplus capital will be returned to shareholders.

Our objective is to run an efficient balance sheet and manage our financial metrics appropriately, consistent with our commitment to investment grade metrics over the medium term. At 31 December 2024, our leverage, or net debt to adjusted EBITDA, was 0.7x (31 December 2023: 1.0x). Excluding the net proceeds of the sale of BritBox International that had been designated to fund the remainder of the buyback, our leverage was 0.8x at 31 December 2024.

Credit ratings

In March 2024, we published an investment grade credit rating from Fitch (BBB- stable outlook). We continue to be rated investment grade by Standard and Poor's (BBB- stable outlook) and Moody's (Baa3 stable outlook). The factors that are considered in assessing our credit rating include our degree of operational gearing and exposure to the economic cycle, as well as business and geographical diversity.

Foreign exchange

As ITV continues to grow internationally, we are increasingly exposed to foreign exchange on our overseas operations. We do not hedge our exposure to revenues and profits generated overseas, as this is seen as an inherent risk. We may elect to hedge our overseas net assets, where material.

ITV is also exposed to foreign exchange risk on transactions we undertake in a foreign currency. Our policy is to hedge a portion of any known or forecast transaction where there is an underlying cash exposure for the full tenor of that exposure, to a maximum of five years forward, where the portion hedged depends on the level of certainty we have on the final size of the transaction.

Finally, ITV is exposed to foreign exchange risk on the retranslation of foreign currency loans and deposits. Our policy is to keep these balances to a minimum and hedge such exposures where there is an expectation that any changes in the value of these items will result in a realised cash movement over the short to medium term. The foreign exchange and interest rate hedging strategy is set out in our Treasury policies which are approved by the ITV PLC Board.

Production inventories, contract assets and liabilities

In 2024, contract assets decreased by £26 million, production inventories increased by £108 million and contract liabilities increased by £47 million, compared to 31 December 2023. These movements are predominantly driven by ITV Studios, reflecting higher production activity in the US following the strikes in 2023 as well as in the UK and internationally, as a result of scripted production cycles and growing commissioning activity.

Pensions

The net pension surplus of the defined benefit schemes at 31 December 2024 on an accounting basis was £182 million (31 December 2023: £209 million surplus). The decrease in the year was a result of the increase in corporate bond yields and rising gilt yields.

The net pension assets include £45 million (31 December 2023: £48 million) of gilts, which are held by the Group as security for future unfunded pension payments to four former Granada executives, the liabilities of which are included in our pension obligations.

Deficit funding contributions

The triennial valuation of the ITV Pension Scheme (the Scheme) as at 31 December 2022 has been completed. At the valuation date, the Scheme had a surplus of £83 million. This is compared to a deficit of £252 million at the previous valuation date of 31 December 2019.

As the scheme is in surplus, no deficit contributions were payable in 2024 and are not expected to be required in 2025, other than a minimal payment relating to a legacy asset backed scheme (see below). The Group's pension deficit contributions for the year to 31 December 2023 were £40 million, and for the year to 31 December 2022 were £137 million.

In 2024, £3 million was paid under the London Television Centre PFP, while the £16 million annual payment under the SDN PFP was not required. These payments will be assessed annually.

The scheme is well hedged against inflation, interest rate volatility and longevity. Refer to Note 3.8 for further details of the Group's pension schemes.

Box Clever

In December 2024, a settlement agreement was signed between ITV, the Pension Regulator (tPR), the Board of the Pension Protection Fund (PPF) and the Box Clever Trustees (Trustees) setting out the terms agreed to settle the long-running Box Clever pension dispute. Under the settlement, in summary, all current Scheme members will be transferred to the ITV Pension Scheme and will receive their full Scheme benefits. Back-payments of underpaid pension with interest will also be paid. There is also provision for estates of members who have died in the PPF assessment period.

ITV has certain termination rights if, after a data cleanse in relation to the benefits of the Scheme members, the value of the liabilities which are expected to transfer to the ITV Pension Scheme has materially increased since the date of the settlement agreement. If ITV does not proceed with the transfer, tPR will be free to recommence regulatory proceedings. ITV will also reimburse the PPF for certain amounts it has lent to the Trustee during the assessment period.

The transfer of liabilities into the ITV Pension Scheme is subject to the approval of the ITV Pension Scheme Trustee. Non-binding heads of terms have also been agreed between ITV and the ITV Pension Scheme Trustee. These propose that after transfer of the Scheme members, £25 million of additional funding will be paid to the ITV Pension Scheme (to form part of the general assets of the ITV Pension Scheme) and a surety bond provided to cover the value of transferred liabilities (until the earlier of 31 March 2027 or the completion of the next actuarial valuation).

Foreign exchange sensitivity

The following table highlights ITV Studios sensitivity, for 2025 (using internal forecasts), to translation resulting from a 10% appreciation/depreciation in sterling against the US dollar and euro, assuming all other variables are held constant. An appreciation in sterling has a negative effect on revenue and adjusted EBITA; a depreciation has a positive effect.

Subsequent events

There were no post balance sheet events to report.

Planning assumptions for the full year 2025

The following planning assumptions for 2025 are based on current expectations.

Profit and loss impact:

·  Total content costs are expected to be around £1.250 billion with lower sports costs year-on-year. H1 content costs will be broadly flat on the prior year

·  We will deliver £30 million of savings which is a combination of new initiatives and annualised benefits from the 2024 savings

·  Adjusted financing costs are expected to be around £40 million

·  The adjusted effective tax rate is expected to be 27% over the medium term

·  Exceptional items are expected to be around £45 million mainly due to costs associated with our digital transformation (c.£10 million) and ongoing transformation and efficiency programme (c.£25 million). The cash impact is expected to be a similar amount.

Cash impact

·  Profit to cash conversion is expected to be around 80% on average over the three years from 2023 to 2025

·  Total capex is expected to be around £65million as we further invest in our digital capabilities

·  The Board has proposed a final dividend of 3.3p, which will be paid in May 2025. This gives a full year dividend of 5.0p, a total of around £190 million

Risk and Uncertainties Disclosure

The rapid pace of market change, combined with persistent macroeconomic pressures and global uncertainties, requires ITV to take an agile and proactive approach to implementing its strategy and managing associated risks.

Our risk management framework

Our risk management framework empowers our people to make informed, timely decisions that support our strategic objectives. It provides clear guardrails to foster innovation while ensuring risks are appropriately identified, assessed and managed, rather than acting as a constraint.

The framework ensures a strong connection between our central risk domain teams and the broader business, embedding risk management into daily operations and decision-making processes at all levels. The integrated approach strengthens our ability to anticipate and respond to evolving challenges.

How we manage risks

We adopt a dual 'top-down' and 'bottom-up' approach to risk management to enhance risk prioritisation and mitigation across ITV, ensuring alignment between strategic goals and operational realities.

·  Divisional and Functional Review: These teams periodically assess their exposure to centrally managed risk categories and identifying significant and emerging risks that could impact performance.

·  Leadership Oversight: Divisional Leadership teams consolidate their most critical risks and uncertainties, including emerging risks, for discussion and prioritisation.

·  Group Oversight: The Group Risk team facilitates and oversees this process, ensuring a comprehensive and balanced view of risks across the organisation.

Risk appetite

The Board has defined our risk appetite for each principal risk, ensuring the right balance between risk-taking and mitigation. Our risk appetite reflects a commitment to innovate and pursue opportunities while maintaining low tolerance in critical areas such as duty of care, data protection and corporate compliance. This approach allows us to be agile and responsive while safeguarding our reputation and long-term sustainability.

Continuous improvement

In 2024 we made good progress in strengthening our risk management practices to navigate an increasingly dynamic risk landscape:

·  Integrated Risk Management: We adopted a unified approach to managing operational and principal risks, breaking down silos and ensuring alignment. This has been critical as we addressed emerging challenges, including generative AI and evolving regulatory requirements, as well as restructuring the business.

·  Risk Appetite: We advanced our understanding of critical risk events and began refining new Key Risk Indicators (KRIs) to enhance risk monitoring and response.

·  Internal Control Environment: We refined our financial and technology control frameworks to establish proportionate frameworks that provide stronger links between risks and controls.

·  Crisis Preparedness: The Group ExCo conducted simulation exercises to test and improve crisis response mechanisms, enhancing decision-making agility in high pressure scenarios.

Risk leadership and governance

Risk management is embedded in our decision-making processes, with each principal risk overseen by a designated Group ExCo member. These sponsors ensure risks are defined, mitigation measures are implemented, effective and aligned with our risk appetite.

To further strengthen oversight, we established a new management-level Risk Committee in 2024, operating under delegated authority from the Group ExCo. This committee, comprising of the Group CFO/COO, the two Divisional COOs and the Group Director of Risk and Assurance, oversees principal and emerging risks, and other significant risk-related matters. Its responsibilities include:

·  Conducting systematic evaluations of our Principal Risks

·  Delivering actionable insights to support decision-making

·  Streamlining risk reporting and communication processes

For further information on our Governance structure, including the Risk Committee's role, which will be included in our 2024 Annual Report and Accounts.

The Group ExCo undertakes a comprehensive review of principal and emerging risks twice a year. These thorough assessments, which include evaluating potential impacts and likelihoods using a consistent methodology, are then submitted to the Audit and Risk Committee and the PLC Board for review, challenge and subsequent approval, ensuring robust and effective oversight of our risk management processes.

Changes to principal risks during the year

In 2024, ongoing monitoring of ITV's critical risks, informed by internal and external data, led to important updates to our principal risk profile:

·  Artificial Intelligence: Elevated from an emerging risk to a principal risk. This reflects the rapid development of GenAI technology and its transformative potential, with significant implications for our operations, content creation and overall strategy (both as opportunity and risk).

·  Transformation: Removed as a standalone principal risk. While transformation remains a key aspect of our business, its various components are now more effectively integrated into relevant individual risks, providing a more granular and accurate reflection of their specific impacts and enabling more targeted mitigation efforts.

·  Changing Viewer Dynamics: Consolidated four M&E strategic risks into a single principal risk, reflecting the shift in audience engagement. Moving from 'viewer habits' to 'dynamics' highlights that consumption changes are driven by both organic preferences and fundamental media ecosystem transformation.

Principal risks and mitigations

Set out below is a description of each of our principal risks, including an explanation of how they are being managed and mitigated. This information provides transparency into our approach to managing the most significant threats and opportunities facing ITV. These risks are not presented in order of priority or significance: