ITV  set  for  con-nued  growth  a4er  another  strong  year  Full  Year  Results  2014          

4  March  2015  

Agenda  

Q&A  

Strategic  Outlook                Adam  Crozier  

Full  Year  Financial  Results            Ian  Griffiths  

2014  Highlights                  Adam  Crozier  

2  

2014  Highlights  Adam  Crozier  

4  March  2015  

3  3  

Significant  further  progress  rebalancing  ITV  and  driving  new  revenue  streams  

Revenue  

External  revenue   £2,590m   8%  

NAR   £1,629m   6%  

Non-­‐NAR   £1,327m   10%  

Earnings  

Broadcast  &  Online  EBITA   £568m   17%  

ITV  Studios  EBITA   £162m   22%  

Group  EBITA   £730m   18%  

Adjusted  PBT   £712m   23%  

Adjusted  EPS   13.8p   23%  

Shareholder  returns  

Ordinary  dividend   4.70p   34%  

Special  dividend   6.25p  

4  

•  Another  year  of  strong  revenue  growth  in  all  parts  of  the  business  

•  Fi4h  consecu-ve  year  of  double  digit  profit  growth  

•  Further  margin  improvement  •  Delivering  value  from  investment  in  quality  

content  ➔  3  more  content  acquisi-ons  in  ITV  Studios  ➔  Online,  Pay  &  Interac-ve  now  a  material,  

profitable  and  high  margin  part  of  ITV  ➔  Launched  our  first  new  channels  in  almost  

a  decade  –  ITVBe  and  ITV  Encore  ➔  Improving  share  of  viewing  a  key  area  of  

focus  •  Clear  opportuni-es  for  further  investment  while  

increasing  shareholder  returns  ➔  Commibed  to  at  least  20%  p.a.  growth  in  

ordinary  dividend  for  3  years  to  2016  ➔  Board  proposes  a  £250m  capital  return  to  

shareholders  

2014  Highlights:  

Our  renewed  strategic  prioriOes  are  focused  on  three  key  areas  for  growth  

 Maximise  audience  and  revenue  share  from  free-­‐to-­‐air  

broadcast  and  VOD  business  

1   Grow  internaOonal  content  business  2  

Build  a  global  pay  and  distribuOon  

business  3  

A  lean  ITV  that  can  create  world  class  content,  executed  across  mulOple  plaWorms  and  sold  around  the  world  

Over  Ome  as  we  conOnue  to  rebalance  the  business  and  grow  new  revenue  streams,  both  organically  and  through  acquisiOon,  there  will  be  an  increasing  emphasis  on  internaOonal  content  creaOon  and  distribuOon  

5  

Progress  in  2014:  •  Economic  recovery  driving  ad  growth  ➔  Con-nuing  to  deliver  unrivalled  commercial  

audience  reach  ➔  Strongest  outperformance  of  ad  market  in  

5  years  ➔  Share  of  broadcast  up  to  45.9%  

•  Launched  new  free-­‐to-­‐air  channel  ITVBe,  providing  more  targeted  female  demographic  for  our  adver-sers  ➔  ITV2  reposi-oning  as  a  younger  channel  

•  Firmly  focused  on  improving  viewing  performance  ➔  ITV  Family  on  screen  share  of  viewing  was  

down  5%  (following  4%  growth  in  2013)  ➔  Online  video  on  demand  was  up  26%  

•  Further  improved  quality  and  reach  of  ITV  Player  ➔  16.5m  app  downloads,  up  41%  ➔  8.0m  registered  users,  up  129%  ➔  Now  on  more  than  20  plaeorms  including  

Windows  8  and  Sky  Go  ➔  Suppor-ng  connected  TV  plaeorms  that  

make  ITV  content  prominent    

1   Maximise  audience  and  revenue  share  from  free-­‐to-­‐air  broadcast  and  VOD  business  

6  

TV  viewing  Mins  

219  242  

221  

0  

50  

100  

150  

200  

250  

2005   2010   2014  

Long  form  video  requests  

150  

273  

406  

496  577  

726  

2009   2010   2011   2012   2013   2014  

Broadcast  &  Online  EBITA  (£m)  

111  

327  379   406  

487  

568  

2009   2010   2011   2012   2013   2014  

Consistently  delivering  mass  audience  reach  

90%  

90%   94

%  

93%   96%  

95%  100%

 

100%

 

99%  

99%  

100%

 

99%  

2009   2010   2011   2012   2013   2014  

Over  3m   Over  5m  

Grow  internaOonal  content  business  2  

7  

ITV  Studios  Revenue  (£m)  

62%  

67%  

63%  

62%  

57%  

53%  38

%  

33%  

37%   38

%  

43%   47%  

2009   2010   2011   2012   2013   2014  

UK   Interna-onal  

Progress  in  2014:  •  Strong  ITV  Studios  revenue  and  profit  growth  in  2014  ➔  Revenue  up  9%  ➔  EBITA  up  22%  

•  Already  largest  commercial  produc-on  company  in  the  UK  ➔  60%  ITV  Network  commissions  now  originate  from  ITV  

Studios  ➔  13%  growth  in  off-­‐ITV  produc-on  revenue  in  the  UK  ➔  5,700  hours  of  original  content  produced  and  delivered  

•  Inves-ng  to  build  an  interna-onal  business  ➔  3  further  acquisi-ons  in  2014  ➔  Following  purchase  of  Le4field,  now  the  largest  unscripted  

independent  produc-on  company  in  the  US  •  ITV  Studios  now  a  global  player  of  scale  ➔  Almost  half  of  revenue  generated  outside  the  UK  ➔  24%  growth  in  interna-onal  produc-on  revenue  

•  Inves-ng  in  growing  our  crea-ve  produc-on  pipeline  ➔  Building  a  global  scripted  business  ➔  Crea-ng  formats  that  travel  

+56%  

554  612  

712  

857  933  

597  

ITV  Studios  EBITA  (£m)  

91   81   83  107  

133  162  

2009   2010   2011   2012   2013   2014  

+78%  

ITV  brands  

Scripted  investments  

AcquisiOons  Associates  

Scripted  Reality  

Factual  &  Comedy  

Digital  investments  

ITV  Nordics  

mediacircus

Grow  internaOonal  content  business…  through  a  mixed  economy  model  2  

8  

Diverse  content  porWolio  with  global  reach  

Talent  &  POD  

Progress  in  2014:  •  Launched  ITV  Encore,  our  first  pay  only  channel  ➔   Profitable  from  launch    

•  Developed  further  new  sources  of  pay  revenue  ➔  New  4  year  deal  with  Sky  ➔  Extended  deal  with  Virgin  for  another  year    

•  Exploring  new  models  for  content  crea-on  and  distribu-on  ➔  3  investments  in  digital  content:  Believe,  Indigenous  and  Zealot  ➔  Invested  in  Cirkus,  a  subscrip-on  VOD  service  for  the  Nordics  ➔  Launched  12  short  form  channels  on  YouTube    

•  Leading  European  distributor  of  content  ➔  Mr  Selfridge,  Lewis  and  Hell’s  Kitchen  US  sold  to  over  150  countries  ➔  12  formats  sold  in  3  or  more  countries  ➔  Acquired  third  party  distribu-on  rights  to  Poldark  (UK),  Schib’s  

Creek  (Canada)  and  Jordskob  (Sweden)  

Build  global  pay  and  distribuOon  business  3  

9  

Online,  Pay  &  InteracOve  revenue  

50  58  

81  

102  

118  

153  

0  

25  

50  

75  

100  

125  

150  

175  

2009   2010   2011   2012   2013   2014  

£m  

(612)  

(188)  

45   206   164   41  

2009   2010   2011   2012   2013   2014  

1.8  

6.4  7.9  

9.1  

11.2  

13.8  

2009   2010   2011   2012   2013   2014  

202  

408  462  

513  

620  

730  

2009   2010   2011   2012   2013   2014  

850   829  

922  

1,036  

1,211  

1,327  

2009   2010   2011   2012   2013   2014  

1,879  

2,064  2,140  

2,196  

2,389  

2,590  

2009   2010   2011   2012   2013   2014  

108  

321  398  

457  

581  

712  

2009   2010   2011   2012   2013   2014  

(aher  dividends  of  £678m)  

Group  External  Revenues  (£m)   Non-­‐NAR  Revenues  (£m)  

EBITA  before  excepOonal  items  (£m)  

Adjusted  profit  before  tax  (£m)   Adjusted  EPS  (p)   Net  Cash/(Debt)  (£m)  

10  

ExecuOon  of  our  strategy  is  delivering  a  consistently  strong  performance  

4  March  2015  

Full  Year  Financial  Results  Ian  Griffiths  

11  

Net  AdverOsing  Revenue  (NAR)  

Non-­‐NAR  

EBITA*  

EPS**  

Net  cash  

Ordinary  dividend  

External  revenue   £2,590m    

£1,327m  

13.8p  

£41m    

£1,629m    

£730m  

Up  8%,  £201m  

Up  10%,  £116m  

Up  23%,  2.6p  

£123m  net  ouelow  

Up  6%,  £87m  

Up  18%,  £110m  

Growth  across  the  business  

Con-nuing  to  rebalance  

Double  digit  earnings  growth  

Strong  cash  genera-on  

Ahead  of  the  market  

Improved  margins  

4.7p   Up  34%,  1.2p   Special  dividend  of  6.25p  

Full  Year  2014  Financial  Highlights  

12  *  EBITA  is  before  excep-onal  items                            **  EPS  is  adjusted  

•  Both  businesses  delivering  good  revenue  growth  

•  Strong  adver-sing  growth,  well  ahead  of  the  market  

•  Con-nued  growth  in  Online  and  Pay  revenue  

•  Studios  now  a  scaled  interna-onal  business  

➔  Organic  growth  in  interna-onal  produc-on  and  distribu-on  

➔  Acquisi-ons  coming  through  as  planned  

➔  Currency  movements  hold  back  revenue  growth  

•  Con-nuing  to  rebalance  the  business  

Revenue  –  growth  across  all  parts  of  the  business  

YOY  Group  Revenue  Tracker  

13  

£m   2014   2013   Change  

Broadcast  &  Online   2,023   1,896   7%  

ITV  Studios   933   857   9%  

Total  revenue   2,956   2,753   7%  

Internal  supply   (366)   (364)   1%  

Total  external  revenue   2,590   2,389   8%  

87   5  

35   11  

87  

22  

2,753  

2,956  

2,700  

2,800  

2,900  

3,000  

2013   NAR   Broadcast  Non-­‐NAR  

Online,  Pay  &  Interac-ve  

ITV  Studios  Organic  

ITV  Studios  Acq'ns  

FX  impact   2014  

£m  

•  Strong  conversion  of  revenue  growth  to  increased  profit  

•  Both  businesses  deliver  strong  double  digit  profit  growth  

•  Group  EBITA  up  £110m,  18%  

•  Margins  improved  2%  to  28%  

•  Broadcast  revenue  growth  is  high  margin  

•  In  part  offset  by  investment  in  schedule  costs  and  new  channel  launches  

•  Studios  acquisi-ons  and  revenue  mix  improves  margins  

•  Cost  savings  con-nue  to  fund  P&L  investments  

Group  EBITA  –  good  revenue  growth  and  -ght  cost  control  deliver  £110  million  of  profit  growth  

YOY  Group  EBITA  Tracker  

14  *  EBITA  is  before  excep-onal  items  

£m   2014   2013   Change  

Broadcast  &  Online   568   487   17%  

ITV  Studios   162   133   22%  

Group  EBITA*   730   620   18%  

Group  EBITA  margin   28%   26%  

87  

35  

33  

33  15  

18   5  

620  

730  

600  

640  

680  

720  

760  

2013   NAR   Network  schedule  

Online,  Pay  &  Interac-ve  

ITV  Studios   Net  cost  savings  

Investments   FX  impact   2014  

£m  

•  Strong  growth  across  all  key  revenue  streams  

•  NAR  up  6%,  compared  to  a  market,  es-mated  up  around  4.5%  

•  30%  growth  in  Online,  Pay  &  Interac-ve  driven  by  VOD  and  Pay  

•  Schedule  investment  includes  the  costs  of  the  World  Cup  and  ini-al  spend  on  ITVBe  and  ITV  Encore  

•  Con-nued  -ght  cost  control  offset  by  marke-ng  and  launch  costs  of  new  channels  

•  Increased  revenue  delivers  growth  in  profits  and  margins  up  2%  to  28%  

£m   2014   2013   Change  

ITV  NAR   1,629   1,542   6%  

Online,  Pay  &  Interac-ve  SDN  external  revenue  Other  commercial  income  

153  71  170  

118  71  165  

30%  -­‐  

3%  

Non-­‐NAR  Revenue   394   354   11%  

Total  Revenue   2,023   1,896   7%  

Schedule  costs  Other  costs  

(1,018)  (437)  

(983)  (426)  

4%  2%  

Broadcast  &  Online  EBITA*   568   487   17%  

EBITA  margin   28%   26%  

Broadcast  &  Online  –  growth  in  high  margin  revenue  delivers  strong  profit  performance  

*  EBITA  is  before  excep-onal  items   15  

•  Over  £1bn  invested  in  Broadcast  content  on  screen  

•  Increased  to  accommodate  World  Cup  and  two  new  channel  launches  

•  Spend  on  ITV  main  channel  original  commissions  is  over  half  of  the  total  budget  

•  Fewer  drama  commissions  in  2014  but  increase  in  2015  and  2016  

•  2015  costs  increase  to  c.  £1,040m  with  a  full  year  of  new  channels  

Broadcast  &  Online  –  investment  in  content  driving  profitable  new  revenue  streams  

•  Our  fastest  growing  revenue  streams  •  Making  a  material  contribu-on  to  revenue  

and  profit  growth  

•  Online  is  adver-sing  around  our  content  viewed  on  non-­‐linear  plaeorms  

•  Pay  is  primarily  plaeorm  operators  paying  us  for  content  –  HD  &  Encore  

*  EBITA  is  before  excep-onal  items   16  

Network  Schedule  

47  

25  

3  10  

983  1,018  

900  

925  

950  

975  

1000  

1025  

1050  

2013   Sport   Commissions   ITV2,  ITV3,  ITV4  &  CITV  

New  Channels   2014  

£m  

Online,  Pay  &  InteracOve  

11  

20   4  

118  

153  

100  

120  

140  

160  

2013   Online  &  On  Demand  

Pay  &  Distribu-on   Interac-ve   2014  

£m  

Jan-­‐14  to  Mar-­‐15  Monthly  ITV  Family  NAR   •  Growth  across  all  major  categories  

•  World  Cup  abracted  adver-sers  looking  for  male  audience  

➔  Gaming  

➔  Cars  ➔  Drinks  ➔  Finance  

•  Con-nued  good  growth  across  H2  

•  Retail  saw  strong  growth  and  not  just  the  big  supermarkets  

•  Entertainment  &  Leisure  and  Travel  –  all  very  strong  

•  Similar  category  growth  across  Q1  2015  

•  NAR  phasing  in  2015  will  be  driven  by  Easter  and  Rugby  World  Cup  

Category   2014  (£m)   YOY  %  change  

Retail   332.7   11  

Entertainment  &  Leisure   177.4   12  

Finance   153.0   3  

Food   131.1   12  

Cosme-cs  &  Toiletries   109.8   (4)  

Cars  and  Car  Dealers   82.7   13  

Airlines  Travel  and  Holidays   75.4   28  

Telecommunica-ons   74.5   (14)  

Publishing  and  Broadcas-ng   65.9   (9)  

Household  Stores   51.8   (8)  

NAR  –  strong  growth  across  all  key  adver-sing  categories  con-nues  across  second  half  

17  

-­‐5%  

0%  

5%  

10%  

15%  

20%  

25%  

Jan   Feb   Mar   Apr   May   Jun   Jul   Aug   Sep   Oct   Nov   Dec   Jan   Feb   Mar  

NOTE:  Monthly  ITV  NAR  figures  and  category  data  based  on  total  ITV  Family  adver-sing  

%  Monthly  Change   Moving  Annual  Total  

£m   2014   2013   Change  

Studios  UK   459   456   1%  

Studios  US   235   175   34%  

Studios  RoW   95   91   4%  

Global  Entertainment   144   135   7%  

Total  revenue   933   857   9%  

Total  Studio  costs   (771)   (724)   6%  

ITV  Studios  EBITA*   162   133   22%  

EBITA  margin   17%   16%  

£m   2014   2013   Change  

Internal  –  ITVS  to  ITV  Network   366   364   1%  

External  revenue   567   493   15%  

Total  revenue   933   857   9%  

•  Growth  coming  from  newly  acquired  businesses,  in  par-cular  Le4field  

•  Organic  business  up  1%  at  constant  currency  

•  UK  business  winning  increased  share  of  ITV  Broadcast  spend  

•  Good  growth  from  interna-onal  produc-on  and  distribu-on  

•  Currency  now  has  an  impact  as  ITVS  is  a  more  scaled  interna-onal  business  

➔  At  constant  rates*  revenue  would  have  been  £22m  higher  and  profit  up  £5m  

•  Format  sales,  making  more  UK  formats  interna-onally  and  Le4field  have  all  helped  margin  mix  

ITV  Studios  –  delivering  growth  from  acquisi-ons  and  the  interna-onal  businesses  

18  *  EBITA  is  before  excep-onal  items  

*  at  2013  rates  

Studios  –  inves-ng  in  an  interna-onal  scripted  business  of  scale  

Series  1  –  a  new  US  cable  show  

•  Ini-al  broadcast  ra-ngs  will  determine  success    

•  Key  judgement  –  how  we  manage  the  deficit  

•  Mi-ga-on  is  selling  rights  interna-onally  but  pre-­‐selling  may  reduce  the  upside  poten-al    

•  Revenue  is  recognised  as  sold,  profit  only  when  certain  deficit  is  recovered  

19  

$32m  

$16m  

$16m  

Cash  out   Cash  in  

Prod

ucOo

n  cost  

Deficit  finance  

Network  broadcast  

licence  

•  Pre-­‐sell  to  other  territories  •  Find  a  co-­‐produc-on  partner  •  Wait  for  broadcast  ra-ngs  and  then  sell  

interna-onally  

Example  cash  flows  using  an  8  hour  scripted  drama  

Series  3  –  a  returning  success  

•  Costs  remain  broadly  the  same,  subject  to  talent  

•  Network  will  pay  more,  resul-ng  in  reduced  risk  

•  Strong  demand  for  both  new  and  previous  series,  interna-onally  and  from  new  plaeorms  

•  Margins  enhanced  as  demand  increases    

•  This  applies  to  UK  as  well  as  US  series  

•  Straight  to  series  so  Network  commibed  

•  Illustra-ve  license  fee  only  

£m   2014   2013   Change  

Total  external  revenue   2,590   2,389   8%  

EBITA  before  excepOonal  items   730   620   18%  

Associates  and  JVs   -­‐   (2)   -­‐  

Internally  generated  amor-sa-on   (11)   (12)   (8)%  

Financing  costs   (7)   (25)   (72)%  

Profit  before  tax   712   581   23%  

Tax   (151)   (136)   11%  

Profit  aher  tax   561   445   26%  

Non-­‐controlling  interests   (7)   (4)   75%  

Earnings   554   441   26%  

Adjusted  EPS  (p)   13.8p   11.2p   23%  

Diluted  adjusted  EPS  (p)   13.7p   10.8p   27%  

Statutory  EPS  (p)   11.6p   8.3p   40%  

•  Strong  revenue  and  opera-ng  profit  growth  

•  23%  growth  in  pre-­‐tax  profit  helped  by  lower  interest  costs  

•  Tax  rate  also  reduced  to  21%  

•  All  translates  to  23%  growth  in  adjusted  EPS  

Adjusted  results  –  double  digit  profit  growth  and  increased  returns  to  shareholders    

20  

Technical  points:  •  Statutory  EPS  up  40%  -­‐  higher  

than  adjusted  due  to  prior  year  bond  buybacks  

•  Shares  in  issue  increased  to  4,002m  following  the  conver-ble  bond  redemp-ons  

£m   2014   2013  

EBITA  before  excepOonal  items   730   620  

Working  capital  movement   (69)   (15)  

Share  based  costs   14   20  

Capex   (37)   (45)  

Deprecia-on   27   24  

Adjusted  cash  flow   665   604  Profit  to  cash  raOo  12  months  rolling   91%   97%  

Profit  to  cash  conversion  –  strong  cashflow  supports  the  execu-on  of  the  strategy  Net  Cash  Movements  

21  

£m   2014   2013  

Adjusted  cash  flow   665   604  

Net  cash  interest  paid   (11)   (24)  

Cash  tax  paid   (85)   (67)  

Pension  funding   (91)   (80)  

Free  cash  flow   478   433  

£m  

478  

30  

313  

214  33   11  

164  41  0  

100  

200  

300  

400  

500  

600  

700  

2013   Free  Cashflow  

Bond  Buybacks  

Dividends   Acquisi-ons   EBT   Other   2014  

•  Focus  on  working  capital  remains  a  priority  •  91%  profit  to  cash  conversion  

•  £47m  working  capital  invested  in  building  an  interna-onal  scripted  business  –  likely  to  increase  in  2015  

•  Free  cash  flow  up  £45m,  10%,  to  £478m  

•  Cash  posi-ve  even  a4er  £527m  of  M&A  and  dividends  paid  to  shareholders  

£250m  special  dividend  

Inves-ng  to  drive  organic  growth  

Acquisi-ons  in  line  with  strategic  priori-es  

Progressive  dividend  policy  At  least  20%  p.a.  growth  for  3  years  to  2016  

Gradually  increase  leverage  to  1.5x  reported  net  debt  to  EBITDA    

1  

2  

3  

4  

CreaOng  a  more  efficient  balance  sheet  whilst  retaining  the  flexibility  to  conOnue  to  invest  

2014  full  year  dividend  of  4.7p,  up  34%  

22  

Capital  AllocaOon  Framework  

4  March  2015  

23  

Strategic  Outlook  Adam  Crozier  

24  

Focus  for  2015  -­‐  Key  opportuniOes  for  growth  

 Maximise  audience  and  revenue  share  from  free-­‐to-­‐air  broadcast  and  VOD  

business  1   Grow  internaOonal  

content  business  2   Build  a  global  pay  and  distribuOon  business  3  

•  Economic  recovery  driving  growth  in  ad  market  

•  Improve  on  screen  viewing  performance  in  key  demographics  

•  Further  strengthen  our  content,  channels  and  brand  to  maintain  our  unique  scale  

•  Grow  our  share  of  total  TV  and  VOD  adver-sing  

•  Con-nue  to  drive  new  revenue  streams  through  sponsorship,  interac-vity  and  brand  extensions  

•  Support  plaeorms  that  make  ITV  content  prominent  

•  Further  invest  in  the  quality  and  distribu-on  of  ITV  Player  

•  Con-nue  to  develop  IP  in  key  crea-ve  markets  to  exploit  growing  worldwide  demand  

•  Maximise  the  use  of  our  strong  cash  flows  to  finance  the  produc-on  of  high  profile  dramas  straight  to  series  

•  Over  -me  build  a  poreolio  with  6  to  10  scripted  series  in  produc-on  per  annum  

•  Develop  more  16-­‐24  focused  content  

•  Abract  and  retain  key  crea-ve  talent  to  generate  more  hits  

•  Con-nue  to  look  at  poten-al  strategic  acquisi-ons  

•  Explore  new  models  for  content  crea-on    

•  Develop  new  pay  services  and  channels  to  take  advantage  of  demand  in  the  UK  and  interna-onally  

•  Consider  wider  partnerships  with  OTT/VOD  players  

•  Secure  retransmission  fees  in  the  medium  term  

•  Scale  interna-onal  distribu-on  business  

•  Invest  in  developing  third  party  distribu-on  deals  

•  Package  and  sell  our  content  to  maximise  its  value  

Focus  for  2015  

Outlook  •  Economic  recovery  driving  growth  in  ad  market  •  NAR  expected  to  be  up  11%  Q1  and  4%  -­‐  7%  in  April  •  Expect  to  outperform  the  market  again  over  the  full  

year  

•  Online,  Pay  &  Interac-ve  revenue  will  con-nue  to  grow  strongly  

•  ITV  Studios  again  expected  to  deliver  around  £100m  revenue  growth  on  a  constant  currency  basis  in  2015  with  a  return  to  good  organic  growth    

•  Will  maintain  a  robust,  efficient  and  flexible  balance  sheet  

•  Clear  opportuni-es  for  further  investment  while  increasing  shareholder  returns  

Strategy  •  Enter  next  stage  of  ITV’s  growth  

strategy  from  posi-on  of  strength    •  Remain  commibed  to  our  vision  of  

crea-ng  a  global  content  and  distribu-on  business    ➔  We  see  clear  opportuni-es  for  

growth  across  the  business  –  in  content,  online,  pay  and  adver-sing    

➔  We  will  con-nue  to  rebalance  the  business  and  grow  new  revenue  streams    

➔  Increasing  emphasis  on  interna-onal  growth    

25  

Overall  expect  another  strong  performance  in  2015  

4  March  2015  

26  

Appendix  Full  Year  Results  2014  

26  

£m   2014   2013   Change  

Revenue   2,590   2,389   8%  

EBITA  before  excep-onal  items   730   620   18%  

Amor-sa-on   (67)   (66)   (2)%  

Excep-onal  items  (total)   (7)   (2)   (250)%  

Associates  and  JVs   -­‐   (2)  

Profit  before  interest  and  tax     656   550   19%  

Net  financing  costs*   (51)   (115)   56%  

Profit  before  tax   605   435   39%  

Tax   (132)   (105)   (26)%  

Profit  aher  tax   473   330   43%  

Non-­‐controlling  interests     (7)   (4)   (75)%  

Earnings   466   326   43%  

Earnings  per  share   11.6p   8.3p   40%  

*  Includes  £30m  excep-onal  cost  rela-ng  to  bond  buybacks  in  2014  (2013:  £44m)  

Reported  numbers  

27  

£m   Reported     Adjustments   Adjusted  

EBITA  before  excep-onal  items   730   -­‐   730  

Excep-onal  items  (total)   (7)   7   -­‐  

Amor-sa-on   (67)   56   (11)  

Financing  costs   (51)   44   (7)  

Profit  before  tax   605   107   712  

Tax   (132)   (19)   (151)  

Profit  aher  tax   473   88   561  

Non-­‐controlling  interests   (7)   -­‐   (7)  

Earnings   466   88   554  

Number  of  shares*  (weighted  average)   4,002m   -­‐   4,002m  

Earnings  per  share   11.6p   -­‐   13.8p  

*  Diluted  number  of  shares  of  4,040m  

ReconciliaOon  between  2014  reported  and  adjusted  earnings  

28  

*  Diluted  number  of  shares  of  4,111m    

ReconciliaOon  between  2013  reported  and  adjusted  earnings  

£m   Reported     Adjustments   Adjusted  

EBITA  before  excep-onal  items   620   -­‐   620  

Excep-onal  items  (total)   (2)   2   -­‐  

Amor-sa-on  and  impairment   (66)   54   (12)  

Financing  costs   (115)   90   (25)  

JVs  and  associates   (2)   -­‐   (2)  

Profit  before  tax   435   146   581  

Tax   (105)   (31)   (136)  

Profit  aher  tax   330   115   445  

Non-­‐controlling  interests   (4)   -­‐   (4)  

Earnings   326   115   441  

Number  of  shares*   3,929m   -­‐   3,929m  

Earnings  per  share     8.3p   -­‐   11.2p  

29  

£m   2014   2013   Change  

Commissions   517   548   (6)%  

Sport   175   128   37%  

Acquired   35   36   -­‐  

ITN  News  and  Weather   45   44   2%  

Total  ITV   772   756   2%  

Regional  news  and  non-­‐news   67   63   6%  

ITV  Breakfast   43   41   5%  

Total  ITV  inc  regional  &  Breakfast   882   860   3%  

ITV2,  ITV3,  ITV4,  ITV  Encore,  ITVBe,  CITV   136   123   11%  

Total  schedule  costs   1,018   983   4%  

Broadcast  schedule  costs  

30  

£m   2014   2013   Change  Organic  change*  

Studios  UK   459   456   1%   (4)%  

Studios  US   235   175   34%   5%  

Studios  RoW   95   91   4%   7%  

Global  Entertainment   144   135   7%   10%  

Total   933   857   9%   1%  

*  At  constant  currencies  and  excluding  revenue  from  2013  and  2014  acquisi-ons  

ITV  Studios  revenue  

31  

AcquisiOon   Country  

IniOal  consideraOon  

(£m)  

Expected  total  consideraOon*  

(£m)  

Max  total  consideraOon*  

(£m)  Expected  

payment  date  

Le4field   US   214   233   504   2019  

DiGa  Vision   US   5   10   33   2020  

United   Denmark   1   4   5   2018  

Total  for  2014   220   247   542  

Total  for  2013   66   93   204   2017-­‐2021  

Total  for  2012   42   67   101   2016-­‐2018  

Total   328   407   847  

Equity  interest  currently  not  owned:  

•  Gurney  38.5%  •  Thinkfactory  35%  •  High  Noon  40%  •  DiGa  Vision  49%  •  Le4field  20%  

*  Undiscounted  and  including  ini-al  considera-on.  All  payments  are  performance  related  

AcquisiOons  

32  

£m   2014   2013  

€50m  Eurobond  at  10%  coupon  Jun  14   (1)   (2)  

£78m  Eurobond  at  5.375%  coupon  Oct  15   2   2  

£135m  Conver-ble  Bond  at  4%  coupon  Nov  16  (redeemed  in  2013)   -­‐   (3)  

£161m  Eurobond  at  6.125%  coupon  Jan  17   (7)   (9)  

£62m  Loan  at  13.55%  coupon  Mar  19  (repaid  in  Jan  2014)   -­‐   (6)  

£525m  RCF  Interest   (2)   -­‐  

Financing  costs  directly  arributable  to  bonds  and  loans   (8)   (18)  

Other   2   (2)  

Cash-­‐related  financing  costs   (6)   (20)  

Non-­‐cash  movements  

Amor-sa-on  of  bonds   (1)   (5)  

Adjusted  net  financing  costs   (7)   (25)  

Mark-­‐to-­‐market  on  bonds  and  swaps   (9)   (9)  

Imputed  pension  interest   (17)   (20)  

Losses  on  buybacks   (30)   (61)  

Other  net  financing  income   12   -­‐  

Statutory  net  financing  costs   (51)   (115)  

Financing  costs  

33  

ExcepOonal  costs  

£m   2014   2013  

Reorganisa-on  and  restructuring  costs   (6)   -­‐  

Acquisi-on-­‐related  expenses   (6)   (8)  

Total  operaOng  excepOonal  items   (12)   (8)  

Gain  on  sale  of  non-­‐current  assets   4   -­‐  

Gain  on  sale  of  subsidiaries  and  investments   1   6  

Total  non-­‐operaOng  excepOonal  items   5   6  

Total  excepOonal  items   (7)   (2)  

34  

£m   2014   2013  

Profit  before  tax   605   435  

Excep-onal  items  (net)   7   2  

Amor-sa-on  of  intangible  assets*   56   54  

Adjustments  to  net  financing  costs   44   90  

Adjusted  profit  before  tax   712   581  

Tax  charge  as  reported   (132)   (105)  

Net  charge  for  excep-onal  items   (2)   (1)  

Charge  in  respect  of  amor-sa-on  of  intangible  assets*   (12)   (12)  

Charge  in  respect  of  adjustments  to  net  financing  costs   (10)   (21)  

Other  tax  adjustments   5   3  

Adjusted  tax  charge     (151)   (136)  

EffecOve  tax  rate  on  adjusted  profits   21%   23%  

Total  cash  paid   (85)   (67)  

*  In  respect  of  intangible  assets  arising  from  business  combina-ons  

P&L  tax  charge  and  cash  tax  on  reported  basis  

35  

£m   31  December  2014   31  December  2013  

€50m  Jun  14     -­‐   (15)  

£78m  Oct  15     (78)   (78)  

£161m  Jan  17   (161)   (161)  

£62m  Mar  19  (repaid  in  Jan  2014)   -­‐   (62)  

Finance  Leases   (17)   (38)  

Cash  and  cash  equivalents   297   518  

Net  cash   41   164  

£m   31  December  2014   31  December  2013  

Cash  and  cash  equivalents   297   518  

Debt   (256)   (354)  

Net  cash   41   164  

Analysis  of  net  cash  

36  

Pension  deficit  

IAS  19  Pension  deficit  

37  

91  

70  

472  

390  20  445  

346  

200  

250  

300  

350  

400  

450  

500  

550  

600  

650  

700  

750  

800  

December  2013   Deficit  funding   Change  in  liabili-es:  Decrease  in  infla-on  

Change  in  liabili-es:  Decrease  in  bond  yields  

Change  is  assets:  Investment  returns  

Other  movements   December  2014  

 Will  not  exceed  contribu-ons  made  in  2014  

 At  the  same  level  as  2014  due  to  debt  buybacks  

 Tax  rate  consistent  with  2014  at  21%,  cash  tax  will  be  more  in  line  with  P&L  charge  

Around  £40-­‐45  million,  similar  to  2014  

 Around  £1,040  million  reflec-ng  our  new  channels  

39  

Interest  

Tax  

Capex  

NPB  

2015  Planning  assumpOons  –  inves-ng  while  remaining  focused  on  cash  and  costs  

 Around  85%  due  to  investment  in  scripted  content  Profit  to  cash  

Pension  

 Policy  for  at  least  20%  p.a.  growth  in  ordinary  dividend  for  3  years  to  2016    Ordinary  dividend