ITV PLC
ANNUAL REPORT & ACCOUNTS 2023
ITV plc Annual Report and Accounts for the year ended 31 December 2023
MORE
TV
THAN
MORE
THAN
TV
optimise
BROADCAST
Digitally transforming as we continue to
attract commercial broadcast audiences
of unparalleled scale
expand
STUDIOS
Further expanding by genre,
geography and customer and
growing faster than market
supercharge
STREAMING
Driving digital viewing and
revenue through ITVX and Planet V,
ITV’s leading addressable
advertising platform
OUR purpose
We entertain and connect with
millions of people in the UK and
globally, reflecting and shaping
culture and building brands with
brilliant content and creativity.
OUR 2026 vision
To be a leader in UK advertiser-
funded streaming and an expanding
global force in content.
OUR strategy
Our strategy is focused on three strategic pillars illustrated below. 2023 was
the year of peak investment for Streaming, which together with the successful
execution of our strategy and the efficiencies delivered to date have made ITV
more robust. ITV has a leading, scaled, global Studios business, a high growth
Streaming service and a cash generative linear advertising business. This ensures
that we are well placed to grow profits from here as we continue to drive
material efficiencies, invest behind our
strategic priorities and deliver
returns to shareholders.
Read more
on page 10
Vertically
Integrated
Producer
Broadcaster
and Streamer
1ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
CONTENTS KEY FINANCIALS
1
STRATEGIC REPORT
Key Financials 1
An Introduction to ITV
and its Business Model 2
Investor Proposition 4
Chair’s Statement 5
Our Key Stakeholders 6
Market Review 7
Chief Executive’s Statement 8
Our Strategy 10
Key Performance Indicators 14
Operating and Financial
Performance Review 18
Social Purpose 32
Our People 40
Alternative Performance Measures 42
Finance Review 45
Non-Financial and Sustainability
Information Statement 52
Risks and Uncertainties 55
Climate Related
Financial Disclosures 65
Long-term Viability
Statement Disclosure 72
GOVERNANCE
Chair’s Governance Statement 75
Board of Directors 77
Management Board 79
Corporate Governance 81
Stakeholder Engagement 84
Our Commitment to Section 172(1) 92
Nominations Committee Report 103
Audit and Risk Committee Report 106
Remuneration Report 117
Directors’ Report 143
FINANCIAL STATEMENTS
Financial Statements 148
Independent Auditor’s Report 149
Primary Statements 156
ITV plc Company Financial
Statements 229
Subsidiary undertakings and
investments 238
ADDITIONAL INFORMATION
Glossary 243
ONLINE
We maintain a corporate website
containing our financial results and a
wide range of information of interest to
all stakeholders, including institutional
and private investors: www.itvplc.com
Group external revenue
£3,624m
-3% (2022: £3,728m)
Cost savings
£24m
(2022:£23m)
Group adjusted EBITA
£489m
-32% (2022: £717m)
Net debt
£553m
(2022: £623m)
Adjusted EPS
7.8p
-41% (2022: 13.2p)
Profit to cash conversion
102%
(2022: 75%)
Statutory operating profit
£238m
-54% (2022: £519m)
Leverage
1.0x
(2022: 0.8x)
Statutory EPS
5.2p
-51% (2022: 10.7p)
Dividend
5.0p
(2022: 5.0p)
FURTHER READING
Social Purpose Impact Report
Read more at
itvplc.com/socialpurpose
Pay Gap Report
Read more at
itvplc.com/investors/governance
ALTERNATIVE PERFORMANCE MEASURES
Strategic Report
The Strategic Report explains in detail how we have
performed this year and sets out, amongst other things,
a fair review of the business, a balanced and comprehensive
analysis of our performance, the use of key performance
indicators to explain the progress we have made,
a description of the principal risks and uncertainties
facing the Company, and an indication of potential
future developments.
The Strategic Report is prepared in line with the relevant
provisions of the Companies Act 2006 and the 2018
Corporate Governance Code (Code) and the Company
has had regard to the guidance issued by the Financial
Reporting Council. It is intended to provide shareholders
and other stakeholders with a better understanding of the
Company, of its position in the markets within which it
operates, and of its prospects. In setting out the Company’s
main risks and uncertainties and throughout, this report
and accounts contains statements that are based on
knowledge and information available at the date of
preparation of the Strategic Report, and what are believed
to be reasonable judgements, and therefore cannot be
considered as indications of likelihood or certainty.
A wide range of factors may cause the actual outcomes and
results to differ materially from those contained within, or
implied by, the various forward-looking statements in this
Annual Report and Accounts. None of these statements
should be construed as a profit forecast.
1. We use both statutory and adjusted measures in our Strategic Report. The latter, in management’s view,
reflects the underlying performance of the business and provides a more meaningful comparison of how
the business is managed and measured day-to-day. A full reconciliation between our statutory and adjusted
results is provided in our Alternative Performance Measures section. Our KPIs (which are based on adjusted
metrics) are set out in the KPIs section.
2 ITV plc Annual Report and Accounts 2023
AN INTRODUCTION TO ITV AND ITS BUSINESS MODEL
WHO WE ARE
ITV TOTAL REVENUE
ITV Studios
£2,170m
(2022: £2,096m)
M&E*
£2,090m
(2022: £2,249m)
* Includes £490 million of digital revenues
1
(2022: £411 million)
ITV GROUP ADJUSTED EBITA
**
ITV Studios
£286m
(2022: £259m)
M&E
£205m
(2022: £464m)
** A full reconciliation between our adjusted and statutory
numbers is included in our APMs section
1. M&E digital revenue includes revenue from digital advertising, subscription, linear addressable advertising, digital sponsorship and commercial partnerships, ITV Win (digital
competitions platform) and other revenues from digital business ventures
OUR TWO DIVISIONS
ITV Studios
ITV Studios is a scaled and global creator, owner and distributor
of high-quality TV content. It operates in 13 countries, across over
60 labels and has a global distribution network. It is diversified by
genre, geography and customer in the key creative markets
around the world.
ITV Studios is the largest producer in the UK, one of the largest
unscripted producers in the US and one of the top three
producers in the majority of the international markets in which it
operates. ITV Studios has established relationships with key
content buyers and leading creative talent in those markets; and
with a combined content library of over 90,000 hours, it is also
one of the pre-eminent global distributors.
Media & Entertainment
ITV is the largest commercial broadcaster and streamer in the
UK, delivering unrivalled audience scale and reach. M&E includes
Streaming and Broadcast through which we distribute content via
ITVX, our free advertiser-funded streaming service, and via our
free-to-air linear TV channels. Our content is also distributed on
third-party partner platforms, such as Sky and Virgin.
ITVX also includes a subscription tier, ITVX Premium, which
provides subscribers with all of ITVX’s programming ad-free
along with other exclusive content.
ITV offers advertisers a unique combination of mass
simultaneous reach, targeted advertising, and commercial and
creative partnerships, in a brand safe environment across ITVX
and our linear TV channels.
Refer to the Operating and Financial Performance Review for further details on our divisions
58%
of revenue generated
outside the UK
(2022: 60%)
19
formats sold in 3+
countries
(2022: 19)
12.5m
monthly active users
(2022: 10.5m)
1,505m
total streaming hours
(2022: 1,192m)
32%
total revenue from
streamers
(2022: 22%)
37%
of revenue from scripted
productions
(2022: 34%)
91%
of the top 1,000 commercial
broadcast TV programmes
(2022: 93%)
32.6%
share of commercial
viewing
(2022: 33.8%)
3ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
OUR STRATEGIC ASSETS AND COMPETITIVE ADVANTAGES
ITV’s business model is based on a unique set of strategic assets and competitive advantages which enable us to grow our diversified
revenue streams and create value for our shareholders.
By developing, owning, managing and distributing the rights to content, ITV can maximise the value of its programme brands across
ITV Studios, Streaming and Broadcast. This ensures ITV is a more diversified business and enables it to drive value from different
revenue models.
Group ITV Studios ITV Media & Entertainment
• Integrated producer, broadcaster
and streamer model creates
valuable synergies
• Strong, trusted brand, products
and culture
• A high-performing, agile and
diverse workforce
• Creates and owns the rights to
world-class content
• Broad global customer base with
major networks, streamers and
broadcasters
• M&E is differentiated from global
streamers with primarily
uniquely British content
• Deep commercial relationships
with advertisers
• Owns Planet V, an intuitive
self-serve addressable
advertising platform
• Strong data capabilities with one
of the largest first-party
datasets in the UK
USING OUR STRATEGIC ASSETS AND COMPETITIVE ADVANTAGES WE AIM TO GROW…
OUR DIVERSIFIED REVENUE STREAMS
ITV Studios
Original production
We create and produce original scripted and unscripted content
commissions for a diverse customer base of global streamers,
major networks and local free-to-air and pay TV broadcasters
and operators across our production bases.
Formats
We create some of the world’s most successful unscripted
formats which we license globally to maximise the value from
our programme rights.
Distribution
We own the rights to a significant catalogue of programmes that
we license to broadcasters and streamers internationally through
our global distribution network.
Media & Entertainment
Advertising
ITVX and our free-to-air linear TV channels drive significant
digital and linear advertising revenues due to our ability to deliver
mass simultaneous audiences and targeted advertising at scale.
Commercial and creative partnerships
Using the power of our brands we help advertisers engage with
audiences in different ways. We provide unique and innovative
commercial and creative partnerships across ITVX and our
free-to-air linear TV channels. These include sponsorship,
product placement and advertiser-funded programming.
Subscription, competitions and third-party revenues
In the UK, we generate streaming subscription revenue through
our ad-free tier, ITVX Premium. We monetise our consumer
interactions through competitions associated with our
programme brands. We also receive third-party revenue from
distributing our channels and streaming services to other
platforms and services.
SUPPORTED BY OUR…
RISK MANAGEMENT FRAMEWORK
ITV operates in an increasingly complex
business environment and our risk
management framework provides the
business with the tools to identify,
assess, manage and continually review
our risks.
Management and the Board can adapt
the strategy to ensure we are striking the
right balance between risk-taking and risk
mitigation, that any underlying risks in the
strategy are being appropriately managed
and therefore enabling the successful
delivery of the strategy.
Our business model enables us to create
value for all our key stakeholders, see page
6 for further detail.
4 ITV plc Annual Report and Accounts 2023
INVESTOR PROPOSITION
ITV is delivering long-term value for shareholders through:
1
Driving significant benefits
from our unique position:
• As a vertically integrated producer,
broadcaster and streamer
Refer to the Chief Executive’s Statement on
page 8 for further details on these benefits
2
Growing its leading, scaled
and diversified global
Studios business:
• ITV will grow faster than the global content
market, at a margin of 13-15%
Refer to Our More than TV Strategy on page 10
and Operating and Financial Performance
Review on page 18 for further details
Reasons
to INVEST
3
Driving strong momentum
in streaming:
• Delivering significant growth in digital
viewing and digital advertising, providing
data-driven targeted advertising at scale
through Planet V (ITV’s addressable
advertising platform) in a trusted, brand
safe environment
Refer to our KPIs on page 14 and Operating and
Financial Performance Review on page 18 for
further details
4
Optimising Broadcast as we
continue to attract mass
linear TV audiences:
• Which remain highly valuable to
advertisers as they grow their businesses
and drives cash generation for the Group
Refer to our KPIs on page 14 and Operating and
Financial Performance Review on page 18 for
further details
5
Increasing profit over the
medium term:
• As we continue to rebalance the business
towards the growth drivers of ITV Studios
and advertiser funded streaming and
deliver further efficiencies
Refer to Our More than TV Strategy on page 10
and KPIs on page 14 for further details
6
Delivering against our KPIs
across the Group:
• On track to deliver our KPI targets in 2026
Refer to our KPIs on page 14 for further details
7
Maintaining a robust
balance sheet, strong cash
generation and disciplined
capital allocation framework:
• Invest organically in line with strategic
priorities; manage financial metrics
consistent with investment grade metrics
over the medium term; sustain a full year
ordinary dividend of at least 5.0p, which
will grow over the medium term; consider
value-creating inorganic investment
against strict criteria when appropriate;
and any surplus capital will be returned to
shareholders
• £235 million share buyback to be
completed within the next 18 months
See the Finance Review on page 45 for
further details
5ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
CHAIR’S STATEMENT
2023 WAS A
CHALLENGING BUT
PRODUCTIVE YEAR
In a nutshell, 2023 was a challenging but
productive year. Economic headwinds were
present throughout the year impacting our
financial performance but we made good
progress strengthening the internal
capabilities of the organisation and hitting
a number of key milestones on our strategic
journey to be ‘More Than TV’, evolving from
a legacy broadcaster to a more sustainable
media and entertainment business.
Taking the financials first. Total external
revenues were down 3% on the prior year as
cost of living pressures affected household
demand for goods and services and led
advertisers to trim their marketing budgets.
Adjusted EBITA
1
declined 32% reflecting
both the drop in revenues and planned
investment in ITVX. Free cash flow was £361
million, up 29% vs 2022. The balance sheet
remains strong and the Board has proposed
a final dividend of 3.3p taking the dividend for
the full year to 5.0p, in line with the prior year.
This is a total return of around £200 million.
The Board has also announced a £235 million
share buyback which will be completed
within the next 18 months.
The media and entertainment industry
continues to evolve rapidly. Technology
advances are dramatically increasing the
choices available, not just in terms of
content, but also how, when and where it can
be consumed. The emergence of generative
AI is a potential game changer in the world of
production while the competitor set is
shifting, from national TV broadcasters to
international streamers and global tech
corporations who are increasingly the
gatekeepers to our audience. These
structural shifts are material and require
us to be on our mettle and take appropriate
action. We need to ensure our internal ways
of working are as sharp and agile as they
can be, that we are ready to take difficult
decisions to keep our cost base down and
have a clear strategy that is future focused
and plays to our strengths.
Our ‘More Than TV’ strategy has three main
objectives:
• Expand Studios
• Supercharge Streaming
• Optimise Broadcast
During the year we made good progress on
each of the three.
Studios grew revenue and profit to record
levels deploying its global scale and strength
to win business across all major genres and
geographies.
In streaming, ITVX had a successful launch
year, proving technically robust and attracting
large cohorts of new viewers with the quality
and depth of its content.
And our linear broadcast business continued
to demonstrate its extraordinary, continuing
ability to generate mass, simultaneous
audiences. In addition, innovations such as
the upgraded iteration of Planet V reinforced
ITV’s position as the clear leader for
advertisers in UK commercial television.
It is the blending of these three strategic
elements that makes ITV unique. Together
they form an integrated model that allows us
to consistently secure world-class content,
provides outstanding flexibility and reach for
UK advertisers and attracts the best writers
and producers to work with us. The model is
strengthened by our long-standing status as
a Public Service Broadcaster (PSB). A Media
Bill is progressing well through Parliament
and its final adoption into law will
fundamentally update the current regulatory
framework and provide enhanced, welcome
support to PSBs whose objective voice at a
time of such dynamic change has never been
more important.
ITV is a special organisation to be a part of
and it’s clear from the frequent engagement
surveys we run and our high levels of
colleague retention, that people like to work
here. They are proud of what we do, of the
lead we show on important issues whether
it’s mental health; diversity, equity and
inclusion; or of the open and respectful way
we try to treat each other. Nothing is ever
perfect and we are eager to find opportunities
to improve, but the values of this Company
are sound.
There have been a number of changes to our
Board during the year. Anna Manz, Mary Harris
and Duncan Painter stepped down and I would
like to thank them sincerely for their efforts.
The Board and the wider Company have
benefited enormously from their time with
us. In their place I am pleased to welcome
Dawn Allen and Marjorie Kaplan. Two highly
accomplished leaders who bring different
experiences to the Board table and from
whom I am sure we will learn much.
Finally my thanks to
Carolyn and the
leadership team for
their exceptional efforts
during some challenging
times and to all my
ITV colleagues for
their continuing
commitment and
passion for the cause.
ANDREW COSSLETT CBE
CHAIR OF THE BOARD
1. Refer to APMs section for the reconciliation between our adjusted and statutory numbers.
6 ITV plc Annual Report and Accounts 2023
OUR KEY STAKEHOLDERS
Our strategy is aligned with the requirements of each of our stakeholders
so that we are creating and delivering value for all.
CUSTOMERS
Including but not limited to the
following:
Agencies and advertisers
We deliver advertisers value
through a unique combination
of mass simultaneous reach on
our linear TV channels, targeted
digital advertising powered by
Planet V – our proprietary
adtech platform, and through
commercial and creative
partnerships around our quality
programme brands on our linear
channels and ITVX.
Broadcasters, networks and
streamers
We deliver high-quality TV
productions globally, across a
range of genres which
broadcasters and streamers can
monetise through their own
business models.
Platforms
We have strong relationships with
aggregators who broadcast our
content and pay us for its
inclusion on their platforms.
VIEWERS AND SUBSCRIBERS
Our content offering is varied and
high quality, which audiences can
watch and engage with, for free or
through a subscription, across a
variety of channels and platforms
in a trusted, brand-safe
environment.
PARTNERS
We collaborate closely with our
partners and aim to cultivate
strong working relationships. We
ensure all suppliers understand
and adhere to our Supplier Code
of Conduct.
OUR COLLEAGUES, PROGRAMME
PARTICIPANTS AND EVERYONE
WE WORK WITH
We protect, invest in and develop
our on and off-screen talent,
and create a culture that
nurtures them to be productive,
commercial and creative. People,
and their physical and mental
health and safety, are our priority
at ITV.
Refer to the
Our People section
for further details.
CITIZENS
As a Public Service Broadcaster
(PSB) in the UK, ITV can help
shape culture for good. Our
provision of free, universally
accessible, high-quality content
along with a trusted news service,
helps to inform citizens, shape
public sentiment, drive national
conversations and support
democratic debate.
Refer to
Social Purpose
for further details.
LEGISLATORS AND REGULATORS
ITV takes its responsibilities and
obligations as a PSB seriously and
conducts business in line with the
appropriate laws and regulations,
to ensure we operate ethically
and responsibly.
See Our Commitment to Section
172 and the Stakeholder
Engagement section for further
details of ITV’s key
stakeholders and how we
engage with them.
SHAREHOLDERS, DEBT PROVIDERS
AND ANALYSTS
Through the successful execution
of our strategic priorities, we will
create value for and deliver
returns for our investors (equity
and debt).
Refer to the
Investment
Proposition section
for further details.
7ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
MARKET REVIEW
The markets in which we operate are dynamic, increasingly competitive
and rapidly changing. The global content market is large and attractive,
with all platforms needing access to the best content to attract viewers
at scale. Ongoing changes in viewing habits, coupled with an ever-evolving
advertising landscape, bring both challenges and opportunities to ITV.
TREND ONE TREND TWO TREND THREE
Global demand for content
The global content market is large and attractive
with all platforms needing a mix of content to
succeed in a very competitive market. Going
forward we expect to see growth in key segments
of the global content market in which we operate,
including content licensing, streamers demand for
unscripted content and cost effective premium
scripted content. 2024 will be impacted by the
2023 US writers and actors strikes delaying
productions until 2025 and weaker demand from
free-to-air broadcasters (FTA) in Europe who are
holding back spend until they see more certainty
in the advertising market.
Fragmentation in viewing
and changing habits
While the average viewing time per person per day
remains stable at 4.5-5 hours per day (Source:
Ofcom), the competitor set has become
increasingly fragmented over time. From PSBs (e.g.
BBC, ITV), to global streaming services (e.g. Netflix,
Disney+), and user-generated video-sharing
platforms (e.g. YouTube, TikTok), viewers now have
an unparalleled level of choice and flexibility about
what, how, where and when they watch content.
The UK advertising market
The UK advertising market is worth £36 billion,
growing at 7% compound annual growth rate
(CAGR) in the past decade. Growth slowed in 2023
(forecast to be +3% in 2023 vs. +9% in 2022), with
high inflation leading to reduced marketing
budgets. There was also a decrease in venture
capital funding, which had funded significant
advertising activity in recent years from new
market entrants.
Total market growth has largely been driven by
online advertising, which is expected to be up 5% in
2023 and up 16% CAGR over the last ten years.
Online is the largest category of advertising spend
(75% of the market) followed by TV advertising
(14% of the market). (Source: AA WARC).
The TV advertising market is increasingly competitive,
with global streaming platforms (Amazon, Netflix,
Disney+) having now launched, or shortly set to
launch, streaming advertising propositions.
Size of global content market in 2023
$226bn
(Source: Estimate from Ampere Analysis:
Feb 2024 – excludes spend from film studios)
Average viewing time per person per day
4 hours 28 mins
(Source: Ofcom Media Nations. Previous 5-year
average of 5 hours per day – incl. COVID-19 years)
2023 UK advertising market
£36bn
(Source: AA WARC. 2022: £35 billion)
How we are responding
Delivery of ITV Studios’ strategic priorities will
ensure ITV gains share over the medium term. By
expanding our scripted and unscripted business
and further diversifying our customer base, ITV
can capture the growth in content spend in key
segments in which we operate including licensing
and demand from streaming platforms for
unscripted content and cost-effective premium
scripted content.
Growing our global formats ensures we have a
range of high-value formats which we can monetise
internationally, through production, format sales
and licensing. Our distribution business can also
capitalise on the value of our extensive catalogue
of formats and scripted content. This contributes
to our higher overall ITV Studios margin relative to
our industry peers.
As a vertically integrated producer broadcaster and
streamer, ITV Studios also benefits from demand
for its content from ITV’s FTA linear TV channels
and our free advertiser-funded streaming service,
ITVX, providing M&E with a strong and secure
content supply.
How we are responding
As a commercial PSB in the UK, we provide the
nation with the flexibility to watch content
whenever and wherever, while maximising
commercial value.
In December 2022, we launched ITVX which
provided a step-change in ITV’s streaming offering
and now has over 17,000 hours of free content.
This has led to significant growth year-on-year in
monthly active users of our streaming service, up
19% and streaming hours, up 26%.
Live viewing, whether via ITVX or on linear TV
channels, remains a major focus: ITV is home to
more commercial audiences of scale than any
other broadcaster or streaming platform in the UK.
In 2024, we will invest around £1.275 billion in
high-quality, trusted content across a wide range
of genres, including large family entertainment
shows, sport, drama, and news which will drive
both video on demand and live viewing on ITVX,
and mass audiences on linear TV channels.
How we are responding
ITV offers our advertising clients something no
streamer can – mass simultaneous reach, targeted
advertising at scale and commercial and creative
partnerships in a brand-safe environment. This
remains a considerable market differentiator along
with our deep, established relationships with
advertisers and agencies.
ITV’s FTA linear TV channels offer unique scale and
reach and it remains a cost-efficient and important
part of marketing campaigns.
ITVX delivers the scale and breadth of digital
audiences which provides inventory for Planet V,
our addressable advertising platform, to create and
deliver targeted advertising at scale. This
underpins our ability to compete for digital video
budgets and gain share in this growing addressable
advertising market, illustrated by our 19% growth in
digital revenues in 2023.
Link to risk Link to strategy Link to risk Link to strategy Link to risk Link to strategy
2
E
4
S
O
3
S
O
Key
E
Expand Studios globally
S
Supercharge Streaming
O
Optimise Broadcast
Refer to the Strategy section in the CEO’s Statement and to the Operating and Financial Performance Review for further details
8 ITV plc Annual Report and Accounts 2023
CHIEF EXECUTIVE’S STATEMENT
ITV Studios delivered record revenues
and profits as the business continued to
demonstrate its strong market position,
with outstanding creative deliveries globally.
In Media and Entertainment, ITVX drove
significant growth in digital viewing and
advertising revenues, with the investment
on plan. It was the year’s biggest and most
successful streaming launch in the UK,
firmly establishing its place in the market,
and winning the award for Best On-Demand
Service at the Edinburgh TV Festival.
Financial highlights
2023 was the second-highest revenue
outturn in ITV’s history. Total ITV group
revenue was down 2% and total external
revenue declined by just 3% in 2023 despite
the severe decline in linear advertising.
ITV’s growth drivers continued to perform
well, with 4% growth in ITV Studios and
19% growth in digital revenues helping
to substantially offset a 15% decline in
linear advertising due to the challenging
advertising market. In total, M&E revenues
were down 7% in the year.
As expected, group adjusted EBITA was
down 32% at £489 million which reflects the
decline in linear advertising revenue and the
planned investment in ITVX. Adjusted EPS
was down 41% at 7.8p. We have reached a
peak level of net investment in our streaming
business in 2023 and we continue to expect
to grow profits from here.
Statutory profit before tax was down 61%
and statutory EPS decreased by 51% to 5.2p.
There was strong cash generation in the year,
with 102% profit to cash conversion and a
robust balance sheet, net debt of £553
million and net debt to adjusted EBITDA
leverage of 1.0x.
In line with ITV’s dividend policy, the Board
has declared a final dividend of 3.3p (2022:
3.3p), giving an ordinary dividend of 5.0p per
share for the full year 2023 (2022: 5.0p)
As announced on 01 March 2024, ITV sold its
50% holding of BritBox International to BBC
Studios for a total consideration of £255
million. The Board will return the entire net
proceeds to shareholders through a share
buyback of £235 million which we expect to
complete within the next 18 months.
Our Purpose, Vision and More
than TV Strategy
The strong operating performance in 2023
demonstrates that the strategy we started
implementing in 2018, and evolved in 2022
with the launch of ITVX, is working. We have
been able to withstand macroeconomic
headwinds because of the actions we have
taken to reposition ITV towards higher,
sustainable growth areas in global
production and digital. The business is
demonstrably more balanced and has strong
delivery momentum as we continue to drive
our strategy.
The media landscape continues to evolve
rapidly and is more competitive for viewers
and advertising, with recent new entrants.
We are in a far stronger position than we were
in 2018, to focus on ITV’s value drivers and
competitive advantages and are confident
that we can compete, as evidenced by a very
strong programming slate: Mr Bates vs The
Post Office is the highest audience drama on
any platform for five years; Fool me Once by
ITV Studios’ Quay Street Productions is in
Netflix’s top 10 English-language dramas of
all time, and ITV Commercial consistently
outperforms the market.
EXECUTING
OUR MORE
THAN TV
STRATEGY
The successful execution of ITV’s strategy of investing in and growing both
production in ITV Studios, and ITVX in Media and Entertainment (M&E), is evident
through the robust financial and operating performance in 2023, despite a
challenging macroeconomic environment.
9ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
Our purpose remains unchanged, we
entertain and connect with millions of people
in the UK and globally, reflecting and shaping
culture and building brands, with brilliant
content and creativity.
Our vision is that by 2026 ITV will be a leader
in UK advertiser-funded streaming, and an
expanding global force in content. We are
focused on three strategic pillars to deliver
this vision:
• Expand our UK and
global production business
• Supercharge our
Streaming business, and
• Optimise our
Broadcast business
These pillars are underpinned by a number
of priorities, and we have set key performance
indicators and targets to deliver by 2026.
With the strong progress we have made to
date, we are on track and confident we can
deliver against these targets. The following
page provides further detail on our strategic
priorities, why they are important and what
they drive.
Integrated producer broadcaster
and streamer
ITV has a unique market position as a global
and diversified vertically integrated producer
broadcaster and streamer with content
central to everything we do. This model
benefits both divisions and therefore
the Group:
For ITV Studios it:
• Provides a sustainable base of core
commissions which gives stability
in a changeable industry;
• Helps with attracting and retaining
industry-leading talent which is key
to a successful creative business;
• Provides a platform to make Studios’
content famous and enables cross-
promotion, supporting the international
sale of our content and formats, and
the monetisation of our IP across our
business models
For M&E it:
• Provides access to world-class content for
ITV’s linear TV channels and ITVX, driving
viewing growth;
• Enables deeper and more creative and
productive partnerships with advertisers,
driving revenue;
• Helps protect from content price inflation
For the Group, this gives us a real competitive
advantage, providing attractive economics
as we operate across the entire value chain,
and benefit from diversification in a
cyclical industry.
ITV Studios
ITV Studios is a scaled and global creator,
owner and distributor of high-quality content
operating in 13 countries and across 60+
labels; diversified by genre, geography and
customer in the key creative markets around
the world.
ITV Studios benefits from its scale as the
largest 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.
In 2023 we further delivered against our four
strategic priorities (as set out in the Strategy
section on the following page) and we remain
on track to achieve all our 2026 KPI targets
and deliver a 5% total organic revenue CAGR
target from 2021 to 2026 – ahead of the
market, and operate at industry-leading
margins of 13 to 15%.
We have grown our scripted business with
316 hours of high-end scripted content
delivered in 2023, an increase of 14% from
the prior year. This has helped to further
diversify our customer base, with almost
a third of Studios revenues coming from
streaming platforms in 2023, up from
22% in 2022.
We also continued to monetise our global
formats with 19 formats in 2023 sold in three
or more countries (2022: 19). Supported by
our integrated model the final priority is to
attract and retain the leading talent in the
industry. We have seen outstanding creative
deliveries from recent talent deals and
acquisitions including Fool Me Once and
After the Flood from Quay Street
Productions, One Piece from Tomorrow
Studios, and Big Beasts from Plimsoll
Productions.
The global content market is large and
attractive, with all platforms needing a mix
of content to succeed in a very competitive
landscape to attract audiences. We expect
to see growth in key segments in which we
operate – content licensing, demand from
streaming platforms for unscripted content
and cost effective premium scripted content.
ITV Studios is very well positioned to take
advantage of this growth and to grow our
market share over the medium term, driven
by our scale and diversified position, our
investment in development and creative
talent and our high-quality IP.
As previously guided, 2024 will be impacted
delays in production as a result of the writers’
and actors’ strike in the US, combined with
the continuation of weaker demand from FTA
broadcasters in Europe who are holding back
spend until they see more certainty in the TV
advertising market.
AN AUDIENCE
WITH KYLIE aired on
ITV in December 2023.
THE LONG SHADOW is
a true-crime drama and
was the most-watched
series of the year
on ITVX.
10 ITV plc Annual Report and Accounts 2023
CHIEF EXECUTIVE’S STATEMENT CONTINUED
expand
STUDIOS
Further expanding by genre,
geography and customer and
growing faster than market
supercharge
STREAMING
Driving digital viewing and
revenue through ITVX and Planet V,
ITV’s leading addressable
advertising platform
optimise
BROADCAST
Digitally transforming as we
continue to attract commercial
broadcast audiences of
unparalleled scale
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%
2026 M&E TARGET
Grow digital revenues
to at least £750m
across M&E
Vertically
Integrated
Producer
Broadcaster
and Streamer
OUR MORE THAN TV STRATEGY
Our strategy is focused on three strategic pillars 1) Expand Studios; 2) Supercharge
Streaming; and 3) Optimise Broadcast. These pillars are underpinned by a number of
priorities (detailed below) to ensure that ITV is best placed to capitalise on the
opportunities presented by the rapidly changing viewing, content production and
advertising environments. These pillars are not independent. They work together –
reinforcing each other, creating synergies and delivering value.
Media & Entertainment (M&E)
ITV M&E is the largest commercial
broadcaster and streamer in the UK,
delivering unrivalled audience scale and
reach. It is underpinned by two strategic
pillars; Supercharge Streaming and
Optimise Broadcast.
By Supercharging Streaming, we aim to drive
digital revenues through ITVX and Planet V
(ITV’s proprietary, self-service programmatic
addressable advertising platform).
We launched ITVX on time and our investment
is on plan and on budget. In our first full year
of ITVX we delivered a step change in viewing
and digital revenues were up 19%. We
increased the number of monthly active users
by almost 20%, up to 12.5 million and those
users are spending more time engaging with
the platform with streaming hours up 26%
to 1.5 billion hours. Brand awareness is now
up to over 90% and we have seen a significant
increase in streaming hours for light viewers
who are harder to reach, up 65%, and our key
target audience of 25-54s which was up 47%.
The key focus of ITVX is our ad-funded
proposition which is where we have
channelled our efforts and resources in
its launch year. In addition, we have ITVX
Premium, a subscription service, which is
primarily an ad-free offering for viewers. The
number of paid-for UK subscribers declined
marginally year on year as we started
transitioning subscribers from our standalone
app, BritBox UK, into ITVX Premium, combined
with the closure of the ITV Catch Up service
on Amazon Prime Video Channels.
In 2024, the BritBox UK service on Amazon
Prime Video Channels and the Britbox UK
standalone app will close as we further
simplify our offering. This will consolidate
all our subscribers under one ITVX Premium
brand and will give us complete ownership
of the subscriber base. The closure of these
services is expected to impact subscriber
numbers and subscription revenues in 2024.
Planet V is the platform enabling the
growth of ITV’s digital advertising – it is a
market-leading addressable advertising
platform which creates and delivers
targeted advertising at scale.
It enables us to create sophisticated
audience segments and serve ads directly
to them. All the major agencies are using
Planet V and see it as an intuitive, easy-to-
buy self-serve platform, allowing them to
streamline their approach to planning and
buying. ITV has one of the largest first-party
data sets in the UK, with over 40 million
registered users on ITVX. Agencies and
advertisers can make use of this alongside
their own data and other first and third-party
datasets, to create more precise addressable
campaigns. Advertisers are prepared to pay
more for this increasingly sophisticated and
valuable ad inventory.
11ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
To support the successful delivery of the strategy, we have key
performance indicators (KPIs) and related targets to be delivered
from 2021 to 2026 which we are on track to deliver. The key to
successfully delivering this strategy is digitally transforming
everything we do.
The successful execution of our strategy to date has made ITV more
robust. ITV has a leading, scaled, global Studios business, a high
growth Streaming service and a cash generative linear advertising
business. This ensures that we are well placed to grow profits from
here as we continue to drive material efficiencies, invest behind our
strategic priorities and deliver returns to shareholders.
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.
PRIORITIES WHY IT’S IMPORTANT FY 2026 TARGET FY 2023 WHAT IT DRIVES
STUDIOS
1. Grow our
scripted business
To meet the growing
global demand for
scripted content
particularly from
streaming platforms
400 high-end scripted
hours per annum
316 hours
(2022: 276 hours)
Growth in total
organic revenue of 5%
on average per annum
to 2026
1
which is
ahead of the market
Delivers adjusted
EBITA
2
margins of 13%
to 15%
In 2023, total organic
revenue grew 3% at
an adjusted EBITA
margin of 13.2%
2. Grow our
global formats
business
To maximise international
monetisation of
high-value formats
20 formats sold in three or
more countries
19 formats
(2022: 19 formats)
3. Further diversify
our customer base
To capture the growth in
content spend from local
and global streaming
platforms
30% of total revenues
from streaming platforms
32%
(2022: 22%)
4. Attract and retain
leading talent
Key to creative success
of a Studios business
N/A N/A
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.
PRIORITIES WHY IT’S IMPORTANT FY 2026 TARGET FY 2023 WHAT IT DRIVES
STREAMING
1. Attract more monthly
active users to ITVX
ITV’s reach is key to
retaining and attracting
advertisers
Grow monthly active
users to 20 million
12.5 million
(2022: 10.5 million)
Growth in digital
revenues to at least
£750m by 2026
Revenues from linear
TV advertising,
commercial and
creative partnerships,
and sponsorship
In 2023, total digital
revenues were
£490 million, up 19%
year-on-year
2. Increase the
time users spend
on ITVX
ITV’s scale is key to
retaining and attracting
advertisers
Grow total streaming
hours to 2 billion hours
1,505 million hours
(2022: 1,192 million
hours)
3. Increase UK
subscriber base
Monetising ITV viewers
who are willing to pay for
ad-free and additional
content
Grow subscribers to
2.5 million
1.3 million
(2022: 1.4 million)
BROADCAST
4. Maintain our strength
in delivering mass
linear audiences
ITV’s mass linear
audiences remains very
important to UK
advertisers
Maintain a share of at
least 80% of the top
1,000 programmes
91%
(2022: 93%)
5. Maintain ITV’s position
in UK broadcast
market
ITV’s scale remains very
important to UK
advertisers
Maintain a share of
commercial viewing of
33%
32.6%
(2022: 33.8%)
1. Average annual growth rate from 2021.
2. Refer to APMs for detail on our adjusted measures.
12 ITV plc Annual Report and Accounts 2023
CHIEF EXECUTIVE’S STATEMENT CONTINUED
This capability underpins our ability
to now compete for online video budgets,
particularly budgets allocated to platforms
such as YouTube, and take share in this
growing addressable advertising market.
The progress we have made in Streaming and
against our KPIs means that we are confident
of delivering at least £750 million of digital
revenues by 2026, with the focus continuing
to be ad-funded.
We have started 2024 really well and will
further enhance ITVX in 2024 building on
the momentum we have. We will increase
the depth and breadth of content, deliver
continuous improvements in the product
and user experience, and expand its
distribution and marketing.
Within Broadcast, we have now digitally
transformed the business and will continue
to do so as we become increasingly agile and
adapt to changing viewer habits. Internally
this means we are always looking at ways to
increase our efficiency and productivity,
whether that is through the operational use
of AI or ensuring our cost base is the right
shape and size. Externally for viewers, it is
ensuring we continue to engage our
audiences through live content such as
sports and successful entertainment shows
to continue to deliver mass audiences which
are so valuable to advertisers, together with
the personalisation and targeting that comes
with ITVX.
ITV continues to be the best destination for
advertisers to reach valuable mass
audiences in the UK. Our share of those mass
linear TV audiences continued with over 90%
of the top 1,000 programmes appearing on
ITV and our share of commercial viewing has
also been broadly maintained at just under
33%. This robust performance demonstrates
ITV’s unique market-leading position in
broadcast in the UK
What sets ITV apart from all its
competitors commercially is the ability
to deliver four things:
• Mass simultaneous reach,
• Sophisticated targeted advertising
• Commercial and creative partnerships
• A brand-safe and trusted environment.
All of this ensures that we can remain
highly competitive in an increasingly
competitive market.
ITVX’s strong performance has continued
into 2024. Total advertising revenue (TAR) is
expected to be up 3% in Q1 compared to the
same period in 2023, with continued strong
growth in digital advertising revenues.
Refer to the Operating and Financial
Performance Review for further details of
ITV Studios and M&E’s strategic priorities
and how the divisions performed in the year.
Cost and efficiency programme
Our existing cost saving programme of £150
million between 2019 and 2026, has delivered
£130 million of annualised savings to date
and we are on track to deliver the full £150
million by 2025 – one year early.
We are now in the early stages of a new
strategic restructuring and efficiency
programme across the Group to reshape the
cost base, enhance profitability, and support
the growth drivers of Studios and Streaming.
We are building on the foundations we have
established in digital and data and the
significant progress we have made in
transforming ITV from a linear broadcaster to
a multi-platform broadcaster and streamer.
Savings will come mainly from technology
and operational efficiencies, organisational
redesign across Group, M&E and ITV Studios
and permanent reductions in discretionary
spend across the Group.
By the end of 2024 we expect the programme
to have delivered incremental annualised
savings of at least £50 million gross per year,
giving a £30 million in year gross benefit in
2024. There will be c.£50 million of one-off
costs to deliver these savings. The ongoing
programme is designed to deliver further
incremental material savings over a
number of years which will further build
ITV’s resilience. We will provide further
information as the programme progresses.
Our Social Purpose
We reach millions of viewers globally,
through our content, and in the UK,
through our linear channels and ITVX.
We are proud of our position as a Public
Service Broadcaster (PSB) in the UK, telling
the stories that are at the heart of culture
and society. We have the opportunity to
advocate for positive change from social
issues to environmental matters and beyond,
providing the UK public with unbiased
information and diverse perspectives.
Our Social Purpose strategy has four focus
areas: Better Health; Diversity, Equity and
Inclusion; Climate Action and Giving Back.
2023 saw us reach the major milestone for
Better Health in surpassing our five-year goal
which was to encourage audiences to take
over 200 million actions to support their
mental or physical wellbeing. We hit an
extraordinary 249 million actions by the
end of 2023 with our flagship mental health
campaign, Britain Get Talking, playing a
significant role in achieving our target.
Our Giving Back activity in 2023 continued with
our biggest fundraising event, Soccer Aid for
UNICEF. Since its launch in 2006, over £90
million has been raised. As we move forward,
our Giving Back work will shift towards
supporting the next generation called
Better Futures.
THE BAY returned for its fourth series on ITV in 2023.
It is produced by Tall Story Pictures (an ITV Studios label).
13ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
Climate Action remains a priority across our
whole organisation, ensuring we achieve Net
Zero by 2050 in how we make, broadcast and
stream our shows, and use our reach to
inform and inspire audiences to make
greener choices. Our first Climate Transition
Plan is published alongside this report.
ITV continues to consolidate our Diversity,
Equity and Inclusion work. We have
championed diversity across our biggest
shows introducing a range of new voices
on-screen and off-screen and have created
new opportunities for under-represented
groups to thrive in our business.
Refer to the Social Purpose section for
further details on the work we have done
in 2023.
Duty of Care
Supporting the mental and physical health
and safety of colleagues and others who
work with ITV and those participating in our
productions remains a key priority. We are
committed to addressing promptly, fairly and
confidentially all concerns and monitoring
the channels we have in place to ensure they
remain appropriate. During 2023 we
continued to strengthen our Speaking Up
programme by driving continuous
communication, awareness and training
of our speaking up channels for individuals
to register concerns, including our speaking
up hotline, SafeCall. I continue to chair the
Duty of Care Operating Board which
meets regularly.
Following the outcome of the external KC
Review, which found that ITV’s handling of
the case surrounding Phillip Schofield and
This Morning was adequate and appropriate.
In 2024 we will focus on implementing the
recommendations arising from the review.
This includes enhanced speaking up related
training focused on different parts of the
Group and further strengthening our
complaints handling processes.
Regulation
The Media Bill which is currently working its
way through Parliament, will update the legal
and regulatory framework for television,
particularly 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. Once the Bill becomes
law, we will remain fully engaged with
Ofcom and the government throughout
any subsequent processes necessary for
its full implementation.
In May 2023, we submitted our application
to Ofcom for the renewal of our Channel 3
licenses, which expire on 31 December 2024.
We are fully engaged in the process, which
we expect to conclude in the first half of 2024.
Colleagues
Our colleagues are central to everything that
we do and are fundamental to the success of
ITV. They have played a significant role in
delivering our strategy effectively this year
and I am incredibly grateful for the hard work
and commitment all our colleagues show.
I always appreciate how our people love
collaborating with each other and with so
many partners externally, and how motivated
they are to be part of making great shows
that lift people and change people’s lives.
We have continued to invest in the
development of our colleagues and in
ensuring we have an inclusive culture where
everyone can be their authentic selves. I am
pleased that in our 2023 Engagement and
Culture Survey, 75% of colleagues who
responded, feel like they belong at ITV.
In 2024 we will be running a series of
Roadshows across ITV and I am really looking
forward to meeting many of our colleagues
from all areas of the business. With their
input, commitment and energy, ITV will
continue to successfully execute our strategy.
Outlook
We have made great progress towards
our 2026 KPIs. 2023 was the year of peak
investment for Streaming, which together
with the successful execution of our
strategy and the efficiencies delivered to
date have made ITV more robust. ITV has
a leading, scaled, global Studios business,
a high growth Streaming service and a
cash generative linear advertising business.
This ensures that we are well placed to
grow profits from here as we continue to
drive material efficiencies, invest behind
our strategic priorities and deliver returns
to shareholders.
CAROLYN MCCALL
CHIEF EXECUTIVE
THREE LITTLE BIRDS
is a drama written by
Sir Lenny Henry and inspired
by his mother’s journey to
Britain in the late 1950s.
It aired on ITV1 and ITVX
in October 2023.
SHETLAND is a crime drama
produced by Silverprint
Pictures (an ITV Studios
label) for the BBC.
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.
Refer to the Operating and Financial Performance Review for further details on the performance of all our KPIs.
ITV GROUP
Adjusted EPS
1
Adjusted EPS represents the adjusted
profit after tax
1
attributable to each equity
share in the year. It is an important measure
as we aim to create long-term value for our
shareholders.
Performance
Adjusted EPS decreased by 41% from 13.2p
to 7.8p. Strong growth in ITV Studios
adjusted EBITA
1
, up 10%, was offset by a
decline in total advertising revenues (TAR),
down 8%, and an increase in M&E costs
from the planned investment in content for
ITVX, higher streaming related costs and
third-party commercial payaways.
2023
7.8p
‑41% on 2022
2022 13.2
2023 7. 8
2020
2021
10.9
15.3
Cost savings
Cost savings are permanent savings to the
business. Managing our cost base and
mitigating the impact of inflation is key as
we aim to run our business as efficiently as
possible and fund investments in line with
our strategic priorities.
Performance
We delivered £24 million of permanent
cost savings in 2023, which is ahead of the
£15 million in year target. To date, we have
delivered £130 million of our 2019 to 2026
target of £150 million.
We are now in the early stages of a new
strategic restructuring and efficiency
programme across the Group which will
deliver incremental annualised savings
of at least £50 million gross per year, giving
a £30 million in year gross benefit in 2024.
2023
£130m
cumulative savings
since 2018
2026 Target
Deliver over £150 million of cumulative savings between 2018
and 2026
Profit to cash conversion
1
One of ITV’s strengths is its cash
generation, reflecting our ongoing tight
management of working capital balances.
Profit to cash conversion serves as a key
indicator in measuring our effectiveness. It
is calculated as our adjusted cash flow as a
proportion of adjusted EBITA
1
.
Performance
Profit to cash conversion was 102% in
the year. The strong outturn compared to
2022 was due a favourable movement in
working capital from the unwind of
programme rights and inventory previously
built up for the launch of ITVX. In addition,
there has been a reduction in production
inventories predominantly in the US as a
result of the 2023 writers’ and actors’ strike.
2023
102%
2020
2021
2022
138
80
75
2023 102
2026 Target
Maintain at around 85%
1. A full reconciliation between our adjusted and statutory results is provided in the APMs section
14 ITV plc Annual Report and Accounts 2023
KEY PERFORMANCE INDICATORS
EXPAND STUDIOS
UK AND GLOBAL PRODUCTION
ITV Studios total organic revenue growth
2
ITV Studios total organic revenue growth
measures the scale and success of our
global studios business. It includes
revenues from programmes sold to M&E,
which as a vertically integrated producer,
broadcaster and streamer, is an important
part of our business.
Performance
Total organic revenue was up 3% following a
strong 2022 which was up 14%. Organic
revenue excludes the benefit of our
acquisitions of Plimsoll Productions and
Lingo Pictures in 2022, and the
unfavourable impact of a £15 million foreign
exchange movement.
ITV Studios total revenue grew 4% to
£2,170 million.
2023
+3% on 2022
2022 14
2023 3
2020
2021
0
31
Note: 2020 was down 25% due to the
impact of the COVID-19 pandemic.
2026 Target
Grow by 5% on average per annum (from 2021)
ITV Studios adjusted EBITA
2
margin %
This is the key profitability measure used
across the ITV Studios business. The
margin is calculated on ITV Studios total
revenue.
Performance
ITV Studios adjusted EBITA margin was
13.2% (2022: 12.4%), which is restored
within the targeted range.
2023
13.2%
+0.8 basis points
on 2022
2022 12.4
2023 13.2
2020
2021
11
12
2026 Target
Deliver in the 13% to 15% range
Total high‑end scripted hours
Total high-end scripted hours is an
important measure in assessing the
success of our strategic priority, to grow our
scripted business. High-end scripted hours
include new commissions or returning
franchises that have a higher cost per hour
than continuing drama.
Performance
The number of high-end scripted hours
produced by ITV Studios increased by 14%
to 316 hours in 2023 driven by titles such as
Big Beasts, Fool Me Once and Love Island
in the UK, and Twin Love and Physical
in the US.
2023
316hrs
+14% on 2022
2022 276
2023 316
2020
2021
112
175
2026 Target
Grow to 400 hours
Number of formats sold in three or more countries
3
The Studios business is focused on
maximising the international monetisation
of high-value formats. A good measure of
international success is when a format is
commissioned in three or more countries in
the year.
Performance
The number of formats sold in three or
more countries was 19, which was flat
year-on-year. Recent formats that have
sold in three or more countries include;
My Mum, Your Dad; Pranked; and
Song of my Life.
2023
19
formats
flat on 2022
2022 19
2023 19
2020
2021
14
15
2026 Target
Grow to 20 formats
% of ITV Studios total revenue from streaming platforms
Over the medium term, the key driver of
growth in the global content market is
expected to be from streaming platforms.
The percentage of ITV Studios total
revenue from streaming platforms is an
important measure of delivering its
strategic priority of further diversifying its
customer base and meeting its 2026 total
organic revenue growth target.
Performance
The percentage of ITV Studios total
revenue from streaming platforms grew to
32%, hitting the target three years early.
Meeting this target is impacted by the
phasing of deliveries and therefore our
target is to maintain at least 30%. Notable
deliveries to streaming platforms in 2023
included: Squid Games: The Challenge
and One Piece for Netflix, and Franklin for
Apple TV+.
2023
32%
+10 basis points
on 2022
2022 22
2023 32
2020
2021
10
13
2026 Target
Grow to 30% of ITV Studios total revenue
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
15ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
M&E
SUPERCHARGE STREAMING
Total digital revenue
1
Total digital revenue comprises all revenue
streams from our digital businesses,
predominantly digital advertising. It is an
important measure of the acceleration of
our digital strategy as we supercharge
streaming.
Performance
Total digital revenue grew 19% to £490
million. The growth was driven by digital
advertising revenue, which was up 21%.
This was marginally offset by a decline in
competition revenues through ITV Win.
2023
£490m
+19% on 2022
2022 411
2023 490
2020
2021
248
347
2026 Target
More than double (compared to 2021) to at least £750m
Total streaming hours
2
Increasing the time users spend streaming
ITV content is a key strategic priority. It
drives scale which is important to attract
and retain advertisers, and contributes to
total digital revenue growth.
Performance
Total streaming hours increased 26% to
1,505 million hours. This growth reflects our
high-quality content offering, along with
our investment in ITVX to enhance the
product and user experience and to expand
our distribution and marketing activity. This
has helped retain and attract more users
who have watched content for longer.
2023
1,505m
hrs
+26% on 2022
2022 1,192
2023 1,505
2020
2021
856
1,048
2026 Target
Double (compared to 2021) to 2bn hours
Monthly active users (MAU)
3
Attracting more monthly active users to
ITVX is a key strategic priority. It increases
reach which is important to attract and
retain advertisers and contributes to total
digital revenue growth.
Performance
Monthly active users grew 19% to
12.5 million. As with total streaming hours,
the growth in monthly active users has
been driven by investment in the quality
and scale of content on ITVX, the
enhanced product and user experience,
and the expanded distribution and
marketing activity.
2023
12.5m
+19% on 2022
2022 10.5
2023 12.5
2020
2021
8.4
9.9
2026 Target
Double (compared to 2021) to 20m
UK subscribers
4
UK subscribers capture total UK
subscriptions to ITV streaming platforms. It
is an important measure of how we are
monetising ITV viewers who are willing to
pay for ad-free and additional content.
Performance
Total UK subscribers as of 31 December
2023 was down 7% year-on-year as we
transitioned subscribers from our
standalone app, BritBox UK, into ITVX
Premium, combined with the closing of the
legacy ITV Catch Up service on Amazon
Prime Video Channels.
The key focus of ITVX is our ad-funded
proposition which is where we have
channelled our efforts and resources in its
launch year.
2023
1.3m
‑7% on 2022
2022 1.4
2023 1.3
2020
2021
0.9
1.2
2026 Target
Double (compared to 2021) to 2.5m
1. 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
2. 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 2022, full year results, total streaming hours were reported as 1,139 million hours, which included some estimates of total streaming viewing from
third-party data providers and has been updated to reflect more recently available and accurate data
3. Monthly active users captures the average number of registered users throughout the year who accessed our owned and operated on-demand platforms each month
4. UK subscribers are users of ITVX’s premium tier and the BritBox UK standalone service. It includes those who pay ITV directly, those who are paid for by an operator, and free
trialists. Before the launch of ITVX in December 2022, this also included ITV Hub+ subscriptions
16 ITV plc Annual Report and Accounts 2023
KEY PERFORMANCE INDICATORS CONTINUED
M&E
OPTIMISE BROADCAST
Share of top 1,000 commercial broadcast TV programmes
5
Maintaining our strength in delivering mass
commercial linear TV audiences enables
ITV to attract and retain advertisers and
command a premium from them.
Performance
Our 2023 share was 91%, which was down
2% points year-on-year, with 2022
benefiting significantly from the FIFA World
Cup. In 2023, dramas such as Unforgotten
and The Bay, entertainment formats such
as Britain’s Got Talent and Saturday Night
Takeaway and sporting events such as
Rugby World Cup, helped to maintain ITV’s
strong commercial mass audience
proposition.
2023
91%
‑2 basis points on
2022
2022 93
2023 91
2020
2021
93
93
2026 Target
Maintain a share of at least 80%
Share of commercial viewing
6
Maintaining ITV’s number one position in
the UK broadcast market helps us attract
and retain advertisers and is vital to
maximising advertising revenues.
Performance
Share of commercial viewing decreased by
1.2% points to 32.6% in 2023, with strong
viewing for the FIFA World Cup benefiting
our share in 2022.
2023
32.6%
‑1.2 basis points on
2022
2022 33.8
2023 32.6
2020
2021
32.8
33.1
2026 Target
Maintain at 33%
5. 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 <ten minutes. This metric is calculated as a
12-month rolling average to normalise seasonal scheduling
6. 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
17ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
18 ITV plc Annual Report and Accounts 2023
OPERATING AND FINANCIAL PERFORMANCE REVIEW
ITV continued to successfully execute its strategy in 2023 despite the
challenging macroeconomic environment. It delivered a robust financial
performance with ITV Studios recording its highest-ever revenues and profit,
and within Media & Entertainment (M&E), ITVX drove a step change in key
viewing metrics and delivered strong growth in digital advertising revenues.
FINANCIAL HIGHLIGHTS
1
Twelve months to 31 December
2023
£m
2022
£m
Change
£m
Change
%
ITV Studios 2,170 2,096 74 4
M&E 2,090 2,249 (159) (7)
Total revenue 4,260 4,345 (85) (2)
Internal supply (636) (617) (19) (3)
Total external revenue 3,624 3,728 (104) (3)
ITV Studios adjusted EBITA 286 259 27 10
M&E adjusted EBITA 205 464 (259) (56)
Adjusted EBITA 491 723 (232) (32)
Unrealised profit in stock adjustment (2) (6) 4 67
Group adjusted EBITA 489 717 (228) (32)
Group adjusted EBITA margin 13% 19% (6%) pts
Statutory operating profit 238 519 (281) (54)
Profit before tax (adjusted) 396 672 (276) (41)
Adjusted EPS (p) 7.8p 13.2p (5.4p) (41)
Statutory EPS (p) 5.2p 10.7p (5.5p) (51)
KEY FINANCIALS
1
Group external revenue
£3,624m
-3% vs 2022
Total ITV Studios revenue
£2,170m
+4% vs 2022
Total digital revenue
£490m
+19% vs 2022
Group adjusted EBITA
£489m
-32% vs 2022
Statutory operating profit
£23 8m
-54% vs 2022
Adjusted EPS
7.8p
-41% vs 2022
Statutory EPS
5.2p
-51% vs 2022
Net debt
£553m
31 Dec 2022: £623m
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 section
Group financial overview
2023 was the second-highest total revenue
outturn in ITV’s history. While total revenue
decreased by 2% and total external revenue
was down by 3% in 2023, our growth drivers
continued to perform well. ITV Studios grew
by 4% and digital revenues
2
grew by 19%,
both of which substantially offset a 15%
decline in linear advertising due to the
challenging advertising market. Total
non-advertising revenue grew by 3%.
Group adjusted EBITA decreased by 32%,
reflecting the challenging advertising market
and planned investment in ITVX. ITV Studios
adjusted EBITA increased by 10%, with the
margin 13.2% restored to within our target
range. M&E adjusted EBITA decreased by
56% for the reasons noted above.
We continue to focus on reducing costs and
driving efficiencies. In the year, we exceeded
our £15 million cost savings target, delivering
£24 million of permanent cost savings across
the business, which included headcount
savings from changes in our operating model
in M&E, permanent operational efficiencies
across ITV Studios and M&E, property
savings from our US Studios business,
and contractual renegotiations.
Our existing cost saving target of £150 million
between 2019 and 2026, has delivered £130
million of annualised savings to date and we
are on track to deliver the full £150 million by
2025 – one year early.
2. Includes revenue from digital advertising, digital sponsorship and our subscription services
19ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
We are now in the early stages of a new
strategic restructuring and efficiency
programme across the Group to reshape the
cost base, enhance profitability, and support
the growth drivers of Studios and Streaming.
We are building on the foundations we have
established in digital and data and the
significant progress we have made in
transforming ITV from a linear broadcaster to
a multi-platform broadcaster and streamer.
Savings will come mainly from technology
and operational efficiencies, organisational
redesign across Group, M&E and ITV Studios,
and permanent reductions in discretionary
spend across the Group.
By the end of 2024 we expect the programme
to have delivered incremental annualised
savings of at least £50 million gross per year,
giving a £30 million in year gross benefit in
2024. There will be c.£50 million of one-off
costs to deliver these savings. The ongoing
programme is designed to deliver further
incremental material savings over a number
of years which will further build ITV’s
resilience. We will provide further
information as the programme progresses.
Total operating exceptional items were
£77 million (2022: £65 million) which included
£24 million of acquisition-related expenses
and £25 million of restructuring and
transformation costs. This stems from the
Group-wide commitment to reduce the
overhead cost base, and includes
restructuring and transformation
programme costs to deliver our strategy
(see note 2.2 to the financial statements
for further detail).
Adjusted financing costs were up year-on-
year at £29 million (2022: £26 million) largely
due to higher market interest rates at similar
levels of debt. Statutory net financing costs
were £45 million, up year-on-year (2022: £26
million) due to charges related to acquisition-
related put and call options.
Our adjusted effective tax rate was 21.5%
(2022: 20.1%) and the statutory effective tax
rate was (8.3%) (2022: 13.2%). The lower
statutory effective tax rate in the year was
due to higher HETV tax credits relative to the
tax charge, and a proportionally lower profit
before tax in the year compared to 2022.
Adjusted EPS for the year was 7.8p (2022:
13.2p), with statutory EPS decreasing from
10.7p to 5.2p. See the Finance Review for
further detail.
Our profit to cash conversion (which is an
APM) in 2023 was high at 102% (2022: 75%).
Conversion in 2023 has been distorted by the
writers’ and actors’ strike in the US, and it will
also impact 2024. In 2023 there was a release
in working capital which will reverse in 2024
as we resume US scripted productions.
Across the two years we expect profit to cash
conversion to be at the normal levels of
around 80%.
At 31 December 2023 we had £361 million
of free cash flow (31 December 2022:
£280 million), our net debt was £553 million
(31 December 2022: £623 million) and our
net debt to adjusted EBITDA was 1.0x
(31 December 2022: 0.8x). Refer to the
Finance Review for more detail.
We have good access to liquidity.
At 31 December 2023, we had cash and
committed undrawn facilities totalling
£1,240 million, including total cash of £340
million (31 December 2022: £1,098 million,
including total cash of £348 million).
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, the Board has declared a
final dividend of 3.3p, giving a full year
ordinary dividend of 5.0p per share for 2023,
which is a total return of c.£200 million
(2022: 5.0p). The Board remains committed
to paying a full year ordinary dividend of at
least 5.0p in 2024, which it expects to grow
over the medium term, whilst balancing
further investment in our strategy and our
commitment to investment grade metrics
over the medium term.
On 01 March 2024 ITV announced the sale of
its 50% shareholding in BritBox International
to BBC Studios for a cash consideration of
£255 million. The Board intends to return the
entire net proceeds to shareholders through
a £235 million share buyback which will be
completed within the next 18 months.
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 scenarios reflecting ITV’s principal
risks has been modelled and considered in
the assessment of ITV’s longer-term viability.
Refer to page 72 for further details.
ARCHIE is a drama based on the life of Cary Grant.
It was produced for ITVX by ITV Studios and Britbox International.
20 ITV plc Annual Report and Accounts 2023
OPERATING AND FINANCIAL PERFORMANCE REVIEW CONTINUED
ITV Studios is a scaled and global creator, owner and distributor
of high-quality TV content operating in 13 countries and across
60+ labels; diversified by genre, geography and customer in the
key creative markets around the world.
ITV
STUDIOS
ONE PIECE is based on a
Japanese manga series and
produced by Tomorrow Studios
in the US (a partnership with
ITV Studios) for Netflix. It has
been recommissioned for a
second season. Image
courtesy of Netflix.
21ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
ITV Studios benefits from scale, being the
largest 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; and with a
combined content library of over 90,000
hours, it is also one of the pre‑eminent
global distributors.
The global content market is large, (c.$226
billion in 2023) and attractive with all
platforms needing a mix of content to
succeed in a very competitive market. Going
forward, we expect to see growth in the key
segments in which ITV Studios operates,
including content licensing and demand from
streaming platforms for unscripted content
and cost effective premium scripted content
which we are well positioned to take
advantage of. We are confident that we will
continue to grow our market share to 2026
driven by our scale; our diversification by
customer; geography and genre; a strong
track record of high-quality content; a very
strong slate for 2024 and beyond; and our
leading creative talent.
Over the last six years ITV Studios revenue
(excluding acquisitions) has grown by around
5% CAGR, faster than the market of around
4% CAGR (Source: Ampere Analysis – based
on the ITVS addressable market).
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.
We have KPI targets for 2026 which reflect
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
Growing our scripted business is
one of our key strategic priorities
Scripted content plays a key role in attracting
and retaining viewers and subscribers on
both FTA and streaming platforms. This
together with the increase in the number of
streaming platforms has led to an increase in
original scripted commissions in the UK, US,
Australia and Europe. Furthermore, over
recent years there has been increasing
demand for locally produced non-English
language scripted content. 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
its 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. We continue to see good
momentum in our creative pipeline with
several of our 2023 deliveries, such as Mr
Bates vs The Post Office, Fool Me Once and
One Piece gaining global attention and
driving significant audiences on their
respective platforms.
In 2023, ITV Studios
high‑end scripted hours
increased by 14%
year‑on‑year to 316 hours
(2022: 276 hours) and
we remain on track to
produce 400 hours of
high‑end scripted content
per annum by 2026.
Global Partnerships (previously Global
Formats and Distribution) plays a key role in
growing scripted value across the business.
Global Partnerships invests around £70
million annually to acquire the distribution
rights (across both scripted and unscripted
genres) in ITV Studios-produced content and
selective third-party content. Having the
integrated producer-distributor relationship
enables Global Partnerships to make
strategic investment decisions around
content funding. By finding co-production
partners and licensees around the world for
our scripted catalogue (of more than 22,000
hours), Global Partnerships maximises the
value of these projects over a long-term
sales lifecycle.
FOOL ME ONCE is a thriller made by Quay Street Productions
(an ITV Studios label) for Netflix. It is one of Netflix’s all-time
top ten English language dramas. Image courtesy of Netflix.
22 ITV plc Annual Report and Accounts 2023
OPERATING AND FINANCIAL PERFORMANCE REVIEW CONTINUED
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, Come Dine With Me, Hell’s Kitchen
and I’m A Celebrity…Get Me Out Of Here!.
These formats 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
that have been commissioned in our UK, US
and international production bases, with the
potential to be future global hits. These
include My Mum, Your Dad (our first global
format to originate from the US); I Kissed A
Boy; and Make Love Fake Love.
As well as protecting our biggest brands, we
are also focused on expanding our franchises
by creating successful spin-offs that allow us
to evolve existing formats. Examples include
The Voice, which now has six spin-off
versions; Love Island has two new spin-offs,
Love Island Games and Love Island All Stars;
and I’m A Celebrity…Get Me Out Of Here!
South Africa is a new spin-off in the UK.
In 2023, across our Global Partnerships
business, we sold 63 unique formats
internationally (2022: 64), 19 of which were
sold to three or more countries (2022: 19).
By 2026, we expect to have 20 such formats,
with a view that one of these may be a
significant new format like The Voice or
Love Island.
Our Global Partnerships business also
focuses on leveraging our vast content
library and maximising the value of both
primary and secondary windows with FTA
broadcasters, Pay TV and streaming
platforms – a growth area for the business.
Global Partnerships has recently launched
a collection of owned and operated FAST
1
channels across the world which features
our content, on platforms such as Pluto,
Samsung and Rakuten. This aligns with
the business strategically positioning itself
to adapt to the evolving media landscape,
taking advantage of various distribution
channels and platforms to reach a
global audience.
Further diversifying our
customer base
As the demand for content from streaming
platforms grows globally, this presents a
significant opportunity for ITV Studios to
further diversify its customer base and
remains a key priority of ITV Studios strategy
to grow its market share and meet its 2026
KPI targets.
In the US, we have well-established and
trusted relationships with all the major
streaming platforms. We currently have
scripted or unscripted projects either in
development or commissioned by all of
them. In 2023, over 40% of US unscripted
revenues and nearly 100% of US scripted
revenues came from streaming platforms.
The percentage of ITV Studios total revenues
from streaming platforms increased to 32%
(2022: 22%) in 2023 and exceeds our 2026
target of 30%. This has been impacted by
the phasing of large deliveries in the year
and therefore we are maintaining our target
at 30%. Deliveries in 2023 included the
following for Netflix: Fool Me Once – one
of their all-time top 10 English language
dramas, Squid Game: The Challenge,
One Piece, and SUBURRÆTERNA; Playdate
for Disney+; Franklin, Physical and Big Beasts
for Apple TV+; Twin Love for Amazon; and
Love Island US and Love Island Games
for Peacock.
Whilst further diversifying our customer base
with streaming platforms is a key strategic
priority for ITV Studios, it requires careful
management of our working capital as
streaming platforms typically expect
extended payment profiles. In some
instances, it may also limit our ability to
maintain all rights for high-value scripted
titles as streaming platforms usually seek
worldwide distribution rights for original
commissions, in return for a premium fee
on commissions.
LOVE ISLAND
ALL STARS is a
reality series and
is a spin-off from the
globally successful
format, Love Island.
SUBURRÆTERNA
is an Italian crime drama
produced by Cattleya
(an ITV Studios label) for
Netflix. Image courtesy
of Netflix.
1. Free Ad-supported Streaming TV
23ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
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, 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 a vertically integrated
producer broadcaster and streamer. We are
proud to be able to continue to attract the
best talent in the market, most recently
welcoming Plimsoll Productions, Lingo
Pictures and Ben Stephenson, who set up
a transatlantic scripted label, Poison Pen
Studios, in ITV Studios.
ITV has successfully integrated its new
labels – many set up through recent talent
deals – and they have delivered an
impressive slate of programmes, including
A Year On Planet Earth and Big Beasts, both
from Plimsoll Productions in the UK, Prosper
from Lingo Pictures in Australia, Fool Me
Once, Playdate and After the Flood from
Quay Street Productions in the UK, and Night
in Paradise from Windlight Pictures in
Germany. This strong pipeline demonstrates
ITV Studios commitment and success in
nurturing and leveraging top creative talent
to deliver engaging and high-quality content.
ITV Studios 2023 financial performance
Twelve months to 31 December
2023
£m
2022
£m
Change
£m
Change
%
Organic Change*
%
ITV Studios UK 962 822 140 17 16
ITV Studios US 395 467 (72) (15) (13)
ITV Studios International 445 465 (20) (4) (8)
Global Partnerships 368 342 26 8 8
Total ITV Studios revenue 2,170 2,096 74 4 3
Total ITV Studios costs (1,884) (1,837) (47) (3) (2)
Total ITV Studios adjusted EBITA** 286 259 27 10 8
ITV Studios adjusted EBITA margin 13.2% 12.4%
* The organic change assumes exchange rates remain consistent with the comparative period and it removes the impact of acquisitions in the current or comparative period.
** Includes the benefit of production tax credits. Refer to Alternative Performance Measures for key adjustments to EBITA and adjusted EBITA.
Twelve months to 31 December
2023
£m
2022
£m
Change
£m
Change
%
Sales from ITV Studios to M&E 629 611 18 3
External revenue 1,541 1,485 56 4
Total ITV Studios revenue 2,170 2,096 74 4
Twelve months to 31 December
2023
£m
2022
£m
Change
£m
Change
%
Scripted
1
802 723 79 11
Unscripted 1,057 1,038 19 2
Core ITV
2
and Other 311 335 (24) (7)
Total ITV Studios revenue 2,170 2,096 74 4
1. Includes high-end scripted and other scripted revenues
2. Core ITV includes the soaps and daytime shows produced by ITV Studios for ITV1
SQUID GAME: THE CHALLENGE is a reality competition
series produced by The Garden (an ITV Studios label) for
Netflix. It was one of Netflix’s most-watched unscripted
originals in 2023. Image courtesy of Netflix.
24 ITV plc Annual Report and Accounts 2023
OPERATING AND FINANCIAL PERFORMANCE REVIEW CONTINUED
ITV Studios delivered its highest-ever
revenues and profits in 2023. Total revenue
was up 4%, and external revenue was up 4%
driven predominantly by growth in the UK.
Sales from ITV Studios to M&E were up 3%,
with several new dramas for ITV1 and ITVX.
Total organic revenue at constant currency
was up 3%, impacted by a £15 million
unfavourable foreign exchange movement
in the year and a £65 million inorganic
contribution from Plimsoll Productions
and Lingo Pictures which were both
acquired in 2022.
Reflecting our presence in key global
production markets, 58% of ITV Studios
revenue was generated outside the UK
(2022: 60%).
ITV Studios adjusted EBITA was up 10%
year-on-year, with our adjusted EBITA margin
of 13.2% (2022: 12.4%) restored to within our
13% to 15% target range. There was a £3
million unfavourable impact from foreign
exchange. During the year, £13 million of
permanent cost savings were delivered
relating to operational efficiencies, our US
property move and a permanent reduction
in discretionary spend.
We continue to look at ways to drive
efficiencies and improve margins over the
medium term, including 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 where possible. We
remain committed to our adjusted EBITA
margin guidance of 13% to 15%.
ITV Studios UK
ITV Studios UK has a diverse range of
scripted and unscripted titles for
broadcasters and streaming platforms. The
business is built upon many long-running and
recurring titles, the majority of which are sold
to the M&E business for transmission on
ITV’s family of linear TV channels and ITVX.
The core portfolio includes daytime
programmes such as Good Morning Britain,
This Morning, Loose Women, and Lorraine;
the soaps: Coronation Street and
Emmerdale; and entertainment programmes
such as The Voice, The Chase, Love Island
and I’m A Celebrity…Get Me Out Of Here!
ITV Studios UK saw strong revenue growth in
2023, up 17% to £962 million (2022: £822
million) and up 16% to £920 million on an
organic basis, which adjusts for the
acquisition of Plimsoll Productions in 2022.
It had an impressive slate of deliveries for a
broad customer base, which included a Love
Island winter and summer series, I’m a
Celebrity…Get Me Out Of Here! South Africa,
After the Flood, and Grace, all for ITV; as well
as The Completely Made-Up Adventures of
Dick Turpin for AppleTV+, Squid Game: The
Challenge for Netflix – which was one of their
most watched unscripted original
productions globally in 2023, Vigil, World On
Fire, The Outlaws, and Shetland for the BBC,
and Dinner With The Parents for FreeVee.
61% of revenue was derived from sales to the
M&E business (2022: 65%).
Deliveries expected in the first half of 2024
include internal sales to M&E of new and
returning entertainment programmes such
as Love Island All Stars, Saturday Night
Takeaway, and the Chase, and returning
dramas, The Bay and Vera. External sales
include The Reluctant Traveller for Apple
TV+, Missing You for Netflix and The
Gathering for Channel 4.
ITV Studios US
ITV Studios US provides content to all the
major networks and cable channels in the
US, along with every major streaming
platform. It has a good foundation of core
programmes, including unscripted titles with
multiple seasons and a high volume of
episodes, along with premium scripted
content, which has enabled the business to
grow its presence significantly and develop
deep client relationships, in a highly
competitive market.
In 2023, ITV Studios US total revenue
declined by 15% to £395 million (2022: £467
million) and by 13% to £405 million on an
organic basis when adjusted for the
unfavourable foreign exchange impact. The
decrease in revenue year-on-year reflects
the phasing of large, unrepeated scripted
and unscripted deliveries year-on-year,
including Snowpiercer, Let The Right One In
and Hell’s Kitchen, combined with lower
demand from networks.
QUEER EYE is a reality series
produced by ITV Studios
America for Netflix and is in its
eighth season. Image courtesy
of Netflix.
MY MUM, YOUR DAD is an
unscripted format originating
in ITV America. It had its first
series in the UK in 2023 and
has been sold to ten countries.
25ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
Within ITV Studios America (scripted), 2023
deliveries included Franklin for Apple TV+
which is ITV Studios America’s biggest
scripted production to date, Physical S3 for
AppleTV+, as well as executive producing
One Piece for Netflix – which was one of the
platform’s most-watched original scripted
productions globally in 2023. ITV America
(unscripted) saw the delivery of new and
returning titles such as Love Island and Love
Island Games for Peacock, The Prank Panel
for ABC and Twin Love for Amazon.
In 2024, ITV Studios America will be
impacted by the US writers’ and actors’
strikes in 2023 which delayed the
development of several projects which
were due for delivery in 2024. This will delay
around £80 million of revenue from 2024
to 2025.
In the first half of 2024, unscripted
deliveries from ITV America are expected
to include Queer Eye for Netflix and Alone
for History Channel.
ITV Studios International
ITV Studios International produces original
scripted and unscripted content across our
production bases, as well as local versions of
key formats developed through our Global
Partnerships business. Growing our
European 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 Amazon, Netflix,
Paramount+, and Disney+, as well as local
streaming platforms, such as Videoland in
the Netherlands, and Stan in Australia.
Revenue within ITV Studios International
decreased by 4% to £445 million
(2022: £465 million) in 2023, and by 8% to
£428 million on an organic basis when
adjusted for the unfavourable impact of
foreign currency and the acquisition of Lingo
Pictures in 2022. This decline reflects lower
deliveries year-on-year, mainly in Italy and
Germany and some scripted deliveries being
delayed to 2024. Deliveries in 2023 included
I’m A Celebrity... Get Me Out Of Here! in
Germany and Australia, Love Island in
Australia, as well as Diana and
SUBURRÆTERNA from Cattleya in Italy, and
Prosper from Lingo Pictures in Australia.
Deliveries expected in the first half of 2024
include Comedy Camp in France, as well as
key formats such as I’m A Celebrity…Get Me
Out Of Here!, The Voice and The Chase being
delivered across multiple countries.
Global Partnerships
Global Partnerships saw good revenue
growth in 2023, up 8% year-on-year to
£368 million (2022: £342 million) and 8% to
£369 million on an organic basis when
adjusted for the unfavourable impact of
foreign currency. The business benefited
from the international distribution of
returning titles such as World On Fire and
Vigil, and has leveraged the breadth and
depth of its extensive catalogue with sales to
other broadcasters and streaming platforms
globally – which are a growth area for Global
Partnerships. Finished programming sales of
unscripted formats were also good, including
The Voice, Love Island and The Graham
Norton Show, all delivering across multiple
different territories.
2024 and beyond should see an increased
pipeline of new content for Global
Partnerships . New titles expected to sell
internationally in 2024 include A Cruel Love:
The Ruth Ellis Story and After The Flood.
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 an adjusted
EBITA margin of 13% to 15%.
Going forward we expect to see growth
in key segments in which we operate –
content licensing, demand from
streaming platforms for unscripted
content and cost effective premium
scripted content which we are well
positioned to take advantage of.
We are confident that we will
continue to grow our market share
to 2026 driven by our scale; our
diversification by customer; geography
and genre; a strong track record of
high-quality content; a very strong
slate for 2024 and beyond; and our
leading creative talent.
As previously guided, 2024 will be
impacted by the 2023 US writers’ and
actors’ strikes which will delay around
£80 million revenue from 2024 to 2025.
In addition, we are seeing weaker
demand from FTA broadcasters in
Europe who are holding back spend
until there is more certainty in the
advertising market.
LOOSE WOMEN is a
daytime panel programme
produced by ITV Studios
Daytime. It has been on
ITV since 1999.
CORONATION STREET
is the UK’s largest Soap
and has been on ITV
since 1960.
26 ITV plc Annual Report and Accounts 2023
OPERATING AND FINANCIAL PERFORMANCE REVIEW CONTINUED
Media & Entertainment (M&E) is the largest commercial
broadcaster and streamer in the UK, delivering unrivalled
audience scale and reach. It includes Streaming and Broadcast,
distributing content through ITVX, our free advertiser-funded
streaming service, and our free-to-air linear TV channels.
MEDIA &
ENTERTAINMENT
MR BATES VS THE POST
OFFICE is a drama series
based on true events. It was
produced by ITV Studios and
was ITV’s biggest new drama
in over a decade.
27ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
MEDIA &
ENTERTAINMENT
ITV’s M&E strategy recognises and
capitalises on the change in viewer
behaviour and the evolving needs of
advertisers. It is based on two strategic
pillars: Supercharge Streaming and
Optimise Broadcast. Our focus is to retain
our existing viewers and advertisers while
also attracting new ones. ITV offers viewers
the choice to watch whenever and however
they wish, with a strong reputation for
brilliant content suited to British audiences.
ITV offers advertisers a unique combination
of mass simultaneous 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 reflect the key drivers of
growth and value. See the Strategy section
within the CEO’s Report 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, and drive
revenues from linear TV advertising,
commercial and creative partnerships,
and sponsorship.
Supercharge
Streaming
Growing and enhancing our
streaming service ITVX
We successfully launched ITVX in December
2022 (which combined our previous offerings
ITV Hub, ITV Hub+ and BritBox UK) to
transform our streaming service from a catch
up service to a content destination and to
deliver the inventory to fulfil the growing
demand for our digital advertising. Although
the main focus of ITVX is the free ad-funded
offering, there is also a subscription tier,
ITVX Premium.
ITVX’s strong performance in its first year is
evident by the step change in our KPIs and
other viewing metrics as we attract more
users who are engaging for longer across our
streaming platforms year-on-year. In 2023,
the service:
• Attracted more users – monthly active
users (MAUs) increased by 19% to 12.5
million year-on-year (2022: 10.5 million)
1. The full year 2022 comparative for total streaming hours has been restated from 1,139 million due to it including some
estimates of total streaming viewing from third-party data providers. This has since been updated to accurately
reflect the actual outcome
2. ITV / YouGov – base: 4,659 Nat Rep UK Adults – Dec 2023
• Attracted a larger audience – total
streaming hours were up 26% to 1,505
million (2022: 1,192 million
1
)
• Increased viewing by our target audience
– streaming hours amongst light viewers
who are harder to reach, increased by 65%,
and streaming hours among the 25-54 age
group demographic increased by 47%
• Increased engagement and content
discovery – streaming hours per viewer,
was up 27% and 90% of users that
watched an ITVX exclusive, went on to
watch other content on the platform
• Increased brand awareness – growing
from around 60% at launch to over 90%
2
in 2023
This increased reach and frequency of
viewers provide advertisers with valuable
addressable audiences at scale in a
brand-safe and measured environment. Our
robust data and analytics capabilities enable
us to offer high-value, data-driven inventory
and to generate higher digital revenues,
which was up 19% year-on-year.
To deliver and maintain this strong
performance we focus our ITVX investment
on enhancing the depth and breadth of
content, continuous improvements in the
product and user experience, and expanding
the distribution and marketing of ITVX.
Content: There are over 25,000 hours of
content available (including over 7,000 hours
exclusively on the premium ad-free tier),
including on-demand content from our five
linear TV channels, FAST channels, exclusive
ITVX content (such as anime, true crime and
US box sets), ITVX Kids, and over 300 films
creating one of the UK’s largest free film
libraries. Programmes which contributed
significantly to the year-on-year increase in
streaming hours include: Love Island,
Rugby World Cup, The Only Way Is Essex
and Big Brother.
We are constantly testing, learning and
evolving our content proposition and
windowing strategy between ITVX and our
linear TV channels to optimise viewing and
monetisation. We are implementing many of
the insights gained during 2023 and utilising
the data we have, particularly around how
we window exclusives, such as dramas,
on our platforms.
News is an important driver of viewing and
our ITV News proposition is now fully
embedded within ITVX, with News streaming
hours up 20% year-on-year and we have
launched exclusive 90-second ITV News
bulletins, a new News category page on the
service and regional short and long-form
catch up.
THE RUGBY WORLD CUP aired
exclusively on ITV and ITVX in 2023.
The semi-final between England and
South Africa was ITV1’s biggest peak
audience of the year.
ITV NEWS ITV has been
providing trusted and impartial
news for more than 60 years.
28 ITV plc Annual Report and Accounts 2023
OPERATING AND FINANCIAL PERFORMANCE REVIEW CONTINUED
Product: Throughout 2023, we have
implemented a series of enhancements to
improve ITVX’s product and user experience.
This included the integration of deeper
personalisation in Q4, driving content
recommendations specific to users. We have
started to see positive results with an uplift
in MAUs and streaming hours, and an
increase in repeat visits by lighter users, who
are harder to reach and a key target for us to
attract to the service. In addition, ITVX Kids
launched in the second half of 2023 as a fully
digital experience; and over 90% of our
content on ITVX is now subtitled.
In the first half of 2024, we will continue to
integrate personalisation across the user
experience and utilise it as a driver for
marketing. We will further monetise our
inventory, by introducing features such as
Pause Ads, which seamlessly play ads when
a user pauses content, and roll-out new ways
for clients to sponsor collections of content
across the service. We will also be
introducing subtitles on adverts, something
that is extremely important to our
advertising clients.
Distribution: The integration of ITVX into
third-party platforms substantially
increased in 2023, with over 40 new ways
for a user to access the service. We have
improved the discoverability of ITVX on
third-party platforms which has helped
drive bigger audiences to our content and
the service is now available in almost 100%
of UK households.
The introduction of ITVX on Sky Q in Q1 2023,
combined with stronger partnerships with
both Sky and Virgin has resulted in streamed,
on demand viewing with targeted advertising,
replacing viewing recorded by users which
cannot be monetised. We can now deliver
targeted advertising across all our channels
on mobile and web, enabling better
monetisation opportunities across
these platforms.
In 2024, ITVX will roll-out on PlayStation 4
and 5. We will further improve the
discoverability of ITVX on third-party
platforms through creating additional links
that bring users directly into ITVX
programmes from the main screens of their
devices. The launch of Freely, the new TV
streaming service which combines live TV
and catch up of the FTA broadcasters will
also help make ITV, along with the other
PSB’s, more accessible. All of this will further
expand our distribution footprint, making our
content more widely available.
Marketing: Our marketing strategy following
ITVX’s launch has been focused on driving
awareness, consideration and viewing to the
service to support the delivery of our KPIs.
We have seen awareness for both adults and
light viewers grow strongly and our
campaigns have helped contribute to the
increase in MAUs and streaming hours
during the year.
Marketing is an important tool to continue to
attract users and viewing on ITVX, and also
on our linear TV channels. We see an
opportunity to adopt a more responsive
approach helping highlight popular programs
to commercial valuable audiences. The
opportunity and returns from this area are
very attractive. In 2024 we will increase our
marketing spend by £15 million to drive both
streaming and linear viewing. This will include
investing in data and on the prominence of
our content on third-party platforms;
campaigns to engage more 25-54 year-old
light viewers – who are highly valuable to
advertisers – showcasing the breadth and
depth of our quality content; along with
continuous focus on measurement and
optimisation of our investment. We will
continue to evaluate content and marketing
ROI and adjust as necessary.
ITVX Premium offers users the opportunity
to enjoy all ITVX programming ad-free plus
exclusive content and access to BritBox UK
(content from the ITV and BBC libraries).
Although the main focus of ITVX’s launch has
been to promote the ad-funded service, we
have improved the premium offering by
incorporating additional content from our
partnership with StudioCanal and worked
with third-party platforms to enable greater
prominence on device interfaces. We are
now simplifying our viewer proposition for
ITVX Premium and taking ownership of the
relationship with the subscribers. As a result,
in 2023, UK streaming subscriptions declined
marginally to 1.3 million (2022: 1.4 million) as
we transitioned users from our standalone
app, BritBox UK, to ITVX Premium, combined
with the closure of the Amazon ITV catch up
channel.
In addition, in 2024 the BritBox UK service on
Amazon Prime Video Channels and the
BritBox UK standalone app will also close as
we further simplify our offering. This will
consolidate all our subscribers under one
ITVX Premium brand, and will give us
complete ownership of the subscriber base.
The closure of these services is expected to
impact subscriber numbers and subscription
revenues in 2024.
UNFORGOTTEN is a UK crime
drama. It returned for its fifth
series in 2023 with the final
episode being the most-watched
programme on ITVX.
I’M A CELEBRITY…GET ME OUT
OF HERE! returned in 2023 for its
23rd series in the UK. It was the
year’s most-watched programme
for 16-34s on any channel.
29ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
Optimise Broadcast
Continuing to deliver
unrivalled audiences with
high-quality programming
Within our Broadcast business, 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 will continue to invest in live content, such
as sports and large entertainment shows, as
well as dramas, factual and news. In total ITV
invests over £1.2 billion annually 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.
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 2023, total ITV
viewing (which includes viewing of all ITV
content, across all devices) was down 5% to
13.1 billion hours. For the first ten months of
the year, the growth of ITV’s digital viewing
largely offset the decline in linear viewing,
however November and December 2023
were impacted by the strong viewing
comparatives of the FIFA World Cup in 2022.
Total broadcaster viewing (broadcaster
viewing across all devices) declined by
3% in the year and total broadcaster and
subscription streaming service viewing
(viewing of all broadcaster and subscription
streaming servicecontent across all devices)
declined by 1% (Source: ITV, BARB).
Despite the challenging linear viewing
landscape, our share of the top 1,000
commercial broadcast TV programmes was
91% in 2023 (2022: 93%) and our share of
commercial viewing
3
was 32.6% (2022:
33.8%) and we continue to have the largest
share of commercial viewing versus our
commercial competitors. Content such
as I’m A Celebrity…Get Me Out Of Here!,
Love Island, Unforgotten, The Bay and the
Rugby World Cup, all contributed to our
viewing KPIs remaining ahead of our
2026 targets, in the year.
We have an exciting schedule for 2024 to
keep our audiences informed and
entertained. This includes entertainment
shows Celebrity Big Brother and Wheel of
Fortune, new dramas Breathtaking,
Protection and Ruth Ellis, along with sporting
events including UEFA Euros and both men’s
and women’s international football qualifiers.
Strong linear and online
advertising proposition
While the advertising market is getting 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 simultaneous
reach, targeted advertising and commercial
and creative partnerships. ITV has deep
relationships with agencies and advertisers;
brand-safe and measured advertising and a
strong track record of commissioning and
producing content which appeals to UK
audiences.
Mass simultaneous reach
Television continues to be a highly effective
and efficient medium for advertisers to
achieve mass scale and reach. As the viewing
and advertising landscape becomes more
fragmented, the scale and reach provided by
television, and particularly ITV, becomes
even more valuable to advertisers. With
global steaming 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. The advertising and
viewing proposition ITV provides to clients is
unparalleled, and something that no
streamer can match.
Targeted advertising – Planet V
Planet V is ITV’s wholly-owned, scaled
programmatic addressable advertising
platform with an intuitive self-service
interface that allows agencies and
advertisers to seamlessly and cost-
effectively buy highly targeted video
advertising on ITVX. Planet V is the
second-largest programmatic video
advertising platform in the UK after Google
and utilises ITV’s extensive data assets and
capabilities to provide compelling advertising
products for advertisers. ITVX has over
40 million registered users, giving ITV and its
advertisers one of the largest first party data
sets in the UK. 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.
4
They can also incorporate their own
first-party data in a GDPR-compliant
environment using InfoSum (an identity
infrastructure provider) and monitor their
campaigns through a custom-built user
interface. Advertisers are prepared to pay
more for this increasingly sophisticated and
valuable ad inventory.
3. ITV’s share of viewing as a proportion of all commercial
ad-funded channels in the UK
4. The accuracy of our Video-On-Demand audience data
has been subject to independent verification by PwC.
THE FIFA WOMEN’S WORLD CUP took place in July 2023 with the tournament
reaching 22 million viewers and having over 16 million streams on ITVX.
30 ITV plc Annual Report and Accounts 2023
OPERATING AND FINANCIAL PERFORMANCE REVIEW CONTINUED
With the expansion of ITVX’s online inventory
and reach, ITV is well positioned to meet the
increasing demand for targeted advertising.
We have a significant opportunity to partake
in the addressable market of around £6.8
billion in 2023 (Source: AA/WARC Q3 2023
Expenditure Report), and have the
foundations in place to successfully
compete for the long tail of advertisers within
the online video market which were
previously inaccessible to ITV due to their
scale and targeting requirements. Since we
launched Planet V we have attracted in
excess of 1,000 new advertisers to ITV.
ITVX and Planet V have helped drive
growth in digital advertising revenue in the
year, up 21%.
Commercial and creative partnerships
ITV’s Commercial team delivers strategic
commercial and creative partnerships with
advertisers who highly value ITV’s large and
targeted audiences to establish and grow
their own brands. This includes product
placement, ad-funded programming and
other partnerships 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 having editorial,
commercial, creative, and production teams
working together, creating valuable
opportunities for advertisers.
Our Commercial team also has various
initiatives to attract and engage advertisers,
attracting over 250 new brands to TV and
nearly 400 digital-only advertisers to ITV in
2023. For example:
• ITV AdVentures Ignite: Encouraging
digitally native brands to advertise on
television for the first time
• ITV AdVentures Invest: Through our Media
for Equity program, we take minority
stakes in direct-to-consumer businesses
in return for advertising inventory across
ITV’s linear TV channels and ITVX, for
example, Flarin, a pain relief brand, and
Resi, an architectural design company
• ITV Ad Labs: This brings together all
innovations under one proposition and
includes data solutions which can
securely match client data with ITV’s
existing registered first-party audience
and Boots’ Advantage Card and Tesco’s
Dunnhumby Clubcard databases.
M&E 2023 financial performance
Twelve months to 31 December
2023
£m
2022
£m
Change
£m
Change
%
Total advertising revenue 1,778 1,931 (153) (8)
Subscription revenue 59 54 5 9
SDN 48 55 (7) (13)
Partnerships and other revenue 205 209 (4) (2)
M&E non-advertising revenue 312 318 (6) (2)
Total M&E revenue 2,090 2,249 (159) (7)
Content costs (1,293) (1,216) (77) (6)
Variable costs (153) (130) (23) (18)
M&E infrastructure and overheads (439) (439) – –
Total M&E costs (1,885) (1,785) (100) (6)
Total M&E adjusted EBITA* 205 464 (259) (56)
Total adjusted EBITA margin 10% 21%
* Refer to APMs for key adjustments to EBITA
Twelve months to 31 December
2023
£m
2022
£m
Change
£m
Change
%
Digital advertising revenue 415 343 72 21
Subscription revenue 59 54 5 9
Other 16 14 2 14
Total digital revenue 490 411 79 19
5. Includes revenue from digital advertising, digital sponsorship and our subscription services
Total M&E revenue was down 7% in 2023
with the decrease predominantly driven by
the expected decline in total advertising
revenue which was down 8% to £1,778
million. Digital revenue
5
, an important
Streaming KPI, was up 19% in the year and
within this, digital advertising revenues were
up 21% year-on-year.
M&E non-advertising revenues were down
2% in 2023, with growth in subscription
revenue offset by the expected and
continuing decline in SDN revenue, and a
reduction in partnerships and other revenue.
Further detail on the year-on-year
movement is included on the following page.
Total M&E costs were up 6% in the year and
within this, content costs was up 6%
reflecting the additional planned investment
in content for ITVX which was partially offset
by a reduction in content amortisation to
reflect the windowing of content between
linear and streaming, as previously guided.
Variable costs were up 18%, driven by an
increase in bandwidth costs and other
streaming-related costs, along with
third-party commercial payaways.
M&E infrastructure and overhead costs were
flat year-on-year with inflation and the
investment in headcount associated with
ITVX, offset by a reduction in the employee
bonus payout and permanent cost savings of
£11 million delivered in the year relating to
the renegotiation of transmission contracts
and property savings.
M&E adjusted EBITA was down 56% with a
margin of 10% reflecting the challenging
advertising market and planned investment
in ITVX.
31ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
Total advertising revenue (TAR)
TAR was down 8% year-on-year in 2023
which was in line with our expectations.
The start of 2023 saw TAR down 10% in Q1
and down 11% in Q2 against tough
comparatives and the challenging
macroeconomic environment. Q3 was up 1%
and Q4 was down 9% with October up 2%,
November down 15% and December down
14% against strong comparatives in 2022
from the FIFA World Cup.
As expected, most TAR categories were
down year-on-year, with the largest being
Finance, down 31% driven by online and retail
banks and insurance companies. Publishing
and Broadcasting was down 28% with
decreases from streaming platforms and
social media sites, and Entertainment and
Leisure was down 18% with declines from
gaming, music and film companies.
Categories that increased spend during the
year included FMCGs, who used brand
advertising to help push through price
increases to consumers. Airlines and Travel
were up 3%, driven by online holiday
companies and overseas tourism boards.
After many years of double digit growth,
e-commerce companies, excluding gambling,
decreased 29% driven by online car and retail
brands, as a result of the reduced availability
of venture capital funding.
Subscription revenue
Subscription revenue is generated directly
from the premium tier of ITVX, our
standalone BritBox UK app, and BritBox UK
and ITV Catch Up services on Amazon Prime
Video Channels. It does not include BritBox
International, which is included within JVs
and Associates.
In 2023, subscription revenue increased by
9% due to the annualisation of subscribers in
2022, combined with new ITVX Premium
subscribers. This was partly offset by a
reduction in subscribers on our BritBox UK
standalone app and the closure of ITV Catch
Up on Amazon Prime Video Channels.
In 2024 the BritBox Amazon and the BritBox
direct to consumer service will close, which
will impact our number of subscribers and
subscription revenues in 2024.
SDN
SDN generates revenue by licensing video
streams 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
licence has been renewed until 2034.
In 2023, external revenue (non-ITV) declined
as expected by 13%. This decrease is
primarily due to the renewal of long-term
contracts with third parties at current market
rates, in the current and prior year. This trend
is expected to continue.
Partnerships and other revenue
Partnerships and other revenue include
revenue from platforms, such as Sky and
Virgin Media O2, competition revenue,
third-party commission, e.g. for services we
provide to STV, and commercial revenue
from our creative partnerships.
Partnerships and other revenue declined by
2% in the year mainly driven by lower
competition revenue.
We expect Partnerships and other revenues
to decline in 2024 following our decision to
revise our partnership agreements to allow
ITVX viewers to watch in HD, and allow ITV to
target ads to a much larger proportion of
those viewers, using Planet V.
BritBox International
On 01 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 current levels for the use of ITV
content under new extended licensing
agreements.
Prior to this date, BritBox International was
ITV’s joint venture with the BBC, providing
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). Subscribers on
31 December 2023 were 3.7 million.
(31 December 2022: 3.0 million). BritBox
International revenue and profit or loss,
is included in share of profits/losses on
JVs and not within M&E adjusted EBITA.
OUTLOOK
We remain on track to deliver at least
£750 million of digital revenues by 2026.
We have had a good start to 2024 and
will build on ITVX’s successful launch
year through continuous improvements
in content, product, distribution and
marketing.
ITVX’s strong performance in 2023 has
shown us that we can grow viewing
significantly with slightly lower overall
content spend. Therefore we expect to
marginally reduce our content cost in
2024 to around £1,275 million as we
further optimise linear, evolve our
windowing strategy and improve
personalisation. At the same time we
will increase our marketing spend by
£15 million to drive both streaming and
linear viewing. We will continue to
evaluate content and marketing ROI
and adjust as necessary.
Compared to the same period in 2023,
TAR is expected to be up 3% in Q1 2024,
with continued strong growth in digital
advertising revenues.
THE MASKED SINGER continues to drive mass audiences
and returned for its fifth series in January 2024.
32 ITV plc Annual Report and Accounts 2023
SOCIAL PURPOSE
Reflecting
CULTURE
AND
SHAPING
Our Social Purpose
agenda focuses on
four key areas where
we can have the
biggest impact:
2023 marks the culmination of five years of
focus on Better Health, while our work on
Climate Action and Diversity, Equity and
Inclusion (DEI) continues to mature. From
2024, our health pillar will have a sharper
focus on Mental Wellbeing, building on the
work of our landmark campaign Britain Get
Talking to encourage everyone to look after
their mental health proactively. Our work to
support others through giving time, money
and using our platform will be reshaped
towards supporting the next generation,
under the name Better Futures.
Our social impact is tracked through
extensive, regular research commissioned
from YouGov and other partners.
Performance and plans are reviewed by the
Board annually and the Management Board
quarterly. Progress against climate action
targets is reviewed quarterly by the ITV
Studios and M&E Boards and progress
against diversity targets is reviewed
quarterly by the Management Board. The
Board Nominations Committee and Audit
and Risk Committee also review progress
against diversity targets and carbon
emissions targets.
Our Social Purpose goals align with the UN’s
Sustainable Development Goals (SDGs). The
nine SDGs below are where we believe ITV
can make the most significant contribution.
Refer to our 2023 Social Purpose Impact
Report for further details on all our Social
Purpose priorities. It is available to download
at: www.itvplc.com/socialpurpose/overview
At the heart of ITV’s purpose to reflect and shape
culture is our Social Purpose, which is all about
shaping culture for good: changing ITV for the better
and using our content and reach to inspire positive
change in the wider world.
MENTAL
Wellbeing
BETTER
Futures
CLIMATE
Action
DIVERSITY,
Equity
and
Inclusion
33ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
MENTAL
Wellbeing
1. Extrapolated from YouGov, November 2023
(Sample: 2,016 UK adults)
2. YouGov Tracker ( 1,011 nat rep sample,
April 2023)
3. Data extrapolated from YouGov and other
nationally representative surveys of the
UK public commissioned by ITV and charity
partners. For more details on each campaign,
see www.itvplc.com/socialpurpose
Creating a culture where we all do more
to look after our mental wellbeing.
OUR GOAL
Inspire 200 million actions to support better mental and physical
health by 2023
SUSTAINABLE DEVELOPMENT GOAL
Mental wellbeing has been our primary
social cause since 2019, and we have
surpassed our five year target of
encouraging 200 million actions to
support mental or physical health by
2023. This has been achieved through
behaviour change campaigns in
advertising airtime, and editorial
content across the year.
Off-screen we continued to focus on
the wellbeing of our people, producers
and participants.
The Campaigns
Britain Get Talking
Britain Get Talking is ITV’s flagship
mental health campaign, designed
to encourage people to connect with
one another to improve their mental
wellbeing. Supported by Mind,
YoungMinds and Scottish Action
for Mental Health (SAMH) in Scotland,
in 2023 the campaign focused on
the growing mental health crisis in
young people.
Ant & Dec, alongside a number of other
famous faces launched a campaign to
encourage schools to set a unique piece
of homework ahead of World Mental
Health Day.
Designed in collaboration with a child
psychologist and our charity partners,
the task encouraged young people to
share their thoughts and feelings openly.
This was accompanied by dedicated
programming integrated into our evening
schedule, focusing on mental health.
THE RESULTS
7.2 million people started a
conversation, or had a better
quality conversation, with a
friend or family member due
to our Britain Get Talking
campaign
1
Tackling online trolling
ITV partnered with The Cybersmile
Foundation on a new campaign titled
‘Would you say it’ to develop three TV
ads to help tackle the rise in online
trolling. We also developed a social
media awareness training module for
programme participants in addition to
existing extensive welfare measures.
THE RESULTS
Over ¼ of 16-34 year olds
(28%) said they plan to think
twice before posting on other
people’s social media posts as
a result of seeing the campaign
2
Behind the Scenes
Mental health in the media
conference
In March we ran a conference series to
open up conversations about mental
health portrayals on-screen, and
approaches off-screen, developed in
partnership with the Film and TV Charity,
Mind, YoungMinds, SAMH and Campaign
Against Living Miserably (CALM). Almost
1,000 participants attended from across
streaming, broadcast, advertising and
production sectors of the TV industry.
Colleague wellbeing
This is a priority at ITV. Refer to the Our
People section (page 40) for details on
how we support the mental health and
wellbeing of our colleagues, and our
Duty of Care charter on pages 81 and 98.
THE RESULTS
249 million actions to
support better mental and
physical health achieved since
2019, surpassing our goal of
200 million
3
BRITAIN GET TALKING
34 ITV plc Annual Report and Accounts 2023
SOCIAL PURPOSE CONTINUED
BETTER
Futures
1. Data supplied by Creative Access
2. Data supplied by Veg Power
3. Daily Mile school registrations, data
provided by The Daily Mile
Supporting the next generation in our industry,
across the UK and around the world.
SUSTAINABLE DEVELOPMENT GOALS
Mentoring and volunteering
In 2023 ITV continued its mentoring
partnership with Creative Access, an
organisation that helps people from
under-represented communities access
careers and progress to leadership in the
creative industries.
ITV colleagues were also involved in
training workshops, including Media
Trust’s Creativity Work’s: Multimedia
Training programme and ITV Academy’s
Creative Access Showcase in
Manchester.
THE RESULTS
90 mentoring partnerships
and 559 hours of mentoring
took place in 2023. There have
been 340 partnerships since
the scheme began
1
Encouraging
actions to improve
children’s physical
health
Eat Them To Defeat Them
Now in its fifth year, ITV continued its
award-winning partnership with Veg
Power to encourage children to eat more
vegetables. Sky and Channel 4 together
matched ITV’s airtime commitment,
enabling a £3 million media campaign,
with additional funding from an alliance
of supermarket and food brands.
THE RESULTS
77% of parents whose
children took part in the school
campaigns said they ate more
vegetables as a result
£132m veg sales as a direct
result of our Eat Them To
Defeat Them campaign since
it launched in 2019
2
The Daily Mile
ITV continued its partnership with The
Daily Mile encouraging schoolchildren to
do 15 minutes of daily exercise to tackle
lowering levels of physical activity in
children in the UK. The ‘Thrive’ campaign
re-ran in September and October,
highlighting the positive impact of daily
exercise in improving mood and memory,
as well as attention in class.
THE RESULTS
32,730 more children took up
the Daily Mile as a result of the
campaign
Nearly half a million
children have signed up to
The Daily Mile since ITV began
supporting the campaign in
April 2019
3
Soccer Aid for UNICEF
2023 saw the 12th Soccer Aid for UNICEF
match, marking 17 years of the ITV and
UNICEF partnership. Teams of former
professional footballers and celebrities
came together to raise money for
UNICEF’s work helping children who are
facing conflict, disasters, and other
crises around the world.
The match took place in front of over
63,000 fans and was broadcast
exclusively on ITV and STV.
THE RESULTS
£14.6 million raised in total
from the match and Soccer
Aid week TV specials. Over
£90 million has been raised
since the start of Soccer Aid
35ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
CLIMATE
Action
Shows with the biggest impact on audiences and
the smallest impact on the planet.
OUR GOALS
– Net Zero: Reducing emissions we control by 46.2% and those we can
influence by 28% by 2030, and all emissions by 90% by 2050
– 100% sustainable supply chain by 2030
– Zero Waste by 2030
– 100% albert certified and trained each year
– Increase visibility and impact of climate action content on-screen
SUSTAINABLE DEVELOPMENT GOALS
Context
As the impacts of climate change
worsen and the transition to a
sustainable economy accelerates, it is
increasingly important for companies
to integrate climate action into strategic
decision making.
To address this, we are publishing our
initial Climate Transition Plan alongside
the 2023 Annual Report and Accounts.
This details how we will transform ITV
to meet our ambitious targets, while
using our reach and influence to
inspire behaviour change in audiences.
For more information on our climate
action progress, refer to our
2023 Social Purpose Impact report.
Targets, data and governance
We are continuously improving our data.
ITV’s Scope 1 and 2 (controlled by ITV)
and Scope 3 (influenced by ITV)
emissions for 2023 were independently
assured by ERM Certification and
Verification Services Limited (ERM CVS),
and we have published an updated Basis
of Reporting document. Our Scope 3
data quality is improving thanks to more
company–level data into our calculations
and engagement with our supply chain.
Reducing our emissions
Reducing our Scope 1 and 2
emissions (controlled by ITV)
ITV’s Scope 1 and 2 emissions are
decreasing on track with our targets,
with a 52% reduction compared to our
baseline year. Our market-based Scope
2 figures have reduced by 28% since their
apparent spike in 2022 which arose from
limited evidence around renewable
energy sources for several sites at the
time. Energy-efficiency measures in our
hub sites, including LED lighting, motion
sensors and solar energy generation,
have driven the reduction in Scope 1 and
2 emissions.
THE RESULTS
Our Scope 1 & 2 emissions
have decreased by 52% since
our baseline year
69% of our electricity comes
from renewable energy
Reducing our Scope 3
emissions (influenced by ITV)
ITV’s Scope 3 footprint has decreased by
17% compared to our baseline year.
Business Travel emissions have
increased by 13% compared to 2022, but
remain below pre-COVID-19 levels with
a 45% reduction compared to 2019. ITV
is introducing prompts to our booking
system to encourage colleagues to
choose lower emission travel.
Purchased Goods and Services are
the largest contributor to ITV’s Scope 3
emissions; of these, 65% come from our
productions. We use BAFTA albert
sustainability certification to tackle this
and work with broadcasting peers to
support sector-wide change.
THE RESULTS
Our Scope 3 emissions have
decreased by 17% since our
baseline year
Zero Waste
We are continuously taking steps to
improve our data quality and monitor
waste in our offices and production
activities, all while working towards a
circular economy from office equipment
to props.
On-screen
As a founding signatory of the Climate
Content Pledge, ITV is committed to
doing more to reach and engage
audiences with climate action content.
Shows from Daytime to The Masked
Singer and Love Island incorporate
climate content.
Biodiversity
We recognise how critical it is for
businesses to address the biodiversity
crisis. In preparation for future reporting
requirements, we are reviewing the
actions we can take across our
production activities, supply chain
engagement and office improvements
to manage our nature related
dependencies, risks and opportunities.
36 ITV plc Annual Report and Accounts 2023
SOCIAL PURPOSE CONTINUED
Methodology
2023 emissions data covers global operations
for which we have operational control. We use
the Greenhouse Gases (GHG) Protocol
Corporate Accounting and Reporting
Standard and the latest conversion factors
from the Department for Energy Security and
Net Zero to calculate Scope 1 and Scope 3
Business Travel emissions, and the latest
conversion factors from the International
Energy Agency to calculate Scope 2 emissions
in tonnes of carbon dioxide equivalents.
‘Location-based’ calculations reflect the
average emissions that using electricity
creates in the country where the energy is
used, while ‘market-based’ calculations
reflect emissions based on the energy
contracts ITV has chosen, such as through
purchasing energy on a renewable tariff.
We have chosen to measure and report our
emissions in total gross emissions in metric
tonnes of CO
2
e per £ revenue, which is the
recommended intensity ratio for the sector.
24% of our market-based Scope 1 and 2 data
set is based on estimated data, which makes
up 1% of the total data set. Estimates are
calculated from previous consumption trends
and published benchmarks.
Our Scope 2 footprint decreased in 2023
because of energy efficiencies in our buildings
and an increase in renewable energy
procurement.
The calculation methodology for the Scope 3
category ‘Purchased Goods and Services’ in
2023 includes actual supplier data provided
via the CDP (Carbon Disclosure Project), and
the use of V6 CEDA EEIO (Environmentally
Extended Economic Input Output) factors,
which are the GHG-Protocol recommended
factors for estimating carbon emissions based
on spend data. The supplier-specific data
accounted for 3.5% of ITV’s total spend and
was calculated using an average data method,
apportioning the total direct, indirect and
upstream emissions of a company based on
their yearly revenue and the proportion to
which ITV spent with them.
Where actual data was not available, ITV
spend data was multiplied by the latest CEDA
EEIO factors. ITV will continue to monitor and
improve our emissions data quality, with an
initial focus on actual supplier specific data.
Energy efficiency initiatives
• A metering project has been launched to
better understand the source of our energy
use, helping to proactively reduce energy
consumption
• The lighting in our Leeds archive has been
swapped to LED lighting, using an estimated
quarter of the energy previously being used
• Photovoltaic panels have been installed at
our Emmerdale set as part of a wider solar
installation project
• Three boilers and three chillers have been
switched off in Leeds, having been replaced
by newer and more efficient cooling and
heating systems
* The emissions data provided has undergone limited assurance by ERM CVS.
Streamlined Energy and Carbon Reporting (SECR) – based on data for the year ended 31 December 2023
Scope Description Unit
2023 2022 Change
UK
Global
(excl. UK) Total UK
Global
(excl. UK) Tot al UK
Global
(excl.
UK)
1
Emissions
from gas,
refrigerants and
owned vehicles tCO
2
e 1,448 284 1,731* 1,608 335 1,943 -10% -15%
2
Location-
based
Market-
based
Electricity emissions
using geographical
location tCO
2
e 3,827 756 4,582* 4,261 1,101 5,361 -10% -31%
Electricity emissions
using purchased
electricity factor tCO
2
e 1,669 794 2,463* 2,570 868 3,438 -35% -8%
1
&
2
Location-
based
Market-
based
Total
Emissions tCO
2
e 5,274 1,039 6,314 5,869 1,435 7,304 -10% -28%
Total
Emissions tCO
2
e 3,116 1,078 4,194 4,178 1,202 5,381 -25% -10%
Direct & Indirect
Energy Consumption kWh 24,793,533 4,417,537 29,211,070 26,975,667 5,501,408 32,477,075 -8% -20%
Total revenue £m £4,260 £4,345 -2%
1
&
2
Location-
based
Market-
based
Normalised
emissions to
revenue
tCO
2
e/
£m 1.238 0.244 1.482 1.351 0.330 1.681 -8% -26%
Normalised
emissions
to revenue
tCO
2
e/
£m 0.732 0.253 0.985 0.962 0.277 1.238 -24% -9%
3
Purchased goods
and services tCO
2
e 274,626 291,120 -6%
3
Capital goods
tCO
2
e 217 1,844 -88%
3
Fuel and
Energy-related
activities tCO
2
e 1,856 2,170 -14%
3
Upstream
transportation
and distribution tCO
2
e 558 1,338 -58%
3
Waste
tCO
2
e 64 62 3%
3
Business travel
tCO
2
e 24,078 21,392 13%
3
Commuting
tCO
2
e 8,564 8,113 6%
3
Upstream
leased assets tCO
2
e 14,361 14,373 -0%
3
Use of sold products
tCO
2
e 487,910 485,171 1%
3
Investments
tCO
2
e 21,312 14,568 46%
3
Total Scope 3
833,546* 840,150 -1%
Total Scope
1, 2 & 3
(Market-
Based) tCO
2
e 837,740 845,531 -1%
37ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
DIVERSITY
Equity &
Inclusion
Overview
In 2023, we have continued to focus on
interventions that drive long-lasting
improvements. Highlights include
investing £22.8 million of our ringfenced
Diversity Commissioning Fund (DCF)
reaching £54.2 million over two years;
Step Up 60 where 185 diverse creatives
have stepped up into more senior
production roles over three years; and
delivering the Amplify senior leadership
programme for Deaf, Disabled or
Neurodivergent colleagues.
We made progress towards all of our
2025 target areas at the All Colleagues
level. At senior levels, progress towards
our targets has been slower, however we
have made improvements overall. In
2023, we ran a successful campaign to
increase diversity data completion rates
up to 82%.
In 2024, we will maintain and build on our
success, seeking out more diverse ideas,
production companies, and talent. We
will continue to collaborate across the
industry to drive systemic change.
Mainstream
Content
We have committed £80 million of ITV’s
content commissioning budget over
three years (2022 to 2024) to drive
racial and disability equity within our
mainstream content. Alongside this,
the £500,000 Development Fund helps
to develop people and ideas that can
qualify for the DCF. As well as creating
new content, the fund helped us
continue investing in shows like Sorry,
I Didn’t Know, which returned for a
fourth series in 2023. We commissioned
diverse-led production companies
including Douglas Road Productions,
Flicker Productions, Fuuse Films, Tall
Story Pictures and TriForce Productions.
We have made impactful improvements
in the lead presenters of our biggest
shows with Maya Jama (Love Island) and
AJ Odudu (Big Brother). ITV Studios
continues to make groundbreaking
diverse content including I Kissed A Boy,
the UK’s first dating show for gay men.
THE RESULTS
We increased our
commissioning spend with
diverse-led production
companies by more than 50%
in the first year of our fund
compared to 2021.
Diversity Commissioning
Fund spend: £54.2 million
including £41.1 million with
diverse-led production
companies (across 2022
to 2023).
Diversity Development
Fund spend: Nearly
£400,000 has been used to
date to fund the development
of over 30 projects including
the pilot of Big Zuu’s 12 Dishes
in 12 Hours leading to it being
commissioned for a series.
Content by, with and for everyone, connecting
and reflecting modern audiences.
OUR GOALS
Champion diversity through our mainstream content, create
equitable opportunities at ITV and across the industry, and create
an inclusive culture at ITV. Build accessibility and disability equity
into everything we do at ITV.
SUSTAINABLE DEVELOPMENT GOALS
BIG ZUU’S 12 DISHES
IN 12 HOURS
38 ITV plc Annual Report and Accounts 2023
SOCIAL PURPOSE CONTINUED
Creating
Opportunities
In 2023, Fresh Cuts, which supports
up-and-coming Black filmmakers to
direct their first film for ITV as part of
Black History Month, returned for a
second year. We ran a range of initiatives
for 21 promising diverse writers. We also
launched initiatives such as Amplify: The
Companies, which nurtures and elevates
ten production companies owned by
People of Colour and Deaf, Disabled,
or Neurodivergent leaders.
We created Production Principles in
2021 as part of the commissioning
process to embed DEI practices in every
programme ITV commissions, and we
reviewed and refreshed these in 2023.
THE RESULTS
475 productions have made
commitments to embed
DEI practices into their
programmes through the
Production Principles.
185 diverse creatives
stepped up into more senior
production roles through
Step Up 60.
Inclusive Culture
Our first colleague network launched in
2012, and since then they have been vital
in shaping our inclusive culture. Our five
Colleague Networks are Able, Balance,
Embrace, Pride and the Women’s
Network. Some networks have global
branches outside the UK. Network chairs
sit on our Inclusion and Diversity Council
chaired by ITV’s CEO. They share
feedback on colleagues’ experiences
with senior leadership and the DEI team.
In our inaugural line manager survey,
85% of colleagues agreed that their
managers build an inclusive team
environment. In 2024, we will work to
improve the experiences of Black, Mixed
Race/Dual Heritage and other minority
ethnic colleagues as ITV’s engagement
and culture survey found that these
groups feel less included.
Our Cultural Advisory Council is now
in its third year. These independent
external advisers from a range of
industries advise and challenge us
on our DEI plans.
THE RESULTS
Our colleague networks
continue to grow with over
1,900 colleagues part of at least
one network and a total of over
3,000 members across all five.
Over 450 colleagues
completed DEI training, with
over 180 senior leaders and
managers trained across
Australia, Germany and the
Netherlands. Results showed
improved understanding,
awareness and confidence
across all locations.
Accessibility and
Disability Equity
Accessibility forms the critical
foundation of our strategy. We launched
the world’s first free 24/7 British Sign
Language channel on ITVX. ITV is an
active member of the TV Access Project
(TAP), a joint initiative created by the
UK’s main broadcasters and streamers
to embed accessibility and achieve full
inclusion for Disabled people by 2030.
We have built accessibility into our
productions from the start. We designed
the Big Brother house with accessible
ramps and a stair lift and remodelled the
Ant & Dec’s Saturday Night Takeaway set
to include visible ramps as the main
stage entrance.
THE RESULTS
ITV Studios hired our
first in-house Access
Coordinator who embeds
accessibility in productions
across all our in-house drama
labels.
ITV developed new Event
Inclusion and Access
Guidelines, which help us, our
partners, and suppliers make
our biggest events inclusive
and accessible.
ELLIE SIMMONDS:
FINDING MY
SECRE T FAMILY
39ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
Targets for 2025
Improve representation in ITV’s workforce, on-screen and off-screen by the end of 2025.
Disability Class Ethnicity Gender LGBTQ+
12%
Deaf, Disabled,
Neurodivergent,
or with a long-term
health condition
33%
from working class
backgrounds
20%
People of Colour at
the ‘All colleagues’
level at ITV
15%
People of Colour at
senior levels
50%
Women
7%
Lesbian, Gay,
Bisexual,
Transgender or
Queer
In 2023, at an All colleagues and Manager level, we have already exceeded many of our 2025 representation targets, as detailed
in the following table. Our diversity data campaign was successful in increasing the number of colleagues sharing their data and,
while this has given us a clearer picture of our workforce, it has also resulted in an increase in the proportion of colleagues from
professional backgrounds and a decrease in those from working class backgrounds, which is below our target across all levels.
In 2024, we will continue to work to improve representation in ITV’s workforce, on and off-screen, sharpening our focus on Deaf,
Disabled and Neurodivergent leads on-screen. We will also maintain our focus on representation at senior levels where we have
further to improve across all characteristics.
UK diversity data
Characteristic 2025 Target
ITV UK workforce On and off-screen
All colleagues
(2023)
Managers
(2023)
Senior
Leaders
(2023)
1
On-screen
(Diamond Sixth
Cut, 2021-22)
2
Off-screen
(Diamond Sixth
Cut, 2021-22)
2
Age 50+ – 20.9% 26.9% 52.5% 23.7% 21.1%
Deaf, Disabled or
Neurodivergent 12% 12.3% 10.5% 7.6% 8.6% 5.5%
People of Colour
20% at the ‘All
colleagues’ level, 15%
at senior levels 15.2% 11.6% 14.4% 23.6% 16.0%
Lesbian, Gay, Bisexual, Trans or
Queer (LGBTQ+)
3
7% 9.6% 8.5% 7.0% 24.0% 20.7%
Women 50% 53.2% 50.3% 49.3% 49.5% 46.4%
Working class background
4
33% 28.9% 31.5% 20.4% N/A
4
N/A
4
Our UK workforce figures include UK permanent and PAYE fixed-term employees only as of 31 December 2023 (it does not include freelance, contingent or agency
workers) and are based on the number of employees who chose to share diversity data, including those who select ‘prefer not to say’. Due to rounding, figures do not
always total 100%.
1. Our Senior Leader population is a defined group of approximately 220 colleagues including the Management Board, colleagues who report to a Management Board
member and/or are on the list of top FTE salaries (excluding on-screen talent). Our Manager population is approximately 900 colleagues distinct from our Senior
Leaders. We updated these categories in 2023 following guidance from Ofcom – while there is some overlap with our previous categories, these figures are not
directly comparable to previous reports
2. On-screen and off-screen representation is measured using Diamond, an industry-wide system for monitoring diversity in broadcasting. This data is from the
latest Sixth Cut report. Diamond collects diversity data from cast, contributors, crew and production companies. Diamond does not currently measure class /
socio-economic background, but we are ensuring this will be included in the current project to update Diamond. The LGBTQ+ figures combine the Diamond figures
for LGB+ and transgender populations. More information about Diamond can be found at: www.creativediversitynetwork.com/diamond
3. Our LGBTQ+ target combines sexual orientation and gender identity. We measure these separately and combine these categories
4. When analysing our class data, we excluded responses from people who answered ‘don’t know’, ‘not applicable’, ‘prefer not to say’ etc. This enables us to compare
with national benchmarks. This method is slightly different to how we analyse other diversity characteristics (based on all colleagues who share data, including
those who respond ‘prefer not to say’) as those questions do not have a ‘don’t know’ option. We followed expert advice on how to analyse and interpret this
information. Class is not measured on-screen and off-screen through Diamond yet, so our 33% target applies to our workforce including senior leaders
Note: Under the Companies Act 2006, we are required to report on the gender breakdown of our senior managers – this statutory definition is broader than our
definition of Senior Leaders. Of our global workforce of 6,743 who disclosed their gender (3,003 men, 3,740 women), 357 were senior managers (190 men, 167 women),
which includes senior leaders and directors on the Boards of undertakings of the Group (to the extent there are additional individuals), but exclude individuals who sit
as directors on the Board of the Company.
ITV has published its Gender, Ethnicity, Disability and LGBTQ+ Pay Gap Report: www.itvplc.com/investors/governance
For more information on our Diversity Acceleration Plan, including further data such as intersectional data and specific breakdowns, refer to: www.itv.com/inclusion/
articles/diversity-acceleration-plan
40 ITV plc Annual Report and Accounts 2023
OUR PEOPLE
heart
OF ITV
THE
AND SOUL
Our people are the heart of ITV; from the diary room
on Big Brother, developing the technology to power
ITVX, to the creation of new formats internationally,
we empower and support them to build and grow
their skills and capabilities, for now, and the future.
This will ensure ITV’s enduring legacy and continued
success, delivering its strategic priorities, within a
creative and inclusive culture where everyone thrives
and delivers their best work.
Composition of our workforce
Our workforce, or ‘colleagues’ are a mix of
permanent and fixed-term employees,
freelancers (individuals who provide their
services on a specific project or programme
for a finite period of time); and contractors
(companies or suppliers who provide a
service to ITV) all playing their part.
Investing in the development
of our people
We have committed to building a high
performing, creative, innovative and diverse
workforce by adopting a comprehensive and
inclusive approach to investing in and
rewarding all our colleagues.
This is demonstrated through a range of
development opportunities, including the
ITV Academy. This provides development
programmes for our production colleagues,
traineeships and entry-level pathways,
aimed at addressing current and future
skills gaps in partnership with ScreenSkills,
Creative Access and the National Film
and Television School.
Refer to page 34 for further details.
We offer apprenticeships in ITV Studios and
Media & Entertainment, as well as across our
Corporate Functions.
Our ‘open to all students’ work experience
campaigns have positively impacted
participants and managers alike, whilst
supporting our Diversity, Equality and
Inclusion strategy. Our work experience
placements offer a launchpad for students
to enhance their readiness for a place on our
apprenticeship programme.
All colleagues have access to online,
on-demand and in-person development
workshops. This enables us to continue to
build leadership and line manager capability
and support personal skills development,
wellbeing and resilience for all colleagues.
Over the last year, we have created focused
development opportunities to build the
digital and data capabilities in support of
the delivery of our digital transformation,
an example being the second series launch
of ITV Fast Forward, a collection of one-hour
immersion sessions exploring the use of
Generative AI, Design Thinking, Machine
Learning and digital disruptors.
We continue to equip leaders, managers and
colleagues with the tools and resources to
manage a hybrid workforce through our
Smart working framework which centres
on a ‘value exchange’, considering business
and team requirements balanced with an
individual’s preferred working pattern.
Our Talking Performance approach, based on
up to four performance conversations a year,
continues to be a key priority. We have used
data from our employee engagement and
culture surveys to further strengthen our
approach to performance management.
As a result of these actions, we saw positive
results in the 2023 Engagement and
Culture Survey;
• 72% of colleagues responded favourably
to: ‘My manager gives me useful feedback
on how well I am performing’
• 84% of colleagues responded favourably
to: ‘I know what I need to do to be
successful in my role.’
41ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
Management development
Throughout 2023 we have refreshed our line
manager development offering, introducing
a series of in-person Leadership workshops
sponsored by our CEO. This included:
• The Art of Brilliant Leadership – centred on
positive psychology and developing high
performing teams
• Resilient Leader – giving leaders the
awareness and tools to manage their
resilience and equip their teams with the
support they need to thrive in a changing
environment
THE ITV WAY
The ITV Ways of working are embedded
across all of our processes from
recruitment and selection, to
development and performance
management. They enable all
colleagues to understand our ways of
working and what we expect at ITV in
order to be commercially successful.
Our ITV Way covers:
Make it brilliant
Creativity for everyone
Make it new
Openness to change, without barriers
Make it together
Collaborating and embracing
differences
Aligned with the ITV Way, we have a set
of behavioural expectations for all
colleagues. Our ITV behaviours provide
a framework for all colleagues to
understand what’s expected of them in
terms of how they deliver as well as
what they deliver in their roles. The
behaviours underpin how we manage
performance and support career and
development conversations.
Attracting and retaining talent is critical to
delivering our More Than TV strategy and our
digital transformation. In 2023 we continued
our Digital Skills Programme to address
shorter-term resourcing gaps as well as build
the digital capabilities we need across
technology, product and data over the next
three to five years.
Our approach to attracting and retaining
talent and information on how the
Remuneration Committee considers
workforce remuneration is detailed on
page 117.
Building an inclusive culture
Ensuring we have an inclusive environment
where everyone can be their authentic self
and thrive, is critical to the delivery of our
strategic priorities.
Our inclusive culture ensures that ITV
remains a great place to work for everyone
and supports the delivery of our strategic
priorities and our Diversity Acceleration Plan.
We value the creativity that diversity brings
to our business and continue to provide
support and development for leaders and
managers to build inclusive teams through a
series of training programmes being;
Inclusive Hiring and Inclusive Leader, as well
as two specific programmes on Race Fluency
and Creating Disability Inclusion.
ITV is committed to recruiting, retaining and
developing disabled people with the
Department for Work and Pensions renewing
our Disability Confident Leader
accreditation. Through this, we commit to
giving full and fair consideration to the
employment of people with a disability or
health condition, and guarantee an interview
to candidates with a disability who meet the
minimum requirement for a role. We also
work with specialist providers to ensure that
the recruitment process, and all training,
career development and promotion
opportunities are accessible and inclusive to
all colleagues with a disability and that they
have equal career opportunities for growth
and progression. We continue to be
members of the ‘Valuable 500,’ the global
business collective made up of 500 CEOs
and their organisations innovating together
for disability inclusion. In 2024, we will take
part in the Generation Valuable leadership
programme where one disabled ITV
colleague will be part of their global
leadership programme and will be mentored
by our CEO.
Refer to page 37 for more information on our
Diversity, Equality and Inclusion strategy.
Engagement
The voice of our colleagues is an integral part
of how we measure and assess our culture,
helping us to identify what is important, how
it feels to work at ITV and agreeing on
organisational wide and locally driven actions
as a result.
2023 saw four key engagement activities:
• Creation and launch of a line manager
survey to understand our colleagues’ view
of line manager capability
• A series of cultural deep-dive focus groups
externally facilitated by Inclusive
Employers
• Bi-annual engagement and culture survey
for employees
• Creation and launch of an engagement
and culture survey for freelancers
Our line manager survey identified
management strengths in wellbeing,
technical capability and resilience. It
identified some areas of focus for future
development for managers to enable them
to give specific feedback that can be
actioned regularly and help colleagues follow
through on innovative ideas. The previously
described Leadership workshops were
designed as a result.
Mental health, wellbeing and
duty of care
Supporting the mental and physical health of
colleagues remains a key priority, particularly
in light of the changing ways of working.
The Mental Health Advisory Group (MHAG),
chaired by Baroness Ruth Davidson in 2023
and Pat Younge from 2024, continued to
meet regularly throughout the year. The
MHAG membership includes experts from
leading mental health charities such as Mind,
YoungMinds and SAMH, as well as
independent advisers and representatives
from across ITV and STV.
In 2023 the MHAG discussed a wide range of
subjects, including; building line manager
capability to have open, honest and effective
wellbeing conversations, the new Employee
Assistance Programme (now extended to
freelancers and international colleagues)
and the role of leaders in managing change.
ITV’s important role as a convenor of mental
health conversations, mental health trends
and industry challenges has been at the
forefront of our social purpose campaigns in
2023, including the award-winning Britain
Get Talking.
By providing support, guidance and challenge
the MHAG helps ensure that ITV’s
commitment to the mental health and
wellbeing of colleagues, production staff and
freelancers, programme participants and the
viewing public remains industry-leading.
Additionally, our Duty of Care Operating
Board ensures that ITV’s duty of care
processes continue to evolve. Refer to pages
81 and 98 for further information about the
role of the Duty of Care Operating Board and
its activities in 2023.
The importance of raising workplace concerns
and ‘speaking up’ has been re-emphasised to all
our colleagues, to ensure they have awareness
of, and feel empowered to, raise concerns
through our Speaking Up framework, refer to
pages 99 and 113.
For further information on how the Board and
management engage with the workforce, refer
to page 94.
42 ITV plc Annual Report and Accounts 2023
ALTERNATIVE PERFORMANCE MEASURES
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
for high‑end drama must be classified as a
corporation tax item. However, 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, the UK
tax credits are 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.
In 2024, the adjustment we make to add back
high‑end production tax credits to EBITA will
change. See the Tax note on page 47 of the
Finance Review Section for further details.
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.
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 statements
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.
The Annual Report and Accounts includes 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.
43ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
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 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
Twelve months to
31 December
2023
Statutory
£m
2023
Adjustments
£m
2023
Adjusted
£m
2022
Statutory
£m
2022
Adjustments
£m
2022
Adjusted
£m
1. £85 million (2022: £49 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 £77 million (2022: £65 million)
largely relate to acquisition‑related expenses,
restructuring, transformation and property move
costs. Refer to the Finance Review
3. £25 million (2022: £57 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. £16 million (2022: £nil) adjustment is for 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
period was 4,059 million (2022: 4,046 million)
EBITA
1
404 85 489 668 49 717
Exceptional items
(operating)
2
(77) 77 – (65) 65 –
Amortisation and
impairment
3
(89) 25 (64) (84) 57 (27)
Operating profit 238 187 425 519 171 690
Net financing costs
4
(45) 16 (29) (26) – (26)
Share of profits on
JVs and associates – – – 8 – 8
Profit before tax 193 203 396 501 171 672
Tax
5
16 (101) (85) (66) (69) (135)
Profit after tax 209 102 311 435 102 537
Non‑controlling
interests 1 – 1 (7) – (7)
Earnings 210 102 312 428 102 530
Shares (million),
weighted average 4,023 – 4,023 4,010 – 4,010
EPS (p) 5.2p – 7.8p 10.7p – 13.2p
Diluted EPS (p)
6
5.2p – 7.7p 10.6p – 13.1p
Adjusted EBITDA (used to calculate the group’s leverage) for the year is £535 million (2022: £770 million), calculated by adding back
depreciation of £46 million (2022: £53 million) to adjusted EBITA (which is shown in the table above).
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 the sale of ITV Studios programmes 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.
Twelve months to 31 December
2023
£m
2022
£m
External revenue (Statutory) 3,624 3,728
Internal supply 636 617
Total revenue (Adjusted) 4,260 4,345
44 ITV plc Annual Report and Accounts 2023
ALTERNATIVE PERFORMANCE MEASURES CONTINUED
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:
Twelve months to 31 December
2023
£m
2022
£m
Change
£m
Change
%
ITV Studios total revenue 2,170 2,096 74 4
Adjustment for constant currency 15 – – –
Adjustment for acquisitions in prior period (65) (32) (33) 103
ITV Studios total revenue – organic basis 2,120 2,064 56 3
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 3.7 to the financial statements.
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 and is
relevant in demonstrating we have met the
required RCF financial covenants at our
reporting date.
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 calculation of covenant adjusted EBITDA, covenant net debt and covenant liquidity are
detailed in the tables below:
31 December
2023
£m
31 December
2022
£m
Statutory operating profit 238 519
Exceptional items 77 65
Amortisation and impairment 89 84
EBITA 404 668
Depreciation 46 53
Right of use assets depreciation (19) (25)
Interest charged on lease liabilities (4) (4)
Covenant adjusted EBITDA 427 692
31 December
2023
£m
31 December
2022
£m
Net debt (including IFRS 16 lease liabilities) (553) (623)
Impact of IFRS 16 lease liabilities 115 132
Long‑term trade payables (25) (17)
Other pension asset 48 47
Covenant net debt (415) (461)
Covenant adjusted EBITDA
*
427 692
Covenant net debt to adjusted EBITDA
*
1.0x 0.7x
Cash and cash equivalents 340 348
Undrawn RCF 600 450
Undrawn CDS facility 300 300
Covenant liquidity
**
1,240 1,098
* 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.
45ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
FINANCE 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.
Twelve months to 31 December
2023
£m
2022
£m
Change
£m
Change
%
ITV Studios total revenue 2,170 2,096 74 4
Total advertising revenue 1,778 1,931 (153) (8)
M&E non‑advertising revenue 312 318 (6) (2)
M&E total revenue 2,090 2,249 (159) (7)
Total non‑advertising revenue 2,482 2,414 68 3
Total group revenue 4,260 4,345 (85) (2)
Internal supply (636) (617) (19) (3)
Group external revenue 3,624 3,728 (104) (3)
Group adjusted EBITA 489 717 (228) (32)
Group adjusted EBITA margin 13% 19% (6)
Statutory operating profit 238 519 (281) (54)
Adjusted EPS 7.8p 13.2p (5.4p) (41)
Statutory EPS 5.2p 10.7p (5.5p) (51)
Dividend per share 5.0p 5.0p
Net debt as at 31 December (553) (623) 70 11
Exceptional items
Twelve months to 31 December
2023
£m
2022
£m
Acquisition‑related expenses (24) (4)
Restructuring and transformation costs (25) (28)
Property costs (10) (24)
Costs relating to the passing of Her Majesty Queen Elizabeth II – (16)
Sports rights impairment reversal – 5
Pension related costs – (4)
Employee‑related tax provision 3 (10)
Insured trade receivable 3 23
Legal settlements (13) –
Legal and other costs (11) (7)
Operating exceptional items (77) (65)
Total exceptional items (77) (65)
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.
46 ITV plc Annual Report and Accounts 2023
FINANCE REVIEW CONTINUED
Net financing costs
Twelve months to 31 December
2023
£m
2022
£m
Financing costs directly attributable to loans and bonds (24) (26)
Cash‑related net financing costs (5) 1
Amortisation on bonds and gilts – (1)
Adjusted financing costs (29) (26)
Net pension interest 8 –
Other net financial losses and unrealised foreign exchange (24) –
Statutory net financing costs (45) (26)
Adjusted financing costs were £29 million (2022: £26 million) largely due to financing costs attributable to loans and bonds. Statutory net
financing costs were £45 million (2022: £26 million) mainly driven by charges related to acquisition‑related put and call options.
JVs and associates
Our share of profits from JVs and associates in the period was £nil (2022: profit of £8 million). This was our share of the net profits and losses
arising from our investments, such as BritBox International, Bedrock Entertainment and Blumhouse Television. The reduction year‑on‑year
primarily results from the phasing of the delivery of productions.
Profit before tax
Statutory profit before tax decreased significantly year‑on‑year to £193 million (2022: £501 million) as a result of the impact of the challenging
advertising market and planned ITVX investment.
Twelve months to 31 December
2023
£m
2022
£m
Statutory profit before tax 193 501
Production tax credits 85 49
Exceptional items 77 65
Amortisation and impairment* 25 57
Adjustments to net financing costs 16 –
Adjusted profit before tax 396 672
* In respect of assets arising from business combinations and investments.
Total exceptional items in the period were
£77 million (2022: £65 million). Acquisition‑
related expenses of £24 million (2022:
£4 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
£25 million (2022: £28 million) relate to
one‑off restructuring projects in respect of
the Group‑wide commitment to reduce the
overhead cost base, as well as reorganisation
and transformation programme costs to
deliver our strategy. Significant projects
include the implementation of a new
cloud‑based ERP solution and rationalisation
of the Studios operational structures outside
the UK.
Property costs relate to the London office
move to Broadcast Centre. No further
exceptional costs are expected related to
this move.
Employee‑related tax provisions credit of
£3 million relates to the release of provisions
in respect of years that are no longer in scope
and confirmation from HMRC that certain
individuals are no longer under review in
respect of IR35. The £10 million charge in
2022 reflected an increase in the provision
for potential employment taxes due to
HMRC in relation to the employment status
of individuals contracted by the Group for
periods before 2022.
In 2017, the Group recorded a bad debt
provision of US$41 million related to trade
receivables for The Voice of China. As the
Directors anticipated recovering the amount
either from the counterparty or from trade
credit insurance, US$37 million was treated
as an exceptional cost and the insurance
excess of US$4 million was treated as an
operating cost. US$34 million of cash
received in 2018 and 2019 on behalf of the
debtor was placed under review and the bad
debt provision remained in place. During
2022, the review was completed, leading to
the release of the corresponding bad debt
provision of which £23 million was treated as
an exceptional credit. During 2023, a
settlement of the remaining claim was
agreed upon with insurers resulting in an
exceptional credit of £3 million.
Legal settlements of £13 million relate to
settlements or proposed settlements on a
number of significant legal cases which are
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, The Voice of Holland,
the UK Competition and Markets Authority
(CMA) investigation and the Phillip Schofield
KC Review.
47ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
Tax
Adjusted tax charge
The total adjusted tax charge for the year was £85 million (2022: £135 million), corresponding to an effective tax rate on adjusted PBT of 21.5%
(2022: 20.1%), which is lower than the standard UK corporation tax rate of 23.5% (2022: 19%). We expect the adjusted effective tax rate to be
around 25% in 2024, as a result of the increase in the UK statutory rate to 25% from April 2023.
On a reported basis, there is a tax credit of £16 million (2022: £66 million tax charge) which corresponds to an effective tax rate of (8.3%)
(2022: tax charge rate 13.2%). This rate in 2023 is lower than in previous years due to the impact of higher HETV tax credits relative to the tax
charge, as well as a proportionally lower profit before tax in the period compared to the prior year. 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.
Twelve months to 31 December
2023
£m
2023
Effective
tax rate
2022
£m
2022
Effective
tax rate
Statutory tax (credit)/charge (16) (8.3)% 66 13.2%
Production tax credits 85 100% 49 100%
Charge for exceptional items 12 15.6% 8 12.3%
Charge in respect of amortisation and impairment
*
6 24.0% 12 21.1%
Charge in respect of adjustments to net financing costs (2) (12.5)% – –
Adjusted tax charge
**
85 21.5% 135 20.1%
* 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 £32 million (2022: £55 million) and is net of £38 million of production tax credits received (2022: £31 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 lower profits and
higher production tax credits received. A reconciliation between the tax charge for the year and the cash tax paid in the year is shown below.
Twelve months to 31 December
2023
£m
2022
£m
Tax credit/(charge) (statutory) 16 (66)
Temporary differences recognised through deferred tax
*
7 44
Prior year adjustments to current tax 12 (9)
Current tax, current year 35 (31)
Phasing of tax payments (including in respect of pension contribution benefits) (20) (6)
Production tax credits – timing of receipt (47) (18)
Cash tax paid (statutory) (32) (55)
* Further detail is included within Note 2.3 of the financial statements.
Changes to the current UK system
of Audio‑Visual tax credits
On 29 November 2023, the UK government
issued final legislation to reform the current
system of Audio‑Visual Expenditure Credit
(‘AVEC’) tax credits to merge the four existing
AVEC schemes (Film, High‑End Television
(HETV), Children’s Television and Animation)
into a single 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. The effect of this
change in legislation will therefore be to
increase our EBITA, adjusted EBITA, adjusted
EBITA margin, profit before tax and tax
expense but will leave our profit after tax
unchanged, this is compared to the previous
HETV accounting treatment. We continue to
assess the impact on the Group and do not
anticipate there to be a material change in
the net economic value.
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. Taxation balances are adjusted for a
change in tax law if the change has been
substantively enacted by the balance sheet
date. However the amendments to IAS 12
‘Income Taxes’ Pillar Two income taxes
provides an exemption from the requirement
to recognise and disclose deferred taxes
arising from enacted or substantively
enacted tax law that implements the Pillar
Two model rules.
Based on an initial 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. The
Group continues to refine this assessment
and analyse the future consequences of
these rules.
48 ITV plc Annual Report and Accounts 2023
FINANCE REVIEW CONTINUED
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 2023, 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
Overall, adjusted profit after tax was down at
£311 million (2022: £537 million). Non‑
controlling interest was a share of losses of
£1 million (2022: share of profit of £7 million)
which is the net result from the non‑ITV
owned share in entities such as Plimsoll,
Cattleya and Tomorrow Studios.
Adjusted basic EPS was down 41% to 7.8p in
the year (2022: 13.2p). The weighted average
number of shares increased year‑on‑year to
4,023 million (2022: 4,010 million). Diluted
adjusted EPS in the year was 7.7p (2022:
13.1p) reflecting a weighted average diluted
number of shares of 4,059 million (2022:
4,046 million).
Statutory EPS decreased by 51% to 5.2p
(2022: 10.7p).
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 declared a final
dividend of 3.3p (2022: 3.3p), giving an
ordinary dividend of 5.0p per share for the
full year 2023 (2022: 5.0p), a total payout
of around £200 million. The Board remains
committed to paying a total dividend of at
least 5.0p in 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:
Announcement
Thursday
7 March 2024
Ex‑dividend date
Thursday
11 April 2024
Record date
Friday
12 April 2024
Dividend paid
Thursday
23 May 2024
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.
Acquisition‑related liabilities or
performance‑based employment‑linked
earnouts are amounts estimated to be
payable to previous owners. The estimated
future payments as at 31 December 2023 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 £86
million and £147 million. The estimated
future payments, treated as employment
costs, are accrued over the period the sellers
are required to remain with the business, and
those not linked to employment are
recognised at 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. Expected future payments of
£105 million have increased by £16 million
since 31 December 2022, due to increases in
forecast profits.
At 31 December 2023, £78 million of
expected future payments had been
recorded on the balance sheet, with the
balance of £27 million to be accrued over the
period in which the sellers are required to
remain with the business.
There were no acquisitions during 2023.
49ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
Cash generation
Profit to cash conversion
Twelve months to 31 December
2023
£m
2022
£m
Adjusted EBITA 489 717
Working capital movement 90 (150)
Adjustment for The Voice of China cash received
*
– 23
Adjustment for production tax credits (47) (18)
Depreciation
**
46 53
Share‑based compensation 16 19
Acquisition of property, plant and equipment and intangible assets
***
(70) (78)
Lease liability payments (including lease interest) (26) (26)
Adjusted cash flow 498 540
Profit to cash ratio (adjusted EBITA/adjusted cash flow) 102% 75%
* Cash received in 2018 and 2019 for The Voice of China was placed under review and treated as an exceptional cash receipt and excluded from the profit to cash conversion
calculation. In 2022, the review completed and the cash was released. This adjustment shows the conversion of exceptional cash to operating cash.
** Depreciation of £46 million (2022: £53 million) includes £28 million (2022: £33 million) which relates to ITV Studios and £18 million (2022: £20 million) relating to Media &
Entertainment.
*** 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:
Twelve months to 31 December
2023
£m
2022
£m
Cash generated from operations 488 537
Cash outflow from exceptional items 68 53
Cash generated from operations excluding exceptional items 556 590
Adjustment for production tax credits 38 31
Adjustment for The Voice of China cash received – 23
Acquisition of property, plant and equipment and intangible assets (70) (78)
Lease liability payments (including lease interest) (26) (26)
Adjusted cash flow 498 540
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 £498 million of operational cash (2022: £540 million) from £489 million of adjusted EBITA (2022: £717 million),
resulting in a profit to cash ratio of 102% (2022: 75%). The increase in our profit to cash ratio year‑on‑year reflects a favourable movement in
working capital due to the unwind of programme rights and inventory previously built up for the launch of ITVX. In addition, there has been a
reduction in production inventories predominantly in the US as a result of the 2023 writers’ and actors’ strike.
Free cash flow
Twelve months to 31 December
2023
£m
2022
£m
Adjusted cash flow 498 540
Net interest paid (excluding lease interest) (27) (37)
Adjusted cash tax
*
(70) (86)
Pension funding (40) (137)
Free cash flow 361 280
* Adjusted cash tax of £70 million is total net cash tax paid of £32 million plus receipt of production tax credits of £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 £361 million (2022: £280 million).
50 ITV plc Annual Report and Accounts 2023
FINANCE REVIEW CONTINUED
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 three
committed facilities in place to maintain our
financial flexibility, which includes a £500
million multilateral Revolving Credit Facility
(RCF). £83 million of this facility matures in
January 2028, and £417 million remains
committed until January 2029. The RCF has
leverage and interest cover covenants which
require us to maintain a covenant net debt to
adjusted EBITDA ratio of below 3.5x and
interest cover (adjusted EBITDA to net
finance charges) above 3.0x.
At 31 December 2023, ITV’s financial position
was well within its covenants. During the
year, the Group secured an additional £100
million of committed funding via a bilateral
RCF which matures in 2028. The terms and
conditions, including financial covenants,
are aligned to the £500 million multilateral
RCF facility.
We also have a bilateral financing facility
of £300 million, which is free of financial
covenants and matures on 30 June 2026.
At 31 December 2023, all facilities were
undrawn (31 December 2022: only
£50 million from the £500 million RCF
was drawn), which with cash and cash
equivalents of £340 million, provided total
liquidity of £1,240 million (31 December
2022: £1,098 million). This provides us with
sufficient liquidity to meet the requirements
of the business in the short to medium term
under a variety of scenarios, including a
severe but plausible downside scenario.
After acquisition‑related costs, pension
and tax payments, we ended the period
with reported net debt of £553 million
(31 December 2022: £623 million).
Reported net debt
At 31 December
2023
£m
2022
£m
Gross cash 340 348
Gross debt (including IFRS 16 lease liabilities) (893) (971)
Net debt (553) (623)
Financing – gross debt
We are financed using debt instruments and facilities with a range of maturities. Borrowings at
31 December 2023 were repayable as follows:
Amount repayable as at 31 December 2023 £m Maturity
€600 million Eurobond
*
535 Sep 2026
£230 million term loan 230 Jul 2027
Other loans 13 Various
Total debt repayable on maturity
**
778
* Includes £15 million currency component of swaps held against euro‑denominated bond.
** Excludes £115 million of IFRS16 Lease Liabilities.
The Group’s €259 million Eurobond which matured in December 2023 was refinanced by
drawing on the £230 million committed four year term loan, maturing in July 2027. The term
loan has the same financial covenants as ITV’s Revolving Credit Facility and is excluded from
the total committed undrawn facilities of £900 million.
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 2023,
our leverage, or net debt to adjusted EBITDA
was 1.0x (31 December 2022: 0.8x).
Credit ratings
We continue to be rated investment grade by
two rating agencies. Our current ratings are
BBB‑ (stable outlook) by Standard and
Poor’s and Baa3 (stable outlook) by Moody’s
Investor Services. The factors that are taken
into account 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.
51ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
Production inventories, contract
assets and liabilities
In 2023, contract assets increased by
£17 million, production inventories
decreased by £259 million and contract
liabilities decreased by £185 million
compared to 31 December 2022. Contract
assets increased due to UK scripted growth
with streaming platforms. The production
inventories decrease was driven
predominantly by key US and UK deliveries.
Contract liabilities decreased due to the
phasing of production deliveries, particularly
in the US and the UK.
Pensions
The net pension surplus for the defined
benefit schemes at 31 December 2023 on an
accounting basis was £209 million (31
December 2022: £192 million). The
movement in the year was driven by
employer contributions and a reduction in
liabilities due to changes in demographic
assumptions partly offset by a fall in
corporate bond yields.
The net pension assets include £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. A full reconciliation is included
within note 3.7 to the financial statements.
Deficit funding contributions
The accounting surplus or deficit does not
drive the deficit funding contribution. The
Group’s deficit funding contributions in 2023
were £40 million, which included £37 million
following the agreement of the 2019 Triennial
valuation of the main section of the Scheme,
and £3 million annual payment under the
London Television Centre pension funding
partnerships. Further details are included in
Note 3.7 to the financial statements.
SDN pension funding partnership
In 2010, ITV established a Pension Funding
Partnership (PFP) with the Trustees backed
by SDN, which was subsequently extended in
2011. The PFP addressed £200 million of the
funding deficit in Section A of the defined
benefit pension scheme and under the
original agreement, a payment of up to
£200 million was due in 2022. The existing
PFP agreement was amended and extended
to 2031. As a result of this agreement,
payments of £94 million were made under
the SDN PFP arrangement in 2022. The
Group is committed to up to nine annual
payments of £16 million from 2023. These
payments are required if the Scheme is
calculated to be in a technical deficit. This
calculation is based upon the most recent
triennial valuation updated for current market
conditions. The partnership’s interest in SDN
provides collateral for these payments. The
£16 million payment under the SDN PFP was
not required to be paid in 2023. However, this
assessment is made on an annual basis and
therefore the £16 million payment may
resume in 2024. The Group retains day‑to‑
day operational control of SDN and SDN’s
revenues, profits and cashflows continue to
be consolidated in the Group’s accounts. On
completion of the final payment in 2031, the
Scheme’s partnership interest will have been
repaid in full and it will have no right to any
further payments.
Post balance sheet event
On 01 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. The Board intends to return the
entire net proceeds to shareholders through
a £235 million share buyback which will be
completed within 18 months. Refer to notes
3.4 and 5.3 to the financial statements for
further details.
Planning assumptions for the
full year 2024
The following planning assumptions for 2024
are based on our current best view but may
change depending on how events unfold over
the rest of the year.
Profit and Loss impact:
• Total content costs are expected to
be around £1,275 million as we further
optimise linear, evolve our windowing
strategy and improve personalisation.
We will invest an additional £15 million
in marketing
• Delivery of £40 million of savings –
comprising of £10 million from our
existing £150 million cost saving target
and £30 million of additional in year
savings as part of the new strategic
restructuring and efficiency programme
• Adjusted financing costs are expected
to be around £35 million
• The adjusted effective tax rate is expected
to be 25% over the medium term in line
with the UK statutory tax rate of 25%
• Exceptional items are expected to
be around £90 million mainly due to
costs associated with the new strategic
restructuring strategic restructuring
and efficiency programme and digital
transformation costs
Cash impact
• Total capex is expected to be around
£75 million as we further invest in our
digital capabilities
• The cash cost of exceptionals is expected
to be around £90 million mainly due to
costs associated with the restructuring
and efficiency programme and digital
transformation cost
• Profit to cash conversion is expected to
be around 80% out to 2026. In 2024 profit
to cash conversion will be lower reflecting
an increase in working capital. Across 2023
and 2024 we expect cash conversion to
be around 80%
• Total pension deficit funding contributions
for 2024 are expected to come down year
on year. More detailed guidance will be
given following the completion on the
triennial valuation
• The Board has proposed a final dividend
of 3.3p, which will be paid in May 2024.
This gives a full year dividend of 5.0p.
Going forward, the Board intends to pay
a full year ordinary dividend of at least
5.0p, which it expects to grow over the
medium term
CMA Investigation
As previously reported, on 12 July 2022,
the UK Competition and Markets Authority
(CMA) opened an investigation into certain
conduct of ITV and other named companies
in the sector relating to the production and
broadcasting of sports content in the United
Kingdom. The investigation is at an early
stage and the CMA has confirmed it is
currently undertaking further investigation
until at least March 2024, subsequent to
which ITV anticipates it will receive additional
detail regarding any future steps.
On 11 October 2023, the CMA opened an
investigation into certain conduct of ITV
and other named companies in the sector
relating to the production and broadcasting
of television content in the UK, excluding
sports content. The investigation remains at
an early stage and it is not currently possible
to reliably quantify any liability that might
result from the investigation. ITV is
committed to complying with competition
law, and is cooperating with the CMA’s
enquiries in relation to both investigations.
Foreign exchange sensitivity
The following table highlights ITV Studios
sensitivity, for the remainder of the year
(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.
Currency
Revenue
£m
Adjusted
EBITA
£m
US dollar
+/‑40‑55
+/ – 5‑7
Euro +/ – 40‑50 +/‑7‑9
CHRIS KENNEDY
GROUP CFO & COO
52 ITV plc Annual Report and Accounts 2023
NON‑FINANCIAL AND SUSTAINABILITY INFORMATION STATEMENT
Refer to page 2 for details on our Business Model.
ENVIRONMENT
Policies Due diligence and implementation Outcomes of policies and related KPIs Related principal risks (pages 57 to 64)
• Our Environmental Management
Policy sets out our commitment to
reaching our Science Based Targets
on carbon emissions by 2030. In
addition, we are part of the
Business Ambition for 1.5 degrees,
setting additional 2050 goals for
90% carbon emissions reduction
across all Scopes
• We disclose against the Task
Force on Climate-related Financial
Disclosures (TCFD) framework
our exposure to climate-related
risks and processes to mitigate
these risks
• ITV’s commitment to climate
action has been assessed by the
Carbon Disclosure Project and
given an A rating, putting ITV in the
top 2% of disclosing companies for
leadership in transparency and
corporate reporting
• Our Supplier Code of Conduct sets
out our expectation of our suppliers
to align with our 2030
environmental targets
• We evaluate and monitor climate
change risks and progress against
our environmental targets through
our governance structure, which
includes the Climate Action
Delivery Group, and is referenced in
further detail in our TCFD report
(see page 65)
• Progress against our environmental
targets is reported to the Studios,
Media & Entertainment, and
Management Boards up to four
times a year, and annually to the
PLC Board. The Audit and Risk
Committee also has oversight
of environmental matters (see
page 114)
• All colleagues and Board
members are required to
complete mandatory training
on climate action
• Climate Action is one of the
priorities of ITV’s Social Purpose
strategy (see page 35). See more on
this and our GHG data
• We are active members of the
industry sustainability body BAFTA
albert, and are committed to
reducing the impact of production
emissions by ensuring all the
programmes produced or
commissioned in the UK are
albert certified
• Climate change is not currently
recognised as a principal risk of the
Group, but is categorised as an
emerging risk and kept under
regular review through our risk
management framework. However,
principal risks are assessed with a
climate risk lens. We have identified
specific climate risks for ITV
through climate scenario analysis
• For our TCFD report see page 65
COLLEAGUES
Policies Due diligence and implementation Outcomes of policies and related KPIs Related principal risks (pages (57 to 64)
• Our Code of Ethics and Conduct
(Our Code) promotes the highest
standards of ethical business,
underpinning our values and
corporate culture
• Adherence is a key requirement of
our overall compliance framework
• Our Diversity, Equity and Inclusion
strategy is aligned with and
supports our business strategy
• Our employment and recruitment
policies are based on equal
opportunities and
non-discrimination and set out our
commitment to an open and
inclusive culture
• ITV’s Duty of Care Charter sets out
our commitment to the physical
and mental health and safety of
employees, participants and others
we work with
• ITV has a ‘Speaking Up’ framework
for anyone working for or with ITV to
raise concerns and grievances in
confidence (and if they wish
anonymously), as well as a
freelancer complaints procedure
• We also have policies on bullying,
harassment and dignity at work,
and grievances
• All colleagues and Board members
complete annual mandatory
training aligned with Our Code.
• Our Code is reviewed regularly and
approved by the Audit and Risk
Committee
• Our Inclusion and Diversity Council,
chaired by the Chief Executive,
drives the organisation’s diversity
and inclusion agenda (see page 37)
• Progress against our diversity
targets is reported to the Studios
and Media & Entertainment Boards
biannually, the Management Board
four times a year, the Nominations
Committee regularly, and the PLC
Board annually
• The Audit and Risk Committee
reviews the Group’s health and
safety procedures at least annually,
and receives regular reports from
the Duty of Care Operating Board,
which the Chair of the Audit and
Risk Committee attends
• Our Speaking Up framework is
monitored and reviewed by the
Audit and Risk Committee
biannually. Statistics on concerns
raised are reviewed at each
Board meeting
• The Speaking Up framework has
been enhanced, making it easier to
raise concerns and support ITV’s
open culture
• Diversity, Equity and Inclusion
is one of the four priorities of
ITV’s Social Purpose strategy
(see page 32)
• ITV has ranked third in the FTSE
250 index and is the top media
company within the index for
women in leadership roles. ITV was
also one of 20 FTSE 250 companies
with at least five women on its
Board. (Source: FTSE Women
Leaders Review February 2024)
• Non-compliance with laws and
regulations is recognised as a
principal risk. The Board has zero
tolerance for known and deliberate
non-compliance. We regularly
assess potential risks associated
with employee conduct and ethics
as part of our compliance
processes
• Failure to deliver our Diversity
Acceleration Plan is not recognised
as a standalone principal risk but is
recognised as an important factor
within the recruitment and
retention of talent principal risk and
remains under review, monitored by
the Nominations Committee
• Failure to create the right
organisational culture, which
allows colleagues to speak up, and
failure to extend an adequate duty
of care or a major health and
safety incident are recognised
as principal risks
The table below, and the information it refers to, sets out our compliance
with the non‑financial reporting requirements in accordance with Sections
414CA and 414CB of the Companies Act 2006.
53ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
SOCIAL IMPACT
Policies Due diligence and implementation Outcomes of policies and related KPIs Related principal risks (pages 57 to 64)
• Social Purpose is a core enabler in
delivering ITV’s overall strategy. We
use ITV’s scale and creativity to
shape culture for good not just
within ITV but across the UK and
other markets that we might
impact. We have set and published
ambitious targets which align to the
United Nations Sustainable
Development Goals (UN SDGs)
• We evaluate and monitor all
our Social Purpose campaigns
and progress against our goals.
2023 carbon emissions data has
been independently verified by
a third party
• ITV’s Mental Health Advisory
Group, chaired by Baroness Ruth
Davidson in 2023 and succeeded by
Pat Younge in 2024, comprises
external expert advisers and ITV
representatives and provides
guidance on best practice for
looking after the welfare of people,
productions and campaigns
• In 2023, ITV introduced a
psychologist professional
development programme to
expand the pool of registered
psychologists working in television.
It was delivered in partnership with
the BBC and accredited by the
British Psychological Society and
aimed at supporting ITV and BBC
programmes in their duty of care to
contributors
• ITV is a member of the Responsible
Media Forum
• Progress against our targets and
the impact of our campaigns are
reported to the Management Board
four times a year, monthly in social
purpose papers and annually to the
PLC Board
• Our Social Purpose strategy
has four priorities relating to
Mental Wellbeing, Better Futures,
Climate Action and Diversity, Equity
and Inclusion, (see pages 32)
• The Social Purpose strategy
is aligned with the UN SDGs. ITV
has identified nine SDGs where it
can have the most impact,
(see page 32)
• Social impact matters are not
considered to be a standalone
principal risk, however social
impact matters which influence
other principal risks are detailed in
our Risks and Uncertainties section
HUMAN RIGHTS
Policies Due diligence and implementation Outcomes of policies and related KPIs Related principal risks (pages 57 to 64)
• ITV is fully committed to ensuring
that we do not participate in the
violation of human rights and
expects the same of our suppliers.
We are a founding member of the
television Industry and Human
Rights Forum set up to identify and
proactively address labour rights
issues in the television industry and
raise awareness beyond it
• ITV’s Modern Slavery Statement
sets out the steps taken to identify,
address and prevent modern
slavery and human trafficking in our
business and supply chain
• Our Supplier Code of Conduct sets
out our expectation of suppliers to
protect human rights of workers
and communities impacted by
operations and supply chains
• Ultimate oversight sits with
the Board
• ITV’s Modern Slavery Working
Group is responsible for overseeing
modern slavery risk management
for ITV in a manner that places
concerns for potential victims at
the centre. It agrees on strategies
for addressing key risks identified
and raises awareness among ITV’s
decision-makers of labour rights
considerations and seeks their
support for appropriate initiatives
• Our Modern Slavery Statement is
reviewed by the Board on an annual
basis. and can be found in the
Governance section of our
ITV PLC website
• No incidences of human rights
abuse or modern slavery have
been identified
• Our Code of Ethics and Conduct
explains ITV’s aim to address and
identify the risks of modern slavery
• Suppliers are required to comply
with our Supplier Code of Conduct
and address the risk of modern
slavery in their operations and
supply chains
• Legal and regulatory
non-compliance (including labour
rights issues) is recognised as a
principal risk with the Board having
zero tolerance for known and
deliberate non-compliance.
We have a compliance and risk
management framework in place
to identify potential risks and
mitigate these
54 ITV plc Annual Report and Accounts 2023
NON‑FINANCIAL AND SUSTAINABILITY INFORMATION STATEMENT CONTINUED
ANTI‑CORRUPTION AND ANTI‑BRIBERY
Policies Due diligence and implementation Outcomes of policies and related KPIs Related principal risks (pages 57 to 64)
• Our Code of Ethics and Conduct
(Our Code) promotes the highest
standards of ethical business and
reinforces the importance of
awareness of compliance
requirements
• Our Anti-Bribery Policy sets out our
responsibilities and provides
information and guidance on what
bribery is and how to deal with
bribery and corruption issues.
Those working for or with us must
observe and uphold the policy
• Our Sanctions Policy ensures that
the business complies with all
relevant international and financial
sanctions in force at the time by the
US, UN, EU or UK government
• Our Supplier Code of Conduct sets
out our expectation of our suppliers
to comply with all anti-bribery laws
• All colleagues and Board members
are required to complete annual
mandatory training aligned with
Our Code, and systems are in place
through the Speaking Up
framework to enable employees to
identify and raise issues, including
suspected wrongdoing, fraud or
malpractice in the workplace
• Bespoke training on the
Anti-Bribery Policy is provided to
employees working in roles or
territories at higher risk of bribery
and corruption issues
• Compliance with the Anti-Bribery
Policy is kept under review and
reported to the Management Board
and Audit and Risk Committee
biannually
• Bribery and corruption risks are
reviewed annually by the Audit
and Risk Committee, as is wider
policy compliance
• We take a zero-tolerance approach
to bribery and corruption and are
committed to acting professionally,
fairly and with integrity in all our
business dealings and relationships
wherever we operate, as well as
implementing and enforcing
effective systems to counter
bribery and corruption
• Legal and regulatory
non-compliance (including with
the Bribery Act 2010) is recognised
as a principal risk. We have a
compliance programme in place
to mitigate the risk of bribery,
which is articulated in our
Anti-Bribery Policy
55ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
RISKS AND UNCERTAINTIES
Risk Landscape
The increasing pace of change in the market and the continued impact of the
macroeconomic environment and global uncertainty means we must continue to
be agile in the way we implement our strategy and manage the resulting risks.
Our approach
The focus in 2023 has been on evolving our
approach to risk management to ensure it
remains appropriate for the risk landscape
and proportionate so as not to stifle
creativity. We started the year by reassessing
our risk landscape and deep diving into the
risk categories that this is made up of. The
learnings from this exercise allowed us to
adapt our approach to further drive
standardisation in our risk management
processes and enhance our understanding
of ITV’s most critical risks.
Our approach places emphasis on the
importance of collaboration between the
Central teams that set expectations and the
Divisions. On a periodic basis, the Divisions
review their exposure to the key risk
categories managed centrally to identify any
significant and emerging risks that might
affect their performance. In addition, the
Divisional Leadership teams bring together
their most significant risks and uncertainties,
including emerging risks, for discussion and
prioritisation. This ‘top-down’ and ‘bottom-
up’ approach is facilitated and overseen by
the Group Risk team.
Emerging risks
Given the changing landscape in which we
operate, we have increased our focus during
2023 on identifying and understanding the
emerging risks we face so we can proactively
take action now. This involved expanding the
ongoing horizon scanning performed to
embed it as a key consideration when
assessing the current position of each
principal risk category.
Our two key emerging risks are climate and
the transformative impact of Generative
Artificial Intelligence (Generative AI).
SPOTLIGHT ON…
CLIMATE
• We approach the actual and emerging risks
associated with the climate no differently
to how we manage any other risk faced by
ITV. The activities taken to manage our
responsibilities related to emerging
regulations, investor expectations and our
external disclosure requirements are of
particular interest to the Board.
• Upskilling and educating the business
forms the basis for ensuring we have
effective management and accountability
for our environmental obligations. This is
supported by a network of green leads to
support both the owners of climate-related
risks and colleagues across ITV to
transform our business so we are fit to
thrive in a sustainable economy. Our
Sustainability team acts as the glue to
oversee these activities, join the dots and
provide advice and guidance.
• Whilst we do not categorise Climate as a
standalone principal risk, which could
materially threaten our viability or strategy,
we recognise that climate needs to be
considered as part of our everyday
activities and is intrinsically linked to many
of our risks.
• For more information on our climate-
related risks, see our Climate-Related
Financial Disclosures Report.
Risk appetite
To help focus the way we manage our
principal risk categories, the Board has
defined our risk appetite for each one to
enable us to strike the right balance between
risk taking and risk mitigation. Our risk
appetite reflects ITV’s willingness to be
innovative and open to ideas as we pursue
our strategy, whilst maintaining our low
tolerance in operational areas, such as duty
of care, data protection and corporate
compliance.
Risk leadership and governance
Our leadership plays an important role in
ensuring risk management is considered in
key decision making. Each of our principal
risk categories has a Management Board
sponsor. They articulate each risk, how we
manage them and the actions being taken
to operate within our risk appetite.
ITV’s risk oversight and governance
framework has been set up to assist the
PLC Board in fulfilling its responsibility
for overseeing the management of risk
across ITV.
The Risk and Compliance Steering
Committee (RCSC) plays an integral part
in assisting the Management Board in
overseeing the management of risk across
ITV. It provides the central teams and
divisions with a route to escalate risks and
commissions deep dives into principal and
emerging risks to enhance understanding
of the key drivers, mitigating activities
and identify further management
activity required.
The Management Board conducts a robust
assessment of principal and emerging risks
faced by the Group twice a year. This includes
consideration of the potential impact and
probability of each of these occurring. The
outcome of these assessments is presented
to the Audit and Risk Committee and the
PLC Board for review and approval.
SPOTLIGHT ON…
CLIMATE
• The Climate Action Delivery Group (CADG)
has been established to support the
Management Board in overseeing the
management of climate-related risks. This
Group, chaired by the CFO/COO, meets
four times a year to review and challenge
progress against plans, deep dive into
escalated risks and identify areas where
further management activity is required.
• The CADG plays an important role in ITV’s
risk oversight and governance. It reports
and escalates key risks to the RCSC that
are considered as part of the Management
Board’s robust assessment of principal and
emerging risks. It also provides updates to
the Management Board, Audit and Risk
Committee and PLC Board on progress
against climate-related targets and our
climate-related disclosures for review
and challenge.
56 ITV plc Annual Report and Accounts 2023
RISKS AND UNCERTAINTIES CONTINUED
OUR RISK OVERSIGHT AND GOVERNANCE STRUCTURE AT A GLANCE
ITV PLC Board
Audit and Risk
Committee
(ARC)
Management Board Risk &
Compliance
Steering
Committee
(RCSC)
Studios
Board
M&E
Board
Climate Action
Delivery Group
(CADG)
Corporate
Functions
Studios
Risk Working
Group
M&E
Risk Working
Group
Key
Direction and management
Reporting and escalation
Advice and oversight
Risk Management Effectiveness
The PLC Board continues to monitor the
effectiveness of risk management at ITV. An
independent assessment of ITV’s risk
management framework and practices was
conducted during Q4 2023 as part of the
2023 internal audit plan. The review
concluded that significant progress has been
made over the last year to achieve an
effective state for principal risk management
within ITV, with a number of opportunities to
enhance the framework and practices
identified and reflected in our risk
management plans for 2024.
Changes to principal risks
during the year
The ongoing management and monitoring of
ITV’s most critical risks throughout the year
has led to changes to the principal risks from
the previous reporting period (H1 2023).
These included:
• Splitting ‘cyber-attack or data breach
incident’ into two separate principal risks
to enhance transparency, improve
accountability and enable us to establish
more focused mitigation strategies
• Removing ‘Pensions Deficit’ as the
ITV pension scheme position has
significantly improved
• The addition of ‘Third-Party Risk
Management’ to recognise the increasing
complexity and importance of our
third-party relationships and the potential
these have to cause significant damage
to our reputation
• Promoting ‘Operational Resilience’
to recognise the importance of being
able to withstand and recover from
our technology and/or services
being compromised.
57ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
Principal risks and mitigations
Set out below is a description of each of our principal risks and how they are being managed and mitigated.
Key Link to strategy Risk direction of travel
(after current mitigations)
Emerging risks
E
Expand Studios globally
S
Supercharge Streaming
O
Optimise Broadcast
Risk is increasing
Risk is reducing
Risk remains static
Indicates where there are macroeconomic related factors,
which may influence the risk.
Indicates where there are climate-related factors, which
may influence the risk.
Indicates where there are AI-related factors, which may
influence the risk.
N.B. – Risks are grouped by category and are not disclosed in order of importance or significance
STRATEGIC RISKS
1. Streaming
Link to
strategy
S
MB Sponsor: Managing Director, Streaming, Interactive & Data
Description What this risk category covers: Some of the things we do to manage it:
ITVX does not grow at
the pace required to
deliver the desired
strategic or financial
outcomes
Link to Viability
Scenarios: 1 | 2 | 6
• How we attract viewers to our streaming services in an
increasingly competitive and challenging market
• How we maintain strong relationships with platforms and
distributors
• How we create a competitive subscription proposition whilst
continuing to drive ad-funded video on demand viewing
• How we manage the complexity of the infrastructure and
technology chains involved in the transition to streaming
• Continue to invest in our streaming capability (e.g.
personalisation)
• Continue to evolve our partnership & distribution strategy
• Continue to invest in content and marketing
• Ongoing monitoring of our performance KPIs
• Horizon scanning of the external market
Examples risks in this category: Some of the metrics we track:
Risk direction:
2023 2022
• Inability to maximise prominence and inclusion
• Increased competition for viewer attention
• Maintaining pace with the market and viewer expectations
• Monthly Active Users (MAUs)
• Total Streaming Hours
• UK Subscribers
• Digital Revenues
• Share of Voice
2. Content Market
Link to
strategy
E
MB Sponsor: Managing Director. ITV Studios
Description What this risk category covers: Some of the things we do to manage it:
Fundamental changes
in the content market
may result in reduced
opportunities,
non-renewal of
premium programmes,
and/or impact the
profitability of ITV
Studios content
Link to Viability
Scenarios: N/A
• The impact the structural decline in linear audiences has on
programming budgets and slots for free-to-air (FTA)
broadcasters
• The impact increased vertical integration (traditional and
streaming platforms) and market consolidation have on
intensifying market competition
• The impact that market changes could have on the demand
for, and profitability of ITV’s content
• Continue to invest in developing, attracting and retaining
world-class creative talent
• Continue to grow and maintain relationships with a diverse
customer base, including global streamers
• Continue to seek opportunities to increase market share and
drive efficiencies across our productions
Examples risks in this category: Some of the metrics we track:
• Content spend cuts from FTA broadcasters and streamers
• Inability to grow streamer customer base as they become
a growing part of the content market
• Increased pressure on our pricing, rights and
production premium
• ITV Studios total organic revenue growth
• ITV Studios adjusted EBITA margin %
• Total high-end scripted hours
• Number of formats sold in three or more countries
• % of ITV Studios total revenue from streaming platforms
Risk direction:
2023 2022
58 ITV plc Annual Report and Accounts 2023
RISKS AND UNCERTAINTIES CONTINUED
3. Commercial
Link to
strategy
S
O
MB Sponsor: Managing Director, Commercial
Description What this risk category covers: Some of the things we do to manage it:
Increasing competition
and challenging
advertising market
conditions impact
our revenue stream
affecting our ability
to fund our content
budget
Link to Viability
Scenarios: 1 | 2 | 4 | 6
• How we compete for share of advertising spend in a
challenging macroeconomic environment and with the large
streamers launching advertising tiers
• The impact redistribution of advertising budgets away from
broadcasting to online platforms could have on ad revenue
• How we respond to continued tightening of data protection
and privacy regulations that impact our ability to provide
targeted advertising
• Continue to enhance our integrated advertising proposition
to offer i) mass simultaneous reach, ii) data driven target
addressable and iii) the ability to integrate brands creatively
into our content and the future development of outcome-
based advertising products
• Continue to invest and extend Planet V to offer unrivalled
addressability at scale
• Continue to offer a unique creative proposition to advertisers
through brand partnerships, product placements,
sponsorships, advertiser funded programmes (AFPs) and
digital advertising solutions
• Continue to invest in an outcomes proposition that enables
advertisers to measure the effectiveness of their campaigns
• Build strategic partnerships with advertisers and agencies
• Continue to monitor the actual and potential advertising
restrictions
Examples risks in this category: Some of the metrics we track:
Risk direction:
2023 2022
• Structural decline in broadcast advertising
• Increased competition for market share from the larger
streamers introducing ad tiers and the growth of online video
• Failure to grow monetisable streaming viewers
• Total Advertising Revenue (TAR)
• Category spend
4. Changing Viewer Habits
Link to
strategy
S
O
MB Sponsor: Managing Director, Media & Entertainment
Description What this risk category covers: Some of the things we do to manage it:
Inability to respond to
changing viewing
habits and deliver the
forecasted audiences/
viewing for both linear
and streaming will
result in failure to
monetise and deliver
against Commercial
revenue targets
Link to Viability
Scenarios: 1 | 2 | 3 | 6
• How we attract our most commercially valuable viewers to
both linear and streaming content
• How we drive reach, scale and simultaneous viewing across
linear and streaming
• How we anticipate, respond and adapt to the shift towards
digital viewing, whilst we maintain and increase our share of
media time
• How we ensure that our content is accessible wherever,
whenever, and however viewers choose to engage with it
• How we retain viewers and increase the volume of the
content they consume
• Continue to invest in and showcase great content on our
channels and ITVX, with a focus on our most commercially
valuable viewers
• Continue to invest in marketing
• Continue to evolve our partnership and distribution strategy
to position ourselves where our viewers are
• Continue to invest in ITVX to ensure viewers spend longer on
the platform once they’re there e.g. personalisation
• Continue to focus on understanding viewer habits to optimise
the relationship between linear and streaming to help drive
the way we commission content for ITVX to grow overall
reach
Examples risks in this category: Some of the metrics we track:
Risk direction:
2023 2022
• Accelerated decline in linear viewing
• Inability to capitalise on the shift to digital viewing through
ITVX
• Increase competition for viewer attention from large
streamers introducing ad tiers and the growth of online video
• Share of commercial viewing
• Share of Top 1000 commercial broadcast TV Programmes
• TV Viewing – Hours per person per day (adults & 16 to 34s)
• Ad viewing time trends
59ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
5. Content Pipeline
Link to
strategy
S
O
MB Sponsor: Managing Director, Media & Entertainment
Description What this risk category covers: Some of the things we do to manage it:
Lack of diversified
commissioning
pipeline (whilst
balancing/maintaining
mass simultaneous
reach on linear TV;
attracting light viewers
on ITVX; and managing
rising content costs)
may impact total
viewing
Link to Viability
Scenarios: 1 | 2 | 3 | 6
• How we anticipate and adapt to changes in the tastes and
habits of viewers
• How we develop a quality and appealing content pipeline that
is both resilient to changes in viewer preferences, as well as
being financially viable
• How we leverage the value of being an integrated producer,
broadcaster and streamer to enable us to continue to provide
unrivalled viewers of scale for UK advertisers and to grow our
digital revenues
• How we ensure we are commissioning content by, with
and for everyone (Diversity, Equity & Inclusion) whilst
also considering the impact our behaviours and those
portrayed through our content have on society and the
wider environment
• Our data and insights team focuses on understanding the
preferences of our most commercially valuable viewers to
help drive the way we commission content
• Continue to invest in content and talent
• Continue to focus on our key franchises and brands to ensure
editorial protection
• Continue to evolve the way we commission and acquire
content as well as innovating how we fund content (e.g.
partnerships, Advertiser Funded Programmes (AFPs) and
co-productions)
• Continue to focus on maintaining strong relationships with
independent studios from whom we commission content
• Continue to invest in live sports, high-end drama and
entertainment programmes to maintain mass simultaneous
reach and to attract our most commercially valuable viewers
• Continue to commission content by, with and for everyone
(e.g. £80 million Diversity Commissioning fund) and to
identify ways to make our content accessible to all
(e.g. Dedicated British Sign Language (BSL) FAST channel)
Examples risks in this category: Some of the metrics we track:
Risk direction:
2023 2022
• Increased cost of content driven by rising costs of production
and increased competition from competitors
• Failing to secure the right talent at the right price
• Accelerated decline in linear viewing and growth of other
digital offerings
• Share of Commercial Viewing
• Share of Top 1000 commercial broadcast TV Programmes
• Total Streaming Hours
• UK Subscribers
6. Partnerships
Link to
strategy
S
O
MB Sponsor: Chief Finance Officer / Chief Operating Officer
Description What this risk category covers: Some of the things we do to manage it:
An inability to develop
and maintain adequate
relationships with
major platform and
distribution providers
may result in reduced
brand prominence,
viewers being unable
to find our content and
a lack of fair value for
that content
Link to Viability
Scenarios: 1 | 2 | 6
• How we develop and maintain strong partnerships with major
platforms and distribution partners to maximise prominence
and inclusion of our content
• How we manage the trade-offs inherent in our commercial
arrangements with our platforms and distribution partners
• How we actively plan for long term changes in traditional
distribution (DTT & DSat) as viewing continues to transition
online (IP)
• Continue to supercharge our streaming service to strengthen
our offering to our most commercially valuable viewers and
advertisers
• Work closely with Ofcom and the government (DCMS) to
modernise the PSB regulatory regime
• Continue to evolve our partnership and distribution strategy
to reduce reliance on single platforms and secure more
advantageous commercial relationships
• We have a dedicated team that continues to build
relationships with the major distribution providers and
platforms to ensure ITV remains attractive from a distribution
perspective
• Continue to collaborate with the other PSBs to a compelling
consumer controlled entry point to our content in readiness
for the shift to IP only viewing through Freely
• Proactive involvement of the ITV Legal team to ensure we
continue to operate within our framework
Examples risks in this category: Some of the metrics we track:
Risk direction:
2023 2022
• Failure to negotiate and re-negotiate favourable carriage
terms with platforms and distribution partners
• Our partners demanding a direct or indirect financial return
for continued carriage
• The increasing prevalence of biased algorithmic or AI
personalisation impacting the prominence of our content
• Relationship health check status
60 ITV plc Annual Report and Accounts 2023
RISKS AND UNCERTAINTIES CONTINUED
7. D a t a
Link to
strategy
E
S
O
MB Sponsor: General Counsel and Company Secretary
Description What this risk category covers: Some of the things we do to manage it:
Failure to ensure
appropriate access
to consistent and
trustworthy data and
remaining compliant
with our regulatory
obligations. We must
ensure the whole of ITV
follows the applicable
data regulations while
anticipating and
adequately preparing
for future ones.
Link to Viability
Scenarios: 4
• How we create value and enable efficiency while providing a
robust framework for data governance
• How we identify the data we have, who is responsible for
looking after it, how it moves around ITV, who is using it and
how is it being used/what is it being used for
• How we remain vigilant in protecting our corporate data and
the personal data we are entrusted with whilst following
today’s global data regulations and anticipating and preparing
for tomorrow’s
• We structure our approach to data use and management
around three pillars – Privacy by design, Security by design
and Value by design.
• Continue to use the OneTrust privacy compliance
management tool to determine whether a Data Protection
Impact Assessment (DPIA) is required
• Data privacy lawyers and data governance experts are
embedded within each of the business areas to act as
partners, monitor data activity and usage, and educate the
business on their data obligations
• We have established policies and procedures which set out
what is expected of people across ITV with respect to data
• We provide mandatory data privacy and data governance
training and promote good data behaviour through awareness
campaigns
• We perform due diligence on our third parties prior to
onboarding
• AI SteerCo was established to provide oversight of the use
and implications of AI for ITV
Examples risks in this category: Some of the metrics we track:
Risk direction:
2023 2022
• Using data to inform decision making without understanding
its quality, accuracy, validity, ownership or legality
• Failing to comply with data protection laws or regulations that
apply to ITV
• Unintentional data exposure (corporate or personal) as a
result of insufficient employee awareness of data governance
and data privacy
• Cyber-attacks from well organised threat groups targeting
ITV resulting in a data breach
• Mandatory Training
• Data Subject Requests
• Total investigated incidents
• High Risk DPIA’s
COMPLIANCE RISKS
8. Policy & Regulation
Link to
strategy
S
O
MB Sponsor: Group Director of Strategy, Policy & Regulation
Description What this risk category covers: Some of the things we do to manage it:
We engage with
regulators and
governments to put
our case to shape the
future regulation that
protects viewers whilst
ensuring PSBs can
compete fairly and
deliver their remits.
We must then be in
compliance with these
regulations whilst
maintaining trust and
delivering our strategy
Link to Viability
Scenarios: 1 | 2 | 6
• The impact the new Media Bill will have on the visibility and
viability of our content distribution and advertising
businesses
• The impact changes in advertising regulation may have on our
Total Advertising Revenue (TAR)
• The impact of emerging regulations and policy on our
business (e.g. sustainability and child protection)
• How unfavourable changes to European Works quotas could
impact the demand for UK content
• How we continue to meet the expected requirements of a
Public Service Broadcaster (PSB)
• Continue to monitor potential policy, legal and regulatory
developments
• Analyse the impact of potential changes and proactively put
forward our position during the development of new policies,
legislation and regulations.
• Continue to engage with the government and regulators on
the PSB regime and other topics relevant to our industry
• Actively participating in consultations on areas which may
impact ITV and collaborating with other organisations in the
industry, where appropriate in line with our competition law
obligations. e.g. with pan-European report on possible
European Works quota changes
• Horizon scanning to identify future changes, analysing the
impact this would have on ITV and agreeing our position (e.g.
medium to long term future of DTT)
Examples risks in this category: Some of the metrics we track:
Risk direction:
2023 2022
• Regulation not keeping pace with the market
• Keeping up with evolving regulation
• Failing to comply with standards, rules, requirements and
obligations
• Continuing to fulfil the requirements of being a Public Service
Broadcaster (PSB)
• Renewal of Channel 3 nations, regions and breakfast licenses
• Regulatory outlook
61ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
9. Corporate Compliance
Link to
strategy
E
S
O
MB Sponsor: General Counsel and Company Secretary
Description What this risk category covers: Some of the things we do to manage it:
We seek to remain
compliant with all
substantive laws.
Key areas of
compliance activity
in respect of relevant
laws, for example,
those relating to
anti-bribery &
corruption, modern
slavery, anti-
competitive behaviour,
competition, trade
sanctions and
Speaking Up
• Breaches of corporate compliance could lead to prosecution,
fines, litigation or a regulator stepping in, which might impact
our reputation and our ability to operate if it resulted in the
loss of licenses
• How we set the expectations of our people and develop the
operational infrastructure and tools to drive and make
compliance easy for the business
• Through our Code of Ethics & Conduct, we foster a culture
where colleagues know the standards expected of them and
can speak up if something’s not right
• We Implement a robust tailored compliance programme
based on our risk assessment, including undertaking
compliance monitoring and effectiveness reviews
• Promote good compliance behaviour in our colleagues,
through awareness and mandatory training
• Work with the business to support the adoption and
implementation of compliance policies and standards
• Conduct due diligence on potential third parties
• Horizon scan to prepare for legislative changes and
developing policies to address them
Examples risks in this category: Some of the metrics we track:
Link to Viability
Scenarios: N/A
• Being exposed to third parties or colleagues engaging in
unlawful or non-compliant activities on ITV’s behalf
• Inadequate operational infrastructure to drive and support
the execution of a strong third party risk management
process
• Lack of clear infrastructure and appropriate culture for
compliance matters in the business
• Speaking Up
• Mandatory training
Risk direction:
2023 2022
OPERATIONAL RISKS
10. Cyber Security
Link to
strategy
E
S
O
MB Sponsor: Chief Technology Officer
Description What this risk category covers: Some of the things we do to manage it:
We aim to protect ITV,
our content, our
colleagues, our viewers
and our partners from
harm and financial
loss caused by cyber
security events.
We adapt our controls
accordingly to detect
and respond to the
evolving threat
Link to Viability
Scenarios: 4
• A successful cyber-attack could lead to ‘black screens’ and
result in a commercial impact due to operational disruption or
critical system outage
• A catastrophic data breach could result in ITV receiving a fine
from the Information Commissioner’s Office (ICO) of up to 4%
of worldwide turnover
• Failure to maintain trust and live up to regulatory, viewer,
partner and other stakeholder expectations related to cyber
security could weaken our reputation
• Implement a robust cyber security risk management (NIST)
framework to protect our applications, systems and networks
• Monitor external threats and gather intelligence on evolving
cyber techniques, tactics, capabilities and the threat
landscape
• Maintaining a vigilant security setup to quickly detect and
respond to cyber risks before they become incidents, whilst
continuing to invest in new and emerging cyber defence and
security tooling
• Promote good security behaviour in our colleagues, through
awareness campaigns and mandatory training
• Perform due diligence on our third parties and monitor our
online applications and technical validation
• Model a severe but plausible hypothetical cyber-attack
scenario annually and facilitate cyber exercises with the
Management Board to simulate an attack to rehearse how
ITV would respond and identify and implement improvement
areas
• Continue to focus on ITV’s recovery capability and minimal
viable company
Examples risks in this category: Some of the metrics we track:
Risk direction:
2023 2022
• Cyber-attacks from organised threat groups targeting ITV
• Being exposed to third parties with vulnerabilities that can
access our systems
• End of life legacy IT estate vulnerabilities
• Labels IT infrastructure Independent to Group
• Attack path stats (by severity)
• Endpoint-related incidents (No. per quarter & trends)
• ITVX Bot Attacks
• Minimum Viable Company (MVC) Recovery Capability
• Third party assessment (critical suppliers)
62 ITV plc Annual Report and Accounts 2023
RISKS AND UNCERTAINTIES CONTINUED
1 1. Transformation
Link to
strategy
E
S
O
MB Sponsor: Chief Finance Officer / Chief Operating Officer
Description What this risk category covers: Some of the things we do to manage it:
We are accelerating
transformation
delivery to build a
simpler, more efficient
and dynamic ITV in
pursuit of our More
Than TV Strategy
Link to Viability
Scenarios: N/A
• Failing to deliver our transformation ambitions will adversely
impact our efficiency, financial performance, and viewer
experience while impacting our reputation
• We are focused on enabling and driving digital transformation
by enhancing organisational agility, improving commercial
control and flexibility and embedding a culture of
achievement
• We do this while remaining cognisant of the volume, speed
and extent of change required to achieve this
• Our Transformation Operations Directors Office (TODO)
focuses on operational issues and reducing the risk involved
in a number of significant and costly transformation activities
• Management Board sponsors, and experienced and skilled
programme directors across all transformation programmes
• Continue to instil new ways of working through implementing
Agile and standardising tooling
• Continue to upskill key business stakeholders with sufficient
knowledge to hold their programme teams to account.
• Monthly Transformation Steering Group (TSG) to track the
overall portfolio delivery and programme dependencies
• Group Design Authority (GDA) and Group Investment
Committee (GIC) to manage technical design and investment
across the portfolio
Examples risks in this category: Some of the metrics we track:
Risk direction:
2023 2022
• Inadequate change management to overcome resistance to
change
• Insufficient resource, lack of required capabilities and
reliance on contractors / third parties
• Failure to manage complex interdependencies
• Transformation programmes fail to deliver the intended value
• Programme Milestones
• Programme Benefits
12. People
Link to
strategy
E
S
O
MB Sponsor: Chief People Officer
Description What this risk category covers: Some of the things we do to manage it:
An inability to attract,
develop and retain key
creative, commercial,
technical and
managerial talent
could adversely
affect our business
Link to Viability
Scenarios: N/A
• To attract and retain the right people in the right places for an
organisation as complex and diverse as ITV, we need to have
effective strategic workforce planning
• Day-to-day people management activities include managing
high levels of recruitment, onboarding and terminations, and
providing access to relevant training and development
opportunities
• Failure to engage our people to ensure their health and
wellbeing and create a diverse and inclusive workplace could
impact our performance and growth ambitions
• Continue to develop our Employee Value Proposition (EVP)
• Continue to evolve our approach to mandatory training and
speaking up through updating existing modules, introducing
new modules and phasing the launch throughout the year
• Ongoing development of succession plans for business
critical and management roles (including nominated
deputies).
• Continue to identify future talent (High potential
programme), support the development of people of colour
(RISE programme), develop the skills needed to help drive the
business forward (Digital skills programme) and offer
industry-leading production training (ITV Academy)
• Our global Employee Assistance Programme (EAP) is
available to permanent, fixed term and freelance colleagues,
as well as to dependents.
• Create an inclusive culture through Disability Access
Passports, Amplify, Fresh Cuts and continuing our Step Up 60
initiative
• Run engagement surveys and targeted pulse surveys to deep
dive into specific topics
Examples risks in this category: Some of the metrics we track:
Risk direction:
2023 2022
• Failure to attract and retain colleagues in a highly competitive
industry
• Technological advancements resulting in a workforce skills
gap
• The actions of onscreen talent impacting ITV’s reputation
and brand
• Failing to maintain a diverse organisation impacting our
innovation and creativity
• Resignation Index
• New Hires (Women, Disability, Colour and LGBTQ+)Diversity
Data (Demographic and disability information)
63ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
13. Duty of Care
Link to
strategy
E
S
O
MB Sponsor: Chief Executive Officer
Description What this risk category covers: Some of the things we do to manage it:
Failure to extend
an adequate duty of
care or the occurrence
of a major health and
safety incident could
result in physical and
mental harm, loss of
human life and
reputational damage
Link to Viability
Scenarios: N/A
• Ensuring we run our business safely with consideration to our
duty of care and the impact we could have on society
• Supporting the mental and physical health and safety of
colleagues, those working with ITV and those participating in
and contributing to our productions, is a key priority
• Our commitment to addressing promptly, fairly and
confidentially all concerns and monitoring the channels we
have in place to ensure they remain appropriate
• We maintain a ‘Speaking Up’ framework that allows anyone
working for or with ITV to raise concerns in confidence
through Safecall , alongside other channels to raise concerns.
• Continue to drive awareness of ‘Speaking up’ through
communications and mandatory duty of care training module
• We have a comprehensive operational risk management
process, and through this, we identify risks to both people’s
physical and mental health and safety and put in place
measures to manage them appropriately
• The ITV Feel Good offering continues to provide advice,
support, resources and tools for inspiring and enabling
colleagues to look after their own well-being and have a
balanced and healthy working lifestyle in a hybrid world
• We continue to evolve the Participant Aftercare Programme
(PAP)
• We support participants through the Participant Crisis Care
Stabilisation Pathway, an Out of Hours Welfare Helpline and a
‘call off’ contract with the Nightingale Hospital
• Partner with the BBC, to develop an Industry Media
Psychologist Development Programme
• Our social purpose campaigns seek to support the viewing
public, including the award-winning Britain Get Talking.
• Continue to monitor and respond to historical issues to
further strengthen our Duty of Care policies
Examples risks in this category: Some of the metrics we track:
Risk direction:
2023 2022
• Failure to appropriately support individuals working with ITV
in our pursuit of editorial content that is relevant and
entertaining
• Failure to adequately consider the impact our content could
have on society
• Speaking Up data
• Accident/Incident Data
14. Third Party Risk Management
Link to
strategy
E
S
O
MB Sponsor: Chief Finance Officer / Chief Operating Officer
Description What this risk category covers: Some of the things we do to manage it:
ITV relies on a wide
range of third parties
to operate its
business. We therefore
must have robust
processes in place
for risk assessing,
onboarding and the
ongoing management
Link to Viability
Scenarios: N/A
• The robustness of our due diligence process for onboarding
third parties to make sure they meet our standards
• How we adequately monitor and manage the impacts of
third-party relationships
• Maintaining a holistic alongside a detailed overview of the
third parties ITV engages with
• Continue to evolve our Third Party Risk Management (TPRM)
framework to support ITV with assessing and managing risks
associated with vendor relationships
• Ongoing input from the risk domain leads to enhanced due
diligence performed across all third-party relationships
• Our supplier code of conduct sets out the minimum
standards we expect of all suppliers
• Continue to extend the use of the Prevalent platform to
automate the risk management of our vendors
• Continue to set expectations in contracts for talent
• Ongoing monitoring of our distribution providers
Examples risks in this category: Some of the metrics we track:
Risk direction:
2023
New Risk
• Failure to adequately assess, monitor and manage the
impacts of third-party relationships
• Colleagues bypass the due diligence process
• Lack of holistic overview of the third parties ITV engages with
• The development and agreement of metrics for the new
principal risk is underway
64 ITV plc Annual Report and Accounts 2023
RISKS AND UNCERTAINTIES CONTINUED
15. Operational Resilience
Link to
strategy
E
S
O
MB Sponsor: Chief Finance Officer / Chief Operating Officer
Description What this risk category covers: Some of the things we do to manage it:
A major business
continuity incident
with linear/online
transmission or a
critical ad system
may result in service
interruption and
revenue loss
Link to Viability
Scenarios: 4
• Maintaining business operations, including our ability to
broadcast linear TV, distribute & stream content and
generate Ad revenue is imperative
• We recognise the complexity of the infrastructure and
technology our critical business operations rely on, and the
impact these being compromised could have on our
resilience. In particular, the number of third parties we rely on,
the increasing number of platform partners that we
broadcast content across/through, the range of broadcasting
operations (i.e., multiple regions, sites and across multiple
systems) and the continually evolving methods by which we
distribute content
• We seek to build resilience into our key IT systems and focus
on maintaining robust and tested disaster recovery and
business continuity plans
• Continue to focus on understanding the minimal viable
company and ITV’s recovery capability
• Annual major incident scenario testing and ahead of major
live events
• Maintain and regularly update business continuity and
disaster recovery plans
• Continue to review and monitor operational performance
• Continue to closely manage our broadcast chain partners
and suppliers to ensure the risk of incidents is minimised
Examples risks in this category: Some of the metrics we track:
Risk direction:
2023
New Risk
• Lack of resilience in our key IT systems
• Inadequate IT disaster recovery plans to meet ITV’s business
operation needs
• Ineffective operational business continuity plans
• The development and agreement of metrics for the new
principal risk is underway
65ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
CLIMATE RELATED FINANCIAL DISCLOSURES
Our commitment to Climate Action
We recognise the climate crisis and the impact it may have on both the wider
world and the success of our business. We are committed to providing greater
transparency regarding ITV’s exposure to climate-related risk and the mitigating
actions we are taking to enhance our preparedness, responsiveness and
resilience in the face of these uncertainties.
This climate related financial disclosure report has been prepared to meet the minimum requirements outlined within the Task Force on
Climate-related Financial Disclosures (TCFD) as well as the mandatory reporting requirements set out in the Companies Act relating to
Climate-related Financial Disclosures (CFD). We have also released our first Climate Transition Plan which sets out ITV’s climate ambitions
and our plans to transition the business to a net-zero pathway. For more information, see our Climate Transition Plan.
TCFD and CFD Summary Disclosure
The table below signposts where the TCFD recommendations and CFD requirements can be found in the report.
Task Force on Climate-related Financial
Disclosures (TCFD) Recommendation
Relevant
Section
Companies (Strategic Report) (Climate-related
Financial Disclosure (CFD)) Regulations
Relevant
Section
Governance
A. Describe the board’s oversight of
climate-related risks and
opportunities.
Risk leadership and
governance (page 66)
A. Describe the Company’s governance
arrangements in relation to assessing
and managing climate-related risks
and opportunities.
Risk leadership and
governance (page 66)
B. Describe management’s role in
assessing and managing climate-
related risks and opportunities.
Our Approach (page 66)
Strategy
A. Describe the climate-related risks and
opportunities the organisation has
identified over the short, medium, and
long term.
Strategy (page 66) D. Describe i) the principal climate-
related risks and opportunities arising
in connection with the Company’s
operations, and ii) the time periods by
reference to which those risks and
opportunities are assessed.
Strategy (page 66)
B. Describe the impact of climate-related
risks and opportunities on the
organisation’s businesses, strategy,
and financial planning.
Strategy (page 66) E. Describe the actual and potential
impacts of the principal climate-
related risks and opportunities on the
Company’s business model and
strategy.
Strategy (page 66)
C. Describe the resilience of the
organisation’s strategy, taking into
consideration different climate-
related scenarios, including a 2°C or
lower scenario.
Detailed Risks Strategy
(page 66)
Resilience (page 71)
F. An analysis of the resilience of the
Company’s business model and
strategy, taking into account
consideration of different climate-
related scenarios.
Detailed Risks Strategy
(page 66)
Resilience (page 71)
Risk Management
A. Describe the organisation’s processes
for identifying and assessing
climate-related risks.
Risk Management (page 66) B. Describe how the Company identifies,
assesses, and manages climate
related risks and opportunities.
Risk Management and
Governance (page 66)
B. Describe the organisation’s processes
for managing climate-related risks.
Governance (page 66)
C. Describe how processes for identifying,
assessing, and managing climate-
related risks are integrated into the
organisation’s overall risk
management.
Risk Management and
Governance (page 66)
C. Describe how processes for identifying,
assessing, and managing climate
related risks are integrated into the
Company’s overall risk management
process.
Risk Management and
Governance (page 66)
66 ITV plc Annual Report and Accounts 2023
CLIMATE RELATED FINANCIAL DISCLOSURES CONTINUED
Task Force on Climate-related Financial
Disclosures (TCFD) Recommendation
Relevant
Section
Companies (Strategic Report) (Climate-related
Financial Disclosure (CFD)) Regulations
Relevant
Section
Metrics and Target
A. Disclose the metrics used by the
organisation to assess climate-related
risks and opportunities in line with its
strategy and risk management
process.
Metrics & Targets (page 71) H. Describe the key performance
indicators used to assess progress
against targets used to manage
climate-related risks and realise
climate-related opportunities and a
description of the calculations on
which those key performance
indicators are based.
Metrics & Targets (page 71)
B. Disclose Scope 1, Scope 2 and, if
appropriate, Scope 3 greenhouse gas
(GHG) emissions and the related risks.
Metrics & Targets (pages 36
and 71)
N/A
C. Describe the targets used by the
organisation to manage climate-
related risks and opportunities and
performance against targets
Strategy (page 66) G. Describe the targets used by the
Company to manage climate-related
risks and to realise climate-related
opportunities and of performance
against those targets.
Metrics & Targets (page 71)
Risk management
Our approach to identifying,
assessing, managing and
monitoring climate-related risks
and opportunities
ITV’s risk management framework provides
the guardrails for risk management activities
and the risk management process supports
central functions and divisions to identify,
assess, manage, monitor and report on risks,
including climate-related risks.
Climate change is not currently categorised
by the Board as a Group ‘Principal Risk’ as it is
unlikely to have a substantial financial impact
in the next three years. It has however been
identified as a key ‘Emerging Risk’ to ITV
with the potential to impact the way we
do business in the medium to long term.
We continue to assess climate risks with
management and the Board every
six months.
We focus on the day-to-day management
of climate risks. Ownership is assigned to all
risks with mitigations and progress against
action plans reviewed and challenged by the
Climate Action Delivery Group (CADG). Risk
owners have responsibility for monitoring the
risks and opportunities, including
implementing appropriate management
strategies with support provided by the
Risk and Social Purpose teams.
We assess climate related risks and
opportunities at Group, Divisional (Studios
and M&E) and entity level. ITV’s principal
risks with the potential to be most impacted
by climate change are Commercial, Content
Market and Content Pipeline. We are taking
action through our Social Purpose goals to
mitigate and manage their impacts both
today and in the future, ensuring we continue
to build resilience to climate-related physical
and transition risks.
Governance
Our governance structures support the PLC
Board, committees and senior management
to ensure that climate change is integrated
into our strategy, business process and
decision making. For more information on
climate governance, see the Risk and
Uncertainties section.
Assessing and Managing climate-
related risks and opportunities
Each business area is supported by Green
Leads and Green Teams that follow the risk
management process to identify, assess and
manage climate-related risks and
opportunities on a day-to-day basis. They
work closely with the Sustainability team
which plays a key role in reviewing these risks
and opportunities.
The CADG is a sub-committee of the
Management Board that meets quarterly
and receives updates from the Green Leads.
It provides oversight and direction over ITV’s
climate action agenda, implementation of
strategies, environmental targets and
climate related risks and opportunities.
Outcomes of these meetings are reported to
the Management Board and Divisional
Boards quarterly to inform decision making.
Remuneration Incentives
The Management Board members have
emission reduction targets included in their
bonuses and all senior management have
Environmental, Social and Corporate
Governance (ESG) objectives. These
measures encourage leadership to actively
contribute to reducing ITVs carbon footprint.
All colleagues consider their contributions to
ITV’s Climate Action and ESG targets in their
Talking Performance reviews and through a
yearly mandatory training module.
Strategy
To date, ITV has not experienced a material
impact or cost from climate risks and
opportunities. We continue to track these
impacts (such as costs from extreme
weather events), to monitor if and when this
does become the case.
Our Methodology and
Assumptions
We review the Climate Scenario Analysis
(CSA) on a three year cycle and update the
scenarios using the latest science. The
assumptions on which our CSA is built have
not changed since our last assessment. Our
key risk areas remain:
1. Changes in the advertising sector
2. Increased costs in the transition to a low
carbon world
3. Resilience of productions to extreme
weather events
For each of the key risk areas, we conducted
quantitative modelling and qualitative
assessment of the potential impact both
physical and transitional risks may have on
our business in a 1.5°C, 2°C and 3+°C
warming scenario, as at 2030, assuming our
business model and activities remain the
same as today.
Our overall assessment of the risks, indicates
that as a business ITV is not significantly
exposed to physical or transition climate
risks in our operations and our Group
business strategy remains relevant even in
light of evolving climate risks. The risks
(individually or collectively) do not represent
a threat to our long-term viability, liquidity or
ability to operate and no risks were identified
which suggested we need to impair balance
sheet assets. The Detailed Risks section that
follows, describes the risks we have
considered to arrive at this conclusion.
67ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
1. CHANGES IN THE ADVERTISING SECTOR
Context
The advertising market continues to shift to the promotion of
low-carbon products and sustainable communications with
increased pressure from governments, regulators, as well as
from agencies and brands from within the industry. Including:
• Stricter advertising regulations or outright bans for carbon
insensitive brands and products.
• Major brands shrink or fail to survive.
• Increased use of carbon calculators in planning and buying
media (e.g. capping frequency of ad campaigns to reduce
carbon emissions).
Time horizon
Medium – Long-term
Impact Area
Revenue Loss
Current policies
(3°C+)
(High carbon
scenario impact)
Revenue loss – minimal
Advertising regulators continue to look unfavourably at
greenwashing and companies with a high carbon footprint.
We will need to consider the reputational impacts of the
adverts we broadcast and advertisers we work with.
SDS (2°C+)
(Low carbon
scenario impact)
Revenue loss – minimal
Advertisers considered as carbon-insensitive or
environmentally damaging and therefore subject to bans on
advertising of their products or services are limited. This
impact will be replaced by clients advertising low carbon
alternative products.
NZE by 2050
(1.5°C+)
(Very low carbon
scenario impact)
Revenue loss – moderate
Governments introduce strict policies to influence
consumption behaviours and a higher proportion of our high
emitting advertising clients are subject to bans. However, we
are able to replace a portion of this revenue through clients
advertising low carbon alternative products.
How we are building our resilience to a 2
o
C or less scenario
There remains uncertainty around the timing and impact of advertising restrictions. In order to prepare for the potential changes, we are:
• Monitoring the regulatory landscape and engaging with parliamentarians and the UK government to make the case for evidence-based regulation of
advertising to limit the impact of advertising restrictions on ITV.
• Continuing to work with advertisers to seek out alternative options to replace potential lost revenue.
• Monitoring the share of our advertising revenue that is aligned with our climate targets and the Net Zero transition
• Trialling incentives with one major agency customer to provide additional media for sustainable brands in their client base
• Working with advertisers to improve the effectiveness of climate-related advertising
• Working closely with collaborative project Ad Net Zero and the advertising sector to support the development of industry wide approaches to the Net Zero
transition
• Scaling our existing sustainable partnerships (e.g. eBay / Love Island and Big Brother / Vinted)
• Developed digital targeting opportunities to enable advertisers to reach ‘climate conscious’ consumers.
Based on our understanding of the context around this risk and all actions in place to prepare, we are confident that we are building resilience against the
potential implications of this risk on ITV
Metrics
Percentage of revenue aligned to our climate action objectives:
• Percentage of i) top 100 advertisers and ii) major media agencies scoring good or excellent
against climate action goals (based on a methodology created by ITV to allow us to start
tracking how our revenue aligns to our net zero transition)
• Percentage of Commercial colleagues completing climate awareness training
Upcoming metrics: Carbon footprint of adverts running on ITV platforms
Targets
We do not currently have any specific targets in respect of this
risk, and will reassess the need for specific action once we
have a better understanding of the relevant indicators.
Link to existing principal risk
Commercial
RAG Key
Risks Opportunities
Minimal increase in expenditure
and / or reduction in revenue
Significant
benefit
Moderate increase in
expenditure and / or reduction in
revenue
Moderate
benefit
Significant increase in
expenditure and / or reduction in
revenue
Minimal
benefit
Detailed Risks
Time Horizon Key
Impact
time horizon
From
(years)
To
(years) Aligned to
Short-term 0 1 ITV Annual reporting period
Medium-term 1 3 ITV Long term viability assessment
period and strategic planning cycle
Long-term 3 10+ ITV science-based and Net Zero
targets*
*This has been extended to align with our additional 2050 emissions commitments
Given the evolving nature of climate change and the future policy changes governments globally are considering, there remains a number of
uncertainties in our modelling. We will continue to review our risks and opportunities in this light and intend to continue building on this analysis
by modelling further risks and opportunities, as they are identified. As the risks and opportunities have remained consistent with previous
years, the methodology used for modelling has remained consistent.
The RAG rating indicates ITV’s exposure to the key climate related risk areas based on the two opposing scenarios of ‘action’ and ‘no action’
in response to climate change, using an amalgamation of financial impacts and benefits.
68 ITV plc Annual Report and Accounts 2023
CLIMATE RELATED FINANCIAL DISCLOSURES CONTINUED
2. INCREASED COSTS IN THE TRANSITION TO A LOW CARBON WORLD
Context
All businesses will face costs associated with the transition to Net
Zero and a low carbon economy. Carbon emissions taxation is being
imposed by more nations worldwide to limit and reduce carbon
intensive activities causing climate change.
We may be exposed to increased costs of operating in all areas of
our business. This could come from increased environmental
regulation, carbon pricing or emissions taxation, investment in low
carbon technologies as well as throughout our supply chain. In
addition, shifts in supply and demand due to climate related impacts
may result in ITV not being able to source materials for production
due to costs.
Time horizon
Medium
Impact Area
Expenditure increase
Current policies
(3°C+)
(High carbon
scenario impact)
Expenditure increase – minimal
The Current Policies’ scenario assumes that no carbon pricing
is introduced and therefore the increased costs are limited as
it stays business as usual.
SDS (2°C+)
(Low carbon
scenario impact)
Expenditure increase – moderate
Increased costs may be felt from the wider transition to a low
carbon economy. However, the SDS scenario does not provide
an indication of how government or regulation may intervene
in this area.
NZE by 2050
(1.5°C+)
(Very low carbon
scenario impact)
Expenditure increase – moderate
Increased costs may be felt from wider transitions to a low
carbon economy. Highest impact expected in terms of
increased costs passed on through the supply chain.
How we are building our resilience to a 2
o
C or less scenario
We are actively seeking to limit the amount of carbon we emit in our business. We continue to focus on increasing our use of renewable energy, assessing the
maturity of our suppliers in relation to managing climate related risks and partnering with peers to support an industry-wide transition approach. Examples of
how we are building our resilience include:
• Consolidating our London offices from three sites to two;
• Focusing our office and productions investment on improving resilience
• Adopting a centralised approach to procuring and maintaining electric vehicles and the supporting infrastructure.
• Transitioning to the cloud, using partners aligned to our Net Zero targets and data centres powered by renewable energy
Metrics
• Scope 1, 2 and 3 footprint;
• percentage of our electricity coming from a renewable energy tariff;
• number of key suppliers aligned with our targets
Targets
• 46.2% reduction of scope 1 and 2 by 2030; 28% reduction of
scope 3 by 2030 (base year 2019);
• 100% of our electricity coming from renewable tariff by
2025;
• 100% of our key suppliers aligned with our targets by 2025.
Link to existing principal risk
Not currently linked to a principal risk. However, it is linked to our climate emerging risk.
69ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
3. RESILIENCE OF PRODUCTIONS TO EXTREME WEATHER EVENTS
Context
If governments and organisations fail to adequately respond to
climate change, we are likely to see an increase in physical climate
risks, such as extreme weather events.
Extreme weather events have the capacity to significantly impact
ITV productions. This may result in operational interruption resulting
in delay in delivering content, meeting consumer contracts and
unforeseen costs.
Time horizon
Medium
Impact Area
Expenditure increase
Current policies
(3°C+)
(High carbon
scenario impact)
Expenditure Increase – moderate
An increase in the frequency and severity of extreme weather
events will result in costs associated with adapting our
approach to how we film, travel and maintain business
operations as well as challenges to obtaining insurance. We
do however continue to evolve our resilience and continuity
plans to ensure they can respond to extreme weather events.
SDS (2°C+)
(Low carbon
scenario impact)
Expenditure Increase – minimal to moderate
The world is already experiencing the impacts of extreme
weather events globally, and whilst the frequency and severity
of these events under this scenario is assumed to be
manageable, we anticipate we will feel these impacts more,
with some corresponding financial consequences.
NZE by 2050
(1.5°C+)
(Very low carbon
scenario impact)
Expenditure Increase – minimal
As the world is already experiencing the impacts of extreme
weather events globally, the increase in frequency and
severity of these events in this scenario is assumed to be
manageable within ITV’s existing business continuity
procedures.
How we are building our resilience to a 2
o
C or less scenario
Within the international ITV Studios business, the environment and potential weather events are key considerations when making decisions on filming
locations and as part of risk assessments. Should a situation arise, we would respond on a case-by-case basis, supported by our existing business continuity
measures, which include insurance, evacuation protocols to ensure we keep talent and crew safe, and sourcing alternative filming locations. This resilience and
agility continue to be tested.
We have implemented a Weather Notification System to enhance our response to extreme weather events. Including real time monitoring of meteorological
data, customised alerts tailored to production areas, and direct notifications to allow for proactive awareness.
Metrics
• Data on cost of damage from extreme weather events (by geography), to assess our
exposure to the risk and the priority areas
• Insurance captives
Targets
• Targets being developed
Link to existing principal risk
Operational Resilience.
70 ITV plc Annual Report and Accounts 2023
CLIMATE RELATED FINANCIAL DISCLOSURES CONTINUED
Detailed opportunities
Our More than TV strategy, and our history of being a climate leader in our sector, put us in a good position to benefit from the opportunities
that exist as we transition to a sustainable world. We see a number of opportunities taking shape which are linked to our relationship with
audiences and advertisers, and to the operational changes we are making. While these opportunities are not significant to our financial
success, we believe it is important to capitalise on these in order to ensure ITV continues shaping culture for good; remains attractive to talent,
customers and partners; retains its reputation for social care; and is resilient to risk.
1. AUDIENCES (REPUTATIONAL BENEFITS)
Context
Our social purpose agenda of shaping culture for good is core to ITV’s
strategy. We have a strong track record in using our brand, reach, talent and
programming to engage a mass audience on climate related themes and
solutions.
By reflecting the challenges that people are facing in modern Britain, we can
remain relevant and attractive to a mass audience, supporting brand
perceptions and helping to maintain our reach in the market.
Time horizon
Short – Medium term
Opportunity Impact
Alignment to corporate strategy – high
Importance to social purpose of shaping culture for good – high
Potential increase in audience / viewership – minimal / moderate
How we are capitalising
It is difficult to attribute positive perception of the ITV brand to our environmental activity. However, we approach this in a number of ways:
• Run monthly audience surveys to monitor how the ITV brand is perceived, which includes questions on our environmental credentials
• Track the impact of campaigns and their effect on the perception of the ITV brand (e.g. Love Island and eBay partnership)
Metrics in development
• ITV brand perception; bespoke indicators relating to specific campaigns,
allowing ITV to track the level of engagement across the audience
Targets
We do not currently set specific targets in this area.
2. COMMERCIAL: GROWING OUR REVENUE FROM NET ZERO ALIGNED BRANDS, PRODUCTS AND SERVICES
Context
We expect to see growth in the volume of advertising for brands, products
and services aligned to the Net Zero transition over the coming years. By
establishing ourselves as a reputable and trusted environment for
advertisers to showcase their sustainability credentials, we can grow the
volume of advertising with existing clients and new low carbon businesses.
Time horizon
Short – Medium term
Opportunity Impact
Alignment to corporate strategy – high
Commercial opportunity – moderate
How we are capitalising
We have created a ‘sustainability fund’ which we are trialling with one of our media agency partners which they can use to support sustainable advertisers in
their portfolio, offering them additional airtime with ITV to help them grow their business through advertising.
Metrics in development
The metrics in this area are in development.
Targets
We do not currently have targets in this area, as we are still exploring the
appropriate methodology for developing indicators, and their integration into
our existing activity.
71ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
3. OPERATIONAL: COST REDUCTIONS AND WIDER BENEFITS OF INNOVATIONS
Context
By developing targets to reduce emissions involved in the production of our
content, we have an opportunity to develop innovative and more efficient
ways to produce and deliver our content. These changes can also improve our
resilience and reduce costs, as well as opening new creative opportunities.
Time horizon
Short – Longer term
Opportunity Impact
Alignment to corporate strategy – high
Cost saving – minimal/moderate*
How we are capitalising
We continue to focus on innovative ways to produce and deliver our content:
• Remote production technology (e.g. FIFA Women’s Football World Cup, Men’s Rugby World Cup and Love Island)
• Testing virtual production technologies for scripted productions
• Cloud based editing to reduce travel and post production energy use
• Monitor clean mobile power solutions that are coming to market and have begun testing and trialling solutions (e.g. battery technology)
In addition, we continue to explore ways to reduce our energy expenditure through sustainable technologies e.g. use of solar panels on our office buildings and
production locations. Whilst these may require initial investment, they will help reduce costs in the longer term and support our energy resilience.
Metrics in development
We are driving a range of actions and innovative practices to reduce our
production emissions. We will explore setting new indicators, for instance
around the share of our productions using remote production technologies,
amount of fuel avoided due to large scale battery technology, or any other key
practices, if they prove helpful in our transition. An update of our activity and
decarbonisation levers in this area can be found as part of our Climate
Transition Plan.
Targets
We do not currently have targets in place in this area, as we are still
developing the indicators that are most relevant.
Resilience
We continue to focus on ensuring ITV
remains resilient to a 2
o
C or lower scenario by
continuing to review the actions we’re taking,
developing new metrics, improving our data
quality in these areas, upskilling teams and
engaging with others in the industry. Our
strategic objectives within our Transition plan
focus on enhancing our climate resilience
across the business.
As we continue to evolve our climate
scenario analysis, this will help to improve
ITV’s overall resilience and preparedness to
mitigate against climate risks in varying
degrees of potential outcomes. ITV’s
strategy remains flexible and will be annually
reviewed to make sure that it remains
resilient in the face of ITV’s risks.
Metrics and Targets
Our Journey to date
Setting ambitious targets and reporting on
our progress accurately and transparently
are critical to our successful sustainability
transition. As part of our Climate Transition
Plan, we are establishing more granular
decarbonisation levers that can be
integrated into our business planning. ITV
does not currently implement an internal
carbon price, but we recognise the value this
may present in the future.
We have also started developing new
indicators to better navigate and monitor the
climate related risks and opportunities as
well as our impact in accelerating the
economy-wide transition to Net Zero.
Our approach to developing these new
metrics is still evolving, as we identify the
approaches and methodologies that are the
most useful in driving business decisions,
meeting stakeholders’ needs and emerging
industry standards.
Following best practice in setting
our Net Zero ambition
Our emissions reduction targets were
updated in 2022 to align with the Net Zero
definition of the Science Based Target
initiative (SBTi). This year, our additional 2050
targets to reduce all of our emissions by 90%
(base year 2019) have been validated by
SBTi. Our 2030 targets, which were validated
by SBTi in 2020, remain unchanged.
ITV emissions reduction targets
Emission reduction 2030 2050
Scope 1 and 2 46.2% 90-95%
Scope 3 28%
We use metrics that are applicable to past,
current and future data, meaning that they
are consistent across our business and allow
for trend analysis. Our methodology aligns
to GHG Protocol Corporate Accounting and
Reporting Standard, and best practice
approaches that relate to our sector.
All details can be found in our Basis of
Reporting. We have not implemented
any changes in the KPI calculation
methodologies compared to previous years.
ERM CVS provided limited assurance of our
full carbon footprint in 2023 following
ISAE3000 methodology.
Explanation of trends in line
with targets
In 2023, our Scope 1 and 2 footprint has
reduced by 52% compared to 2019, ahead
of our targeted trajectory of 17% reduction.
Main drivers include a shift to renewable
electricity tariffs across a majority of our
sites, a transition to low emission fleet
vehicles, and ongoing modernisation of
our sites. Business travel emissions remain
firmly ahead of our targets, with a 45%
reduction from 2019, ahead of the 10%
reduction that was targeted. The most
material Scope 3 category is Purchased
Goods and Services, which has decreased
in 2023 by 13% compared to 2019,
slightly ahead of our targeted trajectory
of 10% reduction.
Given that we are still working on improving
the data quality of this category, with plans
to increase the share of Company level data
in the short term, we are focusing on our
supplier engagement and decarbonisation
activities as a priority.
72 ITV plc Annual Report and Accounts 2023
LONG-TERM VIABILITY STATEMENT (LTVS) DISCLOSURE
How we assess prospects
and risks
The Board continually assesses ITV’s
prospects and risks at its meetings, including
the following:
• Holding ‘Strategy Days’ twice a year, to
oversee the delivery of the Strategy and
consider changes or new initiatives to
further improve the ITV Strategy.
• Considering ad-hoc topics on aspects of
the strategy at Board meetings.
• Performing a robust assessment of the
principal and emerging risks twice a year.
As part of the assessment of prospects and
risks, the Board and management routinely
receive briefings and consider topics related
to changing viewer habits, competitor
strategies, the broadcasting advertising
market and developments in the global
content market. It is also kept informed of
ITV’s resilience to environmental and climate
related risks; technological advancements in
the areas of Generative Artificial Intelligence
(AI) and how the ITV Strategy responds to
these; and sessions led by external analysts
on investors’ perceptions of the ITV business
The Board and management continued to
closely scrutinise the impact of the current
macroeconomic environment on the
business. This included identifying cost
interventions/mitigations to respond to
possible severe downside scenarios; and
increasing the focus and detail provided in
financial performance reviews and
reforecasting to track performance.
How we assess viability
When assessing the longer-term viability of
ITV, we considered
• ITV’s strategy and business plan (pages 2
and 10);
• The principal risks and uncertainties
(pages 55 to 64);
• The Group’s financing facilities including
covenant clauses and future funding plans
(page 50);
• The long range financial plan and cash
forecast; and
• Other sensitivity factors or risks which
have the potential to materially impact
liquidity and/or covenant headroom in the
assessment period.
Based on this review a set of hypothetical
severe but plausible scenarios were
developed. These scenarios have then been
modelled against the first three years of the
long range financial plan and cash forecast,
both individually and collectively, in order to
assess viability.
Whilst all principal risks identified could
have an impact on ITV’s performance, the
scenarios reflect the specific risks which
could potentially impact the Group’s
financial position and viability during the
period to 31 December 2026.
The output from this modelling was reviewed
by the Audit and Risk Committee in detail,
with a report from the Committee to the
Board to support the Board’s review and
approval. In reaching its view, the Board and
Committee also considered external views,
including analyst and other industry
commentary, to understand the wider market
views on the Group’s future prospects, and
the external auditor’s findings and
conclusions on this matter.
Assessment period for viability
The Board is of the view that a three year
assessment period (to 31 December 2026)
continues to be the most appropriate. The
factors the Board considered in adopting this
timeframe were as follows:
• ITV’s long range financial and strategic
planning cycle
• Visibility over ITV’s advertising business is
short term. Advertising remains cyclical
and closely linked to the UK and global
economic growth and impacted by the
uncertain macroeconomic environment.
• The commissioning process and life cycle
of programming gives the Studios division
a more medium-term outlook. However,
while non-returning brands are replaced
with new commissions, over time there is
less visibility as programmes can
experience changes in viewer demand or
come to a natural expiration
• Technology in the media industry
continues to rapidly change the demand
for content and also how it is consumed
• ITV’s business model does not typically
necessitate investment in large capital
projects that would require a longer-term
horizon assessment or returns
• Pension funding, which is one of ITV’s key
funding obligations, is agreed triennially
with the Trustees of the pension scheme
Assumptions Applied
For the LTVS, we have assumed:
• EBITA impacts from LTVS scenarios flow
through to cash in full except for tax
savings at 25%, with the exception of
settlement impacts (in scenarios 4 and 5)
and Scenario 5 remedial costs which are
assumed to be disallowable for tax
purposes
• Any settlements related to ongoing
litigation or fines will be treated as
exceptional items (and therefore excluded
from covenant calculations)
• No acquisitions are made (consistent with
‘Base case’)
• Management and employee Incentive
payments (such as the annual bonus) are
assumed to reflect the Impact of the LTVS
scenario assumptions on earnings
• Dividends of 5.0p per share maintained
throughout, resulting in around £180
million of dividends paid out per year
following the disposal of ITV’s 50%
shareholding in BritBox International.
• Identified cost savings continue to deliver
to plan
We have also assumed that the revolving
credit facilities of £500 million and £100
million are available throughout the period
and that the Credit Suisse CDS facility of
£300 million (which matures in June 2026)
and the EUR 600 million Eurobond (which
matures in September 2026) are re-financed
(and not repaid from cash reserves). The
intention is to refinance a significant
proportion of the 2026 full year financing
arrangements well before maturity.
73ITV plc Annual Report and Accounts 2023
STRATEGIC REPORT
Taking into account current operational and financial performance, the Board has analysed the impact of the following hypothetically severe
but plausible scenarios. These scenarios were assessed in isolation and as combinations of two or three risks and, although not regarded as
plausible but as a reverse stress test, an assessment of all scenarios occurring simultaneously was undertaken:
Scenario Modelled Link to Principal risks or Accounting judgements and estimates
1+2 A significant and sustained downturn in advertising revenue from
2024, as a result of a decline in the advertising market and linear
viewing, driven by macroeconomic factors or increased
competition from large streamers. In this scenario we also fail to
replace the advertising revenue lost as result of the confirmed
restrictions on High in Fat, Salt or Sugar (HFSS) and potential
restrictions on other advertising categories (e.g. gambling and
high carbon products).
Additionally, our Streaming strategy fails to fully deliver the
expected consumption hours (for the digital advertising element)
or subscriber growth (for the SVOD element), impacting revenue
Advertising revenues year on year (including digital advertising
revenues) (2024 vs 2023 – 3%; 2025 vs 2024 – 4%; 2026 vs 2025 – 4%)
Total EBITA impact in 2024 is £62 million, followed by an impact of
£130 million in 2025 and £203 million in 2026.
Business area impacted: Media & Entertainment
Principal Risk 1: Streaming;
Principal Risk 3: Commercial;
Principal Risk 4: Changing Viewer Habits;
Principal Risk 5: Content Pipeline;
Principal Risk 6: Partnerships; and
Principal Risk 8: Policy & Regulation
Further detail on how we mitigate these risks is provided in the
principal risk and uncertainties section (pages 55 to 64)
3 A number of key programme brands within the ITV Studios
division are not recommissioned and new format growth does
not materialise
The scenario assumes key shows come to an end from 2024 (2024
EBITA impact: c. £28 million; 2025 EBITA impact c. £58 million and
2026 EBITA impact: c. £77 million).
Business area impacted: Studios
Principal Risk 4: Changing Viewer Habits
Principal Risk 5: Content Pipeline
Further detail on how we mitigate these risks is provided in the
principal risk and uncertainties section (pages 55 to 64)
4 ITV is subject to a cyber-attack which results in a major
operational disruption, critical system outage or loss of
intellectual property (IP), customer or business data
This scenario assumes that a class action is filed against ITV,
following a major cyber attack which results in a blank screen
causing £100 million of lost advertising revenue, which requires a
substantial compensation payment and results in a fine from the
Information Commissioner’s Office (ICO).
Business area impacted: Group
Principal Risk 3: Commercial
Principal Risk 7: Data
Principal Risk 10: Cyber Security
Principal Risk 15: Operational Resilience
Further detail on how we mitigate these risks is provided in the
principal risk and uncertainties section (pages 55 to 64)
5 Settlements for ongoing litigation are significantly higher than
estimated, resulting in large one-off cash payments
This scenario assumes a higher than provisioned cash outflow in
2024 and 2025 in respect of settlements for ongoing litigation.
Business area impacted: Group
The complexity and potential scale of the ongoing litigation cases
result in a lack of certainty in the final liabilities and payments.
Further detail of the accounting judgements and estimates applied
to ongoing litigation and earnouts are provided in Section 1 to the
Financial Statements. An overview the assessments performed by
the Audit and Risk Committee with respect to these accounting
judgements is provided within the Audit and Risk Committee report
from pages 106 to 116
6 A combination of scenarios 1 to 3 above occurring simultaneously.
This scenario would result in an EBITA impact of £90m in 2024,
£188m in 2025 and £280 million in 2026. Neither covenant is breached
at any time during the assessment period and liquidity headroom
is maintained
Business area impacted: Group
Principal Risk 1: Streaming;
Principal Risk 3: Commercial;
Principal Risk 4: Changing Viewer Habits;
Principal Risk 5: Content Pipeline;
Principal Risk 6: Partnerships; and
Principal Risk 8: Policy & Regulation
Further detail on how we mitigate these risks is provided in the principal
risk and uncertainties section (pages 55 to 64)
We have considered the impact of climate change risks and do not believe they would have a significant financial impact on the business in the
assessment period. Please refer to our Climate-related Financial Disclosures section for further details.
74 ITV plc Annual Report and Accounts 2023
LONG-TERM VIABILITY STATEMENT (LTVS) DISCLOSURE CONTINUED
Viability assessment
Our balance sheet and liquidity position
remains strong. At 31st December 2023, this
comprised unrestricted cash of £340.5
million; undrawn Revolving Credit Facilities
(RCF) of £500 million and £100 million
available throughout the viability period; and
undrawn bilateral facility/CDS of £300
million maturing in June 2026 (assumed to
be replaced with a new facility).
During the viability period, the €600 million
Eurobond maturing September 2026 is
assumed to be refinanced.
We have considered both the individual
scenarios and various combinations of the
scenarios in order to assess viability. Our
modelling concludes that If all scenarios
were to occur concurrently (considered
implausible), management action would be
required to ensure the leverage covenant in
the Revolving Credit Facility (RCF) is not
breached in 2026.
Potential Mitigations
In the unlikely event that all scenarios were to
impact ITV concurrently, ITV would breach
it’s RCF Net Debt / EBITDA covenant in H2
2026 with a ratio of 3.94x compared to the
threshold of 3.5x. The threshold is not
breached in any other half-yearly period
during the assessment period. ITV could
eliminate the need for any further
management action in H2 2026 by exercising
its option under the terms of the RCF to
increase the covenant threshold to 4.0x for
up to 2 consecutive half-yearly periods.
Interest cover remains greater than 3.0x
throughout the viability period.
Viability Statement
Based on the above, the Board has a
reasonable expectation that ITV will remain
viable and be able to continue operations
and meet its liabilities as they fall due over
the three year-period ending 31 December
2026. The assessment has been made with
reference to ITV’s strategy and the current
position and prospects and risks.
The Strategic Report was approved by the
Board and signed on its behalf by:
CHRIS KENNEDY
GROUP CFO & COO
07 March 2024
75ITV plc Annual Report and Accounts 2023
GOVERNANCE
CHAIR’S GOVERNANCE STATEMENT
Dear Shareholder
I am pleased to present our Corporate
Governance Report for 2023.
Year in review
The Board remains committed to
maintaining effective corporate governance
and integrity, enabling us to deliver our
strategy for the long-term benefit of our
stakeholders.
Throughout the year, ITV was focused on
delivering its strategic priorities, with the
executive team investing in a dynamic
programme of digital modernisation.
The Board has been kept well informed
of management’s plans, particularly
following the launch of ITVX and our
vision for streaming and content.
We held two Board Strategy days, one in
June to review the Strategy and a second in
December to hear an update on progress and
consider the rapidly changing environment.
Diversity
We fully recognise the importance of
diversity and inclusion at all levels, through
the entire organisation including the Board.
We are encouraged by the significant
progress against the core initiatives of ITV’s
Diversity Acceleration Plan, launched in July
2020. It’s encouraging to see management’s
commitment and achievements receive
public recognition. We are pleased with our
gender and ethnic diversity representation
on the Board, 45.45% and 18.2%
respectively, exceeding the FCA Listing
Rules, Hampton-Alexander and Parker
targets. For more detail you can refer to our
UK workforce diversity data in the Diversity
and Inclusion report.
Engaging with our stakeholders,
including our workforce
As a Board we focus on how we engage
with our stakeholders and how we deliver
a positive impact for them. Relationships
with our stakeholders in the UK and
internationally are vital to building a
successful and sustainable business.
My statement in the Strategic Report sets
out the ways in which we engaged with
stakeholders during 2023.
Shareholder feedback is regularly considered
during Board meetings and is an important
factor in decision-making. We meet regularly
with shareholders, through one-to-one
meetings, conferences and at the Annual
General Meeting. The 2023 Annual General
Meeting was a physical meeting, with the
opportunity for shareholders to ask
questions before and during the meeting.
The health and wellbeing of our colleagues
is a significant priority. As part of the open
two-way dialogue with colleagues there
is a Board appointed Workforce Engagement
Director. Their role is to work closely with
the colleague Ambassador network and
regularly provide feedback to the Board.
Edward Bonham Carter, our Senior
Independent Director, has acted in this role
since 2019 and stepped down in April. The
Board would like to convey our thanks to him
for serving in this role for the past four years.
Graham Cooke has taken over the position
and for information on Graham’s role and
work, and the Board’s workforce engagement
activities, please see pages 94 to 95.
The Board sought to balance the interests of
all stakeholders throughout the year. Please
see page 83 for examples of key strategic
issues considered and Board decisions taken
in 2023, and pages 92 to 93 for an explanation
of how the Board has had regard to the
section 172 matters (including certain key
stakeholder considerations).
Throughout the year,
ITV was focused on
delivering its strategic
priorities, with the
executive team investing
in a dynamic programme
of digital modernisation.
The Board has been kept
well informed of
Management’s plans,
particularly following
the launch of ITVX and
our vision for streaming
and content.
ANDREW COSSLETT
CHAIR
The 2018
UK Corporate
Governance Code
(the Code)
During 2023, the Company fully complied with all the provisions of the Code.
The Code (July 2018), issued by the Financial Reporting Council (FRC),
and associated guidance are available on the FRC website at www.frc.org.uk.
The Board notes the release by the FRC of the revised Corporate Governance Code
2024 and will work to ensure full compliance with all elements of the new Code over
the next couple of years.
76 ITV plc Annual Report and Accounts 2023
CHAIRMAN’S GOVERNANCE STATEMENT CONTINUED
Culture
Good performance relies on the Company’s
culture being aligned with its purpose, values
and strategy. As ITV continues to become an
increasingly digital business and adopts new
ways of working to improve agility, the Board
recognises the importance of continuing to
foster and monitor the culture across the
organisation. Please see pages 96 to 99 for
the key ways in which the Board and
Committees monitored culture during 2023.
Changes on the Board
Through the Nominations Committee, we
focus on Board succession and composition
to ensure we have the appropriate balance of
skills, independence, experience and diversity.
During the year Mary Harris, Anna Manz and
Duncan Painter stepped down and we
appointed two new Non-executive Directors,
Marjorie Kaplan in September and Dawn
Allen in October.
2024 Annual General Meeting
The 2024 AGM will be held on Thursday 2 May,
at 11.00. The meeting arrangements are
available to view on the Company’s website.
I would like to take this opportunity to thank
my fellow Board members, the Management
team and our colleagues in the wider
workforce, who served during another
challenging year for the Group. As we
navigate 2024 the Board will continue to work
with the management team to deliver on our
strategic initiatives, ensure the wellbeing of
our colleagues and build a successful and
sustainable business for all stakeholders.
ANDREW COSSLETT
CHAIR
7 March 2024
Taking each of the main headings of the Code:
BOARD LEADERSHIP AND COMPANY PURPOSE
The Board’s ultimate objective is the long-term sustainable success of the
Company. Read more about our strategy in the Strategic Report and how the Board
achieves this through, amongst other things, stakeholder and workforce
engagement (pages 84 to 91) and establishing a clear and aligned Company
purpose, strategy and values. Please also see pages 96 to 99 for how the Board
assesses and monitors culture.
DIVISION OF RESPONSIBILITIES
The Board consists of two Executive Directors, eight independent Non-executive
Directors and the Non-executive Chair, who was considered independent on
appointment to the Board. For Board meeting attendance, please see page 82.
Additional external appointments of Board members during 2023 received prior
Board approval. The Directors’ other time commitments are in line with the key
institutional investor and investor body guidelines.
COMPOSITION, SUCCESSION AND EVALUATION
The Nominations Committee Report sets out its activities and areas of focus during
2023, including Board and management level succession planning and recruitment,
Board composition and skills, Board and Company diversity progress updates and
the Board evaluation which took place during the year.
AUDIT, RISK AND INTERNAL CONTROL
The Audit and Risk Committee Report describes the work of the Committee and
how it discharges its roles and responsibilities. The Committee reviewed the
enterprise risk management framework, as well as assessing management’s review
and strengthening of the Group’s internal controls, increasing its focus on IT general
controls. The Committee also monitored the effectiveness of the external auditor,
the internal auditor and the quality of audits. The Company’s disclosures regarding
risk management and internal controls are on page 112 , and details of how the
Committee focused on audit quality are set out on pages 114 and 115.
REMUNERATION
The Remuneration Report describes the work of the Remuneration Committee and
sets out how executive remuneration is aligned to the Company’s purpose, values
and strategy. It also describes how the Committee considered workforce
remuneration and related policies in its decision-making regarding executive
remuneration.
77ITV plc Annual Report and Accounts 2023
GOVERNANCE
BOARD OF DIRECTORS
CAROLYN MCCALL
Chief Executive
Appointed Chief Executive and to the Board on
8 January 2018
Key areas of expertise: Business transformation,
Creative Industry, Digital, Media and Media IP,
Regulation and Public Policy, Strategy, People and
Talent
Key skills and experience: Carolyn has an
impressive track record in media and experience of
leading digital transformational change both in an
international and regulated environment. She has
clear strategic acumen and a strong record of
driving operational excellence and delivering value
to shareholders. Carolyn created the More Than TV
strategy when she joined in 2018. Carolyn has been
instrumental in accelerating the strategy into
Phase Two, having successfully executed Phase
One. She continues to execute the strategy
effectively through her strong leadership of the
Company ensuring ITV’s transformation into a
successful digitally led media and entertainment
company. Previously she was Chief Executive of
easyJet plc for seven years and spent over 20 years
at the Guardian Media Group holding a number of
senior roles, including CEO of Guardian News and
Media and then four years as Chief Executive of
Guardian Media Group. She has previously served
as a Non-executive Director of Lloyds TSB, Tesco
plc and New Look Group plc. In 2008, Carolyn was
awarded an OBE for her services to women in
business and in 2016 a Damehood for her services
to the aviation industry.
Current external appointments: Non-executive
Director, Bridgepoint Group plc; Trustee of the
Development Board of the Royal Academy of Arts.
SALMAN AMIN
R
N
Independent
Non-executive
Director
Appointed to the Board on 9 January 2017
Key areas of expertise: Business transformation,
Digital, Media and Media IP, Strategy,
Remuneration, People and Talent, Sustainability
and ESG
Key skills and experience: Salman brings to the
Board a wealth of experience in global businesses
having worked for over 30 years managing global
brand advertising and media spend. Previously
he was COO, Global Commercial Division at
SC Johnson & Son, and has held positions at
Procter & Gamble and PepsiCo.
Current external appointments: Chief Executive
Officer, Pladis.
ANDREW
COSSLETT
R
N
Chair, Chair of the
Nominations
Committee
Appointed to the Board on 1 June 2022 and as
Chairman on 29 September 2022
Key areas of expertise: Business transformation,
Media and Media IP, Strategy, Remuneration,
People and Talent
Key skills and experience: Andrew is an
experienced chair who has spent his career in a
range of consumer facing sectors. His early career
was with Unilever in a variety of branding and
marketing roles. He then spent 14 years at
Cadbury Schweppes in senior international roles
before becoming Chief Executive Officer (CEO)
for InterContinental Hotels Group (IHG). Andrew
was at IHG for six years, creating value by
leveraging the power of its brands alongside
executing a programme of significant
transformational and cultural change. He served
as CEO for Fitness First, where he was
instrumental in successfully repositioning the
business and brand. Andrew served as a
non-executive director of the Rugby Football
Union (RFU) from 2012, where he was appointed
chair from 2016 until 2021. Andrew received a
CBE for services to the RFU in the 2022 New
Year’s Honours List.
Current external appointments: Chair,
Kingfisher plc
Committee membership
A
Audit and Risk
N
Nominations
R
Remuneration
Terms of engagement for the Non-
executive Directors and written
responsibilities for the Chair, Chief Executive
and Senior Independent Director are
available on our website:
www.itvplc.com/investors/governance
CHRIS KENNEDY
Group CFO and COO
Appointed as Group CFO on 21 February 2019 and
as Group CFO and COO on 2 December 2021
Key areas of expertise: Business transformation,
Creative Industry, Digital, Finance and Treasury,
Audit, Sustainability and ESG, Media and Media IP,
Strategy, Technology and Data
Key skills and experience: Chris has a strong
media background, holding senior management
positions over a 17-year career at EMI. Chris’
experience in executing and driving strategy has
played a key role in ITV’s digital acceleration into
Phase Two of the More than TV strategy, and
ensuring ITV’s transformation into a successful
digitally led media and entertainment company, as
well as driving a rationalisation/cost savings
initiative. He was previously Chief Financial Officer
of Micro Focus International plc, ARM Holdings and
easyJet plc where he spent five years and was
voted FTSE 100 CFO in 2015. As the business
continues to evolve and develop, he took on the
broader role of Chief Operating Officer and Chief
Finance Officer in December 2021.
Current external appointments: Non-executive
Director, Chair of the Audit Committee and
member of the Nomination Committee, Whitbread
plc; Non-executive Director of the Great Ormond
Street Hospital for Children NHS Foundation Trust;
Trustee of the EMI Group Archive Trust.
EDWARD
BONHAM CARTER
A
N
R
Senior Independent
Director, Workforce
Engagement Director
(up to June 2023)
Appointed to the Board on 11 October 2018
Key areas of expertise: Business transformation,
Finance and Treasury, Sustainability and ESG,
Strategy, People and Talent, Audit, Remuneration
Key skills and experience: Edward brings to the
Board a wide range of City experience and
invaluable insight in the understanding of stock
markets and investor expectations. He was
previously Vice Chairman of Jupiter Fund
Management plc (2014) having joined Jupiter in
1994 as a UK fund manager and held the position of
Chief Investment Officer from 1999 to 2010 and
Group Chief Executive until 2014. He started his
career at Schroders as an investment analyst
before moving to Electra Investment Trust where
he was a fund manager.
Current external appointments: Senior
Independent Director, Land Securities Group plc;
Trustee, The Esmee Fairbairn Foundation;
Chairman, Netwealth Investments Ltd.
78 ITV plc Annual Report and Accounts 2023
BOARD OF DIRECTORS CONTINUED
MARGARET EWING
A
N
Independent
Non-executive
Director, Chair of the
Audit and Risk
Committee
Appointed to the Board on 31 October 2017
Key areas of expertise: Business transformation,
Finance and Treasury, Audit, Sustainability and
ESG, Strategy, Regulation and Public Policy
Key skills and experience: Margaret has extensive
experience in financial accounting, corporate
finance, strategic and corporate planning having
served as a Managing Partner of Deloitte LLP and
Chief Financial Officer of BAA plc and Trinity Mirror
plc. Margaret also held Non-executive Director and
Audit Committee positions with Standard
Chartered plc and Whitbread plc and was an
external member of the Audit and Risk Committee
of the John Lewis Partnership. Margaret was a
managing partner of public policy regulation for
Deloitte UK. Margaret’s skills and experience give
her substantial insight into the Company’s
reporting and risk management processes.
Current external appointments: Non-executive
Director and Chair of the Audit and Compliance
Committee and member of the Nominations
Committee of International Consolidated Airlines
Group, S.A.; Senior Independent Director, Chair of
the Audit and Risk Committee and member of the
Nominations Committee of ConvaTec Group plc.
SHARMILA NEBHRAJANI
R
N
Independent
Non-executive
Director, Chair of
the Remuneration
Committee
Appointed to the Board on 10 December 2020
Key areas of expertise: Business transformation,
Digital, Finance and Treasury, Audit, Sustainability
and ESG, Media and Media IP, Regulation and Public
Policy, Strategy, Remuneration, People and Talent
Key skills and experience: Sharmila has strong
public sector, commercial, government and
non-profit experience across a wide range of
sectors, including utilities, financial services,
media, global health and medical research. Earlier
in her career, she held the post of Chief Operating
Officer at BBC Future Media & Technology, where
she managed the business functions of bbc.co.uk,
including the launch of the iPlayer. Sharmila
studied medicine at the University of Oxford, is a
Chartered Accountant and was awarded an OBE in
2014 for services to medical research.
Current external appointments: Non-executive
Director, Chair of the Remuneration Committee,
Member of the Corporate Sustainability and
Nominations Committees, Severn Trent plc;
Non-executive Director, member of the Audit and
Risk, Remuneration and Nominations Committees,
Halma plc; Non-executive Director and Chair of the
Audit and Risk Committee, Coutts & Co; Chairman
of National Institute for Health and Care
Excellence; Non-executive Director, University of
Oxford; and World Fellow, Yale University.
GRAHAM COOKE
A
N
Independent
Non-executive
Director, Workforce
Engagement Director
(from June 2023)
Appointed to the Board on 1 May 2020
Key areas of expertise: Business transformation,
Digital, Media and Media IP, Strategy, Technology
and Data
Key skills and experience: Graham has extensive
technical and digital experience, a focus in
user-centric product design, coupled with in-depth
knowledge of the e-commerce and digital sectors.
He is the founder of Qubit, the leading provider of
e-commerce personalisation technology. Prior to
founding Qubit, he spent five years working at
Google. His most recent role there was as global
leader on Google’s strategy for conversion rate
improvement. Graham has been working with web
technology since 1995, designing and building
websites with emergent technology.
Current external appointments: Director,
Qubit Digital; Non-executive Director, RWS
Holdings PLC.
DAWN ALLEN
A
Independent
Non-executive
Director
Appointed to the Board on 2 October 2023
Key areas of expertise: Business transformation,
Digital, Finance and Treasury, Audit, Strategy,
Technology and Data
Key skills and experience: Dawn has extensive
financial, commercial and international experience
having held global roles in large scale businesses
across consumer-related sector. She joined Tate &
Lyle PLC in 2022 as Chief Financial Officer where
she has been heavily involved in developing the
global strategy, digital capabilities and processes.
Prior to this she was Global CFO & VP, Global
Transformation at Mars where, during a 25-year
career, she held a number of key senior financial
roles in Europe and the US including Global
Divisional CFO, Food, Drinks and Multi Sales and
Regional CFO Wrigley Americas.
Current external appointments: Chief Financial
Officer, Tate & Lyle PLC
GIDON KATZ
Independent
Non-executive
Director
Appointed to the Board on 17 July 2022
Key areas of expertise: Creative Industry, Digital,
Media and Media IP, Strategy, Technology and Data
Key skills and experience: Gidon has extensive
digital and streaming services experience, along
with in-depth knowledge of tech product and
platform businesses having been responsible for
the transformation of Now TV in the UK and the
development and highly successful launch of
Peacock. He joined Roku in 2022 as Senior Vice
President of Consumer at Roku, prior to joining
Roku he was President of Direct to Consumer for
NBCU, launching Peacock in the U.S. Before moving
to the U.S, Gidon led Sky’s streaming service ‘Now’
for six years, having previously launched Virgin
Media’s VOD service. He holds a BA/MA from the
University of Cambridge and an MSc in
International Relations from The London School of
Economics and Political Science.
Current external appointments: President of
Consumer Experience, Roku
MARJORIE KAPLAN
Independent
Non-executive
Director
Appointed to the Board 1 September 2023
Key areas of expertise: Business Transformation,
Creative Industry, Media and Media IP, Strategy
Key skills and experience: Marjorie has extensive
brand, content and audience strategy experience
having spent 20 years as a senior executive in the
global media industry at Discovery, now Warner
Bros Discovery, where she oversaw dramatic
growth at multiple major networks in the US,
building new franchises and unlocking revenue
opportunities across platforms and then was
responsible for strategy, coordination and
execution of the International Division’s global
content activities across the portfolio worldwide.
She has substantial experience in both the US and
Europe with a track record as a change agent,
transforming and growing global brands and
businesses, and building vibrant organisations.
Current external appointments: Head of Faculty
at Merryck & Co; Non-executive Director of
ProSiebenSat.1 Media SE in Germany, ARTDAI
and Trustee at The Grierson Trust.
79ITV plc Annual Report and Accounts 2023
GOVERNANCE
MANAGEMENT BOARD
RUFUS RADCLIFFE
Managing Director,
Streaming and
Interactive
Appointed: April 2017
Experience: Rufus joined ITV as Group Marketing
and Research Director in 2011. He was promoted to
Chief Marketing Officer and appointed to the
Management Board in 2017.
In 2019 he took on additional responsibility for the
Direct to Consumer division as Chief Marketing
Officer and Director of Direct to Consumer. In
October 2020 he was appointed Managing Director
of On Demand, one of the two business units
making up the newly created Media &
Entertainment Division.
Rufus now leads our streaming, interactive and
data teams.
Before joining ITV, Rufus spent 10 years at Channel
4, and prior to that held various positions at
McCann Erickson and JWT.
CAROLYN MCCALL
Chief Executive
Appointed: January 2018
Experience: Biography on page 77.
KEVIN LYGO
Managing Director,
Media &
Entertainment
Appointed: August 2010
Experience: Kevin joined ITV as Managing Director
of ITV Studios and a member of the Management
Board in 2010. He became Director of Television in
February 2016 and in October 2020 he was
appointed Managing Director of the newly created
Media & Entertainment Division.
As well as having overall responsibility for the
Media & Entertainment Division, Kevin continues to
run the Broadcast business unit (one of the two
business units making up the Division) and to
oversee the commissioning of popular
programming delivering ITV’s USP of mass
simultaneous reach.
Kevin’s previous roles included Director of
Television and Content at Channel 4, Director of
Programmes at Channel 5 and a number of
positions at the BBC, including Head of
Independent Commissioning for Entertainment.
JULIAN BELLAMY
Managing Director,
ITV Studios
Appointed: February 2016
Experience: Julian joined ITV in 2014 as
Managing Director of ITV Studios in the UK.
He was promoted to Managing Director of ITV
Studios and appointed to the Management Board
in February 2016.
He has responsibility for running ITV’s global
production and distribution business that
creates, produces and sells finished programmes
and formats in the UK and internationally.
Julian’s previous roles included Creative Director
and Head of Commissioning at Discovery
Networks International, Head of Programming at
Channel 4 and prior to that he ran BBC3 and E4.
He also spent time as Channel 4’s Head of Factual
Entertainment and was a commissioning editor of
Channel 4 News and Current Affairs.
DAVID OSBORN
Chief People Officer
Appointed: October 2014
Experience: David joined ITV as the HR Director
for ITV Studios in 2011, leading the HR agenda for
the ITV Studios Division through the early stages
of transformation.
In 2014 he was promoted to Group HR Director and
appointed to the Management Board. To reflect an
increased portfolio, in 2022 David became Chief
People Officer and is responsible for the People
Strategy for ITV globally, ensuring People decisions
are central to everything we do at ITV. He has
responsibility for Health, Safety and Security and
Duty of Care for all who work at ITV, behind the
scenes and in front of the camera. In addition, he
leads the Human Resources, Workplace Services
and Pensions teams.
Prior to joining ITV David has worked across
a number of different industries and sectors
including Marks and Spencer Plc, Mars Inc.,
Visa International, Vodafone and EMI Music.
CHRIS KENNEDY
Group CFO and COO
Appointed: February 2019
Experience: Biography on page 77.
KELLY WILLIAMS
Managing Director,
Commercial
Appointed: December 2014
Experience: Kelly joined ITV in 2011 as Group
Commercial Director. He was promoted to
Managing Director Commercial and appointed to
the Management Board in 2014. He is the Chair of
Thinkbox, the marketing body for commercial TV in
the UK, a member of the BARB Strategy Board and
sits on the RTL AdAliance International Board.
He has responsibility for all commercial advertising
deals across the ITV family of channels.
Prior to joining ITV, Kelly was the Sales Director
at Channel 5 and prior to that held various positions
at UKTV, Sky and Thames Television.
80 ITV plc Annual Report and Accounts 2023
MANAGEMENT BOARD CONTINUED
KYLA MULLINS
General Counsel and
Company Secretary
Appointed: January 2019
Experience: Kyla joined ITV as General Counsel
and Company Secretary and member of the
Management Board in 2019.
She has responsibility for legal, company
secretariat, compliance and regulatory matters
across the ITV Group.
Prior to joining ITV, Kyla held senior legal positions
in the media, entertainment, strategic outsourcing
and aviation sectors. She was General Counsel and
Company Secretary at easyJet plc and Mitie Group
plc; Global General Counsel of EMI Music; and
Group Legal Director at ITV plc and Granada Media.
Kyla is currently Chair of Independent Television
News (ITN) and is also a Non-executive Director
on the Board of Northern Ballet.
PAUL MOORE
Group
Communications
and Corporate
Affairs Director
Appointed: July 2018
Experience: Paul joined ITV as Group
Communications and Corporate Affairs Director
and a member of the Management Board in 2018.
He has responsibility for all Group communications
including corporate and internal communications,
public affairs, programme publicity and the Social
Purpose strategy.
Prior to joining ITV, Paul was the Communications
and Public Affairs Director at easyJet plc for eight
years and before this worked for FirstGroup and
Virgin Atlantic Airways where he was Director of
Corporate Affairs for ten years. Paul first started
his career as a civil servant and worked for the
Department of Transport.
ADE RAWCLIFFE
Group Director of
Diversity and
Inclusion
Appointed: September 2020
Experience: Ade joined ITV as Head of Diversity
Commissioning in 2017. She was later promoted to
Director of Creative Diversity, before taking on the
role of Group Director of Diversity and Inclusion
and joining the Management Board in 2020.
Ade has responsibility for all diversity and inclusion
related matters across the Group, including
leading, developing and growing ITV’s Diversity,
Equity and Inclusion strategy on and off screen.
Prior to joining ITV, Ade spent over ten years at
Channel 4, most recently leading Creative Diversity,
where she supported and nurtured the careers of
diverse creative talent and sought out and
commissioned a slate of developments which
encouraged diversity, risk-taking and innovation.
Ade is currently a Board Member of Independent
Television News (ITN) Trustee of BAFTA, Chair of
BAFTA’s Learning, Inclusion and Talent Committee,
and a Trustee of the National Trust.
MAGNUS BROOKE
Director of Strategy,
Policy and Regulation
Appointed: February 2021
Experience: Magnus joined ITV in 2006 and
was promoted to the Management Board in
February 2021.
He has Board responsibility for ITV’s strategy,
policy and regulatory teams, which includes
overseeing ITV’s corporate strategy development
and leading on interaction with UK and European
regulators, government and parliamentary
committees.
From 2014 to 2019 Magnus was Chairman of the
Board of the Brussels based Association of
Commercial Television in Europe, which represents
Europe’s commercial broadcasters to the EU
institutions. Magnus is a Director and Chair of the
Remuneration Committee of Everyone TV
(formerly DUK) which runs the Freeview and
Freesat platforms and he was a Non-executive
Director of the news provider ITN for three years
from 2019 to 2022.
Prior to joining ITV Magnus was Head of the BBC
Director General’s Office. He began his career as a
solicitor specialising in regulatory and competition
law at City of London law firm Ashurst, where he
also trained.
SIMON
FARNSWORTH
Chief Technology
Officer
Appointed: January 2024
Experience: Simon joined ITV as Chief Technology
officer and member of the Management Board in
January 2024. He has overall responsibility for
technology strategy and implementation
Prior to joining ITV, he served as News UK’s EVP,
Chief Technology Officer and prior to that held key
roles at Discovery Globecast Australia and Telstra
Broadcast Services.
81ITV plc Annual Report and Accounts 2023
GOVERNANCE
CORPORATE GOVERNANCE
OUR GOVERNANCE STRUCTURE
The PLC Board
Responsible for providing leadership to the Group’s business, including setting the Group’s purpose, strategy and values and promoting its
long‑term sustainable success.
PLC Board Committees
The terms of reference for each Committee are documented and agreed by the PLC Board. These terms of reference are reviewed annually
and are available on our website: www.itvplc.com/investors/governance/terms‑of‑reference.
Nominations
Committee
Remuneration
Committee
Audit and Risk
Committee
Disclosure
Committee
Our Ambassador
Network
See the
Nominations
Committee
Report.
See the
Remuneration
Report.
See the Audit and Risk Committee
Report.
Consists of the Chair of
the Board, Chief
Executive, Audit and Risk
Committee Chair, Group
CFO & COO, and General
Counsel and Company
Secretary. The Director
of Investor Relations
also attends meetings.
The Committee assists
the Company in meeting
its disclosure
obligations, and reviews
and approves regulatory
and other
announcements before
publication but post the
Board’s approval given
subject to final agreed
changes.
Discusses and
inputs into
significant
proposals and
initiatives
impacting our
colleagues.
Our designated
Workforce
Engagement
Director reports
back to the Board
on the Network’s
activities and his
engagement with
the Network.
Duty of Care Operating Board
Consisting of key Management Board
members, including the Chief
Executive and the independent Chief
Psychological Officer. The Operating
Board oversees the Group’s duty of
care processes on screen and across
ITV, monitors and assesses the
processes in place to ensure they
continue to be effective and evolve
as necessary. The Operating Board
meetings are chaired by the Chief
Executive, and the Audit and Risk
Committee Chair attends on behalf
of the Board.
Chief Executive
Responsible for the day‑to‑day running of the Group’s business and performance, the development and implementation of strategy and
promoting our culture and standards.
Management Board
Led by the Chief Executive, the Management Board members are collectively responsible for overseeing and driving the overarching Group
financial and operational performance and executing on the strategic initiatives required to deliver the Group’s strategy set by the Board.
The Management Board balances the needs and resources of the business divisions to make decisions based on what’s best for ITV as a whole.
Studios Board Media & Entertainment Board
Responsible for developing and implementing strategic
objectives and operational plans for the ITV Studios business,
monitoring operational and financial performance, and
assessing and managing risk, in line with the Group’s risk
management framework.
Responsible for developing and implementing strategic
objectives for the Media & Entertainment business (Broadcast,
Commercial, Streaming (ITVX), Interactive and Data business
units), monitoring operational and financial performance, and
assessing and managing risk, in line with the Group’s risk
management framework.
The written responsibilities of the Chair, Senior Independent
Director and Chief Executive are available on the ITV plc website:
www.itvplc.com
82 ITV plc Annual Report and Accounts 2023
CORPORATE GOVERNANCE CONTINUED
PLC Board and Committee membership and attendance
PLC Board and Committee membership and attendance at scheduled meetings in 2023 is set out below.
In addition, chaired by the Senior Independent Director, the Non‑executive Directors met without the Chair or management during the year to
discuss the Chair’s performance, and also met with the Chair without the management present, on an informal basis throughout the year to
discuss matters relevant to the Group. The Non‑executive Directors met with the Chief Executive to discuss Management Board talent and
succession.
* Indicates where a Director has attended all or part of a PLC Board
or Committee meeting by invitation (i.e. when not a member or
prior to being a Director). The Executive Directors did not attend
parts of any Committee meetings where to do so would result in
a conflict of interest.
A number of ad hoc Board and Committee meetings were held
during 2023 though these are not reflected in this table.
1. In June and December half‑day strategy sessions were held with
a scheduled Board meeting held on the same day. Together these
are included in the table as one meeting
2. Dawn Allen joined the Board on 2 October 2023
3. Edward Bonham Carter joined the Remuneration Committee in
April 2023
4. Graham Cooke, Margaret Ewing and Sharmila Nebhrajani joined
the Nominations Committee in April 2023
5. Mary Harris stepped down from the Board on 3 May 2023
6. Marjorie Kaplan joined the Board on 1 September 2023
7. Anna Manz stepped down from the Board on 31 August 2023
8. Duncan Painter stepped down from the Board on 30 November
2023
9. Margaret Ewing was unable to attend a Disclosure Committee
because of another commitment
Attendance at scheduled meetings
Committee members PLC Board
1
Audit and Risk Remuneration Nominations Disclosure
Andrew Cosslett (Chair) 8/8 5/5* 5/5 4/4 4/4
Dawn Allen
2
2/8 1/5 ‑ ‑ ‑
Salman Amin 8/8 ‑ 5/5 4/4 ‑
Edward Bonham Carter
3
8/8 5/5 3/5 4/4 ‑
Graham Cooke
4
8/8 5/5 ‑ 2/4 ‑
Margaret Ewing
9
8/8 5/5 ‑ 2/4 3/4
Mary Harris
5
2/8 1/5 ‑ 2/4 ‑
Marjorie Kaplan
6
3/8 ‑ ‑ ‑ ‑
Gidon Katz 8/8 ‑ ‑ ‑ ‑
Chris Kennedy 8/8 5/5 3/5* 1/4* 4/4
Anna Manz
7
5/8 3/5 3/5 ‑ ‑
Carolyn McCall 8/8 2/5* 1/4* 4/4
Sharmila Nebhrajani
4
8/8 ‑ 5/5 2/4 ‑
Duncan Painter
8
7/8 ‑ 4/5 ‑ ‑
BOARD COMPOSITION
GENDER ETHNICITY DISABILITY BOARD TENURE AGE
Men 6
Women 5
People of Colour 2
White 9
Disability or long‑term
health condition 1
No disability or long‑term
health condition 10
0–2 years 4
2–5 years 2
5–9 years 5
36–45 1
46–55 2
56–65 5
66–75 3
MANAGEMENT BOARD COMPOSITION
*
GENDER ETHNICITY DISABILITY
Men 8
Women 2
People of Colour 1
White 9
Disability or long‑term
health condition 2
No disability or long‑term
health condition 8
* Carolyn McCall and Chris Kennedy are not included in these tables. They are included in the Board
composition numbers above.
BOARD SKILLS AND EXPERIENCE
Business transformation
10
Creative industry
4
Digital
7
Finance and Treasury
5
Audit
5
Sustainability and ESG
5
Media and Media IP
8
Regulation and Public Policy
3
Strategy
11
Technology and Data
4
Remuneration
4
People and Talent
4
83ITV plc Annual Report and Accounts 2023
GOVERNANCE
KEY STRATEGIC MATTERS CONSIDERED BY THE BOARD IN 2023
Stakeholder groups
S
Shareholders (including debt providers)
C
Colleagues
P
Partners
CZ
Citizens
PP
Programme participants
VC
Viewers and subscribers
CT
Customers (including advertisers)
LR
Legislators and regulators
PERFORMANCE
Link to principal risks Link to key stakeholders
Reviews of capital structure, liquidity, investor proposition and valuation 1, 2, 3, 4, 5, 6, 8, 11
S
LR
Reviewed and approved trading results and financial reporting 9
S
LR
Reviewed and approved the budget and five year plan All principal risks
S
C
P
CZ
PP
VC
CT
LR
Evaluation of business operations to optimise opportunities and performance including deep dives
into value drivers
2,3,4,6
S
C
P
Partnerships and distribution review 6
P
VC
Programme of cost and complexity reduction 11
S
C
P
VC
CT
Evaluation of merger, acquisition and divestment opportunities and review of investments 2, 3, 6, 11
S
P
Consideration and approval of material contracts 9
S
P
Principal risks and emerging risks review and updates All principal risks
S
C
P
CT
LR
ITV Together programme improving ways of working for the business 11,13
C
VC
CT
Investor engagement and insight N/A
S
C
LR
SUPERCHARGE STREAMING
Evolving the ITV strategy and progress in delivering the vision for an integrated ad‑funded/
subscription streaming platform for the ITVX launch
1, 2, 3, 4, 5, 6, 11
S
C
P
VC
CT
LR
Recruitment and retention of talent to develop, implement and promote the ITVX strategy 12
S
C
OPTIMISE BROADCAST
Planet V progress, linear addressable, video on demand and linear integration 2,3,4,5
S
P
VC
CT
A review of the Commercial trading model 3
S
CT
LR
Future proofing – Next Generation Platform 10, 15
S
C
P
EXPAND STUDIOS GLOBALLY
Evolution of Studios strategy – continued international expansion, new streamer markets and
changing rights models, monetisation of the Global Partnership Division
2, 11, 12
P
VC
CT
REGULATION
Continued focus on key policy and regulatory issues, including the PSB review, Media Bill and
corporate governance reforms. These continue to be kept under close review along with other issues
that could have a potential short, medium and long‑term impact on the business
8,9
S
C
LR
OTHER
Speaking Up monitoring and update 13
C
CZ
PP
VC
Social Purpose strategy including environmental targets and mental health and ‘giving back’
campaigns
4, 13
S
C
CZ
VC
CT
Crisis management processes and protocols 15
S
C
CZ
VC
CT
Legal and compliance updates, including CMA investigations and Phillip Schofield KC review 8,9
S
C
CT
Review and annual approval of relevant Group compliance, HR and governance policies 8,9,13
S
LR
Climate‑related risks and short to medium‑term impacts, reporting on ESG matters 4, 8, 11
S
C
CZ
VC
CT
Diversity and Inclusion, how this aligns and supports the ITV Strategy
(continue to drive mainstream disability accessibility and building an inclusive culture)
9, 11, 13
S
C
CZ
VC
Cyber Security – fraud prevention strategy 10
S
C
P
CZ
PP
VC
CT
LR
Transformation Office progress review and updates 11
S
C
For further information on principal risks please see pages 57 to 64.
84 ITV plc Annual Report and Accounts 2023
STAKEHOLDER ENGAGEMENT
VIEWERS AND SUBSCRIBERS
Description Link to strategic priorities
Through regular engagement, the Board recognises the evolution of ITV’s relationship with
viewers, which has been pivotal in shaping the Company’s strategy.
Optimise Broadcast;
Supercharge Streaming:
see Our Strategy
Forms of engagement Outcomes and impact on principal decisions
Board and Committee reviews and assessments
• Analysis of target audiences and viewing habits, as part of Board strategy sessions,
particularly with the focus of increasing reach for our ITVX product
• Regular Chief Executive reports to the Board on viewing and subscription figures
• Board session on viewer performance, including subscriber trends as well as marketing
updates regarding new viewers’ and subscribers’ experiences on the ITVX platform
• Reviews by Management and Divisional Boards, on which Executive Directors sit, of viewer
sentiment, concerns and/or data through internal research studies; monitoring of linear
viewing figures; compliance reports and Ofcom reports
• Reviews by members of the Management Board and senior ITV employees of feedback
from viewer services (which serves as a conduit for viewers to channel their comments and/
or concerns) and monitoring the complaint process
• Growing, enhancing and integrating our ad‑funded and
subscription streaming services on ITVX, through
investment in product, content, distribution, data, tech and
analytics
• Use of one content budget for the M&E division as a whole to
enable the business to optimise its content (including its
windowing) strategy and enhance its experience for viewers
• Decision to make changes to schedules to enhance viewing
performance
• Board discussions benefited from Graham Cooke and
Duncan Painter’s technical, digital and commercial
expertise. The Board also benefited from Gidon Katz and
Marjorie Kaplan’s streaming knowledge and expertise
Key issues or priorities identified Read more
• Changing viewer habits (a principal risk)
• Driving awareness, through programming and campaigns, of key social, environmental and
topical issues with ITV playing an important role as a trustworthy and accurate source of
information
• Authentic representation of the diversity of modern Britain on‑screen
Our Business Model (from page 2)
Key Performance Indicators (from page 14)
Social Purpose strategy (from page 32)
Risks and Uncertainties (from page 55)
Complying with the 2018 Corporate Governance Code, we ensure that we engage
with our stakeholders as it is fundamental to the successful delivery of our
strategy. The Board’s clear understanding of stakeholders’ issues, expectations
and perspectives ensures that stakeholder views are carefully considered during
decision‑making processes.
The Board both directly engages with relevant stakeholders and assesses details provided by management and other colleagues to allow the
Directors to understand how organisational decisions have taken stakeholder interests into account and also to influence future
decision‑making. The General Counsel and Company Secretary supports the Board in ensuring that due consideration is given to stakeholder
issues and papers submitted to the Board detail the impact of proposals on key stakeholder groups
At least once a year, the Board identifies its key stakeholders, reviews the issues that matter to them most and discusses potential
enhancements to engagement with them. The Board also has the opportunity to give feedback on areas needing more focus as part of our
Board evaluation. Our Section 172 statement on pages 92 to 93 includes examples of how the Board and its Committees had regard for
stakeholder interests through its discussions and decision‑making during the year.
The table below sets out the key stakeholders which the Board has identified as being important to ITV’s success and some of the key
engagement mechanisms used in 2023.
85ITV plc Annual Report and Accounts 2023
GOVERNANCE
CUSTOMERS (INCLUDING ADVERTISERS)
Description Link to strategic priorities
Customers (including sponsorship, content buyers and advertiser relationships) are integral to
monetising our content and delivering on our strategy.
Expand Studios globally;
Supercharge Streaming:
see Our Strategy
Forms of engagement Outcomes and impact on principal decisions
Meetings and presentations
• Attendance by Board members at the ITV 2023 Palooza event in November, reflecting on
one year of ITVX, launching the Head First award, an advertiser‑facing wellbeing initiative,
and celebrating ways ITV had helped to build brands during the year through creativity and
addressable advertising
• Meetings between the Executive Directors and their industry counterparts (many of whom
are also buyers of Studios content)
• Regular engagement by the Chief Executive and various members of the Management
Board with advertisers and agencies through key ITV and industry events
• Meetings between members of the Management Board and senior ITV employees with
potential buyers of Studios content
• Annual Northern ITV Showcase event
Board and Committee reviews and assessments
• Review of the advertising market and content spend
• Board strategy sessions on: the evolving commercial strategy to address ITV advertising
clients’ needs; video on demand and linear addressable advertising to support ITV’s
streaming ambitions, including feedback from clients, subscription streaming market
growth and impact on Studios, including analysis of major subscription streaming buyers
across territories, regular ITVX’s launch updates
• Regular Board updates on key relationships and developments in the advertising market,
including ITV’s engagement and relationship initiatives with its advertisers and agencies,
and potential growth opportunities for the Studios business
• Regular reports on Commercial and Studios performance by the Chief Executive to the rest
of the Board
• Strengthened customer proposition and priorities for the
supercharged streaming strategy. Board discussions
benefited from Gidon Katz’s streaming knowledge and
expertise
• Board support for the launch of addressable advertising
initiatives on both ITVX and linear. Board discussions on this
topic benefited from Graham Cooke and Duncan Painter’s
digital and commercial expertise
• Endorsement of: innovative initiatives in response to
advertisers’ and agencies’ desired outcomes, assessments
and recommendations to deliver growth in Studios; and
recommendations to manage risk and opportunities
associated with the growing subscription streaming market
• Investment in ITV AdVentures Media for Equity initiative,
offering TV advertising to potential leading, high‑growth,
digital‑first companies in the UK in return for equity
• Investment in, and creation of, new Studios labels to cater to
growing markets and customer base
• Global Producers Retreat allow feedback about learning,
collaboration and sharing of creative ideas
Key issues or priorities identified Read more
• Continue to promote ITVX for the content investments made during the year
• Mitigate the risk of detrimental advertising market changes (a principal risk)
• Maintaining commercial broadcaster relationships and further developing scripted talent (a
priority for streamers in some markets)
• Continue to educate our customers on the effectiveness of TV advertising (including impact
of TV advertising versus online advertising)
• Delivering audience profile and size to optimise advertising sales
• Further creation and exploitation of IP to drive viewing and enhance IP monetisation
opportunities
Our Business Model (from page 2)
Key Performance Indicators (from page 14)
Risks and Uncertainties (from page 55)
86 ITV plc Annual Report and Accounts 2023
STAKEHOLDER ENGAGEMENT CONTINUED
PARTNERS (INCLUDING SUPPLIERS, OTHER BROADCASTERS AND PLATFORM OWNERS)
Description Link to strategic priorities
Strong relationships with our partners are fundamental to our business and operating model, and
to ensure we meet the high standards of conduct that we set ourselves.
Optimise Broadcast:
see Our Strategy
Forms of engagement Outcomes and impact on principal decisions
Meetings and presentations
• Executive Directors’ engagements (meetings, conferences) with key suppliers and partners
(including broadcaster and distribution partners)
• Regular Chief Executive counterpart meetings with key partners
• Executive Directors held a Commercial Clients event at the Palooza event in November
2023, attended by Board members
Board and Committee reviews and assessments
• Strategy sessions on the impact of the supercharged streaming strategy on third parties
(including PSBs, suppliers and platform owners)
• Board oversight of significant contracts with suppliers or partners
• Board update on engagement with third‑party suppliers, including supplier management
policies, processes and controls
• Chief Executive reports on key/strategic partner relationships and Group CFO & COO
reports on important negotiations with key partnerships, at every Board meeting
• Board review of ITV’s Modern Slavery Statement in February, including report on steps
taken to identify, address and prevent modern slavery in our operations and supply chains
• Audit and Risk Committee review of the Group’s supplier payment practices and the
procedures in place to safeguard both ITV and suppliers from fraud
• Development of ITV’s Partnership strategy
• Consideration of key themes/risks across supplier
stakeholder groups and how they are being addressed by
management
• Strengthened creative talent through new partnerships and
strong development slates
• Further collaboration with streaming platforms to drive
reach and consumption
• Board support for targeted engagement with distribution
partners to define approach to the supercharged streaming
strategy
• Endorsement of partnership initiatives to develop
commercial addressable propositions and support ITV’s
data strategy
• Understanding and management of the risks related to our
relationships with/positions of our partners
87ITV plc Annual Report and Accounts 2023
GOVERNANCE
CITIZENS
Description Link to strategic priorities
As a public service broadcaster, we strive to reflect, remain in touch with, and shape public
sentiment and national conversations. Our engagement in this stakeholder category is an integral
part of our Social Purpose strategy.
Social Purpose: see our Social
Purpose strategy
Forms of engagement Outcomes and impact on principal decisions
Meetings and presentations
• Chief Executive met with other broadcaster CEOs to agree further collaboration on our
shared Climate Content Pledge, announced at COP26, and joined other broadcaster CEOs
in hosting an event on Climate Storytelling for 80 CEOs and senior leaders, including an
interview with Bill Gates and briefing from the UK Climate Change Committee
• Chief Executive hosted and participated in an event for NSPCC’s Childline to raise
awareness of childhood mental health challenges and raise funds
Board and Committee reviews and assessments
• Group CFO & COO’s overall responsibility for ITV’s climate action agenda and leadership of
ITV’s Climate Action Delivery Group
• Board receipt of annual updates on Social Purpose, the Group’s climate‑related agenda,
including risk, opportunities and targets, and Diversity and Inclusion (including progress
against ITV’s Diversity Acceleration Plan). The Board agreed ITV’s ongoing commitment to
mental wellbeing as our primary social cause
• Board sessions to assess the key risks to ITV, including environmental risk, their potential
impact, ITV’s resilience and opportunities for improvement
• Audit and Risk Committee monitoring of compliance with and integrity of, and progress on
climate change reporting targets and reported metrics, particularly with regards to TCFD;
reports to the Board on its outcome (see page 114)
• The Management Board receives a monthly update on ESG (as part of standard Board
reports) and a quarterly review of climate action data and progress. M&E and Studios
Boards receive twice yearly updates on climate action
• The Management Board approved first ITV’s Climate Transition Plan which is published on
20th March 2024
• Deepened understanding of opportunities for climate
action and storytelling, with plan for further training for
wider ELT from Climate Change Committee
• Deepened understanding and awareness of ESG and
factors influencing ITV’s corporate purpose, to inform Board
decisions
• The Climate Action Delivery Group meets quarterly, chaired
by the Group CFO & COO to review ITV’s quarterly carbon
emissions data across Scopes 1,2 and 3 (business travel)
and to bring a leadership team together to update on their
divisional goals and progress against Climate Action Plans,
and to oversee delivery of ITV’s Climate Transition Plan.
Ongoing commitment to The Climate Content Pledge (with
other major broadcasters) to promote climate story‑telling
on‑screen
• Mental Health in the Media conference series hosted by ITV
to encourage the TV and advertising industries to take a
deeper look at mental health on‑screen and off‑screen
• ITV developed an Inclusive Language Guide as an internal
tool to create a shared way to communicate inclusively.
Colleagues accessed the guide over 3,000 times in 2023
• ITV’s Cultural Advisory Council, which Chief Executive and
Management Board members attend, comprising a group of
independent external advisers from a range of different
industries and specialisms who advise, challenge and
counsel ITV on its diversity and inclusion activities
• Commitment to The Climate Content Pledge (with other
major broadcasters) to promote climate story‑telling
on‑screen
• Delivery of outcomes is supported by Board members’
active consumption of our national and regional news
services, with follow‑up discussions and liaisons on future
plans with Management Board members and senior leaders
Key issues or priorities identified Read more
• Harnessing our unique mass‑reach platform and the power of our programmes to raise
awareness and action on issues that are important and help shape culture for good, with
particular emphasis on mental health
• Our sustainability and commitment to climate action, embedding sustainability into
business and usual processes alongside targeted initiatives to reduce carbon and support a
circular economy
• Our contribution to wider society through our Better Futures programme, including
charitable fundraising through Soccer Aid for UNICEF and volunteering
• Our focus and commitment to increasing on and off‑screen diversity through our Diversity
Acceleration Plan
Task Force on Climate‑related Financial Disclosures
(from page 65)
Social Purpose strategy (from page 32)
Our Climate Transition Plan
(itvplc.com/socialpurpose/climateaction
88 ITV plc Annual Report and Accounts 2023
STAKEHOLDER ENGAGEMENT CONTINUED
LEGISLATORS AND REGULATORS
Description Link to strategic priorities
The Board is committed to its responsibility as a public service broadcaster (PSB) and conducting
business in line with the appropriate laws and regulation, to ensure we operate in an ethical and
responsible way.
Availability of viewer content:
see Our Strategy
Forms of engagement Outcomes and impact on principal decisions
Meetings and presentations
• Meetings with government ministers and officials and shadow ministers on key issues of
concern, initiatives or consultation. This includes meetings between the Chief Executive
and the Secretary of State for Department for Culture, Media and Sports (DCMS), Shadow
Secretary of State for Culture, Media and Sport and regular meetings between the Chief
Executive and the Minister of State for Media, Tourism and Creative Industries
• Counterpart meetings with Ofcom on a wide range of policy and regulatory issues (which
included Chairs’ and regular Chief Executives’ meetings)
• Regular engagement with the Audit and Risk Committee Chair in relevant stakeholder
forums (including with leaders from the Department for Business and Trade, FRC, Audit
Committee Chairs Independent Forum, 100 Group and Big 4 audit firms) regarding the
proposals for corporate governance and audit reform
• Participation by the Chief Executive as a member of the Prime Minister’s Build Back Better
Business Council
• Participation by the Chief Executive on the government’s Levelling Up Council
• Periodic engagement by senior ITV employees with other regulators including the CMA, ICO
and the European Commission
• Chief Executive participation at the ITV All Party Parliamentary Group
• Hosted the Conservative Arts & Creative Industries Network, Labour Creatives in
MediaCity, and ITV Summer Parliamentary reception
Board and Committee reviews and assessments
• Updates from the Chief Executive on policy and regulation at every Board meeting
• Regular reports to the Board and Audit and Risk Committee on compliance and significant
litigation matters
• Board briefings on ITV’s PSB strategy, Cabinet reshuffle and ministerial meetings
• Updates to the Audit and Risk Committee from the Committee Chair and external auditor
regarding FRC developments and proposed regulatory changes
• Collaboration and focus on important societal issues such
as social mobility and diversity
• Extensive interaction with government, Ofcom and
parliament in relation to the renewal of ITV’s PSB licences
and securing endorsement of the scope of the Media Bill
Key issues or priorities identified Read more
• HFSS advertising ban and other possible advertising restrictions
• Media Bill
• PSB regulation and the PSB licence renewal process
• Legal and regulatory compliance (including tax) – (non‑compliance is a principal risk)
• Regulatory policy changes (a principal risk)
• Monitoring potential change to the AVMS Directive in 2025/6
Our Business Model (from page 2)
Social Purpose strategy (from page 32)
Risks and Uncertainties (from page 55)
89ITV plc Annual Report and Accounts 2023
GOVERNANCE
PROGRAMME PARTICIPANTS
Description Link to strategic priorities
The safety of participants is of paramount importance to the Board. The Board takes its duty of
care to them very seriously, and obtains regular assurance over the support and processes in
place to safeguard their physical and mental health and wellbeing. ITV’s approach to risk
management is led from ITV Plc Board level, assisted by specialists who drive good practice within
the business. ITV production teams are trained in the identification and management of health
and safety risks, and in producing programme-specific risk assessments. Our continuous review
of risk involves our central risk support team and external experts as required, in considering all
stages of the production process, including pre-filming screening, care during production, and
aftercare of participants after filming and broadcast.
Expand Studios globally:
see Our Strategy
Forms of engagement Outcomes and impact on principal decisions
Meetings and presentations
• Chief Executive attendance at Mental Health Advisory Group (MHAG) meeting, which three
other Management Board members regularly attend (two of whom are members of the
Advisory Group) throughout the year
• Chief Executive chairs the Duty of Care Operating Board which includes Management
Board members and is attended by specialist advisers including ITV’s Independent Chief
Medical Officer and Independent Consultant Clinical Psychologist and, on behalf of the
Board, the Chair of the Audit and Risk Committee
• Annual duty of care presentation to the Audit and Risk Committee, which in 2023 was
attended by the Chair and other members of the Board of Directors
Board and Committee reviews and assessments
• Regular Board updates on duty of care processes and issues, and on the Duty of Care
Operating Board’s discussions and activities (including feedback from ITV’s Mental Health
Advisory Group and updates on the ITV2/CALM partnership), through updates from the
Audit and Risk Committee Chair, who is a standing attendee of the Duty of Care
Operating Board
• Appointment of an Independent Chief Medical Advisor and an Independent Consultant
Clinical Psychologist to ITV
• Board review of progress against ITV’s Diversity Acceleration Plan to accelerate change in
diversity and inclusion on screen
• Board updates on any challenges relating to, or publicity surrounding, duty of care
processes relating to any programmes produced or broadcast by ITV
• Annual Audit and Risk Committee reviews of duty of care and health and safety processes,
including duty of care risks and mitigations
• Board review of minutes from the Duty of Care Operating Board meetings, as well as
updates to the operating model, cadence of meetings and Duty of Care Charter
• The Board considered the internal audit reivew of our safeguarding processes and
effectiveness of policies
• Observation of the mental health protection of Love Island
(series 9) programme participants conducted by an
Independent Consultant Clinical Psychologist
• Formal Social Media guideline introduced to protect Love
Island participants and their families from the adverse
effects of social media
• Meetings with mental health advisers who support ITV
productions on‑set to ensure there was clarity of roles and
accountabilities especially with regards to healthcare
regulatory, privacy and ethical obligations
• An annual review of ITV’s guidance on protecting
programme participants and contributors
• Participant Aftercare Programme (PAP) is a company‑
funded counselling service, extended to offer support to
participants under 18, and to News, Daytime, Scripted, and
Continuing Drama productions
• Developed standards and vetting procedure for engaging
mental health advisers to support productions
• In an industry first, ITV initiated a training programme in
partnership with the BBC, and approved by the British
Psychological Society, to build capacity of registered
psychologists working in the media in response to an
acknowledged shortage of appropriately qualified
specialists
• Introduced a fast‑track arrangement with a specialist
hospital to support participants in severe distress
• An online Duty of Care training programme was developed
and launched in Q3 2023
• A programme of assurance visits by ITV’s Duty of Care Team
and HR, allowing for a two‑way sharing of good practice,
promotion of a standardised approach and encouragement
of early engagement and notification of incidents have
taken place, and will continue into Q1 24
• Introduced a 24/7 help line by a health provider for
participants or their family members to contact in order to
close the gap in out‑of‑hours service
• Monthly Duty of Care/Welfare Team meetings to share best
practice with productions
• Regular peer mentoring by two Independent Consultant
Clinical Psychologists to support mental health advisers
working on higher risk and ITV formats
• Regular consultation with ITV’s Independent Chief Medical
Officer and Consultant Clinical Psychologist to manage high
profile and high risk healthcare incidents
• On‑screen campaign to discourage online trolling was
developed and ran across key reality shows
Key issues or priorities identified Read more
• Internal review of duty of care to ensure there is a Group‑wide approach
• Evaluation of the role and professional development of Welfare Producers
• Review the impact of social media on participants
• Review processes in place to support senior talent
• Review policies for working with highly vulnerable contributors
• Ensure there is consistent and high quality collection and analysis of welfare data
Our Business Model (from page 2)
Risks and Uncertainties (from page 55 )
Social Purpose strategy (from page 32)
Our People (from page 40)
90 ITV plc Annual Report and Accounts 2023
STAKEHOLDER ENGAGEMENT CONTINUED
SHAREHOLDERS (INDIVIDUAL AND INSTITUTIONAL), BOND HOLDERS AND OTHER PROVIDERS OF DEBT AND ANALYSTS
Description Link to strategic priorities
Delivering for our investors (equity and debt) and understanding their views and interests ensures
the business continues to be successful in the long term and therefore can deliver for all our
stakeholders.
Deliver value for shareholders:
see Our Strategy
Forms of engagement Outcomes and impact on principal decisions
Meetings and presentations
• Chief Executive and Group CFO & COO presented the full year results and the Interim
results and took questions from analysts
• Chair, Chief Executive and Group CFO & COO held regular meetings with our largest
shareholders
• The Chief Executive and Group CFO & COO held meetings with target investors based in the
UK, US and parts of Europe
• The Chief Executive and Group CFO & COO both attended investor conferences during the
year. These included the Citi, UBS, JP Morgan TMT, Barclays TMT and Morgan Stanley TMT
conferences
• Chair, Chief Executive and Group CFO & COO held a Fund Managers’ dinner in November
with a small group of senior fund managers
• Chief Executive and Group CFO & COO held meetings with equity sales teams and analysts
• The Board attended the AGM, with an opportunity for shareholders to ask questions
before, during and after the meeting
• The Remuneration Committee Chair met with Columbia Threadneedle, Dimensional Fund
Advisors and Schroders to discuss the Remuneration Policy renewal
• Regular dialogue throughout 2023 between the Group CFO & COO, Group Finance Director
and Group Treasurer, and the Rating Agencies and The Core Banking Group
Board and Committee reviews and assessments
• Group CFO & COO reports on analyst consensus, latest shareholder feedback, changes in
share register and key shareholder engagement activities undertaken by the Executive
Directors and Investor Relations team
• Board updates from the Company’s brokers and advisers on market performance, bid
defence and capital structure, and on shareholder sentiment regarding ITV’s performance,
strategy and dividend policy
• Board members’ careful scrutiny of analyst reports throughout the year
• Update to the Board on ITV’s Climate Disclosures, assurance over its carbon footprint and
actions being taken to prepare for further climate‑related regulations
• Consideration of feedback to inform, amongst other things,
ITV’s long‑term strategy, five year plan, dividend policy,
capital allocation and approach to ESG and other
governance issues
• Board discussion on investor sentiment and action for
management to conduct further analysis of ITV’s existing
and prospective investor base with the evolution of the
equity story
• Announcement of the Board’s intention to pay an interim
dividend of 1.7p and propose a final dividend of 3.3p for 2023
• Maintained investment grade credit ratings; refinanced the
£230 million bond which matured in December 2023 with a
£230 million Term Loan maturing July 2027; extended the
maturity of the £500 million RCF; and agreed a new £100
RCF with Lloyds which mature across 2028 and 2029
Key issues or priorities identified Read more
• Strategy and investment priorities
• Strategic progress and delivery against strategic and financial KPIs and targets
• Capital allocation and leverage
• Share price performance
• ESG data and performance
Our Business Model (from page 2)
Investor Proposition (page 4)
Social Purpose strategy (from page 32)
Task Force on Climate‑related Financial Disclosures
(from page 65)
91ITV plc Annual Report and Accounts 2023
GOVERNANCE
COLLEAGUES
Description Link to strategic priorities
The workforce is integral to the day-to-day operations and the practical execution of strategy.
Effective engagement mechanisms provide the Board with important insights and priorities, as
well as ensuring the workforce voice is considered in the Board’s decision-making.
Delivery of strategy:
see Our Strategy
Forms of engagement Outcomes and impact on principal decisions
Meetings and presentations
• Regular participation by the Workforce Engagement Director and Management Board
members at Ambassador meetings (our former workforce advisory panel)
• Regular Chief Executive’s vodcast to update and discuss regulatory and other challenges
for ITV
• Board members engaged directly with senior management and colleagues from across the
business
• Full Engagement and Culture survey (September 2023), and Line Manager Capability survey
(Summer 2023)
Board and Committee reviews and assessments
• Regular Workforce Engagement Director updates to the Board
• Employee engagement included as part of Chief Executive report at every Board meeting
• Board receipt of vodcasts from the Chief Executive to colleagues
• Board and Management Board receipt of feedback from ITV’s staff networks, through
regular updates on Social Purpose and Diversity and Inclusion
• Nominations Committee session on talent and succession planning
• Theme from Line Manager Capability survey results addressed by a series of leadership
development labs and ongoing management training
• Board discussions benefited from the Workforce
Engagement Director’s direct insight into sentiment and
topics that matter most to colleagues
• Ambassadors have been consulted on a range of business
issues during 2023 including: ITV Together; 2023
Engagement and Culture survey; Speaking Up; 2023 new
approach to Mandatory training; and 2023/24 Annual Pay
Review
• Consideration of feedback to inform, amongst other things,
communication with colleagues, development
opportunities and action planning by the Management
Board and Senior Leadership Team, and localised planning
by line managers across the business
• The Workforce Engagement Director listened to the
feedback and issues raised by the Ambassadors and shared
them with the Board
• Ongoing engagement, feedback and discussion with
colleagues regarding their views on the successful delivery
of the Diversity Acceleration Plan
• Opportunity for Board members to talk to employees
openly and transparently about the Remuneration
Committee’s approach to reward at ITV and gain insight into
priorities for colleagues through the Ambassador Q&A and
discussion session on remuneration
• ITV Fast Forward events with insightful topics and speakers
• Board review of feedback and results from the 2023 career
and development pulse survey
• Investment in people initiatives, including diversity and
inclusion training, and ways of working
• Investment in mental health and wellbeing support for
colleagues
• Assurance over ITV’s bench strength and succession
pipeline and continued progress to broaden diversity across
the business and endorsement of our 2023 people priorities
Key issues or priorities identified Read more
• Transparent and honest culture and ethos
• Flexible and digital ways of working
• Mental health and wellbeing support
• Progress on our Diversity Acceleration Plan commitments
• Retention and recruitment of talent (a principal risk)
• Internal cultural change (a principal risk)
Risks and Uncertainties (from page 55)
Social Purpose strategy (from page 32)
Engaging with our Workforce (from page 94)
92 ITV plc Annual Report and Accounts 2023
OUR COMMITMENT TO SECTION 172(1)
The Directors consider that they have acted, in good faith, in a way that
is most likely to promote the success of the Company for the benefit of its
members and stakeholders as a whole, having regard (among other matters)
to the matters set out in Section 172(1)(a‑f) of the Companies Act 2006.
The Board regularly considers stakeholder groups and their most significant issues, views and interests as well as the financial and long‑term
impact of key actions throughout its decision‑making process. The Board also undertakes a formal assessment on an annual basis of whether
the key stakeholders identified remain appropriate.
Long‑term impact Interests of
colleagues
Fostering business
relationships
Impact on
community
and environment
Maintaining
reputation for high
standards of
business conduct
Acting fairly
between members
The below table outlines other areas of this report which detail how the Directors have had regard to the S172 factors
S172 Factor Further Information Can Be Found S172 Factor Further Information Can Be Found
A
The likely
consequence of any
decisions in the long
term
Business Model:
pages 2 to 3
Our Strategys:
pages 10 to 13
Stakeholder Engagement:
pages 84 to 91
B
Interest of employees
Business Model:
pages 2 to 3
Stakeholder Engagement:
pages 84 to 91
People and Culture:
pages 40 to 41 and 96 to 99
Remuneration Report:
pages 117 to 142
C
Fostering the
Company’s business
relationships with
suppliers, customers
and others
Business Model:
pages 2 to 3
Stakeholder Engagement:
pages 84 to 91
Our People:
pages 40 to 41
D
Impact of operations
on the community and
environment
Business Model :
pages 2 to 3
Stakeholder Engagement:
pages 84 to 91
TCFD Report:
pages 65 to 71
E
Maintaining a
reputation for high
standards of business
conduct
Business Model:
pages 2 to 3
TCFD:
pages 65 to 71
Risk Management:
page 112
Audit Committee Report:
pages 106 to 116
F
Acting fairly between
members of the
Company
Business Model:
pages 2 to 3
Stakeholder Engagement:
pages 84 to 91
Remuneration Report:
pages 117 to 142
93ITV plc Annual Report and Accounts 2023
GOVERNANCE
Set out below are a couple of examples of some of the key strategic issues considered by the Board during the year and in reaching their
decision, how the Directors have had regard to the S172 factors of:
ITVX
To promote the success of
ITV, the Board carries out
frequent market reviews,
keeps abreast with emerging
trends and where judged
necessary, will modify the
Strategy in order to deliver its
plan and safeguard the
long‑term business impact
and the interests of its
members and stakeholders.
The Board identified that
digital viewing continues to
grow at the expense of live
linear viewing. To adapt to
these viewing habits, the
Board transformed M&E
strategy to be streaming‑led,
and evolved Content strategy
to grow engagement with
ITV’s streaming service.
Following extensive analysis,
modelling and careful
consideration, which included
the financial implications and
impact on key stakeholders,
customers, investors and
colleagues, the Board
recognised that ITVX, an
integrated AVOD/SVOD
platform, would best
compliment the evolved
strategy, address the ongoing
changes in viewing habits,
and accelerate the delivery of
ITV’s strategic priorities and
long‑term value. ITV’s new
streaming service ITVX was
launched at the end of 2022.
To ensure that ITVX
continued to deliver the
desired outcome post launch,
the Board kept close review
on the technology and
product plans for its
continued rollout. It noted
the increased engagement
with clients, partners and
customers needed to
promote awareness and
ensure the product’s success.
Internal deep dive sessions
were held to understand
ITVX’s performance
throughout the year and
challenges it encountered.
Where deemed necessary,
activities were tailored in
order to ensure its delivery
and safeguard the long‑term
success of ITV.
ITV TOGETHER
In 2022, the Board approved
ITV Together, a global
transformation programme
to evolve the way ITV worked,
bringing in a simpler, modern
and connected way of
working in a simplified
technology landscape.
The Board believe that
collaborative and connected
digital ways of working
delivered by ITV Together will
deliver and have a positive
long‑term impact to the
business and safeguard the
interest of its shareholders.
Accordingly, following an
in‑depth analysis of the
readiness of programme
it approved the launch of
Wave 1 of the programme
in April 2023.
The Board received regular
updates during and after the
launch period taking into
consideration the impact on
colleagues and the disruption
to the business as existing
systems were migrated onto
the Oracle Fusion system.
The Board were then kept
apprised throughout the year
on the project’s development
and implementation plan. It
received regular updates on
management communication
and engagement plans with
colleagues, partners and
suppliers. Feedback from
colleagues were sought to
improve functionality. When
the Board became aware of
certain challenges being
faced by colleagues,
implementation plans were
revised and communicated to
the Group. This demonstrated
the Board’s commitment to
keep in forefront, interest of
the colleagues as well as its
other stakeholders.
94 ITV plc Annual Report and Accounts 2023
ENGAGING WITH OUR WORKFORCE
The Board ensures effective engagement
with the workforce using two of the methods
stipulated under the Code: a designated
Workforce Engagement Director, and a
formal workforce advisory panel (our
Ambassador network). Edward Bonham
Carter had the role from 2019 and was
succeeded by Graham Cooke in June 2023.
The Board extends its thanks to Edward for
his valuable contributions.
The Board recognises the benefits of
personal interaction and informal discussion
to both learn more about day‑to‑day
operations and the practical execution of
strategy, as well as to gather direct insights
into workforce sentiment. Colleagues have
direct contact with the Chief Executive
through her ‘Ask Carolyn’ email address
and the Chair has regular meetings with
Management Board members and Divisional
heads, who provide feed‑back on workforce
issues. The Committee Chairs also have
individual meetings with colleagues in
relation to the business of their
Committee meetings.
Our Ambassador network
Our Ambassador network was established in
2015 and represent colleagues’ interests in
all parts of the Group, shares information
and helps inform our culture by giving our
colleagues a voice.
• Each Ambassador usually represents
approximately 50 colleagues from their
business area, called their constituency
• There are approximately 100 Ambassador
constituencies which are organised into
five UK regional groups and c.20 of these
Ambassadors represent our international
groups
• The Ambassadors normally meet in their
groups four times a year and in 2023 the
Ambassadors have been engaged in a
range of programmes and topics.
Engagement with Ambassadors is primarily
through in‑person meetings on a quarterly
basis. In 2023, 24 meetings were held, 16 of
which were with UK Ambassadors covering
London West, London Central, Leeds and
Manchester, and the remaining eight
meetings with international Ambassadors
(representing all ITV territories). Of the 24
meetings, nine were attended by the
designated Workforce Engagement Director.
The Workforce Engagement Director also
joined the first (since 2019) in‑person
Ambassador Forum in Autumn 2023 which
was attended by over 80 Ambassadors (UK
and International).
The active two‑way dialogue and attendance
at Ambassador meetings also provides an
opportunity to share insights into external
factors affecting ITV, which the
Ambassadors then share with their
constituents. Hearing feedback first hand
gives the Workforce Engagement Director a
broad perspective of company culture,
morale, and priorities for colleagues and the
impact of operational changes.
Regular verbal updates on feedback on
employee topics and issues of interest and/
or concern, were provided to the Board by the
Workforce Engagement Director. These
regular updates ensure that the employees
voices are considered during Board and
Committee discussions.
Ambassadors regularly share how valuable
the network is to them and their
constituents, particularly in relation to having
Board representation at meetings to hear
firsthand business and strategic updates
which they in turn can share more locally.
AMBASSADOR FEEDBACK LOOP
Workforce
Engagement Director
provides feedback from
Ambassadors at Plc
Board Meeting
Workforce
Engagement Director
collects feedback/
insights from Plc Board
Meeting to share with
ITV Ambassadors
Workforce
Engagement Director
shares feedback/
insights from
Plc Board
Workforce
Engagement Director
attends Ambassador
Meetings and collects
feedback/insights
95ITV plc Annual Report and Accounts 2023
GOVERNANCE
What were the takeaways
from Ambassador meetings
during 2023?
2023 has again been a year of change for
colleagues, with an ongoing focus on digital,
organisational and strategic transformation.
Throughout the year the Ambassadors have
been updated on the More Than TV strategy,
with particular focus on ITVX during its
launch year, they were asked to share
feedback from their constituents on how the
strategy and ITVX was being perceived in
their constituencies as this was a key
strategic focus for the M&E business.
The Board’s views on key 2023 topics were
regularly shared, including the performance
of ITVX post its launch in Q4 2022, the
changing media and regulatory landscape
(subscription streaming market growth, US
writers’ strike, HFSS advertising ban, PSB
regulation, changes in viewer habits and the
advertising market), and how this has
affected ITV.
The Ambassadors have been engaged and
updated on the ITV Together programme
(Oracle Fusion), with the programme team
having regularly sought feedback from
Ambassadors and their constituencies to
inform their plans for the initial launch and
stabilisation period, as well as shaping future
communications and engagement activity.
This led to the introduction of local super‑
users to champion and support new
processes and minimise workarounds.
The ever‑changing macro‑environment and
the continuing impact of increasing living
costs has continue to be a key focus. The UK
Ambassadors were given an insight into ITV’s
approach to the pay review process and the
different factors that are considered when
the proposed pay offer was shared with
them. They were asked to give their reactions
together with any questions they had. Their
engagement and feedback were greatly
appreciated and the final pay offer was
amended as a result.
Ambassadors were asked to gather feedback
from their constituents about awareness,
knowledge and trust in the Speaking Up
process and channels. Whilst the majority
were aware of the policy and Speak Up
channels, Ambassadors indicated that there
are varying levels of awareness, confidence
and trust in the process. This will be
addressed in the 2024 Q1 Ambassador
meetings with a planned in‑depth and
practical session to raise awareness and
trust in the Speak Up process. The intention
is that the Ambassadors will then be well
equipped to support their local constituents
in understanding the importance of raising
concerns via our Speak Up channels.
The Ambassadors were given an overview
of the Engagement and Culture survey and
Mandatory Training and were asked to
encourage their constituents to complete
both the survey and mandatory training.
The Ambassadors were updated on the new,
staggered approach to mandatory training
and its importance and were asked for
feedback and to work with local managers
to ensure full completion in their areas.
The headline results from the engagement
and culture survey were shared with the
Ambassadors and they gave their initial
reactions. The Ambassadors have been
asked to play a proactive role, partnering
with their local line managers; to share,
explore and agree actions based on local
results; and to record local actions on a
central IT platform.
What are the key areas of focus
for engagement in 2024?
The Workforce Engagement Director will
continue to attend Ambassador meetings
to engage on important topics, such as
Speaking Up, ITV’s digital transformation,
action planning linked to the 2023
Engagement and Culture survey and
exploring how to further raise the
Ambassadors’ profile.
96 ITV plc Annual Report and Accounts 2023
VALUES IN ACTION – UNDERSTANDING AND MONITORING OUR CULTURE
Continuing to build and promote a culture of openness and integrity,
with inclusion, diversity and equity at the heart are critical to our success
as well as supporting long‑term value for our stakeholders.
The Board recognises that ITV’s culture is a
key enabler of ITV’s digital transformation,
and therefore understands the importance
of monitoring and fostering it. Aligning our
values and purpose with our strategy is
critical to our success. Our business model
is regularly reviewed by the Board to ensure
it continues to deliver our strategy and is
aligned with our purpose.
To allow ITV to deliver on our strategic
priorities and become a truly digitally‑led
business, our culture needs to continue to
evolve, aligning at all stages in our
development with our purpose and values.
We hold regular leader and manager briefings
to provide updates on our strategic priorities
and build understanding of our vision
and purpose.
The Board considers culture formally on an
annual basis and through ongoing feedback
received, observations from various third
parties (e.g. auditors) and its own
interactions with management and their
teams during the year, and is able to satisfy
itself that the policies, practices and
behaviours within the Group are aligned with
ITV’s purpose (including its Social Purpose),
vision, values and strategy. Through the
Board’s discussion of relevant topics, as well
as the Chief Executive’s focus on people and
culture in her Board reports, culture is
considered, whether implicitly or explicitly,
at each Board meeting.
We continually look for opportunities to
enhance ITV’s approach to consider culture.
The Phillip Schofield KC Review concluded
that ITV has an effective Disciplinary and
Grievance procedure which works well in
practice and applied appropriately in most
incidents. The review also found that senior
management are wedded to the importance
of an open culture and has given ITV helpful
direction as to how we can improve further. In
response, ITV has created a small working
group to review and implement the
recommendations.
We entertain and
connect with millions
of people globally,
reflecting and shaping
culture with brilliant
content and creativity.
Over the last year we have focused on specific areas:
• The Board received reports on identified cultural initiatives; the conclusions of the Engagement
and Culture survey benchmarks; and updates on the actions arising from these surveys
• Ongoing engagement with the international offices demonstrates the alignment with the overall
ITV culture and values (2023 Full Engagement and Culture survey, ongoing Mandatory training,
International Ambassadors and Inclusion activity)
• All freelancers complete our Code of Ethics and Conduct mandatory training module, giving them
an understanding of the expectations as they relate to our ITV values and culture. We also
undertook an Engagement and Culture survey with our freelancer population in Autumn 2023
• Continued use of the anti‑bullying, harassment and discrimination app called ‘Call It!’ across our
productions, enabling both freelancers and ITV employees to report incidents of bullying,
harassment and discrimination quickly and anonymously. This is in addition to the ITV‑wide Speak
Up channels
• Our People and Legal teams have developed a Group policy governance framework to clarify and
maintain accountability for owning, improving and approving changes to new and existing policies.
This provides a clear, structured approach to policy development to ensure that policies are
consistent across all business areas, consistently implemented so that they achieve their intended
outcome and are aligned with our organisational values. Our People policies are being reviewed in
line with this framework and some updates have already been implemented i.e. the new
Relationships at Work policy
• A new cultural data dashboard is being developed following the upgrades to Oracle – Fusion
OUR ITV VALUES
Our ITV values underpin the culture at ITV
and these are embedded through our
Code of Conduct:
Creativity
From everyone, for everyone, every day
Collaboration
Working together at pace
Inclusion
Respecting and embracing differences
Integrity & judgement
If something doesn’t feel right, speak up
THE ITV WAY
The ITV Way encapsulates the values that
underpin the culture at ITV:
Make it Brilliant
Creativity for everyone
Make it New
Openness to change, with no barriers
Make it Together
Collaborating and embracing differences
KEY HIGHLIGHTS
92%
Completion rate of
Code of Ethics and
Conduct annual
training
(up from 89%
in 2022)
7.7%
Resignation Index
(down from 9.26%
in 2022)
78%
of employees
through the ITV Rise
programme have
stayed on at ITV and
had a job title
change (promotion)
24
Ambassador
meetings during
2023
(up from 22
in 2022)
75%
feel like they
belong at ITV
66%
think they have
access to the learning
and development
opportunities
they need to do
their job well
97ITV plc Annual Report and Accounts 2023
GOVERNANCE
The table below sets out the framework of policies and practices which underpin our culture and explains key ways in which the Board and/or
Committees monitor and gain insight to ITV’s culture.
ENGAGEMENT AND FEEDBACK CHANNELS
How the Board monitors culture Cultural insight gained
Review assessments of the Company’s culture through the 2023 line
manager effectiveness survey, bi-annual engagement and culture survey,
measurements of organisational culture benchmarked against peers, and
how ITV’s values link to its purpose and behaviour.
Understanding strengths and opportunities in ITV’s culture, and that ITV’s
values and stated purpose authentically reflect its culture and behaviours.
Outcome
The Board continues to monitor insights gained from the Engagement and Culture survey conducted in 2023. Through updates from the Chief Executive
the Board received assurance that ITV’s culture is aligned to its purpose and values, while recognising the cultural evolution required to deliver strategy as ITV
becomes increasingly digital. The Board, through the Audit and Risk Committee, gets feedback from external and internal auditors on culture and alignment to
purpose and values across the organisation, as observed whilst undertaking audits and engaging with management.
How the Board monitors culture Cultural insight gained
Interactions with and feedback from Board members through: (i) the Chief
Executive (including access to the regular Chief Executive’s vodcast and Q&A
and her updates on people priorities and communications at every meeting);
and (ii) engaging regularly (directly and indirectly) with colleagues through
numerous engagement mechanisms (see page 94 to 95 for details regarding
the Board’s workforce engagement, including the Workforce Engagement
Director and Ambassador Network).
A better understanding of day‑to‑day operations, the practical execution of
strategy and the cultural context in which colleagues work. Further insight
into how colleagues have been supported in the move to White City, changes
to ways of working with the introduction of the Oracle Fusion transformation,
as well as the platform across the Newsrooms. The Chief Executive’s vodcast
Q&A sessions provide the Board with insight about morale and important
topics for colleagues, for example ITV’s commitment to diversity and inclusion;
impact of intense external media focus on ITV; and hybrid ways of working.
Outcome
Vodcast viewing figures and feedback are shared with the Chief Executive and used to shape vodcasts and ensure content is what colleagues want to hear.
POLICIES AND PRACTICES
How the Board monitors culture Cultural insight gained
Regular Board updates and relevant Committee updates on a broad range of
risk and business integrity matters, including fraud, compliance, bribery,
corruption and modern slavery, and standard supplier protocols and
procedures. This is done through review of internal audit reports, Speaking Up
data, compliance questionnaires, compliance reports, risk deep dives,
incident reports, policies and training.
A broad understanding of practices and behaviours and how these align
with the purpose, values and strategy of the Group, including an
understanding of the approach to supply chain partners and the culture
of risk ownership in the business.
Outcome
The Board and its Committees provide appropriate scrutiny and challenge of management and receive assurance over ITV’s approaches to managing risk
and business integrity matters.
How the Board monitors culture Cultural insight gained
As part of the Board’s culture assessment, reviews of ITV’s values as set out
in ITV’s Code of Ethics and Conduct.
How the Code of Ethics and Conduct promotes the highest standards
of ethical business underpinning ITV’s values and corporate culture.
Outcome
The Board was satisfied that ITV’s Code of Ethics and Conduct embodies ITV’s values and culture and will continue to review this code annually to ensure
it remains aligned to ITV’s purpose (including its Social Purpose), vision, values and strategy and that there is appropriate compliance across the Group.
How the Board monitors culture Cultural insight gained
Completion of mandatory training modules by all Board members on the
Code of Ethics and Conduct, DE&I, Competition Law, Respecting each other
at work, Fire Safety, Anti‑Bribery & Corruption, Data Privacy & Protection,
Cyber Security, Economic Crime (money laundering, tax evasion, sanctions),
and Climate Action. Subsequent review of the understanding and embedding
of the Code of Ethics and Conduct and related policies and standards
through this training.
A deeper understanding of how ITV’s values and standards are
communicated and how colleagues are kept safe and secure and act
in a compliant way.
Outcome
All members of the Board will continue to undertake training on an annual basis, to ensure their understanding of how colleagues are kept safe and secure and
act in a compliant way remains current.
98 ITV plc Annual Report and Accounts 2023
VALUES IN ACTION – UNDERSTANDING AND MONITORING OUR CULTURE CONTINUED
RECRUITMENT AND RETENTION
How the Board monitors culture Cultural insight gained
Annual review session by the Nominations Committee of senior management
talent and succession planning led by the Chief Executive.
As well as a review of succession plans, this session also provided the Board
with opportunity to understand how we had delivered the 2023 ITV people
priorities, with focus on our key people processes, as well as how we are
managing the people challenges and risks as we lean into our digital
transformation and phase two of the More Than TV strategy.
Outcome
The session was led by the Chief Executive, with a robust conversation on senior level succession planning as well as enabling the Nominations Committee
to ask questions and challenge the strength of the succession plans. Additionally, the pre‑read provided the Committee with details on the steps taken
to deliver and execute on the 2023 people plan across our key people processes, including: selection and hiring of key talent; performance management;
learning & development; and engagement. The paper also outlined any areas of risk as it relates to our people, and how this is being mitigated.
SAFETY, WELLBEING AND MENTAL HEALTH
How the Board monitors culture Cultural insight gained
Review by Audit and Risk Committee of the improvements to the Group’s risk
management processes and systems that drive health and safety behaviours
in the areas of operational security, business continuity and duty of care. This
includes the systems in place for our stakeholders to identify and raise health
and safety issues, including duty of care and Speaking Up concerns.
Insight into the safety behaviours across all business areas (international and
UK), including the culture of ownership of risk.
Outcome
Through regular Board updates from the Chief Executive and from the Audit and Risk Committee, the Board will continue to ensure the right processes and
procedures are in place for the safety of our colleagues, suppliers, programme participants and viewers, and that ITV continues to uphold high standards of
duty of care.
How the Board monitors culture Cultural insight gained
Audit and Risk Committee review of duty of care updates from the Duty of
Care Operating Board (also reported to the Board), on the processes and
standards in place for colleague and other relevant stakeholder’s wellbeing.
Feedback from the Ambassador and Network groups, and Mental Health
Advisory Group (external experts), included guidance and support on ITV’s
approach to mental health and wellbeing with colleagues, production teams,
participants in our programmes and viewers.
How the mental wellbeing processes and support for colleagues and
stakeholders continue to enhance ITV’s culture where social inclusion is
embraced and mental health issues are understood, accepted and
safeguarded.
Outcome
The Board, through the Chief Executive and Duty of Care Operating Board continues to regularly monitor colleague wellbeing (including mental health)
and the efficacy of initiatives on culture. The Audit and Risk Committee Chair attends all Duty of Care Operating Board meetings, on behalf of the Board,
providing Board oversight, challenge and support and enabling direct feedback to the Board. In 2023 there was an internal audit on Safeguarding and
Duty of Care controls with a focus on compliance with the provisions under Ofcom’s Broadcasting Code. The review highlighted examples of good practice
in the design and implementation of the controls, but made some key recommendations around operational effectiveness which have been addressed.
99ITV plc Annual Report and Accounts 2023
GOVERNANCE
SOCIAL PURPOSE, DIVERSITY EQUITY AND INCLUSION
How the Board monitors culture Cultural insight gained
Annual review of ITV’s Social Purpose strategy, performance and plans. How ITV’s Social Purpose campaigns influence culture internally as well
as externally.
Outcome
The Board will continue to monitor key priorities and initiatives in pursuit of ITV’s Social Purpose strategy.
How the Board monitors culture Cultural insight gained
Annual review of Diversity Equity and Inclusion. Regular updates on progress
on ITV’s Diversity Acceleration Plan and feedback from ITV’s inclusion
networks. Regular monitoring by Nominations Committee of progress against
diversity targets, with diversity on the Board agenda at least annually.
Chief Executive attendance at ITV’s Cultural Advisory Council, comprising a
group of independent external advisers from a range of different industries
and specialisms who advise, challenge and counsel ITV on its diversity, Equity
and inclusion activities.
The impact the Diversity Acceleration Plan is having on colleague sentiment
and ITV’s reputation as having an inclusive culture, and the latter’s appeal to
future employees.
How ITV’s culture is enabling progress to be accelerated through Group‑wide
diversity and inclusion initiatives.
Outcome
The Nominations Committee will continue to monitor progress being made to meet diversity targets to ensure recruitment and succession initiatives support
ITV’s Diversity, Equity and Inclusion strategy. See pages 37 to 39 for outcomes related to Diversity, Equity and Inclusion.
SPEAKING UP
How the Board monitors culture Cultural insight gained
The Board receives data on Speaking Up reports received via the independent
Safecall facility and other relevant channels available across ITV, at every
Board meeting. In addition, the Audit and Risk Committee reviews and
monitors the effectiveness of the Speaking Up policy, processes and
framework annually and receives Speaking Up reports at least twice a year
providing analysis of complaints received, those substantiated, process for
investigating, themes and actions taken. Feedback is given to the Board.
Review conducted by the internal audit function in 2023 of the effectiveness
of the Speaking Up process.
See page 113 for the Speaking Up framework’s implementation in 2023.
A perspective on the nature of colleague concerns and trends in the
behaviours of colleagues generally.
Insight into how concerns are handled by ITV and indications of how the
alternative routes for raising all risk concerns are being utilised.
Outcome
The Audit and Risk Committee will continue to monitor the effectiveness of the Speaking Up framework, and feed back to the Board on how this has supported
the openness of ITV’s culture.
REMUNERATION
How the Board monitors culture Cultural insight gained
Review by the Remuneration Committee of the wider employee reward
framework, including gender, ethnicity, disability and LGBTQ+ pay gaps, CEO
pay ratios and how our approach to Directors’ remuneration aligns with our
approach for the overall workforce. Integration of ESG measures into
incentive targets.
Live Q&A and remuneration discussion for Ambassadors hosted by the
Remuneration Committee Chair, which was reported back to the Committee.
Insight into the role that remuneration and setting performance goals, has on
promoting the right behaviours and the extent to which incentives and
rewards are aligned with culture.
Outcome
The Remuneration Committee will continue to report to the Board on colleague sentiment in relation to retention and reward initiatives.
100 ITV plc Annual Report and Accounts 2023
BOARD EVALUATION
An evaluation of the Board and its Committees is carried
out annually and externally facilitated every three years,
with an internal review conducted this year.
BOARD EVALUATION CYCLE
Year 1 (2023) Year 2 (2024) Year 3 (2025)
Year 1 (2023) internal review focused on
year 1 issues raised and any new issues
arising. The process for internal review is
determined on a year‑on‑year basis.
Year 1 progress reviewed internally, and
any areas of focus identified ahead of the
external evaluation in 2025.
Independent, externally facilitated
review of:
• Performance against targets set for 2024
• An external evaluation carried out by an
advisory firm
• Areas of focus identified for 2026
In 2023, the Board undertook an internally facilitated evaluation using bespoke online questionnaires. A description of the process followed for
this year’s review is detailed below.
STAGES 1–5
Stage 1
Evaluation process planning
JULY – SEPTEMBER 2023
The General Counsel and Company Secretary
undertook a detailed review of the externally‑run
2022 Board evaluation in order to develop the
approach for 2023, incorporating
recommendations from the 2018 Code, Parker
Review and FRC Guidance on Board Effectiveness.
A focused questionnaire was designed to gather
individual Directors’ perceptions of the
effectiveness of the Board and its operations.
Stage 2
Questionnaire responses and one-to-one
meetings
OCTOBER – NOVEMBER 2023
The questionnaires were issued to Directors.
The General Counsel and Company Secretary,
regular attendees of the Board and Committee
meetings and some external advisers also
completed certain sections of the questionnaires
to allow their views to be taken into account.
Directors were asked to comment on a range of
issues including:
• Board composition and diversity; dynamics and
expertise; time management; Board support;
stakeholders and workforce engagement;
strategic oversight; risk management and internal
controls; succession planning; and priorities for
change
• Committee and Committee Chair effectiveness;
annual plans and agendas; Committee
composition; and time management
• The Chair’s relationships and communications
with Board members; chairing and managing of
Board meetings; and relationships with the
Company’s shareholders
• Each individual’s preparation for and attendance
at meetings; ability to commit sufficient time;
relationships with fellow Board members; the
extent to which knowledge and experience are
drawn upon; and overall contribution
Stage 3
Evaluation and reporting
DECEMBER 2023
The General Counsel and Company Secretary
collated the individual responses, including
analysis of themes and proposed actions.
A detailed report, setting out the findings of
the evaluation, was provided to the Chair for
consideration with the resulting report being
tabled to the Board for further consideration
and comment in December 2023.
The evaluation found that the Board and its
Committees continue to operate to a high
standard. The Directors work effectively together
and value each other’s contributions at Board and
Committee meetings.
The Senior Independent Director led a separate
evaluation of the Chair with the Non‑executive
Directors to appraise the Chair’s performance.
It was concluded that Andrew Cosslett’s
performance and contribution were strong and
that he demonstrates effective leadership.
Stage 4
Consider results and agree actions
FEBRUARY 2024
The Board discussed the findings and endorsed the
proposed action plan at its meeting in February
2024. The findings of the evaluation exercise were
fully considered when making recommendations in
respect of the appointment and reappointment of
individual Directors, and included an assessment
of their independence, time commitment and
individual performance. The respective 2024 AGM
Resolutions were considered and agreed by the
Board. The proposed actions arising from the
evaluation were thoroughly discussed and agreed
for implementation and monitoring.
Stage 5
Monitor progress
FROM FEBRUARY 2024 ONWARDS
The Board will continue to oversee the progress
made in relation to the agreed actions to ensure
their timely completion.
The Nominations Committee will also continue to
play a key role in monitoring the actions relating to
Board succession, composition, recruitment and
induction.
101ITV plc Annual Report and Accounts 2023
GOVERNANCE
2023 INTERNAL EVALUATION OUTCOMES AND ACTIONS
Areas of focus identified: Our key follow up actions:
Succession planning for the Executive
leadership team.
A key focus for the Nominations Committee in
2024, with recommendations on next steps to be
presented to the Board.
The General Counsel and Company Secretary is
responsible for driving the actions forward. They
compiled an action plan listing specific actions to
address the findings of the evaluation and further
enhance the Board’s effectiveness. The Board
will monitor the implementation of the follow‑up
actions and review progress against the
recommendations.
A reweighting of agendas to include more time for
strategic discussion.
Agendas and board papers reviewed to ensure
there is a clear link to strategy and KPIs for all
matters tabled.
Greater engagement and interaction with
management, and opportunities to meet with
other layers of the organisation. More engagement
with material stakeholders and partners.
Continue having members of the Executive
Leadership Team attend and present at Board
meetings. Plan opportunities for more director
engagement with the wider management Group.
Consider more trips away from London for
the Board.
More time reserved for Non‑executive Director
only sessions.
Work to set up future Board sessions with material
stakeholders and partners. NED‑only sessions
build into Board meetings.
PROGRESS AGAINST 2022 ACTIONS
Action Outcome
To increase focus on and gain deeper insight into
the development of strategy and related topics
identified in the Board Evaluation.
The Chair held one‑to‑one sessions with the Non‑executive Directors to establish the degree of
alignment and identify any gaps in current strategy/KPIs/narrative.
The Chair fed the findings back to the Management team and then the Board with the recommendations
for review. This included spending more time in Board meetings discussing strategy, focusing on
specific issues for deeper discussion and how to manage reporting of progress (e.g. in Board packs).
A programme of deep dives into value drivers and strategic KPIs was delivered across the year. As a
result the Directors were in agreement that they had correctly identified the main strategic challenges
and now had good oversight of delivery.
To consider the future demands on the business
and how to ensure that the Board is equipped to
support the business and the Management team.
The Chair considered the composition of the Board. Two new Non‑executive Directors were appointed
in the year to provide content and finance expertise.
A detailed review of succession planning for the Management Board and its direct reports was
conducted with the Chief Executive at the scheduled annual session at the November Nominations
Committee meeting (which was held after the evaluation questionnaires had been completed
by Directors).
102 ITV plc Annual Report and Accounts 2023
DIRECTORS’ ONGOING DEVELOPMENT AND TIME COMMITMENTS
Ongoing training and development
The ongoing development of Board members
is crucial to ensure that they remain
well‑informed of changes to the business
environment in which ITV operates (including
on legal, regulatory, compliance and
governance matters), and effective in
providing challenge on a wide range of topics.
The Chair, with the support of the General
Counsel and Company Secretary, keeps the
training and development needs
of Directors under review.
During the year, all Directors were provided
with briefings, presentations, deep dives,
teach‑ins and guest speakers on a range of
subjects, including a deep dive on the
proposed governance and audit reform
proposals. The Directors’ development and
training programme covered topics identified
in the 2022 Board evaluation, as areas on
which Directors felt they could benefit from
additional training or support. The
programme included:
• Attending deep dive sessions on the value
drivers for both the Studios and M&E
divisions and the KPIs underpinning them
• Attending a session on the PSB licence
renewal presented by Matthew Horsman
from Mediatique
• Attending a session on future media
landscape presented by BCG
• Completing the refreshed mandatory
training for colleagues (on ITV’s Code of
Ethics and Conduct, Cyber Security, Data
Protection and Privacy, Climate Action and
Diversity, Equity and Inclusion)
Directors are encouraged to ask for any
support they need and are reminded that
there is always an open line to management
on any topic. Non‑executive Directors also
have access to relevant professional
technical briefings from the audit firms,
including the Deloitte Academy Director
updates. In addition, each Director may
obtain independent professional advice at
the Company’s expense where they judge it
necessary to discharge their responsibilities.
Tailored induction for new
Directors
The General Counsel and Company
Secretary assists the Chair in designing and
facilitating an induction programme for new
Directors and their ongoing training.
Each newly appointed Director receives a
comprehensive induction programme
designed to give them a thorough overview
and understanding of the business covering
the Company’s core purpose and values,
strategy, key business areas and operations,
and corporate governance structure. This is
tailored to take into account a Director’s
previous experience and their
responsibilities. Directors are also briefed
on their roles and responsibilities as
directors of a listed company. For
Non‑executive Directors, specific
Committee responsibilities relevant to
their Committee memberships are covered,
to enable them to function effectively as
quickly as possible.
During 2023, there were two new
appointments to the Board, Marjorie Kaplan
and Dawn Allen. For both Directors the
induction programme included the
following elements:
• One‑to‑one meetings with both
Executive and each of the Non‑executive
Directors
• Briefing from the Chief Executive on the
Group’s strategy, and from the Chief
Executive and Group CFO and COO on
operational matters
• Briefing from the Group CFO and COO on
financial matters
• Briefings from the General Counsel and
Company Secretary and the Director of
Investor Relations on legal and
governance matters and shareholder
relationships, which were followed up by
sessions with the Group’s brokers and
external advisers
• Briefings from senior executives and
managers across our key business areas
and operations, including Studios, Media
& Entertainment, Commercial, Policy and
Regulatory Affairs, Investor Relations,
Diversity and Inclusion, Social Purpose,
Reward and Remuneration,
Communications and Technology
• Access to a library of reference materials,
including key information on our
governance framework, recent financial
data and the policies supporting our
business practices, including our share
dealing policies, conflicts of interest
procedure and gifts and hospitality policy
In addition, their inductions covered deep
dives relevant to their new roles at ITV,
their background and experience.
Both Directors also requested and received
additional follow‑up sessions on areas
where they wanted to further their
knowledge, or felt they could support
management with their experience.
Time commitments
The Directors have demonstrated a strong
commitment to their roles on our Board and
Committees with full attendance at Board
and Committee meetings in 2023, see page
82. The Directors have all given careful
consideration to their external time
commitments to ensure that they are able
to devote an appropriate amount of time
to their roles at ITV. For each Director, the
Board considers that the external time
commitments that they are required to
devote do not compromise their
commitment to their roles (on the ITV
Board, Committees and otherwise). The
Nominations Committee reviews, on an
ongoing basis, Directors’ time commitments
against the recommended guidance from
investor bodies and ITV’s top shareholders,
to anticipate any perception of ‘over
boarding’ at the forthcoming AGM. The
Committee was able to confirm that it was
fully satisfied with the amount of time each
Director devoted to the business.
During 2023, the Board considered changes
in the time commitments of the Directors.
There were no role changes or new
appointments that needed the Board’s
additional consideration.
In this report
The purpose of this report is to highlight the role
that the Nominations Committee plays in ensuring
that the Board has the appropriate balance of
skills, experience, knowledge and background to
provide the breadth, depth, diversity of thinking
and perspective needed to effectively deliver
long‑term sustainable success.
103ITV plc Annual Report and Accounts 2023
GOVERNANCE
NOMINATIONS COMMITTEE REPORT
Who is on the Committee
The Committee is composed
entirely of Non‑executive
Directors (NEDs).
The current members are:
• Andrew Cosslett (Chair)
• Salman Amin
• Edward Bonham Carter
• Graham Cooke
• Margaret Ewing
• Sharmila Nebhrajani
Full details of attendance at Committee meetings can
be found on the table on page 82
Detailed biographies can be found on pages 77 and 78
Our role
Following each meeting, the
Committee communicates its
main discussion points and
findings to the Board.
The Committee’s terms of
reference can be accessed on
our website.
www.itvplc.com/investors/
governance
The main role of the Committee is to:
• Regularly review Board composition and the balance of skills, knowledge, experience and diversity
• Determine when appointments and retirements are appropriate, and lead on any Director searches
• Give full consideration to succession planning and oversee the development of a diverse pipeline for succession,
at Board and senior management levels
• Set measurable objectives on Board diversity and monitor progress on these objectives, as well as review
Company‑wide targets
Meetings in 2023
In addition to Committee
members, the Chief
Executive, Chief People
Officer and General Counsel
and Company Secretary
regularly attended meetings
of the Committee.
January
• Identification of need for a NED
with content and media expertise
• Review of Board Diversity Policy
• Director time commitments and
‘over boarding’ considerations
• Re‑election of Directors at the
AGM
• Review of draft
Nominations Committee Report
in Annual Report
• Proposed 2023
Committee schedule
April
• Changes to the composition of the
Committee and appointment of a
new workforce engagement
director
• Identification of a need for a
NED with finance experience
July
• Indicative timeline and process for
internal board evaluation
• Annual review of terms of
reference
• Annual review of the register
of interests
• Company diversity
progress update
November
• People strategy review
(including review of executive
succession plans)
• Company diversity
progress update
The Committee also held a number
of ad hoc meetings in relation to the
Non‑executive Director searches
including discussions on candidate
specifications, longlists and
approval of shortlists, and
discussions on the candidates
following the interview.
Annual review
An annual review of the
performance of the
Committee is conducted
each year.
• In 2023, an internally facilitated Board evaluation was undertaken, which included a review of the Committee. The
results are summarised on page 101.
• Overall, the evaluation concluded that the Committee is working effectively and responding appropriately to its
terms of reference.
• As part of the Committee’s succession planning agenda, the key priorities identified for 2024 were to embed the
two new Non‑executive directors and to continue its focus on Executive and Non‑executive succession planning,
as well as senior management talent retention and succession.
ANDREW COSSLETT
CHAIR
104 ITV plc Annual Report and Accounts 2023
NOMINATIONS COMMITTEE REPORT CONTINUED
BOARD DIVERSITY
45.45%
female Board representation
In line with Parker Review, the Listing
Rules and Hampton‑Alexander Review
recommendations
18.18%
People of Colour Board representation
Board composition and
succession planning
Composition
During the year, the Committee undertook
an analytical review of Board composition,
assessing the range and balance of skills,
experience, diversity, knowledge and
independence to identify any gaps and inform
the Non‑executive Director searches. The
review concluded that the representation of
Board diversity was strong and the Directors
as a whole had the right skills, knowledge and
experience to enable ITV to execute its
strategy. However, the departure of Sir Peter
Bazalgette in 2022 meant there was a
requirement for specialised creative industry
skills experience. In anticipation of the
departure of Anna Manz in 2023, a further gap
was identified in finance skills and expertise.
Two searches were instigated as discussed
further below.
Non‑executive Director succession
planning
The Committee continues to keep
succession under review for each of the
non‑executive roles to take account of
tenure and to ensure the size, structure,
composition and diversity of the Board and
its Committees are appropriate, identifying
internal candidates or where an external
search may be needed, both for emergency
and longer‑term succession.
Executive Director and Management Board
succession planning
During the year, the Chief Executive and
Chief People Officer reported on the
succession planning measures in place for
the Management Board (including the
Executive Directors), as well as the direct
reports to Management Board members.
This included Management Board and
Executive Leadership Team bench strength
analysis for each role identifying short and
medium‑term successors and the diversity
of the pipeline. The Committee was satisfied
that the Company has effective executive
succession planning processes in place,
including appropriate development plans for
key individuals, and was able to understand
the areas where external candidates may
need to be considered. The Committee also
had a session on improving the strength,
depth and diversity of our talent.
Board searches
The Committee approved the appointment
of SRI/Mission Bay for the search for a
Non‑executive Director with specialised
creative industry skills experience and Lygon
Group for the search for a Non‑executive
Director with financial expertise. Other than
the provision of search services, neither SRI/
Mission Bay or Lygon Group have any other
connection with the Company or any
individual director. SRI/Mission Bay had
previously supported the recruitment of
Non‑executive Directors to the Board.
The specifications for both vacancies set
out the agreed key skills, experience and
character profile being sought to fit with the
current balance, membership and dynamics
of the Board and were approved by the
Committee. As in prior years, the Committee
focused on diversity as part of the selection
criteria, selecting the highest calibre
candidates for appointment to the Board,
based on merit and objective criteria.
In each case a shortlist of candidates was
interviewed by all the members of the
Nominations Committee (led by the
Chairman), the Chief Executive and Group
CFO and COO. Following this, the Committee
recommended the appointments of Marjorie
Kaplan and Dawn Allen, which the Board
subsequently approved.
The Committee is satisfied that these
appointments further strengthen the mix
of expertise on the Board. Marjorie Kaplan
has extensive brand, content and audience
strategy experience with a track record
as a change agent. Dawn Allen has extensive
financial, commercial and international
experience having held a number of
senior financial roles in large scale
global businesses.
Both the new Non‑executive Directors
undertook a comprehensive induction
programme. See page 102 for further
information.
Board diversity policy
Our objective to drive the benefits of a
diverse senior management team and wider
workforce is underpinned by our Board
Diversity Policy.
Our belief is that diversity at all levels is
incredibly important as it allows the
organisation to harness the benefit of
differences in skills, experience, culture,
personality, background and work‑style.
We are proud of our commitment to driving
further diversity on a Group‑wide basis.
Please refer to pages 37 to 39 for further
information on our Group‑wide diversity
plan and targets.
Set out below are the objectives of our
Board Diversity Policy and our assessment
of performance against them. These
objectives ensure that both appointments
and succession planning support the
development of a diverse pipeline.
Ensure ITV has a development pipeline of
high calibre senior executive candidates
and encourage senior executives to obtain
external board experience
The ongoing development of senior leaders,
to ensure we retain the best talent to
broaden their skill sets and experience to
prepare them for future senior roles, is
important to us. ITV runs a high potential
leadership programme, building a pipeline of
diverse talent for senior level roles. The Rise
Programme launched in 2020 continues to
promote People of Colour talent progression
at the manager level by providing People of
Colour colleagues greater visibility with
senior leaders through networking and
sponsorship, alongside career coaching.
The programme also works with managers
and Senior Leadership Team advocates to
build race confidence and accelerate an
inclusive culture change at ITV.
Bespoke development initiatives are in
place for senior executives who have been
identified as potential successors, based
on particular development needs.
These include:
• External executive coaching, with clear
coaching objectives (including 360
degrees feedback where relevant)
• Psychometric testing, such as the Hogan
Leadership series that identifies
leadership strengths, derailers and values
• Mentoring by a Non‑executive Director
• Business School executive
education programmes
• Non‑executive Director and Trustee
appointments where there is a suitable
match and development support for those
interested in these opportunities
105ITV plc Annual Report and Accounts 2023
GOVERNANCE
Maintain at least 30% female Directors on
the Board over the short to medium term
As at 31 December 2023, the Board had
45.45% female representation, including one
Executive Director and two Committee
Chairs. We have therefore exceeded the
target of 40% of women on the Board set by
ITV and the FCA Listing Rules, as well as the
Hampton‑Alexander target of 33%. Whilst
the Board recognises that an effective Board
with broad strategic perspective requires
diversity, ultimately the Board appoints
candidates based on merit and assesses
potential Directors against measurable,
objective criteria.
Our principles for Board diversity also apply
to our Management Board and senior
management below this level. We are
therefore pleased that the FTSE Women
Leaders Review ranked ITV third out of the
FTSE 250 and top of the Media sector for
representation of women in leadership, with
52.4% women in the Combined Executive
Committee and Direct Reports.
Maintain at least 10% Directors who are
People of Colour on the Board over the
short to medium term
As at 31 December 2023, the Board had
18.18% representation of People of Colour
with two Directors represented on the Board.
We therefore also comply with the
recommendation of the Parker Review and
the FCA Listing Rule requirement to have at
least one director of colour on the Board.
Use search firms who have signed up to the
Voluntary Code of Conduct on gender
diversity
The Board supports the provisions of the
Voluntary Code of Conduct for Executive
Search Firms which addresses gender
diversity on corporate boards and best
practice for related search processes. Both
executive search agencies used in 2023 for
our Non‑executive Directors are signatories
to the Code.
Ensure the Non‑executive Director search
pool is sufficiently wide and covers
candidates who are People of Colour and
candidates with a wide range of expertise,
skills and backgrounds, and that shortlists
include at least 50% female candidates
When conducting a Non‑executive Director
search, the Committee works closely with
the executive search agency to compile a
long and shortlist of candidates made up of
at least 50% female candidates as well as
candidates from various backgrounds and
industries, including People of Colour.
Candidates were identified and interviewed
and their skills and qualities were assessed
against measurable, objective criteria.
ANDREW COSSLETT
CHAIR
7 March 2024
Listing Rule 9.8.6R (10)
In accordance with Listing Rule 9.8.6R (10), our gender and ethnicity data in the format set out in LR9 Annex 2.1 as at 31 December 2023 is set
out below.
The Board and Management Board members are asked to complete a diversity monitoring form to confirm which of the categories set out in
the below they identify with. As Carolyn McCall and Chris Kennedy sit on both the PLC and Management Boards they have been counted in
both totals.
Gender
Number of Board
members
Percentage of the
Board
Number of senior
positions on the
Board (CEO, CFO,
Chair and SID)
Number of the
executive
management 1
Percentage of
executive
management
Men 6 54.45 3 8 72.73
Women 5 45.45 1 3 27.27
Ethnicity
Number of
Board members
Percentage of
the Board
Number of
senior positions
on the Board
(CEO, CFO,
Chair and SID)
Number of
the executive
management
Percentage of
executive
management
Asian 2 18.18 – – –
Black/African/Caribbean – – – 1 9
Mixed/Multiple Ethnic Groups – – – – –
Other minority ethnic group – – – – –
White 9 81.82 4 10 91
A copy of the Board Diversity policy can be found on our website
www.itvplc.com/investors/governance/directors
106 ITV plc Annual Report and Accounts 2023
AUDIT AND RISK COMMITTEE REPORT
MARGARET EWING
CHAIR, AUDIT AND RISK COMMITTEE
Dear Shareholder
On behalf of the Board, I am pleased to
present the 2023 Audit and Risk Committee
Report which sets out the key areas of focus
during 2023.
During 2023, despite the challenging
economic environment, the Group
accelerated its proposition as a vertically
integrated producer, broadcaster and
streamer, further developing ITVX following
its launch, growing the global studios
business and digitally transforming the
Broadcast business. ITV colleagues have,
despite an incredible workload, risen to the
challenge and delivered positively and
effectively. In this environment, the
Committee has continued to focus on risk
management, internal controls and the
ongoing restructuring, financial and
accounting implications of the strategy
implementation.
Throughout 2023 I have maintained regular
dialogue with all members of the Committee,
the Group CFO & COO, and other members
of management, including meeting with
relevant ‘agenda topic owners’ prior to each
Committee meeting, ensuring the
Committee would be provided with the
necessary information to enable it to guide,
challenge and advise and, when required,
make informed decisions. I also met with
ITV’s legal advisers in respect of ongoing
litigation and other legal matters and met
privately throughout the year with the lead
partner of our external auditor, PwC, and lead
partner of EY, ITV’s provider of outsourced
internal audit.
A significant event in 2023 was the go live
in April of wave 1 of the ITV Together Oracle
Fusion finance and HR systems and
functional transformation. A detailed post
go live stabilisation plan with clear focus
on change management, governance and
priority actions is in place and has been
communicated to impacted teams across
the Group. When the Board visited
colleagues in Manchester, I held meetings
with the teams in the Group’s Global Finance
Operations (GFO) most impacted by the
development, launch and ongoing
stabilisation of the transformation. This
enabled me to gain a good understanding of
the ongoing challenges and the implications
for resourcing, morale and welfare of the
impacted teams, which I fed back to relevant
management, the Committee and the Board.
Management has continued to implement
a detailed programme of remediation and
enhancement to address internal control
issues highlighted by the internal and
external auditors in 2022 and further
identified as a result of the ITV Together
implementation. The Committee received
reports from management, and the external
and internal auditors, at each of its meetings
on the progress in the execution of the
remediation programme. The Committee
recognises that good progress has been
made in this area and is confident the Group
has an effective control environment;
however, the Committee also acknowledges
that the Group is on a journey of maturity and
improved formalisation, automation and
monitoring of its control processes and this
will continue to be an area of key focus for
the Committee during 2024.
The Committee has spent considerable
time reviewing and scrutinising the Group’s
financial results, ensuring it had clear
oversight of the evolving impact of the
Group’s strategy on the business and its
financial affairs plus emerging risks. This
included adjusted performance measures
and exceptional items, progress of certain
legal and regulatory matters and disclosure
and provisioning implications, programme
rights impairment and the implications of
the proposed reform of the system of
audio-visual tax credits. Details of the
significant financial reporting issues we
considered can be found in this report.
Information regarding the Board’s
stakeholder engagement is set out on pages
84 to 91, which also indicates where the
Committee took account of the views of the
Company’s key stakeholders and considered
their interests in its discussions and
decision-making. Whilst we note that the
Government’s previously proposed
corporate governance reforms are not being
introduced, the Committee is pleased that
WHO IS ON THE COMMITTEE
Composition
The current members of the
Committee are:
• Margaret Ewing (Chair)
• Dawn Allen
• Edward Bonham Carter
• Graham Cooke
Full details of attendance at Committee
meetings can be found on the table on
page 82.
Detailed biographies can be found on
pages 77 and 78.
The Committee is composed entirely of
independent Non-executive Directors.
In 2023, Anna Manz and Mary Harris retired
from the Committee (and Board), with
Dawn Allen joining in October 2023.
The Committee members have, between
them, a wide range of relevant sector and
financial experience, enabling the
Committee to fulfil its terms of reference.
This includes providing independent and
robust challenge to management and our
internal and external auditors, to ensure
there are effective and high-quality controls
in place and appropriate judgements are
taken. For the purposes of the Code, the
Board considers that Margaret Ewing and
Dawn Allen, and Anna Manz until her
retirement from the Board, have recent
and relevant financial experience.
2023 Key Matters
Matters considered at the meetings
are set out on the pages that follow.
107ITV plc Annual Report and Accounts 2023
GOVERNANCE
Meetings in 2023
The Committee held five scheduled
meetings during the year, and a number
of ad hoc meetings.
In addition to Committee members, the
Chair of the Board, Group CFO and COO,
Group Director of Finance, Group
Finance Controller, General Counsel and
Company Secretary, Group Director of
Risk Management, Head of Internal
Audit (EY) and External Audit lead
partner (PwC) regularly attend meetings.
There were a number of sessions during
the year when the Committee met the
External Audit lead partner and,
separately, the Head of Internal Audit
without executives present.
Our role
The Committee’s terms of reference,
reviewed annually and last updated in
July 2023, can be accessed on our
website.
The Committee’s principal
responsibilities are to oversee and
provide assurance to the Board on
the integrity and quality of financial
reporting, effectiveness of audit
arrangements and robustness and
effective operation of internal controls,
compliance and risk management
processes. The Committee meeting
agendas are tailored to ensure emerging
topics are included and to allow for ad
hoc discussion and reviews (including
ad hoc meetings when required).
A summary of the Committee’s activities
from the date of our 2022 report and
until the date of this report is detailed on
the following pages.
ANNUAL REVIEW
In 2023, an internally facilitated evaluation of the Committee’s performance was
undertaken. Participants in the evaluation, in addition to Committee members,
included all regular Committee meeting attendees.
The evaluation concluded that the Committee continues to work effectively, is highly
engaged and is responding appropriately to its terms of reference.
Although the evaluation did not identify any concerns, the Committee has agreed
that the areas it will focus on in 2024 will include:
1. The ongoing programmes of enhancement of the financial, IT, reporting,
compliance and operational control frameworks
2. Stabilisation of Wave 1 of ITV Together (the finance, HR and production accounting
transformation programme) and approval of the business case and timing for
commencement of Wave 2
3. Fraud and risk management improvements, including data governance and
privacy and speaking up processes
4. Readiness to comply with all existing and emerging regulations and legislation
regarding sustainability, climate and other ESG related matters
In addition, the Chief Executive and other members of the Management Board will
be invited to attend relevant parts of Committee meetings on a more regular basis to
provide additional strategic and operational insight to the Committee’s reviews and
decision-making.
management took the decision to continue
to implement ‘no regrets’ improvements.
The Group continues to focus on
strengthening its internal controls
environment and has robust plans in place
that will put the Company in a strong position
to comply with the controls’ effectiveness
statement requirement, introduced in the
FRC’s revised Corporate Governance Code
issued in January 2024 and applicable from
1st January 2026.
I was delighted when ITV gained a gold
award for best FTSE 250 Annual Report
and Accounts at the Corporate & Financial
Awards, and was Highly Commended by
the Corporate Reporting Awards. At ITV,
we strive to ensure we maintain clear and
coherent reporting that provides a clear link
from purpose to strategy to operations,
and the Committee was delighted that
colleagues’ efforts and focus have been
recognised in this way.
I personally want to thank all ITV personnel
involved in the Group’s corporate and
financial integrity, controls, recording and
reporting for their immense effort, fortitude
and loyalty during 2023 – a year that has
delivered very significant change and
improvement within ITV in a very short
time frame.
I hope that you find this report informative
and can continue to take assurance from the
work undertaken by the Committee this year.
MARGARET EWING
CHAIR, AUDIT AND RISK COMMITTEE
7 March 2024
108 ITV plc Annual Report and Accounts 2023
AUDIT AND RISK COMMITTEE REPORT CONTINUED
FINANCIAL REPORTING
Our role Reviewed
• Monitor the integrity of published financial information and
review and challenge significant financial reporting issues,
estimates and judgements
• Review the appropriateness of accounting policies
and practices
• Provide advice to the Board on whether the Annual Report
and Accounts are fair, balanced and understandable and the
appropriateness of the risk disclosures, going concern
statement, the longer-term viability statement and the
statement regarding effectiveness of the internal controls
• Quarterly, interim and full year results statements, prior to recommendation to Board for
approval, together with supporting reports from the Group Director of Finance highlighting
all key judgements and estimates
• External auditor reports, including progress updates, regarding interim review and full
year audit
• Final draft 2023 Annual Report and Accounts, prior to recommendation to Board
for approval, including review of the Group Financial Statements, Principal and
Emerging Risks disclosure and assessment that the Annual Report and Accounts is fair,
balanced and understandable
• Assessment of appropriateness of going concern and viability statements, including
management reports on all key judgements, scenario assumptions, supporting analysis/
evidence, reporting and disclosures
• Litigation updates, including status reports and potential impact on financial results in
respect of Box Clever, the Voice of Holland and CMA matters
• Key accounting judgements
• Reports on potential acquisitions and earnout liabilities and performance against
acquisition business case criteria
• Pension matters, including the IAS 19 accounting surplus and underlying assumptions
• Assessment of appropriateness of identification and classification of exceptional items
• Regular tax updates and recommendation of updated tax strategy to Board for approval,
having ensured the relationship with tax authorities, particularly HMRC, is collaborative,
open and transparent
• Treasury policies, updates and funding strategy
• Share plan anticipated performance outcomes for FY23
• Developments in financial and corporate reporting
• Implications for financial reporting of stabilisation phase of ITV Together programme
• Finance team structure and resourcing
• Process to allow subsidiary entities to be considered for audit exemption using
a parental guarantee
• Progress in preparation, audit and filing of all FY22 subsidiary statutory accounts by
regulatory filing dates
109ITV plc Annual Report and Accounts 2023
GOVERNANCE
SIGNIFICANT AUDIT RISKS AND ACCOUNTING JUDGEMENTS
In planning its agenda and reviewing the audit plans of the internal and external auditors, the Committee has considered significant operational and financial
issues and risks which may have had an impact on the Company’s financial statements, internal controls and/or the delivery and execution of the Company’s
strategy (including changes in the nature and significance of some of the Group’s Principal Risks).
The Committee focused on assessing whether management had made appropriate judgements and estimates in preparing the Company’s financial
statements, particularly with regard to the significant issues listed below. These issues were subject to robust challenge and debate between management,
the external auditor and the Committee. The Committee also reviewed detailed external auditor reports outlining work performed and any issues identified in
respect of key judgements and estimates – see the Independent Auditor’s Report on pages 149 to 155. The Committee concluded there was no significant
disagreement or unresolved issue that required referral to the Board.
Risk of fraud (particularly in revenue recognition)
Issue Action taken by the Committee Outcome/future actions
The nature of ITV’s business,
including advertising and
production, means that there
are potential risks of revenue
recognition and other fraud,
including collusion with
advertisers, facilitation
payments, fraudulent
payments to suppliers or
employees and manipulation
of profits or hiding fraud by
use of accounting journals.
Review of the work undertaken to update the GFO Finance
Fraud Prevention Framework following the implementation
of the Oracle Fusion platform and the subsequent impact
on the controls in place to prevent and detect fraud across
all aspects of the Group, including the international
studios businesses.
The Committee also considered the Group’s changing risk
landscape and the implications for non-financial fraud risk.
In addition, the Committee reviewed the results of PwC’s
data auditing techniques for advertising revenue, journals
and payroll as well as their conclusions relating to fraud risk
in revenue recognition.
In anticipation of the UK’s new corporate offence of
‘failure to prevent fraud’, the Committee discussed ITV’s plan
to respond to the new legislation during 2024 including:
• Updating the Fraud Risk Management policy and the fraud
risk assessment
• Monitoring of high-risk financial controls
• Delivery of targeted training
• Reviewing ITV’s due diligence processes and
contractual provisions
The Committee agreed with management’s assessment that
the overall control framework remained effective and the
Group’s revenue recognition processes included a robust
control framework to effectively mitigate the risk of material
financial fraud.
Exceptional items including Alternative Performance Measures
Issue Action taken by the Committee Outcome/future actions
During 2023, management
proposed a number of
matters to be classified as
exceptional items. (See
note 2.2 to the financial
statements and page 172
for an explanation of the
exceptional items policy).
The Committee continued to closely scrutinise the
application of the Group’s policy on exceptional items,
spending considerable time reviewing the existing policy
and challenging management’s proposed classification.
The Committee scrutinised in particular those exceptional
items that recur over a number of years, such as
restructuring, transformation and property costs, or
frequently occurred, e.g. legal costs, and considered the
views of the external auditor.
The Committee concluded that the policy in respect of
exceptional items and management’s approach to
exceptional items were appropriate.
The Committee also recognised that management had
exercised discipline on the categorisation of costs as
exceptional items, the policy had been applied consistently
and the amounts were clearly disclosed in the Annual Report
and Accounts.
The Committee will continue to review the exceptional
items policy and definitions regularly, consider evolving
regulatory scrutiny and the impact of exceptional items
on reported earnings.
Review of legal cases
Issue Action taken by the Committee Outcome/future actions
ITV is subject to ongoing legal
disputes where the outcome
is not certain, including the
quantum of liability (actual or
possible) in respect of the
Box Clever pension scheme
deficit and the two separate
UK Competitions and
Markets Authority (CMA)
investigations that
commenced in 2022
and 2023.
Throughout 2023, the Committee reviewed management’s
updates on its various outstanding legal cases and any
potential liability that might arise from them. In addition,
twice during the year, the Committee Chair met with the
Company’s various external legal advisers to understand
their perspectives on the status of the various legal cases.
In respect of Box Clever, the Committee considered the
response from and management’s interactions with the
Pensions Regulator, views of external actuarial and legal
advisers and the level of provision for the case and
disclosure, given the high level of uncertainty of the final
outcome and the legal process, which could continue for
a number of years.
With regards to the two separate CMA investigations, The
Committee considered the contingent liability disclosure
proposed by management and agreed with management’s
conclusion that it is not possible to reliably quantify any
liability that might result from the investigations due to the
early stage of each of them.
The Committee discussed the provisions held and related
disclosures in respect of all other material legal cases.
Following considerable discussion and input from the
external auditor and legal adviser, the Committee agreed
that the provision and disclosure made in respect of
Box Clever was appropriate, given the status of discussions
with the Pensions Regulator. See note 3.7 to the financial
statements.
The Committee also agreed that the contingent liability
disclosure proposed by management in relation to the CMA
investigations was appropriate.
The Committee also considered other ongoing legal matters
and agreed with management’s proposed position and
related disclosures.
110 ITV plc Annual Report and Accounts 2023
AUDIT AND RISK COMMITTEE REPORT CONTINUED
OTHER SIGNIFICANT ISSUES IMPACTING FY23 AND/OR FUTURE YEARS
Acquisitions and related liabilities
Issue Action taken by the Committee Outcome/future actions
Acquisition liabilities are
amounts payable to former
owners of businesses
acquired for remaining
minority shareholdings.
The payments are linked to
the financial and/or
operating performance of
the business over future
periods and are usually
linked to continued
employment.
The Committee reviewed management’s process to
determine the expected future payments and the related
year end liability, including the classification of those costs
linked to employment as exceptional.
In 2022 the Group acquired a majority stake in Plimsoll
Productions. During 2023, the Committee considered
management’s post-acquisition review and, in light of the
review, the appropriateness of the anticipated future
payments. In addition, the Committee reviewed the
conclusions of EY’s internal audit of Plimsoll’s production
financial controls and compliance with ITV’s Group policies.
The Committee agreed with management’s assessment
of expected future payments for Plimsoll and other previous
acquisitions.
The Committee was pleased to note that the integration
of Plimsoll with ITV had been successful, including adoption
of ITV’s policies, a good controls environment and ongoing
transition to ITV corporate network and systems.
Pensions risk management
Issue Action taken by the Committee Outcome/future actions
Managing the impact of
economic turbulence in the
year on the investment
strategy of the ITV Pension
Scheme and the valuation of
pension assets and liabilities.
The Committee received an update on the management of
the Group’s pension risks, with a focus on investment
governance and strategy. Strong risk management and
maintaining the risk exposure in balance were fundamental
objectives.
The Committee noted the update and was confident that
the actions taken meant that the risks identified continued
to be managed and maintained as previously agreed with
the Committee.
Treasury and financial risk management
Issue Action taken by the Committee Outcome/future actions
During 2023 the Committee
considered updates from
management on the impact
of financial risks affecting
the business.
The Committee reviewed the Group’s debt maturity profile
and the options to address the short-term refinancing needs
of the business, with a term loan from relationship banks
being proposed. Subsequently, an assessment was
considered on management of the longer-term financing
requirements, which included a proposal to implement an
Euro Medium Term Note programme (during H1 2024).
The annual review of treasury policies focused on mitigation
of foreign exchange risk.
The Committee considered, supported and approved
management’s proposed policy changes and the actions
taken to mitigate other financial risk.
The Committee also recommended to the Board the
approval of the financing proposals of management to
ensure the Group retains appropriate liquidity to support
delivery of the Group’s strategy, particularly in the current
uncertain and volatile economic and political environment.
IR35
Issue Action taken by the Committee Outcome/future actions
From April 2021 the
responsibility for
undertaking IR35
employment status
assessments, and where
necessary withholding PAYE
and paying NICs, passed to
the employer, rather than
remaining with individuals
and their personal service
companies. ITV has been in
continuous discussion with
HMRC on this matter
throughout 2023.
The Committee considered updates from management
on developments in the application of IR35 and status of
ongoing discussions with HMRC regarding the tax status and
treatment of ‘front of camera’ presenters who were not
employees.
During the latter part of 2023, the Committee considered
management’s proposed changes to the provision recorded
at 30 June 2023, updated to reflect ongoing discussions and
agreements reached with HMRC, including the removal of
certain prior years no longer in scope. Management
proposed to classify those amounts related to prior years as
exceptional given their materiality and nature.
The Committee considered and supported management’s
proposed increased provision and proposed accounting
treatment, taking into account the external auditor’s views.
The Committee noted that the outcome of ITV’s negotiations
with HMRC and the implications for the relevant ‘front of
camera’ individuals.
111ITV plc Annual Report and Accounts 2023
GOVERNANCE
OTHER SIGNIFICANT ISSUES IMPACTING FY23 AND/OR FUTURE YEARS
Organisation for Economic Co-operation and Development (OECD) Base Erosion Profit Shifting (BEPS 2.0) Agreement – Pillar 2
Issue Action taken by the Committee Outcome/future actions
The UK substantively
enacted Finance (No2) Act
2023 in June 2023
introducing a global minimum
effective tax rate of 15% for
large groups and for financial
years beginning on or after
31 December 2023.
The Committee received a briefing on the anticipated
financial and compliance impact of Pillar 2, informed
by advice from professional advisers engaged to assist
management in navigating the detailed and
complex legislation.
The Committee concluded that management was in a good
position to perform accurate and detailed Pillar 2 calculations
in 2024 and was comfortable that the financial impact to the
Group would not be material.
The Committee will continue to monitor the Group’s approach
to and implementation of Pillar 2.
Audio-Visual Expenditure Credits (AVEC)
Issue Action taken by the Committee Outcome/future actions
HM Treasury and HMRC have
established a new
audio-visual tax regime
(AVEC) to replace the current
High-End Television (HETV)
Tax Credit regime in the UK
which results in a reduced
effective tax rate and a
potential Pillar 2 top-up
tax liability.
The Committee received a briefing from management
on the impact of the new UK tax credit regime and a
recommendation to adopt the new AVEC regime at the
earliest opportunity.
The Committee considered and supported management’s
recommendation noting that this would have no impact on
the Group’s future reported and adjusted profit after tax.
Going concern and viability assessments
Issue Action taken by the Committee Outcome/future actions
In light of the continuing
uncertain economic
environment, the Committee
applied considerable
scrutiny to management’s
assumptions, stress testing
and scenario analyses
supporting the going concern
and viability statements as
well as seeking impartial
external views on
ITV’s viability.
The Committee reviewed and challenged management’s
process and assessment of going concern, longer-term
prospects and viability by considering forecast cash flows,
base case and downside scenario analysis, the results
of further stress testing of those scenarios, and other
principal risks, including continuing uncertainty in the
macro environment.
In reaching its view, the Committee also considered: (i)
analyst and other expert commentary to understand the
wider market views on the Group’s future financial
performance and viability; (ii) Board approved financial
forecasts; (iii) the Group’s financing facilities including
covenant tests and future funding plans; and (iv) the external
auditor’s findings and conclusions on this matter.
The Committee also considered the adequacy and accuracy
of the disclosures in the 2023 Annual Report and Accounts in
respect of the Group’s ability to continue as a going concern
and its future viability.
Following this thorough review and strong challenge of
management’s assumptions, the Committee considered the
assessment to be appropriate and recommended the draft
viability statement and related disclosures for approval by
the Board. The Committee also concluded that it remained
appropriate to adopt the going concern basis of accounting in
preparing the consolidated financial statements and the
relevant Annual Report and Accounts disclosure was
appropriate. See pages 162 and 163.
Given the uncertain economic outlook, and its impact on the
demands for content production and advertising, the
Committee will continue to closely monitor the Group’s
financial status and prospects.
Impairment assessment
Issue Action taken by the Committee Outcome/future actions
The continued uncertainty in
the economic environment,
with increasing costs,
inflation and interest rates,
and its impact on the trading
outlook for the Group may
give rise to indicators of
impairment of value of
certain Group assets.
The Committee considered and challenged:
• Management’s assessment of the level of aggregation of
assets for cash-generating units (CGUs) and agreed that no
changes were required
• The basis for calculating the discount rate for each CGU,
having sought the external auditor’s views on the
methodology applied and outcome, and consequently
agreed that the discount rates were considered appropriate
in the current economic environment
• Management’s assessment of impairment, incorporating
the cash flows used to assess going concern and viability
assessment, and noted that no impairment was required in
either the base case or other scenarios.
In 2023, management engaged external advisers to assist in
reassessing and improving the Group’s approach to content/
programme rights valuation. Following this review, the
decision was taken to revert to a whole portfolio assessment.
Having received the views of the external auditor following
their detailed audit of the management’s assessment of the
carrying value of CGUs, including goodwill, the Committee
agreed that no impairment of CGUs is required.
The Committee agreed with management’s conclusion that
sports rights should be assessed for impairment as part of
the whole portfolio of programme rights.
112 ITV plc Annual Report and Accounts 2023
AUDIT AND RISK COMMITTEE REPORT CONTINUED
RISK MANAGEMENT AND INTERNAL CONTROLS
Our role Committee reviewed:
• Assist the Board to establish and articulate overall risk
appetite and oversee and advise the Board on specific
strategic risk exposures and mitigations
• Review the risk identification and mitigation processes and
undertake deep dives into high-risk business areas or
processes
• Review the effectiveness of the internal control and risk
management processes
• Oversee appropriate compliance, speaking up and fraud
prevention arrangements
• Biannually, management’s conclusions regarding principal and emerging risks and
uncertainties and associated mitigations
• Progress in implementing the enhanced ERM framework, including enhancements to the
risk governance structure
• Progress in improving operational risk management capability for security, duty of care, and
crisis management
• Insurance arrangements and policies, including how those support mitigation of principal
and other financial risks
• Progress in implementing the financial controls framework and effectiveness review for the
ITV Together programme
• Ongoing programme of improvements to technology and IT-related controls and
governance environment
• Mapping of the internal audit plan to key principal and operational risk areas to understand
assurance coverage
• Outcome of the risk focused audits undertaken by the internal auditors, including
implementation of agreed actions to address audit conclusions
• Enhancements to the Speaking Up policy and report on ongoing actions taken to
strengthen Speaking Up processes and further increase awareness across the organisation,
including reflection of the relevant recommendations arising from the Committee’s deep
dive review in July 2023 and the external review by Jane Mulcahy KC
• Progress in implementation of data privacy and governance enhancements, including
actions arising from the internal audit of the effectiveness of relevant processes
• Biannually, effectiveness of compliance framework and monitoring
• The M&A approvals process and approved amendments
• Fraud risk and fraud prevention, detection and controls framework and its effectiveness
• Transformation Programme updates, particularly in respect of ITV Together
• Deep dives on the Group’s resilience to key risks, including cyber, crisis management,
duty of care and Speaking Up
• The internal audit conclusions and recommendations regarding the effectiveness and
maturity of the second lines of defence in respect of the Group’s financial, IT general and
compliance controls
Risk management
Recognising the evolving nature of the risk
landscape, due to the increasing pace of
change in the industry, the continued impact
of the macroeconomic environment and
global instability, ITV needs to be able to be
agile in flexing aspects of its strategy
implementation and manage resulting risks
smartly. The Committee’s focus for 2023
therefore has been on evolving ITV’s
approach to risk management to ensure it
remains appropriate and proportionate as
well as enhancing the understanding of ITV’s
most critical risks. This has included focus on
progress in optimising the practices and
behaviours of the second line of defence and
introducing more collaboration and structure
across financial, IT, compliance and
operational controls, with the Committee
providing challenge and direction as
appropriate.
Financial internal controls
Throughout 2023, the Committee received
regular updates on management’s ongoing
enhancements to the Group’s controls
environments, including financial and IT
controls, finance fraud risk prevention,
cyber security, data privacy processes
and capability, Speaking Up effectiveness,
compliance programme, and resilience to
risk, including crisis management and
business continuity.
Although certain aspects of the Group’s
control environment are immature, with
some existing deficiencies (particularly in
respect of IT general controls, where
mitigations have been implemented to
address these weaknesses), the Committee
is satisfied that the Group’s internal controls
over financial reporting operated effectively
throughout the year, with no material
weaknesses identified. This was principally
based on a programme of internal audit
reviews, independent Group finance
assurance reviews, and monthly
management financial control
self-assessments and the reviews
undertaken by the external auditors as part
of their 2023 audit plan. During 2023, the
Committee was regularly presented with
observations following second line design
reviews conducted by the Financial
Governance and Compliance team post
Oracle Fusion Go-Live (part of the ITV
Together programme), with a particular focus
on controls automation progress and fraud
controls. Moreover, where specific areas for
improvement were identified, it was noted
that mitigating workaround controls and
processes were in place. These updates
provided the Committee with the
opportunity to increase the scope of its own
review and obtain additional visibility over
the financial control environment during the
year, particularly those areas not covered in
the Internal Audit plan. In addition, the
Committee considered the suite of
automated analytics that enable ongoing
monitoring of high-risk financial transactions
and access controls across Group systems.
In 2024, the Committee intends to continue
with focused bi-annual (and in respect of
certain areas of internal controls, quarterly)
sessions with the relevant change
programme and compliance, financial,
operational and technology controls
sponsors and leadership teams. In particular,
the Committee will focus on strategic
initiatives being implemented within the
Group’s technology function, with the
objective of improving the overall IT control
maturity. Key activities in 2024 will include
updates to the IT controls framework,
completion of control design assessments
for applicable systems, control gap
remediation and rollout of awareness
sessions across Group Technology. The
Committee notes the roadmap of activities
for 2024, which includes controls self-
certification and independent assurance
testing across the IT controls landscape, to
enable a cultural shift and more proactive
management of risks.
113ITV plc Annual Report and Accounts 2023
GOVERNANCE
ITV
Together
Oracle Fusion went live on 11 April 2023,
changing the operations and interaction of
colleagues, HR, Finance and Production
Finance processes.
The Committee noted that a change of this
nature and size was complex, and was pleased
that it launched with minimal disruption to the
business with a high volume of users and
transactions being processed.
However, due to system and reporting issues
identified, various processes and controls did
not operate as anticipated, with alternative
manual controls implemented to mitigate any
risk. Consequently, Deloitte conducted a post
implementation review in the second half of
2023, focusing on project governance, resourcing
and change management, the outcomes of
which were communicated to the Committee.
Throughout 2023 the Committee closely
monitored the programme of remediation and
the effectiveness of the mitigations. In addition,
the Committee Chair held a number of meetings
with the programme leadership to receive
detailed briefings on the progress of the change
management plan, providing challenge
and support.
In the last few months of 2023, the ITV Together
programme moved into Stabilisation and
Adoption of the Oracle Fusion solution phase,
with the embedding of new ways of working
following hyper care, running until June 2024.
During this phase the Committee will monitor
delivery of enhancements to meet the target
finance control automation objective; alongside
fully embedding the end-to-end IT controls to
ensure Oracle Fusion is robust and sufficiently
controlled, enabling reliance over the process
and control automation.
Speaking
Up
The Board continued to receive regular reports
on issues raised during 2023 via Safecall, the
independent whistleblowing facility, and other
complaint notification channels available within
ITV, with the Committee reviewing an overview
summary for the year. This included an
assessment of any identified trends or themes
in complaints, the nature of any noteworthy
allegations, the corrective measures
implemented to address substantiated
complaints, and the process applied to triage
and correctly investigate complaints. The
Committee also considered the actions taken
by management as a result of the investigations’
conclusions and recommended additional
actions where appropriate, overseeing the
investigation of all significant issues reported.
The Committee received regular updates on the
status of and improvements to ITV’s awareness
campaign, alongside an internal audit completed
at the end of 2022, the results of which
highlighted the need to drive continued
awareness and focused training to ensure that
communications are effective. The Committee
noted significant progress that had been made
during 2023, which was demonstrated in the
strong scores for awareness of the programme
and the routes for raising concerns in the
engagement survey.
The Committee also noted the actions that
had been taken in 2023 to strengthen recording
and collation of relevant data to provide a better
insight into concerns being raised through the
various channels available across the Group,
including the Safecall facility. During 2023,
listening circles/focus groups were introduced,
which were run by an external provider, inviting
colleagues and freelancers to participate in
confidential discussions about areas of concern.
The Committee welcomed the development
of a programme of mandatory training for line
managers on managing grievances,
disciplinaries, concerns and complaints.
The recommendations arising from the KC’s
review of This Morning included a more targeted
approach to Speaking Up related training for
different parts of the Group and a further
strengthening of the concerns and complaints
process. The Committee will monitor
management’s implementation of these
enhancements during 2024.
Crisis
Management
Over the past year, a series of significant
external, non-ITV specific incidents and the
evolving global landscape have underscored
the necessity for a structured and robust crisis
management response capability at ITV.
During 2023, the revised crisis management
framework and plan was subject to internal
audit review by EY, as well as tested via a series
of simulated exercises facilitated by Deloitte,
the results of both being reported to and
discussed by the Committee, and progress
in implementing the agreed resulting changes
monitored by the Committee.
The Committee acknowledged that the good
progress in 2023 provides a solid foundation for
continued improvement in 2024, including the
requirement to conduct regular training and
simulated exercises across the Group in order to
ensure ITV’s resilience and readiness to
effectively respond to crisis events.
Cyber
Security
The Committee recognises that ITV has a
unique range of factors that impact how
management focuses on cyber to enable the
future business strategy whilst managing the
immediate risks by reducing dependence on
legacy systems, building security into the
delivery of its strategy and creating a cyber
culture that provides consistent defence over
a devolved organisation.
The Committee received regular updates
throughout 2023 and is pleased with the
maturity and effective progress achieved.
The Group has adopted the internationally
recognised NIST cybersecurity maturity
framework and the Committee is supportive
of the cyber team using this internationally
recognised standard in the development
of ITV’s approach.
During 2023, the Committee received regular
updates on progress in adopting a programme
of enhancement to the Group’s maturity
framework, which included:
• Development of a new security operations
capability to detect and protect against cyber
in public cloud estate
• Expanded coverage of controls across the
Group’s international businesses – to improve
how to track and measure threats, and changes
in cyber culture
• Continued assessment of third-party
suppliers/vendors to identify risks
For 2024, the Committee will continue to
regularly review the enhancements in the
Group’s cyber security profile, which will include
additional focus on improving API security,
increasing defence against AI-based email
attacks and bolstering defences against data
loss with an aim to achieve target maturity
by the end of the year.
114 ITV plc Annual Report and Accounts 2023
AUDIT AND RISK COMMITTEE REPORT CONTINUED
CLIMATE‑RELATED GOVERNANCE
Our role Items covered
Review of ITV’s global environmental and climate risk
mitigation strategy, targets, progress and reporting in
compliance with the Task Force on Climate-related Financial
Disclosures (TCFD), Climate-related Financial Disclosures
(CFD) and other environmental reporting requirements,
and readiness for publishing a Climate Transition Plan,
in accordance with the UK government’s Transition Plan
Taskforce recommendation, alongside preparation for
EU Corporate Sustainability Reporting Directive disclosure
in 2026.
Assessing the integrity of the targets and data included in
the reporting and obtaining appropriate assurance on its
completeness, reasonableness and accuracy.
Reviewed:
• Report from the independent provider of limited assurance over Greenhouse Gas (GHG)
emissions data, including Scope 1, 2 and 3
• ITV’s TCFD reporting, including ITV climate scenario analysis and consequential risks and
impact (including financial).
• Climate risk embedded into ITV’s Principal Risks
• Roadmap to achieve Net Zero detailed in Climate Transition Plan, published alongside
Annual Report and Accounts.
Climate‑related governance
The Committee plays a key role in the
governance of climate-related risks and
opportunities and the Group’s compliance
with environmental and climate risk related
regulatory reporting requirements. During
2023, management briefed the Committee
on progress in further embedding climate
action, risks and opportunities into the
running of the business (and potential
financial implications), including the planned
publishing of its first Climate Transition Plan
in 2024 and the steps taken to enhance ITV’s
alignment to the TCFD and CFD criteria and
related disclosures. The Committee agreed
with management’s assessment that the
financial impact of known risks and
opportunities is not material.
The Committee also reviewed the
methodology and internal quality assurance
processes over GHG emissions reporting,
following the implementation of a new
environmental reporting system across ITV,
and the results of the independent limited
assurance provided over carbon footprint
data. ITV has appointed EcoAct as its
sustainability partner to advise on TCFD and
CFD recommendations and best practice
and highlight areas for improvement. In
addition to reviewing ITV’s 2023 TCFD
disclosure against TCFD and CFD
recommendations, EcoAct has also
assessed the report against the Climate
Financial Disclosure recommendations,
following changes to the Companies Act.
The Committee is encouraged by the
continued progress made by management to
meet the minimum requirements for TCFD
disclosures, and in starting to deliver against
ITV’s ambitious environmental targets. The
Committee also noted the significant
improvements in the management of
environmental targets and climate-related
risks and opportunities and the continuing
progress made to enhance the approach and
to strengthen the quality of reporting that
will continue into 2024.
A key area of focus for the Committee during
2024 will be ensuring the Company continues
to respond appropriately to the rapidly
changing and new regulations and reporting
requirements, extending the limited
assurance to a wider set of indicators and
agreeing with management a timeline for
upgrading to reasonable assurance.
INTERNAL AUDIT
Our role Items covered
• Monitor and review the effectiveness and independence of
the internal audit function
• Review and approve the internal audit plan and monitor its
implementation, approving any amendments to the plan
• Review the continued appropriateness of the outsourcing of
the internal audit function, oversee the tendering of the
internal audit contract and approve the appointment of the
internal auditor and the remuneration and terms of
engagement
• Performed an assessment of internal audit independence and effectiveness
• Approved the 2023 and 2024 internal audit plans
• Reviewed internal audit reports including a review of activity, key recommendations arising
from audits, themes across audits, status reports on action plans and regulatory and
programme compliance
• Annual review of risk acceptance of audit findings
• Meeting regularly with the internal auditor in the absence of management
Internal audit
EY was appointed ITV’s internal auditor with
effect from April 2022. The Committee
continues to support ITV’s current model of a
fully outsourced internal audit function,
which allows best practice in terms of
risk-based approach and auditing
techniques, continuous robust and
independent challenge, and the use of
specialists in high-risk areas and across the
various geographies.
The Committee assesses the effectiveness
of the internal audit throughout the year
using a number of measures, including the
Committee’s private sessions with the
internal audit partner, reports from internal
audit on the development and delivery of the
internal audit plan, communication of results
of reviews performed and the completion of
agreed actions arising from reviews. In
addition, the Committee formally considered
the effectiveness and quality of the internal
audit provision in a private discussion
between the Committee members and
Group CFO & COO (who also represented
management’s views on the quality of the
internal audit provision). The discussion was
guided by a series of questions circulated by
the Committee Chair, which included internal
auditor independence and objectivity,
resourcing, involvement in business
discussions on risk, and communications
between the internal auditor and the
Committee.
115ITV plc Annual Report and Accounts 2023
GOVERNANCE
The Committee concluded that overall it was
pleased with the quality and insight provided
by the internal audits completed, particularly
the specialist audits, with material
improvements in various control areas and
processes being implemented as a result of
internal audit recommendations. In reaching
this conclusion the Committee
acknowledged that the EY internal audit
team is still familiarising itself with the
various businesses of the Group and
developing appropriate relationships with
senior management, whilst maintaining the
independence of management.
Prior to the start of the year, the Committee
considered and approved the 2023 internal
audit plan, which was structured to align with
ITV’s strategic drivers and principal risks and
addressed operational, financial,
compliance and technology controls and a
number of key operational risks. The internal
audits performed provided assurance over
areas deemed to be of greater risk and
relative importance to the Group in 2023.
The internal auditor also provided the
Committee (and therefore the Board) with
valuable insight on the culture across the
Group and the reflection of the Group’s
values by management and other
employees. A cultural assessment is
routinely incorporated in audit ratings.
The Committee is satisfied that, during
2023, delivery of the approved internal
audit strategy and plan provided timely
and appropriate assurance on the
effectiveness of controls in place to
successfully manage relevant Group
principal risks.
EXTERNAL AUDITOR
Our role Items covered
• Oversee the relationship with the external auditor
• Review the quality and effectiveness of the external audit,
including approval of the annual audit plan, and the
procedures and controls designed to ensure auditor
independence and objectiveness
• Review and make recommendations to the Board on the
tendering of the external audit contract, and the
appointment, remuneration and terms of engagement of the
external auditor
• Regularly meeting with the external auditor in the absence of management
• Review, challenge and subsequent approval of H1 review and FY23 audit strategy/plans
• PwC’s reports on the H1 review and FY23 audit progress, findings and conclusions
• Auditor opinion on FY23 financial statements
• Recommendation to reappoint PwC at 2024 AGM
• Approval of non-audit services policy
• Approval of 2023 audit fee proposal
• Consideration of the ongoing independence of the external auditor and the evidence of
quality and effectiveness in the delivery of the audit
• Review outcome for FY22 external audit quality indicators (AQIs), setting of the 2023 AQI
measures and subsequent consideration and monitoring of performance against these,
including post the FY23 audit
External audit effectiveness
and quality
The Committee is cognisant of the fact
that assessing external audit quality is a key
responsibility within its remit. Set out below
are the specific areas that the Committee
focused on in assessing audit quality,
including relevant outcomes:
• Identification of Audit Quality Indicators
(AQIs): In 2022 seven AQIs were identified
as useful in enabling the Committee to
assess the effectiveness and quality of
the external audit. In July 2023 the
Committee reviewed performance of
these AQIs against the 2022 targets and
concluded that the adoption of AQIs was a
meaningful and valuable tool for all
parties. Seven AQIs were identified and
have been used for the 2023 audit. A final
review of the performance of the AQIs
against the 2023 targets will be
undertaken in May 2024.
• Audit plan and strategy: The Committee
discussed PwC’s detailed audit plan and
strategy, including the intended scope of
the audit, identification of significant and
elevated audit risks, the level of materiality
proposed and the principles of PwC’s
centrally directed audit approach. The
Committee welcomed the plan to enhance
the focus on utilising data-enabled
auditing approaches to maximise
efficiencies and insight from the auditor’s
testing. Following discussion and
challenge, the Committee agreed the
methodology adopted for determining
materiality and the scope of the audit.
• Auditor’s reporting (written and verbal)
to the Committee: The Committee
reviewed the effectiveness of the audit
throughout the year, taking into account
(amongst other things) the delivery of the
approved audit strategy, approach to
adjusting the audit plan to reflect changes
in risk assessment during the year and
insight and robust challenge around the
key accounting judgements and in dealing
with management.
• Interaction with auditor: The numerous
interactions with the auditor provided
the Committee with an insight into the
quality of the audit process and the
audit leadership team, and with the
opportunity to assess the auditor’s
challenge of management’s views. In
addition, the Committee Chair met
regularly with the lead audit partner,
receiving early insight to the progress of
the audit and any issues emerging,
including the auditor’s views or concerns
regarding the capacity within the finance
teams, given the ongoing challenges
related to the introduction of the new
Oracle Fusion system and ways of working.
The Committee noted that PwC
challenged management robustly on key
judgements and estimates, accounting
treatments and disclosures. The
Committee also reviewed PwC’s 2023
transparency report.
116 ITV plc Annual Report and Accounts 2023
AUDIT AND RISK COMMITTEE REPORT CONTINUED
• Internal evaluation session: Drawing the
above assessments together, and key to
the determination of a high-quality audit,
was a formal internal assessment session
attended by the Committee members and
the Group CFO & COO. This session was
informed by circulating in advance themes
for discussion, including the audit plan and
strategy, execution of the agreed plan and
conclusion, team performance and
communications, firm-wide procedures
(including resources, support and culture),
and insights and the reporting PwC shared
with the Committee. The Group CFO &
COO’s input to this session was informed
by a prior meeting with relevant members
of the finance team, and other relevant
teams, to ensure that feedback was
obtained from all levels and divisions
of the Group that interacted with PwC.
The Committee spent time discussing
the degree of challenge and robustness
of approach to the audit.
The assessments above enabled the
Committee to conclude that PwC has
continued to provide a high-quality robust
audit, which it conducted with rigour and
effective and constructive challenge,
including questioning key accounting issues,
and exercising professional scepticism in its
review of management’s assumptions,
judgements and assertions.
The Committee appreciated, in particular,
the understanding of the business and the
quality of communications of the lead and
technology audit partners, the detailed
risk-based planning (with clear explanations
for any subsequent deviations) and the
structured, pragmatic approach to finding
the right solution, supported by the effective
use of PwC internal experts and specialists.
Audit tender and rotation
PwC was appointed as the external auditor
for ITV effective from 1 January 2021,
following a formal competitive tender
process, including seeking investor views
and agreement. The current PwC lead audit
partner, Jonathan Lambert, has led the audit
since the beginning of PwC’s tenure at ITV.
The Company will put the external audit
contract out to public tender at least every
ten years and will seek the rotation of the
audit partner in line with regulation and
professional and ethical guidance.
The Company confirms that it has complied
with the provisions of the CMA‘s Statutory
Audit Services for Large Companies Market
Investigation (Mandatory Use of Competitive
Tender Processes and Audit Committee
Responsibilities) Order 2014 for the financial
year under review.
Independence and objectivity
In addition to the above assessment of the
effectiveness and quality of the audit, the
Committee seeks to assess and ensure the
objectivity and independence of the external
auditor through:
• Focus on the assignment and rotation of
key personnel
• The adequacy of audit resource
The Policy on the Independence and
Objectivity of External Auditors (approved in
February 2024), which includes restrictions
on the provision of non-audit services and
the hiring of former external auditor
employees. This policy is available on the
governance section of ITV’s website: www.
itvplc.com/investors/governance/policies
Non‑audit services
In accordance with the Independence
and Objectivity of External Auditors policy, in
2023 the Company incurred fees for
non-audit services of approximately
£1,500,000 (2022: £155,000) which related
principally to reporting accountant work on a
proposed acquisition and the review of the
interim financial information. For information
on audit fees see note 2.1 to the financial
statements.
Committee conclusions and
confirmations
Fair, balanced and understandable
The Board is required to provide its opinion
on whether it considers that the Company’s
2023 Annual Report and Accounts, taken
as a whole, are fair, balanced and
understandable, and provide the information
necessary for shareholders to assess the
Company’s position and performance,
business model and strategy.
The Committee discussed the preparation
of the Company’s 2023 Annual Report and
Accounts with the Board. To support the
Board in providing its opinion, the Committee
considered the assigned responsibilities for
content and overall cohesion and clarity of
the Annual Report and Accounts and
assessed the quality of reporting through
discussion with Management and the
external auditor. Specific areas of challenge
included the presentation of exceptional
items, the equal prominence of GAAP and
non-GAAP financial measures within the
front half of the Annual Report and Accounts
and the description of going concern and
viability statement assumptions.
The process included considering each
of the elements (fair, balanced and
understandable) on an individual basis to
ensure ITV’s reporting was comprehensive
in a clear and consistent way, and in
compliance with accounting standards and
regulatory and legal requirements and
guidelines. The reviews carried out by
internal functions within the Company and
independent reviewers were undertaken with
a view to ensuring that all material matters
have been reflected in the Company’s 2023
Annual Report and Accounts, and that they
correctly reflect:
The Company’s position and performance as
described on pages 18 to 31
The Company’s business model as described
on pages 2 and 3
The Company’s strategy, as described on
pages 10 to 13
Following its review, the Committee advised
the Board that the Company’s Annual Report
and Accounts for the year ended
31 December 2023 were fair, balanced
and understandable.
In this report
117ITV plc Annual Report and Accounts 2023
GOVERNANCE
REMUNERATION REPORT
Dear Shareholder
Despite a challenging and rapidly evolving
market backdrop, this has been a year of
progress for ITV. Economic headwinds have
negatively impacted the broader sector,
however we continued to make progress
on strengthening the capabilities of the
organisation and hitting a number of key
milestones on our strategic journey to be
‘More than TV’, evolving from a legacy
broadcaster to a more sustainable media
and entertainment business.
We delivered against each of our three main
strategic objectives. Studios grew revenue
and profits to record levels, deploying its
global scale and strength to win business
across all major genres and geographies. In
streaming, ITVX had a successful launch
year, proving technically robust and through
the quality and depth of its content attracted
large cohorts of new viewers. The linear
broadcast business continued to
demonstrate its extraordinary ability to
generate mass, simultaneous audiences. In
addition, innovations such as Planet V, the
platform enabling the growth of ITV’s digital
advertising, reinforced ITV’s position as the
clear leader in UK commercial television.
Macroeconomic pressures have depressed
advertising volumes across the market.
Continued cost of living pressures have
affected consumer demand and this has
resulted in reduced marketing spend by
many advertisers, impacting ITV’s financial
results. Total revenues for 2023 were slightly
down on the prior year at £4,260m. Although
there was an expectation that adjusted
EBITA for 2023 would fall as a result of
planned strategic investment, the outcome
of £489m was towards the lower-end of
our forecasts reflecting a more challenging
external environment. We are pleased to
see that the balance sheet remains robust,
enabling our targeted strategic investment
programme to continue and securing the
dividend for the full year at 5.0p, consistent
with last year. We are now in the early stages
of a new strategic restructuring and
efficiency programme across the Group to
reshape the cost base, enhance profitability,
and support the growth drivers of Studios
and Streaming. By the end of 2024 we expect
the programme to have delivered
incremental annualised savings of at
least £50 million gross per year, giving a
£30 million in year gross benefit in 2024.
The pace of change for the sector continues
to be significant. Technology advances are
dramatically increasing the choices for
consumers, the emergence of generative AI
is a potential game changer in the world of
production and the competitor set is now
made up of international streamers and
global tech corporations rather than national
television broadcasters. In light of these
structural shifts it is essential that the
business continues to evolve and respond.
2024 will be another pivotal year with a focus
on reshaping the organisation, so that ITV can
be a sustainable media and entertainment
business for the long term.
Policy renewal
In line with the usual three-year cycle, the
Director’s Remuneration Policy will require
renewal at the 2024 AGM.
As part of the last policy renewal,
shareholders approved the adoption of
Restricted Shares as our primary long-term
incentive vehicle. The rationale for this
model included:
• Simple structure – highly effective pay
model in a competitive global media
talent market
• Addresses inherent advertising market
volatility – the performance of the
business continues to be inherently linked
to the buoyancy of the highly cyclical
advertising market. This often makes
long-term target setting challenging
• Rewards strategic investment and
transformation – focus on execution of our
investment strategy to deliver long-term
sustainable performance, rather than
short-term gain. The structure provides
flexibility, by allowing the delivery of the
strategy to be judged over the longer term,
rather than within fixed three year
performance periods
• Focuses executives on long-term
stewardship of the brand
SHARMILA NEBHRAJANI OBE
CHAIR, REMUNERATION COMMITTEE
The purpose of this report is to set
out for shareholders the principles
and policy we apply to remuneration
for our Directors and to update you
on how we have applied these for
the financial year ended
31 December 2023. The report
also aims to demonstrate how
our current approach and our
Remuneration Policy align with our
strategy, support the retention of
key talent and reward them for
strong performance.
READ MORE
Remuneration Committee (page 119)
Remuneration Policy application in
2023 and 2024 (from page 120)
Directors’ Remuneration Policy
(from page 122)
Remuneration across the Company
(page 129)
Annual Report on Remuneration
(from page 130)
Other disclosures (from page 137)
118 ITV plc Annual Report and Accounts 2023
REMUNERATION REPORT CONTINUED
As our strategic transformation continues
and given that the Restricted Share scheme
is only in its third year of operation, the
Remuneration Committee has concluded
that the current remuneration structure
continues to support our strategic goals and
enables the business to remain agile in a
dynamic and cyclical sector where viewer
behaviours continue to evolve. We therefore
propose to roll forward the previous policy
with only minor amendments.
As part of the policy renewal process we
engaged with a number of our major
investors. Consistent with the messaging
received in prior years, it was clear that while
the majority of investors and mainstream
proxy voting agencies continue to support
our approach to pay, a minority of investors
retain reservations. Although we are mindful
of the diverse views of our investors, we have
opted to retain the current pay approach as it
continues to support our strategy. The 2021
policy represented a major shift in approach
and the first Restricted Share awards under
this policy will not be released until 2026;
it therefore feels premature to make further
radical change at this stage.
The Board continues to maintain dialogue
with investors, and the Remuneration
Committee has engaged with them on
numerous occasions over recent years.
In many cases remuneration proposals
have been adapted in direct response to
their feedback. In line with our normal
approach, we will continue to keep the
effectiveness of our approach to pay,
developments in the market, and evolving
investor sentiment under review.
In terms of implementing the policy for
2024, the Committee has approved a salary
increase of 3% for both the Chief Executive
and Group CFO & COO which is in line with
other senior executives but below the
5%-6% increase applied for the majority of
employees. Incentive opportunities for both
executives will be consistent with prior years.
The performance measures and weightings
for the 2024 annual bonus are similar to
2023 with the addition of a cost savings
metric (worth 10% of the award) to reflect
the scale and importance of this priority,
with 50% linked to adjusted EBITA.
Consistent with prior years the targets for
the annual bonus have been set to reflect
internal and external forecasts for the
Company, including significant budgeted
cost savings and critical investment spend.
We remain mindful of the impact of share
price volatility on future share awards and
investor concerns regarding potential
windfalls. The Committee will consider this
at the point of grant and at vesting. Where
necessary, the Committee retains the ability
to adjust vesting outcomes to ensure they
are appropriate.
Incentive outcomes
The Company’s resilient performance
despite economic headwinds was reflected
in the incentive outturns. The 2023 annual
bonus was based on adjusted EBITA (60%),
cash conversion (10%), individual strategic
targets (20%), as well as a scorecard of
ESG priorities (10%). Financial targets were
set in the context of advertising market
uncertainty, with targets set to be
stretching but realistic.
While adjusted EBITA achievement was at
the lower end of the targeted range, cash
conversion was ahead of planned results
and progress was made against our ESG
scorecard measures. As noted above, the
business also made significant progress on
executing our strategic goals in response to
the evolving marketplace. The overall bonus
outcome for the Executive Directors was
56.41% of maximum, with one-third of the
bonus award deferred into shares for three
years. This represents a significantly lower
outturn than the 81.72% achieved by both
directors for 2022, primarily reflecting
the economic backdrop impacting
financial performance.
This is also the first year in which the
Restricted Share awarded to our Executive
Directors will vest. Although the single figure
includes a value for the first award granted in
2021, in practice these awards will only be
released in 2026 following completion of a
two year holding period. Under this pay
model, long-term incentive award levels
were reduced by 50%, but with performance
alignment primarily provided via the share
price. While the short-term share price
performance has been disappointing,
both Executive Directors maintain sizeable
interests in ITV shares, in excess of the
requirement under the Shareholding
Guidelines, and have personal financial
exposure that mirrors that of our investors.
As noted above, the strategic transformation
of the business continues and the Board
remains confident that the investments
made today will be reflected in the
long-term performance of the business.
Wider workforce
The Committee continues to focus on wider
workforce pay, recognising that the cost of
living continues to be a real concern for a
number of our colleagues. In relation to 2024
salary increases, the overall aim was to
provide all employees with a meaningful
increase to their base salary which reflected
economic realities. While the high
inflationary environment impacts everyone,
the Committee recognises lower earning
employees suffer the consequences more
acutely. Salary increases for more senior
roles were therefore reduced to help fund
more meaningful increases for employees at
lower pay levels.
Salary increases were scaled from 6% for
lower paid employees, 5% for low-mid tier
roles, 4% for mid-senior roles and 3% for the
more senior executives. As detailed in last
year’s report, a similar approach was taken
for the 2023 salary increases, with uplifts
of up to 6% applied for lower paid staff.
In January 2023, a one-off cost of living
payment was made providing £1,000 to
all our staff earning up to £75,000. Although
the 2023 Employee Bonus outcome of £764
for wider staff was lower than prior years,
reflecting the lower than expected EBITA,
management elected to make a one-off
additional payment to staff of £636. This
combined payment of £1,400 reflects the
exceptional levels of commitment shown by
employees in delivering the transformation
of the business.
Reflecting our broader ethos, ITV remains
committed to ensuring all colleagues earn
at least the real Living Wage. The Company
remains similarly committed to Diversity and
in addition to its gender pay gap data, ITV has
voluntarily published its ethnicity pay gap
information since 2018, one of only a small
number of FTSE companies to do so. ITV has
also been calculating its disability and
LGBTQ+ pay gaps since 2020 and published
this information for the first time in 2023.
Concluding remarks
As a Committee, we are committed to
making responsible and measured decisions
around pay. I hope this report provides clear
and transparent disclosure, including the
wider context informing these decisions.
As a Committee we will continue to engage
with shareholders whenever possible to
listen to feedback and discuss pay matters.
In the meantime, I look forward to your
support for both the Remuneration Policy
and the Report at the upcoming AGM.
SHARMILA NEBHRAJANI OBE
CHAIR, REMUNERATION COMMITTEE
7 March 2024
119ITV plc Annual Report and Accounts 2023
GOVERNANCE
Remuneration Committee
WHO IS ON THE COMMITTEE
The Committee is composed
of independent
Non-executive Directors.
The current members are:
• Sharmila Nebhrajani (Chair)
• Salman Amin
• Andrew Cosslett
• Edward Bonham Carter
Anna Manz and Duncan Painter stepped down as
members of the Committee in the year. Edward Bonham
Carter joined as a Committee member in April 2023
Full details of attendance at Committee meetings can
be found in the table on page 82
Detailed biographies can be found on pages 77 and 78
OUR ROLE
Following each meeting, the
Committee communicates its
main discussion points and
findings to the Board.
The Committee’s terms of
reference can be accessed on
our website www.itvplc.com/
investors/governance
The main role of the Committee is to:
• Review the ongoing appropriateness, relevance and effectiveness of the Remuneration Policy, including in relation
to retention and development, whilst taking into account workforce remuneration and related policies, and the
alignment of incentives and reward
• Propose to shareholders changes to the Remuneration Policy as appropriate
• Approve the implementation of remuneration arrangements for the Chair, Executive Directors, Management
Board and other senior executives (together the Senior Executive Group) considering arrangements for the wider
employee group
• Approve the design of the Company’s annual bonus arrangements and long-term incentive plans, including the
performance criteria that apply for the Senior Executive Group
• Determine the award levels for the Senior Executive Group based on performance against annual bonus targets
and long-term incentive conditions
MEETINGS IN 2023
In addition to Committee
members, the Executive
Directors, Chief People
Officer, General Counsel and
Company Secretary, Group
Reward Director and
independent adviser Deloitte
attend meetings as required.
Attendees do not take part
in decisions relating to their
own remuneration and
potential conflicts are
suitably mitigated.
January
• Indicative LTIP and PSP performance
• Annual review of the Chair’s fees
• Pay gap reporting and CEO pay ratios
• Compliance with shareholding guidelines
February
• Bonus outcomes for 2022
• Performance outcomes for 2020 LTIP and PSP awards
• Bonus targets for 2023
• Financial underpin target for 2023 ESP awards
• Remuneration Report and compliance against the
Remuneration Policy
• Review of the Senior Executive Group
• Adviser independence
• Gender and ethnicity pay gap reporting and CEO
pay ratios
June
• Approach for Remuneration Policy review
• 2023 awards under the executive and SAYE plans
• Committee terms of reference review
September
• Financial performance update
• Employee reward framework, including review
of remuneration and related policies and
remuneration trends
• 2023 AGM season update
• Remuneration Policy and Shareholder
Engagement update
December
• Review of 2023 bonus performance
• 2024 Bonus framework and targets
• 2024 Remuneration Policy Renewal
• Annual pay review
ANNUAL REVIEW
A review of the performance
of the Committee is
conducted each year.
• In 2023 an internally facilitated Board evaluation was undertaken, which included a review of the Committee.
The results are summarised on pages 100 to 101
• Overall, the evaluation concluded that the Committee is working effectively and responding appropriately to its
terms of reference
• The Committee recommended a focus on wider comparatives in relation to international remuneration
120 ITV plc Annual Report and Accounts 2023
REMUNERATION REPORT CONTINUED
OVERVIEW OF REMUNERATION POLICY 2023
WHAT DID EXECUTIVE DIRECTORS EARN DURING 2023?
SINGLE FIGURE REMUNERATION AT A GLANCE
Carolyn McCall
Chris Kennedy
Salary
Benefits Pension Bonus Share awards
Total
£2,881,440
Total £1,930,437
PERFORMANCE AGAINST ANNUAL BONUS TARGETS RESTRICTED SHARES – 2021 ESP
0% 50% 100%
% of maximum
EBITA
(60% total)
ESG
(10% total)
Cash
(10% total)
Individual/ strategic
(20% total)
Actual
Maximum
Restricted Shares granted in
2021 are due to vest in May 2024
Detail on vesting is set out
in the report.
BONUS OUTCOME
Carolyn McCall
56.41%
of maximum
Chris Kennedy
56.41%
of maximum
PERCENTAGE OF TOTAL OPPORTUNITY ALIGNMENT WITH SHAREHOLDERS
Chief Executive
Group CFO & COO
Fixed
Annual Bonus (% of max)
ESP (% of grant value vesting)
Total received of
maximum opportunity
67%
100%
27%
43%
30%
29%
43%
28%
56%
51%
Total received of
maximum opportunity 68%
100%
56%
51%
Share ownership
Shareholding is a means by which the interests of the Executive Directors
are aligned with those of shareholders. As at 31 December 2023 both
directors had holdings in ITV that exceeded their respective shareholding
policy requirements – 400% of salary for Carolyn McCall and 225% of salary
for Chris Kennedy.
Carolyn McCall
(400% of salary)
Chris Kennedy
537
37.42 62.58
Shares held beneficially
Unvested restricted share awards not subject to
performance conditions, accounted for on a net of tax basis
372
22.33 7 7. 6 7
%
(225% of salary)
WIDER WORKFORCE IN 2023
SALARY ALL EMPLOYEE BONUS ‘THANK YOU’ PAYMENT PENSION BROAD BENEFITS
PROGRAMME
up to
6%
increase
£764
38.2% of the maximum
opportunity of £2,000
£636
Total combined payment of
£1,400 made to eligible
employees
up to
9%
company contribution
See page 129
121ITV plc Annual Report and Accounts 2023
GOVERNANCE
OVERVIEW OF REMUNERATION POLICY 2024
HOW WILL EXECUTIVES BE PAID IN 2024?
FIXED PAY
Chief Executive salary:
£1,040,729
Group CFO & COO salary:
£744,587
Salary increase of 3%.
Increases for employees
range from 3% to 6%.
Benefits package
remains unchanged –
includes private medical
insurance and car‑related
benefit.
Retirement benefits of
9% to align with the
workforce pension
contributions.
ANNUAL BONUS
2024 bonus metrics – measure and support execution of the strategy
Cash element 2/3 total bonus
Expand Studios globally
50%
Adjusted EBITA: Profitability of
underlying business
Deferral into shares for three years 1/3 total bonus
10%
Cost savings: Rebasing the cost
base of the organisation
Optimise Broadcast
Cash element
Chief Executive: up
to 120% of salary;
Group CFO & COO:
up to 110% of salary
Deferred shares
Chief Executive: up
to 60% of salary;
Group CFO & COO:
up to 55% of salary
Both bonus
elements subject
to malus and
clawback
10%
Cash conversion: Effective cash
generation
10%
ESG scorecard
Supercharge Streaming
20%
Individual strategic:
Deliver strategic priorities
RESTRICTED SHARES
Successful execution of strategy ultimately reflected in the share price
Released after five years
Annual grant: Chief Executive: up to 132.5% of salary; Group CFO & COO:
up to 112.5% of salary – 50% discount to legacy LTIP award level
Release of shares subject to performance underpin: assessed after year
three – ability for Remuneration Committee to scale back awards if the
underpins are not met
Awards subject to malus and clawback
Simple structure – aligns with strategy and shareholders
over the long term
Retains key talent – aligned to global talent market and peer practices
Rewards strategic investment – delivery of long-term sustainable performance,
rather than short-term gain
Reflective of dynamic and cyclical nature of sector and viewer behaviours,
where business needs to remain agile and adapt
Focus on long-term stewardship of the brand
SHAREHOLDING GUIDELINES
Guidelines apply in post, and extend beyond tenure In‑post guideline – Chief Executive: 400% of salary and Group CFO & COO: 225% of salary
Applies for two years following departure – Chief Executive: 265% of salary and Group
CFO & COO: 225% of salary
WIDER WORKFORCE IN 2024
SALARY ALL EMPLOYEE BONUS
OPPORTUNITY
PENSION BROAD BENEFITS
PROGRAMME
up to
6%
increase
up to
£2,000
up to
9%
company contribution
See page 129
122 ITV plc Annual Report and Accounts 2023
DIRECTORS’ REMUNERATION POLICY
The following sets out the proposed ITV Directors’ Remuneration Policy
(the Policy). The Policy is subject to a binding shareholder vote at ITV’s
AGM on 2 May 2024 and, if approved, will apply from this date.
The previous Policy was last renewed at the 2021 AGM, when the Company implemented a new Restricted Shares structure.
The Committee discussed the current Policy over a series of meetings throughout 2023 and early 2024, debating its continued
effectiveness given the strategic priorities of the business, the cyclical nature of the sector, evolving market trends and investor guidance.
We also engaged with major investors in order to better understand their views around our pay approach. Input was sought from the
management team, while ensuring that conflicts of interest were suitably mitigated. An external perspective was provided by the
Committee’s independent advisers. The Committee undertook an extensive consultation process with major shareholders before finalising
the Policy. The key features of our approach were also assessed against the principles of clarity, simplicity, risk management, predictability,
proportionality and alignment to culture.
As noted in the Chair’s statement, the Committee determined that the existing Restricted Shares structure continues to be an appropriate
and effective long-term incentive vehicle for ITV, recognising that the first awards under this structure will vest in 2024 and will not be released
until 2026. The Policy presented for shareholder approval at the 2024 AGM therefore contains no significant changes from the 2021 Policy.
Minor updates have been made to the detail of the Policy to ensure it continues to operate as intended. The proposed Policy retains the key
best practice features as applied under the Policy approved in 2021.
Executive Director Remuneration Policy Table
Fixed pay policy for Executive Directors
BASE SALARY
Purpose and link to strategy Reflects the individual’s skills, responsibilities and experience. Supports the recruitment and retention of Executive
Directors of the calibre required to deliver the business strategy within the competitive media market.
Operation Normally reviewed annually and paid monthly in cash. Consideration is typically given to a range of factors when determining
salary levels, including:
• Personal and Company-wide performance
• Scope of role and experience
• Typical pay levels in relevant markets for each executive whilst recognising the need for an appropriate premium to attract
and retain superior talent, balanced against the need to provide a cost-effective overall remuneration package
• The wider employee pay review
Maximum potential
payment
Ordinarily salary increases will be in line with the average increase awarded to other employees in the Company. Increases
may be made above this level to take account of individual and business circumstances, which may include factors such as:
an increase in size or scope of the role or responsibility; or an increase to reflect the individual’s development and
performance in the role.
While there is no maximum, salary levels for each individual are responsibly set taking into account the factors described
above.
Performance metrics None, although overall individual and business performance is considered when setting and reviewing salaries.
RETIREMENT BENEFITS
Purpose and link to strategy To provide competitive post-retirement benefits or cash allowance as a framework to save for retirement.
Supports the recruitment and retention of Executive Directors of the calibre required to deliver the business strategy within
the competitive media market.
Operation Executives can choose to participate in the ITV defined contribution scheme, receive a cash allowance or receive payments
into a personal pension or a combination thereof.
Contributions are set as a percentage of base salary.
Post-retirement benefits do not form part of the base salary for the purposes of determining incentives.
Maximum potential
payment
The maximum benefit will normally be capped at a level comparable to the benefit available to the wider employee base. This
is currently 9% of salary.
Performance metrics None
123ITV plc Annual Report and Accounts 2023
GOVERNANCE
BENEFITS
Purpose and link to strategy Ensures the overall package is competitive and provides financial protection for employees and their families.
Operation The Company provides a range of market competitive benefits, which may include travel-related benefits, participation in
all-employee share schemes, private medical insurance and other insurance benefits.
Additional benefits may also be provided in certain circumstances, if required for business needs. For example (but not
limited to), relocation expenses, housing allowance and education support.
Maximum potential
payment
Set at a level which the Committee considers to be appropriately positioned taking into account typical market levels for
comparable roles, individual circumstances and the overall cost to the business.
While there is no maximum monetary value for benefits, any benefits provided will be reasonable in the context of relevant
market practice, individual circumstances and overall cost to the business.
In addition, the Company may reimburse relocation expenses and/or provide for tax equalization arrangements. Participation
in any tax-approved all-employee share plans will be limited by the maximum permitted under the relevant legislation.
Variable pay policy for Executive Directors
ANNUAL BONUS SCHEME (BONUS) AND DEFERRED SHARE AWARD PLAN (DSA)
Purpose and link to strategy Incentivises executives and colleagues to achieve key strategic outcomes on an annual basis. Focus on key financial metrics
and corporate objectives to deliver the business strategy.
The element of the Bonus compulsorily deferred into shares rewards delivery of sustained long-term performance, provides
alignment with the shareholder experience and supports the retention of executives.
Operation Measures and targets are set annually, normally based on business plans at the start of the financial year and pay-out levels
are determined by the Committee following the year end based on performance against objectives.
Paid once the results have been audited. Financial results used for bonus calculation will be subject to suitable review (e.g.
sign-off by Audit and Risk Committee) before consideration by the Committee.
The Committee has the discretion to amend the bonus outcome if any formulaic assessment of performance is considered
to be inappropriate taking into account factors such as a balanced view of overall business or individual performance for the
year, and the original intentions of the plan.
Not more than two-thirds of the Bonus is delivered in cash with the balance deferred into shares under the DSA normally for a
period of three years.
During the deferral period share awards may be reduced or cancelled in certain circumstances. Dividends or equivalents may
be earned on deferred shares.
Maximum potential
payment
The maximum Bonus opportunity for any Executive Director will not exceed 200% of salary.
The current maximum Bonus opportunities are 180% of salary for the Chief Executive and 165% of salary for the Group
CFO & COO. Increases above the current opportunities, up to the maximum limit, may be made to take account of individual
circumstances, which may include: an increase in size or scope of the role or responsibility; a change in business
circumstances; or an increase to reflect the individual’s development and performance in their role.
Performance metrics Performance measures and targets are set by the Committee each year based on corporate objectives closely linked to
strategic priorities of the business. The majority of the Bonus opportunity will be based on corporate and financial measures.
The remainder of the Bonus will be based on performance against individual and/or strategic objectives.
Details of the performance criteria for the Bonus are set out in the Annual Report on Remuneration. The payment schedule
for each metric will be scaled based on the stretch of the underlying target. Normally, up to 20% of the maximum opportunity
will be received for threshold performance.
124 ITV plc Annual Report and Accounts 2023
REMUNERATION REPORT CONTINUED
RESTRICTED SHARES
Purpose and link to strategy Incentivises Executive Directors to deliver the business strategy and aligns with longer-term Company performance and the
shareholder experience.
Acts as a retention tool to retain the executives required to deliver the business strategy.
Operation Awards may be structured as conditional rights or nil-cost options (or economic equivalent). Awards will normally be
granted annually with vesting after three years, subject to satisfaction of a performance underpin. Awards will normally be
required to be held for an additional two year holding period so that the award is released after five years. During the holding
period awards may be reduced or cancelled in certain circumstances. Further detail is provided in the Annual Report
on Remuneration.
Dividends (or equivalents) may be earned in respect of any vested shares.
Maximum potential
payment
The maximum award level is 175% of salary.
Our current operational policy is to make annual awards of 132.5% of salary to the Chief Executive and 112.5% to the
Group CFO & COO.
Performance metrics The Committee may define the terms of the performance underpin. The criteria may be based on financial and/or non-
financial metrics and include reference to corporate, divisional or individual performance. When determining vesting the
Remuneration Committee will take into account all factors deemed relevant at the time (e.g. progress against execution of
the strategy, the nature of the wider trading environment). As the underpin is qualitative, there are no performance condition
weightings applicable, nor is there a threshold-max vesing range.
Information on the individual award grants is set out in the Annual Report on Remuneration.
SHAREHOLDING GUIDELINES
Purpose and link to strategy To create alignment between Executive Directors and shareholders both during service and after departure.
Operation Shareholding guidelines are in place which encourage Executive Directors to build up a holding in Company shares during the
course of tenure.
The shareholding guideline for the Chief Executive is 400% of base salary and for the Group CFO & COO 225%.
Executive Directors will normally also be expected to retain an interest in Company shares for two years following departure.
The expected holding requirement following departure will be equal to two times the Executive Director’s Restricted Shares
grant level.
Further details of current shareholdings of the Executive Directors, together with further detail on the operation of the
shareholding guidelines are set out in the Annual Report on Remuneration.
Detailed provisions
The Committee may make any remuneration payments and payments for loss of office (including exercising any discretion available to it in
connection with such payments) notwithstanding that they are not in line with the Policy set out above, where the terms of the payment were
agreed either: (i) during the term of, and was consistent with any previous policy; or (ii) at a time when the relevant individual was not a director
of the Company and the payment was not in consideration for the individual becoming a director of the Company. This includes the ability to
make payments in recognition of legacy Long Term Incentive Plan (LTIP) awards, awarded under any previous Policy.
The Committee may adjust or amend Bonus and share awards only in accordance with the provisions of the relevant plan rules. This includes
making adjustment to reflect one-off corporate events, such as a change of control or a change in the Company’s capital structure. In accordance
with the plan rules, share awards may be settled in cash rather than shares where the Committee considers this appropriate (e.g. to comply
with securities law).
The Committee may make minor amendments to the Policy to aid its operation or implementation without seeking shareholder approvals
(e.g. for regulatory, exchange control, tax or administrative purposes or to take account of a change in legislation) provided that any such
change is not to the material advantage of the Director.
Malus and clawback
Malus and clawback provisions may be operated at the discretion of the Committee in respect of any cash and deferred share elements of the
bonus, Restricted Share and legacy LTIP awards. Under malus, unvested share awards (including any Restricted Share or legacy LTIP awards
subject to a post-vesting holding period) can be reduced (down to zero if considered appropriate) or be made subject to additional conditions.
Clawback allows for repayment of bonuses previously paid and/or shares previously received following vesting.
Malus/clawback can be operated up to four years following the start of the relevant bonus year for bonuses, and up to six years from the
relevant date of grant for Restricted Share and legacy LTIP awards.
For awards granted from 2020 onwards, the Committee has the discretion to apply malus and/or clawback in the event of the following
circumstances: material misstatement of financial results; gross misconduct; fraud; payments based on an erroneous calculation or data;
serious reputational damage; or material corporate failure.
125ITV plc Annual Report and Accounts 2023
GOVERNANCE
Performance measures and target setting
The annual bonus is assessed against financial, strategic and individual targets determined by the Committee. This enables the Committee to
reward annual financial performance delivered for shareholders, and performance against specific financial, operational or strategic
objectives set for each director, which are closely linked to the strategic priorities of the business. The Committee sets targets taking into
account external forecasts, internal budgets and business priorities.
A key feature of Restricted Share awards is that the successful execution of the strategy and the success of the business is ultimately reflected
in the share price, therefore providing strong alignment with the interests of our shareholders. The vesting of Restricted Share awards is
subject to a performance underpin. For 2024 awards, the Committee will retain the ability to reduce vesting on the Restricted Shares (including
to nil) where adjusted Return on Capital Employed is below the Company’s cost of capital. In addition, the Committee has retained a broader
discretion to also enable reduction in vesting levels where there is a material weakness in the underlying financial health and sustainability of
the business. These underpins have been selected as they are considered to provide a robust and sustainable safeguard against payments for
failure. Further detail on performance criteria is set out in the Annual Report on Remuneration.
When considering performance outcomes, the Committee will look beyond formulaic results to ensure the outcomes align with the overall
business or individual performance. The Committee may adjust the targets for awards or the calculation of performance measures and vesting
outcomes for events not foreseen at the time the targets were set to ensure they remain a fair reflection of performance over the relevant
period. Discretion will be exercised mindful of broader performance, and any change to the outcome will be disclosed in the next Annual
Report on Remuneration.
Application of Remuneration Policy
The chart below provides an indication of the level of remuneration that would be received by each Executive Director under the following three
assumed performance scenarios:
Below threshold performance Fixed elements of remuneration only – base salary, benefits and pension
Mid-performance Assumes 50% pay-out under the annual bonus
Assumes 100% vesting of the Restricted Shares
Maximum performance Assumes 100% pay-out under the annual bonus
Assumes 100% vesting of the Restricted Shares
Scenario charts
0 1,000,000 2,000,000 3,000,000 4,000,000
0 1,000,000 2,000,000 3,000,000 4,000,000
0 10 20 30 40 50 60
70
Minimum
100%
36% 27% 37%
29%
42%
29%
£0.8m
£2.3m
£2.9m
Chris Kennedy
0 10 20 30 40 50 60
70
Mid performance
Maximum
0 10 20 30 40 50 60
70
Minimum
100%
33% 27% 40%
26% 43% 31%
£1.2m
£3.5m
£4.4m
Carolyn McCall
0 10 20 30 40 50 6070
Mid performance
Maximum
0 30 60
Notes:
1. Fixed pay is the salary as at 1 January 2024, pension is per the Policy, and the value for benefits is equivalent to that included in the remuneration table on page 130.
2. Annual bonus is based on 180% of salary for Carolyn McCall and 165% of salary for Chris Kennedy.
3. Based on Restricted Share grants of 132.5% for Carolyn McCall and 112.5% for Chris Kennedy.
126 ITV plc Annual Report and Accounts 2023
REMUNERATION REPORT CONTINUED
Impact of share price
The value of Restricted Shares will fluctuate based on the share price over the relevant vesting period. For example, if the share price
increased by 50% over the relevant vesting and holding period, the maximum values shown in the charts above would increase to £5.1 million
for Carolyn McCall and to £3.3 million for Chris Kennedy. Conversely if the share price was to fall by 50%, the maximum values shown in the
charts above would reduce to £3.7 million for Carolyn McCall and to £2.5 million for Chris Kennedy.
Recruitment remuneration
When agreeing the components of a remuneration package for a new Executive Director, the Committee will apply the principles
detailed below.
The package will be competitive to attract and retain the most suitable candidate for the job. Where possible, the Committee will always seek
to align the remuneration package with the Policy outlined above. However, where appropriate, detailed elements of the package may be
tailored to the circumstances of the individual upon recruitment. The Committee will ensure that the arrangements are in the best interests of
both ITV and its shareholders and remain subject to the overall variable pay limits set out below.
Ongoing remuneration In determining an appropriate remuneration structure and levels, the Committee will take into account all relevant factors to
ensure that ITV is able to recruit the most appropriate candidate for the job and that the arrangements are in the best
interests of both ITV and its shareholders. The Committee will typically seek to align the ongoing remuneration package with
the ongoing Policy outlined in this Report.
Fixed pay will be determined in line with the policy table in this Report. The Committee may also hire a new Executive Director
at a lower salary, with more significant increases to salary being awarded as the individual gains experience.
The maximum level of variable remuneration which may be granted to a new director upon appointment (excluding any
buyout awards for forfeited remuneration) will be capped in line with the Policy table above. Within the limits of the Policy
table the Committee may also rebalance the relative weighting of fixed pay and variable pay elements to reflect the
circumstances on appointment.
Buyout awards for
forfeited remuneration
The Committee may make awards to ‘buyout’ a candidate’s remuneration arrangements that are forfeited as a result of
joining the Company.
In doing so, the Committee will take account of relevant factors, including any performance conditions attaching to forfeited
awards, the likelihood of the awards vesting and the form and timing of the awards. The Committee will typically seek to
make buyout awards on a comparable basis to those that have been forfeited but, particularly where the performance period
is substantially complete, may reflect such conditions in some other way, such as through an appropriate discount to the face
value of awards forfeited. Exceptionally, where necessary, this may include a guaranteed or non-prorated annual bonus in
the year of joining.
In exceptional circumstances, the Committee may grant a buyout award under a structure not included in the Policy but that
is consistent with the principles set out above (and may rely upon Listing Rule 9.4.2 in structuring such a buyout).
The Committee will take all relevant factors into account (including the candidate’s location, the calibre of the individual, external influences,
internal relativities and the overall business context) when determining the new remuneration package and seek to ensure that no more is paid
than necessary.
In the Remuneration Report following the appointment, the Committee will fully explain to shareholders the remuneration package for the
appointed individual and the rationale for such arrangements.
On the appointment of a new Non-executive Chair or Non-executive Director, the terms and fees will normally be consistent with the fee policy
outlined in the Policy.
Service contracts and loss of office
Executive Directors
Executive Directors have rolling service contracts that provide for 12 months’ notice on either side. For a new joiner, the contract may
commence with a notice period of up to two years reducing to the standard 12 months over time. There are no special provisions that apply
in the event of a change of control. Service contracts are available for inspection at the Company’s registered office.
A payment in lieu of notice, including base salary, benefits and retirement benefits may be made in certain circumstances, including if:
• The Company terminates the employment of the executive with immediate effect, or without due notice
• Or termination is agreed by mutual consent
Service contracts normally include clauses requiring departing directors to mitigate losses from termination, balancing the commercial
circumstances at the time (e.g. impact on non-compete/non-solicitation clauses, protection of intellectual property).
Where appropriate, the Company may also provide benefits in connection with departure which may include making a payment in respect of
outplacement costs, legal fees and the cost of any settlement agreement.
With the exception of termination for cause, Executive Directors may be eligible for a bonus award prorated to reflect the proportion of the
financial year for which they were employed and subject to the performance achieved, normally provided they have a minimum of three
months’ service in that bonus year.
127ITV plc Annual Report and Accounts 2023
GOVERNANCE
In accordance with the terms of the relevant incentive plans rules, the Committee retains discretion to determine the treatment of any
outstanding awards held by a departing Executive Director. The appropriate treatment will vary depending on the relevant facts and
circumstances at the time. The table below sets out the general position and range of approaches in respect of incentive arrangements.
Plan Good leaver (e.g. ill health) Bad leaver (e.g. dismissed for cause) Change of control
Bonus Executive Directors may be eligible for a
bonus award prorated to reflect the
proportion of the financial year for which
they were employed and subject to the
performance achieved, normally provided
they have a minimum of three months’
service in that bonus year.
Awards lapse. Awards would normally continue unless
the Committee determined otherwise.
DSA Injury, ill health, disability or transfer of
undertakings. Awards release in full at the
leaving date.
For other good leavers identified by the
Committee, awards release at the end of
the deferral period unless the Committee
decides to release the shares earlier.
Awards lapse. Awards release in full at effective date
of change.
Restricted Shares
during the
performance period
Awards are typically prorated for time
served (where departure occurs during
the first three years) and vest subject to
satisfaction of performance underpins.
Awards are released at the end of holding
period unless the Committee decides to
release the shares earlier.
Awards lapse. Outstanding awards would normally vest
and be released subject to satisfaction of
performance underpins and capped
based on the time elapsed since grant,
subject to the discretion of the
Committee.
Restricted Shares
– during the
additional holding
period
Awards are released at end of holding
period unless the Committee decides to
release the shares earlier.
Awards are normally retained, and are
released at end of holding period unless
the Committee decides to release the
shares earlier.
In the case of misconduct, awards will
lapse.
Awards are released at the effective date
of change.
External appointments
With specific prior approval of the Board, Executive Directors may normally undertake one external appointment as a non-executive director
of another publicly quoted company and retain any related fees or share awards paid to them for their services.
Non‑executive Directors
The table below summarises the main elements of remuneration for Non-executive Directors.
Component Operation Maximum potential payment
Non‑executive Director fees The Committee determines the fees of the Non-executive
Chair. The Chair and the Executive Directors determine the
fees of the Non-executive Directors, which are accepted by
the Board.
The fees are set at a level that is considered to be
appropriate, taking into account the size and complexity of
the business and the expected time commitment and
contribution of the role.
Additional fees may be payable for membership and/or
chair of a committee or other additional responsibilities.
Non-executive Directors are not entitled to any
performance-related pay or pension.
Role-appropriate benefits may also be provided in certain
circumstances. This includes the reimbursement of any
travel expenses (and associated tax on those expenses).
The aggregate fees of the Chair and Non-executive
Directors will not exceed the limit from time to time
prescribed within the Company’s Articles of Association
(currently £1,500,000 p.a.). The value of benefits (including
the reimbursement of travel and other expenses, and
associated taxes) provided will be reasonable in the market
context and take account of the individual circumstances
and requirements of the Company.
128 ITV plc Annual Report and Accounts 2023
REMUNERATION REPORT CONTINUED
Each Non-executive Director, including the Chair, has a contract of service or letter of appointment with the Company. Non-executive
Directors will serve for an initial term of three years, subject to election and annual re-election by shareholders, unless otherwise terminated
earlier by and at the discretion of either party upon one month’s written notice (12 months for the Chair). The Directors’ service contracts and
letters of appointment are available for inspection at the Company’s registered office.
Employment conditions elsewhere in the Company
The Committee has responsibility for ensuring effective engagement and alignment with the workforce in relation to remuneration and
related policies and practices. When setting the policy for Directors’ remuneration, the Committee considers the pay and employment
conditions of employees to ensure fairness across the organisation. Although it does not consult directly with employees in respect of
determining the Directors’ Remuneration Policy, it receives general feedback from employees via the HR function as part of the output from
the employee Engagement and Culture survey and receives a report on employment practices elsewhere in the Company. Graham Cooke,
as our designated Workforce Engagement Director, regularly attends Ambassador meetings to understand any views and concerns colleagues
may have on this matter and is responsible for sharing these with the Committee – more information on this can be found in the Corporate
Governance section of this Report. In her role as Chair of the Committee, Sharmila Nebhrajani joined Graham at an Ambassador meeting in
June 2023 in order to share the Committee’s approach to remuneration in the wider context.
The approach to determining the compensation for employees globally follows the same principles as for our Executive Directors.
Consideration is given to the level of experience, responsibility, individual performance and remuneration paid for comparable roles within
the market. The Committee considers data on pay trends and practices, such as gender pay gap information, and the CEO to worker pay ratio.
Incentive arrangements across the Company are tailored based on the nature of the role. Bonuses operate on a wide basis across the
Company and long-term share awards are offered to senior management. Being a great place to work is key to developing our culture. Pay is
just one factor used to attract, retain and develop a talented and diverse workforce. More information on ITV’s commitment to investing in
and building a productive, creative and diverse workforce can be found in the Social Purpose section of this Annual Report and Accounts.
Shareholder views
The Committee maintains regular and transparent communication with shareholders. We believe that it is important to regularly meet with
our key shareholders to understand their views on our remuneration arrangements and what they would like to see going forward. We welcome
feedback from shareholders at any time during the year.
Where we are proposing to make any significant changes to the remuneration framework or the manner in which the framework is operated we
would seek major shareholders’ views and take these into account. In recent years, the Committee has consulted with major shareholders
regarding the operation of the Policy on numerous occasions.
Prior to the adoption of the Policy at the 2021 AGM the Committee undertook extensive consultation with major investors regarding the
proposed changes to the pay structure. Engagement with investors on matters relating to executive pay have continued in subsequent years
and discussions were held prior to the proposed renewal of the Policy at the 2024 AGM. Throughout the period the major proxy agencies have
remained supportive of our remuneration proposals. Whilst the vast majority of our investors have consistently voted in favour of our pay
resolutions, the Committee recognises that there are a diverse range of views amongst investors, particularly in relation to restricted share
proposals. Whilst the Committee remains satisfied regarding the rationale and benefits of the existing pay model, it will continue to monitor
the effectiveness of the Policy going forward to ensure it continues to support execution of the strategy and the views of our major
shareholders continue to inform and guide our overall approach.
We intend to maintain a dialogue with our shareholders in future years, particularly when the Committee anticipates any substantial change
to the remuneration framework.
129ITV plc Annual Report and Accounts 2023
GOVERNANCE
CASCADE OF REMUNERATION THROUGH THE ORGANISATION
The table below summarises how remuneration compares across the different groups of employees
throughout the company.
EMPLOYEES AT ALL LEVELS
Element of pay Description
Base salary Salaries are reviewed annually, with Executive Directors normally receiving a salary increase in line with that received by the
wider workforce. In 2024 there was a tiered approach to the annual pay review based on salary level. Lower earners in the business
received 6%, higher earners including the Executive Directors and Management Board received 3%, and all other employees received
between 4-5%.
ITV has held the Living Wage accreditation since 2014 and was the first broadcaster to do so. We pay the London Living Wage in
London and the Living Wage outside of London. This means that we pay everyone, from employees and apprentices to contractors
and temporary workers, at least the hourly rate set independently and updated annually by the Living Wage Foundation, which is
higher than the government’s National Minimum Wage and National Living Wage rates.
Flexible benefits A range of benefits are available to all employees, providing financial security, encouraging a healthy and balanced lifestyle, and
helping individuals make their pay go further.
All employees receive the following benefits:
• Five weeks holiday each year, plus bank holidays, and an extra two days after five years’ service
• Enhanced Company sick pay and family friendly policies, including maternity, paternity, adoption and shared parental leave
• Income protection cover of 50% of salary
• Life assurance cover at four times annual basic salary
• Wellbeing benefits, including an annual wellbeing day, a range of digital health services and an Employee Assistance Programme
(EAP) providing a confidential helpline and additional support
There are also voluntary benefits available for employees to choose from, including the opportunity to buy up to six weeks’ extra
holiday, a Cycle to Work scheme, a salary sacrifice car benefit, gym membership, private healthcare and a health cash plan, which
includes optional hospital treatment insurance.
We continually look for opportunities to evolve our employee benefits in cost effective ways that support both the needs of the
business and our diverse workforce.
Pension Employees at all levels can participate in our pension arrangements.
Eligible employees are invited to join the Defined Contribution Plan and can choose to make a core contribution between 3–6% of their
pensionable earnings, which ITV will match and in addition pay a further 3% (i.e. up to 9% in total).
A small number of senior executives have pension contributions paid into their personal pension or receive a cash allowance in lieu
of contributions.
Save As You Earn All eligible UK employees have the opportunity to benefit from ITV’s long-term performance and share price growth by participating in
the Save As You Earn plan. They can save up to £500 per month over a three or five year period to acquire shares in the Company at a
20% discount to the share price at the start of the savings period.
Annual
bonus – cash
All ITV employees have an annual bonus opportunity which is based on a % of salary for senior roles and those in Sales, or the same
maximum monetary value for all other employees. In 2023 the employee bonus opportunity was £2,000, with the 2023 bonus paying
out at £764. A thank you payment of £636 was made to uplift the amount paid to employees.
SENIOR EXECUTIVES
Element Summary of policy
Deferred Share
Award Plan
Senior Executives are required to defer one-third of their bonus into ITV shares for three years.
Executive Share
Plan
Share-based awards are granted to selected senior leaders across the business which vest on the third anniversary of grant subject to
the Committee’s assessment of the performance underpin. Grant levels are generally expressed as a % of salary, with award levels
linked to role and seniority. The detailed terms of operation vary by jurisdiction to reflect local market, legal and tax considerations.
For Executive Directors any vested awards are subject to an additional two year holding period.
Shareholding
guidelines
The Executive Directors and other members of the Management Board, are subject to shareholding guidelines that align their
interests with those of shareholders.
The Executive Directors are also subject to post-cessation shareholding guidelines, aligning their interests to shareholders for two
years after their employment with ITV ceases.
130 ITV plc Annual Report and Accounts 2023
ANNUAL REPORT ON REMUNERATION
The sections of the Annual Report on Remuneration that have been audited
by PwC are indicated with headings throughout the report.
Remuneration Policy application in 2023
The following section provides details of how the current Remuneration Policy was implemented in 2023.
Executive Directors – Audited
The table below sets out in a single figure the total remuneration for both Executive Directors for the financial year.
Carolyn McCall Chris Kennedy
Notes
2023
£000
2022
£000
2023
£000
2022
£000
Salary 1,010 971 723 695
Taxable benefits 18 18 18 18
Pension 91 146 65 62
Total fixed remuneration 1,119 1,135 806 775
Annual Incentive (Bonus – cash and shares) 1 1,026 1,429 673 937
ESP / LTIP awards 2, 3 736 1,126 447 684
Save As You Earn (SAYE) 4 – – 5 –
Total variable remuneration 1,762 2,555 1,125 1,621
Total 2,881 3,690 1,931 2,396
1. Two‑thirds of the annual bonus is settled in cash and one‑third is deferred into shares awarded under the ITV Deferred Share Award plan which automatically release on the third
anniversary of the award, subject to continued employment.
2. The 2021 ESP awards were subject to a performance underpin assessed based on results for the year ended 31 December 2023. The amount shown is the indicative vesting value
using the average share price in Q4 of 2023 (63.31 pence). The awards will vest in May 2024 and will include dividend shares reinvested. Following a two year holding period, they will
become exercisable from May 2026. These awards were granted based on a share price of 123.37 pence, therefore the values shown do not include an amount attributable to share
price growth.
3. In the 2022 Annual Remuneration Report, the amount shown for share awards for both Executive Directors was the indicative vesting value of the 2020 LTIP award that was subject
to performance conditions measured to 31 December 2022 using the average share price in Q4 2022 (70.67 pence). The figure shown in the table above represents the subsequent
value received on the vesting date of 6 April 2023 using the share price on that date (80.82 pence). These awards are subject to a two year holding period.
4. Chris Kennedy was granted share options under the SAYE on 13 September 2023 at a 20% discount of the ITV share price at the time of grant. The amount disclosed is the value of
the total discount when investing the maximum (£500 per month) over a three year contracted period.
The aggregate emoluments for all Directors as required under Schedule 5 (SI 2008/410), is the total remuneration shown in the table above
less share awards but including gains on exercise of options and amounts receivable under LTIPs, plus the total emolument figures for
Non‑executive Directors shown on page 134.
Further information in relation to each of the elements of remuneration for 2023 set out in the table above is detailed below. An explanation
for 2022 is set out in detail in our 2022 Annual Report and Accounts which can be found on our website www.itvplc.com/investors
The Single Figure outcome has decreased for the Chief Executive from £3,690k in 2022 to £2,881k in 2023, while for the Group CFO & COO
it has decreased from £2,396k in 2022 to £ 1,931k in 2023. Largely this is a result of the 2021 ESP that was awarded at 50% of previous LTIP
awards vesting in 2023 as well as the restatement of the 2019 LTIP that vested in 2022.
Salary
As disclosed in last year’s report, both Carolyn McCall and Chris Kennedy received a 4% salary increase for 2023. This was in line with other
senior executives but lower than the 5‑6% increase awarded to the majority of employees. Carolyn McCall’s salary was £1,010,416 and
Chris Kennedy’s salary was £722,900.
Taxable benefits and pension – Audited
The benefits provided to the Executive Directors are the cost of private medical insurance and car‑related benefits.
The Executive Directors were not part of an ITV pension scheme but receive a cash allowance in lieu of pension. ITV was a first mover in
reducing executive pension levels. In 2017, the level for the Chief Executive was reduced from 25% of salary to 15% of salary (prior to the 2018
Corporate Governance Code (the Code) coming into force). In accordance with the Code the Committee determined that directors joining from
1 January 2019 would receive pension contributions in line with the wider employee group, therefore Chris Kennedy received a cash allowance
in lieu of pension of 9% of salary. This is aligned with the maximum matching percentage amount payable to employees in the ITV Defined
Contribution Pension plan, which is the pension scheme offered to the majority of Group employees. To bring Carolyn McCall in line with the
policy and the wider employee group, her cash allowance was reduced to 9% from 1 January 2023.
Annual Incentive – Bonus (cash and shares) – Audited
Annual incentives are provided to Executive Directors through the bonus, with one‑third of any award deferred into shares under the
Deferred Share Award Plan (DSA). The maximum bonus opportunity for the year for the Chief Executive was 180% and for the Group CFO
& COO was 165%.
131ITV plc Annual Report and Accounts 2023
GOVERNANCE
The performance measures and weightings for 2023 bonuses were the same as in previous years. For 2023, 10% of the bonus was assessed
against a scorecard of ESG measures linked to our carbon footprint, the sustainability of our UK productions and commissions and progress
towards our diversity goals. The balance of the bonus was linked to EBITA (60%), cash conversion (10%) and individual personal and strategic
targets (20%).
The majority of the 2023 bonus (70%) was based on the achievement of corporate and financial targets, with bonus outcomes determined in
accordance with pre‑set target ranges. In line with the principles applied in previous years, the financial outcomes used for the bonus are
adjusted (both positively and negatively) for certain items, such as acquisitions and currency movements to ensure a fair like‑for‑like
comparison with the targets set at the start of the year.
As part of the assessment of performance, the Committee also undertook a holistic review of overall performance, to ensure that outcomes
were a fair reflection of the underlying business performance.
The corporate and financial targets applied for 2023, together with performance against those targets and the resulting level of bonus, are set
out in the table below.
The adjusted EBITA ranges were set at the start of the year to reflect the market expectations for an anticipated slowdown in advertising
spend, as well as the impact of our continued budgeted investment in content and technology. The target ranges set therefore reflect this
external market and investment context.
Performance required
Performance measure Weighting 20% 50% 80% 100%
Performance
achieved
Pay‑out level
(% of maximum)
ITV adjusted EBITA
1
60% £473m £503m £523m £573m £491m 38.2%
ITV cash conversion
2
10% 66% 72% 75.6% 78% 102% 100%
1. The ITV EBITA outcome was adjusted for translational currency movements. Outperformance in Studios profitability was balanced by the impact of contraction in the wider
advertising market. This resulted in EBITA performance towards the lower end of the range.
2. While overall cash conversion performance was strong and supported the payout level, it was recognised that performance relative to the target range was partly attributable
to a favourable movement in working capital, in part due to the impact of the US writers and actors strike expected to unwind in 2024. See page 14 for more information.
The annual ESG targets applied for 2023, together with performance against those targets are set out below.
Social purpose goal Scorecard objectives Achievement
Net zero carbon emissions
1
Scope 1 and 2 emissions to be below 7,271 tonnes of CO
2
e, in
line with our SBTi trajectory.
Business travel emissions to be below 39,257 tonnes of
CO
2
e, in line with our SBTi trajectory.
Combined scope 1 and 2 emissions were 42% lower than the
target set for 2023.
Scope 3 business travel emissions were 39% lower than the
target set for 2023.
Actual emissions performance is reflective of reduced
studios output due to the industry strikes during 2023.
100% albert certified
2
100% albert certification for new programmes produced
and commissioned in the UK (excluding acquisitions of
finished programmes and repeats). Certification includes
programme makers taking part in albert’s Creative Offsets
initiative or approved equivalent to make their production
carbon neutral.
In 2023 94% of the programmes produced by ITV Studios
had albert certification. 64% of the shows commissioned by
ITV had albert certification, up from 42% in 2022. There was
good progress made in this area and the business continues
to work with the albert team and wider production
community to achieve our 100% aspiration, while
recognising the challenges we are still facing in engaging
producers. See page 65 for more information on delivery of
climate related targets.
Increase diversity on and
off‑screen by the end of 2023
3
To hit the following targets for:
Representation on‑screen
• 50% Women
• 20% People of Colour
• 12% Deaf, Disabled or Neurodiverse
• 7% LGBTQ+
All colleague representation
• 50% Women
• 31.8% from working class backgrounds
• 16.9% People of Colour
• 12% Deaf, Disabled or Neurodiverse
• 7% LGBTQ+
Training
• 80% of managers to have completed ‘Creating Disability
Inclusion’ training and/or ‘License to Hire’ training.
In 2023, progress continued to be made towards our
colleague and on‑screen diversity targets, exceeding or
close to hitting targets for most characteristics. On‑screen
targets were exceeded for LGBTQ+ and People of Colour,
but representation of Deaf, Disabled and Neurodivergent
people was below the target level. Targets were exceeded
for Deaf, Disabled or Neurodivergent colleagues at ITV
(increasing to 12.3% from 11.4% in 2022) as well as women
and LGBTQ+ colleagues. More needs to be done to increase
the representation of People of Colour and colleagues from
a working class background at ITV and the Committee
noted the continuing work to achieve all of ITV’s diversity
targets.
1. ITV emissions reduction targets and performance are validated and published as part of the Science Based Targets initiative (SBTi) (https://sciencebasedtargets.org/). Further
information on ITV’s Climate Action targets and scope can be found at itvplc.com/socialpurpose and in the Social Purpose section of the Annual Report.
2. albert certification is an externally audited process that recognises programmes that have embedded sustainability not only within the production process but also through
considering sustainability messaging included in programmes.
3. On‑screen diversity is measured via Diamond, a single online system delivered through the Creative Diversity Network (CDN) and used by UK broadcasters to obtain consistent
diversity data on UK‑originated productions they commission (https://creativediversitynetwork.com/diamond/).
132 ITV plc Annual Report and Accounts 2023
REMUNERATION REPORT CONTINUED
The annual Social Purpose targets goals can be found on our website www.itvplc.com.
The Committee noted the progress that had been made against our ESG targets in 2023 and agreed that based on holistic assessment
against the balanced scorecard this element should deliver an outcome of 75% of maximum.
The remainder of the bonus (20%) was based upon the Committee’s assessment of the contribution each Executive Director made to
the overall strategy through the delivery of specific targets. The Committee applies suitable judgement when assessing performance in
this regard.
Area of focus Achievement
Chief Executive objectives Maximise the potential of ITV Studios globally: by working
to identify, create and deliver opportunities to maximise
scale and increase value.
ITV Studios Iberia set up during the year to be the
exclusive home of ITV Studios’ formats in Spain, joining an
international production and distribution group that spans
13 countries.
Overall, ITV Studios delivered total organic revenue
growth of 3% and adjusted EBITA margin of 13% in the
year. ITV Studios total revenue from streaming platforms
grew to 32%, hitting the target three years early.
Continue to deliver the Digital Transformation agenda:
achieving key programme milestones with particular focus
on digital culture and products.
Key achievements include the stabilisation and growth
of ITVX, including across core partner platforms, and
the delivery of Planet V and ITV’s data strategy in line
with plans.
Phase one of ITV Together went live, delivering changes
in core People and Finance activities.
Delivered the second series of ITV Fast Forward,
to build the digital and data capabilities of colleagues,
with sessions exploring the use of generative AI, design
thinking, machine learning and digital disruptors.
Develop the equity story: by evolving the external
positioning and communication of the successful execution
of the More Than TV Strategy. Highlight the value created by
the strategy through key delivery milestones and the
achievement of KPIs.
Regular engagement with investors and analysts to
update on key achievements and progress against the
strategy, particularly focusing on the value created
through ITV’s digital transformation and digital
revenue growth.
Implement People strategy: with a focus on retaining key
talent and capabilities, and delivering a strong, diverse
succession pipeline of talent, supporting inclusivity and the
delivery of ITV’s DEI plans and KPIs.
70% of colleagues participated in the 2023 engagement
and culture survey, which resulted in an overall ITV
engagement score of 68% (1% higher than the last
survey in 2021).
The Nominations Committee was satisfied with the
talent and succession planning information shared
during the year in respect of the Management Board
and Executive Leadership Team roles, including the
diversity of identified successors.
Group CFO & COO objectives Cost – maintain continuous focus across all divisions and
functions: by executing on current cost savings
programmes; by planning and beginning restructuring of
long‑term cost base; and by focusing on different cost areas
to deliver 2023 cost saving target.
Delivered £24m of permanent cost savings in 2023,
ahead of the £15m target set for the year. A new ongoing
strategic restructuring and efficiency programme has
been established to deliver further cost savings in 2024.
Capital – review allocation and demonstrate clear
returns: by improving capital allocation across divisions; by
demonstrating return on investment; by a focus on working
capital management; and by ensuring effective Group
Investment Committee and streamlining Group approvals
process.
Capital allocation improved in 2023 with a key focus on
returns and business case lead investment proposals.
Equity – ensure clarity of message and drive value
creation: by creating communication plan and materials to
provide clear and simple external messaging; by
establishing ITVX and AVOD as lead KPIs for M&E; and by
evaluating and executing options to increase scale and value
for Studios.
Regular engagement with investors and analysts, focusing
on the value created by the growing global Studios
business and the digital transformation of M&E, through
ITVX and Planet V. ITV Studios Iberia established during
the year, further increasing the scale of ITV Studios.
Digital – increase digital revenues and launch ITV
Together: by maximising revenue opportunities from ITVX;
by driving test and learn mantra using financial data and
insight; and by launching ITV Together and embedding new
ways of working across Finance.
Delivered total digital revenue growth of 19% to £490m,
driven by digital advertising revenue, which was up 21%.
Launched the first phase of ITV Together in April 2023,
delivering changes in core People and Finance activities.
As noted above, there was strong achievement against the objectives set at the start of the year. The Committee therefore agreed that this
element should deliver an outcome of 80% of maximum for the Chief Executive and 80% of maximum for the Group CFO & COO.
133ITV plc Annual Report and Accounts 2023
GOVERNANCE
Consistent with the requirements of the Code, the Committee considers wider performance before approving the formulaic outcomes from
incentive plans. Where appropriate the Committee has scope to apply judgement and discretion. To assist the Committee with determining
whether adjustments are required, the Committee applies a framework which considers performance from multiple perspectives, including
the underlying strength of results, the execution of strategic priorities, performance indicators which do not form part of the formulaic
assessment, and non‑financial factors, such as culture and our focus on duty of care. The Committee has a track record of adjusting outcomes
where appropriate, with negative discretion applied in both 2018 and 2019, and the cancellation of the bonus for 2020.
Outcome
(% of maximum) Total value
Value delivered in
shares under
the DSA Value paid in cash
Carolyn McCall 56.41 £1,025,875 £341,958 £683,917
Chris Kennedy 56.41 £672,839 £224,280 £448,559
The final outcome of 56.41% is below the 81.72% bonus outcome achieved in 2022. This largely reflected the challenging advertising
environment, with depressed advertising volumes impacting performance against the stretching adjusted EBITA target. This was balanced
with outperformance in the Studio’s scripted titles and strong deal making in Global Partnerships, as well as continued strong performance
against the cash conversion target, and successful delivery on key ESG, strategic and individual objectives.
The value delivered in shares under the DSA is deferred for three years and released on the third anniversary of the award subject to continued
employment. In line with the Remuneration Policy, bonus awards (including deferred elements) remain subject to malus and clawback
provisions which seek to safeguard against payments for failure.
Restricted Share awards – Audited
Restricted Share awards were made under the ITV plc Executive Share Plan (the ITV ESP) to Carolyn McCall and Chris Kennedy on 13 May 2021
and were subject to a financial underpin measured to 31 December 2023. Dividends paid accumulated on a reinvestment basis during the
three year vesting period and will be released on the vesting date. The indicative value of these awards are set out below.
Number of
share options
(nil‑cost)
Value at
award date
1
Dividend shares
reinvested at
31 December 2023
2
Number of options
vesting
3
Value at
31 December
2023
4
Carolyn McCall 1,013,062 £1,249,815 150,288 1,163,350 £736,517
Chris Kennedy 615,390 £759,207 91,294 706,684 £447,402
1. The share price used to calculate the number of shares under award was 123.37 pence (the three‑day trading average of the share price before grant, 13 May 2021).
2. Dividends earned on the award were reinvested over the vesting period. Subject to shareholder approval, the award will be eligible for the May 2024 dividend payment which has not
been included in the table above.
3. The vesting share options will become exercisable after a two year holding period on 13 May 2026.
4. The share price used to value the shares at 31 December 2023 is the average share price for the final quarter of 2023 (63.31 pence).
The ITV ESP was approved by shareholders at the 2021 AGM. The initial award under this Plan was made in May 2021, with grant levels reduced
by 50% compared to the annual LTIP awards granted in previous years.
As disclosed at grant, awards normally vest after three years following the date of award subject to the satisfaction of a performance underpin.
Any vested awards would then be subject to a two year holding period.
The Committee retains the ability to reduce vesting of the Restricted Shares (including to nil) where:
• Adjusted Return on Capital Employed is below the Company’s cost of capital; and/or
• There is a material weakness in the underlying financial health or sustainability of the business
The Committee has assessed the underpin conditions that apply to the 2021 awards and determined that it is appropriate for these awards to
vest. The Group’s adjusted return on capital was above the Group’s cost of capital based on the 2023 audited results, while the Committee
judged the financial health and sustainability of the business to be robust. The balance sheet remains strong as demonstrated by continued
investment in the business and planned returns to shareholders. The Group performed strongly against key financial and non‑financial
metrics across the vesting period, demonstrating resilience given ongoing macroeconomic challenges. In line with the disclosure requirement,
the award value is shown following the assessment of the underpin. In practice, the value to participants will be based on the share price at the
end of the two year holding period applicable to awards, demonstrating the long‑term performance alignment of the pay structure.
134 ITV plc Annual Report and Accounts 2023
REMUNERATION REPORT CONTINUED
Restricted Share awards made in 2023 – Audited
On 28 March 2023 awards were made under the ITV plc Executive Share Plan (the ITV ESP) to Carolyn McCall and Chris Kennedy as set out
below.
Performance measure % salary awarded
Number of
share options
(nil cost)
1
Value at award date
Performance
period ends Holding period Release date
Carolyn McCall 132.5 1,643,105 £1,338,802 28 March 2026 2 years 28 March 2028
Chris Kennedy 112.5 998,114 £813,263 28 March 2026 2 years 28 March 2028
1. Nil cost options were granted based on the average share price on the three trading days preceding the award which was 81.48 pence.
The awards are over restricted shares with grant levels reduced by 50% compared to the annual LTIP awards granted in previous years.
Awards will normally vest after three years following the date of award subject to the satisfaction of a performance underpin assessed at
31 December 2025. As the awards have a performance underpin, there are no performance condition weightings applicable, nor is there a
threshold‑max vesting range. Any vested awards would then be subject to a two year holding period.
For the awards granted in 2023, the Committee will retain the ability to reduce vesting of the Restricted Shares
(including to nil) where:
• Adjusted Return on Capital Employed is below the Company’s cost of capital; and/or
• There is a material weakness in the underlying financial health or sustainability of the business
When assessing the latter, the Committee will consider all factors deemed relevant at the time, including for example, progress against
execution of the strategy, performance against financial and non‑financial KPIs and the nature of the wider trading environment. In line with
best practice, the Remuneration Committee will retain the discretion to adjust any incentive awards where vesting outcomes are considered
to be inappropriate. Further detail on the assessment of the performance underpin will be disclosed at the time of vesting in 2026.
As a further safeguard malus and clawback provisions may be operated at the discretion of the Committee in respect of any element of these
awards. Under malus, unvested share awards (including any portion of the award subject to a post‑vesting holding period) can be reduced
(down to zero if considered appropriate) or be made subject to additional conditions. Clawback allows for repayment of shares previously
received following vesting or release from a holding period if applicable. Malus/clawback can be operated up to six years from the relevant date
of grant for Restricted Share awards. The circumstances in which the operation of these provisions would be applied may be considered from
time to time but currently include material misstatement of financial results, gross misconduct or fraud and material reputational damage.
The Committee maintains sufficient scope in the ITV ESP rules to exercise discretion and judgement in line with the spirit of the Code.
Chair and Non‑executive Directors – Audited
The table below sets out in a single figure the total remuneration for Non‑executive Directors for the financial year. The annual fee for the
Chair was £400k which is unchanged from appointment. For 2023 , the Non‑executive Directors received a 4% increase to the base fee,
which was the first increase to fees paid to Non‑executive Directors since 2016. No increases were made to the other fees.
Fees Taxable benefits
1
Tota l
Notes
2023
£000
2022
£000
2023
£000
2022
£000
2023
£000
2022
£000
Andrew Cosslett (Chair) 2 400 124 1 – 401 124
Dawn Allen 3 18 – – – 18 –
Salman Amin 73 70 1 1 74 71
Peter Bazalgette (former Chair) 4 – 336 – 6 – 342
Edward Bonham Carter 5 102 95 1 1 103 96
Graham Cooke 73 70 1 1 74 71
Margaret Ewing 88 85 1 1 89 86
Marjorie Kaplan 6 23 – – – 23 –
Mary Harris 7 25 77 2 4 27 81
Gidon Katz 8 68 30 1 23 69 53
Anna Manz 9 52 76 1 1 53 77
Sharmila Nebhrajani 10 88 80 – 1 88 81
Duncan Painter 11 67 70 1 1 68 71
1,077 1,113 10 40 1,087 1,153
1. The amounts disclosed in the table above relate to the reimbursement of taxable relevant travel and accommodation expenses (and associated taxes) for attending Board
meetings and related business. In addition, Peter Bazalgette received private healthcare for the time he served as a director.
2. Andrew Cosslett joined the Board on 1 June 2022 as a Non‑executive Director. He was appointed the Chair of the Board on 29 September 2022. He received the basic
NED fee up until his appointment as Chair. Following his appointment as Chair his annual fee is £400,000.
3. Dawn Allen joined the Board and Audit & Risk Committee on 2 October 2023.
4. Peter Bazalgette stepped down from the Board on 29 September 2022.
5. Edward Bonham Carter became a member of the Remuneration Committee in April 2023.
6. Marjorie Kaplan joined the Board on 1 September 2023.
7. Mary Harris stepped down as Chair of the Remuneration Committee on 29 April 2022 and from the Board on 3 May 2023.
8. Gidon Katz joined the Board on 18 July 2022.
9. Anna Manz stepped down from the Board on 31 August 2023.
10. Sharmila Nebhrajani was appointed Chair of the Remuneration Committee on 29 April 2022.
11. Duncan Painter stepped down from the Board on 30 November 2023.
135ITV plc Annual Report and Accounts 2023
GOVERNANCE
Remuneration Policy application in 2024
Executive Directors
The following section provides details of how the Policy will be implemented in 2024.
Salary
Salaries are paid in line with the Policy. Both Executive Directors received an increase of 3% from 1 January 2024 which is in line with other
senior executives, but below the 5‑6% increase applied for the majority of employees. When considering salary increases for the wider
workforce, the overall aim was to provide all employees with a meaningful increase to their base salary which reflected the broader economic
context. While the high inflationary environment was impacting all employees, it was recognised that lower paid employees were being
impacted more acutely. Salary increases for the more senior roles were reduced to help fund more meaningful increases for employees at
lower pay levels. The salary increases therefore were scaled from 6% for lower paid employees, 5% for mid‑low tier roles, 4% for mid‑high tier
roles and 3% for the more senior executives.
2024 Salary
Carolyn McCall £1,040,729
Chris Kennedy £744,587
Taxable benefits and pension
These are provided in line with the Policy. Both Executive Directors receive private medical cover, car‑related benefits, and a cash allowance in
lieu of participation in any ITV pension scheme.
Both Executive Directors receive a cash allowance in lieu of pension of 9% of salary, which is aligned with the wider employee group.
Annual Incentive – Bonus (cash and shares)
The maximum bonus opportunity for 2024 remains unchanged: Carolyn McCall – 180% of salary; and Chris Kennedy – 165% of salary. Awards
made to Executive Directors through the bonus will be paid two‑thirds in cash and one‑third deferred into shares under the DSA.
The targets that will apply for the 2024 annual bonus have been set taking into account internal and external forecasts for company and
market performance and continued strategic investments. Cost savings objectives have been included for 2024, recognising the strategic
importance of reshaping the business for the future. The Board considers the actual targets for 2024 to be commercially sensitive at this time,
however, envisage providing retrospective disclosure of these targets in next year’s report.
The Committee may adjust bonus targets or outcomes to reflect significant one‑off events (e.g. major transactions), foreign exchange
movements or material changes to assumed plan conditions to ensure that the plan continues to reward performance fairly.
The Committee may amend the bonus pay‑out should any formulaic assessment of performance not reflect overall performance in the year.
Restricted Share awards
Awards in 2024 will be made to the Executive Directors with a value of 132.5% of salary for Carolyn McCall and 112.5% of salary for Chris
Kennedy. These levels remain unchanged from the awards made in 2023.
Awards will normally vest after three years following the date of award subject to the satisfaction of a performance underpin. Any vested
awards would then be subject to a two year holding period.
For 2024 awards, in line with the performance underpin that applied to awards made in 2023, the Committee will retain the ability to reduce
vesting of the Restricted Shares (including to nil) where:
• Adjusted Return on Capital Employed is below the Company’s cost of capital; and/or
• There is a material weakness in the underlying financial health or sustainability of the business
When assessing the latter, the Committee will consider all factors deemed relevant at the time, including for example, progress against
execution of the strategy, performance against financial and non‑financial KPIs and the nature of the wider trading environment. In line with
best practice, the Committee will retain the discretion to adjust any incentive awards where vesting outcomes are considered to be
inappropriate. Further detail on the assessment of the financial underpin will be disclosed at the time of vesting.
Malus and clawback: Malus and clawback provisions may be operated at the discretion of the Committee in respect of any cash and deferred
share elements of the bonus and Restricted Share awards. Under malus, unvested share awards (including any Restricted Share awards
subject to a post‑vesting holding period) can be reduced (down to zero if considered appropriate) or be made subject to additional conditions.
Clawback allows for repayment of bonuses previously paid and/or shares previously received following vesting or release from a holding period
if applicable. Malus/clawback can be operated up to four years following the start of the relevant bonus year for bonuses (for cash and shares),
and up to six years from the relevant date of grant for Restricted Share awards. The circumstances in which the operation of these provisions
would be applied may be considered from time to time but currently include material misstatement of financial results, gross misconduct or
fraud and material reputational damage. The Committee maintains sufficient scope in the ITV plc Executive Share Plan rules to exercise
discretion and judgement in line with the spirit of the Code.
136 ITV plc Annual Report and Accounts 2023
REMUNERATION REPORT CONTINUED
Non‑executive Directors
In line with the Executive Directors the Chair and Non‑executive Directors received a 3% increase to the Board fees from 1 January 2024.
Current fees are as set out below.
1 January 2024
£
1 January 2023
£ % Change
Chair 412,000 400,000 3
Board fee 69,686 67,656 3
Additional fees for:
Senior Independent Director 25,000 25,000 –
Audit and Risk Committee Chair 20,000 20,000 –
Audit and Risk Committee member 5,371 5,371 –
Remuneration Committee Chair 20,000 20,000 –
Remuneration Committee member 5,371 5,371 –
Details of Committee membership can be found on page 82.
Comparison of Directors to wider employees
In line with the requirements in The Companies (Directors’ Remuneration Policy and Directors’ Remuneration Report) Regulations 2019, which
implement Articles 9a and 9b of European Directive 2017/828/EC1 (commonly known as the Revised Shareholder Rights Directive or SRD), the
table below provides details of the percentage change in the base salary, benefits and bonus of the Directors between 31 December 2020 and
31 December 2023 compared with the average percentage change for other UK employees.
The figures for all Directors are calculated based on remuneration received in the relevant year as set out in the tables on pages 130 and 134.
For base salary/fees, part year figures have been pro‑rated up for the purposes of this disclosure. In addition, the figures below reflect the
voluntary decision taken by members of the Board to take a 20% cut in salary/fees for the period from April to October 2020. There was also no
global salary review in 2021 and no annual bonus payments paid for 2020 to the Executive Directors and wider workforce.
Notes
2022‑2023 2021‑2022 2020‑2021 2019‑2020
Salary/fee
change%
Benefits
change%
Bonus
change%
Salary/fee
change %
Benefits
change %
Bonus
change %
Salary/fee
change %
Benefits
change %
Bonus
change %
Salary/fee
change %
Benefits
change %
Bonus
change %
Average employee 1 8 5 (27) 4 3 (11) 4 5 – 4 6 –
Salman Amin 2 4 – – – 51 – 13 140 – (12) (81) –
Dawn Allen 2, 5 – – – – – – – – – – – –
Edward Bonham Carter 2, 6 7 – – – 51 – 13 140 – (12) (92) –
Graham Cooke 2 4 – – 6 51 – 15 – – – – –
Andrew Cosslett (Chair) 2, 7 – 100 – – – – – – – – – –
Margaret Ewing 2 3 – – – – – 13 – – (12) (92) –
Marjorie Kaplan 2, 8 – – – – – – – – – – – –
Mary Harris 2, 9 (5) (50) – (18) 63 – 13 155 – (12) (84) –
Gidon Katz 2, 10 4 (96) – – – – – – – – – –
Chris Kennedy (Group CFO & COO) 3, 4 4 – (28) 3 3 (12) 13 12 – (10) (9) –
Anna Manz 2, 11 3 – – – 51 – 13 140 – (12) (88) –
Carolyn McCall (Chief Executive) 3, 4 4 – (28) 3 3 (13) 13 12 – (10) (9) –
Sharmila Nebhrajani 2,12 9 (100) – 12 78 – 13 – – – – –
Duncan Painter 2, 13 4 – – – 51 – 13 140 – (11) (88) –
1. The percentage change in benefits is the average change for all UK employees (excluding the Chief Executive and Group CFO & COO) with any of the same benefits as the Chief
Executive and Group CFO & COO.
2. Calculated using the fees and taxable benefits disclosed under the Non‑executive Directors’ remuneration in the table on page 134. Taxable benefits for Non‑executive Directors
comprise expense reimbursements relating to attendance at Board meetings rather than conventional employee benefits. The increases seen in the period 2020‑2021 are primarily
due to the ability for Directors to attend some meetings in person during 2021, against the majority of meetings being held on a virtual basis during 2020. The increases seen in the
period 2021‑2022 are primarily due to the attendance at two board dinners in the year, against one dinner in 2021.
3. Calculated using the data from the single figure table on page 130. Benefits include the cost of medical insurance and car‑related benefits.
4. The Executive Directors are the only employees of the parent company, and therefore there is no comparator data for this sample. In the interests of transparency, the percentage
change in pay for all UK employees has been disclosed on a voluntary basis. As the majority of employees are based in the UK and share the same benefits as the Executive
Directors, overseas employees have not been included.
5. Dawn Allen joined the Board on 2 October 2023 and therefore no comparison has been provided to 2022.
6. Edward Bonham Carter became a member of the Remuneration Committee in April 2023.
7. Andrew Cosslett joined the Board in June 2022. To enable a comparison for the purposes of this disclosure, his 2022 fees have been pro‑rated up.
8. Marjorie Kaplan joined the Board on 1 September 2023 and therefore no comparison has been provided to 2022.
9. Mary Harris stepped down as Remuneration Committee Chair in April 2022 and from the Board in May 2023 and received fees up to this point only. To enable a comparison for the
purposes of this disclosure, her 2023 fees have been pro‑rated up.
10. Gidon Katz joined the Board in July 2022. To enable a comparison for the purposes of this disclosure, his 2022 fees have been pro‑rated up.
11. Anna Manz stepped down from the Board in August 2023 and received fees up to this point only. To enable a comparison for the purposes of this disclosure, her 2023 fees have been
pro‑rated up.
12. Sharmila Nebhrajani was appointed as Chair of the Remuneration Committee in May 2022.
13. Duncan Painter stepped down from the Board in November 2023 and received fees up to this point only. To enable a comparison for the purposes of this disclosure, his 2023 fees
have been pro‑rated up.
137ITV plc Annual Report and Accounts 2023
GOVERNANCE
CEO pay ratio
Year Methodology 25th percentile pay ratio Median pay ratio 75th percentile pay ratio
2023 Option A 70.1 52:1 38.1
2022 Option A 93:1 69:1 50.1
2021 Option A 92:1 68:1 49:1
2020 Option A 33:1 24:1 18:1
2019 Option A 89:1 66:1 49:1
The employee at the 25th percentile, median and 75th percentile was determined based on the single figure of total remuneration for every
UK employee at 31 December 2023, Option A in the Reporting Regulations. This method is the most statistically accurate approach and aligned
with majority practice in the FTSE 250.
Our 2022 ratios have been updated to reflect the final actual 2022 remuneration values for the CEO and all other employees. Our 2023 pay
ratios are based on the current CEO single figure and the indicative value of share awards that were subject to performance measured to 31
December, based on the average share price over the final quarter of the year. The 2023 ratios will be restated in the 2024 Remuneration
Report to reflect the updated CEO single figure and the actual value of shares on the vesting date.
The total remuneration of each comparator employee has been calculated using the actual values received in respect of the full financial year
and in accordance with the methodology used to calculate the single figure of remuneration for the CEO. We have not omitted any component
from their pay and benefits and no adjustments have been made to their actual remuneration.
The full‑time equivalent remuneration values for the individuals in the table above are as follows:
2023
CEO 25th percentile Median 75th percentile
Salary £1,010,416 £36,450 £46,339 £71,055
Total remuneration £2,881,440 £41,448 £55,393 £76,714
2022
CEO 25th percentile Median 75th percentile
Salary £971,554 £31,502 £46,891 £64,771
Total remuneration £3,689,906 £39,849 £53,485 £73,558
The median pay ratio for 2023 is considered to be consistent with the pay, reward and progression policies during the year for the Company’s
UK employees taken as a whole. Our UK headcount and the total remuneration values for the comparator employees have both increased
year‑on‑year. We implemented Company‑wide annual pay review increases of 4‑6% in January 2023, with the higher increases made to
employees at lower pay levels. We also remain committed to ensuring colleagues earn at least the real Living Wage or higher.
To help our employees manage with the rising cost of living, over 80% of UK employees received a payment of £1,000 each in January 2023.
This followed a previous payment of £1,000 that was made in October 2022. An annual bonus arrangement extends to all employees who don’t
participate in a management or sales bonus scheme and is paid in March each year. The 2023 employee bonus opportunity was up to £2,000,
based on ITV plc EBITA performance, and the actual payout was up to £764 for every eligible employee. All comparator employees identified in
the pay ratio calculations were eligible for the employee bonus and the cost of living payment.
Our 2023 pay ratios have reduced because the total remuneration figure for the CEO is lower than in previous years. A significant proportion
of the remuneration for the CEO is performance related and the level of actual performance outcomes has a corresponding effect on the
CEO pay ratios. The total remuneration values for the comparator employees have also all increased year‑on‑year.
Other Disclosures
Shareholder views
The Committee maintains regular and transparent communication with shareholders. We believe that it is important to regularly meet with
our key shareholders to understand their views on our remuneration arrangements and what they would like to see going forward. We welcome
feedback from shareholders at any time during the year.
Where we are proposing to make any significant changes to the remuneration framework or the manner in which the framework is operated
we would seek major shareholders’ views and take these into account. In recent years, the Committee has consulted with major shareholders
regarding both the design and operation of the Policy.
Prior to the finalisation of the 2024 Remuneration Policy, the Committee consulted with major shareholders to consider their views. We intend
to maintain a dialogue with our shareholders in future years, particularly when the Committee anticipates any substantial change to the
remuneration framework.
138 ITV plc Annual Report and Accounts 2023
REMUNERATION REPORT CONTINUED
Compliance with the 2018 Corporate Governance Code
The table below shows how the Committee addressed the principles of clarity, simplicity, risk, predictability, proportionality and
alignment to culture when determining the Directors’ remuneration policy. The Committee notes the release by the FRC of the revised
Corporate Governance Code 2024 and will work to ensure full compliance.
IMPACT OF THE 2018 CORPORATE GOVERNANCE CODE
Clarity
Code provision: Remuneration
arrangements should be transparent and
promote effective engagement with
shareholders and the workforce.
• The presentation of the Remuneration Report is intended to provide clarity on the Company’s approach
• We aim to be completely transparent about our remuneration policy and arrangements and comply with
certain disclosure requirements ahead of when we are required to do so for openness and transparency
• Great importance placed on engaging with our stakeholders, particularly with shareholders and the workforce
on remuneration. The Chief People Officer attends all Committee meetings and our Workforce Engagement
Director, Graham Cooke, provides regular feedback. Employees also have the opportunity to comment
through the Ambassador network and employee surveys. This ensures the views of employees are considered
during Committee deliberations.
Simplicity
Code provision: Remuneration structures
should avoid complexity and their rationale
and operation should be easy to
understand.
The Company operates an approach to remuneration that is simple to understand and familiar to key
stakeholders and has three key elements:
• Fixed element: comprising base salary, taxable benefits and a pension allowance
• Short‑term element: an annual performance‑related bonus with a selection of financial and non‑financial
targets measured over the financial year, two‑thirds paid in cash and one‑third in shares deferred for a three
year period
• Restricted share element: normally released after five years subject to achievement of a performance
underpin
Risk
Code provision: Remuneration
arrangements should ensure reputational
and other risks from excessive rewards,
and behavioural risks that might arise from
target‑based incentive plans, are identified
and mitigated.
A combination of short and long‑term incentives with the majority delivered in shares encourages Executive
Directors to deliver long‑term sustainable shareholder returns, discouraging decision‑making that only focuses
on the short term.
The Committee retains flexibility to adjust payments through malus and clawback provisions, and an overriding
discretion to depart from formulaic outcomes where behaviours may be viewed as inappropriate or criteria on
which the award was based do not reflect the underlying performance of the Company.
Predictability
Code provision: The range of possible
values of awards to individual directors and
any other limits or discretions should be
identified and explained at the time of
approving the policy.
Shareholders are kept fully informed and consulted on the values that can be earned under the incentive plans
for different levels of performance.
The Remuneration Policy provides estimates of potential future reward in different performance scenarios.
Proportionality
Code provision: The link between
individual awards, the delivery of strategy
and the long‑term performance of the
Company should be clear. Outcomes
should not reward poor performance.
The Restricted Share awards reward the creation of shareholder value, which ultimately focuses on the
long‑term achievement of strategic deliverables.
Performance measures and personal objectives in the bonus are designed to align with strategy and financial
performance and provide for a range of pay out levels which are dependent on and linked to Company
performance.
Deferral periods and holding periods (including in the bonus) help to further align incentive outcomes for
executives to the shareholder experience in the long term.
The Committee has overriding discretion over eventual outcomes when they do not reflect business
performance, and/or shareholder experience, and ensures that poor performance would not be rewarded.
Alignment to culture
Code provision: Incentive schemes should
drive behaviours consistent with company
purpose, values and strategy.
When considering the alignment of incentive plans and culture the Committee considers the following:
• Metrics: ensuring that performance targets are aligned to culture and do not drive the wrong behaviours
• Governance: ensuring adoption of best practice through a robust malus and clawback policy with a
substantial list of relevant trigger events, such as corporate failure and reputational damage. The Committee
also retains discretion under the plan rules to override formulaic vesting outcomes and to extend holding
periods. These elements enable the Committee to satisfy itself that the right steps have been taken to ensure
executive remuneration is appropriate from a cultural context
• Engagement: understanding remuneration for the wider workforce and ensuring that pay decisions are
aligned across the Group and wider engagement with our stakeholders, including our employees
139ITV plc Annual Report and Accounts 2023
GOVERNANCE
Payments to past Directors ‑ Audited
There were no payments made to past Directors in 2023.
Payments for loss of office ‑ Audited
There were no payments made to Directors for loss of office in 2023.
Directors’ share interests and post‑cessation shareholding ‑ Audited
The Committee continues to recognise the importance of Directors being shareholders so as to align their interests with other shareholders.
Shareholding guidelines are in place, which encourage Executive Directors to build up a holding of ITV plc shares based on a percentage of
base salary.
Where the value of shares required to be held increases as a result of a salary increase (or an increase in the relevant percentage), the
Executive Directors must increase their holdings to achieve compliance. The Committee may change the guidelines so long as they are not,
overall, in the view of the Committee, less onerous.
Non‑executive Directors are required to build and then maintain a holding of 100% of their base fee (unless for some reason they are unable to
retain their fees).
Interests in share awards following departure enable departing Executive Directors to remain aligned with the interest of shareholders for an
extended period after leaving the Company. Deferred Share Awards, legacy LTIP and ESP awards subject to a holding period will normally vest
(and be released from their holding periods) at the normal time. This means that Executive Directors may retain a significant interest in shares
for up to five years following departure from the Company. Following adoption of the policy in 2021, Executive Directors will normally be
required to retain an interest equivalent to two times their annual ESP grant (265% for the Chief Executive and 225% for the Group CFO & COO)
for two years following departure. In order to enforce this requirement, on vesting, relevant shares are automatically transferred to a secure
nominee arrangement until the appropriate level of interest has been achieved. The shares will be retained in this arrangement until the end of
the two year period.
The figures set out below represent shareholdings in the ordinary share capital of ITV plc beneficially owned by Directors and their family
interests at 31 December 2023. To show alignment with the shareholding guidelines the net number of unvested share awards not subject to
performance conditions and the vested LTIP in holding periods are included for the Executive Directors. The Committee continues to keep
both the shareholding guidelines and actual Director shareholdings under review and will take appropriate action should they feel it necessary.
Interests in shares
Notes
Unconditional
shares held at
31 December
2023
1
Restricted
shares held at
31 December
2023
2
Restricted
shares held at
31 December
2023
3
% shareholding
guidelines met
4
Unconditional
shares held at
31 December
2022
% of salary/fees
required
to be held under
shareholding
guidelines
Executive Directors
Carolyn McCall
1,721,466 1,716,030 2,117,214 134 1,277,456 400
Chris Kennedy 664,596 1,077,956 1,286,114 166 458,368 225
Non‑executive Directors
Dawn Allen
5 – – – – – 100
Salman Amin 50,674 – – 103 50,674 100
Edward Bonham Carter 100,000 – – 124 100,000 100
Graham Cooke 6 – – – – – 100
Andrew Cosslett 621,242 – – 114 621,242 100
Margaret Ewing 7 57,700 – – 97 57,700 100
Marjorie Kaplan 8 – – – – – 100
Mary Harris 9 – – – – 90,517 100
Gidon Katz 10 75,000 – – 83 75,000 100
Anna Manz 11 – – – – 46,312 100
Sharmila Nebhrajani 12 15,620 – – 21 10,000 100
Duncan Painter 13 – – – – 82,087 100
1. Shares beneficially held by Directors and family interests.
2. Restricted Share awards under the DSA and LTIP subject to continued service are accounted for on a net of tax basis.
3. Restricted Share awards under the ESP subject to performance underpin are accounted for on a net of tax basis.
4. In order to reflect economic exposure, shareholding guidelines are assessed on the greater of the share price on 31 December 2023 (63.28 pence) and the value at acquisition/grant.
5. Dawn Allen was appointed to the Board on 2 October 2023 and has until 2029 to meet her shareholding requirements.
6. Graham Cooke was appointed to the Board on 1 May 2020 and has until 2026 to meet his shareholding requirements.
7. Following an increase to fees in 2023 Margaret Ewing’s interest has fallen to 97%. Shares will be acquired at the earliest opportunity to ensure full compliance with the requirement
to hold shares with a value of 100% of the basic fees.
8. Marjorie Kaplan was appointed to the Board on 1 September 2023 and has until 2029 to meet her shareholding requirements.
9. Mary Harris stepped down from the Board on 3 May 2023.
10. Gidon Katz was appointed to the Board on 18 July 2022 and has until 2028 to meet his shareholding requirements.
11. Anna Manz stepped down from the Board on 31 August 2023.
12. Sharmila Nebhrajani was appointed to the Board on 10 December 2020 and has until 2026 to meet her shareholding requirements.
13. Duncan Painter stepped down from the Board on 30 November 2023.
140 ITV plc Annual Report and Accounts 2023
REMUNERATION REPORT CONTINUED
Outstanding interests under share plans
The following tables provide details of the Executive Directors’ interests in outstanding share awards.
Notes
At
1 January
2023
Awarded
in year
Vested
in year
Exercised
in year
Lapsed
in year
At
31 December
2023
Share price
used for
award
(pence)
Share
option
price
(pence)
Share
price at
exercise
(pence)
Vesting
date
Holding
period
ends
Carolyn McCall
LTIP
28 March 2018 1 144,989 – – 144,989 – – 145.25 – 80.83
28 March
2021
28 March
2023
28 March 2019 1 692,937 – – – – 692,937 126.37 – –
28 March
2022
28 March
2024
6 April 2020 1 3,575,495 – 1,393,013 – 2,182,482 1,393,013 69.91 – –
6 April
2023
6 April
2025
ESP
13 May 2021 2 1,013,062 – – – – 1,013,062 123.37 – –
13 May
2024
13 May
2026
28 March 2022 2 1,338,577 – – – – 1,338,577 96.17 – –
28 March
2025
28 March
2027
28 March 2023 2 – 1,643,105 – – – 1,643,105 81.48 – –
28 March
2026
28 March
2028
DSA
3
6 April 2020 4 692,767 – 692,767 692,767 – – 69.91 – 80.82
6 April
2023
28 March 2022 567,177 – – – – 567,177 96.17 – –
28 March
2025
28 March 2023 5 – 584,666 – – – 584,666 81.48 – –
28 March
2026
Chris Kennedy
LTIP
28 March 2019 1 420,928 – – – – 420,928 126.37 – –
28 March
2022
28 March
2024
6 April 2020 1 2,171,954 – 846,194 – 1,325,760 846,194 69.91 – –
6 April
2023
6 April
2025
ESP
13 May 2021 2 615,390 – – – – 615,390 123.37 – –
13 May
2024
13 May
2026
28 March 2022 2 813,126 – – – – 813,126 96.17 – –
28 March
2025
28 March
2027
28 March 2023 2 – 998,114 – – – 998,114 81.48 – –
28 March
2026
28 March
2028
DSA
3
6 April 2020 4 389,111 – 389,111 389,111 – – 69.91 – 80.82
6 April
2023
28 March 2022 367,120 – – – – 367,120 96.17 – –
28 March
2025
28 March 2023 5 – 383,421 – – – 383,421 81.48 – –
28 March
2026
SAYE
7 April 2020 6 24,426 – – – 24,426 – 92.11 73.69 –
1 June
2023
13 September 2023 6 – 32,907 – – – 32,907 70.46 56.37 –
1 November
2026
1. Awards under the LTIP are subject to performance over a three year period. Any proportion of the award that meets the performance conditions will become exercisable after a two
year holding period.
2. Awards under the ESP vest after three years subject to a financial underpin condition being met. The award will then become exercisable after a two year holding period. The face
value of awards granted in the financial year to Carolyn McCall under the ESP was £1,338,801 and to Chris Kennedy was £813,262.
3. There were no DSA awards made in 2021 for 2020 performance.
4. For awards released during the year, sufficient shares were sold to cover income tax and national insurance liabilities, with the balance of shares retained by the Executive Director.
The shares are included in the balance of unconditional shares in the table on page 139.
5. Awards under the DSA were granted as nil cost options and become exercisable after three years subject to continued employment. The face value of awards granted in the financial
year to Carolyn McCall was £476,385 and to Chris Kennedy was £312,411. Awards were granted based on the average share price on the three trading days preceding the award.
6. Share options under the SAYE were granted at a 20% discount of the ITV share price at the time of grant.
141ITV plc Annual Report and Accounts 2023
GOVERNANCE
External directorships
With specific approval of the Board, Executive Directors may undertake external appointments as a non‑executive director of other
publicly quoted companies and retain any related fees paid to them. During the year, the Executive Directors retained fees for the
directorships set out below.
Company
2023
£000
Carolyn McCall Bridgepoint Group plc 107
Chris Kennedy Whitbread plc 87
The Board and Committee are satisfied that these commitments do not compromise their duties as Executive Directors of ITV plc.
Service contracts
The Directors’ service contracts and letters of appointment are available for inspection at the Company’s registered office.
Executive Directors: Executive Directors have rolling service contracts that provide for 12 months’ notice on either side. There are no special
provisions that apply in the event of a change of control.
Date of appointment Nature of contract
Notice period
from Company
Notice period
from Director
Compensation for
early termination
Carolyn McCall 8 January 2018 Rolling 12 months 12 months None
Chris Kennedy 21 February 2019 Rolling 12 months 12 months None
Non‑executive Directors: Each Non‑executive Director, including the Chair, has a letter of appointment with the Company. Non‑executive
Directors will serve for an initial term of three years, subject to election and then annual re‑election by shareholders, unless otherwise
terminated earlier by and at the discretion of either party upon one month’s written notice (12 months for the current Chair). After the initial
three year term, reappointment is on an annual basis.
All Non‑executive Directors are subject to re‑election at the AGM in 2024. Details of appointment and tenure are set out in the table on page 77
to 78.
Committee membership and advisers
The Directors who were members of the Committee when matters relating to the Executive Directors’ remuneration for the year were
considered are set out on page 119.
The Committee obtains advice from various sources in order to ensure it makes informed decisions. The Executive Directors are invited to
attend Committee meetings as appropriate. No individual is involved in decisions relating to their own remuneration.
The Chief People Officer is the main internal adviser and provides updates on remuneration, employee relations and human resource issues.
Deloitte LLP was appointed by the Committee as the independent adviser on remuneration policy and the external remuneration environment
with effect from September 2017 following a review of other advisers in the market place. Total fees for advice provided to the Committee
during the year amounted to £88,400 on a time/material basis (exclusive of VAT and expenses). Deloitte are members of the Remuneration
Consultants Group and abide by its Code of Conduct in relation to remuneration consulting in the UK.
The Committee regularly reviews the quality and objectivity of the advice it receives from Deloitte in private sessions and this is challenged
as a part of the Board evaluation process. It is satisfied that the advice it has received has been objective and independent, and that any
conflicts have been appropriately managed. The Committee is satisfied that the Deloitte LLP engagement partner and advisory team that
provide remuneration advice to the Committee, do not have any connections with the Company or individual directors that may impair
their independence.
The wider UK Deloitte firm provided ITV with a number of other services during the year relating to risk and internal audit (until April 2022),
tax, financial advice and consultancy. The members of the executive remuneration consulting team are not incentivised to cross‑sell
non‑related services to ITV.
Relative importance of spend on pay
The table below shows pay for all employees compared with other key financial indicators.
2023
£m
2022
£m % Change
Employee pay
1
693 631 10
Ordinary dividend 201 201 –
Employee headcount
2
6,869 6,677 3
1. Employee pay is the total remuneration paid to all employees across ITV on a fulltime equivalent basis. More detail is set out in note 2.1 to the financial statements.
2. Employee headcount is the monthly average number of employees across ITV on a fulltime equivalent basis. More detail is set out in note 2.1 to the financial statements.
This number is included to contextualise the employee pay figure.
There were no share buybacks during either year.
142 ITV plc Annual Report and Accounts 2023
REMUNERATION REPORT CONTINUED
Historical performance
The graph below shows the TSR performance of the Company against the FTSE 100 index over the ten year period to 31 December 2023.
The FTSE 100 was chosen as ITV has been a member of the FTSE 100 during the ten year period.
31/12/2013 31/12/2014 31/12/2015 31/12/2016 31/12/2017 31/12/2018 31/12/2019 31/12/202331/12/202231/12/202131/12/2020
ITV FTSE 100
Source: Thomson Reuters Datastream
TSR (rebased to 100 at 31 December 2013)
0
20
40
60
80
100
120
140
160
180
Chief Executive remuneration
The table below provides a summary of the total remuneration received by the Chief Executive over the last ten years, including details of the
annual bonus pay‑out and long‑term incentive award vesting level in each year.
Tota l
remuneration
£000
Bonus %
of maximum
Award vesting
% of maximum Award type
2023 Carolyn McCall 2,881 56.41 100 ESP
2022 Carolyn McCall 3,690 81.72 38.96 LTIP
2021 Carolyn McCall 3,307 96.38 35.82 LTIP
2020 Carolyn McCall 1,150 – 8.83 LTIP
2019 Carolyn McCall 3,122 87.5 62.35 LTIP
2018 Carolyn McCall 3,695 73.6 – LTIP
2017 Peter Bazalgette (for the six month period served) 225 – – LTIP
Adam Crozier (for the six month period served) 2,050 97.9 63 LTIP
2016 Adam Crozier 3,632 40 80 LTIP
2015 Adam Crozier 3,881 96 75 LTIP
2014 Adam Crozier 4,842 94 75 LTIP
The long‑term incentive award vesting percentage relates to the proportion of the award that met performance conditions in the relevant
financial year.
Shareholder voting
At the 2023 AGM, the majority of investors and mainstream proxy voting agencies were supportive of the Remuneration Report. The Committee
recognises that a limited minority of shareholders opted to not support the Director’s Remuneration Report, and it is understood that this was
driven by a mix of factors. Select shareholders continue to retain reservations regarding the remuneration policy, which was approved by 92%
of shareholders in 2021, and is subject to renewal at the 2024 AGM. Voting in some cases was partially influenced by broader company factors
not directly related to our pay practices. An extensive shareholder consultation was undertaken by the Committee in 2023 in advance of the
Policy renewal, with shareholders given the opportunity to raise these concerns. The Board continues to maintain dialogue with investors, and
the Remuneration Committee has engaged with investors on numerous occasions over recent years. In many cases remuneration proposals
have been adapted in direct response to investor feedback. While there is a recognition that there are differing viewpoints amongst our major
investors on matters relating to pay, we will continue to constructively engage with investors on matters and take into account their feedback
as we make key executive pay decisions.
Votes cast by proxy and at the meeting by poll in respect of the Executive Directors’ remuneration were as follows:
Resolution Number of shares Voting for % Number of shares Voting against % Total votes cast Votes withheld
Remuneration Policy (2021 AGM) 2,708,902,059 92.23 228,270,767 7.77 2,937,172,826 250,200,490
Annual Report on Remuneration (2023 AGM) 2,467,727,854 88.23 329,265,772 11.77 2,796,957,548 52,988,620
This Remuneration Report was approved by the Board on 7 March 2024 and has been signed on behalf of the Directors by
SHARMILA NEBHRAJANI OBE
CHAIR, REMUNERATION COMMITTEE
7 March 2024
143ITV plc Annual Report and Accounts 2023
GOVERNANCE
DIRECTORS’ REPORT
The Directors present their Annual Report and the audited consolidated and
parent company financial statements for the year ended 31 December 2023.
The Directors’ Report comprises this report and the entire Governance section including the Chair’s Governance Statement. In accordance
with the Financial Conduct Authority’s Listing Rules, the information to be included in the 2023 Annual Report and Accounts, where applicable,
under LR 9.8.4, is set out in this Directors’ Report. Other information that is relevant to this report, and which is incorporated by reference,
can be located as follows:
INFORMATION PAGE NUMBER
Carbon and greenhouse gas emissions
See page 35
Corporate Governance Report
See pages 75 to 142
Culture
See pages 96 to 99
Directors’ service contracts
See page 126
Employee engagement and involvement
See pages 94 to 95
Employee equality, diversity, reward, investment and inclusion
See pages 37 to 39
Future developments of the business of the Group
See pages 10 to 11
Membership of the Board during the 2023 financial year
See page 77 to 78
Research and development
See pages 10 to 11
Stakeholder engagement and Company’s business relationships
See pages 84 to 91
Corporate
Articles of Association: The Articles of Association may only be amended by special resolution of the shareholders. The current Articles
were adopted as the Articles of Association of the Company at the conclusion of the 2022 AGM and are available on our website.
www.itvplc.com/investors/governance
Auditor: The external auditor for the 2023 financial year was PricewaterhouseCoopers LLP. The Independent Auditor’s Report starting
on page 149 sets out the information contained in the Annual Report which has been audited by the external auditor.
The Audit and Risk Committee considered the performance and audit fees of the external auditor, and the level of non‑audit work undertaken.
It recommended to the Board that a resolution for the reappointment of PricewaterhouseCoopers LLP for a further year as the Company’s
auditor be proposed to shareholders at the AGM on 2 May 2024.
Change of control: No person holds securities in the Company carrying special rights with regard to control of the Company. All of
the Company’s share schemes contain provisions relating to a change of control. Outstanding awards and options would normally vest
and become exercisable on a change of control, subject to the satisfaction of any performance conditions and proration for time
where appropriate.
Certain of the Group’s debt and derivative instruments have change of control clauses whereby the counterparty can require ITV to repay or
redeem the instruments in the event of a change of control (although in some cases only if it is accompanied by a credit rating downgrade to
sub investment grade). The Company is not aware of any other significant agreements to which it is a party that take effect, alter or terminate
upon a change of control of the Company.
Other agreements: The Company does not have any agreements with any Director or employee that would provide compensation for loss of
office or employment resulting from change of control following a takeover bid.
Dividends: The Board has proposed a final dividend of 3.3 pence for the year ended 31 December 2023 subject to shareholder approval at the
AGM on 2 May 2024. The final dividend will be paid on 23 May 2024 to shareholders on the register on 12 April 2024 (the record date). The
ex‑dividend date is 11 April 2024. For more information please refer to page 5.
Political contributions: It is the Company’s policy not to make cash contributions to any political party. However, within the normal activities
of the Company’s national and regional news‑gathering operations, there may be occasions when an activity might fall within the broader
definition of ‘political expenditure’ contained within the Companies Act 2006. Shareholder authority for such expenditure was given at the
2023 AGM. During 2023 there were no payments made by the Group falling within this definition (2022: nil). The Directors will seek to renew this
authority at the 2024 AGM.
Branches: Branches of the Group outside the United Kingdom are indicated in the Subsidiary undertakings and investments section on pages
238 to 242.
144 ITV plc Annual Report and Accounts 2023
DIRECTORS’ REPORT CONTINUED
Directors
Appointments: A table showing Directors who served in the year and to the date of this report can be found on page 82. Biographies for
Directors currently in office can be found on pages 77 and 78 and on our website.
www.itvplc.com/about/board‑of‑directors
The appointment and replacement of Directors is governed by the Articles of Association, the UK Corporate Governance Code, the Companies
Act 2006 and related legislation. The Directors may from time to time appoint one or more Directors. Any such Director shall hold office only
until the next AGM and shall then be eligible for appointment by the Company’s shareholders in accordance with the Corporate Governance
Code. Subject to annual shareholder approval, Non‑executive Directors are appointed for an initial three year period and annually thereafter.
Each Director will retire and submit themselves for election or re‑election at the forthcoming AGM.
Conflicts of interest: The Board has delegated the authorisation of any conflicts to the Nominations Committee and has adopted a
Conflicts of Interest Policy. The Board has considered in detail the current external appointments of the Directors that may give rise to a
situational conflict and has authorised potential conflicts where appropriate. This authorisation can be reviewed at any time but will always
be subject to annual review.
Powers including in relation to issuing or buying back shares: Subject to applicable law and the Company’s Articles of Association,
the Directors may exercise all powers of the Company, including the power to authorise the issue and/or market purchase of the Company’s
shares (subject to an appropriate authority being given to the Directors by shareholders in a general meeting and any conditions attaching
to such authority). The Articles and a schedule of Matters Reserved for the Board can be found on our website (below).
www.itvplc.com/investors/governance
At the 2023 AGM, the Directors were given the following authority:
• To allot a maximum of 1.34 billion shares, representing approximately one‑third of the Company’s issued share capital, extending
to 2.68 billion if used for a rights issue
• To allot a maximum of 402.5 million shares, without first offering them to existing shareholders in proportion to their holdings, representing
approximately 10% of the Company’s issued share capital
• To purchase in the market a maximum of 402.5 million shares, representing up to approximately 10% of the Company’s issued share capital
Under these authorities 27 million shares were allotted and no shares were bought back during the 2023 financial year and up to the date of this
report. On 7 March 2024 ITV announced that it had commenced a programme to purchase the Company’s shares up to a maximum
consideration of £235 million using the authority granted by shareholders at the 2023 AGM. The continuation of the programme after the 2024
AGM is subject to shareholder authority being granted at the 2024 AGM and, following the expiry of such authority, the shareholder authority
granted at the Company’s Annual General Meeting to be held in 2025.
Insurance and indemnities: The Company maintains liability insurance for its Directors and officers that is renewed on an annual basis. The
Company has also entered into deeds of indemnity with its Directors and certain directors of associated companies. A copy of the indemnity
can be found on our website. The indemnity, which constitutes a qualifying third‑party indemnity as defined in Section 234 of the Companies
Act 2006, was in force during the 2023 financial year.
Disclosures
Listing Rule 9.8.4 disclosures: There are no disclosures to be made under Listing Rule 9.8.4, other than that the Trustee of the Employees’
Benefit Trust (EBT) waived its rights to receive dividends on shares it holds which do not relate to restricted shares held under the ITV Deferred
Share Award Plan. See note 4.8.
Financial risk management: The Directors have carried out a robust assessment of the principal and emerging risks facing the Company,
including in relation to its business model, future performance, solvency and liquidity. Details of our principal risks and associated mitigations,
together with details of our approach to risk management, are set out on pages 55 to 64. Note 4.2 to the financial statements gives details of
the Group’s financial risk management policies and related exposures. Note 4.2 is incorporated by reference and deemed to form part of this
report.
Going concern: The going concern statement is set out on page 162. The statement is incorporated by reference and deemed to form part
of this report.
Data: As a part of our business activity, ITV processes large amounts of personal data. ITV recognises that to enable this use of personal data
to transform our business and to meet the expectations of our viewers, advertisers and colleagues, it is critical that we continue to build on our
approach to applying privacy in a lawful and ethical way. A programme of work to support this has been led by our Global Data Protection
Officer. The work includes making improvements to our data governance framework and delivering our data privacy function to protect rights,
engender trust and make data available for commercial purposes. ITV has a number of policies, procedures and tools in place to support this,
including our Privacy and Data Protection Policy and an Information Security Policy that governs the processing and security of data.
Compliance with these policies is mandatory and forms part of the Code of Ethics and Compliance. All colleagues undergo regular training to
remind them of their responsibilities under these policies. Privacy and data protection is kept under review by the Audit and Risk Committee.
145ITV plc Annual Report and Accounts 2023
GOVERNANCE
Subsequent events
For details on post balance sheet events see note 5.3 on page 226.
Pensions
The Company operates a number of pension arrangements which provide retirement and death benefits for colleagues.
ITV Pension Scheme (the Scheme): The Scheme is predominantly a Defined Benefit (DB) scheme, which is closed to future accrual, but also
includes a small Defined Contribution (DC) section closed to future contributions.
ITV Pension Scheme Limited (a wholly owned subsidiary of ITV plc) is a corporate Trustee and manages the Scheme under a trust which is
separate from the Company. Members of the Trustee board are formally appointed as directors of ITV Pension Scheme Limited. There are six
directors including the Chair – four appointed by the Company and two nominated by the members. The Company appointed Trustee directors
include the Chair and two professional independent Trustees.
Currently, the Trustee has one committee: Corporate Affairs. The Corporate Affairs Committee is convened as and when appropriate for
dealing with any corporate activities that may arise. The Trustee board holds regular meetings throughout the year at which key issues and
more routine business matters are dealt with. A budget is agreed each year. The Trustee board manages risk through its meeting agendas
and has a conflicts of interest policy and maintains a register of interests for each Trustee director, which are reviewed regularly. It is the
responsibility of the Trustee to have in place appropriate training for its directors and effective committee structures. The Trustee directors
receive regular training throughout the year and also have the support of various professional advisers. The Group pensions department
helps identify training opportunities. Training is delivered both by attendance at external courses and with targeted training to support
specific agenda items at the start of the relevant Trustee board meeting. Where appropriate, longer training sessions are organised.
Comprehensive records are kept of all training completed by each Trustee director. The Trustee board completes regular assessments
of its advisers.
The Chair confirms in an annual statement that the Trustee meets its legal duties in relation to the DC section as required under the Pensions
Regulator’s Code of Practice 13.
Full valuations are carried out every three years. The latest actuarial valuation of the main DB scheme was due as at 1 January 2023 with the
exercises expected to be completed within the statutory deadline of 31 March 2024.
ITV Defined Contribution Plan (the Plan): The trust based Plan was established to accept contributions from 1 March 2017 for ex‑DB
members and DC members who transferred from the Scheme. Eligible fixed term and permanent employees are invited to join the Plan after
completing the required time in the Company’s Auto‑Enrolment (AE) arrangement – the AE Section of the Plan, which was set up on
1 April 2020. These individuals are given the opportunity to transfer funds from the AE plan and make backdated contributions within
permitted levels.
ITV DC Trustee Limited (a wholly owned subsidiary of ITV plc) is a corporate Trustee and manages the DC assets, which are held under trust
separately from the Company. Members of the Trustee board are formally appointed as directors of ITV DC Trustee Limited. There are five
directors including the Chair — three appointed by the Company and two nominated by the members. It is the responsibility of the Trustee
to have in place appropriate training for its directors. The governance framework for managing the Plan and developing the board is in line
with that in place for the ITV Pension Scheme.
The Chair confirms in an annual statement that the Trustee meets its legal duties in relation to the DC Plan as required under the Pensions
Regulator’s Code of Practice 13.
Ulster Television Pension and Assurance Scheme (the UTV Scheme): The UTV Scheme provides DB benefits. It closed to future accrual
with effect from 31 March 2019.
UTV Pension Scheme Limited (a wholly owned subsidiary of ITV plc) is a corporate Trustee and manages the DB assets, which are held
under trust separately from the Company. Members of the Trustee board are formally appointed as directors of UTV Pension Scheme Limited.
There are five directors including the Chair — three appointed by the Company (including a professional Trustee as chairman) and two
nominated by the members. It is the responsibility of the Trustee to have in place appropriate training for its directors. The governance
framework for managing the UTV Scheme and developing the board is in line with that in place for the ITV Pension Scheme.
Full valuations are carried out every three years. The latest actuarial valuation of the UTV scheme was due as at 1 July 2023.
The People’s Pension: Since 2013, employers within the Group have been required to enrol all eligible individuals into a pension scheme
automatically (auto‑enrolment). This applies to all eligible individuals who are contracted to work for us, regardless of their contract type or tax
status (i.e. it applies to workers and not simply employees). For freelancers and employees not eligible to join the DC Plan, the auto‑enrolment
plan is provided by a company called The People’s Pension under a master trust which is run by an independent board of Trustee directors and
eligible individuals are enrolled into this arrangement.
Pension Scheme indemnities: Qualifying pension scheme indemnity provisions, as defined in Section 235 of the Companies Act 2006, were in
force for the financial year ended 31 December 2023 and remain in force for the benefit of each of the directors of ITV Pension Scheme Limited,
ITV DC Trustee Limited and UTV Pension Scheme Limited. These indemnity provisions cover, to the extent permitted by law, certain losses or
liabilities incurred as a director or officer of ITV Pension Scheme Limited, ITV DC Trustee Limited and UTV Pension Scheme Limited.
146 ITV plc Annual Report and Accounts 2023
DIRECTORS’ REPORT CONTINUED
Shares
Issued share capital: At the date of this report, there were 4,052,409,194 ordinary shares of 10 pence each in issue, all of which are fully
paid up and quoted on the London Stock Exchange.
Rights: The rights attaching to the Company’s ordinary shares are set out in the Articles of Association. There are no securities carrying
special rights.
Restrictions: There are no restrictions on the transfer of ordinary shares in the capital of the Company other than those which may be
imposed by law from time to time. The Company is not aware of any agreements between shareholders that may result in restrictions on the
transfer of securities and/or voting rights. With regard to the deadline for exercising voting rights, votes are exercisable at a general meeting of
the Company in respect of which the business being voted upon is being heard. Votes may be exercised in person, by proxy or, in relation to
corporate members, by corporate representatives. The Articles provide a deadline for submission of proxy forms of not less than 48 hours
before the time appointed for the holding of the meeting or adjourned meeting. However, when calculating the 48‑hour period, the Directors
can, and have, decided not to take account of any part of a day that is not a working day. In accordance with the Disclosure Guidance and
Transparency Rules (DTRs), Persons Discharging Managerial Responsibility are required to seek approval to deal in ITV shares. The Company
is not aware of any agreements between shareholders that may result in restrictions on the transfer of securities and/or voting rights.
Share schemes: Details of employee share schemes are set out in note 4.8 of the financial statements. The Company has an Employees’
Benefit Trust (EBT) funded by loans to acquire shares for the potential benefit of employees. Details of shares held by the EBT as at
31 December 2023 are set out in note 4.8. During the year, shares have been released from the EBT in respect of share schemes for employees.
The Trustee of the EBT has the power to exercise all voting rights in relation to any investment (including ordinary shares) held within the EBT.
From 2023, awards granted under the Company’s Save As You Earn Scheme and the Executive Share Plan are met by the issue of new shares
when the options are exercised. Awards under the Deferred Share Award Plan will continue to be met by market purchase shares. The
Company will monitor the number of shares issued under these schemes and the impact on dilution limits.
Substantial shareholders: Information regarding interests in voting rights provided to the Company pursuant to the DTRs is published on a
Regulatory Information Service and on the Company’s website.
As at 7 March 2024, the information in the table below had been received, in accordance with DTR5, from holders of notifiable interests (voting
rights) in the Company’s issued share capital. However, these holdings are likely to have changed since notified to the Company; notification of
any change is not required until the next applicable threshold is crossed.
The number of shares is based on announcements made by each relevant shareholder using the Company’s issued share capital at that date.
% of
direct interest
in shares
% of
indirect interest
in shares Total % held
Total number
of shares
as notified
Ameriprise Financial, Inc and its group 5.08 0.05 5.12 206,179,898
Artemis Investment Management LLP 5.14 – 5.14 206,764,435
Liberty Global Incorporated Limited 9.90 – 9.90 398,515,510
RWC Asset Management LLP 5.67 – 5.67 228,339,000
Schroders plc 5.22 0.01 5.23 210,615,274
Silchester International Investors LLT – 5.00 5.00 202,667,604
147ITV plc Annual Report and Accounts 2023
GOVERNANCE
Statement of Directors’ Responsibilities
The Directors consider that the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Group’s and Company’s position and performance, business model and strategy.
Each of the Directors, whose names and functions are listed in the Board of Directors section on pages 77 to 78 confirm that, to the best of their
knowledge:
• The Group financial statements, which have been prepared in accordance with UK‑adopted international accounting standards, give a true
and fair view of the assets, liabilities, financial position and profit of the Group
• The Company financial statements, which have been prepared in accordance with United Kingdom Accounting Standards, comprising FRS
101, give a true and fair view of the assets, liabilities and financial position of the Company
• The Strategic Report contained on pages 1 to 74 includes a fair review of the development and performance of the business and the position
of the Group and Company, together with a description of the principal risks and uncertainties that it faces
In the case of each Director in office at the date the Directors’ Report is approved:
• So far as the Director is aware, there is no relevant audit information of which the Group’s and Company’s auditors are unaware
• They have taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information
and to establish that the Group’s and Company’s auditors are aware of that information
The Directors are responsible for preparing the Annual Report and Accounts and the financial statements in accordance with applicable law
and regulation.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the
Group financial statements in accordance with UK‑adopted international accounting standards and the Company financial statements in
accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101
‘Reduced Disclosure Framework’, and applicable law).
Under company law, Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the
state of affairs of the Group and Company and of the profit or loss of the Group for that period. In preparing the financial statements, the
Directors are required to:
• Select suitable accounting policies and then apply them consistently
• State whether applicable UK‑adopted international accounting standards have been followed for the Group financial statements and
United Kingdom Accounting Standards, comprising FRS 101 have been followed for the Company financial statements, subject to any
material departures disclosed and explained in the financial statements
• Make judgements and accounting estimates that are reasonable and prudent
• Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and Company will continue
in business
The Directors are responsible for safeguarding the assets of the Group and Company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
The Directors are also responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s and Company’s
transactions and disclose with reasonable accuracy at any time the financial position of the Group and Company and enable them to ensure
that the financial statements and the Directors’ Remuneration Report comply with the Companies Act 2006.
The Directors are responsible for the maintenance and integrity of the Company’s website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
By order of the Board
CHRIS KENNEDY
GROUP CFO & COO
7 March 2024
ITV plc
Registered Number: 4967001
148 ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
In this
section
The financial statements have been presented in a style that attempts to make them less complex and
more relevant to shareholders and other stakeholders. We have grouped the note disclosures into five
sections: ‘Basis of Preparation’, ‘Results for the Year’, ‘Operating Assets and Liabilities’, ‘Capital Structure
and Financing Costs’ and ‘Other Notes’. Each section sets out the accounting policies applied in producing
the relevant notes, along with details of any key judgements and estimates used. The purpose of this
format is to provide readers with a clearer understanding of what drives financial performance of the Group.
The aim of the text in boxes is to provide commentary on each section or note, in plain English.
Keeping
it simple
Notes to the financial statements provide information required by statute, accounting standards or Listing
Rules to explain a particular feature of the financial statements. The notes are a part of the financial
statements and will also provide explanations and additional disclosure to assist readers’ understanding
and interpretation of the Annual Report and the financial statements.
Contents
Independent Auditors’ Report to the members of ITV plc 149
Primary Statements 156
Consolidated Income Statement 156
Consolidated Statement of Comprehensive Income 157
Consolidated Statement of Financial Position 158
Consolidated Statement of Changes in Equity 159
Consolidated Statement of Cash Flows 161
Section 1: Basis of Preparation 162
Section 2: Results for the Year 166
2.1 Profit before tax 166
2.2 Exceptional items 172
2.3 Taxation 17
4
2.4 Earnings per share 178
Section 3: Operating Assets and Liabilities 180
3.1 Working capital 180
3.2 Property, plant and equipment 185
3.3 Intangible assets 187
3.4 Assets classified as held for sale 192
3.5 Investments 193
3.6 Provisions 19
4
3.7 Pensions 196
Section 4: Capital Structure and Financing Costs 205
4.1 Net debt 205
4.2 Borrowings 207
4.3 Managing market risks: derivative financial instruments 209
4.4 Net financing costs 218
4.5 Fair value hierarchy 219
4.6 Lease liabilities 221
4.7 Equity 222
4.8 Share-based compensation 223
Section 5: Other Notes 225
5.1 Related party transactions 225
5.2 Contingent assets and liabilities 226
5.3 Subsequent events 226
5.
4
Subsidiaries exempt from audit 227
ITV plc Company Financial Statements 229
Notes to the ITV plc Company Financial Statements 231
149ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ITV PLC
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
Opinion
In our opinion:
• ITV plc’s Group financial statements and Company financial statements (the ‘financial statements’) give a true and fair view of the state
of the Group’s and of the Company’s affairs as at 31 December 2023 and of the Group’s profit and the Group’s cash flows for the year
then ended
• the Group financial statements have been properly prepared in accordance with UK-adopted international accounting standards as
applied in accordance with the provisions of the Companies Act 2006
• the Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards, including FRS 101 ″Reduced Disclosure Framework″, and applicable law)
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006
We have audited the financial statements, included within the Annual Report and Accounts 2023 (the ″Annual Report″), which comprise: the
Consolidated and Company Statements of Financial Position as at 31 December 2023; the Consolidated Income Statement, the
Consolidated Statement of Comprehensive Income, the Consolidated and Company Statements of Changes in Equity; and the
Consolidated Statement of Cash Flows for the year then ended; and the notes to the financial statements, comprising material accounting
policy information and other explanatory information.
Our opinion is consistent with our reporting to the Audit and Risk Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (‘ISAs (UK)’) and applicable law. Our responsibilities
under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest entities, and we have fulfilled our
other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were not provided.
Other than those disclosed in Note 2.1 ‘Profit Before Tax’, we have provided no non-audit services to the Company or its controlled
undertakings in the period under audit.
Our audit approach
Overview
Audit scope
• We performed full scope audit procedures over eight components, covering components in the UK, the USA and the Netherlands
• Additionally, we performed a financial statement line item audit over six large balances across four components
• Taken together, the entities over which audit work was performed accounted for 79% of the Group’s external revenue and 78% of the
Group’s absolute profit before tax and operating exceptional items
Key audit matters
• Valuation of gross defined benefit pension scheme obligations (Group)
• Valuation of complex pension scheme assets (Group)
• Presentation of exceptional items, including valuation of the Box Clever provision (Group)
• Recoverability of investments (Company)
Materiality
• Overall Group materiality: £23.5 million (2022: £28.2 million) based on 5% of the three-year average Group profit before tax adjusted to
exclude operating exceptional items
• Overall Company materiality: £71.0 million (2022: £ 64.9 million) based on 1% of the Company’s total assets
• Performance materiality: £17.5 million (2022: £ 21.1 million) (Group) and £53.3 million (2022: £48.6 million) (Company)
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.
150 ITV plc Annual Report and Accounts 2023
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ITV PLC
CONTINUED
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud)
identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit;
and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures thereon,
were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
Recoverability of investments is a new key audit matter this year for the Company. Recoverability of amounts owed by subsidiary
undertakings, which was a key audit matter last year, is no longer included because of the increased focus on the impairment assessment
associated with the investment carrying value as a result of the performance in the year. Otherwise, the key audit matters below are
consistent with last year.
Key audit matter How our audit addressed the key audit matter
Valuation of gross defined benefit pension scheme obligations (Group)
Refer to note 3.7 in the financial statements. The Group had gross
defined benefit scheme obligations of £2,194 million (2022: £2,292
million) recognised at 31 December 2023, which are significant in the
context of the overall Consolidated Statement of Financial Position.
The valuation of defined benefit pension scheme obligations involves
the exercise of judgement and technical expertise in choosing
appropriate actuarial assumptions such as the discount rate, inflation,
and mortality rates. Management engaged external actuarial experts
to assist in selecting appropriate assumptions and to calculate the
schemes’ liabilities.
We utilised our in-house actuarial experts to evaluate whether the
assumptions and methodology used in calculating the defined
benefit obligations were reasonable by:
• Assessing whether the mortality rate and other demographic
assumptions were reasonable based on the consideration of the
specifics of each plan and industry benchmarks
• Evaluating the appropriateness of the discount and inflation rate
assumptions by assessing the methodology used to set them
and comparing the assumptions against our internal acceptable
ranges set based on market data
• Reviewing the methodology and actuarial models used by external
actuaries to assess their appropriateness and testing the
Consolidated Statement of Financial Position liability and
movements over the year
Based on our procedures, we concluded that the key assumptions
utilised lay within acceptable ranges, the methodology used to
calculate the liability was appropriate, and that the liability
calculation had not been materially misstated. We assessed the
related disclosures included in the Group financial statements
and consider them to be appropriate.
Valuation of complex pension scheme assets (Group)
Refer to note 3.7 in the financial statements. The Group had gross
defined benefit scheme assets of £2,355 million (2022: £2,437 million)
recognised at 31 December 2023, which are significant in the
context of the overall Consolidated Statement of Financial Position.
The valuations of complex pension scheme assets such as Pooled
Investment Vehicles (‘PIVs’), property investments and longevity
swaps are inherently subjective. As such, there is judgement in
determining the fair value of the assets including the selection
of appropriate valuation methodologies and other assumptions.
Given the judgement and the quantum of these assets, this is a
heightened area of audit risk.
We obtained independent confirmations from the investment
managers to confirm the valuation of the scheme assets at the
Consolidated Statement of Financial Position date.
We understood management’s processes and controls for
monitoring and review of complex asset valuations. We specifically
instructed our in-house valuations experts to consider whether the
assumptions and methodology used in valuing the assets were
reasonable in relation to the longevity swap contract.
For complex PIVs, we also requested and reviewed third party
investment manager controls reports, details of any transactions
close to the year end, and details of the latest audited financial
statements, to determine whether there were any inconsistencies
with the year end values being attributed.
Based on the procedures performed, we noted no material issues
arising from our work.
151ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
Key audit matter How our audit addressed the key audit matter
Presentation of exceptional items, including valuation of the Box Clever provision (Group)
Refer to notes 2.2 and 3.6 in the financial statements. The Group
recorded significant exceptional items of £77 million (2022:
£65 million) which were included on the face of the Consolidated
Income Statement and disclosed within the Annual Report.
The presentation of items as exceptional can be judgemental
and have a significant impact on the readers of the financial
statements. Due to the quantum and number of exceptional
items in the year, we focused on the presentation of these
items to ensure they were treated consistently with the Group’s
accounting policy. The Group had recorded a provision of
£52 million (2022: £52 million) for the liability that might arise
as a result of the Box Clever Financial Support Directions issued by
the Pensions Regulator, which is unchanged since the prior year.
There is continued uncertainty as to the quantum of the amount
for which ITV may be liable.
We substantiated a sample of exceptional items to corroborating
evidence. We assessed management’s rationale for the designation
of certain items as exceptional against the Group’s policy,
considering the nature and impact of these items. We assessed the
appropriateness and completeness of the disclosures included in
the Group financial statements and the levels of equal prominence
of GAAP and non-GAAP measures within the Annual Report.
Specifically, with respect to the Box Clever provision, we enquired
of management and their external legal counsel on the latest
status of the dispute and their views as to the most likely outcome,
including the form and quantum of any potential settlement.
We assessed the basis for management’s estimate of the provision,
and utilised our in-house actuarial experts to evaluate whether the
assumptions and methodology used in estimating the deficit
amounts were reasonable.
We noted that consistent assumptions were used for the ITV
pension arrangements, all of which were in our acceptable ranges.
We noted that there remains a significant amount of uncertainty
related to this matter including the timing, amount and form of
settlement. We therefore reviewed the disclosures to ensure they
provide appropriate details on the developments and the range of
possible outcomes.
Based on our procedures, we were satisfied that the treatment and
classification of exceptional items is consistent with the Group’s
policy, and the Annual Report disclosures, including the Box Clever
matter, are appropriate.
Recoverability of investments (Company)
Refer to Note iii in the financial statements. At 31 December 2023
the Company held investments in subsidiaries with a carrying
value of £3,224 million (2022: £3,224 million). The fall in market
capitalisation below the carrying value of the investments at
31 December 2023 is considered to be an impairment indicator and,
as a result, management performed an impairment assessment.
Management prepared a Value in Use (‘VIU’) model which includes
j
udgements regarding the future cash flows of the Group.
The model is based on the first three years of the Board approved
five year plan and incorporates a terminal growth rate into
perpetuity. Through this assessment, management identified that
the VIU of the trading entities exceeded the carrying value of the
Company’s investments, therefore concluding that no impairment
was required.
We performed the following procedures:
• Understood the basis of preparation of the forecasts
• Ensured the model used is consistent with the forecast and
assumptions used elsewhere in the business (including the
goodwill impairment assessment and going concern)
• Supported by PwC valuations experts, we reviewed and challenged
management’s independent discount rate and terminal growth
rate for appropriateness
• Completed mathematical accuracy checks over the model
• Based on our procedures we are satisfied that the carrying value
of the investments is supportable
We also evaluated the disclosures in Note iii Investments in
subsidiary undertakings, which we consider to be appropriate.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a
whole, taking into account the structure of the Group and the Company, the accounting processes and controls, and the industry in which
they operate.
The Group is organised and managed across three divisions: Media & Entertainment (M&E), ITV Studios and Central Services. Within the
M&E and Studios divisions, given the shared systems and controls environment in the UK, we identified each individual UK business as
a component. Outside of this, we identified each component at an individual entity level.
Based on our risk and materiality assessments, we determined which components required an audit of their complete financial information
having consideration to the relative significance of each component to the Group, and the overall coverage obtained over each material line
item in the consolidated financial statements.
Due to their high concentration of the Group’s overall profit before tax and operating exceptional items, we identified two financially
significant components, M&E and UK Studios, which, in our view, required an audit of their complete financial information. We identified an
additional six components (inclusive of the Company) as requiring a complete audit in order to achieve the required coverage in respect of
each material line item in the financial statements. To further supplement this coverage, an audit over specific line items was performed
over six large balances across four components, due to their overall size and in order to achieve the required coverage over these specific
financial statement line items.
Audit work over the UK components and the large balances were performed by the UK Group engagement team in addition to central
procedures over tax, treasury, legal claims, defined benefit pension schemes, pension assets, impairment assessments, going concern
and consolidation adjustments. Audit procedures over three components were performed by other PwC network firms in the Netherlands
and the USA.
152 ITV plc Annual Report and Accounts 2023
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ITV PLC
CONTINUED
Where the work was performed by component audit teams, we determined the level of involvement we needed to have in the audit work at
those components to be able to conclude whether sufficient appropriate audit evidence had been obtained as a basis for our opinion on the
Group financial statements as a whole. Our oversight procedures included the issuance of formal, written instructions to component auditors
setting out the work to be performed and regular communication throughout the audit cycle including regular component calls and a site visit
to the component team in the Netherlands, review of component auditor work papers and participation in audit clearance meetings.
Taken together, the components where we performed our audit work accounted for 79% of the Group’s external revenue, and 78% of the
Group’s absolute profit before tax and operating exceptional items. This was before considering the contribution to our audit evidence from
performing audit work at the Group level, including disaggregated analytical review procedures, which covers a significant portion of the
Group’s smaller and lower risk components that were not directly included in our Group audit scope.
Our audit of the Company financial statements included substantive procedures over all material balances and transactions.
The impact of climate risk on our audit
As part of our audit, we made enquiries of management to understand the process to assess the extent of the potential impact of climate
change risks on the Group and its financial statements. The Group explains the impact of climate change on its business within the ‘Climate
Related Financial Disclosures’ section of the Strategic Report. Management’s assessment considered the climate-related risks disclosed in
the Annual Report including the impact of changes in the advertising sector, increased costs in the transition to a low carbon world and the
resilience of productions to extreme weather events.
As disclosed within the basis of preparation section of the financial statements, management considered that the impact of climate change
does not give rise to a material financial statement impact.
In response, we used our understanding of the Group to evaluate management’s assessment; in particular, we considered how climate
change risks, both physical and transitional, would impact the assumptions made in the forecasts prepared by management used in the
impairment analysis and in the going concern and viability assessments. We did not identify any matters as part of this work which were
inconsistent with the disclosures in the Annual Report or led to any material adjustments to the accounts.
We also read the disclosures made in relation to climate change in the other information within the Annual Report, and considered their
consistency with the financial statements and our knowledge from our audit. Our responsibility over other information is further described
in the ‘Reporting on other information’ section of our report.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These,
together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit
procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually
and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Financial statements – Group Financial statements – Company
Overall materiality £23.5 million (2022: £28.2 million) £71.0 million (2022: £ 64.9 million)
How we determined it 5% of the three-year average Group profit
before tax adjusted to exclude operating
exceptional items
1% of the Company’s total assets
Rationale for benchmark applied We consider the most appropriate benchmark
on which to calculate materiality is the Group’s
adjusted profit before tax adjusted to exclude
operating exceptional items as it is one of the
key indicators of financial performance of the
Group. We use a three year average due to the
volatility of earnings.
Balances and transactions that eliminate
upon consolidation were audited to a higher
materiality. We considered a total asset
measure to reflect the nature of the
Company, which primarily acts as a holding
Company for the Group’s investments.
For each component in the scope of our Group audit, we allocated a materiality that is less than our overall Group materiality. The range of
materiality allocated across components was between £4.3 million and £20.0 million.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected
misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit and the
nature and extent of our testing of account balances, classes of transactions and disclosures, for example in determining sample sizes.
Our performance materiality was 75% (2022: 75%) of overall materiality, amounting to £17.5 million (2022: £ 21.1 million) for the Group
financial statements and £53.3 million (2022: £48.6 million) for the Company financial statements.
In determining the performance materiality, we considered a number of factors – the history of misstatements, risk assessment and
aggregation risk and the effectiveness of controls – and concluded that an amount at the upper end of our normal range was appropriate.
We agreed with the Audit and Risk Committee that we would report to them misstatements identified during our audit above £1.1 million
(Group and Company audit) (2022: £1.4 million) as well as misstatements below those amounts that, in our view, warranted reporting for
qualitative reasons.
153ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
Conclusions relating to going concern
Our evaluation of the Directors’ assessment of the Group’s and the Company’s ability to continue to adopt the going concern basis of
accounting included:
• A critical assessment of management’s base case and downside scenarios, challenging and obtaining corroborating evidence for the
key assumptions, and verifying that the forecasts have been subject to board review and approval
• Examining the Group’s available financing, including related covenants, and maturity profile to assess liquidity through the assessment
period
• Reviewing the key inputs into the model management used to develop their scenarios to ensure that these were consistent with our
understanding and the inputs used in other key accounting judgements in the financial statements such as impairment
• Assessing the historical reliability of management forecasting by comparing budgeted results to actual performance
• Performing our own independent sensitivity analysis to assess appropriate downside scenarios
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually
or collectively, may cast significant doubt on the Group’s and the Company’s ability to continue as a going concern for a period of at least
twelve months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation
of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the Group’s and the
Company’s ability to continue as a going concern.
In relation to the Directors’ reporting on how they have applied the UK Corporate Governance Code, we have nothing material to add or draw
attention to in relation to the Directors’ statement in the financial statements about whether the Directors considered it appropriate to
adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of
this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report
thereon. The Directors are responsible for the other information. Our opinion on the financial statements does not cover the other
information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form
of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether
the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to
be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures
to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to
report that fact. We have nothing to report based on these responsibilities.
With respect to the Strategic Report and Directors’ Report, we also considered whether the disclosures required by the UK Companies
Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters
as described below.
Strategic Report and Directors’ Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic Report and Directors’ Report
for the year ended 31 December 2023 is consistent with the financial statements and has been prepared in accordance with applicable legal
requirements.
In light of the knowledge and understanding of the Group and Company and their environment obtained in the course of the audit, we did not
identify any material misstatements in the Strategic Report and Directors’ Report.
Directors’ Remuneration
In our opinion, the part of the Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006.
Corporate Governance Statement
The Listing Rules require us to review the Directors’ statements in relation to going concern, longer-term viability and that part of the
Corporate Governance Statement relating to the Company’s compliance with the provisions of the UK Corporate Governance Code
specified for our review. Our additional responsibilities with respect to the Corporate Governance Statement as other information are
described in the Reporting on other information section of this report.
154 ITV plc Annual Report and Accounts 2023
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ITV PLC
CONTINUED
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance
Statement is materially consistent with the financial statements and our knowledge obtained during the audit, and we have nothing material
to add or draw attention to in relation to:
• The Directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks
• The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging risks and an
explanation of how these are being managed or mitigated
• The Directors’ statement in the financial statements about whether they considered it appropriate to adopt the going concern basis of
accounting in preparing them, and their identification of any material uncertainties to the Group’s and Company’s ability to continue to do
so over a period of at least twelve months from the date of approval of the financial statements
• The Directors’ explanation as to their assessment of the Group’s and Company’s prospects, the period this assessment covers and why
the period is appropriate
• The Directors’ statement as to whether they have a reasonable expectation that the Company will be able to continue in operation and
meet its liabilities as they fall due over the period of its assessment, including any related disclosures drawing attention to any necessary
qualifications or assumptions
Our review of the Directors’ statement regarding the longer-term viability of the Group and Company was substantially less in scope than an
audit and only consisted of making inquiries and considering the Directors’ process supporting their statement; checking that the statement
is in alignment with the relevant provisions of the UK Corporate Governance Code; and considering whether the statement is consistent with
the financial statements and our knowledge and understanding of the Group and Company and their environment obtained in the course of
the audit.
In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate
governance statement is materially consistent with the financial statements and our knowledge obtained during the audit:
• The Directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and provides the
information necessary for the members to assess the Group’s and Company’s position, performance, business model and strategy
• The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems
• The section of the Annual Report describing the work of the Audit and Risk Committee
We have nothing to report in respect of our responsibility to report when the Directors’ statement relating to the Company’s compliance
with the Code does not properly disclose a departure from a relevant provision of the Code specified under the Listing Rules for review by
the auditors.
Responsibilities for the financial statements and the audit
Responsibilities of the Directors for the financial statements
As explained more fully in the Statement of Directors’ Responsibilities, the Directors are responsible for the preparation of the financial
statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The Directors are also
responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the Group and industry, we identified that the principal risks of non-compliance with laws and regulations
related to competition law, data privacy, broadcasting and media regulations and UK Listing Rules, and we considered the extent to which
non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct
impact on the financial statements such as the Companies Act 2006 and tax legislation. We evaluated management’s incentives and
opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the
principal risks were related to posting inappropriate journal entries to manipulate the financial performance of the Group and management
bias in accounting estimates. The Group engagement team shared this risk assessment with the component auditors so that they could
include appropriate audit procedures in response to such risks in their work. Audit procedures performed by the Group engagement team
and/or component auditors included:
• Enquiry of management, those charged with governance and the Group’s internal and external legal counsel around actual and potential
fraud and non-compliance with laws and regulations
• Discussion with external lawyers regarding significant legal matters
• Enquiry of tax and compliance functions to identify any instances of non-compliance with laws and regulations
• Challenging assumptions made by management in determining their significant judgements and accounting estimates (refer to key
audit matters)
• Identifying and testing journal entries, in particular journal entries posted with unusual account combinations
• Reviewing financial statement disclosures and testing to supporting documentation
155ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance
with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not
detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing techniques.
However, it typically involves selecting a limited number of items for testing, rather than testing complete populations. We will often seek to
target particular items for testing based on their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw a
conclusion about the population from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors’ Report.
Use of this report
This report, including the opinions, has been prepared for and only for the Company’s members as a body in accordance with Chapter 3 of
Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any
other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our
prior consent in writing.
OTHER REQUIRED REPORTING
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not obtained all the information and explanations we require for our audit or
• adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been received from
branches not visited by us or
• certain disclosures of Directors’ remuneration specified by law are not made or
• the Company financial statements and the part of the Remuneration Report to be audited are not in agreement with the accounting
records and returns
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit and Risk Committee, we were appointed by the members on 29 April 2021 to audit the
financial statements for the year ended 31 December 2021 and subsequent financial periods. The period of total uninterrupted engagement
is three years, covering the years ended 31 December 2021 to 31 December 2023.
OTHER MATTER
In due course, as required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule 4.1.14R, these financial
statements will form part of the ESEF-prepared annual financial report filed on the National Storage Mechanism of the Financial Conduct
Authority in accordance with the ESEF Regulatory Technical Standard (‘ESEF RTS’). This auditors’ report provides no assurance over whether
the annual financial report will be prepared using the single electronic format specified in the ESEF RTS.
Jonathan Lambert (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
7 March 2024
156 ITV plc Annual Report and Accounts 2023
CONSOLIDATED INCOME STATEMENT
| 2023 | 2022 | ||
| For the year ended 31 December | Note | £m | £m |
Revenue | 2.1 | ||
Operating costs | 2.1 | ( | ( |
Operating profit | |||
| Presented as: | |||
Earnings before interest, tax and amortisation (EBITA) before exceptional items | 2.1 | ||
Operating exceptional items | 2.2 | ( | ( |
Amortisation and impairment | 3.3, 3.5 | ( | ( |
Operating profit | |||
Financing income | 4.4 | ||
Financing costs | 4.4 | ( | ( |
Net financing costs | ( | ( | |
Share of profits after tax of joint ventures and associated undertakings | 3.5 | ||
Profit before tax | |||
Taxation | 2.3 | ( | |
Profit for the year | |||
| Profit/(loss) attributable to: | |||
Owners of the Company | |||
Non-controlling interests | 4.7.6 | ( | |
Profit for the year | |||
| Earnings per share | |||
| Basic earnings per share | 2.4 | ||
Diluted earnings per share | 2.4 |
157ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| 2023 | 2022 | ||
| For the year ended 31 December | Note | £m | £m |
Profit for the year | |||
| Other comprehensive (expense)/income: | |||
| Items that are or may be reclassified to profit or loss | |||
Revaluation of financial assets | 4.7.4 | ( | ( |
Net gain/(loss) on cash flow hedges and costs of hedging | 4.7.3 | ( | |
Exchange differences on translation of foreign operations | 4.7.3 | ( | |
Income tax (charge)/credit on items that may be reclassified to profit or loss | 2.3 | ( | |
| Items that will never be reclassified to profit or loss | |||
Remeasurement (losses)/gains on defined benefit pension schemes | 3.7 | ( | |
Income tax credit/(charge) on items that will never be reclassified to profit or loss | 2.3 | ( | |
Other comprehensive (expense)/income for the year, net of income tax | ( | ||
Total comprehensive income for the year | |||
| Total comprehensive income/(expense) attributable to: | |||
Owners of the Company | |||
Non-controlling interests | 4.7.6 | ( | |
Total comprehensive income for the year |
158 ITV plc Annual Report and Accounts 2023
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
| 31 December 2023 | 31 December 2022 | ||
| Note | £m | £m | |
| Non-current assets | |||
Property, plant and equipment | 3.2 | ||
Intangible assets | 3.3 | ||
Investments in joint ventures, associates and equity investments | 3.5 | ||
Derivative financial instruments | 4.3 | ||
Distribution rights | 3.1.2 | ||
Contract assets | 3.1.6 | ||
Defined benefit pension surplus | 3.7 | ||
Other pension asset | 3.7 | ||
Deferred tax asset | 2.3 | ||
| Current assets | |||
Programme rights and other inventory | 3.1.1 | ||
Trade and other receivables due within one year | 3.1.3 | ||
Trade and other receivables due after more than one year | 3.1.3 | ||
Trade and other receivables | |||
Contract assets | 3.1.6 | ||
Production inventories | 3.1.7 | ||
Current tax receivable | 2.3 | ||
Derivative financial instruments | 4.3 | ||
Assets classified as held for sale | 3.4 | ||
Cash and cash equivalents | 4.1 | ||
| Current liabilities | |||
Borrowings | 4.1, 4.2 | ( | ( |
Lease liabilities | 4.6 | ( | ( |
Derivative financial instruments | 4.3 | ( | ( |
Trade and other payables due within one year | 3.1.4 | ( | ( |
Trade payables due after more than one year | 3.1.5 | ( | ( |
Trade and other payables | ( | ( | |
Contract liabilities | 3.1.6 | ( | ( |
Current tax liabilities | 2.3 | ( | |
Provisions | 3.6 | ( | ( |
( | ( | ||
Net current assets | |||
| Non-current liabilities | |||
Borrowings | 4.1, 4.2 | ( | ( |
Lease liabilities | 4.6 | ( | ( |
Derivative financial instruments | 4.3 | ( | ( |
Defined benefit pension deficit | 3.7 | ( | ( |
Deferred tax liabilities | 2.3 | ( | ( |
Other payables | 3.1.5 | ( | ( |
Provisions | 3.6 | ( | ( |
( | ( | ||
Net assets | |||
| Attributable to equity shareholders of the parent company | |||
Share capital | 4.7.1 | ||
Share premium | 4.7.1 | ||
Merger and other reserves | 4.7.2 | ||
Translation reserve | 4.7.3 | ||
Fair value reserve | 4.7.4 | ( | ( |
Retained earnings | 4.7.5 | ||
Total equity attributable to equity shareholders of the parent company | |||
Non-controlling interests | 4.7.6 | ||
Total equity |
159ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
| Attributable to equity shareholders of the parent company | ||||||||||
| Merger | Non- | |||||||||
| Share | Share | and other | Translation | Fair value | Retained | controlling | Total | |||
| capital | premium | reserves | reserve* | reserve | earnings | Total | interests | equity | ||
| Note | £m | £m | £m | £m | £m | £m | £m | £m | £m | |
Balance at 1 January 2023 | 4.7 | ( | ||||||||
Total comprehensive income/(expense) | ||||||||||
| for the year | ||||||||||
Profit/(loss) for the year | ( | |||||||||
| Other comprehensive | ||||||||||
| (expense)/income | ||||||||||
Revaluation of financial assets | 4.7.4 | ( | ( | ( | ||||||
| Net gain on cash flow hedges and costs | ||||||||||
| of hedging | 4.7.3 | |||||||||
Exchange differences on translation of foreign operations | 4.7.3 | ( | ( | ( | ( | |||||
| Remeasurement loss on defined | ||||||||||
| benefit pension schemes | 3.7 | ( | ( | ( | ||||||
Income tax (charge)/credit on other comprehensive income/(expense) | 2.3 | ( | ||||||||
Total other comprehensive expense | ( | ( | ( | ( | ( | ( | ||||
| Total comprehensive | ||||||||||
| (expense)/income for the year | ( | ( | ( | |||||||
| Transactions with owners, recorded | ||||||||||
| directly in equity | ||||||||||
| Contributions by and distributions | ||||||||||
| to owners | ||||||||||
| Issue of shares | 4.7.1 | ( | ||||||||
Equity dividends | ( | ( | ( | ( | ||||||
| Movements due to share-based | ||||||||||
| compensation | 4.8 | |||||||||
| Movements in the employee benefit | ||||||||||
| trust | ( | ( | ( | |||||||
Tax on items taken directly to equity | 2.3 | ( | ( | ( | ||||||
Total transactions with owners | ( | ( | ( | ( | ||||||
Changes in non-controlling interests | 4.7.6 | ( | ( | |||||||
Balance at 31 December 2023 | 4.7 | ( |
* See note 4.3 for further breakdown of Translation Reserve, including Hedging Reserve and Cost of Hedging Reserve
160 ITV plc Annual Report and Accounts 2023
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY CONTINUED
| Attributable to equity shareholders of the parent company | ||||||||||
| Merger | Non– | |||||||||
| Share | Share | and other | Translation | Fair value | Retained | controlling | Total | |||
| capital | premium | reserves | reserve* | reserve | earnings | Total | interests | equity | ||
| Note | £m | £m | £m | £m | £m | £m | £m | £m | £m | |
Balance at 1 January 2022 | 4.7 | |||||||||
| Total comprehensive income | ||||||||||
| for the year | ||||||||||
Profit for the year | ||||||||||
| Other comprehensive | ||||||||||
| (expense)/income | ||||||||||
Revaluation of financial assets | 4.7.4 | ( | ( | ( | ||||||
| Net loss on cash flow hedges and costs | ||||||||||
| of hedging | 4.7.3 | ( | ( | ( | ||||||
Exchange differences on translation of foreign operations | 4.7.3 | |||||||||
| Remeasurement gain on defined | ||||||||||
| benefit pension schemes | 3.7 | |||||||||
Income tax credit/(charge) on other comprehensive income/(expense) | 2.3 | ( | ( | ( | ||||||
Total other comprehensive income/(expense) | ( | |||||||||
Total comprehensive income/(expense) for the year | ( | |||||||||
| Transactions with owners, recorded | ||||||||||
| directly in equity | ||||||||||
| Contributions by and distributions | ||||||||||
| to owners | ||||||||||
Equity dividends | ( | ( | ( | ( | ||||||
| Movements due to share-based | ||||||||||
| compensation | 4.8 | |||||||||
| Movements in the employee benefit | ||||||||||
trust | ( | ( | ( | |||||||
Tax on items taken directly to equity | 2.3 | ( | ( | ( | ||||||
Total transactions with owners | ( | ( | ( | ( | ||||||
Changes in non-controlling interests | 4.7.6 | ( | ( | |||||||
Balance at 31 December 2022 | 4.7 | ( |
* See note 4.3 for further breakdown of Translation Reserve, including Hedging Reserve and Cost of Hedging Reserve
161ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CASH FLOWS
| 2023 | 2022 | ||||
| For the year ended 31 December | Note | £m | £m | £m | £m |
| Cash flows from operating activities | |||||
Cash generated from operations before exceptional items | 2.1 | ||||
| Cash flow relating to operating exceptional items: | |||||
Operating exceptional items | 2.2 | ( | ( | ||
Increase in exceptional payables | |||||
Cash outflow from exceptional items | ( | ( | |||
Cash generated from operations | |||||
Defined benefit pension deficit funding | ( | ( | |||
Interest received | |||||
Interest paid* | ( | ( | |||
Net taxation paid | ( | ( | |||
( | ( | ||||
Net cash inflow from operating activities | |||||
| Cash flows from investing activities | |||||
Acquisition of property, plant and equipment | ( | ( | |||
Acquisition of intangible assets | ( | ( | |||
Acquisition of subsidiary undertakings, net of cash acquired | ( | ( | |||
Acquisition of investments | ( | ( | |||
Dividends received from investments | |||||
Loans granted to associates and joint ventures | ( | ( | |||
Loans repaid by associates and joint ventures | |||||
Net cash outflow from investing activities | ( | ( | |||
| Cash flows from financing activities | |||||
Bank and other loans – amounts repaid | ( | ( | |||
Settlement of derivatives*** | ( | ||||
Bank and other loans – amounts raised | |||||
Release of restricted cash | |||||
Payment of lease liabilities** | ( | ( | |||
Issue of share capital | |||||
Acquisition of non-controlling interests | ( | ( | |||
Dividends paid to non-controlling interests | ( | ( | |||
Equity dividends paid | ( | ( | |||
Net cash outflow from financing activities | ( | ( | |||
Net increase/(decrease) in cash and cash equivalents | ( | ||||
Cash and cash equivalents at 1 January | 4.1 | ||||
Effects of exchange rate changes and fair value movements | ( | ||||
Cash and cash equivalents at 31 December | 4.1 |
* Interest paid includes interest on bank, other loans, derivative financial instruments and lease liabilities
** Net cash flow on lease liabilities in note 4.1 of £26 million (2022: £26 million) includes interest on lease liabilities included in interest paid of £4 million (2022: £4 million)
*** Net cash flow from forwards and swaps held against the euro denominated bond repaid in the year
162 ITV plc Annual Report and Accounts 2023
NOTES TO THE FINANCIAL STATEMENTS
163ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
164 ITV plc Annual Report and Accounts 2023
NOTES TO THE FINANCIAL STATEMENTS
SECTION 1: BASIS OF PREPARATION CONTINUED
Area | Key judgements | Key sources of estimation uncertainty |
| Exceptional items | The classification of income or | |
| (See note 2.2) | expenses as exceptional items | |
| Defined benefit pension | Estimates of the assumptions for valuing the | |
| (See note 3.7) | defined benefit obligation | |
| Provisions related to | The basis for calculating | Estimates of the amount required to settle the |
| Box Clever | the provision | potential liability |
| (see note 3.6) | ||
| Employee-related | The individuals who are included in | Estimates of the amounts required to settle |
| provisions (See note 3.6) | the calculation | the liability |
| Acquisition-related | Whether future amounts payable | Estimates of cash-flow forecasts to support the |
| liabilities | are linked to employment | calculation of the future liabilities |
| (See note 3.1.4 and 3.1.5) | ||
| Transmission | Whether the transponder contracts | |
| commitments | should be classified as leases in | |
| (See note 3.1.1) | accordance with IFRS 16 |
165ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
Accounting standard | Requirement | Impact on financial statements |
| IFRS 17 ‘Insurance | IFRS 17 ‘Insurance Contracts’ is a comprehensive new | No material change to the |
| Contracts’ and related | accounting standard covering recognition, measurement, | Group’s financial position |
| amendments | presentation and disclosures. This standard replaces IFRS | or performance. |
| 4 ‘Insurance Contracts’. | ||
| Amendments to IAS 1 | The amendments aim to help entities provide accounting | No material change to the |
| ‘Presentation of Financial | policy disclosures that are more useful by replacing the | Group’s financial position |
| Statements’ and IFRS | requirement for entities to disclose their ‘significant’ | or performance. |
| Practice Statement 2 | accounting policies with a requirement to disclose their | |
| ‘Making Materiality | ‘material’ accounting policies. The IFRS Practice Statement 2 | |
| Judgements’ | has been amended by adding guidance and examples to | |
| explain and demonstrate the application of the ‘four-step | ||
| materiality process’ in making decisions about accounting | ||
| policy disclosures. | ||
| Amendments to IAS 8 | The amendments introduce a new definition of accounting | No material change to the |
| ‘Accounting Policies, | estimates and clarify how entities use measurement | Group’s financial position |
| Changes in Accounting | techniques and inputs to develop accounting estimates. | or performance. |
| Estimates and Errors’ | ||
| Amendments to IAS 12 | The amendments aim to narrow the scope of the initial | No material change to the |
| ‘Income taxes’ – Initial | recognition exception under IAS 12 so that it no longer | Group’s financial position |
| recognition exception | applies to transactions that give rise to equal taxable and | or performance. |
| deductible temporary differences. | ||
| Amendments to IAS 12 | The amendments provide a temporary exception from | The Group has applied the |
| ‘Income Taxes’- Pillar Two | the requirement to recognise and disclose deferred taxes | exception under IAS 12 to |
| income taxes | arising from enacted or substantively enacted tax law | recognising and disclosing |
| that implements the Pillar Two model rules published by | information about | |
| the OECD, including tax law that implements qualified | deferred tax assets and | |
| domestic minimum top-up taxes described in those rules. | liabilities related to top-up | |
| income taxes. |
166 ITV plc Annual Report and Accounts 2023
NOTES TO THE FINANCIAL STATEMENTS
SECTION 2: RESULTS FOR THE YEAR
In this
section
This section focuses on the results and performance of the Group. On the following
pages, you will find disclosures explaining the Group’s results for the year,
segmental information, exceptional items, taxation and earnings per share.
2.1 Profit
before tax
Keeping
it simple
This section analyses the Group’s profit before tax by reference to the activities
performed by the Group and an analysis of key operating costs.
Total revenue and adjusted earnings before interest, tax and amortisation (adjusted
EBITA) (both as defined in the APMs section of the Annual Report) are the Group’s
key performance and profit indicators. They reflect the way the business is managed
and how the Directors assess the performance of the Group. This section therefore
also shows each division’s contribution to total revenue and adjusted EBITA.
The Group is a vertically integrated producer broadcaster and streamer, consisting of ITV Studios and Media &
Entertainment (M&E).
Accounting policies
167ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
Segment | Major classes of revenue and revenue recognition policy | Payment terms | |||
| ITV Studios | |||||
| Programme | • | Revenue generated from the programmes produced for broadcasters | • | Payment term is | |
| production | and streaming platforms in the UK, US and internationally is | over the term of | |||
| recognised at the point of delivery of an episode and acceptance by | the contract | ||||
| the customer. Revenue from producer for hire contracts, where in an | |||||
| event of cancellation, cost is recovered plus a margin, is recognised | |||||
| over time, over the term of the contract | |||||
| Format licences | • | A licence is granted for the exploitation of a format in a stated territory, • | Payment term is | ||
media and period. Licence revenue is recognised when the licence | over the term of | ||||
period has commenced (point in time) | the contract | ||||
| Programme | • | A licence is granted for the transmission of a programme in a stated | • | Payment term is | |
| distribution | territory, media and period and revenue is recognised at the point | over the term of | |||
| rights | when the contract is signed, the content is available for download and | the contract | |||
| the licence period has started (point in time) | |||||
Segment | Major classes of revenue and revenue recognition policy | Payment terms | ||
| Media & Entertainment | ||||
| Total advertising | • | Net advertising revenue is generated from selling spot airtime on linear • | Received in the | |
| revenue | TV and is recognised at the point of transmission | month after | ||
• | Online advertising revenue from video on demand is generated from | transmission | ||
selling advertising on ITVX (ITV Hub before the launch of ITVX in | • | Received in the | ||
December 2022) and is recognised at the point of delivery | month after | |||
• | Revenue from the sponsorship of programmes across ITV linear | campaign is delivered | ||
channels and online is recognised over the period of transmission | • | Received prior to | ||
| transmission | ||||
| Subscriptions | • | Revenue from subscription services is recognised over the | • | Payment term is |
| subscription period | over the term of | |||
| the contract or | ||||
| subscription period | ||||
| SDN | • | Revenue is generated from the carriage fee or capacity of the digital | • | Payment term is |
| multiplex and is recognised over the term of the contract | over the term of | |||
| the contract | ||||
| Partnerships and | • | Revenue from platforms such as Sky and Virgin Media O2, and | • | Payment term is |
| other revenue | third-party commissions. Revenue related to performance obligations | over the term of | ||
| delivered over time (e.g. provision of HD and SD channels and updated | the contract | |||
| library content) are recognised over the term of the contract while | ||||
| revenues related to one-time provision of content are recognised on | ||||
| delivery of the content (point in time) | ||||
• | Interactive revenue is earned from entries to competitions and is | • | Payment term is | |
| recognised as the event occurs (point in time) | within two months | |||
• | Minorities revenues is the revenue received from Channel 3 licencees | of the competition | ||
| that are not part of the ITV Group. The performance obligations are | being aired | |||
| delivered as programming is delivered to the licensee and revenue is | • | Payment term is | ||
| recognised over the term of the contract (over time) | over the term of | |||
• | Other categories of revenues within ‘Partnerships and other revenue’ | the contract | ||
| are individually immaterial | ||||
168 ITV plc Annual Report and Accounts 2023
NOTES TO THE FINANCIAL STATEMENTS
SECTION 2: RESULTS FOR THE YEAR CONTINUED
| 2023 | 2023 | 2022 | 2022 | |
| £m | % of total | £m | % of total | |
ITV Studios UK | 962 | 822 | ||
ITV Studios US | 395 | 467 | ||
ITV Studios International | 445 | 465 | ||
Global Partnerships * | 368 | 342 | ||
| Total ITV Studios | 2,170 | 51% | 2,096 | 48% |
Total advertising revenue (TAR) | 1,778 | 42% | 1,931 | 44% |
Subscriptions | 59 | 54 | ||
SDN | 48 | 55 | ||
Partnerships and other revenue | 205 | 209 | ||
Media & Entertainment | 2,090 | 49% | 2,249 | 52% |
| Total revenue | 4,260 | 4,345 |
| Media & | |||
ITV Studios * | Entertainment | Consolidated | |
| 2023 | 2023 | 2023 | |
| £m | £m | £m | |
Total segment revenue | 2,170 | 2,090 | 4,260 |
Intersegment revenue | (629) | (7) | (636) |
Revenue from external customers | 1,541 | 2,083 | 3,624 |
| Adjusted EBITA | 286 | 205 | 491 |
| Unrealised profit in stock adjustment | (2) | ||
| Group adjusted EBITA | 489 |
| Media & | |||
| ITV Studios* | Entertainment | Consolidated | |
| 2022 | 2022 | 2022 | |
| £m | £m | £m | |
Total segment revenue | 2,096 | 2,249 | 4,345 |
| Intersegment revenue | (611) | (6) | (617) |
Revenue from external customers | 1,485 | 2,243 | 3,728 |
| Adjusted EBITA | 259 | 464 | 723 |
| Unrealised profit in stock adjustment | (6) | ||
| Group adjusted EBITA | 717 |
169ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
| 2023 | 2022 | |
| £m | £m | |
UK | 1,372 | 1,415 |
US | 391 | 472 |
Rest of the world | 137 | 155 |
Total non-current assets | 1,900 | 2,042 |
| 2023 | 2022 | 2023 | 2022 | |
| £m | £m | £m | £m | |
| Products and services | Products and services | |||
| transferred at a point in time | transferred over time | |||
Total advertising revenue, subscriptions, SDN and other M&E | 1,755 | 1,902 | 328 | 341 |
Programme production, programme distribution rights | 1,187 | 1,169 | 266 | 236 |
Format licences | 82 | 76 | 6 | 4 |
Total external revenue | 3,024 | 3,147 | 600 | 581 |
| 2024 | 2025 | 2026 | Beyond | |
| £m | £m | £m | £m | |
Media & Entertainment | 92 | 73 | 53 | 29 |
ITV Studios | 151 | 180 | 39 | 12 |
Total revenue | 243 | 253 | 92 | 41 |
Internal supply | (43) | (52) | – | – |
Total external revenue | 200 | 201 | 92 | 41 |
| Note | 2023 | 2022 | |
| £m | £m | ||
Group adjusted EBITA | 489 | 717 | |
Production tax credits | (85) | (49) | |
EBITA before exceptional items | 404 | 668 | |
Operating exceptional items | 2.2 | (77) | (65) |
Amortisation and impairment | (89) | (84) | |
Net financing costs | 4.4 | (45) | (26) |
Share of profits of joint ventures and associated undertakings | – | 8 | |
Statutory profit before tax | 193 | 501 |
170 ITV plc Annual Report and Accounts 2023
NOTES TO THE FINANCIAL STATEMENTS
SECTION 2: RESULTS FOR THE YEAR CONTINUED
| Note | 2023 | 2022 | |
| £m | £m | ||
| Cash flows from operating activities | |||
Statutory profit before tax | 193 | 501 | |
| Add back: | |||
Share of profits of joint ventures and associated undertakings | – | (8) | |
Net financing costs | 4.4 | 45 | 26 |
Operating exceptional items | 2.2 | 77 | 65 |
Depreciation of property, plant and equipment (net of exceptional items) | 3.2 | 46 | 53 |
Amortisation and impairment | 89 | 84 | |
Share-based compensation | 4.8 | 16 | 19 |
Increase in programme rights and distribution rights | (33) | (70) | |
Decrease/(increase) in receivables, contract assets and production inventories | 274 | (133) | |
(Decrease)/increase in payables and contract liabilities | (151) | 53 | |
Movement in working capital | 90 | (150) | |
Cash generated from operations before exceptional items | 556 | 590 |
| 2023 | 2022 | |
| £m | £m | |
Wages and salaries | 548 | 497 |
Social security and other costs | 98 | 80 |
Share-based compensation (see note 4.8) | 16 | 19 |
Pension costs | 31 | 35 |
Total staff costs * | 693 | 631 |
Less: staff costs allocated to productions, exceptional items or capitalised | (308) | (284) |
Net staff costs | 385 | 347 |
2023 | 2022 | |
ITV Studios | 4,017 | 4,042 |
Media & Entertainment | 2,852 | 2,635 |
6,869 | 6,677 |
2023 | 2022 | |
ITV Studios | 4,248 | 4,144 |
Media & Entertainment | 2,939 | 2,681 |
7,187 | 6,825 |
171ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
| PwC | PwC | |
| 2023 | 2022 | |
| £m | £m | |
For the audit of the Group’s annual financial statements | 2.1 | 1.8 |
For the audit of subsidiaries of the Group | 1.7 | 1.3 |
Audit-related assurance services | 0.2 | 0.2 |
Total audit and audit-related assurance services | 4.0 | 3.3 |
Other assurance services | 1.3 | – |
Total non-audit services* | 1.3 | – |
Total fees paid to auditors | 5.3 | 3.3 |
172 ITV plc Annual Report and Accounts 2023
NOTES TO THE FINANCIAL STATEMENTS
SECTION 2: RESULTS FOR THE YEAR CONTINUED
2.2 Exceptional
items
Keeping
it simple
Exceptional items are excluded from management’s assessment of profit because
by their size or nature they could distort the Group’s underlying quality of earnings.
They are typically gains or losses arising from events that are not considered
part of the core operations of the business. These items are excluded to reflect
performance in a consistent manner and are in line with how the business is
managed and measured on a day-to-day basis.
| 2023 | 2022 | ||
| (Charge)/credit | Ref. | £m | £m |
| Operating exceptional items: | |||
Acquisition-related expenses | A | (24) | (4) |
Restructuring and transformation costs | B | (25) | (28) |
Property costs | C | (10) | (24) |
Pension related costs | D | – | (4) |
Costs related to the passing of Her Majesty Queen Elizabeth II | E | – | (16) |
Sports rights | F | – | 5 |
Employee-related tax provision | G | 3 | (10) |
Insured trade receivable provision | H | 3 | 23 |
Legal settlements | I | (13) | – |
Legal and other costs | J | (11) | (7) |
| Total operating exceptional items | (77) | (65) | |
Tax on operating exceptional items | 12 | 8 | |
Total operating exceptional items net of tax | (65) | (57) |
173ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
174 ITV plc Annual Report and Accounts 2023
NOTES TO THE FINANCIAL STATEMENTS
SECTION 2: RESULTS FOR THE YEAR CONTINUED
2.3
Taxation
Keeping
it simple
This section sets out the Group’s tax accounting policies, the current and deferred tax
charges or credits in the year (which together make up the total tax charge or credit in
the Consolidated Income Statement), a reconciliation of profit before tax to the tax
charge for the year and the movements in deferred tax assets and liabilities.
| 2023 | 2022 | |
| £m | £m | |
| Current tax: | ||
Current tax credit/(charge) on profit before exceptional items | 24 | (38) |
Current tax credit on exceptional items | 11 | 7 |
35 | (31) | |
Adjustments related to prior periods | (12) | 9 |
23 | (22) | |
| Deferred tax: | ||
Origination and reversal of temporary differences | (7) | (34) |
Deferred tax credit on exceptional items | 1 | 1 |
Impact of changes to statutory tax rates | 1 | (6) |
(5) | (39) | |
Adjustments related to prior periods | (2) | (5) |
(7) | (44) | |
Total taxation credit/(charge) in the Consolidated Income Statement | 16 | (66) |
175ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
| 2023 | 2022 | |
| £m | £m | |
Profit before tax | 193 | 501 |
| Notional taxation charge at UK corporation tax rate of 23.5% (2022: 19%) on profit | ||
| before tax | (45) | (95) |
Non-taxable income/non-deductible expenses | (10) | (15) |
Prior year adjustments | (14) | 4 |
Other taxes | (8) | (8) |
Previously unrecognised deferred tax assets | 6 | – |
Current year losses not recognised | (17) | (8) |
Impact of overseas tax rates | 2 | (1) |
Impact of changes in tax rates | 1 | (6) |
Movement on tax provisions | (1) | (1) |
Production tax credits | 102 | 64 |
Statutory taxation credit/(charge) in the Consolidated Income Statement | 16 | (66) |
176 ITV plc Annual Report and Accounts 2023
NOTES TO THE FINANCIAL STATEMENTS
SECTION 2: RESULTS FOR THE YEAR CONTINUED
| At | Recognised in | Recognised | At | |||
| 1 January | the income | in OCI | Foreign | 31 December | ||
| 2023 | statement | and equity | Other | exchange | 2023 | |
| £m | £m | £m | £m | £m | £m | |
Tangible assets | 1 | (6) | – | – | – | (5) |
Intangible assets | (49) | (1) | – | – | 1 | (49) |
Pension scheme | (56) | (1) | (2) | – | – | (59) |
Tax losses | 27 | 7 | – | – | (2) | 32 |
Share-based compensation | 9 | (1) | (3) | – | – | 5 |
Other temporary differences | 30 | (5) | (3) | 1 | – | 23 |
(38) | (7) | (8) | 1 | (1) | (53) |
| At | Recognised in | Recognised | At | |||
| 1 January | the income | in OCI | Foreign | 31 December | ||
| 2022 | statement | and equity | Other | exchange | 2022 | |
| £m | £m | £m | £m | £m | £m | |
Tangible assets | 4 | (3) | – | – | – | 1 |
Intangible assets | (45) | 1 | – | (3) | (2) | (49) |
Pension scheme | (6) | (27) | (23) | – | – | (56) |
Tax losses | 32 | (8) | – | – | 3 | 27 |
Share-based compensation | 11 | 5 | (7) | – | – | 9 |
Other temporary differences | 29 | (12) | 6 | 4 | 3 | 30 |
25 | (44) | (24) | 1 | 4 | (38) |
177ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
178 ITV plc Annual Report and Accounts 2023
NOTES TO THE FINANCIAL STATEMENTS
SECTION 2: RESULTS FOR THE YEAR CONTINUED
2.4
Earnings
per share
Keeping
it simple
Earnings per share (EPS) is the amount of post-tax profit attributable to each share.
Basic EPS is calculated on the Group profit for the year attributable to equity
shareholders of £210 million (2022: £428 million) divided by 4,023 million
(2022: 4,010 million), being the weighted average number of shares in issue
during the year, which excludes Employee Benefit Trust (EBT) shares held in trust
(see note 4.8).
Diluted EPS reflects any commitments made by the Group to issue shares in the
future and so it includes the impact of share options.
Adjusted EPS is presented in order to show the business performance of the Group
in a consistent manner and reflect how the business is managed and measured on
a day-to-day basis. Adjusted EPS reflects the impact of operating and non-
operating exceptional items on Basic EPS. Other items excluded from Adjusted EPS
are amortisation and impairment of intangible assets acquired through business
combinations; net financing cost adjustments; and the tax adjustments relating to
these items. Each of these adjustments is explained in detail in the section below.
The calculation of Basic EPS and Adjusted EPS, together with the diluted impact on each, is set out below:
2023 | 2022 | |
Statutory profit for the year attributable to equity shareholders of ITV plc (£m) | 210 | 428 |
Weighted average number of ordinary shares in issue – million | 4,023 | 4,010 |
Basic earnings per ordinary share | 5.2p | 10.7p |
2023 | 2022 | |
Statutory profit for the year attributable to equity shareholders of ITV plc (£m) | 210 | 428 |
Weighted average number of ordinary shares in issue – million | 4,023 | 4,010 |
Dilution due to share options – million | 36 | 36 |
Total weighted average number of ordinary shares in issue – million | 4,059 | 4,046 |
Diluted earnings per ordinary share | 5.2p | 10.6p |
| 2023 | 2022 | ||
| Ref. | £m | £m | |
Statutory profit for the year attributable to equity shareholders of ITV plc | 210 | 428 | |
Exceptional items (net of tax) | A | 65 | 57 |
Profit for the year before exceptional items | 275 | 485 | |
Amortisation and impairment of acquired intangible assets | B | 19 | 45 |
Adjustments to net financing costs | C | 18 | – |
Adjusted profit for the year attributable to ITV shareholders | 312 | 530 | |
Total weighted average number of ordinary shares in issue – million | 4,023 | 4,010 | |
Adjusted earnings per ordinary share | 7.8p | 13.2p |
2023 | 2022 | |
Adjusted profit (£m) | 312 | 530 |
Weighted average number of ordinary shares in issue – million | 4,023 | 4,010 |
Dilution due to share options – million | 36 | 36 |
Total weighted average number of ordinary shares in issue – million | 4,059 | 4,046 |
Diluted adjusted earnings per ordinary share | 7.7p | 13.1p |
179ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
180 ITV plc Annual Report and Accounts 2023
NOTES TO THE FINANCIAL STATEMENTS
SECTION 3: OPERATING ASSETS AND LIABILITIES
In this
section
This section shows the assets used to generate the Group’s trading performance
and the liabilities incurred as a result. On the following pages, there are notes
covering working capital, non-current assets and liabilities, acquisitions and
disposals, provisions and pensions.
Liabilities relating to the Group’s financing activities are addressed in section 4.
Deferred tax assets and liabilities are shown in note 2.3.
3.1
Working
capital
Keeping
it simple
Working capital represents the assets and liabilities the Group generates through
its trading activity. The Group therefore defines working capital as distribution
rights, programme rights, trade and other receivables, trade and other payables,
contract assets and liabilities and production inventories.
Careful management of working capital ensures that the Group can meet its trading
and financing obligations within its ordinary operating cycle.
Working capital is a driver of the profit to cash conversion ratio, a key performance
indicator for the Group. For those subsidiaries acquired during the year, working
capital at the date of acquisition is excluded from the profit to cash calculation so
that only subsequent working capital movements in the period controlled by ITV are
reflected in this metric.
In the following note, you will find further information regarding working capital
management and analysis of the elements of working capital.
3.1.1 Programme rights and commitments
Type of programme | Streaming policy | Linear policy |
Acquired content | Cost charged to the Income Statement | Cost charged to the Income Statement |
| on a declining-balance method over the | over a number of linear transmissions | |
| licence period | (episodic) | |
Commissioned content | Cost charged to the Income Statement | Cost charged to the Income Statement |
| on a declining-balance method over the | on first linear transmission (episodic) | |
| licence period | ||
Sports rights | Cost charged to the Income Statement | Cost charged to the Income Statement |
| on first transmission | on first linear transmission | |
| Current affairs, live | Cost charged to the Income Statement | Cost charged to the Income Statement |
| events, soaps | on first transmission | on first linear transmission |
| Library of content | Straight-line amortisation over licence windows | |
| (ITVX only) |
181ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
| 2023 | 2022 | |
| £m | £m | |
Acquired programme rights | 284 | 225 |
Commissions | 83 | 103 |
Sports rights | 46 | 49 |
413 | 377 |
| Transmission | Programme | Total | |
| 2023 | £m | £m | £m |
Within one year | 20 | 488 | 508 |
Later than one year and not more than five years | – | 380 | 380 |
20 | 868 | 888 |
| Transmission | Programme | Total | |
| 2022 | £m | £m | £m |
Within one year | 25 | 466 | 491 |
Later than one year and not more than five years | 19 | 349 | 368 |
44 | 815 | 859 |
The net book value of distribution rights at the year end is as follows:
| 2023 | 2022 | |
| £m | £m | |
Distribution rights | 14 | 17 |
During the year, £18 million was charged to the Consolidated Income Statement (2022: £25 million).
182 ITV plc Annual Report and Accounts 2023
NOTES TO THE FINANCIAL STATEMENTS
SECTION 3: OPERATING ASSETS AND LIABILITIES CONTINUED
| 2023 | 2022 | |
| £m | £m | |
| Due within one year: | ||
Trade receivables | 427 | 476 |
Other receivables | 145 | 162 |
Prepayments | 58 | 54 |
630 | 692 | |
| Due after more than one year: | ||
Trade receivables | 37 | 24 |
Other receivables | 25 | 20 |
62 | 44 | |
Total trade and other receivables | 692 | 736 |
| 2023 | 2022 | |
| £m | £m | |
Current | 408 | 437 |
Up to 30 days overdue | 29 | 34 |
Between 30 and 90 days overdue | 21 | 20 |
Over 90 days overdue | 6 | 9 |
464 | 500 |
| 2023 | 2022 | |
| £m | £m | |
At 1 January | 24 | 43 |
Charged during the year | 4 | 14 |
Bad debts written off | (8) | – |
Release of provision | (11) | (33) |
At 31 December* | 9 | 24 |
183ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
| 2023 | 2022 | |
| £m | £m | |
Trade payables | 105 | 141 |
VAT and social security | 35 | 38 |
Other payables | 170 | 146 |
Acquisition-related liabilities – employment-linked contingent consideration | 5 | 2 |
Acquisition-related liabilities – payable to sellers under put options agreed on acquisition | 39 | 1 |
Accruals | 596 | 573 |
950 | 901 |
| 2023 | 2022 | |
| £m | £m | |
Trade payables | 25 | 17 |
Other payables | 33 | 28 |
Acquisition-related liabilities – employment-linked contingent consideration | 10 | 6 |
Acquisition-related liabilities – payable to sellers under put options agreed on acquisition | 24 | 38 |
67 | 72 | |
Total trade and other payables due after more than one year | 92 | 89 |
184 ITV plc Annual Report and Accounts 2023
NOTES TO THE FINANCIAL STATEMENTS
SECTION 3: OPERATING ASSETS AND LIABILITIES CONTINUED
2023 | 2022 | |||
| Contract | Contract | Contract | Contract | |
| assets | liabilities | assets | liabilities | |
| £m | £m | £m | £m | |
Balance at 1 January | 185 | (372) | 189 | (359) |
Decrease due to balance transferred to trade receivables | (152) | – | (180) | – |
Increases as a result of the changes in the measure of progress | 169 | – | 170 | – |
Decreases due to revenue recognised in the year | – | 332 | – | 405 |
Increase due to cash received | – | (147) | – | (383) |
Acquisitions | – | – | 6 | (35) |
Balance at 31 December * | 202 | (187) | 185 | (372) |
| 2023 | 2022 | |
| £m | £m | |
Production inventories | 234 | 493 |
| 2023 | 2022 | |
| £m | £m | |
Increase in programme rights and distribution rights | (33) | (70) |
Decrease/(increase) in receivables, contract assets and production inventories | 274 | (133) |
(Decrease)/increase in payables and contract liabilities | (151) | 53 |
Working capital inflow/(outflow) | 90 | (150) |
185ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
3.2
Property, plant
and equipment
Keeping
it simple
The following note shows the physical assets used by the Group to operate the
business, generating revenues and profits. These assets include office buildings
and studios, as well as equipment used in broadcast transmission, programme
production and support activities.
The cost of these assets is the amount initially paid for them or for right of use
assets, the discounted future lease payments. A depreciation expense is charged to
the Consolidated Income Statement to reflect annual wear and tear and the
reduced value of the asset over time. Depreciation is calculated by estimating the
number of years the Group expects the asset to be used (useful economic life). If
there has been a technological change or decline in business performance, the
Directors review the value of the assets to the business to ensure they have not
fallen below their depreciated value. If an asset’s value falls below its depreciated
value, an additional impairment charge is made against profit.
This note also explains the accounting policies followed by ITV and the specific
estimates made in arriving at the net book value of these assets.
Asset class | Depreciation policy |
Freehold land | not depreciated |
Freehold buildings | up to 60 years |
Leasehold improvements | shorter of residual lease term or estimated useful life |
Vehicles, equipment and fittings* | 3 to 20 years |
Right of use assets | over the term of the lease |
186 ITV plc Annual Report and Accounts 2023
NOTES TO THE FINANCIAL STATEMENTS
SECTION 3: OPERATING ASSETS AND LIABILITIES CONTINUED
| Vehicles, | ||||||
| Improvements to leasehold | equipment | Right | ||||
| Freehold | land and buildings | and fittings | of use | |||
| land and | Long | Short | Owned | assets | Total | |
| buildings £m | £m | £m | £m | £m | £m | |
| Cost | ||||||
At 1 January 2022 | 12 | 87 | 26 | 235 | 154 | 514 |
Additions | – | 2 | – | 33 | 57 | 92 |
Reclassifications | – | – | – | 4 | 1 | 5 |
Foreign exchange | – | 2 | – | 4 | 6 | 12 |
Disposals and retirements | – | (6) | – | (62) | (10) | (78) |
At 31 December 2022 | 12 | 85 | 26 | 214 | 208 | 545 |
Additions | – | 2 | – | 28 | 12 | 42 |
Derecognition of right of use asset | – | – | – | – | (14) | (14) |
Foreign exchange | – | (1) | – | (2) | (3) | (6) |
Disposals and retirements | – | (2) | (8) | (33) | (43) | (86) |
At 31 December 2023 | 12 | 84 | 18 | 207 | 160 | 481 |
| Depreciation | ||||||
At 1 January 2022 | – | 25 | 19 | 152 | 64 | 260 |
Charge for the year | 1 | 3 | 1 | 31 | 25 | 61 |
Foreign exchange | – | – | – | 3 | 2 | 5 |
Disposals and retirements | – | (1) | – | (62) | (4) | (67) |
At 31 December 2022 | 1 | 27 | 20 | 124 | 87 | 259 |
Charge for the year | 1 | 3 | 1 | 25 | 22 | 52 |
Derecognition of right of use asset | – | – | – | – | (6) | (6) |
Foreign exchange | – | – | – | (2) | (1) | (3) |
Disposals and retirements | – | (2) | (8) | (32) | (42) | (84) |
At 31 December 2023 | 2 | 28 | 13 | 115 | 60 | 218 |
| Net book value | ||||||
At 31 December 2023 | 10 | 56 | 5 | 92 | 100 | 263 |
At 31 December 2022 | 11 | 58 | 6 | 90 | 121 | 286 |
187ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
3.3
Intangible
assets
Keeping
it simple
The following note identifies the non-physical assets used by the Group to generate
revenue and profits.
These assets include formats and brands, customer contracts and relationships,
contractual arrangements, licences, software development, film libraries and
goodwill. The cost of these assets is the amount that the Group has paid or, where
there has been a business combination, the fair value of the specific intangible
assets that could be sold separately or which arise from legal rights. In the case of
goodwill, its cost is the amount the Group has paid in acquiring a business over and
above the fair value of the individual assets and liabilities acquired. The value of
goodwill is the ‘intangible’ value that comes from, for example, a uniquely strong
market position and the outstanding productivity of its employees.
The value of intangible assets, with the exception of goodwill, reduces over the
number of years the Group expects to use the asset, the useful economic life, via an
annual amortisation charge to the Consolidated Income Statement. Where there
has been a technological change or decline in business performance, the Directors
review the value of assets, including goodwill, to ensure they have not fallen below
their amortised value. Should an asset’s value fall below its amortised value, an
additional impairment charge is made against profit.
This note explains the accounting policies applied and the specific judgements and
estimates made by the Directors in arriving at the net book value of these assets.
188 ITV plc Annual Report and Accounts 2023
NOTES TO THE FINANCIAL STATEMENTS
SECTION 3: OPERATING ASSETS AND LIABILITIES CONTINUED
Class of intangible asset | Amortisation method | Estimated useful life | Valuation method |
Brands | Straight-line | 8 to 14 years | Applying a royalty rate to the expected future revenue |
| over the life of the brand | |||
Formats | Straight-line | up to 8 years | Expected future cash flows from those assets existing |
| Customer | Straight-line or | up to 6 years | at the date of acquisition are estimated. If applicable, |
| contracts | reducing balance | a contributory charge is deducted for the use of other | |
| as appropriate | assets needed to exploit the cash flow. The net cash | ||
Customer relationships | Straight-line | 5 to 10 years | flow is then discounted back to present value |
| Contractual | Straight-line | up to 13 years | Expected future cash flows from those contracts |
| arrangements | depending on the | existing at the date of acquisition are estimated. | |
| contract terms | If applicable, a contributory charge is deducted | ||
| for the use of other assets needed to exploit the | |||
| cash flow. The net cash flow is then discounted back | |||
| to present value | |||
Licences | Straight-line | 11 to 29 years | Start-up basis of expected future cash flows existing |
| depending on | at the date of acquisition. If applicable, a contributory | ||
| term of licence | charge is deducted for the use of other assets needed | ||
| to exploit the cash flow. The net cash flow is then | |||
| discounted back to present value. Public service | |||
| broadcasting (PSB) licences are valued as a start-up | |||
| business with only the licence in place | |||
Libraries and other | Sum of digits or | up to 20 years | Initially at cost and subsequently at cost less |
| straight-line as | accumulated amortisation | ||
| appropriate | |||
| Software licences and | Straight-line | 1 to 10 years | Initially at cost and subsequently at cost less |
| development | accumulated amortisation |
189ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
190 ITV plc Annual Report and Accounts 2023
NOTES TO THE FINANCIAL STATEMENTS
SECTION 3: OPERATING ASSETS AND LIABILITIES CONTINUED
| Customer | Software | |||||||
| Formats | contracts and | Contractual | Libraries | licences and | ||||
| Goodwill | and brands | relationships | arrangements | Licences | and other | development | Total | |
| £m | £m | £m | £m | £m | £m | £m | £m | |
| Cost | ||||||||
At 1 January 2022 | 3,893 | 527 | 441 | 11 | 176 | 104 | 240 | 5,392 |
Additions | – | – | – | – | – | – | 44 | 44 |
Acquisitions | 107 | 1 | 13 | – | – | – | – | 121 |
Disposals | – | – | – | – | – | – | (5) | (5) |
Foreign exchange | 37 | 21 | 8 | – | – | 2 | 1 | 69 |
At 31 December 2022 | 4,037 | 549 | 462 | 11 | 176 | 106 | 280 | 5,621 |
Additions | – | – | – | – | – | – | 39 | 39 |
Disposals | – | – | (1) | – | – | – | (63) | (64) |
Foreign exchange | (18) | (9) | (4) | – | – | (1) | – | (32) |
At 31 December 2023 | 4,019 | 540 | 457 | 11 | 176 | 105 | 256 | 5,564 |
Amortisation and impairment | ||||||||
At 1 January 2022 | 2,654 | 460 | 433 | 11 | 129 | 93 | 134 | 3,914 |
Charge for the year | – | 41 | 6 | – | 2 | – | 27 | 76 |
Reclassifications | – | – | – | – | – | – | (5) | (5) |
Foreign exchange | – | 19 | 7 | – | – | – | 1 | 27 |
At 31 December 2022 | 2,654 | 520 | 446 | 11 | 131 | 93 | 157 | 4,012 |
Charge for the year | – | 17 | 4 | – | 2 | – | 64 | 87 |
Disposals | – | – | (1) | – | – | – | (63) | (64) |
Foreign exchange | – | (8) | (4) | – | – | (1) | – | (13) |
At 31 December 2023 | 2,654 | 529 | 445 | 11 | 133 | 92 | 158 | 4,022 |
| Net book value | ||||||||
At 31 December 2023 | 1,365 | 11 | 12 | – | 43 | 13 | 98 | 1,542 |
At 31 December 2022 | 1,383 | 29 | 16 | – | 45 | 13 | 123 | 1,609 |
| 2023 | 2022 | |
| £m | £m | |
ITV Studios | 903 | 921 |
Media & Entertainment | 386 | 386 |
SDN | 76 | 76 |
1,365 | 1,383 |
191ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
192 ITV plc Annual Report and Accounts 2023
NOTES TO THE FINANCIAL STATEMENTS
SECTION 3: OPERATING ASSETS AND LIABILITIES CONTINUED
3.4
Assets
classified as
held for sale
Keeping
it simple
The following section outlines the Group's assets and liabilities held for sale.
Assets and any associated liabilities, where management is committed to a plan to sell,
are recognised as held for sale in the Consolidated Statement of Financial Position.
The sale should be highly probable and within 12 months of classification as held for sale.
| 2023 | 2022 | |
| £m | £m | |
Assets classified as held for sale - investments in joint ventures | 66 | – |
66 | – |
193ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
3.5
Investments
Keeping
it simple
The Group holds non-controlling interests in a number of different entities.
Accounting for these investments, and the Group’s share of any profits and losses,
depends on the level of control or influence the Group is granted via its interest.
The three principal types of non-consolidated investments are joint arrangements
(joint ventures or joint operations), associates, and equity investments.
A joint arrangement is an investment where the Group has joint control, with one or
more third parties. An associate is an entity over which the Group has significant
influence (i.e. power to participate in the investee’s financial and operating
decisions). Any other investment is an equity investment.
| Joint ventures | Associates | Equity investments | Total | |
| £m | £m | £m | £m | |
At 1 January 2022 | 43 | 51 | 4 | 98 |
Additions | 5 | 6 | 7 | 18 |
Share of profits | 7 | 1 | – | 8 |
| Impairments/fair value | ||||
adjustments | – | (4) | – | (4) |
Foreign exchange | 4 | 6 | – | 10 |
At 31 December 2022 | 59 | 60 | 11 | 130 |
Additions | 5 | 3 | 10 | 18 |
Share of profits/ (losses) | 8 | (8) | – | – |
| Impairments/fair value | ||||
| adjustments | – | (5) | – | (5) |
Dividends received | (3) | – | – | (3) |
Foreign exchange | (3) | (3) | – | (6) |
Classified as held for sale | (66) | – | – | (66) |
At 31 December 2023 | – | 47 | 21 | 68 |
194 ITV plc Annual Report and Accounts 2023
NOTES TO THE FINANCIAL STATEMENTS
SECTION 3: OPERATING ASSETS AND LIABILITIES CONTINUED
3.6
Provisions
Keeping
it simple
A provision is recognised by the Group where an obligation exists relating to events
in the past and it is probable that cash will be paid to settle it.
A provision is made where the Group is not certain how much cash will be required to
settle a liability, so an estimate is required. The main estimates relate to the cost of
holding properties that are no longer in use by the Group, the likelihood of settling
legal claims and contracts the Group has entered into that are now unprofitable.
| Legal and | ||||
| Contract | Property | other | ||
| provisions | provisions | provisions | Total | |
| £m | £m | £m | £m | |
At 1 January 2023 | 34 | 9 | 126 | 169 |
Additions | – | 2 | 20 | 22 |
Utilised | (16) | (1) | (15) | (32) |
Released | – | – | (5) | (5) |
Foreign exchange | – | – | – | – |
At 31 December 2023 | 18 | 10 | 126 | 154 |
| Analysed between: | ||||
Current | 12 | 1 | 124 | 137 |
Non-current | 6 | 9 | 2 | 17 |
195ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
196 ITV plc Annual Report and Accounts 2023
NOTES TO THE FINANCIAL STATEMENTS
SECTION 3: OPERATING ASSETS AND LIABILITIES CONTINUED
3.7
Pensions
Keeping
it simple
In this note, we explain the accounting policies governing the Group’s pension
schemes, followed by analysis of the components of the net defined benefit
pension surplus or deficit, including assumptions made, and where the related
movements have been recognised in the financial statements. In addition, we have
placed text boxes to explain some of the technical terms used in the disclosure.
What are the Group’s pension schemes?
There are two types of pension schemes. A ‘Defined Contribution’ scheme that is
open to ITV employees, and a number of ‘Defined Benefit’ schemes that have been
closed to new members since 2006 and closed to future accrual in 2017. In 2016, on
acquisition of UTV Limited, the Group took over the UTV Defined Benefit Scheme,
which closed to future accrual at the end of March 2019.
What is a Defined Contribution scheme?
The Defined Contribution scheme is where the Group makes fixed payments into a
separate fund on behalf of those employees participating in saving for their
retirement. ITV has no further obligation to the participating employee and the risks
and rewards associated with this type of scheme are assumed by the members
rather than the Group. Although the Trustee of the scheme makes available a range
of investment options, it is the members’ responsibility to make investment
decisions relating to their retirement benefits.
What is a Defined Benefit scheme?
In a Defined Benefit scheme, members receive payments during retirement, the value
of which is dependent on factors such as salary and length of service. The Group
makes contributions to the scheme, a separate Trustee-administered fund that is not
consolidated in these financial statements, but is reflected on the defined benefit
pension surplus or deficit line in the Consolidated Statement of Financial Position.
The Trustee, appointed according to the terms of the Schemes’ documentation,
is required to act in the best interest of the beneficiaries and is responsible
for managing and investing the assets of the Scheme and its funding position.
Schemes can be funded, where regular cash contributions are made by the
employer into a fund which is invested. In the event of poor investment returns or
increases in liabilities, the Group may need to address this through increased levels
of contribution. Alternatively, schemes can be unfunded, where no regular money or
assets are required to be put aside to cover future payments but in some cases,
security is required.
The accounting defined benefit pension surplus or deficit (IAS 19) is different from the
actuarial valuation surplus or deficit as they are calculated on the basis of different
assumptions, such as discount rate. The accounting defined benefit pension surplus
or deficit (IAS 19) figure is calculated as at the balance sheet date. While the actuarial
surplus or deficit (which drives cash funding requirements) is calculated as part of the
triennial valuations. The next triennial valuation will be as at 31 December 2022 and is
currently underway for the ITV Pension Scheme. The triennial valuation at 30 June
2023 for the UTV Pension Scheme was agreed in early 2024.
197ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
| 2023 | 2022 | |
| £m | £m | |
Total defined benefit scheme obligations | (2,194) | (2,292) |
Total defined benefit scheme assets | 2,355 | 2,437 |
Defined benefit pension surplus (IAS 19) | 161 | 145 |
| Presented as: | ||
Defined benefit pension surplus* | 187 | 172 |
Defined benefit pension deficit | (26) | (27) |
Defined benefit pension surplus/(deficit) (IAS 19) | 161 | 145 |
Other pension asset | 48 | 47 |
Net pension surplus | 209 | 192 |
198 ITV plc Annual Report and Accounts 2023
NOTES TO THE FINANCIAL STATEMENTS
SECTION 3: OPERATING ASSETS AND LIABILITIES CONTINUED
| 2023 | 2022 | |
| £m | £m | |
Defined benefit obligation at 1 January | 2,292 | 3,943 |
Interest cost | 112 | 63 |
Actuarial gain | (63) | (1,119) |
Settlement payments from plan assets – buyout of Section C | – | (439) |
Benefits paid | (147) | (156) |
Defined benefit obligation at 31 December | 2,194 | 2,292 |
199ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
2023 | 2022 | |
Discount rate | 4.75% | 5.05% |
Inflation assumption (RPI) | 3.05% | 3.15% |
| Deferred/ | Deferred/ | |
| Pensioner | Pensioner | |
| Rate of increase in pension payment (LPI* 5% pension increases) | 2.80%/3.00% | 2.80%/3.00% |
Rate of increase to deferred pensions (CPI) | 2.50% | 2.50% |
2023 | 2023 | 2022 | 2022 | |
Retiring today at age | 60 | 65 | 60 | 65 |
Males | 25.7 | 21.1 | 26.2 | 21.6 |
Females | 27.3 | 22.6 | 28.9 | 24.1 |
Retiring in 20 years at age | 60 | 65 | 60 | 65 |
Males | 27.1 | 22.3 | 27.5 | 22.7 |
Females | 28.9 | 24.0 | 30.4 | 25.5 |
200 ITV plc Annual Report and Accounts 2023
NOTES TO THE FINANCIAL STATEMENTS
SECTION 3: OPERATING ASSETS AND LIABILITIES CONTINUED
| 2023 | 2022 | |
| £m | £m | |
Fair value of Scheme assets at 1 January | 2,437 | 3,873 |
Interest income on Scheme assets | 120 | 63 |
Loss on assets, excluding interest income | (98) | (1,039) |
Employer contributions | 50 | 145 |
Settlement payments from plan assets – buyout of Section C | – | (439) |
Benefits paid | (147) | (156) |
Administrative expenses paid | (7) | (6) |
Pension insurance risk premium – buyout of Section C | – | (4) |
Fair value of Scheme assets at 31 December | 2,355 | 2,437 |
201ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
| Market value | Quoted | Market value | Market value | Quoted | Market value | |
| 2023 | 2023 | 2023 | 2022 | 2022 | 2022 | |
| £m | £m | % | £m | £m | % | |
| Liability hedging assets | ||||||
Fixed interest gilts | 449 | 449 | 365 | 365 | ||
Index-linked interest gilts | 516 | 516 | 788 | 786 | ||
| Interest rate and inflation hedging | ||||||
| derivatives | ||||||
| (swaps and repos) | (112) | (142) | (375) | (401) | ||
853 | 823 | 36% | 778 | 750 | 32% | |
Other bonds | 1,456 | 62 | 62% | 1,447 | 58 | 59% |
| Return seeking investments | ||||||
Infrastructure | 175 | 174 | ||||
Property | 149 | 171 | ||||
324 | 14% | 345 | 14% | |||
| Other investments | ||||||
Cash and cash equivalents | 41 | 121 | ||||
Insurance policies | 41 | 17 | ||||
Longevity swap fair value | (360) | (271) | ||||
(278) | (12%) | (133) | (5%) | |||
Total Scheme assets | 2,355 | 885 | 100% | 2,437 | 808 | 100% |
202 ITV plc Annual Report and Accounts 2023
NOTES TO THE FINANCIAL STATEMENTS
SECTION 3: OPERATING ASSETS AND LIABILITIES CONTINUED
Assumption | Change in assumption | Impact on defined benefit obligation |
Discount rate | Increase by 0.1% | Decrease by £25 million |
Decrease by 0.1% | Increase by £25 million | |
Increase by 0.5% | Decrease by £115 million | |
Decrease by 0.5% | Increase by £125 million | |
| Rate of inflation | Increase by 0.1% | Increase by £10 million |
| (Retail Price Index) | Decrease by 0.1% | Decrease by £10 million |
| Rate of inflation | Increase by 0.1% | Increase by £5 million |
| (Consumer Price Index) | Decrease by 0.1% | Decrease by £5 million |
Life expectancies | Increase by one year | Increase by £70 million |
203ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
| 2023 | 2022 | |
| £m | £m | |
| Amount charged to operating costs: | ||
Scheme administration expenses | (7) | (6) |
(7) | (6) | |
| Amount charged to exceptional costs: | ||
Pension insurance risk premium – buyout of Section C | – | (4) |
| Amounts credited to net financing cost | ||
Net interest on defined benefit obligation | 8 | – |
Total charged in the Consolidated Income Statement | 1 | (10) |
| 2023 | 2022 | |
| £m | £m | |
| Remeasurement (losses)/gains | ||
Loss on scheme assets excluding interest income | (98) | (1,039) |
| Actuarial gains/(losses) on liabilities arising from change in: | ||
– experience adjustments | 45 | (119) |
– financial assumptions | (68) | 1,228 |
– demographic assumptions | 86 | 10 |
63 | 1,119 | |
Total recognised in the Consolidated Statement of Comprehensive Income | (35) | 80 |
.
204 ITV plc Annual Report and Accounts 2023
NOTES TO THE FINANCIAL STATEMENTS
SECTION 3: OPERATING ASSETS AND LIABILITIES CONTINUED
205ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
SECTION 4: CAPITAL STRUCTURE AND FINANCING COSTS
In this
section
This section outlines how the Group manages its capital structure and related
financing costs, including its balance sheet liquidity and access to capital markets.
The Directors determine the appropriate capital structure of ITV; specifically how
much is raised from shareholders (equity) and how much is borrowed from financial
institutions (debt) in order to finance the Group’s activities both now and in the
future. Maintaining capital discipline and balance sheet efficiency remains
important to the Group. Any potential courses of action in relation to this will take
into account the Group’s liquidity needs, flexibility to invest in the business, pension
deficit initiatives and impact on credit ratings.
The Directors consider the Group’s capital structure and dividend policy at least
twice a year ahead of announcing results. The Directors take into account the
available realised distributable reserves from which a dividend would be paid in
addition to liquidity and solvency of the Group. The Directors also consider the
capital structure and dividend policy in the context of the Group’s ability to continue
as a going concern, to execute the strategy and to invest in opportunities to grow
the business and enhance shareholder value. The ITV plc Board oversees
governance and approves tax and treasury related policies and procedures.
4.1
Net debt
Keeping
it simple
Net debt is the Group’s key measure used to evaluate total cash resources net of
the current outstanding debt, including our discounted lease liabilities. A full
analysis and discussion of net debt and covenant net debt is included in the
Operating and Financial Performance Review.
The tables below analyse movements in the components of net debt during the year:
| Currency and | ||||
| 1 January | non-cash | 31 December | ||
| 2023 | Net cash flow | movements | 2023 | |
| £m | £m | £m | £m | |
Loans and facilities due within one year | (289) | 278 | 6 | (5) |
Loans and facilities due after one year | (541) | (228) | 11 | (758) |
Total loans and facilities | (830) | 50 | 17 | (763) |
| Currency component of forwards and swaps | ||||
held against euro denominated bonds * | (9) | 10 | (16) | (15) |
Lease liabilities | (132) | 26 | (9) | (115) |
Total debt | (971) | 86 | (8) | (893) |
Cash | 257 | (37) | (5) | 215 |
Cash equivalents | 91 | 38 | (4) | 125 |
Total cash and cash equivalents | 348 | 1 | (9) | 340 |
Net debt | (623) | 87 | (17) | (553) |
206 ITV plc Annual Report and Accounts 2023
NOTES TO THE FINANCIAL STATEMENTS
SECTION 4: CAPITAL STRUCTURE AND FINANCING COSTS CONTINUED
| Currency and | |||||
| 1 January | non-cash | 31 December | |||
| 2022 | Acquisitions** | Net cash flow | movements | 2022 | |
| £m | £m | £m | £m | £m | |
Loans and facilities due within one year | (290) | (19) | 257 | (237) | (289) |
Loans and facilities due after one year | (732) | – | – | 191 | (541) |
Total loans and facilities | (1,022) | (19) | 257 | (46) | (830) |
| Currency component of forwards and swaps | (36) | – | – | 27 | (9) |
| held against euro denominated bonds | |||||
Lease liabilities | (92) | – | 26 | (66) | (132) |
Total debt | (1,150) | (19) | 283 | (85) | (971) |
Restricted cash * | 50 | – | (50) | – | – |
Cash | 246 | – | 5 | 6 | 257 |
Cash equivalents | 440 | – | (355) | 6 | 91 |
Total cash and cash equivalents * | 686 | – | (350) | 12 | 348 |
Net debt | (414) | (19) | (117) | (73) | (623) |
207ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
4.2 Borrowings
Keeping
it simple
The Group borrows money from financial institutions in the form of bonds, bank
facilities and other financial instruments. The interest payable on these instruments
is shown in the net financing costs note (note 4.4).
There are Board-approved policies in place to manage the Group’s financial risks.
Macroeconomic market risks, which impact currency transactions and interest
rates, are discussed in note 4.3. Credit and liquidity risks are set out below.
• Credit risk: the risk of financial loss to the Group if a customer or counterparty
fails to meet its contractual obligations
• Liquidity risk: the risk that the Group will not be able to meet its financial
obligations as they fall due
The Group is required to disclose the fair value of its debt instruments. The fair
value is the amount the Group would pay a third party to transfer the liability.
This estimation of fair value is consistent with instruments included in note 4.5.
208 ITV plc Annual Report and Accounts 2023
NOTES TO THE FINANCIAL STATEMENTS
SECTION 4: CAPITAL STRUCTURE AND FINANCING COSTS CONTINUED
Book value | Fair value | ||||
| 2023 | 2022 | 2023 | 2022 | ||
| Maturity | £m | £m | £m | £m | |
| Loans due within one year | |||||
€259 (previously €500) million Eurobond | Dec 2023 | – | 229 | – | 227 |
Revolving credit facility * | – | 50 | – | 50 | |
Other short-term loans | Various | 5 | 10 | 5 | 10 |
5 | 289 | 5 | 287 | ||
| Loans due in more than one year | |||||
€600 million Eurobond | Sept 2026 | 520 | 531 | 490 | 480 |
£230 million Term Loan | July 2027 | 230 | – | 230 | – |
Other long-term loans | Various | 8 | 10 | 8 | 10 |
758 | 541 | 728 | 490 | ||
763 | 830 | 733 | 777 |
209ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
210 ITV plc Annual Report and Accounts 2023
NOTES TO THE FINANCIAL STATEMENTS
SECTION 4: CAPITAL STRUCTURE AND FINANCING COSTS CONTINUED
| Impact on | Impact on | Impact on | Impact on | |
| profit before tax | profit before tax | Equity | Equity | |
| 2023 | 2022 | 2023 | 2022 | |
| £m | £m | £m | £m | |
US dollar – increase 10% | (6) | (9) | 7 | 6 |
US dollar – decrease 10% | 7 | 9 | (8) | (8) |
Euro – increase 10% | (1) | (4) | 1 | (3) |
Euro – decrease 10% | 2 | 5 | – | 4 |
Australian dollar – increase 10% | (1) | (1) | (2) | (4) |
Australian dollar – decrease 10% | 1 | 1 | 2 | 4 |
211ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
| Assets | Liabilities | |
| At 31 December 2023 | £m | £m |
| Current | ||
Foreign exchange forward contracts and swaps – cash flow hedges | 3 | (1) |
Foreign exchange forward contracts and swaps – fair value through profit or loss | 1 | – |
| Non-current | ||
Cross-currency interest swaps – cash flow hedges | – | (15) |
Foreign exchange forward contracts and swaps – cash flow hedges | 1 | (1) |
5 | (17) |
| Assets | Liabilities | |
| At 31 December 2022 | £m | £m |
| Current | ||
Foreign exchange forward contracts and swaps – cash flow hedges | 2 | (6) |
Foreign exchange forward contracts and swaps – fair value through profit or loss | – | (1) |
| Non-current | ||
Cross-currency interest swaps – cash flow hedges | – | (8) |
Foreign exchange forward contracts and swaps – cash flow hedges | 2 | – |
4 | (15) |
212 ITV plc Annual Report and Accounts 2023
NOTES TO THE FINANCIAL STATEMENTS
SECTION 4: CAPITAL STRUCTURE AND FINANCING COSTS CONTINUED
| Total | Between | Between | ||||
| Carrying | contractual | Less than | 1 and 2 | 2 and 5 | Over | |
| value | cash flows | 1 year | years | years | 5 years | |
| At 31 December 2023 | £m | £m | £m | £m | £m | £m |
| Non-derivative financial liabilities | ||||||
Borrowings | (763) | (785) | (12) | (8) | (763) | (2) |
Lease liabilities | (115) | (140) | (18) | (19) | (52) | (51) |
Trade and other payables | (931) | (931) | (906) | (25) | – | – |
Other payables – non-current | (33) | (33) | – | (33) | – | – |
Other payables – commitments on acquisitions | (78) | (105) * | (47) | – | (55) | (3) |
| Derivative financial instruments | ||||||
| Foreign exchange forward contracts and swaps – | ||||||
| cash flow hedges | ||||||
Inflow | 4 | 195 | 150 | 45 | – | – |
Outflow | (2) | (193) | (149) | (44) | – | – |
| Cross-currency swaps – cash flow hedges | ||||||
Inflow | – | 542 | 7 | 7 | 528 | – |
Outflow | (15) | (580) | (16) | (16) | (548) | – |
| Foreign exchange forward contracts and swaps – | ||||||
| fair value through profit or loss | ||||||
Inflow | 1 | 177 | 171 | 6 | – | – |
Outflow | – | (176) | (170) | (6) | – | – |
(1,932) | (2,029) | (990) | (93) | (890) | (56) |
| Total | Between | Between | ||||
| Carrying | contractual | Less than | 1 and 2 | 2 and 5 | Over | |
| value | cash flows | 1 year | years | years | 5 years | |
| At 31 December 2022 | £m | £m | £m | £m | £m | £m |
| Non-derivative financial liabilities | ||||||
Borrowings | (830) | (865) | (302) | (8) | (550) | (5) |
Lease liabilities | (132) | (149) | (21) | (26) | (37) | (65) |
Trade and other payables | (915) | (915) | (898) | (14) | (3) | – |
Other payables – non-current | (28) | (28) | – | (25) | (3) | – |
Other payables – commitments on acquisitions | (47) | (89) * | (8) | (26) | (33) | (22) |
| Derivative financial instruments | ||||||
| Foreign exchange forward contracts and swaps – | ||||||
| cash flow hedges | ||||||
Inflow | 4 | 480 | 401 | 63 | 16 | – |
Outflow | (6) | (486) | (409) | (61) | (16) | – |
| Cross-currency swaps – cash flow hedges | ||||||
Inflow | – | 560 | 7 | 7 | 546 | – |
Outflow | (8) | (596) | (16) | (16) | (564) | |
| Foreign exchange forward contracts and swaps – | ||||||
| fair value through profit or loss | ||||||
Inflow | – | 51 | 45 | 6 | – | – |
Outflow | (1) | (52) | (46) | (6) | – | – |
(1,963) | (2,089) | (1,247) | (106) | (644) | (92) |
213ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
| Less than | Between | Between | Greater than | ||
| At 31 December 2023 | 1 year | 1 to 2 years | 2 to 5 years | 5 years | Total |
| Foreign exchange forward contracts and swaps | |||||
| Notional amount (£m) | (5) | – | – | – | (5) |
| Average forward rate (AUD/EUR) | 1.6933 | – | – | – | |
| Foreign exchange forward contracts and swaps | |||||
Notional amount (£m) | (1) | (11) | – | – | (12) |
Average forward rate (AUD/GBP) | 1.2773 | 1.7559 | – | – | |
| Foreign exchange forward contracts and swaps | |||||
Notional amount (£m) | 9 | 2 | – | – | 11 |
Average forward rate (CAD/GBP) | 1.7711 | 1.6594 | – | – | |
| Foreign exchange forward contracts and swaps | |||||
Notional amount (£m) | (1) | – | – | – | (1) |
Average forward rate (DKK/GBP) | 8.6515 | – | – | – | |
| Foreign exchange forward contracts and swaps | |||||
Notional amount (£m) | 1 | 8 | – | – | 9 |
Average forward rate (EUR/GBP) | 1.1278 | 1.1272 | – | – | |
| Foreign exchange forward contracts and swaps | |||||
Notional amount (£m) | 1 | – | – | – | 1 |
Average forward rate (ILS/GBP) | 4.6398 | – | – | – | |
| Foreign exchange forward contracts and swaps | |||||
Notional amount (£m) | (1) | – | – | – | (1) |
Average forward rate (SEK/GBP) | 12.9636 | – | – | – | |
| Foreign exchange forward contracts and swaps | |||||
Notional amount (£m) | 4 | – | – | – | 4 |
Average forward rate (NOK/GBP) | 13.2027 | – | – | – | |
| Foreign exchange forward contracts and swaps | |||||
Notional amount (£m) | (4) | – | – | – | (4) |
Average forward rate (ZAR/AUD) | 12.6830 | – | – | – | |
| Foreign exchange forward contracts and swaps | |||||
Notional amount (£m) | (56) | 20 | – | – | (36) |
Average forward rate (USD/GBP) | 1.3431 | 1.2188 | – | – | |
| Foreign exchange forward contracts and swaps | |||||
Notional amount (£m) | (5) | – | – | – | (5) |
Average forward rate (ZAR/EUR) | 20.6262 | – | – | – | |
| Foreign exchange forward contracts and swaps | |||||
Notional amount (£m) | (1) | – | – | – | (1) |
Average forward rate (ZAR/GBP) | 23.0200 | – | – | – | |
| Cross-currency interest rate swaps | |||||
Notional amount (£m) | – | – | 533 | – | 533 |
Average hedge rate (EUR/GBP) | – | – | 1.1264 | – |
214 ITV plc Annual Report and Accounts 2023
NOTES TO THE FINANCIAL STATEMENTS
SECTION 4: CAPITAL STRUCTURE AND FINANCING COSTS CONTINUED
| Less than | Between | Between | Greater than | ||
| At 31 December 2022 | 1 year | 1 to 2 years | 2 to 5 years | 5 years | Total |
| Foreign exchange forward contracts and swaps | |||||
Notional amount (£m) | (5) | – | – | – | (5) |
Average forward rate (AUD/EUR) | 1.5688 | – | – | – | |
| Foreign exchange forward contracts and swaps | |||||
Notional amount (£m) | (4) | (12) | (16) | – | (32) |
Average forward rate (AUD/GBP) | 1.7205 | 1.7967 | 1.7909 | – | |
| Foreign exchange forward contracts and swaps | |||||
Notional amount (£m) | 7 | 3 | – | – | 10 |
Average forward rate (CAD/GBP) | 1.7155 | 1.6446 | – | – | |
| Foreign exchange forward contracts and swaps | |||||
Notional amount (£m) | (2) | – | – | – | (2) |
Average forward rate (CAD/USD) | 1.2400 | – | – | – | |
| Foreign exchange forward contracts and swaps | |||||
Notional amount (£m) | (1) | – | – | – | (1) |
Average forward rate (DKK/GBP) | 8.3506 | – | – | – | |
| Foreign exchange forward contracts and swaps | |||||
Notional amount (£m) | (241) | (14) | – | – | (255) |
Average forward rate (EUR/GBP) | 1.1097 | 1.1485 | – | – | |
| Foreign exchange forward contracts and swaps | |||||
| Notional amount (£m) | (6) | – | – | – | (6) |
Average forward rate (EUR/USD) | 0.8859 | – | – | – | |
| Foreign exchange forward contracts and swaps | |||||
| Notional amount (£m) | 8 | – | – | – | 8 |
Average forward rate (NOK/GBP) | 12.0018 | – | – | – | |
| Foreign exchange forward contracts and swaps | |||||
| Notional amount (£m) | (4) | – | – | – | (4) |
| Average forward rate (ZAR/AUD) | 11.7780 | – | – | – | |
| Foreign exchange forward contracts and swaps | |||||
| Notional amount (£m) | 67 | 16 | – | – | 83 |
| Average forward rate (USD/GBP) | 1.2627 | 1.1389 | – | – | |
| Foreign exchange forward contracts and swaps | |||||
Notional amount (£m) | (1) | – | – | – | (1) |
Average forward rate (ZAR/GBP) | 20.8998 | – | – | – | |
| Cross-currency interest rate swaps | |||||
Notional amount (£m) | – | – | 539 | – | 539 |
Average hedge rate (EUR/GBP) | – | – | 1.1253 | – |
215ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
2023 | 2022 | |||||
| Pre-tax | Pre-tax | |||||
| Change in fair | Pre-tax | closing | Change in fair | Pre-tax | closing | |
| value used for | closing cash | cost of | value used for | closing cash | cost of | |
| measuring | flow hedge | hedging | measuring | flow hedge | hedging | |
| ineffectiveness | reserve | reserve | ineffectiveness | reserve | reserve | |
| At 31 December | £m | £m | £m | £m | £m | £m |
| Highly probable/firm commitment | ||||||
forecast transactions | 1 | 3 | – | 3 | 2 | (1) |
Borrowings | 11 | 1 | (2) | (5) | (4) | (8) |
| Amounts | ||||||
| Total hedging | Ineffectiveness | Cost of | reclassified | |||
| gain/(loss) | recognised in | hedging | from OCI to | |||
| recognised in | Income | Line item in | recognised | Income | Line item in | |
| OCI | Statement | the Income | in OCI | Statement | the Income | |
| At 31 December 2023 | £m | £m | Statement | £m | £m | Statement |
| Highly probable/firm | ||||||
| commitment forecast | Cost of sales/ | |||||
transactions | 1 | – | 4 | 2 | overheads | |
| Net financing | Net financing | |||||
Borrowings | 11 | 7 | cost | 2 | 26 | cost |
| Amounts | ||||||
| Total hedging | Ineffectiveness | Cost of | reclassified | |||
| gain/(loss) | recognised in | hedging | from OCI to | |||
| recognised in | Income | Line item in | recognised | Income | Line item in | |
| OCI | Statement | the Income | in OCI | Statement | the Income | |
| At 31 December 2022 | £m | £m | Statement | £m | £m | Statement |
| Highly probable/firm | Overheads/ | |||||
| commitment forecast | Work in | |||||
| transactions | 3 | – | (4) | 11 | progress | |
| Net financing | Net financing | |||||
Borrowings | (5) | 3 | cost | 4 | (37) | cost |
216 ITV plc Annual Report and Accounts 2023
NOTES TO THE FINANCIAL STATEMENTS
SECTION 4: CAPITAL STRUCTURE AND FINANCING COSTS CONTINUED
| Cash | Cost of | Foreign | |||
| flow hedge | hedge | currency | Translation | ||
| reserve | reserve | reserve | reserve | ||
| £m | £m | £m | £m | ||
| As at 1 January 2022 | 3 | (7) | 45 | 41 | |
| Effective portion of changes in fair value arising from: | |||||
Foreign exchange forward contracts | (1) | (4) | – | (5) | |
| Cross-currency interest rate swaps – borrowings: | |||||
• | Change in fair value from the effective hedge instrument | 25 | 4 | – | 29 |
| Amount reclassified to Income Statement | |||||
• | FX forward reclassified to cost of sales/overheads | 4 | – | – | 4 |
• | FX forward and swaps reclassified to finance costs | (10) | – | – | (10) |
• | Amounts reclassified to work in progress | 7 | – | – | 7 |
• | CCIRS reclassified to finance costs | (27) | – | – | (27) |
Net loss on cash flow hedges and cost of hedging | (2) | – | – | (2) | |
Foreign currency revaluation of the net foreign operations | – | – | 67 | 67 | |
Exchange differences on translation of foreign operations | – | – | 67 | 67 | |
Income tax credit on other comprehensive income/(expense) | 1 | – | – | 1 | |
As at 31 December 2022 | 2 | (7) | 112 | 107 | |
| Effective portion of changes in fair value arising from: | |||||
Foreign exchange forward contracts | (13) | 4 | – | (9) | |
| Cross-currency interest rate swaps – borrowings: | |||||
• | Change in fair value from the effective hedge instrument | (9) | 2 | – | (7) |
| Amount reclassified to Income Statement | |||||
• | FX forward reclassified to cost of sales/overheads | 2 | – | – | 2 |
• | FX forward and swaps reclassified to finance costs | 15 | – | – | 15 |
• | CCIRS reclassified to finance costs | 11 | – | – | 11 |
Net gain on cash flow hedges and cost of hedging | 6 | 6 | – | 12 | |
Foreign currency revaluation of the net foreign operations | – | – | (38) | (38) | |
Exchange differences on translation of foreign operations | – | – | (38) | (38) | |
Income tax charge on other comprehensive income/(expense) | (1) | (2) | – | (3) | |
As at 31 December 2023 | 7 | (3) | 74 | 78 | |
217ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
| Net financial | |||||
| Gross collateral | assets/liabilities | Related amounts | |||
| Gross financial | assets/liabilities | per balance | not set-off in the | ||
| assets/ liabilities | set-off | sheet | balance sheet | Net | |
| At 31 December 2023 | £m | £m | £m | £m | £m |
| Assets | |||||
Derivative financial instruments | 5 | – | 5 | (2) | 3 |
Cash and cash equivalents | 340 | – | 340 | – | 340 |
| Liabilities | |||||
Derivative financial instruments | (17) | – | (17) | 2 | (15) |
Loans and facilities | (763) | – | (763) | – | (763) |
| Gross collateral | Net financial | Related amounts | |||
| Gross financial | assets/liabilities | assets/liabilities | not set-off in the | ||
| assets/liabilities | set-off | per balance sheet | balance sheet | Net | |
| At 31 December 2022 | £m | £m | £m | £m | £m |
| Assets | |||||
Derivative financial instruments | 4 | – | 4 | (4) | – |
Cash and cash equivalents | 348 | – | 348 | – | 348 |
| Liabilities | |||||
| Derivative financial instruments | (15) | – | (15) | 4 | (11) |
Loans and facilities | (830) | – | (830) | – | (830) |
218 ITV plc Annual Report and Accounts 2023
NOTES TO THE FINANCIAL STATEMENTS
SECTION 4: CAPITAL STRUCTURE AND FINANCING COSTS CONTINUED
4.4
Net financing
costs
Keeping
it simple
This section details the interest income generated on the Group’s cash and other
financial assets and the interest expense incurred on borrowings and other
financial liabilities.
In reporting ‘adjusted profit’, the Group adjusts net financing costs to exclude
unrealised mark-to-market movements on interest rate and foreign exchange
derivatives, gains/losses on bond buybacks, net pension interest, interest and fair
value movements in acquisition-related liabilities and other financing costs.
Our rationale for adjustments made to financing costs is set out in the
Finance Review.
| 2023 | 2022 | |
| £m | £m | |
| Financing income | ||
Interest income | 14 | 9 |
Foreign exchange gain | 2 | 3 |
Pension interest income (see note 3.7) | 9 | – |
Other finance income | – | 1 |
25 | 13 | |
| Financing costs | ||
Pension interest expense (see note 3.7) | (1) | – |
Interest expense on financial liabilities measured at amortised cost | (15) | (18) |
Foreign exchange loss | (7) | (1) |
Other finance expense | (47) | (20) |
(70) | (39) | |
Net financing costs | (45) | (26) |
219ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
| Fair value | Level 1 | Level 2 | Level 3 | |
| 31 December | 31 December | 31 December | 31 December | |
| 2023 | 2023 | 2023 | 2023 | |
| £m | £m | £m | £m | |
| Assets measured at fair value | ||||
| Financial instruments at fair value through reserves | ||||
Other pension assets – gilts (see note 3.7) | 48 | 48 | – | – |
| Financial instruments at fair value through profit or loss | ||||
Money market funds | 125 | 125 | – | – |
Equity investments (see note 3.5) | 21 | – | – | 21 |
| Financial assets at fair value through profit or loss | ||||
Foreign exchange forward contracts and swaps | 1 | – | 1 | – |
Convertible loan receivable | 2 | – | – | 2 |
| Financial assets at fair value through reserves | ||||
Cash flow hedges | 4 | – | 4 | – |
201 | 173 | 5 | 23 |
| Fair value | Level 1 | Level 2 | Level 3 | |
| 31 December | 31 December | 31 December | 31 December | |
| 2023 | 2023 | 2023 | 2023 | |
| £m | £m | £m | £m | |
| Liabilities measured at fair value | ||||
| Financial liabilities at fair value through profit or loss | ||||
Acquisition-related liabilities – payable to sellers under put options agreed on acquisition (see notes 3.1.4 | ||||
and 3.1.5) | (63) | – | – | (63) |
| Financial liabilities at fair value through reserves | ||||
Cash flow hedges | (17) | – | (17) | – |
(80) | – | (17) | (63) |
220 ITV plc Annual Report and Accounts 2023
NOTES TO THE FINANCIAL STATEMENTS
SECTION 4: CAPITAL STRUCTURE AND FINANCING COSTS CONTINUED
| Fair value | Level 1 | Level 2 | Level 3 | |
| 31 December | 31 December | 31 December | 31 December | |
| 2022 | 2022 | 2022 | 2022 | |
| £m | £m | £m | £m | |
| Assets measured at fair value | ||||
| Financial instruments at fair value through reserves | ||||
Other pension assets – gilts (see note 3.7) | 47 | 47 | – | – |
| Financial instruments at fair value through profit or loss | ||||
Money market funds | 91 | 91 | – | – |
Equity investments (see note 3.5) | 11 | – | – | 11 |
| Financial assets at fair value through profit or loss | ||||
Convertible loan receivable | 3 | – | – | 3 |
| Financial assets at fair value through reserves | ||||
Cash flow hedges | 4 | – | 4 | – |
156 | 138 | 4 | 14 |
| Fair value | Level 1 | Level 2 | Level 3 | |
| 31 December | 31 December | 31 December | 31 December | |
| 2022 | 2022 | 2022 | 2022 | |
| £m | £m | £m | £m | |
| Liabilities measured at fair value | ||||
| Financial liabilities at fair value through profit or loss | ||||
Foreign exchange forward contracts and swaps | (1) | – | (1) | – |
Acquisition-related liabilities – payable to sellers under put options agreed on acquisition (see notes 3.1.4 | ||||
| and 3.1.5) | (39) | – | – | (39) |
| Financial liabilities at fair value through reserves | ||||
Cash flow hedges | (14) | – | (14) | – |
(54) | – | (15) | (39) |
221ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
4.6
Lease
liabilities
Keeping
it simple
The Group accounts for operating leases under IFRS 16 ‘Leases’. Lease liabilities
representing the discounted future lease payments and right of use assets
are recognised in the Consolidated Statement of Financial Position. Lease costs
such as property rent are now recognised in the form of depreciation and interest in
the Consolidated Income Statement.
| 2023 | 2022 | |
| £m | £m | |
| Contractual discounted cash flows | ||
Less than one year | 18 | 21 |
Two to five years | 57 | 55 |
More than five years | 40 | 56 |
Lease liabilities at 31 December | 115 | 132 |
| Currency and | ||||
| 1 January | non-cash | 31 December | ||
| 2023 | Net cash flow | movements | 2023 | |
| £m | £m | £m | £m | |
Lease liabilities | (132) | 26 | (9) | (115) |
Total lease liabilities | (132) | 26 | (9) | (115) |
| Currency and | ||||
| 1 January | non-cash | 31 December | ||
| 2022 | Net cash flow | movements | 2022 | |
| £m | £m | £m | £m | |
Lease liabilities | (92) | 26 | (66) | (132) |
Total lease liabilities | (92) | 26 | (66) | (132) |
The following amounts have been included in the Consolidated Income Statement:
| 2023 | 2022 | |
| £m | £m | |
Interest expense on lease liabilities | (4) | (4) |
Amounts recognised in the Consolidated Income Statement | (4) | (4) |
The Group has elected not to recognise right of use assets and lease liabilities for short-term leases (i.e. lease term
less than 12 months) or low-value assets (i.e. under £5,000). The Group will continue to expense the lease payments
associated with these leases on a straight-line basis over the lease term. At 31 December 2023, this was less than
£1 million (2022: less than £1 million).
Variable lease payments that depend on an index or a rate are also less than £1 million (2022: less than £1 million).
Some property leases contain extension options beyond the non-cancellable period. The Group assesses at the
lease commencement date whether it is reasonably certain to exercise the extension options. The lease liability
at 31 December 2023 includes one such extension which resulted in an increase in the lease liability of £2 million.
There are no other significant extension options.
The Group signed a subleasing arrangement, which is classified as a finance lease in accordance with IFRS 16 ‘Leases’.
In accordance with the standard, the right of use asset with a net book value of £8 million was derecognised and
replaced by a net investment in the sublease which has been recognised within other receivables. See note 3.2. This
arrangement does not impact the lease liabilities arising from the original lease which have been included in this note.
222 ITV plc Annual Report and Accounts 2023
NOTES TO THE FINANCIAL STATEMENTS
SECTION 4: CAPITAL STRUCTURE AND FINANCING COSTS CONTINUED
4.7
Equity
Keeping
it simple
This section explains material movements recorded in shareholders’ equity,
presented in the Consolidated Statement of Changes in Equity, which are not
explained elsewhere in the financial statements.
| 2023 | 2022 | |
| £m | £m | |
Merger reserves | 95 | 95 |
Capital reserves | 112 | 112 |
Capital redemption reserves | 36 | 36 |
Revaluation reserves | 2 | 2 |
Put option liabilities arising on acquisition of subsidiaries | (34) | (34) |
Total | 211 | 211 |
223ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
4.8
Share-based
compensation
Keeping
it simple
The Group utilises share award schemes as part of its employee remuneration
packages, and therefore operates a number of share-based compensation
schemes, namely the Deferred Share Award (DSA), Executive Share Plan (ESP),
Performance Share Plan (PSP), Long Term Incentive Plan (LTIP) and Save As You
Earn (SAYE) schemes. The share-based compensation is not pensionable.
A transaction will be classed as share-based compensation where the Group
receives services from employees and pays for these in shares or similar equity
instruments. If the Group incurs a liability linked to the price or value of the Group’s
shares, this will also fall under a share-based transaction.
| 2023 | 2022 | |||
| Weighted | Weighted | |||
| Number | average | Number | average | |
| of options | exercise price | of options | exercise price | |
| (‘000) | (pence) | (‘000) | (pence) | |
Outstanding at 1 January | 104,729 | 24.74 | 98,934 | 24.98 |
Granted during the year – nil priced | 20,993 | – | 17,238 | – |
Granted during the year – other | 16,395 | 59.21 | 13,814 | 62.85 |
Forfeited during the year | (4,210) | 68.61 | (3,095) | 56.49 |
Exercised during the year – nil priced | (15,551) | – | (6,201) | – |
Exercised during the year – other | (12,954) | 49.31 | (110) | 50.61 |
Expired during the year | (19,168) | 15.57 | (15,851) | 35.87 |
Outstanding at 31 December | 90,234 | 25.88 | 104,729 | 24.74 |
Exercisable at 31 December | 12,933 | 34.88 | 4,383 | 30.63 |
224 ITV plc Annual Report and Accounts 2023
NOTES TO THE FINANCIAL STATEMENTS
SECTION 4: CAPITAL STRUCTURE AND FINANCING COSTS CONTINUED
| 2023 | 2022 | |||||
| Weighted | Weighted | |||||
| Weighted | average | Weighted | average | |||
| average | Number | remaining | average | Number | remaining | |
| exercise price | of options | contractual life | exercise price | of options | contractual life | |
| Range of exercise prices (pence) | (pence) | (‘000) | (years) | (pence) | (‘000) | (years) |
Nil | – | 49,386 | 0.33 | – | 59,056 | 0.29 |
20.00 – 49.99 | 49.17 | 15,330 | 1.17 | 49.17 | 29,225 | 1.81 |
50.00 – 69.99 | 58.51 | 21,454 | 2.79 | 61.73 | 10,878 | 3.44 |
70.00 – 99.99 | 79.42 | 3,965 | 2.12 | 85.22 | 5,351 | 1.35 |
100.00 – 109.99 | 105.98 | 61 | 0.92 | 105.98 | 90 | 1.46 |
120.00 – 149.99 | 135.20 | 38 | 0.33 | 130.61 | 129 | 0.94 |
Assumptions
ESP, DSA, LTIP and PSP options are valued directly by reference to the share price at date of grant.
The options granted in the current and prior year for the HMRC approved SAYE scheme, are valued using the Black–
Scholes model, using the assumptions below:
| Gross | ||||||||
| Share price | Exercise | Expected | Expected | dividend | Risk-free | |||
| at grant | price | volatility | life | yield | rate | Fair value | ||
| Scheme name | Date of grant | (pence) | (pence) | % | (years) | % | % | (pence) |
3 Year | 12 April 2022 | 79.08 | 67.72 | 47.00 | 3.25 | – | 1.55 | 21.19 |
5 Year | 12 April 2022 | 79.08 | 67.72 | 40.05 | 5.25 | – | 1.58 | 18.45 |
3 Year | 5 September 2022 | 62.74 | 57.73 | 47.80 | 3.25 | – | 2.97 | 14.95 |
5 Year | 5 September 2022 | 62.74 | 57.73 | 41.03 | 5.25 | – | 2.85 | 12.63 |
3 Year | 5 April 2023 | 79.78 | 70.12 | 45.43 | 3.25 | – | 3.40 | 21.53 |
5 Year | 5 April 2023 | 79.78 | 70.12 | 42.41 | 5.25 | – | 3.28 | 20.99 |
3 Year | 13 September 2023 | 72.34 | 56.37 | 40.60 | 3.25 | – | 4.47 | 20.17 |
5 Year | 13 September 2023 | 72.34 | 56.37 | 42.27 | 5.25 | – | 4.29 | 20.57 |
Employees’ Benefit Trust
The Group has investments in its own shares as a result of shares purchased by the ITV Employees’ Benefit Trust
(EBT). Transactions with the Group-sponsored EBT are included in these financial statements and consist of the
EBT’s purchases of shares in ITV plc, which is accounted for as a reduction to retained earnings.
The table below shows the number of ITV plc shares held in the EBT at 31 December 2023 and the releases from the
EBT made in the year to satisfy awards under the Group’s share schemes:
| Number of shares | Nominal value | ||
Scheme | Shares held at | (released)/purchased | £ |
1 January 2023 | 14,587,379 | 1,458,738 | |
LTIP releases | (93,835) | ||
DSA releas es | (3,115,726) | ||
ESP releases | (226,277) | ||
PSP releases | (5,995,984) | ||
SAYE releases | (13,150,667) | ||
Market purchased shares | 9,510,276 | ||
Newly issued shares | 27,000,000 | ||
31 December 2023 | 28,515,166 | 2,851,517 |
The total number of shares held by the EBT at 31 December 2023 represents 0.77% (2022: 0.36%) of ITV’s issued
share capital. The market value of own shares held at 31 December 2023 is £18 million (2022: £11 million).
The shares will be held in the EBT until such time as they may be transferred to participants of the various Group
share schemes. Rights to dividends have been waived by the EBT in respect of shares held that do not relate to
restricted shares under the DSA. In accordance with the Trust Deed, the Trustees of the EBT have the power to
exercise all voting rights in relation to any investment (including shares) held within that trust. The Trust is accounted
for as a separate entity and therefore is only accounted for in the consolidated financial statements and not included
in the ITV plc Company financial statements.
225ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
SECTION 5: OTHER NOTES
| 2023 | 2022 | |
| £m | £m | |
Sales to joint ventures | 60 | 41 |
Sales to associated undertakings | 13 | 16 |
Purchases from joint ventures | 33 | 33 |
Purchases from associated undertakings | 78 | 77 |
| 2023 | 2022 | |
| £m | £m | |
Amounts owed by joint ventures | 41 | 12 |
Amounts owed by associated undertakings | 10 | 19 |
Amounts owed to joint ventures | 6 | 5 |
Amounts owed to associated undertakings | 8 | 17 |
| 2023 | 2022 | |
| £m | £m | |
Short-term employee benefits | 11 | 11 |
Share-based compensation | 6 | 6 |
17 | 17 |
226 ITV plc Annual Report and Accounts 2023
NOTES TO THE FINANCIAL STATEMENTS
SECTION 5: OTHER NOTES CONTINUED
5.2
Contingent
assets and
liabilities
Keeping
it simple
A contingent asset or liability is a liability that is not sufficiently certain to qualify for
recognition as an asset or provision where uncertainty may exist regarding the
outcome of future events.
5.3
Subsequent
events
Keeping
it simple
Where the Group receives information in the period between 31 December 2023
and the date of this report about conditions related to certain events that existed at
31 December 2023, we update our disclosures that relate to those conditions in light
of the new information. Such events can be categorised as adjusting or non-
adjusting depending on whether the condition existed at 31 December 2023. If non-
adjusting events are material, non-disclosure could influence the economic
decisions that users make on the basis of the financial statements. Accordingly, for
each material category of non-adjusting event after the reporting period we
disclose in this section the nature of the event and an estimate of its financial
effect, or a statement that such an estimate cannot be made.
Disposal of the Group’s Interests in BritBox International
On 1 March 2024, the Group announced the sale of its entire 50% interest in digital streaming service, BritBox
International to its joint venture partner BBC Studios for a cash consideration of £255 million. The transaction has
been effected by the disposal of the Group’s 50% interests in BritBox LLC, BB Rights LLC, Denipurna Limited and
BritBox International Limited and the 100% interest in ITV SVOD Australia Pty Ltd, which holds the 50% interest in
BritBox Australia Management Pty Limited.
At 31 December 2023, the Group included these interests at their carrying value of £66 million, as held for sale in the
Consolidated Statement of Financial Position. See notes 3.4 and 3.5.
227ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
Company number | Company name | Company number | Company name | ||
04195187 | 12 Yard Productions (Investments) Limited | 03089273 | ITV Ventures Limited | ||
04145307 | 12 Yard Productions Limited | 11107431 | ITV Vera Limited | ||
10058419 | Back Productions Limited | 14460676 | ITV WKOW Limited | ||
13087812 | Big Talk Alone Limited | 13087699 | ITV Y&M Limited | ||
10496857 | Big Talk Cold Feet Limited | 05518785 | Juice Music UK Limited | ||
12092620 | Big Talk Friday Limited | 05976348 | Mammoth Screen Limited | ||
11109596 | Big Talk Goes Wrong Limited | 09355455 | Mammoth Screen (End) Limited | ||
13087733 | Big Talk Horseface Limited | 08546227 | Mammoth Screen (End2) Limited | ||
13087735 | Big Talk I Hate You Limited | 10528827 | Mammoth Screen (End9) Limited | ||
07037447 | Big Talk Investments Limited | 11109917 | Mammoth Screen (End6) Limited | ||
10528952 | Big Talk Living the Dream Limited | 11908267 | Mammoth Screen (End7) Limited | ||
13813181 | Big Talk Ludwig Limited | 12368766 | Mammoth Screen (End8) Limited | ||
11723899 | Big Talk Offenders Limited | 13087685 | Mammoth Screen (Evans) Limited | ||
11109572 | Big Talk Peacock Limited | 12368661 | Mammoth Screen (FS) Limited | ||
02897434 | Big Talk Pictures Limited | 13989267 | Mammoth Screen (GK) Limited | ||
06567813 | Big Talk Studios Limited | 11995990 | Mammoth Screen (MD) Limited | ||
02936337 | Boom Cymru TV Ltd | 12735978 | Mammoth Screen (MD2) Limited | ||
07922831 | Boom Pictures Limited | 13989179 | Mammoth Screen (MIE) Limited | ||
03866274 | Box Clever Technology Limited | 11062257 | Mammoth Screen (NC) Limited | ||
04192851 | Box Clever Trustees Limited | 09660486 | Mammoth Screen (Pol2) Limited | ||
11801341 | BritBox SVOD Limited | 10031005 | Mammoth Screen (Pol3) Limited | ||
01891539 | Broad Street Films Limited | 10528763 | Mammoth Screen (Pol4) Limited | ||
02285229 | Campania Limited | 11108289 | Mammoth Screen (Pol5) Limited | ||
04159249 | Carlton Content Holdings Limited | 08799982 | Mammoth Screen (Poldark) Limited | ||
00301188 | Carlton Film Distributors Limited | 09646520 | Mammoth Screen (QV) Limited | ||
01692483 | Carlton Finance Limited | 11108327 | Mammoth Screen (Serpent) Limited | ||
03984490 | Carlton Food Network Limited | 11204836 | Mammoth Screen (SG) Limited | ||
03053908 | Carlton Programmes Development Limited | NI678277 | Mammoth Screen (TJ) Limited | ||
03210452 | Carlton Screen Advertising (Holdings) Limited | 13087656 | Mammoth Screen (Tower) Limited | ||
03210363 | Carltonco Ninety-Six | 10528702 | Mammoth Screen (VF) Limited | ||
02280048 | Castlefield Properties Limited | 11108322 | Mammoth Screen (Vic3) Limited | ||
06409013 | Cat’s on the Roof Media Limited | 11108320 | Mammoth Screen (WOF) Limited | ||
04257248 | Channel Television Holdings Limited | NI687412 | Mammoth Screen (WOF2) Limited | ||
08195508 | Cirkus Limited | 10973979 | Mammoth Screen (WOTW) Limited | ||
10240192 | Cloth Cat LBB Limited | 13412337 | Metavision Limited | ||
02852812 | Cosgrove Hall Films Limited | 09477931 | Monumental Television Limited | ||
09366309 | Crook Productions Limited | 04201477 | Morning TV Limited | ||
05421502 | Cynhyrchiadau Boomerang Cyfyngedig | 12368748 | MT Ghosts Limited | ||
08479545 | Double Double Limited | 14764613 | MT Marlow Murder Club Limited | ||
07821062 | EQ Pictures Limited | 13813329 | MT Mrs Sidhu Limited | ||
09366308 | Gameface Productions Limited | 13989060 | MT Maryland Limited | ||
05946785 | Gorilla TV Group Limited | 13087117 | MT Murder in Provence Limited | ||
03776018 | Gorilla TV Limited | 14763338 | Output Productions Limited | ||
00290076 | Granada Group Limited | 07473151 | Oxford Scientific Films Limited | ||
03962410 | Granada Limited | 13506403 | Planet Woo Limited | ||
03106798 | Granada Media Limited | 15175627 | Planet V Limited | ||
05344772 | Granada Screen (2005) Limited | 09020906 | Possessed Limited | ||
00733063 | Granada Television Overseas Limited | 14163547 | QSP ATF Limited | ||
00250311 | Granada UK Rental and Retail Limited | 14784655 | QSP Buried Limited | ||
04842712 | Interactive Telephony Limited | 14163654 | QSP FMO Limited | ||
00608490 | ITC Entertainment Group Limited | 14460916 | QSP Ghosted Limited | ||
SC375274 | ITV (Scotland) Limited | 14496123 | QSP Men Up Limited | ||
11516620 | ITV | 112 | Limited | 14458573 | QSP MU Limited |
12956892 | ITV AdVentures Limited | 14462220 | QSP MY Limited | ||
13087805 | ITV Alde r Limited | 14460933 | QSP PD Limited | ||
14047839 | ITV Archie Limited | 14460663 | QSP TRK Limited | ||
11667230 | ITV Barking Limited | 13714204 | QSP Nolly Limited | ||
02578005 | ITV Breakfast Limited | 14048037 | QSP SO limited | ||
02937518 | ITV Consume r Limited | 12350991 | Second Act (Grace) Limited | ||
13087759 | ITV Duneen Limited | 09366311 | Second Act Productions Limited | ||
10494684 | ITV Enterprises Limited | 07714999 | Sightseers Film Limited | ||
04159210 | ITV Holdings Limited | 03991026 | So Television Limited | ||
14133299 | ITV Grace Limited | 11423826 | The Addressable Platform Limited | ||
04159213 | ITV International Channels Limited | 07155077 | The Garden Productions Limited | ||
14846610 | ITV JCDM Limited | 02351132 | TwoFour Broadcast Limited | ||
SC473179 | ITV LTVC (Scotland) Limited | 08602993 | TwoFour Group Holdings Limited | ||
14863612 | ITV Mandrake Limited | 05493388 | TwoFour Group Limited | ||
13989147 | ITV Maternal Limited | 11109744 | WP Anne Limited | ||
00603893 | ITV Network Limited | 10796122 | WP Bodyguard Limited | ||
11723842 | ITV Nightingale Limited | 14360979 | WP Delia Limited | ||
00603471 | ITV Pension Scheme Limited | 12368643 | WP Diplomat Limited | ||
14461569 | ITV POS Limited | 13988864 | WP Fifteen Limited |
228 ITV plc Annual Report and Accounts 2023
NOTES TO THE FINANCIAL STATEMENTS
SECTION 5: OTHER NOTES CONTINUED
Company number | Company name | Company number | Company name |
01565625 | ITV Properties (Developments) Limited | 12116627 | WP Karen Pirie Limited |
13087782 | ITV Ralph and Katie Limited | 14988579 | WP Lockerbie Limited |
14460328 | ITV RE Limited | 11109287 | WP LOD5 Limited |
08554937 | ITV Shetland Limited | 12116457 | WP LOD6 Limited |
11723826 | ITV Spy Limited | 13087865 | WP Malpractice Limited |
02203983 | ITV Studios Global Distribution Limited | 12116461 | WP Pembrokeshire Limited |
09498877 | ITV TFG Holdings Limited | 13087860 | WP RM Limited |
11107934 | ITV The Bay Limited | 11109929 | WP Save Me 2 Limited |
13087693 | ITV The Reckoning Limited | 12368475 | WP Showtrial Limited |
12368504 | ITV TLC Limited | 14653603 | WP The Gathering Limited |
09498177 | ITV Top Class Limited | 12368477 | WP The Suspect Limited |
14048049 | ITV Venturer Limited | 11109437 | WP Vigil Limited |
229ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
ITV PLC COMPANY FINANCIAL STATEMENTS
Statement of Financial Position
As at 31 December
Note
2023
£m
2022
£m
Non-current assets
Investments in subsidiary undertakings iii 3,224 3,224
Derivative financial instruments vi 2 2
Other receivables 4 –
Deferred tax asset 2 3
3,232 3,229
Current assets
Amounts owed by subsidiary undertakings due within one year iv 3,569 2,954
Amounts owed by subsidiary undertakings due after more than one year iv 97 96
Amounts owed by subsidiary undertakings iv 3,666 3,050
Derivative financial instruments vi 5 7
Other receivables 28 17
Cash and cash equivalents v 226 197
3,925 3,271
Borrowings – (279)
Amounts owed to subsidiary undertakings iv (3,563) (2,681)
Accruals (9) (8)
Derivative financial instruments vi (5) (8)
Current liabilities (3,577) (2,976)
Net current assets 348 295
Borrowings v (750) (531)
Derivative financial instruments vi (16) (10)
Non-current liabilities (766) (541)
Net assets 2,814 2,983
Share capital vii 406 403
Share premium viii 174 174
Other reserves viii 34 29
Retained earnings viii 2,200 2,377
Total shareholders’ funds 2,814 2,983
The Company has elected to take the exemption under section 408 of the Companies Act 2006 from presenting the parent company
Income Statement. The Company’s profit for the year was £7 million (2022: profit of £800 million).
The financial statements on pages 229 to 242 were approved by the Board of Directors on 7 March 2024 and signed on its behalf by
Chris Kennedy
Director
230 ITV plc Annual Report and Accounts 2023
ITV PLC COMPANY FINANCIAL STATEMENTS CONTINUED
Company Statement of Changes in Equity
Note
Share
capital
£m
Share
premium
£m
Other
reserves
£m
Retained
earnings
£m
Total
£m
Balance at 1 January 2023 vii/viii 403 174 29 2,377 2,983
Total comprehensive income for the year
Profit for the year – – – 7 7
Net gain on cash flow hedges and cost of hedging – – 5 – 5
Total comprehensive income for the year – – 5 7 12
Transactions with owners recorded directly in equity
Contributions by and distributions to owners
Issue of shares
3 – – – 3
Equity dividends – – – (201) (201)
Movements due to share-based compensation – – – 16 16
Tax on items taken directly to equity – – – 1 1
Total transactions with owners 3 – – (184) (181)
Balance at 31 December 2023 406 174 34 2,200 2,814
Note
Share
capital
£m
Share
premium
£m
Other
reserves
£m
Retained
earnings
£m
Total
£m
Balance at 1 January 2022 403 174 31 1,760 2,368
Total comprehensive income for the year
Profit for the year – – – 800 800
Net loss on cash flow hedges and cost of hedging – – (2) – (2)
Total comprehensive income for the year – – (2)
800
798
Transactions with owners recorded directly in equity
Contributions by and distributions to owners
Equity dividends – – – (201) (201)
Movements due to share-based compensation
– – – 19 19
Tax on items taken directly to equity – – – (1) (1)
Total transactions with owners – – – (183) (183)
Balance at 31 December 2022 vii/viii 403
174
29
2,377
2,983
231ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
NOTES TO THE ITV PLC COMPANY FINANCIAL STATEMENTS
Note i
Accounting
policies
In this
section
This section sets out the notes to the ITV plc Company only financial
statements. Those statements form the basis of the dividend decisions made by
the Directors, as explained in detail in note viii below. The notes form part of the
financial statements.
Basis of preparation
The Company is a qualifying entity as it is a member of the ITV plc Group where ITV plc
publicly available consolidated financial statements. These financial statements were prepared in accordance with
Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ (‘FRS 101’). The Company is registered in England
and Wales.
In preparing these financial statements, the Company applies the recognition, measurement and disclosure
requirements of international accounting standards in conformity with the requirements of the Companies Act 2006
(‘Adopted IFRSs’), but makes amendments where necessary in order to comply with Companies Act 2006 and has
set out below where advantage of the FRS 101 disclosure exemptions has been taken.
Exemptions applied
The following exemptions from the requirements of IFRS have been applied in the preparation of these financial
statements, in accordance with FRS 101:
• Presentation of a Statement of Cash Flows and related notes
• Disclosure in respect of capital management
• Disclosure of related party transactions between wholly-owned subsidiaries and parents within a group
• Disclosures required under IFRS 2 ‘Share Based Payments’ in respect of group settled share-based compensation
• Disclosures required by IFRS 7 ‘Financial Instruments: Disclosure’
• Certain disclosures required under IFRS 13 ‘Fair Value Measurement’
• Disclosure of information in relation to new standards not yet applied
The Company proposes to continue to apply the reduced disclosure framework of FRS 101 in its next financial statements.
The financial statements have been prepared on a going concern basis.
Changes in accounting policy
New accounting standards, interpretations and amendments that are effective from 1 January 2023 have not had
significant impact on the Company’s results or Statement of Financial Position.
Accounting standards effective in future periods
The Directors have considered the impact on the Company of new and revised accounting standards, interpretations
or amendments that are not yet effective and do not expect them to have a significant impact on the Company’s
results and Statement of Financial Position.
Accounting judgements and estimates
The preparation of financial statements requires management to exercise judgement in applying the Company’s
accounting policies. It also requires the use of estimates and assumptions that affect the reported amounts of
assets, liabilities, income and expenses. Actual results may differ from these estimates.
Expected credit losses on amounts due from subsidiary undertakings is considered a key source of estimation uncertainty.
Subsidiaries
Subsidiaries are entities that are directly or indirectly controlled by the Company. Control exists where the Company
has the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
The investment in the Company’s subsidiaries is recorded at cost.
Foreign currency transactions
Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of the
transaction. Foreign currency monetary assets and liabilities at the balance sheet date are translated into sterling at
the rate of exchange ruling at that date. Foreign exchange differences arising on translation are recognised in the
profit and loss account. Non-monetary assets and liabilities measured at historical cost are translated into sterling
at the rate of exchange on the date of the transaction.
Borrowings
Borrowings are recognised initially at fair value including directly attributable transaction costs, with subsequent
measurement at amortised cost using the effective interest rate method. The difference between initial fair value
and the redemption value is recorded in the profit and loss account over the period of the liability on an effective
interest basis.
232 ITV plc Annual Report and Accounts 2023
NOTES TO THE ITV PLC COMPANY FINANCIAL STATEMENTS CONTINUED
Derivatives and other financial instruments
The Company uses a limited number of derivative financial instruments to hedge its exposure to fluctuations in
interest and other foreign exchange rates. The Company does not hold or issue derivative instruments for
speculative purposes.
Derivative financial instruments are initially recognised at fair value and are subsequently remeasured at fair value
with the movement recorded in the profit and loss account within net financing costs, except where derivatives
qualify for cash flow hedge accounting. In this case, the effective portion of cash flow hedge is recognised in other
reserves within equity. The cumulative gain or loss is later reclassified to the profit and loss account in the same
period as the relevant hedged transaction is realised. Derivatives with positive fair values are recorded as assets
and negative fair values as liabilities.
The fair value of foreign currency forward contracts is determined by using the difference between the contract
exchange rate and the quoted forward exchange rate at the balance sheet date.
The fair value of interest rate swaps is the estimated amount that the Company would receive or pay to terminate
the swap at the balance sheet date, taking into account current interest rates and the current creditworthiness of
swap counterparties.
Third-party valuations are used to fair value the Company’s derivatives. The valuation techniques use inputs such as
interest rate yield curves and currency prices/yields, volatilities of underlying instruments and correlations between
inputs. For financial assets and liabilities classified at fair value through profit or loss, the fair value change and
interest income/expense are not separated.
Current tax
Current tax is the expected tax payable or receivable on the taxable income or loss for the year and any adjustment in
respect of previous years.
The Company recognises liabilities for anticipated tax issues based on estimates of the additional taxes that are
likely to become due, which require judgement. Amounts are accrued based on management’s interpretation of
specific tax law and the likelihood of settlement. Where the final tax outcome of these matters is different from the
amounts that were initially recorded, such differences will impact the current tax and deferred tax provisions in the
period in which such determination is made.
Deferred tax
The tax charge for the year is recognised in the Income Statement or directly in equity according to the accounting
treatment of the related transaction.
Deferred tax arises due to certain temporary differences between the carrying amount of assets and liabilities for
financial reporting purposes and those for taxation purposes. The amount of deferred tax provided is based on the
expected manner of realisation or settlement of the carrying amount of assets and liabilities. A deferred tax asset is
recognised only to the extent that it is probable that sufficient taxable profit will be available to utilise the temporary
difference. Recognition of deferred tax assets therefore involves judgement regarding timing and level of future
taxable income.
Share-based compensation
The Company utilises share award schemes as part of its employee remuneration packages, and therefore operates
a number of share-based compensation schemes, namely the Deferred Share Award (DSA), Executive Share Plan
(ESP) Performance Share Plan (PSP), Long Term Incentive Plan (LTIP) and Save As You Earn (SAYE) schemes.
A transaction will be classed as share-based compensation where the Company receives services from employees
and pays for these in shares or similar equity instruments. If the Company incurs a liability based on the price or value
of the shares, this will also fall under a share-based transaction. The Company recognises the retained earnings
impact of the share-based compensation for the Group as awards are settled in ITV plc shares. The cost of providing
those awards is recognised as a cost of investment to the subsidiaries that receive the service from employees.
The fair value of the equity instrument granted is measured at grant date and spread over the vesting period via a
charge to the Income Statement with a corresponding increase in equity. The fair value of the share options and
awards is measured using either market price at grant date or, for the SAYE scheme, a Black–Scholes model, taking
into account the terms and conditions of the individual scheme.
Vesting conditions are limited to service conditions and performance conditions. For performance-based schemes,
the relevant performance measures are projected to the end of the performance period in order to determine the
number of options expected to vest. The estimate is then used to determine the option fair value, discounted to
present value. The Company revises its estimates of the number of options that are expected to vest, including an
estimate of forfeitures at each reporting date. The impact of the revision to original estimates, if any, is recognised in
the Income Statement, with a corresponding adjustment to equity.
233ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
Exercises of share options granted to employees can be satisfied by market purchase or issue of new shares. No new
shares may be issued to satisfy exercises under the terms of the DSA.
During the year, all exercises were satisfied by using shares held in the ITV Employees’ Benefit Trust. The Trust is
accounted for as a separate entity and therefore is only accounted for in the consolidated ITV financial statements.
Dividends to shareholders
Dividends payable to shareholders are recognised through equity on the earlier of their approval by the Company’s
shareholders or their payment. Dividends are distributed based on the realised distributable reserves (within
retained earnings) of ITV plc (Company) and not based on the Group’s retained earnings.
Note ii
Employees and
share-based
compensation
Employees
Two (2022: two) Directors of ITV plc (i.e. the Executive Directors) were employees of the Company during the year,
both of whom remain employed at the year end. The costs relating to these Directors are disclosed in the
Remuneration Report.
Share-based compensation
The weighted average share price of share options exercised during the year was 49.3 pence (2022: 50.6 pence)
(excluding nil priced share options). The options outstanding at the year end have an exercise price in the range of nil
to 135.20 pence (2022: nil to 130.61 pence) and a weighted average contractual life of one year (2022: two years) for
all the schemes in place for the Group.
Note iii
Investments
in subsidiary
undertakings
The carrying value of the Company’s investments in subsidiary undertakings at 31 December 2023 was £3,224 million
(2022: £3,224 million).
The carrying value of the Company’s investments in subsidiary undertakings is assessed for impairment on an annual
basis. Determining whether the carrying amount has any indication of impairment requires judgement. In testing
for impairment, estimates are used in deriving cash flows and the discount rates. The estimation process is complex
due to the inherent risks and uncertainties associated with long-term forecasting. The outcome of the value in use
calculation including borrowings supports the carrying value of the investments in subsidiary undertakings.
Due to the significant headroom, there is no reasonably possible scenario that would result in a material adjustment
to the amounts reported in the financial statements.
The Company’s review resulted in no impairment for 2023 (2022: no impairment).
The listing of subsidiary undertakings and investments is listed on page 238 to 242.
Note iv
Amounts
owed (to)/from
subsidiary
undertakings
The Company operates an intra-group cash pool policy with certain 100% owned UK subsidiaries. The pool applies
to bank accounts where there is an unconditional right of set off and involves the daily closing cash position for
participating subsidiaries whether positive or negative, being cleared to £nil via daily bank transfers to/from ITV plc.
These daily transactions create a corresponding intercompany creditor or debtor, which can result in significant
movements in amounts owed to and from subsidiary undertakings in the Company balance sheet. Interest is payable
on intra-group cash pool balances at 0.5% above base rate per annum and the balances are repayable on demand.
Other loans to subsidiary undertakings are repayable according to contractual terms. The classification of balances
as due after more than one year is based on the intention of when the balances are expected to be settled rather
than the contractual terms.
The credit risk management practices of the Company include internal review and reporting of the historical credit losses
and forward-looking data. The Company applies the IFRS 9 simplified approach in measuring expected credit losses,
which use a lifetime expected credit loss allowance for amounts due from subsidiary undertakings, and other receivables.
To measure expected credit losses, amounts due from subsidiary undertakings, and other receivables have been
grouped by shared credit risk characteristics. In addition to the expected credit losses, the Company may make
additional provisions for the particular receivables if the deterioration of financial position is observed.
During the year, the Company provided for £22 million (2022: £192 million) of doubtful debts for amounts owed by its
subsidiary undertakings. £2 million (2022: £11 million) was written back to the Income Statement for provisions of
doubtful debts no longer required.
The recoverability of the amounts owed by subsidiary undertakings is assessed on an annual basis or more
frequently when an indication of impairment exists. Determining whether there is an indication of impairment requires
j
udgement as the assessment is based on either net assets of the undertaking or forecast future performance.
234 ITV plc Annual Report and Accounts 2023
NOTES TO THE ITV PLC COMPANY FINANCIAL STATEMENTS CONTINUED
Note v
Net debt
Keeping
it simple
The Directors manage the Group’s capital structure as disclosed in section 4 to
the consolidated financial statements. Borrowings, cash and derivative financial
instruments are mainly held by ITV plc and disclosed in these Company
financial statements.
Cash and cash equivalents
At 31 December 2023, the Company has a cash position of £226 million (2022: £197 million).
Loans and facilities due within one year
In January 2022, the Company entered into a new syndicated £500 million Revolving Credit Facility (RCF) to meet
short-term funding requirements which was undrawn at 31 December 2023. The original terms of the RCF ran until
January 2027; however, the Group took the opportunity to request an extension for one year on the first and second
anniversary of the facility. As a result, £83 million of the RCF is committed until January 2028 and £417 million is
committed until January 2029. The RCF was undrawn as at 31 December 2023 (2022: drawn-down by £50 million).
The €259 million Eurobond was repaid in December 2023. The sterling-equivalent repayment value, totalling £233 million,
had been hedged using FX forward rate agreements.
Loans and loan notes due after one year
The Company has a €600 million Eurobond in issue at a fixed coupon of 1.375%, which matures in September 2026
and has been swapped back to sterling (£533 million) using a number of cross-currency interest rate swaps.
The resulting fixed rate payable in sterling is c.2.9%.
A new £230 million term loan was taken out in the year, and was fully drawn-down in December 2023 in order to
repay the €259 million Eurobond. The term loan matures in July 2027. Interest on the loan is determined as an
aggregate of compounded SONIA plus a margin.
See section 4.1 of the Group Notes for further details of borrowings and available facilities.
Note vi
Managing
market risks:
derivative
financial
instruments
What is the value of our derivative financial instruments?
Assets
2023
£m
Liabilities
2023
£m
Current
Foreign exchange forward contracts and swaps – fair value through profit or loss 5 (5)
Non-current
Cross-currency interest swaps – cash flow hedges – (15)
Foreign exchange forward contracts and swaps – fair value through profit or loss 2 (1)
7 (21)
Assets
2022
£m
Liabilities
2022
£m
Current
Foreign exchange forward contracts and swaps – fair value through profit or loss 7 (7)
Foreign exchange forward contracts and swaps – cash flow hedges
– (1)
Non-current
Cross-currency interest swaps – cash flow hedges – (8)
Foreign exchange forward contracts and swaps – fair value through profit or loss 2 (2)
9 (18)
The Company employs cross-currency interest rate swaps to exchange the principal and interest coupons in a debt
instrument from one currency to another.
Currency risk
The Company’s foreign exchange policy is to use forward foreign exchange contracts and cross-currency interest
rate swaps both to manage foreign currency cash flow timing differences and to hedge foreign currency
denominated monetary items.
Cash flow hedges
In order to fix the sterling cash outflows associated with the commitments and interest payments – which are mainly
denominated in euros – the Company has taken out forward foreign exchange contracts and cross-currency interest
rate swaps for the same foreign currency amount and maturity date as the expected foreign currency outflow.
The amount recognised in other comprehensive income during the year all relates to the effective portion of the
revaluation loss associated with these contracts. A cumulative loss of £26 million (2022: £37 million of cumulative
gain) was recycled to the Consolidated Income statement to off-set movements on the hedged item, a residual
£7 million loss (2022: £3 million loss) remained on the income statement which was not offset.
235ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
Under IFRS 9, the Company has adopted the ‘cost of hedging’ approach which allows the recognition of the value of
the currency basis at inception of the hedge to be recorded on the Statement of Financial Position and amortised
through net financing costs in the Income Statement over the life of the bond. Any mark-to-market change in fair
value of the currency basis is recognised in ‘cost of hedging’ in the Statement of Comprehensive Income.
Undiscounted financial liabilities
The Company is required to disclose the expected timings of cash outflows for each of its derivative financial liabilities.
The amounts disclosed in the table are the contractual undiscounted cash flows (including interest), so will not always
reconcile with the amounts disclosed on the Statement of Financial Position.
At 31 December 2023*
Carrying
value
£m
Total
contractual
cash flows
£m
Less than
1 year
£m
Between
1 and 2 years
£m
Between
2 and 5 years
£m
Over 5 years
£m
Non-current and current
Cross-currency swaps – cash
flow hedges
Inflow – 542 7 7 528 –
Outflow (15) (580) (16) (16) (548) –
Foreign exchange forward contracts
and swaps – fair value through profit
or loss
Inflow 7 614 514 100 – –
Outflow (6) (614) (514) (100) – –
(14) (38) (9) (9) (20) –
At 31 December 2022*
Carrying
value
£m
Total
contractual
cash flows
£m
Less than
1 year
£m
Between
1 and 2 years
£m
Between
2 and 5 years
£m
Over 5 years
£m
Non-current and current
Foreign exchange forward contracts
and swaps – cash flow hedges
Inflow – 233 233 – – –
Outflow (1) (236) (236) – – –
Cross-currency swaps – cash flow
hedges
Inflow – 560 7 7 546 –
Outflow (8) (596) (16) (16) (564) –
Foreign exchange forward contracts
and swaps – fair value through profit
or loss
Inflow 9 570 403 136 31 –
Outflow (9) (570) (403) (136) (31) –
(9) (39) (12) (9) (18) –
* The Company is jointly and severally liable for VAT at 31 December 2023 of £43 million (31 December 2022: £35 million)
Note vii
Share capital
Allotted, issued
and fully paid
2023
£m
Allotted, issued
and fully paid
2022
£m
Allotted, issued and fully paid ordinary shares of 10 pence each 406 403
Total 406 403
The Company’s ordinary shares give shareholders equal rights to vote, receive dividends and to the repayment of capital.
The Company issued 27 million ordinary shares in the year to the ITV Employees’ Benefit Trust (EBT) to satisfy the
share-based compensation awards. See note 4.8 for further details.
236 ITV plc Annual Report and Accounts 2023
NOTES TO THE ITV PLC COMPANY FINANCIAL STATEMENTS CONTINUED
Note viii
Equity and
dividends
Keeping
it simple
ITV plc is a non-trading investment holding company and derives its profits from
dividends paid by subsidiary companies.
The Directors consider the Company’s capital structure and dividend policy at
least twice a year ahead of announcing results and do so in the context of its
ability to continue as a going concern, to execute the strategy and to invest in
opportunities to grow the business and enhance shareholder value.
The dividend policy is influenced by a number of the principal risks as identified
on pages 57 to 64 that could have a negative impact on the performance
of the Company.
In determining the level of dividend in any year, the Directors follow the dividend
policy and also consider a number of other factors that influence the proposed
dividend and dividend policy, including:
• The level of retained distributable reserves in ITV plc the Company
• Availability of cash resources (as disclosed in note 4.1 to the consolidated
financial statements) and
• Future cash commitments and investment plans, to deliver the Company’s
long-term strategic plan
• Consideration of the factors underlying the Directors’ viability assessment and
• The future availability of funds required to meet longer-term obligations
including pension commitments.
Equity
The retained earnings reserve includes profit after tax for the year of £7 million (2022: £800 million), which includes
dividends of £nil from subsidiaries in 2023 (2022: £980 million).
During the year, the Company provided for £22 million (2022: £192 million) of doubtful debts for amounts owed by its
subsidiary undertakings. £2 million (2022: £11 million) was written back to the Income Statement for provisions of
doubtful debts no longer required.
The recoverability of the amounts owed by subsidiary undertakings is assessed on an annual basis or more
frequently when circumstances indicate that the carrying value may be impaired. Determining whether there is an
indication of impairment requires judgement as the assessment is based on either net assets of the undertaking or
forecast future performance.
The share premium of £174 million remains unchanged in the year. Other reserves of £34 million (2022: £29 million)
comprises Merger reserves of £36 million (2022: £36 million) which relate to share buybacks in prior years and Translation
reserves with net losses of £2 million (net losses of £7 million) which relate to cash flow hedges and cost of hedging.
Dividends
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, the Board proposes a final dividend of 3.3p
(2022:3.3p), giving a full year dividend of 5.0p (2022: 5.0p) per share. In 2023, £201 million of dividends were paid
(2022: £201 million), representing a final 2022 dividend of 3.3p per share and an interim 2023 dividend of 1.7p per share.
Note ix
Contingent
liabilities
Keeping
it simple
A contingent liability is a liability that is not sufficiently certain to qualify for
recognition as a provision where uncertainty may exist regarding the outcome of
future events.
As previously reported, on 12 July 2022, the UK Competition and Markets Authority (CMA) opened an investigation
into certain conduct of ITV and other named companies in the sector relating to the production and broadcasting of
sports content in the United Kingdom. The investigation is at an early stage and the CMA has confirmed it is currently
undertaking further investigation until at least March 2024, subsequent to which ITV anticipates it will receive
additional detail regarding any future steps.
On 11 October 2023, the CMA opened an investigation into certain conduct of ITV and other named companies in
the sector relating to the production and broadcasting of television content in the UK, excluding sports content.
The investigation remains at an early stage and it is not currently possible to reliably quantify any liability that might
result from the investigation. ITV is committed to complying with competition law, and is cooperating with the CMA's
enquiries in relation to both investigations.
There are contingent liabilities in respect of certain litigation and guarantees, broadcasting issues, and in respect of
warranties given in connection with certain disposals of businesses. None of these items are expected to have a
material effect on the Group’s results or financial position.
Under a Group registration, the Company is jointly and severally liable for VAT at 31 December 2023 of £43 million
(31 December 2022: £35 million).
The Company has guaranteed certain performance and financial obligations of subsidiary undertakings.
237ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
Note x
Capital and
other
commitments
There are contingent liabilities in respect of certain litigation and guarantees, broadcasting issues, and in respect
of warranties given in connection with certain disposals of businesses. None of these items is expected to have a
material effect on the Company’s results or financial position.
The Company enters into guarantee contracts to guarantee the performance and/or financial obligations of other
companies within the Group. In this respect, the Company treats these guarantee contracts as contingent liabilities
until it becomes probable that the Company will be required to make a payment under the relevant guarantee.
The Company has a £300 million bilateral loan facility which matures on 30 June 2026. Utilisation requests are
subject to the lender’s ability to source ITV Credit Default Swaps (CDS) in the market at the time the utilisation
request is made. The facility remains free of financial covenants. At 31 December 2023, the facility was undrawn.
During 2023, the Group secured £100 million of committed funding via a new bilateral RCF, which matures in
December 2028. The terms and conditions, including financial covenants but not emissions targets, are aligned
to the £500 million RCF facility. The facility is currently undrawn.
There are no capital commitments at 31 December 2023 (2022: none).
Note xi
Related party
transactions
Keeping
it simple
The related parties identified by the Directors include amounts owed to and from
subsidiary undertakings that are not wholly owned within the Group as well as
transactions with key management. The Company is a holding company with no
commercial activity.
To enable the users of the financial statements to form a view about the effects
of related party relationships on the Company, we disclose the Company’s
transactions with those during the year.
Transactions with subsidiary undertakings that are not wholly owned
The amounts owed by and to these related parties at the year end were:
2023
£m
2022
£m
Amounts owed by subsidiary undertakings that are not wholly owned 42 55
Amounts owed to subsidiary undertakings that are not wholly owned (24) (4)
Amounts owed by subsidiary undertakings that are not wholly owned relate mainly to funding provided to production
companies in our Studios division.
Amounts owed to subsidiary undertakings that are not wholly owned, relate mainly to amounts owed to 3sixtymedia
Limited and World Productions Limited.
Transactions with key management personnel
Key management consists of ITV plc Executive Directors.
Key management personnel compensation, on an accounting basis, is as follows:
2023
£m
2022
£m
Short-term employee benefits 3 3
Share-based compensation 2 3
5 6
Total emoluments and gains on share options received by key management personnel in the year were:
2023
£m
2022
£m
Emoluments 2 3
Gains on exercise of share options 1 –
3 3
238 ITV plc Annual Report and Accounts 2023
SUBSIDIARY UNDERTAKINGS AND INVESTMENTS
Wholly-owned subsidiary undertakings of the Company at 31 December 2023, all of which are wholly owned (directly or indirectly)
and incorporated and registered where stated.
Company Name Country % Holding
12 Yard Productions (Investments) Limited (1)(a) UK 100
12 Yard Productions Limited (1)(a) UK 100
A.C.E. (1988) Limited (1)(a) UK 100
Back Productions Limited (7)(a) UK 100
Big Talk Alone Limited (1)(a) UK 100
Big Talk Cold Feet Limited (1)(a) UK 100
Big Talk Friday Limited (1)(a) UK 100
Big Talk Goes Wrong Limited (1)(a) UK 100
Big Talk Horseface (1)(a) UK 100
Big Talk I Hate You Limited (1)(a) UK 100
Big Talk Investments Limited (1)(a) UK 100
Big Talk Living the Dream Limited (1)(a) UK 100
Big Talk Ludwig Limited (1)(a) UK 100
Big Talk Offenders Limited (1)(a) UK 100
Big Talk Peacock Limited (1)(a) UK 100
Big Talk Pictures Limited (1)(a) UK 100
Big Talk Studios Limited (1)(a) UK 100
Boom Cymru TV Ltd (5)(a) UK 100
Boom Pictures Limited (1)(a) UK 100
Box Clever Technology Limited (1)(a) UK 100
Box Clever Trustees Limited (83)(a) UK 100
BritBox SVOD Limited (1)(a) UK 100
Broad Street Films Limited (1)(a) UK 100
Campania Limited (1)(a)(k) UK 100
Carbon Media Limited (1)(a) UK 100
Carlton Active Limited (1)(a) UK 100
Carlton Cinema Limited (1)(a) UK 100
Carlton Communications Limited* (1)(a)(d) UK 100
Carlton Content Holdings Limited (1)(a) UK 100
Carlton Film Distributors Limited (1)(a) UK 100
Carlton Finance Limited (1)(a) UK 100
Carlton Food Network Limited (1)(a) UK 100
Carlton Programmes Development Limited (1)(a) UK 100
Carlton Screen Advertising (Holdings) Limited (1)(a) UK 100
Carltonco 99 Limited (1)(a) UK 100
Carltonco Eighty-One Limited (1)(a)(b) UK 100
Carltonco Fifty Limited (1)(a)(k) UK 100
Carltonco Forty-Five Limited (1)(a) UK 100
Carltonco Ninety-Six (1)(a)(f) UK 100
Carltonco Seventeen Limited (1)(a) UK 100
Castlefield Properties Limited (1)(a) UK 100
Cat’s on the Roof Media Limited (1)(a) UK 100
Central Television Limited (1)(a) UK 100
Channel Television Holdings Limited (1)(a) UK 100
Cirkus Limited (1)(a) UK 100
Cloth Cat LBB Limited (5)(a) UK 100
Cosgrove Hall Films Limited (1)(a) UK 100
Crook Productions Limited (1)(a) UK 100
Cynhyrchiadau Boomerang Cyf (5)(a) UK 100
Double Double Limited (1)(a) UK 100
Electronic Rentals Group (1)(a) UK 100
EQ Pictures Limited (1)(a) UK 100
Gameface Productions Limited (1)(a) UK 100
GIL Limited (1)(a) UK 100
Gorilla TV Group Limited (5)(a) UK 100
Gorilla TV Limited (5)(a) UK 100
Granada AV Solutions Limited (1)(a) UK 100
Granada Film (1)(a) UK 100
Granada Film Productions Limited (1)(a) UK 100
Granada Group Limited (1)(a) UK 100
Granada Limited (1)(a) UK 100
Granada Media Limited (1)(a)(l) UK 100
Granada Screen (2005) Limited (1)(a) UK 100
Granada Television Limited (1)(a) UK 100
Granada Television Overseas Limited (1)(a) UK 100
Granada UK Rental and Retail Limited (1)(a)(e) UK 100
Interactive Telephony Limited (1)(a) UK 100
Company Name Country % Holding
International Television Enterprises London Limited (1)(a)(d) UK 100
ITC Distribution (1)(a) UK 100
ITC Entertainment Group Limited (1)(a) UK 100
ITC Entertainment Holdings Limited (1)(a) UK 100
ITV (Scotland) Limited (20)(a) UK 100
ITV 112 Limited (9)(a) UK 100
ITV AdVentures Limited (1)(a) UK 100
ITV Alder Limited (1)(a) UK 100
ITV Archie Limited (1)(a) UK 100
ITV Barking Limited (1)(a) UK 100
ITV Breakfast Broadcasting Limited (1)(a) UK 100
ITV Breakfast Limited (1)(a) UK 100
ITV Broadcasting Limited (1)(a) UK 100
ITV Central Limited (1)(a) UK 100
ITV Consumer Limited (1)(a) UK 100
ITV DC Trustee Limited (1)(a) UK 100
ITV Digital Channels Limited (1)(a) UK 100
ITV Duneen Limited (1)(a) UK 100
ITV Enterprises Limited (1)(a) UK 100
ITV Grace Limited (1)(a) UK 100
ITV Holdings Limited (1)(a) UK 100
ITV International Channels Limited (1)(a) UK 100
ITV Investments Limited* (1)(a) UK 100
ITV JCDM Limited (1)(a) UK 100
ITV LTVC (Scotland) Limited (20)(a) UK 100
ITV Mandrake Limited (1)(a) UK 100
ITV Maternal Limited (1)(a) UK 100
ITV Meridian Limited (1)(a) UK 100
ITV Nightingale Limited (1)(a) UK 100
ITV Pension Scheme Limited (1)(a)(b) UK 100
ITV POS Limited (1)(a) UK 100
ITV Properties (Developments) Limited (1)(a) UK 100
ITV Ralph and Katie Limited (1)(a) UK 100
ITV RE Limited (1)(a) UK 100
ITV Rights Limited (1)(a) UK 100
ITV Services Limited (1)(a)(e) UK 100
ITV Shetland Limited (1)(a) UK 100
ITV Spy Limited (1)(a) UK 100
ITV Studios Limited (1)(a) UK 100
ITV Studios Global Distribution Limited (1)(a) UK 100
ITV Studios (Israel) Limited (1)(a) UK 100
ITV Supplementary Pension Scheme Limited (1)(a) UK 100
ITV TFG Holdings Limited (1)(a) UK 100
ITV The Bay Limited (1)(a) UK 100
ITV The Reckoning Limited (1)(a) UK 100
ITV TLC Limited (1)(a) UK 100
ITV Top Class Limited (1)(a) UK 100
ITV Venturer Limited (1)(a) UK 100
ITV Ventures Limited (1)(a) UK 100
ITV Vera Limited (1)(a) UK 100
ITV Wales & West Limited (1)(a) UK 100
ITV WKOW Limited (1)(a) UK 100
ITV Y&M Limited (1)(a) UK 100
ITV2 Limited (1)(a) UK 100
Juice Music UK Limited (1)(a) UK 100
London News Network (1)(a) UK 100
London Weekend Television Limited (1)(a) UK 100
LWT (Holdings) Limited (1)(a)(c) UK 100
Mammoth Screen (End) Limited (1)(a) UK 100
Mammoth Screen (End2) Limited (1)(a) UK 100
Mammoth Screen (End9)Limited (1)(a) UK 100
Mammoth Screen (End6) Limited (1)(a) UK 100
Mammoth Screen (End7) Limited (1)(a) UK 100
Mammoth Screen (End8) Limited (1)(a) UK 100
Mammoth Screen (Evans) Limited (1)(a) UK 100
Mammoth Screen (BHR) Limited (1)(a) UK 100
Mammoth Screen (GK) Limited (1)(a) UK 100
239ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
Company Name Country % Holding
Mammoth Screen (MD) Limited (1)(a) UK 100
Mammoth Screen (MD2) Limited (1)(a) UK 100
Mammoth Screen (MIE) Limited (1)(a) UK 100
Mammoth Screen (NC) Limited (1)(a) UK 100
Mammoth Screen (Pol2) Limited (1)(a) UK 100
Mammoth Screen (Pol3) Limited (1)(a) UK 100
Mammoth Screen (Pol4) Limited (1)(a) UK 100
Mammoth Screen (Pol5) Limited (1)(a) UK 100
Mammoth Screen (Poldark) Limited (1)(a) UK 100
Mammoth Screen (QV) Limited (1)(a) UK 100
Mammoth Screen (Serpent) Limited (1)(a) UK 100
Mammoth Screen (TJ) Limited (25)(a) UK 100
Mammoth Screen (Tower) Limited (1)(a) UK 100
Mammoth Screen (VF) Limited (1)(a) UK 100
Mammoth Screen (Vic3) Limited (1)(a) UK 100
Mammoth Screen (WOF) Limited (1)(a) UK 100
Mammoth Screen (WOF2) Limited (25)(a) UK 100
Mammoth Screen (WOTW) Limited (1)(a) UK 100
Mammoth Screen Ltd (1)(a) UK 100
Metavision Limited (1)(a) UK 100
Millbank Studios (1)(a) UK 100
Monumental Television Limited (1)(a) UK 100
Morning TV Limited (1)(a) UK 100
Moving Picture Company Films Limited (1)(a) UK 100
MT Ghosts Limited (1)(a) UK 100
MT Marlow Murder Club Limited (1)(a) UK 100
MT Mrs Sidhu Limited (1)(a) UK 100
MT Maryland Limited (1)(a) UK 100
MT Murder in Provence Limited (1)(a) UK 100
New Providence Productions Limited (1)(a) UK 100
Output Productions Limited (3)(a) UK 100
Oxford Scientific Films Limited (5)(a) UK 100
Pickwick Packaging Limited (1)(a) UK 100
Planet Woo Limited UK 100
Planet V Limited (1)(a) UK 100
Possessed Limited (1)(a) UK 100
QSP ATF Limited (1)(a) UK 100
QSP Buried Limited (1)(a) UK 100
QSP FMO Limited (1)(a) UK 100
QSP Ghosted Limited (1)(a) UK 100
QSP Men Up Limited (5)(a) UK 100
QSP MU Limited (1)(a) UK 100
QSP MY Limited (1)(a) UK 100
QSP PD Limited (1)(a) UK 100
QSP TRK Limited (1)(a) UK 100
QSP Nolly Limited (1)(a) UK 100
QSP SO limited (1)(a) UK 100
SDN Limited (1)(a) UK 100
Second Act (Grace) Limited (1)(a) UK 100
Second Act Productions Limited (1)(a) UK 100
Sightseers Film Limited (1)(a) UK 100
So Television Limited (1)(a) UK 100
The Addressable Platform Limited UK 100
The Garden Productions Limited (1)(a) UK 100
TwoFour Broadcast Limited (3)(a) UK 100
TwoFour Group Holdings Limited (1)(a) UK 100
TwoFour Group Limited (3)(a) UK 100
UTV Limited (24)(a) UK 100
UTV Pension Scheme Limited (24)(a) UK 100
Westcountry Television Limited (1)(a) UK 100
World of Sport Wrestling Limited (1)(a) UK 100
Yorkshire Television Limited (1)(a) UK 100
Zebedee Productions Limited (1)(a) UK 100
Artist Services Cable Pty Ltd (26)(a) Australia 100
Artist Services Investments Pty Limited (26)(a) Australia 100
Artist Services Productions Pty Ltd (26)(a) Australia 100
Granada Media International (Australia) Pty Ltd (26)(a) Australia 100
Granada Media Investments (Australia) Pty Ltd (26)(a) Australia 100
Granada Productions Pty Ltd (26)(a) Australia 100
Company Name Country % Holding
ITV Services Pty Ltd (26)(a) Australia 100
ITV Studios Australia Pty Limited (26)(a) Australia 100
ITV Studios Global Distribution Pty Limited (26)(a) Australia 100
ITV SVOD Australia Pty Limited (26)(a) Australia 100
Totally Full Frontal Productions Pty Limited (26)(a) Australia 100
ITV Holdings (Cayman) Limited (27)(a) Cayman
Islands
100
ITV Studios Denmark Holdings Aps (73)(a) Denmark 100
United Productions ApS (74)(a) Denmark 100
ITV Studios Finland Oy (40)(a) Finland 100
Granada (Fiji) Pte Ltd. (48)(a) Fiji 100
ITV Studios France Holdings SAS (64)(a) France 100
ITV Studios TV France (64)(a) France 100
ITV Studios France SAS (64)(a) France 100
Tangaro (51)(a) France 100
Phara Prod International (51)(a) France 100
Tetra Media Studios SAS (51)(a) France 100
Bildergarten Entertainment GmbH (55)(a) Germany 100
ITV Studios Germany GmbH (28)(a) Germany 100
ITV Studios Germany Holdings GmbH (28)(a) Germany 100
ITV Studios Germany Fiction GmbH (55)(a) Germany 100
Oystercatcher GmbH (55)(a) Germany 100
Windlight Pictures GmbH (44)(a) Germany 100
Elecrent Insurance Limited (21)(a) Guernsey 100
ITV Studios Global Distribution (Hong Kong) Limited (58)(a) Hong Kong 100
Talpa China Limited (57)(a) Hong Kong 100
Armoza International Media Ltd (56)(a) Israel 100
Channel Television Limited (22)(a) Jersey 100
ITV London Properties Limited (23)(a) Jersey 100
ITV Properties (Jersey) Limited (23)(a) Jersey 100
Global Music & Talent Agency B.V. (41)(a) Netherlands 100
ITV (Europe) Holdings B.V.* (41)(a) Netherlands 100
ITV Studios Global Entertainment B.V. (41)(a) Netherlands 100
ITV Studios Holding B.V.* (41)(a) Netherlands 100
ITV Studios Netherlands B.V. (42)(a) Netherlands 100
ITV Studios Netherlands Content B.V. (42)(a) Netherlands 100
ITV Studios Netherlands Drama B.V. (43)(a) Netherlands 100
ITV Studios Netherlands Holding B.V. (43)(a) Netherlands 100
ITV Studios Norway AS (70)(a) Norway 100
ITV Studios Norway Vest AS (70)(a) Norway 100
ITV GE (Asia) Pte Limited (77)(a) Singapore 100
ITV Studios Spain SL (78)(a) Spain 100
ITV Studios Netherlands Servicios SL (84)(a) Spain 100
ITV Studios Sweden Drama AB (59)(a) Sweden 100
ITV Studios Scandinavia Holdings AB (59)(a) Sweden 100
ITV Studios Germany GmbH, Köln, Zweigniederlassung Zürich
(60)(m)
Switzerland 100
ALB1819 Productions Inc. (30)(j) USA 100
Bertha Productions LLC (30)(h) USA 100
Big Return Productions LLC (30)(h) USA 100
Cardinal Productions of Ohio, Inc. (30)(j) USA 100
Carlton Media Company, Inc. (30)(j) USA 100
Cranktown Productions Inc. (30)(j) USA 100
Critical Productions Inc (30)(j) USA 100
Electric Farm Entertainment Holdings Inc. (30)(j) USA 100
Feeding Time Productions, LLC (34)(h) USA 100
Fourth State Productions Inc (35) (j) USA 100
Gear Shop Inc. (30)(j) USA 100
Got A Text Inc. (30(j) USA 100
Granada Cracker US Productions (32)(j) USA 100
Granada Television International, Inc. (30)(j) USA 100
Grafting 101, Inc. (30)(h) USA 100
Gurney Productions, LLC (32)(h) USA 100
GWC Enterprises Inc. (30)(j) USA 100
Hamdon Entertainment, Inc. (30)(j) USA 100
High Noon Group, LLC (33)(h) USA 100
High Noon Productions, LLC (33)(h) USA 100
ITC Distribution, LLC (30)(h) USA 100
ITC Entertainment Group, Inc (30)(j) USA 100
ITC Films, LLC (30)(h) USA 100
240 ITV plc Annual Report and Accounts 2023
SUBSIDIARY UNDERTAKINGS AND INVESTMENTS CONTINUED
Company Name Country % Holding
ITC Productions, LLC (30)(h) USA 100
ITV America Inc. (30)(j) USA 100
ITV Bedrock Holding, Inc. (30)(h) USA 100
ITV Believe Holding, Inc. (30)(j) USA 100
ITV Blumhouse Holding Inc (30)(j) USA 100
ITV Diga Holding, Inc (30)(j) USA 100
ITV Entertainment Services Inc.( 30)(j) USA 100
ITV Global Entertainment, Inc. (30)(j) USA 100
ITV Gurney Holding Inc. (30)(j) USA 100
ITV HN Holding Inc. (30)(j) USA 100
ITV International Corporation (30)(j) USA 100
ITV Leftfield Holding Inc. (30)(j) USA 100
ITV New Form Holding Inc. (30)(j) USA 100
ITV NewTV Holding Inc. (30)(j) USA 100
ITV Popco Holding Inc. (30)(j) USA 100
ITV Southpoint Holding Inc (30)(j) USA 100
ITV Studios America Inc. (30)(j) USA 100
ITV Studios, Inc. (32)(j) USA 100
ITV Studios The Voice USA, Inc. (32)(j) USA 100
ITV SVOD Holding Inc. (30)(j) USA 100
ITV Thinkfactory Holding Inc. (30)(j) USA 100
ITV Tomorrow Holding, Inc. (30)(j) USA 100
ITV US Holdings, Inc. (30)(j) USA 100
JB Entertainment Holding Company, Inc. (30)(j) USA 100
Kirkstall Road Enterprises, Inc. (30)(j) USA 100
Company Name Country % Holding
Krewed Inc (30)(j) USA 100
Leftfield Entertainment, LLC (30)(h) USA 100
Leftfield Pictures of NY Holdings, LLC (30)(h) USA 100
Leftfield Pictures of NY, LLC (30)(h) USA 100
Leftfield Ventures, LLC (30)(h) USA 100
Loud Television, LLC (30)(h) USA 100
LWT Enterprises Inc. (30)(j) USA 100
Marriage Boot Camp Reality Stars, LLC (30)(h) USA 100
Moving Pictures Services Inc. (30)(j) USA 100
Outpost Entertainment LLC, (30)(h) USA 100
Over the Pond Productions, Inc. (30)(j) USA 100
Poison Pen Studios Inc. (30)(j) USA 100
Post 460 Inc (30)(j) USA 100
Quay Street Enterprises, Inc. (30)(j) USA 100
Sandia Pictures Inc (30)(j) USA 100
Sirens Media, LLC (30)(h) USA 100
Solowe Productions Inc (30)(j) USA 100
Southbank Studios Inc. (30)(j) USA 100
Southsquare Productions Inc. (30)(j) USA 100
The Casting Hive Inc. (30)(j) USA 100
Thinkfactory Group, LLC (30)(h) USA 100
Thinkfactory Media, LLC (30)(h) USA 100
Trailer Park Productions, Inc (30)(j) USA 100
Upper Ground Enterprises, Inc. (30))(j) USA 100
OTHER SUBSIDIARIES, JOINT VENTURES, ASSOCIATES AND OTHER SIGNIFICANT HOLDINGS
Company Name Country % Holding
Absolutely Rights Limited (6)(f) UK 20
That Mitchell and Webb Company Limited (7)(a) UK 20
BARB Audiences Limited (82)(i) UK 20.6
Live Tech Games Limited (78)(a)(e) UK 21.21
Route 24 Limited (17)(a) UK 24.9
DTV Services Limited (13)(a) UK 25
Clearcast Limited (11)(a) UK 25
Genial Productions Limited (39)( a) UK 25
Koska Limited (53)(a) UK 25
South Shore Productions Limited (54) (a) UK 25
Thinkbox TV Limited (16)(a) UK 28.58
Independent Television News Limited (15)(a) UK 40
Malacara Limited (5)(a) UK 49
British Film-Makers Limited (1)(a) UK 50
Denipurna Limited (1)(a) UK 50
Digital 3 and 4 Limited (12)(a) UK 50
Noho Film and Television Limited (18)(a) UK 50
Standard Music Limited (19)(a) UK 50
Tell Me Everything Limited (18)(a) UK 50
BritBox International Limited (1)(a) UK 50
BritBox International Trading Limited (1)(a) UK 50
3sixtymedia Limited (1)(a) UK 80
Escapade Bidco Limited (1)(a) UK 79.5
Plimsoll Productions Limited (1)(a) UK 79.5
Plimsoll International Ltd (1)(a) UK 79.5
Year on Earth Productions Ltd (1)(a) UK 79.5
Titan Productions Ltd (1)(a) UK 79.5
Magnify Content Media Ltd (1)(a) UK 79.5
Age Before Beauty Limited (4)(a) UK 90
Gold Digger Productions Limited (4)(a) UK 90
Mainstreet Pictures Limited (4)(a) UK 90
Unforgotten Productions Limited (4)(a) UK 90
WP Anne Limited (1)(a) UK 95
WP Bodyguard Limited (1)(a) UK 95
WP Delia Limited (1)(a) UK 95
WP LOD5 Limited (1)(a) UK 95
WP Vigil Limited (1)(a) UK 95
Company Name Country % Holding
WP Fifteen Limited (1)(a) UK 95
WP Lockerbie Limited (1)(a) UK 95
WP LOD6 Limited (1)(a) UK 95
WP Save Me 2 Limited (1)(a) UK 95
WP The Gathering Limited (1)(a) UK 95
WP Diplomat Limited (1)(a) UK 95
WP Showtrial Limited (1)(a) UK 95
WP The Suspect Limited (1)(a) UK 95
WP Pembrokeshire Limited (1)(a) UK 95
WP Karen Pirie Limited (1)(a) UK 95
WP Malpractice Limited (1)(a) UK 95
WP RM Limited (1)(a) UK 95
World Productions Limited (1)(a) UK 95
GC Films Pty Limited (26)(a) Australia 49
BritBox Australia Management Pty Limited (38)(a) Australia 50
ATP Post Pty Ltd Australia 51
ES Productions Pty Ltd Australia 51
Lingo Pictures Pty Ltd Australia 51
Messenger Productions Pty Ltd Australia 51
Prosper Productions Pty Ltd Australia 51
Queen of Oz Productions Pty Ltd Australia 51
Secrets Productions Pty Ltd Australia 51
Secrets 2 Productions Pty Ltd Australia 51
Upright Productions Pty Ltd Australia 51
Upright Productions 2 Pty Ltd Australia 51
Apple Tree Productions ApS (75)(a) Denmark 51
Gedesel (52)(a) France 50
SCI MD 60 (51)(a) France 50
15.15 Productions (71)(a) France 51
Funny Corp (51)(a) France 51
Macondo Productions Audiovisuels (51)(a) France 51
Beaubourg Stories 2 (72)(a) France 56.01
Eldorado Fiction (51)(a) France 62.4
Beaubourg Stories (72)(a) France 70.01
Balina Films (72)(a) France 72.51
Beaubourg Fiction (72)(a) France 72.51
Tetra Media Fiction (51)(a) France 78
241ITV plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
Company Name Country % Holding
Colette Productions (51)(a) France 80
Shoot Again Productions (51)(a) France 95
Beaubourg Audiovisual (51)(a) France 95
Think Cattleya Srl (37)(a) Italy 40
Radio Cattleya Srl (37)(a) Italy 80
Cattleya Srl (37)(a) Italy 80
Cattleya International Srl (37)(a) Italy 51
Cattleya Producciones SL (37)(a) Spain 51
Appletree Productions AB (59)(a) Sweden 51
ITV Studios Sweden AB (59)(a) Sweden 100
Maximum Media Production FZ-LLC (63)(a) UAE 100
ITV Studios Arabia Holding Ltd (63)(a) UAE 100
ITV Studios Middle East FZ-LLC (63)(a) UAE 90.2
Tomorrow Friends LLC (30)(h) USA 45
Company Name Country % Holding
Bedrock Entertainment LLC (30)(h) USA 40
Southrock Productions LLC (30)(h) USA 40
BritBox, LLC (36)(h) USA 50
Blumhouse TV Holdings LLC (30)(h) USA 45
Work Friends LLC (30)(h) USA 45
Circle of Confusion Television Studios LLC (30)(h) USA 51
South Circle Productions LLC (30)(h) USA 51
BB Rights, LLC (30)(h) USA 50
Jaffe/Braunstein Entertainment, LLC (31)(h) USA 51
Tomorrow Studios LLC (30)(h) USA 60
Next Steps Productions, LLC (30)(h) USA 60
Plimsoll Productions USA, Inc USA 79.5
Yellow Productions USA, Inc USA 79.5
MEMBERSHIPS, PARTNERSHIPS AND COMPANIES LIMITED BYGUARANTEE
Company Name Country % Holding
ITV Network Limited (1)(i) UK 100
ITV LTVC Scottish Limited Partnership (68)(h)** UK 100
ITV Scottish Limited Partnership (68)(h)** UK 100
Producers Rights Agency Limited (66)(i) UK 50
DTT Multiplex Operators Limited (67)(i) UK 25
Company Name Country % Holding
Everyone TV Limited (13)(i) UK 25
BritBox Australia Partnership Australia 50
Futureflip Entertainment India LLP (69)(h) India 100
The Lab Television 2013 Limited Partnership (61)(a) Israel 50
The Lab Television Limited (61)(a) Israel 50
ADDRESS KEY
(1) ITV White City, 201 Wood Lane,
London W12 7RU, United Kingdom
(2) 218 Penarth Road, Cardiff, CF11 8NN,
United Kingdom
(3) Twofour Studios, Estover, Plymouth,
Devon, PL6 7RG, United Kingdom
(4) Kingsbourne House, 229–231 High Holborn,
London, WC1V 7DA, United Kingdom
(5) Gloworks, Porth Teigr Way, Cardiff, Wales,
CF10 4GA, United Kingdom
(6) 18 The Glasshouse Studios, Fryern Court
Road, Fordingbridge, Hampshire, SP6 1NG,
United Kingdom
(7) 26 Nassau Street, London, W1W 7AQ, United
Kingdom
(8) 5 New Street Square, London, EC4A 3TW,
United Kingdom
(9) Orange Tower, Media City UK, Salford M50
2HF
(10) The Met Building, 22 Percy Street, London,
W1T 2BU, United Kingdom
(11) 4 Roger Street, 2nd Floor, London, WC1X 2JX,
United Kingdom
(12) 124 Horseferry Road, London, SW1P 2TX,
United Kingdom
(13) Tryptych Bankside, 6th Floor, 185 Park Street,
London, SE1 9SH
(14) 23-24 Newman Street, London, W1T 1PJ,
United Kingdom
(15) 200 Gray’s Inn Road, London, WC1X 8HF,
United Kingdom
(16) Manning House, 22 Carlisle Place, London,
SW1P 1JA, United Kingdom
(17) 325-327 Oldfield Lane North, Greenford,
Middlesex, United Kingdom, UB6 0FX
(18) 3rd Floor 20-22 Berkeley Square, London,
United Kingdom, W1J 6EQ
(19) Roundhouse, 212 Regent’s Park Road,
London, NW1 8AW, United Kingdom
(20) Quartermile One, 15 Lauriston Place,
Edinburgh, Scotland, EH3 9EP, United
Kingdom
(21) PO Box 230, Heritage Hall, Le Merchant
Street, St Peter Port, Guernsey, GY1 4JH
(22) Le Capelain House, Castle Quay, St. Helier,
JE2 3EH, Jersey
(23) Ogier House, The Esplanade, St. Helier, JE4
9WG, Jersey
(24) City Quays 2, 8th Floor, 2 Clarendon Road,
Belfast, BT1 3YD, United Kingdom
(25) Office 306, Forsyth House, Cromac Square,
Belfast, Northern Ireland, BT2 8LA, United
Kingdom
(26) Level 4, 19 Harris Street Pyrmont NSW 2009
(27) Ocorian Trust (Cayman) Limited, Windward 3,
Regatta Office Park, PO Box 1350, Grand
Cayman KY1-1108, Cayman Islands
(28) Agrippastraße, 87-93, 50676, Köln, Germany
(29) Keplerstrasse 4-6, 10589, Berlin, Germany
(30) The Corporation Trust Company, Corporate
Trust Center, 1209 Orange Street,
Wilmington, Newcastle, DE 19801, USA
(31) 321 Southern Beverly Drive, Suite M, Beverly
Hills, CA 90212, USA
(32) CT Corporation System, 818 West Seventh
Street, Suite 930, Los Angeles, CA 90017, USA
(33) The Hodson Law Firm, 1129, East 17th Avenue,
Denver, CO 80014, USA
(34) CT Corporation System, 3867 Plaza Tower
Drive East Baton Rouge Parish, Baton Rouge,
LA 70816, USA
(35) CT Corporation System, 289 S. Culver Street,
Lawrenceville, GA, 30046-4805, USA
(36) 1120 Avenue of Americas, 5th Floor, New York,
NY10036, USA
(37) Piazzale Valerio Massimo, 7, 00162, Roma,
Italy
(38) Level 1, 35-51 Mitchell Street, McMahons
Point, NSW 2060, Australia
(39) 39 Long Acre, London, WC2E 9LG, United
Kingdom
(40) Hämeentie 15A, 00500 Helsinki, Finland
(41) Familie de Mollaan 1, 1217 ZB, Hilversum,
Netherlands
(42) Koos Postemalaan 8, 1217 ZC, Hilversum,
Netherlands
(43) Haarlemmer Houttuinen, 21 1013 GL,
Amsterdam, Netherlands
(44) Rumfordstrasse 21a, Munchen, 80469,
Germany
(45) Noorderweg 8, 1221 AA, Hilversum,
Netherlands
(46) Zevenend 45, 1251 RL, Laren, North Holland,
Netherlands
(47) Hollandse Kade 34, 1391JM, Abcoude,
Netherlands
(48) Level 3, Pacific House, Butt Street. Suva, Fiji
(49) Westersingel 108, 3015 LD Rotterdam,
Netherlands
(50) Keizersgracht 149a, 1015CL, Amsterdam,
Netherlands
(51) 60 rue Marcel Dassault, 92100, Boulogne-
Billancourt, France
(52) 4 rue de Commaille, 75007, Paris, France
(53) Europa House, Goldstone Villas, Hove,
Sussex BN3 3RQ
(54) 210 High Holborn, London, England, WC1V
7HD
(55) Genthiner Strasse 5, 10785 Berlin, Germany
(56) 16 Haarbaa St, Tel Aviv 6473916, Israel
(57) 11/F, Unit B, Winbase Centre, 208 Queen’s
Road Central, Sheung Wan, Hong Kong
(58) Rooms 517–520, 5th Floor, Sun Hung Kai
Centre, 30 Harbour Road, Wan Chai, Hong
Kong
242 ITV plc Annual Report and Accounts 2023
SUBSIDIARY UNDERTAKINGS AND INVESTMENTS CONTINUED
* Direct subsidiary
** Having met the criteria under Regulation 7 of the Partnership (Account) Regulations 2008 (SI 2008/569) these Limited Partnerships have taken the exemption to deliver accounts
to the Registrar of Companies
(59) Soder Malarstrand 65, 11825, Stockholm,
Sweden
(60) Scharenmoosstrasse 105, 8052, Zurich,
Switzerland
(61) 23 Habarzel Street, Tel Aviv, 69710, Israel
(63) Building 2, Dubai Media City, Dubai, UAE
(64) 12 boulevard des Iles, 92130 Issy-les-
Moulineaux, Paris, France
(65) Avenida Cidade de Lisboa, Frente Sucupira, 2°
andar, Cidade de Praia, Cape Verde
(66) Fitzrovia House, (3rd Floor), 153-157
Cleveland Street, London, W1T 6QW,
United Kingdom
(67) 27 Mortimer Street, London, England,
W1T 3JF
(68) C/O Dentons UK and Middle East LLP,
Quartermile One 15 Lauriston Place,
Edinburgh, EH3 9EP
(69) #1302, Tower-3, Indiabulls Finance Centre,
Senapati Bapat Road, Elphinstone Road
(West), Mumbai, Mumbai City, Maharashtra
40013, India
(70) Lars Hilles Gate 30, 5008, Bergan, Norway
(71) 10 rue Maître Jacques, 92100 Boulogne,
Billancourt, France
(72) 5–7 rue Saint-Augustin, 75002, Paris, France
(73) DLA Piper Denmark, Radhuspladsen 4, 1550
Kobenhavn V, Denmark
(74) Finsensvej 6E, 2000, Frederiksberg, Denmark
(75) Aumento Advokatfirma, Ny Osteragde 3,4,
1101, Kobenhavn, Denmark
(76) 120 West 3rd Avenue #201, Vancouver BC
V5Y 1E9, Canada
(77) 101c Telok Ayer Street, Singapore 068574
(78) Calle Velaquaz 18, 6-D, 28001 Madrid, Spain
(79) 3 Kings Brook Close, Rempstone,
Loughborough, England, LE12 6RR
(80) 9th Floor, Azar Building, Sami Solh Avenue,
Beiruit, Lebanon
(81) 1 Television Centre, 101 Wood Lane, London,
United Kingdom, W12 7FA
(82) 3rd Floor, 20 Orange Street, London, United
Kingdom, WC2H 7EF
(83) Portwall Place, Portwall Lane, Bristol, BS1
6NA
(84) Calle Puccini 3, San Bartolome de Tirajana,
35109 Las Palmas, Gran Canaria, Spain
INTEREST KEY
(a) Ordinary
(b) Deferred
(c) Special deferred
(d) Redeemable preference
(e) Cumulative preference
(f) Cumulative redeemable preference
(g) Convertible preference
(h) Membership / Partnership
(i) Guarantee
(j) Common
(k) Preference
(l) Part Preference
(m) Branch
243ITV plc Annual Report and Accounts 2023
ADDITIONAL INFORMATION
GLOSSARY
Advertiser funded platform or channel –
platform or channels that include
advertising as part of the user experience
e.g. ITV Family of channels, ITVX
Broadcasters’ Audience Research Board
(BARB) – organisation owned by
broadcasters and advertisers, providing
data on linear and online television viewing
statistics by UK households
Catch up viewing – non-live viewing of
recently broadcast television programmes,
either via a recording device, often called
a personal video recorder (PVR) or digital
video recorder (DVR), such as Sky or
through a streaming service such as ITVX,
BBC iPlayer, Channel 4 or My5
Channel 3 licences – the 15 regional
licences and one national licence awarded
to transmit Channel 3 across the UK. All are
owned by ITV except for two of the regional
licences which are owned by STV
Digital revenue – includes revenue from
digital advertising, subscription, linear
addressable advertising, digital
sponsorship and commercial partnerships,
ITV Win (digital competitions platform)
and other revenues from digital
business ventures
FAST channels – Free Ad-supported
Streaming TV services – curated,
data-driven channels that are always on
with content that evolves and changes
depending on viewer preferences
Free‑to‑air (FTA) television – viewing of
television through devices not requiring
a subscription such as the Freeview or
Freesat services
Intellectual Property (IP) – intangible
property that is the result of creativity
Inventory – advertising inventory is the
number of advertisements or amount of
advertising space, which we have available
to sell to advertisers
Impact or Commercial Impact – one
Commercial Impact is defined as one
viewer watching one 30-second television
commercial
ITV Family – the ITV family of linear TV
channels which includes ITV1, ITV2, ITV3,
ITV4, ITVBe, CITV (which moved onto ITVX
in H2 2023) and all associated +1 and
HD equivalents
Linear television – television service
where the viewer has to watch a scheduled
TV programme at the particular time it is
offered, and on the particular channel it is
presented on
Monthly Active User (MAU) – the average
number of monthly registered users across
a defined period who accessed ITV owned
and operated on-demand platforms (web,
mobile, or connected TV)
Net Advertising Revenue (NAR) – the
amount of money received by a broadcaster
as payment for television spot advertising
net of any commission paid to agencies
Non‑consolidated licensees – the two
regional channel 3 licences that ITV does
not own. These licences are owned by STV
and revenues received from these licences
for ITV programming content are referred
to as minority revenues
Ofcom – communications regulator in the
UK who regulate the TV, radio and
video-on-demand sectors, fixed-line
telecoms (phones), mobiles and postal
services, plus the airwaves over which
wireless devices operate
SDN – multiplex operator owned by ITV,
which operates one of the eight national
multiplex licences in the UK on Freeview
Share of Commercial Impacts (SOCI) –
the term used to define the share of total
UK television commercial impacts
delivered by one channel or group of
channels. This measure excludes viewing
of BBC channels as they do not generate
commercial impacts. Unless stated
otherwise, SOCI figures cited throughout
this report are based on BARB data and
are based on the universe of Adults (16+)
Share of Viewing (SOV) – the share of the
total viewing audience during a defined
period gained by a programme or channel.
This measure includes viewing of BBC
channels. Unless stated otherwise, SOV
figures cited throughout this report are
based on BARB data and are based on the
universe of individuals
Share of Commercial Viewing (SOCV) –
the share of total viewing of audiences
during a defined period as a proportion of
all ad-supported commercial broadcaster
viewing in the UK. This measure excludes
the BBC
Simulcast viewing – viewing live TV
channels via a broadcaster’s streaming
service such as ITVX, at the same time as
broadcast on linear TV
Spot advertising – linear television
advertising occupying a short break during
or between programmes
Streaming service – online provider of
unlimited, on-demand streaming of
content such as TV shows, films and
original programming over the internet to a
TV, computer, or mobile device
Subscriptions – users of ITVX’s premium
tier, which includes those who pay ITV
directly, those who are paid for by an
operator, and free trialists
Subscription streaming service – a
paid-for, subscription streaming service
available to subscribers on demand but
for a fee e.g. ITVX premium
Total Advertising Revenue (TAR) – this
includes ITV Family NAR, advertising via
ITVX, programme sponsorship revenue
and other affiliated advertising revenue
streams
Total ITV Streaming Hours – the total
number of hours viewers spent watching
ITV across all streaming platforms. This
figure includes both advertiser-funded
and subscription streaming
YouView – a joint venture (with the
BBC, Channel 4, Channel 5, BT, TalkTalk,
and Arqiva) to operate and promote a
hybrid television platform combining
Freeview channels with catch up and
on-demand service
Printed in the UK by Pureprint using vegetable inks and
their environmental printing technology.
Pureprint is a CarbonNeutral® company. Both manufacturing mill
and the printer are registered to the Environmental Management
System ISO14001 and are Forest Stewardship Council® (FSC)
chain-of-custody certified.
Designed and produced by
ITV plc
www.itv.com
Investors: www.itvplc.com
Stock code: ITV
ITV plc Annual Report and Accounts for the year ended 31 December 2023