ITV : Q&A Transcript 2023

ITV plc 2023 AGM - Q&A Transcript

External Auditor - PricewaterhouseCoopers

A question regarding the duration of PwC's engagement and whether the contract will be put out for tender in the near future.

Question answered by Andrew Cosslett, Chair

ITV appointed PricewaterhouseCoopers last year, so they are new as our external auditors. I think there are doing an outstanding job. The audit profession as a whole has received quite a lot of scrutiny over the last two to three years. There are a new set of regulations being put together by the FRC under the auspices of the government which are going to tighten regulation in this industry and the way ITV runs the audit process. We review the quality of their work through the Audit Committee under Margaret Ewing's leadership in a well-documented and thorough review. We have been very pleased with their work, and we are glad they are on the team. They will be with us, all other things being equal, for a maximum of eight years.

Social Purpose

A question regarding the continued social purpose reporting in the annual report and targets set.

Question answered by Andrew Cosslett, Chair

Social purpose is a very big focus for ITV because we can make a very big difference not just in the way we run our organisation, but we also have an opportunity to influence behaviour and the way things are in the real world. The social purpose report details the work we are doing in this area, our climate change agenda and what we are doing to reduce our carbon emissions, including waste. Our wellbeing initiatives are also set out, which is a big focus for us at the moment. It is a great report if you have not read it, it shows the progress that we are making and we are very proud of it. On the carbon front we have been given an A rating by one of the global authorities in this called the CDP - the Carbon Disclosure Project. Only 2% of the organisations in the world get this.

Channel 4 privatisation

A question regarding the proposed channel 4 privatisation and whether ITV had considered making a bid

Question answered by Andrew Cosslett, Chair

The privatisation of Channel 4 is no longer going ahead. Following recent changes in government it is no longer a proposal and will not be part of the future Media Bill.

Share price

A query regarding the decline of the Company's share price and whether this can still be measured as a successful financial performance

Question answered by Andrew Cosslett, Chair

The frustration on the share price is something we all share. ITV has a strategy which involves investment and we announced last year a major investment into ITVX. The plan is that it will be enable ITV to grow in the future, because we will have invested in the technology and the skills that take us forward. That investment was significant but in the long-term interest of the shareholders, which is what the Board focuses on more than everything else, even though the impact on share prices is disappointing and frustrating.

Love Island

Query regarding the vetting processes for contestants on the programme

Question answered by Carolyn McCall, CEO

ITV has an extensive casting process for the 15,000 to 18,000 people applying to go on Love Island. The process helps to narrow down the applicants, to ensure the successful candidates are both physically and mentally fit enough, and that they will also be able to cope with the fact that they are expected to be entertaining. There is a huge amount that goes into the casting. If there was anything that did not fit the show's values the producers would pull them out. It is a very rigorous process which has been very well developed because we are into multiple series of Love Island.

Share Action

Query regarding ITV's policies related to the insecurity of work, particularly for lower-paid employees and contracted workers. Share Action has had successful engagement on the Living Wage its members are now engaging with companies on the issue of insecure work and promoting the Living Hours standard as a marker of responsible business practice.

I would like to ask the Board to give an overview of ITV's approach to contracts and how their current practices compare to the above measures. Will the company be a leader and become an early adopter of the standard? Lastly, would ITV still be willing to meet with Share Action, the Living Wage Foundation and investors from the Good Work Coalition to discuss this further?

Question answered by Andrew Cosslett, Chair

Yes, ITV will be happy to engage with Share Action on this topic. Please connect with David Osborn, our Chief People Officer following this meeting to arrange a suitable time.

AGM venue

Query regarding the possibility of ITV hosting its AGM at one of its office spaces

Question answered by Andrew Cosslett, Chair

We recently consolidated our London presence to one building as a major cost saving initiative. However, as a result this means there is little available space and therefore we would not consider holding an AGM at our offices which are based in White City.

Betting platform

Query whether ITV would consider building its own online betting platform

Question answered by Carolyn McCall, CEO

No, we would not consider this as it is not our business model.

'Nolly'/ 'It's a Sin'

Query as to why ITV did not buy 'It's a Sin' yet it bought 'Nolly' which was also made by Nicola Shindler.

Question answered by Carolyn McCall, CEO

Nicola Shindler recently joined ITV Studios and is a formidable talent, however she was not part of the ITV Studios family at the time that she made 'It's a Sin' which was commissioned by Channel 4.

Balance sheet and Net Debt

Query as to whether ITV's net debt is too high at £650m when the profit is £500m.

Question answered by Chris Kennedy, Group CFO and COO

We have a capital allocation methodology and one of the key parts of that is that we will maintain investment grade status. What that means is actually we are in the top tier of companies in terms of our debt. Credit rating agencies who rate governments and big companies all over the world have rated us as being in the top tier with this investment growth. That is why we are maintaining a strong balance sheet.