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Good morning, everyone, and welcome to ITV's 2026 Interim Results. As always, I'm joined today by Chris Kennedy, our CFO and COO. Having spoken to you very recently following our announcement of the transaction with Sky, we will keep today's update relatively short, starting with a summary of the key messages from the first half, and then Chris will take you through our financial and operating performance in more detail.

I'll then provide a strategic update on both businesses. ITV delivered a solid performance in H1, and we remain firmly on track to deliver our full year guidance of good growth in ITV Studios and strong profitable Digital revenue growth across M&E. As announced earlier this month, we have agreed the sale of our M&E business to Sky. And as we've said, this is a transformative moment for ITV. The transaction will create significant value for shareholders, enabling a GBP 950 million net cash return, excluding any contingent consideration.

Crucially, it will also unlock the value of ITV Studios, which, as you know, is an attractive and growing global content business that will deliver long-term value to shareholders through its clear value creation strategy. The Board has declared an interim dividend of 1.7p per share, in line with last year. In addition, we are today announcing a GBP 100 million share buyback, which represents an early return of part of the previously announced GBP 950 million net cash return expected on completion of the sale of M&E.

Turning to the first half performance. Both divisions delivered revenue growth. ITV Studios saw strong growth in the U.K. production sector and through global distribution revenues from our IP Library. And in M&E, the ratings and commercial success of the Men's Football World Cup drove a good performance, and there was continued strong growth in Digital revenue driven by ITVX. Group EBITDA was flat, reflecting the expected second half weighted Studios margin and profit. I'm now going to hand over to Chris to go through the numbers in a bit more detail.

Thank you, Carolyn, and good morning, everyone. Total Studios revenue grew 2% to GBP 912 million, 3% on an organic basis, which continues to outpace the global content market. EBITDA was down 9% to GBP 97 million with a margin of 11%. As previously guided, both sales and margin are weighted to the second half of the year and to Q4 in particular.

We have a strong pipeline of big budget scripted dramas and unscripted formats scheduled for delivery in H2 and good visibility on revenue.

Moving on to Media & Entertainment. We delivered GBP 850 million in total advertising revenue, up 3% year-on-year. Our Digital strategy continues to prove its value with Digital revenues growing 13% to GBP 307 million. ITVX viewing grew by 27% in the first half with June being our first month with over 20 million monthly active users.

Both Digital and linear revenues were supported by the FIFA Men's World Cup, which delivered exceptional mass audiences. Cost discipline across both content and non-content remained strong. We've reduced overall content costs by 2% even with the World Cup. Noncontent costs are higher as a result of increased marketing for our new brand campaign and to support the launch of new content. Excluding marketing, non-content costs were up 3% with GBP 4 million of permanent savings delivered so far this year. EBITDA was up 37% to GBP 48 million.

The balance sheet is strong. We ended the period with net debt of GBP 652 million and a leverage ratio of 1x. Our cash generation remains good with a profit to cash conversion of 63% as expected on a rolling 12-month basis. This is lower than our average, owing to a buildup of working capital, reflecting the H2 weighting of Studios revenues and the commissioning cycle and M&E. Over the full year, we expect this to partially reverse.

You'll all be familiar with our capital allocation framework. In line with our commitment to provide cash returns to shareholders, we've declared an interim dividend and the start of a GBP 100 million buyback program. As we look ahead to the remainder of 2026, we are keeping our guidance unchanged. For Studios, we expect good total revenue growth for the full year with margins landing at the lower end of our 13% to 15% target range. Within M&E, we expect continued strong profitable Digital revenue growth. However, we are mindful of the macroeconomic climate and its potential impact on linear advertising budgets.

Q3 TAR is expected to be down around 5%, which would mean TAR for the first 9 months being flat year-on-year. Whilst as usual, it's too early to give a view on Q4, it's worth noting that last year's tough performance reflected a notably challenging U.K. economic backdrop. We are managing what we can control and remain on track to deliver our target of GBP 20 million of cost savings over the full year, bringing our cumulative savings since 2019 to GBP 273 million.

Our planning assumptions, which are set out in the appendix, have not changed other than exceptional costs. These now reflect a credit for a legal settlement in H1 in relation to a historic dispute over the use of one of ITV's formats in Spain and also the proportion of transaction and separation costs related to the sale of M&E that we will incur this year. Thank you, and I'll hand back to Carolyn.

Thanks, Chris. As we look ahead, we remain focused on the performance of both businesses to continue to drive profitable growth, strong cash generation and attractive shareholder returns while supporting the regulatory process and implementing separation of the business following our announced transaction with Sky. You'll be very familiar with our 3 strategic pillars, and they are part of our -- more than TV strategy. First, Expanding Studios; second, Supercharging Streaming; and thirdly, Optimizing Broadcast. And I'll just take each one in turn.

Starting with expanding Studios. On the day we announced the transaction, Julia and David spoke with great passion about ITV Studios and its strategy. And I just want to recap why it has such a compelling value proposition and good track record for delivery. ITV Studios' leading position in the global content market is to reiterate, built upon 3 competitive advantages. It's world-class talent who are consistently producing some of the most successful shows and formats right around the world. Its global scale and diversification, which creates strong and a really strong and resilient platform for growth and its unique and valuable IP Library, which coupled with the Digital distribution capabilities of Zoo 55 maximizes the monetization of our IP globally. You will recognize this slide from our investor presentation just a couple of weeks ago. It shows ITV Studios' operating model as a creator, owner, producer and distributor of IP, which ensures that it captures the full value of the content life cycle. And this enables ITV Studios to consistently drive above-market growth and deliver industry-leading margins and strong cash generation.

The core strength of the model is simple. A successful creative idea is rarely a one-off project. It drives multiyear, multi-market and multichannel revenue. Our confidence in ITV Studios performance is rooted in the quality of our pipeline of programs and our highly demanded IP Library for both new and established programs. For H2, this includes and look out for them, The Gentleman & The Woods for Netflix, Guilty Creatures for Apple TV+, a double season of Hell's Kitchen in the U.S. for Fox and the return of Line of Duty & Vigil for the BBC and of course, I'm a Celebrity for ITV.

Diversifying revenues across markets, customers and genres ensures we capture opportunities wherever they emerge and provides a stable foundation of recurring revenues that delivers high-quality earnings. And that, combined with our premium content and disciplined cost management, delivers attractive EBITDA margins. This is further supported by a flexible, asset-light and low-risk production model.

So looking ahead, ITV Studios priorities are very clear: continue to deliver profitable organic revenue growth ahead of the market, generate strong cash flow and allocate capital in a disciplined way in line with our clear value creation strategy. And the business remains fully committed to maintaining a robust investment-grade balance sheet while supporting attractive shareholder returns.

We look forward to sharing much more detail on ITV Studios at the Capital Markets Day, which we expect to do in H1 2027.

Turning now to Media & Entertainment, which includes the pillars of Supercharge Streaming and Optimise Broadcast. Sky has really valued this business highly because of the transformation of the business and the continued progress we are making. M&E is a commercial leader in the U.K. with its leading Digital platforms in ITVX and Planet V. It is trusted brand, which -- with a really compelling content offering, valued and loved by both viewers and advertisers, its deep relationships with advertisers and partners and a really strong record of tight cost management. This foundation ensures M&E remains well positioned to continue delivering profitable Digital growth and strong cash generation.

ITVX has delivered really good growth in the first half, as Chris said. Of course, the Football World Cup drove amazing engagement on the platform alongside some standout performances from drama and entertainment, which I'll mention shortly. We continued to scale our targeted advertising offering through Planet V, our world-class addressable advertising platform using our extensive first-party data set and targeting options.

Since launch, we've attracted over 1,700 new advertisers. Our strategic partnerships and commercial innovations are progressing well, expanding the demand for our targetable advertising and extending the reach of our content. For example, the strategic partnership with YouTube has increased our reach to younger viewers. And through our in-house sales team, we've now partnered with over 1,300 brands, up from 800 at the year-end. We've now launched Comcast Universal Ads in the U.K., which will accelerate the SME strategy through further simplifying access to premium TV advertising.

Now to the third pillar, which is to optimize broadcast. ITV delivers, as you all know, mass cultural moments at scale. That's hugely valuable to advertisers in a really competitive and also fragmented market. This was really demonstrated most clearly by the World Cup. The quarter final match between England and Norway delivered the biggest commercial audience of the year so far with a peak audience of 18.4 million viewers. And we attracted around 200 advertisers to the tournament across multiple categories, 70 of which are new to football. But it hasn't all been about football. As I said, we've also seen excellent viewing across our portfolio for drama, entertainment and reality on linear and ITVX.

Gone, the drama was the biggest new commercial drama of the year. The 1% Club remains the biggest quiz show on TV and the summer series of Love Island is the biggest commercial program of the year for 16 to 34s, excluding football.

Just before I close, I wanted to give you an update on the regulatory process for the sale of M&E. The process is led by Sky, but we're working closely with them and with Ofcom, the CMA and DCMS to support their respective processes and provide all requested information. The process has already started and the CMA has launched its own review process.

Based on the advice we have received, our own assessment and the strong procompetitive rationale for the transaction, we remain confident that it will be approved by the relevant decision-makers. Given that this is a media merger, we expect the Secretary of State to issue a public interest intervention notice in due course. The transaction may go to a Phase 2 CMA review. And if it does, then it's likely the transaction will complete in H2 '27.

So to sum up, we've delivered a solid first half and are confident in our full year guidance with good visibility over our Studios pipeline for H2 and continued strong momentum in ITVX. The entire ITV senior leadership team remain fully focused on the performance of both businesses while ensuring a smooth regulatory process and implementation successfully of the separation of ITV.

Throughout this period, we are completely also committed to motivating and supporting our colleagues who have worked so hard and are so proud of what we have achieved and continue to achieve. And of course, I want to say a massive thank you to them all for their continued support, dedication, focus and, of course, passion, which has set both divisions up for a highly successful future.

Thank you. We're very happy now to take your questions.

[Operator Instructions]

Our first question today comes from Adam Berlin with Goldman Sachs.

Three questions, if I could. First question on ITVX. You talked about viewership being up 27% and revenues up 13%. Can you just explain why the revenues don't grow in line with the viewership? Is there -- I mean one thing I read recently was that there may be too much kind of Digital video inventory with Netflix and Amazon, Disney all launching ads. So is any downward pressure on pricing? Do you have spare inventory? Can you just explain kind of how that works? That would be helpful.

And second question is ITV Studios. Can you just -- you probably go into this more on the Capital Markets Day you just talked about for next year, but can you tell us a little bit about the kind of the growth algorithm for Studios? And how do you get that mid-single-digit growth? Is it volume? Is it mix? Is it price per hour? How does that work? And what do you think is going to drive the growth over the medium term?

And then third question on the buyback. Can you just tell us about the timing, how long will it take you to complete that GBP 100 million buyback?

Right. Okay. Thanks, Adam. I'll probably take the first one on ITVX. We sell our addressable advertising at a fixed price, and then you can pay more for premium targeting. So on average, people do trade up from the base price. And if you go right back to the beginning with ITVX, the reason we launched it was because demand was exceeding supply of inventory and the ad load was getting too much. So the way we manage the business is we manage the ad load.

If we've got great viewing and viewing is growing faster than demand, the ad load goes down and vice versa. So it varies over the year. You're absolutely right during the World Cup, we had huge audience uplift, and you've got a steady growth in the Digital revenue. I suspect you might see that move over the course of the year as viewing moves. But we manage it with the ad load is the short answer to your question.

And I think I'd just build on that by saying that we are fully in control of our yield. And we have always had not just fixed price, but also we've kept our yield very -- our CPM is high. And we have never really diminished that. We don't diminish the CPM. So you can buy lots and lots of cheap kind of [indiscernible] Inventory, but you can't buy ITVX in that way.

And the only place you can buy ITVX inventory is through Planet V. And therefore, that allows us that control. And it's very important for us to keep that CPM high given what the transition will do eventually from TV, from linear, which to ITVX.

It's very carefully managed kind of -- it's a very carefully managed balance. We're very acutely kind of focused on it.

Yes. And obviously, Adam, you know that the other benefit of Planet V is it's wholly owned, so there's no payaways in it.

So it's highly profitable. Okay. I'll take the ITV Studios and then obviously, Chris come in. Look, this is a huge market. It's GBP 235 billion market, but it's also highly fragmented. And within that market, the growth for us will continue to come from some of the areas that we've been developing strongly.

So we pivoted 5 years ago towards streamers. 5 years ago, we were taking 5% revenue from streamers. Now we take around 30%. And we are in areas in the segments in streamers where they will continue to grow with us. So that will be high-quality drama, but priced at a very reasonable level. That's what we're very, very good at. So that's one area of growth.

And then streamers have started commissioning a lot more unscripted, and we have so many formats, and we also have been -- and Squid Game is a great example of that. Love Island Games is a great example of that. That's all unscripted. So we will often do new formats or extensions of formats for anyone who wants to buy them, but streamers is a really important category for that.

So we still see growth opportunities. The other area is Digital. So we set up Zoo 555 about 3 years ago. We now have another business within Zoo 555 called -- which is Studio 55, which is all about brands and really, really ensuring that we're getting the most out of our content on Digital platforms and getting brands involved, and we can do the creative work and all sorts of things for them. So just on Studio -- on Zoo 55, we set ourselves a target of GBP 120 million, which will be doubling the revenue there by 2027.

So we definitely see Digital as a further growth area. And I think when you do -- we do come to CMD, you'll understand far more the balance between mix, price, volume and share. That will be the third area that we think there are continued strong opportunities that we can increase our share of this very large market. Because it's so fragmented, we still have a relatively low share of the overall market. Buyback?

Yes. So length of the buyback, we think between 9 and 12 months. That's going as [indiscernible] Liquidity.

Our next question comes from Nizla Naizer with Deutsche Bank.

I have 3 questions from my end as well. Firstly, just on the M&E outlook for Q3. Could you maybe give us some color as to why it is as weak as maybe down 5%? Like how strong was July and how weak is the outlook for August and September to sort of offset that? Some color would be great. And secondly, the declines in M&E in Q3, how could that impact the EBITDA for the segment for the full year? Or are there any cost-saving measures that would mean consensus stays unchanged? Some color on maybe how the profitability would be impacted would be great.

And my third question is, when you think of Q4, maybe it's a bit too early, but based on the conversations that you're having around Q4 campaigns, do you get the sense that there has been some spend that's been brought forward during the World Cup time from Q4? Or is Q4 still likely to be a stronger quarter when you think of the whole year? Some color there would be great.

Okay. I think, look, the M&E outlook for Q3 is -- there are lots of moving parts to it. When you think about it, we've had a change of Prime Minister in the U.K. and advertisers just waiting to see a little bit what is going to happen. There has definitely been macro effects from the Iran war and the impacts of that on cost of living, inflation, et cetera, et cetera. We've had a very positive impact from the World Cup, but we have money moving around in quarters. So July, very, very strong, as you say. Yes, probably some advertisers in the shoulder period, so from Q3 will have moved some money into June, July, definitely. I think the better statistic to look at for advertising is to look at 9 months and to say -- and for us, we would say being flat, broadly flat in that 9 months with those headwinds that I've just described is a very strong performance, and we have definitely outperformed.

Then you've asked about Q4, I think too early to say. I think unlikely that there will be a bring forward of World Cup. It's difficult to say. There could be some advertisers that have spent the majority of their money in the World Cup and therefore, will reduce spend in Q4. But we have very little visibility of Q4 at the moment. We're having loads of conversations, as you'd expect at the moment. So I kind of answered, I hope, question 1 and 3. Chris, perhaps on the cost and EBIT?

Yes. And just to build on what Carolyn said about Q4, I mean, Q4 is about Christmas and advertisers will spend for Christmas. On EBITDA, again, it's too early to say around Q4. You know that we do react to the ad market in terms of the scheduling and we tailor viewing to match the ad demand. But for now, I mean, we are flat for the first 9 months. It's too early to say about Q4. So we -- whilst obviously, we do mitigation planning, we're not -- we haven't announced any further savings.

At this time, we do not have any further questions registered. [Operator Instructions]

This time, we have not received any last questions. And so I'll turn the call back over to Carolyn for closing comments.

Just want to say thank you all for joining us. We know it's a really busy day. So thank you very much for your time. See you all soon.

Good morning, and welcome to ITV's investor call on the announced sale of our Media and Entertainment business to Sky. As always, I'm here with Chris Kennedy, our Group CFO and COO, who will talk about the financial details of the transaction. We're also joined by Julian Bellamy, the Managing Director of ITV Studios; and David McGraynor, the COO of ITV Studios, who will walk you through why ITVS as a stand-alone business will create further shareholder value.

The deal announced today is a transformative moment for the ITV Group. It creates significant value for shareholders, enabling a cash return of GBP 950 million. It protects and secures the future of ITV Media and Entertainment as a public service broadcaster and it unlocks the value of Studios and provides the best of both worlds, creating a distinctive pure-play global content business supported by a longer-term relationship on content with ITV M&E and Sky.

The combination of 2 complementary businesses, ITV M&E with ITV X and its free-to-air channels and Sky with its technology-led user-centric platform benefits users and advertisers. At a time of unprecedented change in viewer behavior characterized by infinite content choice and the proliferation of ad-supported tiers across streaming platforms, this combination enables the combined business to better compete with deep pocketed U.S. streamers and to increase investment in British content.

Now we've talked about the integrated model to you for a long, long time and its value. The GBP 2.1 billion content supply agreement is a minimum spend guarantee, which replicates the benefits ITV M&E and ITV Studios have always had. Sky has also committed to all the PSB requirements, ensuring viewers can watch their favorite shows free-to-air, preserving the quality and diversity of programming and news plurality that are the hallmarks of ITV's contribution to the U.K.'s creative industries. I'm now going to hand over to Chris to give you a bit more detail on the actual transaction.

Thank you, Carolyn, and good morning, everyone. We think this is a great deal for shareholders with a transaction valuing ITV M&E of between GBP 1.4 billion and GBP 1.6 billion. This value is made up of a combination of a GBP 1.2 billion initial cash consideration subject to customary closing adjustments, and this is payable on completion, and there is no tax to pay on this element. The contribution of Love Productions, the maker of the Great British Bake-off, which is valued at GBP 200 million, and up to another GBP 200 million of cash, which is contingent upon 2027 total advertising revenue.

This earn-out becomes payable if total ad revenue is above GBP 1.7 billion with a maximum payout of GBP 1.8 billion. The earn-out will be subject to U.K. corporation tax. And for reference, the current consensus total ad revenue for 2027 is GBP 1.75 billion. Crucially, the transaction also unlocks the value of ITV Studios, which post completion will be a distinctive pure-play global content business. In 2025, ITV Studios EBITDA was GBP 330 million. As an indicator of how TV production businesses are valued, the recently announced merger of [Banner] and -- all 3 Media was transacted at a 10x EBITDA multiple.

To unlock this value, we're separating a business that has been integrated for decades. This is a complex exercise, which includes the negotiation and then implementation of the long-term content supply agreement between ITV Studios and Sky. We've got a robust plan that will involve a significant amount of work in order to separate the 2 businesses.

As a result, over the next 3 to 4 years, we will incur transaction and separation costs of around GBP 185 million gross or GBP 155 million net of tax. We estimate that the initial net cash proceeds from the deal are therefore around GBP 1.05 billion. And we'll use this cash to deliver value to shareholders through, firstly, paying down debt to ensure that ITV Studios has a strong balance sheet. We're targeting net debt-to-EBITDA of around 1.5x post completion, which is comfortably investment grade.

And secondly, through significant cash return to shareholders at completion. Lastly, ITV Studios will incur around GBP 25 million of stranded costs, which will be broadly offset by the contribution from Love Productions. Therefore, ITV Studios historic segment performance, which we have reported is a good proxy for pro forma EBITDA to history.

Now I appreciate that there's a lot of information to take in. But to summarize, before media speculation on our discussions with Sky, ITV plc had a market cap of around GBP 2.5 billion. As a result of this transaction, shareholders have the potential to receive value materially in excess of that, a cash return of GBP 950 million, which is a substantial direct distribution of the value we've unlocked, coupled with ownership of an independent investment-grade ITV studios in a large and attractive global market. And this is before any additional return from the earn-out. Carolyn will now talk you through the benefits of the deal for other stakeholders.

Thanks, Chris. So as we've already said, this is a transformative moment because viewers will continue to watch their favorite shows free-to-air from national and regional news to the most popular dramas, soaps, entertainment and live sports. We will also have access to a broad range of programs across both free and paid platforms. Under the terms of the Channel 3 license, which Sky is acquiring as part of this transaction, Sky will comply with all our public service broadcast commitments to the end of the license period in 2034, including regional national news.

Advertisers will continue to benefit from trusted high-quality content. The combined business will have the resources and technology capabilities to compete more effectively with global media and technology companies in the U.K., creating a scaled alternative U.K. platform for advertisers. So together, Sky and ITV M&E have a significant content budget underpinned by the CSA, which will support continued investment in British creativity.

Now turning to ITV Studios. As you know, it has a compelling investment proposition, which includes, first, profitable organic revenue growth ahead of the market, further enhanced through disciplined capital allocation, including potential for value-accretive bolt-on M&A, building on its very successful track record.

Secondly, industry-leading margins and strong cash generation, enabling ongoing growth investment and an attractive dividend. And thirdly, an investment-grade balance sheet. Finally, it has a very clear value creation strategy going forward. Before I hand over to Julian to provide a deeper dive on the Studios business, we wanted to show you some of the brilliant programs, which really demonstrates the quality of the business.

Thanks, Carolyn. I'm Julian Bellamy, Managing Director of ITV Studios. I've been running the Studios division for 10 years, but I've also been a producer, director and commissioner. So I know firsthand what an extraordinary and rare creative powerhouse ITV Studios is. We own some of television's most loved shows and brands. We originate, produce, distribute and monetize this content, delighting audiences around the world. Our people are passionate and our culture is strong.

Over the next few minutes, I'll explain why we're really excited about ITV Studios next chapter. We have a terrific business, well positioned to deliver sustained profitable growth and cash generation going forward. It's a business built off 3 significant competitive advantages: world-class talent, global scale and a unique IP library. These advantages underpin the results we deliver, over GBP 2 billion of revenue, around GBP 330 million of EBITDA and industry-leading EBITDA margins of 16%. Let's look at each one of those advantages in turn.

First, we have an amazing creative talent base across over 60 production labels in 13 markets. It's one of the most formidable in the industry. And that's important because they ultimately create and produce the shows that power our Studios business. It's people like the creators of I'm a Celebrity and Love Island or the producers of Rivals, the hit Disney+ series or the team behind One Piece, a global #1 series for Netflix.

It's creators of this caliber across over 60 labels that also means we can attract some of the best on-screen talent in the industry. Now assembling a creative talent base of that quality is far from easy. It takes years and years of patient investment, carefully nurtured relationships, hard-won trust and a distinctive producer-friendly culture that has creative freedom, entrepreneurialism and empowerment at its heart. And that culture is why we have such a high retention rate for our top creative talent. For example, in the U.K., 3/4 of our Label MDs and creative leaders have stayed with us after finishing their earn-outs. And 2/3 of our Label MDs have served over 5 years with us.

And as you saw in the tape, it's also why our talent is widely recognized as being amongst the best in the business. And of course, our outstanding team of creative talent is why we're able to produce some of the biggest and most memorable shows on TV year in, year out. Entertainment hits like -- the Voice, Love Island, -- the Chase, Come Dine with Me and many other shows that we sell all around the world. This gives ITV Studios a really solid base of long-term recurring revenue, diversified across both customers and geographies.

And as for our scripted output, that's been blazing its own trail with a consistent track record of success from the BBC Smash hit drama line of Duty to Fool Me Once, one of Netflix's biggest English language shows of all time or from Mr. Bates versus the Post Office, which was ITV's biggest drama in over 20 years to Coronation Street and Emmerdale, the U.K.'s biggest and longest running soaps. It's a track record that we're very proud of.

Building on that success, the addition of Love Productions will complement and further strengthen our talent base and our library of world-beating IP. As multi-award-winning producers have hit shows, including the Great British Bakeoff, the Piano and The Great British Sewing Bee, all of which have been recommissioned this year, Love has a proven track record of brilliant unscripted series and a consistently strong financial performance with GBP 75 million of revenue and GBP 24 million EBITDA. We're delighted they're joining us.

Our second big competitive advantage is scale, and there are 2 parts to this. The first is about the U.K. ITV Studios is Britain's biggest producer with around 30 production labels making over 5,000 hours of programming every year. Now that's important because the U.K. is the world's leader in creating and exporting unscripted formats. It's the biggest exporter of scripted shows outside America and the world's biggest market for original commissions after China and the U.S. And crucially, it's a territory where producers are able to own their IP, unlocking profit streams that other markets with less rights don't.

The other advantage of scale is our global reach. Outside the U.K., we have around 30 production labels across the U.S., Europe and Australia, plus a world-class global distribution and commercial arm that monetizes our shows around the world. Now that's important because it enables us to capture the full value chain of the IP we create, helping to drive our industry-leading margins.

As you can see from this slide, our global scale also builds diversification and resilience, meaning we're not dependent on any one geography, customer or genre. As with our talent base, this U.K. and global scale can't be achieved overnight or easily replicated. It's taken years and years to build and has positioned ITV Studios as a strong, resilient business with the capability to adapt to the changing media environment.

That scale also means we have long-standing trusted and strategic relationships with a tremendous range of buyers worldwide from Netflix to Disney, RTL to TF1 and many, many others. And of course, in the U.K., we'll have a very close ongoing relationship with ITV, M&E and Sky, underpinned by a new long-term content supply agreement that includes a minimum spend commitment of GBP 2.1 billion from 2028 to the end of 2032. A welcome and exciting extension to our mutually beneficial relationship that's existed between ITV Studios and ITV M&E for many years.

The content supply agreement formally guarantees that ITV M&E's current level of spend with ITV Studios outside sport is maintained until at least the end of 2032. It spans genres, including drama, entertainment, soaps and daytime and encompasses programs commissioned for either ITV M&E or Sky. This provides ITV Studios with a guaranteed bedrock of commissions from one of Europe's biggest commissioners and a fantastic platform for our amazing talent to launch new shows and create new IP at scale.

It's also a tremendous opportunity to build an even closer relationship and win more business with a fantastic team at Sky, something we're all really looking forward to. The third major competitive advantage is our special and unique IP library. It's a vast catalog with over 100,000 hours of content spanning over 60 years. In fact, you may not even realize some of these shows are in our library from Poirot to Sherlock, the Graham Norton Show to Poldark, -- and it's growing by roughly 4,000 hours of new IP every year, continuously adding to some of the biggest brands in global television.

Not only that, over 90% of that IP library is English language, the vast majority of which is British content, which is a much more valuable asset than most and a real competitive advantage. The library is also very diversified, covering a broad range of genres from drama to entertainment to factual, enabling us to act as a one-stop shop for our clients' programming needs.

In addition, we're driving significant incremental revenue through our fast-growing digital studio, Zoo 55, which not only distributes and monetizes our IP across all digital and social platforms, but enables us to build a direct relationship with fans of our shows around the world. Last year, our content had over 47 billion views across social platforms.

An IP library of this scale and pedigree, more than 6 decades in the making is critical to our future success and one of the most durable competitive advantages in the industry. All this is important because a strong IP library drives higher margins and builds further diversification and resilience into the business. More on that from David shortly. So in summary, our combination of talent, scale and the IP library really sets ITV Studios apart in a dynamic competitive industry, and they all underpin the financials and the value creation plan that David will take you through now.

Thanks, Julian, and good morning, everyone. I'm David McGraynor, the Chief Operating Officer of ITV Studios, where I lead our global commercial, operational and business development teams. I joined the business 15 years ago as CFO, becoming COO in 2020. So I've seen firsthand the growth and transformation of ITV Studios into one of the world's leading content businesses.

Now Julian has just explained what makes us such a distinctive creative business with unique strengths. I'm now going to focus on how this translates into a business with attractive economics, firstly, through high-quality earnings; secondly, by illustrating our strong financial track record; third, through our growth potential; and finally, how that generates long-term shareholder value.

Let me start with the quality of our earnings. When I think about the quality of our earnings, 4 things stand out. First, our diversified operations across markets, customers and genres not only gives us resilience, but allows us to capture opportunities wherever they emerge. Second, we have a high level of recurring revenues. Across the business, more than 75% of revenues come from returning shows and recurring monetization activities, giving us real visibility and predictability.

Third, the quality of our content, combined with disciplined cost management supports attractive EBITDA margins of between 14% and 16%, which I'll talk more about later. And finally, our cash generation is strong. On average, we convert around 80% of operating profit into cash, and that's supported by a flexible made-to-order production model, an asset-light operating structure and a largely variable cost base.

And underpinning all of this, our integrated operating model, which combines local production with global distribution and monetization allows us to capture more value from the IP we create and own. The heart of our business model and how we create and capture value is illustrated on this slide. First, we create and produce content through each of our 60-plus labels. That includes both new IP and returning series, all produced to order for broadcasters and streamers around the world.

Today, our production business represents around 80% of Studios revenues and delivers stable, predictable earnings. Second, where we own rights, that content becomes part of the IP library Julian has just spoken about. And third, we monetize that IP repeatedly through global partnerships and Zoo 55. We sell finished programs and formats internationally. We produce our formats in markets where we have local production companies. We monetize content on digital platforms such as YouTube, and we connect our brands with consumers through licensing, merchandising and commercial partnerships.

The Voice is a great example of how a successful brand can be scaled and monetized globally with over 150 adaptations in 76 territories. Across studios, monetization activity is around 20% of revenues, but it is high margin and highly recurring because it's driven by existing IP rather than new productions. And the key point of our business model is this, a successful idea isn't a one-off project. It becomes a multiyear, multi-market, multichannel revenue stream. And that is what makes our model so powerful, and it's what underpins the quality, durability and cash generation of the business.

The result of those economics is a business that consistently delivers industry-leading margins relative to our peer group. Our margins reflect both the quality and mix of our content as well as the efficiency of the operating model we've built over many years. While margins are an important indicator of quality, our focus is ultimately on maximizing economic returns rather than targeting a specific margin at an individual project or segment level in isolation.

The strength of the business is also reflected in our long-term financial track record. Over more than a decade, we've consistently grown revenues while maintaining attractive margins. That performance has been driven by competitive advantages Julian described earlier, combined with disciplined execution and a clear strategic focus on the fastest-growing parts of the market. Those same strengths give us confidence in our ability to continue creating value in the years ahead.

So turning to the market. We operate in a large and attractive global content market worth more than $235 billion last year. It's a market that has proven remarkably resilient despite industry disruption over the past few years. While growth is increasingly driven by streamers, ad-supported platforms and demand for library content, the free-to-air segment remains a large and important part of the ecosystem.

Combined, these characteristics play directly to our strengths. In a market where overall growth is moderating, talent, scale and IP ownership become even more crucial in winning market share. It's equally important to be well positioned in the fastest-growing parts of the market. Our ability to pivot early and at scale to growth segments of the market is something we've consistently demonstrated over time. For example, we've significantly increased our focus on streamers as that segment expanded. And as a result, revenues from streamers have almost tripled over the past 4 years.

We've also expanded our scripted capability, enabling us to capture growing demand from global platforms. And more recently, we've launched Zoo 55, which is accelerating the digital monetization of our IP. Zoo 55 is a highly capital-efficient growth opportunity because it creates incremental revenue from content we already own.

Now looking ahead, our priorities are clear. We want to continue delivering profitable revenue growth to generate strong cash flow and to allocate capital in a disciplined way. Over the medium term, we expect to continue delivering profitable organic revenue growth ahead of the market while maintaining margins within our established 13% to 15% EBITA range. Cash generation is expected to remain strong with operating profit to cash conversion averaging around 80% over time. And as Chris highlighted earlier, we remain committed to maintaining a robust investment-grade balance sheet. As a result of the transaction, there are a few adjustments to ITV Studios revenues and margins, the details of which can be found in the RNS and the financial guidance reflects these changes.

Finally, let me turn to value creation. Value creation starts with investing organically to drive profitable growth while maintaining a strong investment-grade balance sheet. That, in turn, supports an attractive dividend. Beyond that, we can enhance returns through disciplined value-accretive acquisitions, building on our successful track record. And where appropriate, surplus capital can be returned directly to shareholders. Taken together, our competitive strengths, market positioning and disciplined approach to capital allocation give us confidence to deliver durable long-term value for shareholders. With that, I'll hand back to Carolyn.

Thank you, Julian. Thank you, David. Now you've heard ITV Studios is a really exciting business, and we look forward to going into much more detail at the Capital Markets Day. Let me now just walk you through the key transaction milestones from here on in. As you'd expect, the transaction is subject to customary regulatory approvals. We're working very closely with Ofcom, DCMS and the CMA to ensure we cooperate fully with their respective processes, provide all requested information. The same applies, of course, to Comcast and Sky.

Initial discussions have already taken place. We plan to make formal regulatory filings in short order, targeting Q4 2026 for commencement of the formal review period. As I've said, we will host Capital Markets Day for ITV Studios closer to completion indicatively in H1 2027, where management will provide further detail on the company's strategy, financial performance and medium-term outlook as a stand-alone business.

Completion is expected in H2 2027. Based on the advice we've been given and our own assessments, we are confident because we think the regulators will also see the fundamental changes that I described earlier on in the market. The capital return to shareholders will follow completion with further details to be provided closer to that date. So just to summarize, this deal creates significant and sustainable value for our shareholders. It enables a cash return of around GBP 950 million. It unlocks the value of studios. And more than that, it benefits multiple stakeholders through the attractive combination of 2 leading British streamers and broadcasters.

As you all know, ITV celebrated its 70th birthday last year, and it continues to hold a unique and valuable place, both in the lives of British viewers and in our creative sector. Through the more than TV strategy, ITV has successfully evolved in a rapidly changing media landscape, and this transaction actually builds on that momentum. The value this deal creates reflects a huge amount of hard work by the people in ITV, and they have been the ones that have executed our strategy so successfully.

And I would like to thank every single one of our colleagues for their continued focus and commitment in transforming ITV and setting up both of our divisions for future success. Thank you very much for listening, and we will now take your questions.

[Operator Instructions] The first question today comes from Ed Young of Morgan Stanley.

Two questions, please. First of all, I wonder if you could elaborate a bit more on why now is the right time for this transaction? And sort of connected with that, what were the key elements of the deal that were must have to get right to proceed with it? And then second of all, in terms of the use of proceeds, just wondering how you considered shareholder returns versus keeping hold of more cash to potentially be more aggressive in terms of building scale. And perhaps you could talk a little bit about the balance of building scale and maintaining the right sort of culture and hone the business to the creative that will be there.

Okay. Thanks, Ed. So why now? Well, look, we have -- as a Board, we have said to you, we look at all our strategic options. We've kept them under review forever really. I mean we always look at those. We had -- we had done a lot of work on this for a long time. And why now is kind of like because all the conditions were right to come together. I mean we think the market has changed so fundamentally, and it's actually been -- it's changed exponentially actually since COVID in terms of viewing habits.

The global streamers have really accelerated what they do in the U.K. in particular. And also that had an impact, obviously, on viewers and on advertisers. And so I think both companies have seen the benefits of coming together because they're complementary. We know we will make a bigger, better content business, so i.e., for viewers. We also think there are a lot of benefits for advertisers.

So we think the market has changed fundamentally, which means scale is very, very important. And I also think that from a regulatory point of view, I'm hoping that very much the regulators see those changes, too. And actually, it is worth saying that through all our strategic thinking on the ExCo and the Board, the company at the top of the list to do anything with was Sky. And so ITV did approach Sky actually to just say do you want to chat and do you want to talk further? And that's really how this happened. And so I think really, the conditions were right all around for us to have these very serious discussions that have now materialized in a transaction. Chris, do you want to take the second one?

Yes. So key elements of the deal, I mean, fundamentally, it needs to be a deal that created value for shareholders because that's the lens we use as a Board. So we were pleased with the valuation that was put on M&E by Sky. And that's a reflection, I think, of the successful execution of the strategy. We wouldn't be in this position if we haven't done -- the team had done an amazing job on ITVX and the viewing and the advertising revenue that's come from that.

It was important to replicate the current arrangement between M&E and Studios. So this long-term supply agreement 5 years from completion, GBP 2.1 billion, which underpins the partnership that will continue between M&E and Studios was also important. And as Carolyn said, we needed the confidence that the time was right with the regulators and the certainty around completion. I can't prejudge it, but we have that confidence.

And use of proceeds, Ed, you know we've consistently said, and I'll pass to Julian, Studios has the scale right now to compete. It's one of the largest independent producers in the world. So we don't need scale for scale's sake. We've had a really successful history of bolt-on acquisitions, which fulfill a purpose they're financially sensible, but also that they build out the portfolio of labels that we have. And obviously, we're getting love production as part of this deal. So that's a GBP 200 million effectively a GBP 200 million acquisition there and then.

So we feel that the right thing to do is to set the Studios business up for success with an investment-grade balance sheet, 1.5x leverage, which is comfortably investment grade, which allows Studios to continue to do bolt-on acquisitions, but we don't need to retain the cash.

Yes. I mean just to add to that, yes, I mean, as Chris said, I think in Studios, we feel we've absolutely got the scale to compete at the scale and the quality. And hopefully, that came across in the presentation where it's the scale, both in the U.K. and international, but also then blend it with the IP library and the talent base. And so look, we're very focused on getting the best out of the assets that we have and executing our strategy and delivering value for our shareholders. And as Chris said, we've always have and we will continue to have a very clear and consistent approach to our bolt-on M&A strategy. We're always looking for great creative businesses that are a great strategic cultural fit and that they can join the group in a way that creates value for shareholders.

The next question comes from Julian Roch of Barclays.

I'll start with the $2.1 billion spend from Sky over '28, 2032 5 years, so that's $525 million a year, but internal revenue have been $600 million every year for the past 4 years. So does that mean you expect less revenue going forward? That's my first production. My first question, sorry.

The second one is lost production. It seems that the numbers you're giving us GBP 75 million of revenue and GBP 24 million of EBITDA are '24 numbers. So can we get the '25 numbers? And can we also get the IFRS 16 depreciation? And then finally, 55 revenues, are those included in the GBP 603 million of streamer revenues in '25? And how much was 55 revenues in '25? So all numbers question, sorry.

That's good. Well, Chris, all numbers question.

Lucky, I'm here, Julien. Yes, so the GBP 600 million in internal revenue that you referenced, that includes intra Studios revenue, which was GBP 89 million last year. And it also includes sport production, which is transferring from studios to M&E at completion because Sky are a brilliant broadcaster of sports, and we've got a brilliant sports team, so it made sense as part of...

50 million.

Yes. So the GBP 420 million average over the 5 years is in line with the internal supply historically. So no change there. Love production, '25 numbers have not yet been made publicly available, but they are pretty much in line with '24. And I didn't quite get the question on 55. I think it was.

25 revenue part of the CSA. Anything that goes to Zoo 55?

Yes. So yes. So as you know, Zoo 55 do the channel management for the M&E programming on YouTube. That will continue in the future. So yes, that Zoo 55 relationship remains.

Sorry, my question was, is the Zoo 55 revenue included in your EUR 603 million of streamer revenues. When you're breaking down your revenue between streamer internal and broadcast, is the Zoo 55 in the 603?

Yes, why don't we take that one offline, Julien, because I'm not sure I know the question you're asking.

It was Page 23 -- sorry, Slide 23. You're breaking down your 2130,1527 FT Pay TV and other and 603 streamers. Is the 55 revenue in the 603 -- or is it in the 12...

I see where you are. Right. Yes. So that is by customer, so it will include all the revenue streams from business. So the proportion is Zoo 55.

It's in. Okay. And how much was the 55 in '25 of revenue?

At the moment, it's around GBP 60 million.

The next question comes from Adam Berlin of Goldman Sachs.

My first question, you showed a helpful slide with the market for TV content, which has been reasonably stable for the last few years. Can you just talk a little bit more detail on a question for Julian about how you plan to grow ITV Studios in what seems to be a fairly flat market. Why should ITV Studios grow in the flat market? That's the first question.

And the second question is, can you help us, Chris, with free cash flow, say, 2025 for ITV Studios? I know you've given us the profit to cash ratio for adjusted EBITDA, but any estimate you've got on what you think the stand-alone free cash flow would have been for ITV Studios?

You want to take the first one.

Yes. Yes, I mean, I hope this came across in the presentation that our revenue growth is going to be driven by leveraging those competitive advantages that we talked about. So that's your formidable talent base that we have, the scale that we have both in the U.K. and globally and also the IP library, a scaled IP library, predominantly English language.

Plus we're leaning into those growth segments within the market. So streamers, you can see how much we've grown our business with the streamers with something like doubled over the last 5 years. In scripted, 10% growth in 2025. We've seen a big growth for us in that segment. And then in the library with the IP library, global partnerships, again, driving a lot of growth. aided by Zoo 55, something like 7.5% CAGR between '21 and 2025. So those have really been the primary levers of our growth.

And it's worth also just adding that the streamers are doing much more unscripted now. And so -- and you're the leading unscripted producer.

Yes. It's a really good point. We've seen that segment grow a lot. And you can see some of the success that we're having, whether it's Squid Games, the challenge for Netflix or, of course, Love Island is a smash hit at the moment over in the U.S., the most watched streaming series in the U.S. across all streaming platforms in 2026.

It's on Peacock.

It's on Peacock.

Yes. And then on the cash generation, Adam, we've said that we believe the Studios business will be at around the 80% cash conversion mark, which is broadly where it's been historically. There tends to be because it's growing and in scripted, you do get a working capital movement each year as we grow the business. But -- so on an adjusted EBITDA last year of around GBP 300 million, that's GBP 240 million of cash. It's a capital-light model, so very little CapEx at all. We don't own large studios or lots of kits. It's a variable cost model. So out of that, you've got then the interest on 1.5x leverage and tax, which is broadly at the U.K. corporation tax rate.

The next question comes from Annick Maas of Bernstein.

My first question is, you've shown us very helpfully how much streamers have contributed to growth and free-to-air and pay TV have contributed to the decline in the last few years. Can you give us like a numbers indication of how much you expect streamers to grow in the mix in the next years and free-to-air pay TV to decline?

And my second one is, I'm coming back to your comment on the time -- on the fact that it's the right time with the regulator. Do you have any like deal precedents that make you more confident that the regulator will look this time around, not only at the TV advertising market, but at a wider definition of the ad market?

What are you saying about growth in studio? I mean so we can't do an outlook Yes. We're not going to do an outlook statement, but we would say that the market overall is growing. And then we will always say that we will grow ahead of the market. I mean that's really what we can say today.

Yes. And as you can see from the slides that we presented that capture the overall content market. This is the data from Ampere. And you can see the view is that there will be a gentle decline in free-to-air of around about just under 2%. And you'll see the streamers growing by around about 2%. But within that, of course, there are other segments that we mentioned earlier on, the growth of unscripted and long stream growth of scripted and so on. But that's broadly the latest data.

And remember, this is a fragmented market. So there -- it's well over $200 billion. Our turnover is $2 billion. So the market trends are important. But also what we do for self-help is as important. So that's why the strategy about making sure we've got global formats, making sure we're going after streamers, Zoo 55 is very exciting as the 100,000 hours of catalog that we've got English language primarily becomes open to digital exploitation, and that's an incremental revenue stream. So honestly, the studio strategy is all about self-help within a very big market.

And it's about growing share and -- continuing to grow share, which we've been doing effectively. And then on the regulator, look, there has been a media deal for many years. But the Vodafone 3 deal went through and -- the regulators took a very rational, very sensible approach to that. And so I do think that, as I said, we've taken a lot of advice, and we've done a lot of assessment out of Sky. And we do believe now is the time because it is so fundamentally a changed market.

It is -- you just have to look at your own experiences to know how viewing has changed. And certainly, from where we sit, we have ample evidence of how advertising has changed. So as we say, there is no precedent at the moment for this in the media space, but we believe that the evidence is pretty compelling, but we can't prejudge a process.

And the final question today comes from Adrien De Saint Hilaire of Bank of America.

A couple of questions, if that's okay. First one, I know it's quite early in the process, but could you talk a bit about the future capital allocation of the new ITV studios? I appreciate the market is indeed really fragmented on your side. So do you think there will be opportunities for future deals here?

And then thanks for giving the split of streaming versus traditional clients. Could we double-click a bit within streaming between SVOD and AVOD because it seems like most of the growth now in the market is coming from AVOD. But I'm not quite sure if that category for you guys is significant.

And related to that, as most of your revenue or your revenue growth comes from streaming, do you think this will have a bearing on your margin because I think these companies, the streamers are set to have better, stronger bargaining power vis-a-vis the producers?

Yes. So Adrien, on the future capital allocation, I think we said earlier, the capital allocation model really is a continuation of the way we work today. So it's about investing for organic growth. There will be a sustainable dividend. We'll maintain investment grade, and we will continue to look for value-accretive strategic acquisitions with a strategic fit to the current portfolio.

So really no change there in terms of the capital allocation of the future business. On the streaming customers SVOD versus AVOD...

Well, all fronts. I mean, look, one of the characteristics of the last year is that we've been -- in the last few years is that we have grown our streamer business right across the board, not just with global streamers. Actually, there's also regional local streamers like BritBox, for example, that we've grown. And AVOD Fast, we see that very much as part of our overall digital strategy that Zoo 55 is right at the forefront with. And that's in conjunction with our YouTube business, gaming, gaming and so on. So we're pushing on all fronts, and it is an important growth lever for us going forward.

And in terms of the -- with the margin question, as you know, the Studios business is a mix of lots of different business channels. So all the way from a format sale, which is 100% margin to sports production, which is a very low kind of mid-single-digit margin and then everything in between. We're not worried about streamers' buying power because essentially, our moat is brilliant creative ideas that are must-have for shows. And I think you've got some great statistics about the power of our shows on the likes of Netflix in terms of...

I was just going to say, look, when we're looking at our margin as a Studios business, our focus is -- we are always focused on what's going to give us the best economic return. And the margin is an output of those decisions. And the thing -- and I hope this came across in the presentation, the margin is really driven by a number of things. But the 3 big ones are: one, the hit factor, the creative strength of the slate; two, the amount of reoccurring revenue that we have, and you saw that in the mid-70s percent and then the power of those big brands.

When you've got a show like Love Island that's in 76 different territories, that's really then driving and then it's driving ancillary revenue as well. That's driving a lot of our leading margin.

And drama is a good example, isn't it, of where streamers look to us because we do drama in a sweet spot, which is high quality but not as expensive as some of the big budget kind of dramas Bridgerton.

Exactly. When you think, for example, that there's a show like Fool me once made by Quay Street Productions company just outside of Manchester that is in the top 10 all-time most watched Netflix shows -- English language Netflix shows, it gives you a sense of the power and influence of some of those shows.

And Quay Street and they've had multiple shows -- so I think we're known -- as you said, this moat is a very deep moat because we're known for certain things, and we do it very efficiently. So it's cost efficient for streamers. So I think that's important. And I think overall, just it's worth reiterating, we have the leading margins in the production industry, but also our KPI is very clear. We've always said we'd be between 13% and 15%, which is top end. That's the last question. Any more questions?

I think we have one more.

We do have a follow-up from Julien Roch of Barclays.

Yes, it's me again, which is a follow-up from Adrian question and my initial question, which is on Page 22, you kind of broke down the market between like traditional then YouTube AVOD and SVOD. But then on Page 23, you brought down your revenue in 2, not in 3. So what we're trying to do is break your revenue in 3 -- so which is Adrian's question, but also mine is in the 603 of streamers, does that include 55? And is 55 the entirety of your YouTube AVOD revenue -- or is there more? And then what is the Zoo 55 revenue in '25. So we're trying to break down the market -- your revenue in 3 in '25, not in.

Julien, I mean, that data is all available. I think the best thing we'll take on board your desire to see a bit more granularity on the streamers. And as we said in the presentation, there will be a Capital Markets Day presentation later in the regulatory process. So I think that level of detail is probably best left to that market presentation.

It's a good point because we'd be aiming to do that. I think indicatively, we're saying H1 '27. So that's next year, where we'll go much, much deeper into the Studios business. That is the last question.

I'd just like to say thank you all very much for joining us this morning, and see you all soon.

Good morning, everyone, and welcome to ITV's 2025 Full Year Results. As always, I'm here with Chris Kennedy, our CFO and COO. I'm going to start this morning with a brief summary of the 2025 highlights and then Chris will talk you through our financial and operating performance in a bit more detail.

ITV delivered a good performance in 2025 outperforming market expectations despite the challenging market backdrop. We have transformed ITV and are demonstrably a much leaner and more agile business with a strong digital platform. We have capitalized on numerous growth opportunities as a result and are generating strong levels of cash. We've created 2 attractive and resilient businesses in ITV Studios and Media & Entertainment. We have successfully changed the shape of ITV and achieved a key strategic target. 2/3 of our total revenue now comes from Studios and M&E digital and that really demonstrates the scale of ITV's transformation.

Before discussing our results, I wanted to mention the leak in November about potential transaction. As you know, we confirmed that we were in preliminary discussions with Sky regarding the possible sale of our M&E business. We are actively engaged with Sky and we will provide an update to you when we can. The effectiveness of our strategy to diversify ITV's revenue streams is clear in our results with the growth in ITV Studios and our digital M&E business combined with our disciplined cost management largely offsetting a difficult linear advertising segment. In line with our dividend policy, the Board has proposed a final dividend of 3.3p giving an unchanged full year dividend of 5p, a total payment of around GBP 190 million.

I'll now hand over to Chris to go through the numbers in more detail.

Thank you, Carolyn. Good morning, everyone. ITV Studios continues to demonstrate strong momentum with total revenue climbing 5% to GBP 2.13 billion. This performance highlights our ability to consistently outperform the broader market. Notably, external revenue rose by 10% reflecting our successful move toward global streaming partners and the rapid scaling of our digital distribution via Zoo 55. The U.S. unscripted business had a good year with a strong slate of deliveries. Love Island U.S. was the most watched streaming TV original season of 2025 in America, greatly increasing the value of the format. Overall performance in the U.S. was down year-on-year due to the phasing of deliveries and some short-term market softness.

We're already seeing good momentum in 2026 and are confident that this year will be much stronger. Our U.K. and international arms saw 14% revenue growth driven by high demand from both streamers and broadcasters. Adjusted EBITA for Studios was GBP 297 million and EBITA margin was 13.9%. The year-on-year change in the margin reflects a lower proportion of catalog sales in our revenue mix as we previously guided. We remain highly efficient. We delivered GBP 31 million in cost savings this year and continue to leverage our world-class talent and unique IP to drive recurring value.

Turning to Media & Entertainment. The highlight is the continued evolution of our digital business. Digital advertising revenue grew 12% to GBP 540 million and total digital revenues were up 10% to GBP 614 million. This strong trajectory is a testament to the success of ITVX, Planet V and our data-driven ad products. Total advertising revenue fell 5%, better than guidance with our digital growth providing an important and profitable hedge against double-digit linear advertising decline. We've been incredibly disciplined on costs within M&E. Content costs were down 5% reflecting an ever more optimized investment strategy.

Noncontent costs fell by 6% with permanent cost savings of GBP 32 million and temporary savings of GBP 15 million. This ensured that our M&E adjusted EBITA margin remained steady at 11.8% despite the decline in advertising revenue. The balance sheet remains robust. We ended the year with net debt of GBP 566 million and a leverage ratio of 1x. Our cash generation remains good with a profit to cash conversion of 65% as expected and over the 3 years from 2023 to 2025, cash conversion averaged around 80%, in line with our target. This provides us with the flexibility to reinvest in our growth drivers and provide meaningful cash returns to shareholders.

Our capital allocation is clear. We reinvest for profitable growth, maintain an investment-grade balance sheet and return surplus cash to shareholders. We've maintained an ordinary dividend of 5p and continue to keep our capital structure under review. A core pillar of our strategy is reshaping our cost base to better reflect viewer dynamics and enhance productivity and profitability. In 2025, we accelerated our efficiency efforts delivering GBP 63 million in permanent noncontent savings across the business. This brings our cumulative permanent savings since 2019 to GBP 253 million.

Looking forward to 2026 taking the year as a whole, Studios will show good revenue growth with margin at the lower end of our target range. As is usual, revenue, profit and margin will be weighted to the second half with momentum continuing into 2027. In M&E, digital revenue is predicted to continue its strong trajectory in 2026. We anticipate Q1 TAR to be down around 2%, which is better than we expected. And looking forward to the rest of the year, we have a strong schedule of sports being the only commercial broadcaster of the expanded FIFA Men's Football World Cup and the new Men's Rugby Nations Championship, both of which will boost ad revenue from Q2 onwards. Finally, you can find detailed planning assumptions in the appendices in the slide deck.

Thank you. Carolyn, back to you.

Thank you, Chris. As you know, our strategic vision is to be a leader in U.K. advertiser-funded streaming and a diversified and expanding global force in content. Our strategy is familiar to you. Just to summarize it in 3 key pillars: expanding Studios, supercharging streaming and optimizing broadcast.

So let's turn first to expanding Studios. ITV Studios has built a unique and leading position in the global content market. It has 3 core competitive advantages and value drivers. Its world-class talent who are producing some of the most successful shows around the world; second, its global scale and diversification are creating a strong platform for further growth; and three, its unique and valuable IP library, which combined with Zoo 55, its digital studio, maximizes the monetization of our IP globally and this is underpinned by a culture of cost discipline. All of this ensures the business is well positioned to continue to grow ahead of the market and drive attractive margins.

So let's take these value drivers in turn. First, ITV Studios culture. It's entrepreneurial and offers creative autonomy and it's backed by global distribution and resource and that attracts and retains industry-leading talent. This is a position we continue to enhance through strategic acquisitions, talent deals and partnerships and that delivers both creative scale and revenue synergies. Most recently in 2025, we acquired Moonage Pictures in the U.K. They're the producers of The Gentleman for Netflix and also Plano a Plano in Spain, the producers of Suspicious Minds for Disney+.

So the success of this strategy is really clear I think from the creative output and other recently acquired labels also demonstrate the success of this strategy. So Rivals by Happy Prince for Disney+ is returning for a Season 2. Skyscraper Live for Netflix by Plimsoll, which saw Alex Honnold's free solo quite terrifying ascent of one of the world's largest tallest skyscrapers in Taipei. Our track record on retention is really, really strong. In the U.K. where we do the majority of talent deals, about 75% of our label MDs and creative leaders stay with the business post earn-out.

ITV Studios also has a formidable portfolio of world-leading brands and formats through our established scripted and unscripted labels. Love Island is now in 28 markets. It continues to expand with successful spinoffs such as Love Island Games and Beyond the Villa. Squid Game: The Challenge was Netflix's biggest reality competition and has been recommissioned for a third series. ITV Studios is constantly refreshing its portfolio with new formats like Nobody s Fool and Celebrity Sabotage, both of which launched on ITV this year and have already started to sell really well internationally. They're original shows.

ITV Studios also has a strong slate of high quality returnable scripted brands that demonstrate incredible longevity. Line of Duty is an example, Gomorrah is another example and there are newer brands like Ludwig and Vigil, which have all been recommissioned. So the global content market remains large and attractive. It's expected to grow about 1.5% to 2% this year. ITV's resilience though comes from having a diversified portfolio by geography with 59% of revenue generated internationally, by genre with 32% of revenue from the scripted and by customer with 28% of revenue from the growing streamers where we have a proven track record of success now.

We have deep strategic relationships with every major global content buyer, which combined with a very strong pipeline of new and returning hits, ensures that we capture further share of the key growth areas, which are scripted and unscripted commissions for streamers and IP distribution. Now a significant driver of our long-term value is our unique IP library, which now exceeds 100,000 hours of content. ITV Studios adds thousands of hours of content every single year and licenses this to over 350 customers globally. That scale allows ITV Studios to maximize the monetization of its IP and we already generate GBP 400 million of high margin revenue through our global partnerships business.

Most recently this is through Zoo 55, a key area of incremental growth. Zoo 55 distributes ITV Studios IP across 3 areas. Social video where we had over 24 billion views across 200-plus social channels globally last year; FAST enabled platforms where we have partnerships with multiple partners such as Samsung, Tubi, Xumo and viewing here has been up 28% year-on-year; and the third is games and gaming where we've got 40 games live at the moment across 19 of our brands and that is going to continue to expand.

And some of the key brands we distribute include Hell's Kitchen, River Monsters, the Graham Norton Show, Come Dine With Me, Love Island and there are hundreds more. So as you'd expect, we are leveraging AI to deliver content more effectively and efficiently. For example using it for subtitling, content selection and curation. Overall in 2025, Zoo 55 generated over 47 billion global views, which was up over 30% year-on-year and that drives double-digit revenue growth. ITV Studios is on track to achieve GBP 120 million of high-margin digital revenue from Zoo 55 by the end of 2027.

So the combination -- this particular combination of talent, scale and quality IP ensures that ITV Studios remains a very attractive and resilient business and it delivers high quality earnings. As a creator, owner, producer and distributor of IP; ITV Studios captures the full value of its world-class content from initial idea to global delivery. Around 60% of its revenues are recurring. This is coupled with Studios diversified revenue streams and low-risk production model, remember, where we only produce programs once they have actually been commissioned. Together, this ensures ITV Studios drives growth ahead of the market at attractive margins and delivers strong cash flow.

I'm now going to turn to Media & Entertainment, which includes our pillars of Supercharge Streaming and Optimise Broadcast. We have completely transformed M&E into a strong and resilient streamer and broadcaster with a very disciplined cost base, well positioned to deliver profitable digital revenue growth and strong cash generation. It leverages its compelling position and value drivers, which include wide reach in the U.K., leading platforms in ITVX and Planet V, an extensive first-party data set and deep and established relationships with advertisers and commercial partners.

We are really pleased with the success of ITVX and Planet V. Since its launch in 2022, ITVX has built incredible momentum delivering 25% CAGR in total streaming hours and 16% CAGR in digital advertising revenues. Planet V, our first-class addressable advertising platform, allows brands to target audiences by leveraging an extensive first-party data set of over 40 million registered users. Now that can be augmented of course with third-party data from our partners like Tesco and Mastercard for really granular targeting. It is a powerful engine for growth bringing in over 1,500 new advertisers to ITV since its launch.

Digital advertising now represents 31% of our total advertising revenues. With this momentum, digital advertising revenue is outperforming our original plan when we launched ITVX, which is fantastic news. And given the strong performance of ad-funded streaming and our focus on profitable growth, we have, as you know, pivoted our digital strategy by doubling down on AVOD and deprioritizing subscription video on demand. Therefore, it's going to take slightly longer than initially anticipated to reach the overall GBP 750 million digital revenue target. Importantly, this has saved significant incremental content and marketing spend.

As a result, as this slide shows, we reached breakeven 2 years earlier than planned recouping our entire investment in ITVX 4 years earlier than projected. In doing so, we've created a profitable ITVX platform with attractive growth prospects. So building on the foundations of our strategic investments in ITVX and Planet V, we are now competing effectively for a greater share of the GBP 9.5 billion online video advertising segment and attracting new ITV advertisers. We're expanding our digital reach through strategic partnerships, the SME strategy and through commercial innovations.

Our YouTube partnership for example is successfully extending reach with over 40% of ITV's content viewed on the platform coming from under 35s. Our YouTube sales team continues to grow from partnering with 8 brands at launch to 800 today. We've recently agreed a major deal with Banijay to sell all their advertising around their YouTube content. We've also added new partnerships with TikTok and expanded our relationship with Disney+ to include their content on ITV1's peak schedule. With our SME strategy, we're removing barriers to entry for TV advertising, simplifying the buying process and leveraging AI to produce cost-effective advertising.

We're making good progress towards the launch of our self-serve advertising platform in collaboration with Sky, Channel 4 and Comcast's Universal Ads, which we will be testing later this year. And in a first of its kind in the U.K., we launched picture-in-picture adds, which you might have seen in the 6 Nations. This drives incremental reach and value with sensitivity to the viewer experience. We're also increasing our inventory and can now do targeted advertising on our linear channels on the Sky and Freely platforms.

And if that weren't enough, in addition, we're leveraging our brand, IP and first-party data to drive profitable non-advertising digital revenue. We've just launched the Birthday Draw. You might have heard the ads for that all across Global Radio and it's a partnership with Global for GBP 1 million cash price. We're also evolving ITV Win into a premium destination, bringing scaled competitions to audiences with new games. So it's early days for both of those, but we expect these 2 initiatives to drive double-digit growth in interactive revenues.

Now finally, to our third pillar, which is Optimise Broadcast. We continue to demonstrate our strength and resilience in delivering mass audiences. In 2025, ITV delivered 91% of the Top 1,000 commercial audiences. To reinforce this value, we're collaborating with Channel 4 and Sky on Lantern, an outcomes program to clearly measure the effectiveness of TV advertising. We have a fantastic slate for the year focusing on drama, entertainment, reality and sport and we optimize our spend and deliver the most valuable audiences for advertisers.

We're significantly increasing live sports. We are the only commercial broadcaster with the rights to the Men's Football World Cup, as Chris said, which includes 19 more matches on ITV, a 60% increase. In addition, we have the rights to all England Men's rugby games this year. In summary, we're really confident we will continue to create value for shareholders. With the profitable growth of ITV Studios and the M&E digital business underpinned by strong cash generation, we will continue to deliver attractive returns to shareholders.

None of this of course would be possible without ITV's unique blend of creativity and commercialism, which is fueled by the talent and commitment of our people. And I just want to take a minute to say how proud we all are of what we do, the work that's done in ITV, but especially how proud we are of our colleagues and we're incredibly grateful to them for their hard work and achievements.

Thank you. We're now ready to take your questions.

[Operator Instructions] The first question today comes from Annick Maas of Bernstein.

The first one is on the advertising market. I mean your Q4 was better than anticipated. Your guide for Q1 is better. Can you tell us a bit more what the sentiment is in the ad market? Is this coming from across the board? Is it just certain campaigns or advertisers? That's the first one. The second one is on programming costs, which I guess also the guide is better than what was expected despite owning actually the World Cup rights. So is there something in there that is AI cost savings or what is really explaining the program cost savings? Just thinking also ahead how we should therefore think about program costs going forward?

And same question for Studios. You're guiding to the bottom end of your margin guide because of the revenue mix. I thought production would probably be within your whole industry, the 1 segment where you can put through AI savings the quickest. So is that so or if not, why not? And then maybe just 1 last one, which is on studio growth more generally. If you look to the midterm, I guess some of your competitors have been saying that the sort of growth level that you've seen for the last 5 years or so in the production world are slightly coming down. Is this something you are seeing or is it that you are taking share of the others and therefore, you can consistently grow better?

Okay. On the ad market, I think Q4 was largely down as a result of a pause by advertisers while they waited to see what the budget was going to be and so it was down year-on-year and we had expected it not to be like that. So that was the story behind Q4. Q1 is definitely trading better than we thought because the run rate from Q4 feeds into Q1 if that makes sense. Thus, February was really improved on January and March has improved further not just on February, but on March. So you're right, it's definitely better. I think that the fact that we have the World Cup in Q2 and Q3 means that we're having very, very active conversations with many, many advertisers. So I mean just to give you an example of that.

We have more inventory because we've got 19 more matches, that's 60% more than we had at the World Cup in Qatar. We're talking to about 100 advertisers at the moment and that is spanning 20 different categories. So we're very actively engaged with a huge number really of advertisers. And where we would say the trend really was, the Q4 was down on virtually all categories except 1 or 2. Q1, you'd have seen supermarkets doing well. You'd have seen travel was actually doing very well, let's wait and see on that one. But there's no discernible trend on categories in Q4 and Q1 whereas I think now with Q2 and Q3, the range of advertisers we're talking to would kind of indicate that all categories should be quite active in those quarters.

So that is very good news. And I think the other really interesting thing is we're getting a lot more interest in the World Cup from very big global brands and they're looking really to create high quality content and very bespoke creative advertising around kind of high-end content. So using players, using teams, et cetera. That's all brilliant for TV because it's the thing TV does best. You can't really do that in any other medium. So that's I think really good and we've agreed to sponsor and that will be announced. So I think the advertising market certainly, because the World Cup will lift it, should be a strong year for us. Your second question was costs I think.

I think specifically content costs. So you're right. Last year we didn't have one of the big mens events and we've obviously got the FIFA World Cup, as Carolyn said, and we've also got the new Rugby Nations Championship as well, which runs Q3 and then into Q4. So really a strong slate of sport all the way through from Q2 to Q4 and we have managed that within the overall envelope of content and that happens in several ways. There's some self-help in there. We did a reorganization of daytime soaps, which completed at the end of the year.

The new schedule started 1st of January. That saved us some money on those shows while maintaining exactly the viewer experience as we had before. In fact with the power hour in the soaps, that was viewer led. People were saying we don't want to watch an hour of the same soap, we'd like 2 half hour episodes and that's worked really, really successfully. So we've saved some money there and that's enabled us to reinvest elsewhere in the schedule as well as affording the World Cup.

And longer term, the team have just got -- they get better and better and better every year using the really granular viewer data that we've got through ITVX now to inform windowing decisions, acquisition decisions, commissions, we can see how a show grows and also making the marketing a lot more effective as well. So all of that means that -- I think you asked about where do we think that content cost will go longer term. We're really pleased that we've held it at plus or minus the same level ever since the launch of ITVX.

Yes, because we've absorbed a lot of inflation in that.

Yes, exactly. And so that's what we're looking to do going forward whilst continuing to grow that viewing on ITVX.

And then on your Studios question, I'm just going to -- we'll take it in 3 parts because you asked a margin question, you asked AI question, you asked a growth question. Let me kick off on the AI question because I think you're right. I think AI obviously lends itself very well to Studios. And I think the first thing to say is our fundamental belief is that we use AI on creativity only to enhance and augment it, but we then use it in a very, very strategic way where we integrate it in everything we do end-to-end. So it's a very integrated way of working in Studios.

And we've had quite a lot of experience already now because we've been doing this probably for the last 18 months to 2 years where we started with having what we call the Skunk Works and now actually it's kind of embedded in all the labels. So whether that is tools for R&D, research and development or preproduction or postproduction or editing or production planning and indeed marketing, we're kind of using it for the whole end-to-end process in Studios.

And what we try and do there is that of course there's efficiency gains, we use that to offset inflation and then try and bank some of that. And then we use productivity gains to get people to do more interesting things for instance in development to try and get more shows in. So the more resource we free up, we actually reuse that in a higher value kind of function if that makes sense. So that's what we're doing on AI.

And then Studios, you talked about the margin guidance and we've guided for bottom end. Our Studios business has industry-leading margins. We are the best in the business and the team have to work really hard at that. Last year they made GBP 31 million of cost savings. That came from some quite difficult decisions around label reorganizations in some geographies. At the same time, we're refilling the pipe. So we've made 4 bolt-on acquisitions and those take some time to integrate the back office. So the whole strategy is around maintaining the margin within that 13% to 15% range. It will go up and down depending on the mix of business we do in the year and where we are in the cycle, but very pleased with the level they're at. And the whole point about Studios is we want profitable growth and that means maintain the margins within that range.

And in terms of growth, we see the market growing. So it's a very big market, it's GBP 230 billion market. It's growing at about 1.5% to 2.5% according to Ampere. And our goal really is to be ahead of market growth and to take share. So that continues. That continues to be part of our strategy.

And you'll have seen that we've done that consistently over the last 8 years, consistent growth. And from a compound average basis over the course of that period, we've outgrown the market and we'll continue to take share.

Our last question today comes from Julien Roch of Barclays.

My first question is on the World Cup. Based on previous additions, can you give us an indication of the impact either millions of pounds or percentage? Second question is impact of AI on a cost basis, I know it's early days. But Stroer who reported this morning said that within 5 years they thought they could save EUR 50 million thanks to AI, which is about 3.5% of their operating cost. So any indication there? And then the last question is on your linear inventory, where are you in terms of that inventory being sold digitally or programmatically so it can be included in the kind of new AI platform that all the agencies are developing?

Okay. So on the World Cup, we don't guide for the uplift for individual tournaments. But you'll have seen performance on '25 versus '24 where we had the FIFA Men's World Cup. You can see the categories that outperformed when we have those. So as Carolyn said, we're really looking forward to the rest of the year with sport. It should give us an uplift and it should bring the whole advertising market in the U.K. up with it. But we don't give the exact tournament by tournament guide on that.

No. I mean just as a little fact on sports. The reason we really focused on live sport is in '25 when there wasn't a Euros or a World Cup, our reach of sport on ITV1 was 46.2 million people, which is fantastic and we would expect to exceed that in terms of our reach obviously this year because of the rugby and the football. We've got all the racing. It's an unprecedented year for sport for us.

And then, Julien, on the AI question, could you repeat it? I didn't quite pick up what the question was there.

So everybody is saying that AI is going to transform our lives. Every company is going to generate more revenue and they're also going to save a lot of cost. And Stroer who reported this morning said that in their view, AI would allow them to save EUR 50 million within 5 years, which is 3.5% of their operating cost. So I was wondering whether you already have sized the potential efficiency gain from all those wonderful AI things we're all going to do all the time.

The way we look at AI is exactly how you described it, where can we use it to augment creativity? Where can we use it to increase revenue and create new revenue streams? And on the flip side, how can we use it to create efficiency so that same number of people can do more with the AI tools? On the efficiency side, it absolutely fits into our long-term cost saving program. We've demonstrated that we are relentless about the efficiency within the organization. We've taken out a huge amount of cost over the last 6 years. We'll continue to do that. It's a multiyear program and within that, AI will obviously help with the next leg of that program.

Because we integrate it. We build it into the continuous cost improvement program. So it's something that we task ourselves with, but it's not always about -- there's a net cost saving, but then there's also an offset against inflation. There's an offset against other costs because cost of production is going up. So we just look at it in a much more integrated way than that. And I missed the company actually, Julien. Did you hear who the company was? No. Who was saying that they would do the EUR 50 million, it's just interesting for us.

Stroer, the German outdoor company.

I mean there will be significant savings. But in Studios in particular, we're very focused on how we can release resource to do more stuff that will generate more hits. I mean that's the kind of philosophy in Studios, which is why we will gain efficiencies and we will net off inflation, but we also want to reinvest in, say, making sure development is stronger.

Yes. I mean I think it really is -- I hate to use the phrase, but it really is in the DNA of ITV, this everyday efficiency. If you look at M&E, noncontent costs were down 5% last year and that is a lot of hard work by a lot of people across a whole range of initiatives. There aren't big set piece efficiency programs. It's baked into people's every day.

I think the third question was linear inventory.

Yes. So last year we finished the year, 30% of the linear inventory could be -- was capable of having a targeted ad within it. By the end of '26, we're looking to bring that up to 50%. Obviously we will not be using anywhere near 50% for the targeted industry -- targeted advertising because we can now make the choice both for advertisers and for ITV about what is the best use of that inventory? Is it better to use it for a targeted ad or is it better in a mass reach campaign. One of the reasons we've doubled down on sport is that those big live audiences are more valuable than ever.

So we would not be doing a targeted ad in the World Cup because that is the only place an advertiser can get the huge audiences that we attract. So over the course of this coming year, you will see coming out of ITV commercial a few more ad products where they will be -- they've already developed them in conjunction with advertisers and they're releasing those to do that targeted advertising in the live streams.

My question was not about targeted advertising. It's more being able to buy linear advertising on a digital platform, right? Because all the agencies are developing those AI platforms that they're going to give to their clients where clients can buy across media at a click of a button. And so if TV is not on those platforms, some clients will be lazy and maybe deemphasize TV. So it's more on whether you can buy digitally the linear advertising.

Yes. Understood. And absolutely, the commercial teams are really engaged with the agencies both on the buy side in terms of buying linear inventory, but also doing the outcomes work, launching Lantern in conjunction with Sky and Channel 4 to give measurability. All of the work we're doing to demonstrate the value of TV because if those models are rational, TV should benefit because we have the highest ROI of any media. So absolutely, we're working with them.

Is that what you meant, Julien?

Yes. But only working with agencies, you can have many reasons. You can do both at a click of a button on those platform alongside Hugo and Meta and not only ITVX or targeted, the whole inventory.

So I suppose that goes to the distribution strategy and our distribution strategy is to be in as many places. I mean I think we've got something like 98% coverage now of all platforms with ITVX and then a bit lower than that for channels. But our strategy is to be in as many places as possible on the right commercial terms, which then allows us to benefit from their reach and our inventory.

We have no further questions at this time. So I'd like to hand back to Carolyn for closing remarks.

Just want to say thanks very much for joining us today. We know it's a very busy day out there so thanks for your time. Bye for now.