BBC Worldwide delivers a strong performance in spite of currency challenges
While our results for 2014/15 will reflect the choices and investments we are making to do this - including BBC Store and the introduction of new brands - we nonetheless expect to deliver further returns to our shareholder over the course of the year.Tim Davie, CEO of BBC Worldwide
- Headline profit up 0.7% to £157.4m, and up 11.6% at constant currency
- Headline profit margin up from 14.0% to 15.1%
- Returns to the BBC up 11.4% to £173.8m, equivalent to 10.1% of BBC Television’s content funding in the year
- Investment in content up 13.7% to £200.6m, including a 19.5% increase in BBC commissions to £88.9m
- Returns to the independent production sector up 28.1% to £116.4m
- Sherlock was licensed to 224 territories in the year, more than any other programme
- Guinness World Record for Doctor Who 50th anniversary episode simulcast and cinema screening
- An eighth straight year of ratings growth at BBC AMERICA, up 13.5%
- BBC.com ended the year with an average of 79.8m unique users
- New genre brands BBC Brit, BBC Earth and BBC First developed; BBC First to launch in Australia next month
- Approvals granted for the UK version of BBC Store, UK launch set for 2015
BBC Worldwide has today published its 2013/14 Annual Review, revealing a year of solid underlying growth, and increased returns to the BBC.
Headline profit increased 0.7% to £157.4m (2012/13: £156.3m), and was up 11.6% at constant currency*. Headline profit margin increased from 14% to 15.1%, a record for the company. This was achieved on headline sales of £1,042.3m (2012/13: 1,115.8m), down 6.6%, or 5.2% at constant currency, principally reflecting portfolio changes: the sale of Lonely Planet and a new revenue share agreement for BBC.com. Adjusting for these, trading revenue was broadly flat, with growth from non-English language markets, sales to digital platforms and advertising helping to offset pressure on US and UK affiliate fees and declining DVD markets.
These results were delivered despite the strengthening of sterling in the year. Movements in foreign exchange rates had a £17.1m negative impact on the headline profit.
Tim Davie, CEO of BBC Worldwide, said: “BBC Worldwide performed well, reflecting the quality of our content and enabling reinvestment into the UK television industry. Headline profit at constant currency, shareholder returns and returns to the indie sector all grew by double digits. This was achieved at the same time as a major re-shaping of the company along regional lines.
“We will continue to execute on our strategy - more premium content, dynamic global brands and digital innovation - in the course of the new financial year. While our results for 2014/15 will reflect the choices and investments we are making to do this - including BBC Store and the introduction of new brands - we nonetheless expect to deliver further returns to our shareholder over the course of the year.”
Returns to the BBC:
BBC Worldwide is pleased to announce an increase of 11.4% in returns to the company’s parent, the BBC, to £173.8m (2012/13: £156.0m), equivalent to 10.1% of the year’s content funding for BBC Television. This includes a significant increase in its investment in BBC commissioned content, up 19.5% on the prior year to £88.9m (2012/13: £74.4m), further supporting the BBC’s desire to air ambitious, high quality content to UK audiences. Stand-out titles supported by BBC Worldwide included award-winning Top of the Lake, a third series of Sherlock, the 50th anniversary of Doctor Who: The Day of the Doctor and landmark natural history series Hidden Kingdoms. Dividends of £58.5m were up 2.1% on the previous year (2012/13: £57.3m).
Inspiring Global Audiences:
In October 2013, BBC Worldwide launched a new strategy focused on inspiring audiences through offering more high quality content, increasing the brand portfolio and developing more digital avenues for audiences to access content, with bbc.co.uk and BBC.com at its heart.
Progress has been made across all three aspects of the strategy:
- Investment in content increased by £24.2m to £200.6m (2012/13: £176.4m), exceeding the £200m target set for 2014/15 one year early.
- In 2013/14 BBC Worldwide represented over 250 British independent production companies, with over 40 output and development deals in place, with those struck in the year including start-ups Lonesome Pine and Voltage TV.
- New content partnerships included an agreement with CCTV, China’s state broadcaster, for joint development partnership of natural history titles.
- BBC Worldwide delivered over 40 channel feeds across 123 territories in the year.
- BBC AMERICA’s ratings grew a further 13.5%, delivering eight consecutive years of growth.
- 2013/14 saw leading franchise brand Doctor Who celebrate its 50th Anniversary in November. BBC Worldwide delivered a simulcast in 98 countries and 15 languages, receiving a Guinness World Record for the largest ever simultaneous transmission of a TV drama.
- BBC.com reached an average of 78.9m unique users by year-end, including 4.7m to the non-news sections: Travel, Future, Autos and two new sections launched in the year, Culture and Capital.
- E-commerce also continued to do well with BBCShop.com in the UK delivering 30.4% growth.
- Approval was granted for the UK version of BBC Store, which will offer UK audiences access to around 10,000 hours of content to buy and keep at launch in 2015.
A new organisation:
2013/14 also marked the company’s first full-year operating as a regionalised business, enabling a clearer focus on clients, partners and audiences. This is the first time BBC Worldwide has reported results on a regional basis, with seven regions segmented into the four areas below: UK, North America, Australia and New Zealand and rest of the world, collectively known as Global Markets.
While all our regions delivered a solid operating performance, we saw a particularly good performance from Global Markets, with both Western Europe and emerging markets growing very strongly. The other business areas all delivered stable results despite trading conditions that were tough for some of our established businesses:
- Our UK business is successfully reducing dependency on DVD to become an increasingly diversified and digital business; headline sales of £362.2m (2012/13: £380.3m) and profit of £55.2m (2012/13: 57.9m), down 4.8% and 4.7% respectively, also reflect a one-off charge relating to the bankruptcy of audiobook publisher AudioGO, in which we held a minority stake.
- UKTV, the award -winning media company of which we own 50% with Scripps Networks Interactive, Inc., grew its share of the commercial TV market to an all-time high of 8.2%.
- BBC Good Food and Top Gear magazines both continued to outperform their competition in circulation.
- BBC Worldwide North America held its own while facing tough and fragmented market conditions. Headline sales of £342.5m (2012/13: £361.2m) and headline profit of £50.7m (£53.5m), both down 5.2%, were affected by the impact of a new revenue share agreement for BBC.com, most pronounced in its largest advertising market, and a £4.8m production tax credit which reduced revenue by the same amount.
- Ratings for North America’s flagship cable channel, BBC AMERICA climbed 13.5%, delivering eight consecutive years of growth as BBC AMERICA showcased more original TV dramas than any other cable channel, and had the highest number of critically acclaimed programmes on US ad-supported television in 2013, among them Peabody Award-winning original drama Orphan Black.
- It was another strong year for digital sales, with VOD and DTO together up 36.7% in local currency.
- Global Markets delivered a 10.8% increase in headline sales of £279.1m (2012/13: £251.8m), with profit up 45.2% to £39.5m (2012/13: £27.2m).
- The fourth series of Danse avec les Stars (Dancing with the Stars) delivered an average audience of 6.3m in France.
- Top Gear delivered BBC Knowledge’s highest ever ratings on Poland’s Cyfrowy Polsat platform in March.
- Sherlock was Asia’s stand-out hit with S3 attracting over 67m hits on China’s digital platform YouKu in the year, and to date close to 70m.
- And in Latin America, BBC Entertainment was named the Best Pay TV channel in Mexico’s Premios Anuales for the second consecutive year.
Australia and New Zealand:
- Australia and New Zealand together form a key region for BBC Worldwide. The year’s performance shows that we are moving in the right direction, with strategy building blocks for the future in place. Headline sales of £76.0m (2012/13: £132.7m) and headline profit of £12.4m (£17.8m) were down 42.7% and 30.3%; excluding the impact of the Lonely Planet disposal and foreign exchange, headline sales were up 4%.
- BBC Worldwide ANZ secured a number of important deals including an agreement with pay TV platform Foxtel which will become launch partner for BBC First, a second look with the Australian Broadcasting Corporation and a production partnership with FremantleMedia Australia.
- BBC Knowledge in Australia witnessed ratings increase by 14.4% on the prior year.
- The DVD market also included some notable successes including a 95.5% growth in sales for Call The Midwife and 59.6% growth in Doctor Who title sales.
Tim Davie commented: “All our regions put in a competitive performance with Global Markets particularly impressive in the year. Despite facing tougher trading conditions in some of our established businesses, I am pleased that we held or grew margin in all four regional segments. Longer term I am confident that a greater local focus will bring benefits from closer connections to consumers and clients alike, and from taking more decisions in market.”
For further information please contact:
BBC Worldwide Press Office: 020 8433 2719
Mobile: 07540 125748/ 07739 300280
NOTES TO EDITORS
*The constant currency measure shows what 2013/14 results would have been if exchange rates had been the same as in 2012/13.
The full Annual Review, as well as the BBC Worldwide Annual Report and Financial Statements, can be found here: www.bbcworldwide.com/annualreview
Due to the organisational restructure in April 2013, this year’s Annual Review highlights the changes to the business under the new regional organisation.
About BBC Worldwide. BBC Worldwide is the main commercial arm and a wholly owned subsidiary of the British Broadcasting Corporation (BBC). Its vision is to build the BBC’s brands, audiences, commercial returns and reputation across the world. This is achieved through investing in, commercialising and showcasing content from the BBC around the world, in a way that is consistent with BBC standards and values. The business also champions British creativity globally.
In 2013/14, BBC Worldwide generated headline profits of £157.4m and headline sales of £1,042.3m and returned £173.8m to the BBC. For more detailed performance information please see our Annual Review website: http://www.bbcworldwide.com/annualreview
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