*For 2006/07 and 2007/08 headline profit is presented
before exceptional items under UKGAAP as previously applied by the
Group.
Against this backdrop, BBC Worldwide achieved another record
performance:
- Headline sales were up 7.8% to a record £1157.7m (£1074.2m
2009/10), and headline profit saw double-digit growth - up 10.3% to
£160.2m (£145.2m 2009/10) - evidence that our growth strategy
remains right for the times.
- Headline operating margin increased to 13.8% (13.5% 2009/10),
despite continuing investment in new businesses, owing to the
continued success of established high-margin businesses and newer
ventures moving towards profitability.
- Profit before tax, inclusive of the results of discontinued
operations, grew 59.2% to £201.2m, including the gain on disposal
from investments in Animal Planet and People&Arts.
- Total returns to the BBC, our parent and sole shareholder,
increased by 8.6% to £181.9m (£167.5m 2009/10), supporting its
development of world-class content. This includes dividends of
£76.4m in relation to 2010/11 performance and investments in
BBC-commissioned programming of £78.5m.
Progress against our five strategic objectives is laid out in
detail on our Strategy pages, available via the right hand
navigation, and the performance of each business can be found on
our Performance review page.
Our investment in great content continued. In addition to the
direct investments we made in programming commissioned by the BBC
and other UK broadcasters, we also commissioned twice as much
programming for our international channels and made local versions
of our formats for customers. These included Dancing with the Stars
(the international version of Strictly Come Dancing) in France for
the first time, for TF1, and Top Gear for HISTORYTM in
the USA. Both have already been recommissioned.
Several of the UK independents in which we have stakes garnered
awards, such as Best Independent Production Company for Left Bank
Pictures at the Broadcast Awards 2011, and new commissions in the
year included series two of Rev (Big Talk Productions) and Stephen
Fry's Planet Word (Sprout Pictures).
I am particularly proud of our role in taking so much UK content
to the world via our sales and distribution network, our portfolio
of BBC-branded channels and our websites. In this respect we are
uniquely placed to help our sectors of the UK creative industries
to expand through exports.
In 2010/11 our international sales increased by 9.6% to £642.9m
(£586.8m 2009/10). This figure represents 55.5% of headline sales,
marginally ahead of 54.6% last year. While sales growth outside the
UK has been strong, so too has UK performance, so we expect it to
take us an extra year (to 2013) to hit our target of
two-thirds.
In 2010/11 we sold around 74,000 hours of high-quality UK
programming to over 690 customers from the USA to Indonesia.
Digital sales, predominantly online and mobile, increased to 8.1%
of net sales* (7.0% 2009/10), on course toward our target of 10% by
2012. Impartial news and information was distributed to a monthly
average of 58m users by BBC.com. The monthly average user base for
all our websites is now 68m.
What's more, our expertise in further extending enjoyment of
content by developing apps, merchandise, games, DVDs, publications
and live events continued apace. Downloads of our apps in the year
were over 12m; we have 11.8m fans of our Top Gear and Doctor Who
pages on Facebook; and we have a number of digital games titles in
the market.
I have noted how proud we are of the role we play in building
the BBC's reputation around the world and taking UK media brands
and content to every habitable continent. The responsibility that
comes with that role is something those who work for the company
take very seriously, whether based in the UK or in our many
international offices.
Our Values (see corporate responsibility) are
what differentiate BBC Worldwide in the marketplace. They reflect
the qualities that all our customers have come to expect from us.
To that end we have taken steps in the past year to embed these
Values more formally into our people processes and systems in order
to ensure they remain at the heart of our business. We have also
completed a substantial programme of staff training, including
relevant people from our joint ventures and partnerships, in all
aspects of our editorial policies and commercial practices.
The Values also underpin the way we work with suppliers and
manage sustainability. Products licensed or commissioned by BBC
Worldwide are produced all around the world, and our ethical
sourcing team operates an exacting programme to check conditions at
manufacturing sites.
Our headquarters in London, New York and Sydney are
environmentally efficient and, supported by our ISO 14001
environment management system, we are continually looking at ways
to further reduce the impact of our operations. Our long-term
commitment to sustainable paper for our publishing businesses was
recognised this year with an FSC Global Partner award. Rapid
international expansion means that we will need to work hard to
control our travel footprint.
Despite the high-pressure environment in which we work, staff
still take time to volunteer in the local community, and I have
been personally delighted to see our fledgling, London-based staff
choir develop over the year, both in repertoire and outreach.
This year we have laid out all our work across these areas in a
corporate responsibility
report. I hope you will read it and contact me should you have
any questions or feedback for us.
As ever, I would like to offer my heartfelt thanks to all the
people in our own operations and joint ventures, and to those who
produce the excellent and inspiring content we market, for their
outstanding efforts.
Our vision is to be a leading global entertainment company,
rooted in BBC Values, offering world-class content that resonates
with local audiences. Our growth strategy is designed to deliver
that vision by building on the assets that set us apart - the BBC
brand and our portfolio of distinctive, high-quality consumer
brands and content. In the year ahead, we will continue to invest
in these and in the infrastructure via which to exploit them.
John Smith