Jan is a key member of UKTV's Executive Leadership Team and is responsible for all financial decision-making, including achieving financial targets, controlling cashflow, and management accounting. He also oversees UKTV's relationships with C4 Sales and Sky Media Ireland and is responsible for all technical and operational aspects of UKTV, including the roll-out of digital services under the UKTV Play brand.
Since joining the company, UKTV's revenues and EBITDA have grown substantially to reach £319 million and £82 million respectively, as well as £148 million investment in programming and related launches. UKTV reported double-digit growth in these three areas in 2015.
We sat down with him ahead of his presentation at CFO Rising Europe.
How did you get started in finance?
I actually started my career in retail banking in France and the Czech Republic, after which I did an MBA and moved into a strategy role in a consumer goods business, Allied Domecq Spirits & Wine. Subsequently, I took on a variety of operational and business transformation roles at the likes of Telewest, Accenture, and Telefonica O2 Europe before joining Virgin Media in 2008 in a strategic planning capacity. Although I had worked closely with Finance in a number of those positions, my first genuine Finance job was as Interim Finance Director for Virgin Media’s wholly owned TV channels and adsales business IDS. I enjoyed it so much that when the opportunity to become CFO at UKTV came up in 2010 I grasped it and have relished the job ever since, expanding my responsibilities to become CFO & COO in 2014. I believe the experience of working in different functions before focusing on Finance has given me a broader perspective both to understand how businesses really work and also as to how Finance can help drive commercial success.
How has the role of the finance function changed over the last decade? Do you think the CFO role has changed to become more of a generalist?
The role of the finance function in general and the CFO, in particular, has changed tremendously over the last decade and in a positive, enriching way. Where the CFO’s role was often seen as limited to scorekeeping, budgeting, and corporate governance / risk management, nowadays a successful CFO will play an increasingly important role in these areas too:
- Strategy development – building a framework that enables the leadership team to allocate resources towards investments that deliver long-term value, and ensure that the financial plans are fully aligned with the strategic story;
- Performance management – instead of relying only on backward-looking financial metrics, focus on key performance indicators that are based on and support the achievement of the business strategy;
- Partnership with the rest of the organization – build close relationships in order both to understand better the operational challenges the business faces and to encourage the business unit leaders proactively to seek out the CFO’s advice on building value;
As the custodian of the whole P&L the CFO should be focusing not just on cost but also on revenue – in the medium to long term value creation can only come from building the topline as well as the bottom line so the modern CFO should have a keen eye on both.
What unique challenges do you face as a finance leader at UKTV?
UKTV has a unique position in a fast-paced and rapidly changing sector:
- Traditional linear TV viewing is starting to show significant declines although it still dominates the video world;
- Viewers are increasingly accessing content through devices other than TVs, but the revenue models for these are still immature and more complex than for broadcast TV;
- The principal source of revenue for most broadcasters is advertising which is a highly cyclical and hence variable income stream;
- Content remains the most potent weapon for differentiation between brands and between TV platforms such as Sky, Virgin Media, and BT, which means that control of IP is increasingly important and fought-over;
- Competition has expanded greatly over the last few years to include global giants such as Netflix and Amazon. Within this industry context, UKTV is itself a unique business as a result of being a joint venture between BBC Worldwide and the US publicly-listed Scripps Networks and the challenge has been how to drive significant growth in market share, revenue and EBITDA to build long-term value.
What will you be discussing in your presentation?
My presentation will be about our response to the challenges I outlined above, and how at UKTV we have been able to build a virtuous circle of investment in content and channels which has resulted in record performance in 2015:
- Share of commercial impacts (viewing of ads) at 9.31% (vs 8.23% in 2013)
- Revenue of £319m (vs 278m in 2013)
- EBITDA of £82.0m (vs 67.4m in 2013)
We have achieved this through a strategy based on:
- Building our content IP which not only means greater ability to exploit our content wherever and whenever we want but also has led to much higher diversification in terms of the types of programmes that deliver the highest viewing;
- Growing our linear TV business – investing in content and launching new channels in Freeview means we are now the third commercial broadcaster in the UK (by share of commercial impacts) ahead of the whole Sky family and the whole Five family and behind only ITV and Channel 4;
- Growing our VOD business – firstly by building our presence on the services most heavily used by consumers and secondly by developing our content offering for those services has enabled our digital brand UKTV Play to grow by 84% year on year in the first half of 2016.
I will also describe how the finance function has played a key role in enabling this commercial success.