Universal Music Group N.V. Reports Financial Results for the Third Quarter and Nine Months Ended September 30, 2024
Announces Promotion of
Summary Q3 2024 Results1
- Revenue of €2,870 million increased 4.3% year-over-year, or 4.9% in constant currency, with growth in all segments. Excluding a prior-year item affecting comparability, detailed below, revenue grew 6.3% year-over-year, or 7.0% in constant currency.
- Recorded Music subscription revenue grew 7.6% year-over-year, or 8.2% in constant currency while streaming revenue declined 0.8% year-over-year, but grew 0.3% in constant currency.
- Adjusted EBITDA of €621 million increased 6.9% year-over-year, or 8.2% in constant currency, and Adjusted EBITDA margin expanded 0.5 percentage points to 21.6%. Excluding a prior-year item affecting comparability, detailed below, Adjusted EBITDA grew 8.9% year-over-year, or 10.3% in constant currency.
- Top sellers included
Taylor Swift ,Sabrina Carpenter , Billie Eilish,Chappell Roan and Post Malone.
Summary YTD Results1
- Revenue of €8,396 million increased 6.3% year-over-year, or 7.4% in constant currency, driven by strong growth in all segments. Excluding a prior-year item affecting comparability, detailed below, revenue grew 7.0% year-over-year, or 8.2% in constant currency.
- Recorded Music subscription revenue grew 8.2% year-over-year, or 9.2% in constant currency and streaming revenue grew 0.9% year-over-year, or 1.8% in constant currency.
- Adjusted EBITDA of €1,862 million increased 10.0% year-over-year, or 11.7% in constant currency, and Adjusted EBITDA margin expanded 0.8 percentage points to 22.2%. Excluding a prior-year item affecting comparability, detailed below, Adjusted EBITDA grew 10.8% year-over-year, or 12.4% in constant currency.
- Top sellers included
Taylor Swift , Billie Eilish,Morgan Wallen ,Sabrina Carpenter andNoah Kahan .
1
This press release includes certain alternative performance indicators which are not defined in the International Financial Reporting Standards ("IFRS") issued by the
HILVERSUM,
"Even as we continue to grow revenue and Adjusted EBITDA, we are already making progress on the strategic initiatives we outlined at our recent Capital Markets Day," said Sir
UMG Results
|
Three Months Ended
|
% |
% |
|
Nine Months Ended
|
% |
% |
||
(in millions of euros) |
2024 |
2023 |
YoY |
const. |
|
2024 |
2023 |
YoY |
const. |
|
(unaudited) |
(unaudited) |
|
|
|
(unaudited) |
(unaudited) |
|
|
Revenue |
2,870 |
2,752 |
4.3 % |
4.9 % |
|
8,396 |
7,901 |
6.3 % |
7.4 % |
EBITDA |
556 |
478 |
16.3 % |
17.8 % |
|
1,626 |
1,244 |
30.7 % |
33.6 % |
EBITDA margin |
19.4 % |
17.4 % |
2.0pp |
|
|
19.4 % |
15.7 % |
3.7pp |
|
Adjusted EBITDA |
621 |
581 |
6.9 % |
8.2 % |
|
1,862 |
1,692 |
10.0 % |
11.7 % |
Adjusted EBITDA margin |
21.6 % |
21.1 % |
0.5pp |
|
|
22.2 % |
21.4 % |
0.8pp |
|
|
|||||||||
Note: % YoY indicates % change year-over-year; % const. indicates % change year-over-year adjusted for constant currency. Constant currency is calculated by taking current year results and comparing against prior year results restated at current year rates. |
Q3 2024 Results
Revenue for the third quarter of 2024 was €2,870 million, an increase of 4.3% year-over-year, or 4.9% in constant currency. As previously disclosed, revenue in the third quarter of 2023 included a €53 million benefit in Music Publishing from the accrual for a catch-up payment from certain digital service providers related to the Copyright Royalty Board Phonorecords III ruling in 2023 (the "CRB Phonorecords III Accrual"). Excluding this item, revenue grew 6.3% year-over-year, or 7.0% in constant currency.
UMG's Recorded Music, Music Publishing and Merchandising and Other segments all contributed to the revenue growth in the quarter, as discussed further below.
EBITDA for the quarter increased 16.3% year-over-year, or 17.8% in constant currency, to €556 million and EBITDA margin was 19.4%, compared to 17.4% in the third quarter of 2023. EBITDA and EBITDA margin were impacted by non-cash share-based compensation expenses of €65 million during the third quarter of 2024, compared to €103 million during the third quarter of 2023. Excluding non-cash share-based compensation expenses, Adjusted EBITDA for the quarter was €621 million, up 6.9% year-over-year, or 8.2% in constant currency. Adjusted EBITDA margin increased 0.5 percentage points to 21.6%, compared to 21.1% in the third quarter of 2023, driven by operating leverage and cost savings.
EBITDA and Adjusted EBITDA in the third quarter of 2023 included an €11 million benefit in Music Publishing from the CRB Phonorecords III Accrual. Excluding this item, Adjusted EBITDA was up 8.9% year-over-year, or 10.3% in constant currency, as a result of revenue growth and cost savings. The CRB Phonorecords III Accrual did not impact Adjusted EBITDA margin or margin expansion.
YTD 2024 Results
In the nine months ended
Revenue for the nine months ended
For the nine months ended
EBITDA and Adjusted EBITDA for the nine months ended
Recorded Music
|
Three Months Ended
|
% |
% |
|
Nine Months Ended
|
% |
% |
||
(in millions of euros) |
2024 |
2023 |
YoY |
const. |
|
2024 |
2023 |
YoY |
const. |
|
(unaudited) |
(unaudited) |
|
|
|
(unaudited) |
(unaudited) |
|
|
Subscriptions and streaming |
1,491 |
1,414 |
5.4 % |
6.2 % |
|
4,436 |
4,169 |
6.4 % |
7.3 % |
of which streaming |
354 |
357 |
(0.8 %) |
0.3 % |
|
1,039 |
1,030 |
0.9 % |
1.8 % |
of which subscription |
1,137 |
1,057 |
7.6 % |
8.2 % |
|
3,397 |
3,139 |
8.2 % |
9.2 % |
Downloads and other digital |
42 |
59 |
(28.8 %) |
(28.8 %) |
|
136 |
174 |
(21.8 %) |
(21.4 %) |
Physical |
288 |
294 |
(2.0 %) |
(0.7 %) |
|
900 |
933 |
(3.5 %) |
0.0 % |
License and other |
325 |
270 |
20.4 % |
21.7 % |
|
863 |
764 |
13.0 % |
14.2 % |
Recorded Music revenues |
2,146 |
2,037 |
5.4 % |
6.2 % |
|
6,335 |
6,040 |
4.9 % |
6.3 % |
|
|||||||||
Note: % YoY indicates % change year-over-year; % const. indicates % change year-over-year adjusted for constant currency. |
Q3 2024
Recorded Music revenues for the third quarter of 2024 were €2,146 million, up 5.4% compared to the third quarter of 2023, and up 6.2% in constant currency. Subscription revenue grew 7.6% year-over-year, or 8.2% in constant currency, driven primarily by the growth in global subscribers, as well as price increases at certain platforms. Streaming revenue declined 0.8% year-over-year, but grew 0.3% in constant currency due to mixed performance at advertising-based platform partners as the digital advertising market remains volatile. Physical revenue decreased 2.0% year-over-year, or 0.7% in constant currency, as growth in vinyl sales largely offset a difficult comparison against last year's strong CD sales in
YTD 2024 Results
In the nine months ended
Music Publishing
|
Three Months Ended
|
% |
% |
|
Nine Months Ended
|
% |
% |
||
(in millions of euros) |
2024 |
2023 |
YoY |
const. |
|
2024 |
2023 |
YoY |
const. |
|
(unaudited) |
(unaudited) |
|
|
|
(unaudited) |
(unaudited) |
|
|
Performance |
101 |
106 |
(4.7 %) |
(3.8 %) |
|
315 |
293 |
7.5 % |
8.6 % |
Synchronisation |
64 |
55 |
16.4 % |
18.5 % |
|
187 |
183 |
2.2 % |
2.7 % |
Digital |
295 |
294 |
0.3 % |
0.7 % |
|
890 |
789 |
12.8 % |
13.4 % |
Mechanical |
28 |
25 |
12.0 % |
12.0 % |
|
79 |
77 |
2.6 % |
2.6 % |
Other |
12 |
11 |
9.1 % |
0.0 % |
|
37 |
38 |
(2.6 %) |
0.0 % |
Music Publishing revenues |
500 |
491 |
1.8 % |
2.2 % |
|
1,508 |
1,380 |
9.3 % |
10.0 % |
|
|||||||||
Note: % YoY indicates % change year-over-year; % const. indicates % change year-over-year adjusted for constant currency. |
Q3 2024
Music Publishing revenue amounted to €500 million in the third quarter of 2024, up 1.8% year-over-year, or 2.2% in constant currency. Music Publishing revenue in the third quarter of 2023 included the €53 million benefit from the CRB Phonorecords III Accrual. Excluding this item, Music Publishing revenue was up 14.2% year-over-year, or 14.7% in constant currency.
Within Music Publishing, digital revenue grew 0.3% year-over-year, or 0.7% in constant currency. Excluding the CRB Phonorecords III Accrual, digital revenue grew 22.4% year-over-year, or 22.9% in constant currency, reflecting continued growth of streaming and subscription revenue. Performance revenue declined 4.7% year-over-year, or 3.8% in constant currency as a result of lower collections in parts of Europe. Synchronisation revenue increased 16.4% year-over-year, or 18.5% in constant currency driven by growth in advertising campaigns in the
YTD 2024 Results
In the nine months ended
Within Music Publishing, digital revenue grew 12.8% year-over-year, or 13.4% in constant currency. Excluding the CRB Phonorecords III Accrual, digital revenue grew 20.9% year-over-year, or 21.6% in constant currency, driven by growth in streaming and subscription revenue. Performance revenue grew 7.5% year-over-year, or 8.6% in constant currency, synchronisation revenue grew 2.2% year-over-year, or 2.7% in constant currency and mechanical revenue grew 2.6% year-over-year both as-reported and in constant currency.
Merchandising and Other
|
Three Months Ended
|
% |
% |
|
Nine Months Ended
|
% |
% |
||
(in millions of euros) |
2024 |
2023 |
YoY |
const. |
|
2024 |
2023 |
YoY |
const. |
|
(unaudited) |
(unaudited) |
|
|
|
(unaudited) |
(unaudited) |
|
|
Merchandising and other revenues |
237 |
227 |
4.4 % |
3.5 % |
|
578 |
491 |
17.7 % |
17.5 % |
|
|||||||||
Note: % YoY indicates % change year-over-year; % const. indicates % change year-over-year adjusted for constant currency. |
Q3 2024
Merchandising and other revenue in the third quarter of 2024 was €237 million, an increase of 4.4% year-over-year, or 3.5% in constant currency, driven by growth in direct-to-consumer sales and higher touring merchandise sales, partially offset by lower retail sales.
YTD 2024 Results
Merchandising and other revenue of €578 million was up 17.7% year-over-year, or 17.5% in constant currency, driven by the growth in touring merchandise sales and direct-to-consumer sales, partially offset by lower retail sales.
Chief Financial Officer Transition
Universal Music Group EVP, CFO and President of Operations
"Boyd has done an outstanding job leading UMG's global financial functions through a period of unprecedented growth and change, including our successful listing on the Euronext in 2021, and our last three years as a stand-alone public company," said Sir
Items Impacting Comparability of Results
TOTAL UMG
|
Three Months Ended
|
Nine Months Ended
|
||
(in millions of euros) |
2024 |
2023 |
2024 |
2023 |
Revenue |
|
|
|
|
CRB Phonorecords III Accrual |
- |
53 |
- |
53 |
|
|
|
|
|
Adjusted EBITDA |
|
|
|
|
CRB Phonorecords III Accrual |
- |
11 |
- |
11 |
MUSIC PUBLISHING
|
Three Months Ended
|
Nine Months Ended
|
||
(in millions of euros) |
2024 |
2023 |
2024 |
2023 |
Revenue |
|
|
|
|
CRB Phonorecords III Accrual |
- |
53 |
- |
53 |
|
|
|
|
|
Adjusted EBITDA |
|
|
|
|
CRB Phonorecords III Accrual |
- |
11 |
- |
11 |
CRB Phonorecords III Accrual
Revenue, EBITDA and Adjusted EBITDA in 2023 included the accrual for a catch-up payment from certain digital service providers related to the Copyright Royalty Board Phonorecords III ruling in 2023 disclosed and booked in Q3 2023.
Conference Call Details
The Company will host a conference call to discuss these results on
While listeners may use the webcast, a dial-in telephone number is required for investors and analysts to ask questions. Investors and analysts interested in asking questions can pre-register for a dial-in line at investors.universalmusic.com under the "Financial Reports" tab.
Cautionary Notice
This press release is published by
Forward-Looking Statements
This press release may contain statements that constitute forward-looking statements with respect to UMG's financial condition, results of operations, business, strategy and plans. Such forward-looking statements may be identified by the use of words such as 'profit forecast', 'expect', 'estimate', 'project', 'anticipate', 'should', 'intend', 'plan', 'probability', 'risk', 'target', 'goal', 'objective', 'will', 'endeavour', 'optimistic', 'prospects' and similar expressions or variations on such expressions. Although UMG believes that such forward-looking statements are based on reasonable assumptions, they are not guarantees of future performance. Actual results may differ materially from such forward-looking statements as a result of a number of risks and uncertainties, many of which are related to factors that are outside UMG's control, including, but not limited to, UMG's inability to compete successfully and to identify, attract, sign and retain successful recording artists and songwriters, failure of streaming and subscription adoption or revenue to grow or to grow less rapidly than anticipated, UMG's reliance on digital service providers, UMG's inability to execute its business strategy, the global nature of UMG's operations, changes in global economic and financial conditions, UMG's inability to protect its intellectual property and against piracy, UMG's inability to attract and retain key personnel, changes in laws and regulations (and UMG's compliance therewith) and the other risks that are described in our 2023 Annual Report. Accordingly, UMG cautions readers against placing undue reliance on such forward-looking statements. Such forward-looking statements are made as of the date of this press release. UMG disclaims any intention or obligation to provide, update or revise any such forward-looking statements, whether as a result of new information, future events or otherwise.
Alternative Performance Indicators
This press release includes certain alternative performance indicators which are not defined in IFRS Accounting Standards issued by the
About
At
Contacts
Media
Investors
Appendix
Non-IFRS Alternative Performance Indicators and Reconciliations
Reconciliation of Adjusted EBITDA
|
Three Months Ended
|
% |
|
|
Nine Months Ended
|
% |
||
(in millions of euros) |
2024 |
2023 |
YoY |
|
|
2024 |
2023 |
YoY |
|
(unaudited) |
(unaudited) |
|
|
|
(unaudited) |
(unaudited) |
|
EBITDA |
556 |
478 |
16.3 % |
|
|
1,626 |
1,244 |
30.7 % |
|
|
|
|
|
|
|
|
|
Non-cash share-based compensation expenses |
65 |
103 |
(36.9 %) |
|
|
236 |
448 |
(47.3 %) |
Adjusted EBITDA |
621 |
581 |
6.9 % |
|
|
1,862 |
1,692 |
10.0 % |
Definitions
In this press release, UMG presents certain financial measures when discussing UMG's performance that are not measures of financial performance or liquidity under IFRS Accounting Standards ("non-IFRS"). These non-IFRS measures (also known as alternative performance indicators) are presented because management considers them important supplemental measures of UMG's performance and believes that they are widely used in the industry in which UMG operates as a means of evaluating a company's operating performance and liquidity. UMG believes that an understanding of its sales performance, profitability, financial strength and funding requirements is enhanced by reporting the following non-IFRS measures. All non-IFRS measures should be considered in addition to, and not as a substitute for, other IFRS measures of operating and financial performance as described in this press release. In addition, it should be noted that other companies may have definitions and calculations for these non-IFRS measures that differ from those used by UMG, thereby affecting comparability.
EBITDA and EBITDA margin
UMG considers EBITDA and EBITDA margin, non-IFRS measures, to be relevant measures to assess its operating performance and the performance of its operating segments as reported in the segment data. It enables UMG to compare the performance of operating segments regardless of whether their performance is driven by the operating segment's organic growth or by acquisitions. It excludes restructuring expenses, which may impact period-to-period comparability. EBITDA margin is EBITDA divided by revenue. To calculate EBITDA, the accounting impact of the following items is excluded from the Operating Profit:
i. amortization of intangible assets;
ii. impairment losses on goodwill and other intangibles;
iii. depreciation of tangible assets including right of use assets;
iv. (gains)/losses on the sale of tangible assets, including right of use assets and intangible assets; and
v. restructuring expenses.
Adjusted EBITDA and Adjusted EBITDA margin
The difference between EBITDA and Adjusted EBITDA consists of non-cash share-based compensation expenses and, if applicable, certain one-time items that are deemed by management to be significant and incidental to normal business activity. Adjusted EBITDA margin is Adjusted EBITDA divided by revenue. UMG considers Adjusted EBITDA and Adjusted EBITDA margin, non-IFRS measures, to be relevant measures to assess performance of its operating segments excluding items that may be incidental to normal business activity and excluding non-cash share based compensation which may impact period-to-period comparability.
Logo - https://mma.prnewswire.com/media/512308/UMG.jpg
View original content:https://www.prnewswire.co.uk/news-releases/universal-music-group-nv-reports-financial-results-for-the-third-quarter-and-nine-months-ended-september-30-2024-302293152.html