Universal Music Posts Higher 3Q Revenue Amid Streaming Push -- Update
October 27 2021 - 12:57PM
Dow Jones News
By Mauro Orru
Universal Music Group NV--the music major behind The Weeknd,
Billie Eilish and Taylor Swift--posted higher revenue in the third
quarter as it continued to benefit from the growing popularity of
streaming services.
The world's largest music company, which started trading on the
Euronext Amsterdam stock exchange last month, said Wednesday that
revenue for the three months to Sept. 30 climbed to 2.15 billion
euros ($2.49 billion) from EUR1.86 billion last year.
Earnings before interest, taxes, depreciation, and
amortization--a closely watched profit metric for Universal--rose
to EUR426 million from EUR380 million, with a margin of 19.8%.
"Our operational and financial performance this quarter--our
first as an independent, publicly traded company--demonstrates both
why UMG is the world's most successful music company, as well as
how our commitment to artists' career development and fostering
innovation promotes growth across the music ecosystem," said Chief
Executive Lucian Grainge.
Universal's recorded music business, which encompasses
subscription and streaming revenue, accounted for the lion's share
of revenue growth. Subscription and streaming revenue jumped 15.2%
at constant currency to EUR1.13 billion.
Universal shares surged in their trading debut last month, a
sign of investors' confidence in a resurgent music industry that
continues to benefit from consumers spending more time listening to
music, a trend accelerated by the coronavirus pandemic.
The music business's fortunes started to turn around in 2016,
when growth from streaming services offered by the likes of Spotify
Technology SA and Apple Inc. began to outweigh declining CD and
digital download sales amid rampant online piracy.
The recorded music industry generated $21.6 billion in global
revenue in 2020, with streaming accounting for 62% of the total,
according to the International Federation of the Phonographic
Industry, which represents the recording industry worldwide.
However, Universal believes streaming is still in its early
days, with opportunities for further expansion driven by growth in
the number of paid subscribers, even in established markets.
The company is targeting revenue growth of more than 10% this
year, with earnings before interest, taxes, depreciation, and
amortization expected to grow more than 20%.
"Our results this quarter demonstrate the continued strength of
our artist roster and catalogue, the increasingly diversified
revenue streams of our business, and our ability to deliver growth
for our shareholders," said Chief Financial Officer Boyd Muir.
Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94
(END) Dow Jones Newswires
October 27, 2021 12:42 ET (16:42 GMT)
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