UMG Universal Music Group NV

By Mauro Orru

Universal Music Group NV--the music major behind the Weeknd, Billie Eilish and Taylor Swift--posted higher revenue for the second quarter as it continued to benefit from the popularity of streaming services offered by the likes of Spotify Technology SA, Apple Inc. and Amazon.com Inc.

The world's largest music company said Wednesday that revenue for the three months to the end of June climbed to 2.54 billion euros ($2.57 billion) from EUR2.02 billion last year.

Universal's recorded music business, which encompasses subscription and streaming, accounted for the lion's share of revenue growth. Subscription revenue rose 7% at constant currency to EUR966 million, while streaming revenue jumped 15.6% to EUR348 million.

Still, streaming growth cooled down compared to the first three months of the year, when Universal's streaming revenue jumped 18.4% at constant currency. Streaming services have enjoyed a banner two years as listeners turned to digital when coronavirus restrictions the world over brought live concerts to a standstill.

But growth is continuing. Universal said last year that streaming was still in its early days, with opportunities for further expansion driven by growth in the number of paid subscribers, even in established markets.

On Wednesday, Spotify reported user growth and a lift in advertising revenue in the most recent quarter, thwarting fears that inflation and subscription fatigue were hitting consumers' wallets.

Universal's revenue from physical sales, such as CDs, surged 17.4% at constant currency to EUR303 million. BTS, King & Prince, Rammstein, Olivia Rodrigo and INI were among the top sellers for the quarter.

The record label has sealed a series of catalog- and music-rights acquisitions in recent months as the value of royalty revenue from music rights has soared. Catalogs have sold for as much as 30 times their average annual royalties.

Frank Zappa's family trust sold his entire song catalog to Universal last month, handing it control of a vast archive of unreleased work from the late composer. Bob Dylan sold his songwriting catalog, which included 600 copyrights over the course of 60 years of music, to Universal in 2020 for between $300 million and $400 million.

Adjusted earnings before interest, taxes, depreciation, and amortization--a key profitability measure for Universal--rose to EUR507 million from EUR429 million.

Universal was expected to post revenue of EUR2.41 billion and adjusted earnings of EUR499 million, according to UBS estimates.

"Our strong performance across diversified revenue streams is fuelled by the successful partnerships we've formed with our artists-both new and established-in markets around the world," said Chief Executive Lucian Grainge.

For the first half of the year, Universal posted EUR241 million in profit, down 46.7% from last year due to the revaluation of investments in companies such as Spotify or Tencent Music Entertainment Group. Excluding exceptional items, profit increased 32% to EUR763 million.

Universal will be distributing EUR435 million, or EUR0.24 a share, to shareholders for the first half as part of its policy to pay a dividend of 50% of adjusted net profit.

Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94

(END) Dow Jones Newswires

July 27, 2022 13:03 ET (17:03 GMT)

Universal Music Group NV (EU:UMG)
Historical Stock Chart
Von Mär 2024 bis Apr 2024

Universal Music Group NV (EU:UMG)
Historical Stock Chart
Von Apr 2023 bis Apr 2024