Universal Music Group has reported revenue of €2.9 billion in the first three months of the year – an increase of 8.1% year-on-year in constant currency (all figures will be in constant currency).
UMG has also announced that it will increase its share buyback authorisation and monetise a portion of the equity stake in Spotify. It follows the bid by Pershing Square that called for the Spotify stake to be sold.
The major confirmed it would sell half of its equity stake in Spotify with proceeds used for the share buyback and to be shared with artists. UMG's Spotify stake is currently valued at €2.7 billion.
UMG credited the consolidation of Downtown, initial pricing benefits of Streaming 2.0 agreements, strong physical sales and healthy synchronisation income contributing to growth in recorded music and publishing divisions.
Universal said that the Downtown acquisition “provides UMG with capabilities and infrastructure to deliver further growth in the fast-growing label and artist services sector”.
Overall recorded music revenues were up 8.9% year-on-year in Q1. With the Downtown boost, recorded music subscription revenue grew 12.5% year-on-year, while streaming revenue (non-subscription) increased 5.0%.
Physical revenue increased 12.7%, both with and excluding Downtown, with particular strength in Japan and the US.
Top sellers in the quarter included BTS, Olivia Dean, Taylor Swift, the KPop Demon Hunters soundtrack and Morgan Wallen.
Music publishing revenue grew 7.0% year-on-year in Q1.
Adjusted EBITDA of €636 million declined 3.8% year-on-year.
Sir Lucian Grainge, chairman and CEO of UMG, said, “We delivered a solid quarter of growth in our core businesses, complemented by our strategic development and investment in fast-growing areas of the industry. We continue to build the most successful music company in history by attracting the world’s top talent, engaging fans globally, and delivering long-term value for stakeholders. Central to that mission is fostering an environment that protects artists and songwriters, champions human creativity, and embraces innovation at a pivotal moment for our industry."
Matt Ellis, UMG’s CFO, said: “Against the backdrop of a healthy industry, we are consistently driving sustained revenue growth through our multi-faceted strategy, while continuing to expand EBITDA and reinvest for the future. In addition, the important steps we are announcing today to increase our share buyback authorisation and monetise a portion of our equity stake in Spotify will lead to enhanced shareholder value while maintaining the flexibility the Company requires to drive further success."
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