Business

Universal Music Group Revenues Pass $7.7 Billion in 2019, IPO Planned By 2023

Billie Eilish
Matt Winkelmeyer/Getty Images for LACMA

Billie Eilish performs onstage at the 2019 LACMA Art + Film Gala Presented By Gucci at LACMA on Nov. 2, 2019 in Los Angeles. 

The Universal Music Group's revenues passed $7.7 billion (€7.16 billion euros) in 2019, up 14% at constant currency and perimeter thanks to another strong surge in streaming revenue, which was up over 20% year over year.

Recorded music revenues accounted for $6.11 billion (€5.6 billion) of UMG's total take, up 11.6% year over year, while the publishing division's revenues topped a billion -- $1.14 billion (€1.052 billion) -- an increase of 9.2%, both at constant currency and perimeter.

That represents another strong year for the world's biggest record company, which finished 2019 by completing the sale of 10% of UMG to Tencent in a deal that values the company at $33 billion. The deal also includes an option for the Chinese conglomerate to purchase an additional 10% of UMG before Jan. 15, 2021.

In addition, according to Vivendi's presentation to shareholders posted online, an initial public offering for Universal Music Group is “currently planned for early 2023 at the latest.” Last week, the Warner Music Group announced plans for an IPO of its own.

Universal's strong performance helped parent company Vivendi increase its revenues 5.6% in constant currency, to $17.2 billion (€15.9 billion), with adjusted net income up 50.5% to $1.8 billion (€1.7 billion) for 2019. Vivendi also owns French television company, as well as the Havas Group, Editis, Gameloft and more.

Within recorded music, streaming jumped 21.5% during the year to $3.604 billion (€3.325 billion). Perhaps the most surprising number was that physical music sales increased 3.1% to $1.09 billion (€1.01 billion), a marked change from years of decline in the format. Download sales continued their decline, down 23.2% to $464 million (€428 million), though the growth in physical offset the losses in digital sales, according to Vivendi's press release. Licensing increased to $943 million (870 million).

Meanwhile, the company said that on the top five major platforms — Amazon, Apple, Deezer, Spotify and YouTube, alphabetically — it represented a different top artist: Taylor Swift, Billie Eilish, J Balvin, Post Malone and Daddy Yankee.

Elsewhere, merchandise and other revenues increased 73.7% year over year to $530 million (€489 million), which the company attributed to a growth in touring and direct-to-consumer sales.

UMG's earnings before interest, taxes and amortization (EBITA) grew 22.3% to $1.22 million (€1.124 million) over 2018.

As for publishing, Universal Music Publishing Group broke the $1 billion milestone for a second straight year, thanks to increased subscription and streaming revenues. The $1.14 billion UMPG generated was logged before it was announced earlier this month that Taylor Swift had signed an exclusive global publishing pact with the company.

For the fourth quarter of 2019, UMG brought in $2.28 billion (€2.10 billion) in revenue, up from $2.06 billion (€1.90 billion) in the same period in 2018. Of that, recorded music accounted for $1.80 billion (€1.662 billion), with streaming and subscriptions making the lion’s share, at $998 million (€921 million), up 16.8% year over year. Physical sales actually dropped 14% during the quarter, to $371.8 million (€343 million), while digital sales slipped 17.8% to $117 million (€108 million).