Universal Music Group, the world’s largest music company, saw sales grow 7% during the third quarter — excluding revenues from EMI Recorded Music — but said it’s on course to achieve the £100 million ($160 million) in cost-savings it predicted when it bought the London-based company.
UMG’s EBITA (earnings before interest, taxes and amortization) were up 47% increase over the third quarter of 2013. EBITA for the year so far were up 12.5%, with €255 million. Excluding restructuring and integration costs incurred from UMG’s absorption of EMI among other deals, EBITA was up 19.9%.
Universal Music bought EMI’s recorded music labels on September 30, 2012, so it did not own EMI assets in the corresponding quarter a year ago. Excluding EMI, UMG’s revenues were flat in the first nine months of the year. Including EMI, UMG’s sales are up by 22% during those nine months to €3.4 billion (about $4.5 billion).
Digital music sales continue their uptick, and now account for over half (54%) of UMG’s recorded music sales compared with 48% a year ago. Imagine Dragons, Rihanna, Robin Thicke, Drake and Taylor Swift, as well as French artists Stromae and Vanessa Paradis, were named as being the company’s biggest sellers for the year.
In July, Vivendi, UMG’s Paris-based parent company was offered $8.5 billion for UMG, which the conglomerate rejected. Since then, the company has been selling off some its assets as it is in the process if restructuring to focus on being a media and entertainment business.
Parent company Vivendi, which is in the process of restructuring its business to focus on media and entertainment, has seen its profits slide in recent quarters. EBITDA for Vivendi as a whole was down markedly by 23.8% at €2.12 billion, down from €2.85 billion in 2012. Revenue was even year-over-year; €16.19 billion in 2013, compared with €16.34 billion in 2012, an increase of 1%.