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Universal Music Posts Double-Digit Revenue Growth in First Quarter Since Going Public

Universal Music Group's third quarter earnings report boasts of double-digit increases in revenue, driven by growth in streaming and music publishing.

Universal Music Group garnered revenues of 2.153 billion euros ($2.539 billion) in the third quarter ended Sept. 30, acording to the company’s quarterly earnings report released Wednesday (Oct.27). That marks a 17.4% increase (on a constant currency basis, 16.1% on an actual basis) over 2020, when revenue totaled 1.855 billion euros ($2.139 billion).

During the quarter, during which the company spun off from Vivendi on 21 to list on the Euronext Amsterdam exchange, UMG also enjoyed 12.1% growth in earnings before interest, taxes, depreciation and amortization to 426 million euros ($502.3 million) — up from the year earlier corresponding period when EBITDA totaled 380 million euros ($438.1 million).


Recorded music generated 1.711 billion euros ($2.018 billion) in revenue — up 15.5% from 1.481 billion euros in 2020’s third quarter.

Music publishing hit 363 million euros ($428.05 million) — up 19.8% increase from 303 million euros ($349.4 million) in 2020’s third quarter.

Merchandise and other revenue, which was probably hit hardest by the pandemic, meanwhile brought in 84 million euros ($99.05 million) — up 13.5% from 74 million euros ($85.3 million) in 2020’s third quarter.

Within recorded music revenue, streaming grew 14% to 1.131 billion euros ($1.334 billion) for the period — up from 992 billion euros ($1.144 billion) in 2020’s third quarter.

Downloads and other digital fell 4.7% to 82 million euros ($96.7 million) from 86 million euros ($99.16 million).

Physical, CDs, vinyl and other formats grew 11.6% to 280 million euros ($330.2 million) from 2020’s total of 257 billion euros ($296.3 million).

Licensing and other revenue grew 49.3% to 218 million euros ($257.1 million) from 146 million euros ($168.3 million) in 2020’s third quarter.


As a percentage of recorded music revenue, streaming comprised 66.1%, and downloads 4.8%, which means that digital overall is 70.9%; while physical is 16.4% and licensing and other income streams is 12.7%.

Top sellers for the quarter included new releases from Billie Eilish, King & Prince and Drake, as well as continued sales of Olivia Rodrigo and more.

Boyd Muir, UMG executive vp, CFO and president of operations, noted during Wednesday’s earnings call with analysts that strong vinyl sales in the U.S. drove the growth of physical sales. “Taylor Swift, Olivia Rodrigo and Billie Eilish, now hold the top three positions of the last 30 years for single week vinyl sales,” he said. “While we don’t expect physical album sales to remain a growth business every quarter, it does speak to the enormous demand for products that cater to super fans, an area, which we are focused on further developing.”

The growth of licensing and other revenues can be attributed to the economy’s reopening from the pandemic. That area also includes UMG’s audiovisual production business, which creates original music based film and TV content. “This is a newer business for us, driven by a smaller number of titles, revenue will vary quarter-to-quarter based on the timing of deals to sell this content to distributors and to platforms,” Muir said. “Of note this quarter was Billie Eilish’s concert film Happier Than Ever: A Love Letter to Los Angeles, which premiered on Disney Plus. We are passionate about this business and we see as an important part of our strategy for growth, but don’t yet expect to drive this level of growth consistently.”


Since the start of 2021, UMG’s EBITDA grew 21.3% to 1.248 billion euros ($1.485 billion) on revenues of 5.984 billion euros ($7.014 billion) — as compared with the same nine-month period of 2020 where UMG’s EBITDA was 1.029 billion euros ($1.125 billion) on revenues of 5.314 billion euros ($5.914 billion).

Revenue growth in the latest year represented a 12.6% increase. That means EBITDA margin grew to 20.9% of revenue, versus the prior year when it was 19.4% Moreover, EBITDA for this year was impacted by $35 million in fees related to the company’s public listing and other occurrences which brings adjusted EBITDA to 1.286 billion euros ($1.53 billion).

In opening the company’s conference call, chairman and CEO Lucian Grainge noted that “music is on a stunningly powerful trajectory” and that UMG results were buoyed by that as well as the company’s stellar performance.

Breaking out revenue by operations for the nine-month period, recorded music tallied 4.848 billion euros ($5.77 billion) — a 14% increase over the 2020 period when revenue was 4.252 billion euros ($4.73 billion).

Universal Music Publishing Group’s growth totaled 5.8% (10.09% in constant currency) to 927 million euros ($1.103 billion) — up from 876 million euros ($975 million) in 2019.

Merch and other enjoyed a 13.8% increase to 222 million euros ($264.2 million) from 2020’s total of 195 million euros ($217 million).

Looking at recorded music revenue by channel, streaming tallied 3.262 billion euros ($3.88 billion) — up from 2.806 billion euros ($3.123 billion) in the year-earlier corresponding period.

Downloads and other digital fell to 235 million euros ($279.7 million) — a 27.5% drop from 324 million euros ($360.6 million) in the year-earlier nine-month period.

Physical formats grew to 742 million euros — up 22.8% from 604 million euros in the year-earlier nine-month period.

Licensing and other revenue grew to 609 million euros ($724.7 million) — up 17.6% from 518 million euros ($576.5 million).

As a percentage of recorded music revenue, streaming now generated 67.1% of revenue and downloads 4.8%, so combined digital is 72.1%; physical is 15.3% and licensing and other income streams is 12.6%.

This story uses exchange rates for the third quarter numbers of 1 euro to $1.179 for 2020 and $1.153 for 2019; for the nine month period the exchange rates used for 1 euro are $1.19 for 2020 and $1.113 for 2019.