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Lucian Grainge

Revenue Keeps Rolling At UMG For Q3 2021

UMG's Sir Lucian Grainge. Courtesy Image.
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Hilversum, The Netherlands (CelebrityAccess) — Universal Music Group revealed solid revenue growth for the third fiscal quarter of 2021, the company’s first earnings statement after going public on Euronext Amsterdam Stock Exchange in September.

According to UMG, the company posted revenue of €2.153 billion, up 16.1% compared to the third quarter of 2020. During the quarter, UMG saw revenue gains from all of its divisions, including recorded music, music publishing, merch, and other segments.

Breakouts include recorded music revenue of €1.711 (up %15.5), propelled by a 14% growth in streaming revenue in both subscription and ad-supported streaming revenues. UMG cited particularly strong growth in advertising revenue due to improvement in ad-based monetization and new and enhanced deals in social media.

Physical revenue grew 8.9%, or 11.6% in constant currency, underwritten by the insatiable demand for vinyl as well as growth in direct-to-consumer sales, the company said.

However, revenue for other digital products such as downloads, continued to decline, falling by 4.7% for the quarter as on-demand streaming continues to be the prominent business model for music consumption.

License revenue proved to be a strong point for UMG in Q3 2021, growing by 49.3% during the period, which UMG said was driven by improvements in broadcast and neighboring rights collections, audio-visual production income and synchronization, live and brand deals.

UMG reported €363 million in revenue from its music publishing operation, up 19.8% year-over-year and bolstered by the growth in music streaming as well as the timing of disbursements from collection societies, the label group said.

EBITDA, or earnings before interest, taxes, depreciation, and amortization for the quarter grew 12.1% year-over-year to €426 million, propelled by the label group’s revenue growth. However, UMG’s EBITDA margin slid slightly from the third quarter of 2020, with the company posting a margin of 19.8%, compared to 20.5% during the same period last year.

UMG attributed the decline to one-time costs, including shared based compensation related to their public listing at the end of September.

“Our operational and financial performance this quarter – our first as an independent, publicly traded company – demonstrates both why UMG is the world’s most successful music company, as well as how our commitment to artists’ career development and fostering innovation promotes growth across the music ecosystem,” said Sir Lucian Grainge, UMG’s Chairman and CEO.

“Our results this quarter demonstrate the continued strength of our artist roster and catalogue, the increasingly diversified revenue streams of our business, and our ability to deliver growth for our shareholders,” added Boyd Muir, EVP, CFO and President of Operations of Universal Music Group.

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