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

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.

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.