Warner Music Group Reports Q1 Revs Down 0.8%
February 14, 2013 at 5:06 AM (PT)
WARNER MUSIC GROUP has released its fiscal first quarter financial results for the period ended DECEMBER 31st, 2012.
For the quarter, revenue declined 0.8%, but grew 0.3% in constant currency. The Company noted, "Despite a difficult year-over-year comparison resulting from strong physical sales of MICHAEL BUBLÉ's "Christmas" in the prior-year quarter, the company's stable revenue results reflect solid digital revenue growth in both Recorded Music and Music Publishing, as well as growth in Recorded Music licensing revenue, offset by a decline in physical sales and non-digital Music Publishing revenue."
Digital revenue represented 33.2% of total revenue for the quarter, compared to 28.3% in the prior-year quarter. The growth in digital revenue reflects growth in subscription and streaming revenue as well as download revenue.
As of DECEMBER 31st, 2012, the company reported a cash balance of $189 million, total long-term debt of $2.225 billion, including $30 million included in the current portion of long term debt, and net debt (total long-term debt minus cash) of $2.036 billion. During the quarter, the company used $132 million of cash in connection with its NOVEMBER 2012 refinancing.
"We are pleased with the start we’ve had to our fiscal year," said CEO STEPHEN COOPER. "We continue to make progress throughout our organization, while maintaining our focus on long-term artist development, innovation and growth and carefully managing costs."
"Digital revenue, OIBDA and OIBDA margin all showed solid growth," added EVP/CFO BRIAN ROBERTS. "Even with $132 million in cash outflows in the quarter associated with our refinancing, we had $189 million of cash on our balance sheet as of DECEMBER 31st, 2012."
WMG noted Recorded Music revenue declined 0.3%, but grew 0.8% in constant currency. The company's Recorded Music business "experienced an increase in digital revenue, as subscription and streaming revenue and download revenue were both strong." Recorded Music digital revenue represented 36.1% of total Recorded Music revenue, compared to 31.1% in the prior-year quarter. Domestic Recorded Music digital revenue was $128 million, or 49.4% of total domestic Recorded Music revenue, compared to 44.9% in the prior-year quarter.
Music Publishing revenue declined 4.1%, or 3.3% in constant currency. WMG reported, "26.7% growth in digital revenue, driven by increases in subscription and streaming revenue and download revenue, was more than offset by the expected decline in mechanical revenue of 21.2%, reflecting the ongoing transition from physical to digital sales in the recorded music industry. Performance revenue was relatively flat, declining 2.1% as a result of an unfavorable currency impact, and synchronization revenue declined 4.3%, reflecting lower video game revenue."