Warner Music Reports Q2 Financials, Recorded Music Revs Up 11%
Former Chair/CEO Edgar Bronfman, Jr. To Exit Board
May 14, 2013 at 4:47 AM (PT)
WARNER MUSIC GROUP has released its fiscal second quarter financial results for the period ended MARCH 31st, 2013.
"We recorded an impressive quarter, thanks to great releases from our artists and excellent execution from our operators," said CEO STEPHEN COOPER. "These are the results of a very strong release schedule, solid performance from carryover releases and continued financial discipline."
"We achieved robust growth in OIBDA and OIBDA margin," added EVP/CFO BRIAN ROBERTS. "And we realized strong free cash flow of $121 million, closing the quarter with $294 million in cash on our balance sheet which gave us the ability to pay down $102.5 million of our existing term loan on MAY 9th, 2013. In addition, on MAY 13th, 2013, we issued an irrevocable notice of redemption relating to $50 million of our currently outstanding 6.000% Senior Secured Notes due 2021 and eu17.5 million of our currently outstanding 6.250% Senior Secured Notes due 2021."
For the quarter, revenue grew 8.3%, or 9.6% in constant currency. Physical and digital Recorded Music revenue, Recorded Music licensing revenue and Music Publishing digital and performance revenue all increased. Digital revenue represented 41.6% of total revenue for the quarter, compared to 37.7% in the prior-year quarter. The growth in digital revenue reflects growth in subscription and streaming revenue as well as download revenue.
Recorded Music revenue grew 11.0%, or 12.4% on a constant-currency basis. Physical and digital revenue were up 11.8% and 18%, respectively, "due to a very strong release schedule and solid performances from carryover releases." Licensing revenue grew 10.6%. Artist Services and Expanded Rights revenue declined 16.7% due primarily to the timing of tours.
Recorded Music digital revenue represented 47.3% of total Recorded Music revenue, compared to 44.5% in the prior-year quarter. Domestic Recorded Music digital revenue was $145 million, or 58.2% of total domestic Recorded Music revenue, compared to 59.4% in the prior-year quarter. Revenue growth in the U.S., U.K., FRANCE, GERMANY, CANADA and LATIN AMERICA was offset by declines in JAPAN, ITALY and other parts of ASIA and EUROPE. Major sellers included BRUNO MARS, JOSH GROBAN, FUN., ED SHEERAN and BLAKE SHELTON.
Bronfman Exits WMG Board
During the conference call, it was announced that former WMG Chairman/CEO EDGAR BRONFMAN, JR. is leaving the company's board. No replacement was announced.
You can read the transcript of the conference call, courtesy SEEKING ALPHA, here.