Warner Music Group Fourth Quarter Revenues Boosted By Parlophone Acquisition
December 12, 2013 at 4:55 AM (PT)
WARNER MUSIC GROUP fiscal fourth quarter revenue grew 4.5% (7.3% in constant currency) to $764 million, driven in part by the acquisition of PARLOPHONE LABEL GROUP. Without the PARLOPHONE revenue, revenue fell 3.6% (1.0% in constant currency), with growth in digital (17.4%, 19.4% in constant currency), artist services, expanded rights, and recorded music licensing revenue more than offset by declines in physical recorded music and music publishing revenue, although digital growth offset the decline in physical recorded music sales for the full year). Revenue growth in the U.S., U.K., SPAIN, and FRANCE was partially offset by declines in JAPAN and GERMANY. Adjusted net income grew from a loss of $10 million to a gain of $1 million, based on tax changes and benefits.
The recorded music division saw a 6.3% gain (9.7% in constant currency) to $644 million, boosted by the PARLOPHONE deal; without PARLOPHONE, revenue fell 3.5% (0.3% in constant currency). The company said that it expected a decline in non-PARLOPHONE revenue due to a light release schedule. Digital music revenue, up 18% to $262 million, represented 40.7% of total recorded music revenue, up from 36.6% in fourth quarter 2012. Music publishing revenue fell 4.5% to $126 million.
CEO STEPHEN COOPER said, “This was a year of significant accomplishment at WARNER MUSIC GROUP. We intensified our focus on signing and developing extraordinary artists, we executed well on our digital strategy and we acquired and have been successfully integrating PARLOPHONE LABEL GROUP.”
EVP/CFO BRIAN ROBERTS added, “We also significantly improved our financial flexibility over the course of the fiscal year. Even as we increased our borrowings in order to finance the acquisition of PARLOPHONE LABEL GROUP, we lowered our annual interest expense through debt repayments and refinancings of our debt.”