Universal Music Group’s Financial Performance Driven By Subscription And Streaming Activities

Q3 Financials

UNIVERSAL MUSIC GROUP’s parent company, VIVENDI has reported 3rd quarter financials, and for the recorded music division, revenues amounted to €3,985 million, up 10.9% at constant currency and perimeter compared to the first nine months of 2016 (+10.0% on an actual basis).

VIVENDI wrote, "Recorded music revenues grew by 12.1% at constant currency and perimeter as growth in subscription and streaming revenues (+40.8%) more than offset the continued decline in both download and physical sales. Music publishing revenues grew by 9.6% at constant currency and perimeter, also driven by increased subscription and streaming revenues, as well as growth in synchronization and performance revenues. Merchandising and other revenues were down 2.8% at constant currency and perimeter, due to lower touring activity."

Recorded music best sellers for the first nine months of 2017 included new releases from KENDRICK LAMAR and DRAKE, carryover sales from THE WEEKND, the 50th Anniversary edition of Sgt. Pepper’s Lonely Hearts Club Band by THE BEATLES, and soundtrack releases from the movies MOANA and LA LA LAND.

UMG’s income from operations amounted to €472 million, up 20.9% at constant currency and perimeter compared to the first nine months of 2016 (+20.5% on an actual basis) as a result of higher revenues. UMG’s EBITA amounted to €442 million, up 25.5% at constant currency and perimeter compared to the first nine months of 2016 (+25.2% on an actual basis) as a result of higher revenues and lower restructuring charges. EBITA for the first nine months of 2016 included a legal settlement income.

For the third quarter of 2017, excluding the legal settlement income and a one-time catch up in accounting for certain streaming revenues recognized in the third quarter of 2016, and at constant currency and perimeter compared to the same period of 2016, revenues amounted to €1,319 million, up 8.3%, and EBITA amounted to €156 million, up 6.2%. Including these items and at constant currency and perimeter compared to the same period of 2016, revenues grew by 5.3% and EBITA was down 7.7%.

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