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UMG KEEPS PUMPING UP THE VOLUME

Universal Music Group pulled in €2.54b—about $2.7b—in the three months that ended 6/30, representing growth of 17.3% year-over-year in constant currency. For the first half of 2022, revenue is up nearly 17% to €4.73b.

Recorded-music revenues in the quarter were up 16.2% (9% in constant currency) to €1.92b, with streaming subscription revenue up 14.6% to €966m. Subscription revenue in Q2 2021 benefited from the DSP catch-up payment and if excluded, subscription revenue would be up 20.4%. Ad-supported streaming revenue grew by nearly 25% to €348m.

Overall EBITDA for the quarter grew 18.7% year-over-year to €507m.

Physical revenue enjoyed another impressive showing, increasing 21.2% over 2021 to €303m thanks largely to releases from BTS and King & Prince. Licensing and other revenue improved 12.4% year-over-year.

Besides BTS and King & Prince, top sellers included Rammstein, Olivia Rodrigo and INI.

"Our strong performance across diversified revenue streams is fueled by the successful partnerships we've formed with our artists—both new and established—in markets around the world,” said UMG Chairman and CEO Sir Lucian Grainge. "The widespread growth we are producing throughout UMG demonstrates that our strategy is progressing as planned, underscoring the strength and resilience of our business and our ability to deliver for our artists and our shareholders alike."

Music-publishing revenue hit €476m in the second quarter, up 62.5% year-over-year, or 50.6% in constant currency, thanks to a change in society accounting.*

Excluding that benefit, publishing revenue grew 29% over 2021, fueled by healthy growth in streaming and subscriptions, the broadening monetization of music-publishing rights, a continued rebound in physical sales and initial contributions from catalog acquisitions made in prior years.

Grainge singled out Drake, BTS, Olivia Rodrigo and Frank Zappa as success stories that represent the “many different forms” of UMG's artist partnerships. He also called out the importance of moving film and TV projects in house to increase control and profits, noting high-profile audiovisual projects featuring Neil Diamond, The Rolling Stones, Shania Twain and the Bee Gees.

“We help sustain fan engagement over an artist’s career,” Grainge told analysts on a conference call. “Keeping artists thriving and relevant is what we do at UMG.”

Grainge also reported that UMG had signed a new agreement with Facebook parent Meta during Q2 that expands and deepens revenue-sharing opportunities.

*As disclosed in the UMG Annual Consolidated Financial Statements for the year ended 12/31, UMG adjusted its accounting policy in relation to certain revenues that are collected through societies. In prior years, these revenues were recognized when the relevant collection society notified UMG of the usage by the end customer and collectability was assured. Recognition of that revenue is now based on an accrual for the best available estimate of when the usage occurs and the amount of consideration that is probable to be collected. This has affected the timing of the recognition of certain revenues across financial reporting quarters, with a benefit of €98 million in revenue and €17 million in both EBITDA and adjusted EBITDA for the second quarter of 2022.

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