Universal Music Group N.v. · EURONEXT:UMG
Universal Music — FY2021 Earnings Presentation
24 slides from Universal Music's earnings presentation, Mar 3, 2022
Slide 1: Fourth Quarter & Full Year Ended December 31, 2021
FOURTH QUARTER & FULL YEAR ENDED DECEMBER 31, 2021 March 3, 2022
Slide 2: Important Information
Important Information Forward Looking Statements This presentation contains statements that may constitute forward-looking statements relating to the business, financial performance and results of Universal Music Group N.V. (the “Company”) and the industry in which the Company operates. These statem
Slide 3: Sir Lucian Grainge, Chairman and CEO
SIR LUCIAN GRAINGE CHAIRMAN AND CEO
Slide 4: 8 of the Top 10 Global Artists in 2021
8 OF THE TOP 10 GLOBAL ARTISTS IN 2021 IFPI GLOBAL ARTIST CHART 2021 1 BTS 2 Taylor Swift 3 Adele 4 Drake 5 Ed Sheeran 6 The Weeknd 7 Billie Eilish 8 Justin Bieber 9 Seventeen 10 Olivia Rodrigo SOURCE: IFPI 4
Slide 5: 2021 Global Artist Success
2021 GLOBAL ARTIST SUCCESS SPOTIFY APPLE MUSIC YOUTUBE DEEZER 4 OF THE TOP 5 THE WEEKND 8 OF THE TOP 10 THE TOP 4 AND THE TOP 3 GLOBAL ARTISTS OF 2021 GLOBAL ARTIST OF THE YEAR GLOBAL ALBUMS H.E.R. MOST SUBSCRIBED ARTISTS THE WEEKND AFTER HOURS OLIVIA RODRIGO SOUR TAYLOR SWIFT SONGRWRITER OF THE YEA
Slide 6: 2021 U.S. Success
2021 U.S. SUCCESS UMPG UMPG THE TOP 6 8 OF THE TOP 10 THE TOP 5 7 OF THE TOP 10 3 OF THE TOP 5 THE TOP 4 7 OF THE TOP 10 ARTISTS ARTISTS ALBUMS ALBUMS SINGLES SINGLES SINGLES TOP ARTISTS: TOP ALBUMS: UMG TOP SINGLES: UMPG TOP SINGLES: DRAKE MORGAN WALLEN THE WEEKND & DUA LIPA OLIVIA RODRIGO OLIVIA R
Slide 7: 2021 Regional Success
2021 REGIONAL SUCCESS UNITED KINGDOM: GERMANY: FRANCE: JAPAN: 7 OF THE NO.1 SPOTIFY’S TOP BILLBOARD’S TOP 10 SINGLE STREAMED TOP SELLING ARTISTS OF THE YEAR ALBUM ARTIST OF THE YEAR & DAMSO NATHAN EVANS “WELLERMAN” QALF INFINITY NO. 1 ALBUM OLIVIA RODRIGO TAYLOR SWIFT & OUR ARTISTS WON BTS DRAKE & T
Slide 8: Health & Fitness Partners
HEALTH & FITNESS PARTNERS AARMY @ GFitnesst BARRY'S APEX CLMBR @echelon EQUINOX+ lu: hydrow FITRADIO U3 LITEBOXER @) MEDRhythms AN Mentra music ?) PELOTON S supernatural STEEZY > STRYDE 4 Y 1) oO STUDIO UNIVERSAL MUSIC GROUP
Slide 9: Web3/NFT Partners
WEB3/NFT PARTNERS (A) Avtograph —_illboard ©curio HABET Genies* ONEOF THE SANDBOX snawcrash /UUUM ees UNIVERSAL MUSIC GROUP 9
Slide 10: UMPG Acquires Sting's Song Catalog
UMPG ACQUIRES STING’S SONG CATALOG UNITING STING’S MUSIC PUBLISHING AND RECORDED MUSIC GLOBALLY UNDER UNIVERSAL MUSIC GROUP “It is absolutely essential to me that my career’s body of work have a home where it is valued and respected – not only to connect with longtime fans in new ways, but also to i
Slide 11: Boyd Muir, UMG Q4 and FY 2021 Results
BOYD MUIR EVP, CFO AND PRESIDENT OF OPERATIONS UMG Q4 AND FY 2021 RESULTS
Slide 12: FY 2021 Summary Results
FY 2021 SUMMARY RESULTS (€ MILLION) REVENUE ADJUSTED ADJUSTED FY 2021 EBITDA EBITDA MARGIN €8,504 €1,788 21.0% +17.0% YOY +20.9% YOY +0.9 PP YOY Note: All growth rates are in constant currency. 12
Slide 13: Sustained Growth of Revenue, Adjusted EBITDA and Margin
SUSTAINED GROWTH OF REVENUE, ADJUSTED EBITDA AND MARGIN (€ MILLION) 2,000 25.0% 1,800 21.0% 20.1% 1,600 20.0% +17.0% 17.7% 1,400 +5.1% 1,200 16.3% +20.9% 15.0% +15.6% 1,000 +19.3% 8,504 +26.4% 1,788 7,159 7,432 800 10.0% 1,497 6,023 600 1,272 983 400 5.0% 200 - 0.0% 2018 2019 2020 2021 2018 2019 202
Slide 14: Q4 Revenue and Adjusted EBITDA
Q4 REVENUE AND ADJUSTED EBITDA (€ MILLION) REVENUE ADJUSTED EBITDA +16.0% 2,520 141 +42.4% 2,118 408 97 +28.3% 310 +6.8% 503 458 +12.3% 1,975 1,715 21.6% 20.0% 4Q20 4Q21 4Q20 Adjusted 4Q21 EBITDA Recorded Music Music Publishing Merchandising&Other Adjusted EBITDA Margin Note: All growth rates are in
Slide 15: Recorded Music
RECORDED MUSIC (€ MILLION) 4Q REVENUE FY REVENUE FY EBITDA +12.3% +20.4% +16.9% 1,614 1,975 6,822 1,715 5,967 1,360 23.7% 22.8% Q420 Q421 FY20 FY21 FY20 FY21 EBITDA Margin Note: All growth rates are in constant currency. 15
Slide 16: Recorded Music Revenue
RECORDED MUSIC REVENUE (€ MILLION) +12.3% +16.9% 1,975 6,822 1,715 5,967 +16.1% +19.8% 1,219 4,481 3,833 1,027 +10.5% +21.2% +5.1% +16.5% 379 (19.4%) 1,121 (3.3%) 341 896 258 288 945 776 89 89 413 324 Subscription Downloads Physical License & Total Subscription Downloads Physical License & Total & S
Slide 17: Recorded Music Revenue
RECORDED MUSIC REVENUE (€ MILLION) BEST SELLERS 2021 % Change 2020 2021 North America 3,392 21% The Weeknd Olivia Rodrigo Billie Eilish BTS Europe 2,020 12% Post Malone Justin Bieber Lil Baby The Weeknd Asia 896 17% Pop Smoke Morgan Wallen Latin America 216 20% BTS ABBA Justin Bieber Billie Eilish R
Slide 18: Acceleration in Streaming & Subscription Revenue Growth
ACCELERATION IN STREAMING & SUBSCRIPTION REVENUE GROWTH (€ MILLION) +648 +508 +19.8% 4,481 +17.1% 3,833 3,325 2019 2020 2021 Note: All growth rates are in constant currency. 18
Slide 19: Music Publishing
MUSIC PUBLISHING (€ MILLION) 4Q REVENUE FY REVENUE FY EBITDA +15.0% +28.3% 408 1,335 1,186 +16.3% 307 310 269 22.7% 23.0% Q420 Q421 FY20 FY21 FY20 FY21 EBITDA Margin Note: All growth rates are in constant currency. 19
Slide 20: Merchandising and Other
MERCHANDISING AND OTHER (€ MILLION) 4Q REVENUE FY REVENUE FY EBITDA +42.4% +27.4% 141 363 (27.3%) 97 292 21 16 7.2% 4.4% Q420 Q421 FY20 FY21 FY20 FY21 EBITDA Margin Note: All growth rates are in constant currency. 20
Slide 21: Free Cash Flow
FREE CASH FLOW (€ MILLION) - Dividend policy: 50% of net income - 2021 interim dividend: €0.20/share - Final dividend proposal 2021: €0.20/share 275 - Total 2021 dividend: €0.40/share (364) 85 (255) (388) (3) (86) (17) (8) 1,399 1,140 638 Operating Adjustments* Royalty Other Income Net cash Catalog
Slide 22: Content Investment
CONTENT INVESTMENT (€ MILLION) ROYALTY ADVANCES, NET CONTENT INVESTMENT - Required / core to our business 1,517 - Driver of long-term growth - Investing into a growing market - Mix of new and established artists (50%) - Recent opportunities with superstar artists wanting to 929 do more with us; Fron
Slide 23: Balance Sheet @ 12/31/21
BALANCE SHEET @ 12/31/21 €2,595M €585M €2,010M 1.2X GROSS DEBT CASH NET DEBT NET DEBT/ EBITDA 23
Slide 24: Q&A
Q&A SIR LUCIAN GRAINGE CHAIRMAN AND CEO BOYD MUIR EVP, CFO AND PRESIDENT OF OPERATIONS MICHAEL NASH EVP, DIGITAL STRATEGY 24