Universal Music Group N.v. · EURONEXT:UMG
Universal Music — Q2 2023 Earnings Presentation
21 slides from Universal Music's earnings presentation, Jul 27, 2023
Slide 1: 2nd Quarter & 1st Half 2023 Results
2 QUARTER & ND 1 HALF 2023 ST RESULTS WEDNESDAY JULY 26, 2023
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" or "UMG") and the industry in which the Company operates. The
Slide 3: Sir Lucian Grainge, Chairman & CEO
SIR LUCIAN GRAINGE CHAIRMAN & CEO 3
Slide 4: 2Q23 Consolidated Results
2Q23 CONSOLIDATED RESULTS REVENUE ADJUSTED EBITDA +8.8% +19.2% € 2,697 € 2,535 € 590 € 507 2Q22 2Q23 2Q22 2Q23 Note: € in Millions; Revenue and Adjusted EBITDA growth in constant currency 4
Slide 5: H1 2023 U.S. Success
H1 2023 U.S. SUCCESS TOP ALBUMS TOP SONGS TOP ALBUM DEBUTS 7 OF THE TOP 10 6 OF THE TOP 10 5 OF THE TOP 5 ALBUMS IN 2023 IN THE U.S. SONGS IN 2023 IN THE U.S. INCLUDING INCLUDING ALBUM DEBUT WEEKS IN 2023 IN THE U.S. 4 OF THE TOP 5 No. 1 Morgan Wallen Taylor Swift Morgan Wallen Metro Boomin Morgan W
Slide 6: H1 2023 U.K. Success
H1 2023 U.K. SUCCESS TOP ARTISTS TOP ALBUMS TOP ALBUMS UMG ARTISTS HELD 6 OF THE TOP 10 6 OF THE TOP 10 THE No.1 POSITION FOR ARTISTS IN 2023 IN THE U.K. ALBUMS IN 2023 IN THE U.K. 15 OF THE 26 CHART WEEKS TAYLOR SWIFT LEWIS CAPALDI DRAKE Morgan Wallen The Weeknd Metro Boomin “Last Night” “Die For Y
Slide 7: H1 2023 Japan Success
H1 2023 JAPAN SUCCESS TOP SELLING ARTIST TOP NEW ARTISTS KING & PRINCE 6 OF THE TOP 10 LE SSERAFIM ALBUMS IN 2023 IN THE U.K. TRAVIS JAPAN Source: Oricon mid-year charts 2023 7
Slide 8: Key Latin Signings
KEY LATIN SIGNINGS KAROL G ANITTA KAROL G SIGNS WITH ANITTA SIGNS TO INTERSCOPE RECORDS REPUBLIC RECORDS 1st Woman To Debut No. 1 on Billboard 200 1st Solo Latin Artist to Reach No. 1 with Spanish-Language Album on Spotify Globally 8
Slide 9: Artist Centric Model
ARTIST CENTRIC MODEL BETTER VALUES GREATER ENHANCED PLATFORM ARTISTRY AND THE ALIGNMENT VALUE, ACCELERATED ARTIST / FAN BETWEEN GROWTH, BETTER RELATIONSHIP ARTISTS SUBSCRIBER AND PLATFORMS ECONOMICS 9
Slide 10: Driving Presence in High-Growth Markets
DRIVING PRESENCE IN HIGH-GROWTH MARKETS SIGN & DEVELOP PARTNER ACQUIRE SIGN AND PARTNER WITH ACQUIRE DEVELOP LOCAL LABELS LOCAL LABELS, LOCAL ARTISTS & PROVIDE THEM WITH GLOBAL CATALOGS & PROMOTION, DISTRIBUTION AND A FULL SUITE OF ARTIST SERVICES ARTIST SERVICES BUSINESSES 10
Slide 11: Boyd Muir, EVP, CFO & President of Operations
BOYD MUIR EVP, CFO & PRESIDENT OF OPERATIONS 11
Slide 12: 2Q23 Consolidated Results
2Q23 CONSOLIDATED RESULTS REVENUE ADJUSTED EBITDA ADJUSTED EBITDA MARGIN +8.8% +19.2% +1.9pp € 2,697 21.9% € 2,535 20.0% € 590 € 507 2Q22 2Q23 2Q22 2Q23 2Q22 2Q23 Note: € in Millions; Revenue and Adjusted EBITDA growth in constant currency. 12
Slide 13: 1H23 Consolidated Results
1H23 CONSOLIDATED RESULTS REVENUE ADJUSTED EBITDA ADJUSTED EBITDA MARGIN +9.1% +16.2% +1.3pp € 1,112 € 5,148 21.6% € 962 20.3% € 4,734 1H22 1H23 1H22 1H23 1H22 1H23 Note: € in Millions; Revenue and Adjusted EBITDA growth shown in constant currency. 13
Slide 14: Recorded Music
RECORDED MUSIC 2Q23 REVENUE 1H23 REVENUE 1H23 ADJUSTED 1H23 ADJUSTED EBITDA EBITDA MARGIN +10.9% +10.3% +15.6% +1.1pp 24.2% 23.1% € 969 € 4,003 € 842 € 2,080 € 3,643 € 1,922 2Q22 2Q23 1H22 1H23 1H22 1H23 1H22 1H23 Note: € in Millions; All growth rates are in constant currency. 14
Slide 15: Recorded Music Revenue
RECORDED MUSIC REVENUE 2Q23 REVENUE BREAKDOWN 1H23 REVENUE BREAKDOWN 2Q22 2Q23 1H22 1H23 +13.0% +5.3% -10.3% +11.3% 16.1% +11.6% +1.8% -14.7% +20.8% +12.6% € 2,082 € 1,068 € 358 € 673 € 639 € 326 € 267 € 493 € 61 € 116 Subscription Streaming Download & Physical License & Other Subscription Streaming
Slide 16: Recorded Music Revenue Regional Breakdown and Top Sellers
RECORDED MUSIC REVENUE TOP SELLERS 1H23 1H23 REGIONAL REVENUE BREAKDOWN North America EMEA* € 2,024 € 1,094 King & Prince Morgan Wallen King & Prince Taylor Swift King & Prince Mr. 5 One Thing at a Time First Dome Tour Arena Tour 2022 +8.9% +5.9% Metro Boomin TOMORROW Karol G The Weeknd Morgan Walle
Slide 17: Music Publishing
MUSIC PUBLISHING 2Q23 REVENUE 1H23 REVENUE 1H23 ADJUSTED 1H23 ADJUSTED EBITDA EBITDA MARGIN -0.6% +25.7%* +4.8% +18.5%* +8.0% +18.0%* +0.8pp 0.0pp* € 216 € 889 24.3% € 851 € 200 23.5% € 476 € 464 2Q22 2Q23 1H22 1H23 1H22 1H23 1H22 1H23 Note: € in Millions; All growth rates are in constant currency.
Slide 18: Merchandising & Other
MERCHANDISING & OTHER 2Q23 REVENUE 1H23 REVENUE 1H23 ADJUSTED 1H23 ADJUSTED EBITDA EBITDA MARGIN +12.1% +5.6% + 42.9% +2.0pp € 20 7.6% € 264 € 157 € 248 € 141 € 14 5.6% 2Q22 2Q23 1H22 1H23 1H22 1H23 1H22 1H23 Note: € in Millions; All growth rates are in constant currency. 18
Slide 19: 1H23 Net Profit and EPS
1H23 NET PROFIT AND EPS (NET PROFIT IN € MILLIONS) NET PROFIT ADJUSTED NET EPS ADJUSTED EPS* PROFIT* +159.3% +13.6% +161.5% +10.8% € 754 € 0.34 € 0.41 € 625 € 664 € 0.37 € 0.13 € 241 1H22 1H23 1H22 1H23 1H22 1H23 1H22 1H23 Note: Net Profit € Millions; All growth rates are YoY as reported. * 2022 res
Slide 20: 1H23 Free Cash Flow
• Strong growth in operating cash flow funds long-term strategic M&A and other 1H23 FREE CASH FLOW investment in the business • €125m taxes paid to cover employee withholding on transition grants to lessen dilutive impact of equity plan • Dividend policy: At least 50% of adjusted net income • 1H23 i
Slide 21: Q&A
SIR LUCIAN GRAINGE CHAIRMAN AND CEO Q&A BOYD MUIR EVP, CFO & PRESIDENT OF OPERATIONS MICHAEL NASH EVP, CHIEF DIGITAL OFFICER 21
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