Universal Music Group N.v. · EURONEXT:UMG
Universal Music — Shareholder Meeting (May 2023)
78 slides from Universal Music's shareholder meeting presentation, May 11, 2023
Slide 1: Universal Music Group Annual General Meeting
05 11 UNIVERSAL MUSIC GROUP ANNUAL GENERAL MEETING
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: Sherry Lansing, Chairman of the Board
SHERRY LANSING CHAIRMAN OF THE BOARD & INDEPENDENT NON-EXECUTIVE DIRECTOR
Slide 4: Agenda Item 1: Opening
AGENDA ITEM 1 OPENING
Slide 5: Agenda Item 2: Discussion of the Annual Report 2022
AGENDA ITEM 2 DISCUSSION OF THE ANNUAL REPORT 2022
Slide 6: Sir Lucian Grainge CBE, Chairman & CEO
SIR LUCIAN GRAINGE CBE CHAIRMAN & CEO UNIVERSAL MUSIC GROUP
Slide 7: FY2022 Consolidated Results
FY2022 CONSOLIDATED RESULTS REVENUE ADJUSTED EBITDA FREE CASH FLOW +13.6% +11.7% +70.2% € 1,086 € 10,340 € 2,135 € 8,504 € 1,788 € 638 FY21 FY22 FY21 FY22 FY21 FY22 Note: € in Millions; Revenue and Adjusted EBITDA growth shown in constant currency, Adjusted EBITDA margin change in percentage points,
Slide 8: Top 20 of the Top Global Artists in 2022
4 OF THE TOP 5 GLOBAL ARTISTS IN 2022 1 TAYLOR SWIFT 2 BTS AND 15 OF THE TOP 20 GLOBAL 3 DRAKE 5 THE WEEKND ARTISTS IN 2022 SOURCE: IFPI
Slide 9: 2022 Global Artist & Songwriter Success
2022 GLOBAL ARTIST & SONGWRITER SUCCESS SPOTIFY DEEZER APPLE MUSIC 4 OF THE TOP 5 THE TOP 2 UMPG SONGWRITERS IN GLOBAL ARTISTS OF 2022 & 9 OF THE TOP 10 TAYLOR SWIFT • DRAKE 5 OF THE TOP 10 GLOBALLY STREAMED SONGS GLOBAL ARTISTS OF 2022 THE WEEKND • BTS “STAY” IMAGINE DRAGONS THE WEEKND “As It Was”
Slide 10: 2022 U.S. Success
2022 U.S. SUCCESS SPOTIFY YOUTUBE BILLBOARD 7 OF THE TOP 10 THE NO. 1 4 OF THE TOP 5 SONGS IN THE U.S. SONG ON THE HOT 100 YEAR-END CHART ARTISTS OF 2022 IN THE U.S. GLASS ANIMALS “Heat Waves” DRAKE • TAYLOR SWIFT KANYE WEST • THE WEEKND & ENCANTO CAST “We Don’t Talk About Bruno” JESSICA DARROW “Sur
Slide 11: 2022 Regional Success
2022 REGIONAL SUCCESS UNITED KINGDOM GERMANY ITALY FRANCE JAPAN 6 OF THE 7 OF THE 7 OF THE THE THE TOP 10 TOP 10 TOP 10 TOP FEMALE #1 ARTIST ARTISTS OF THE YEAR MOST-STREAMED ARTISTS MOST-STREAMED ARTISTS ARTIST ON BILLBOARD’S ON SPOTIFY ON SPOTIFY YEAR-END CHART TAYLOR SWIFT SFERA EBBASTA LUCIANO D
Slide 12: Growth in Subscribers
GROWTH IN SUBSCRIBERS amazonmusic @Music .=:deezer yf \_N 77 =_ TENCENT MUSIC ENTERTAINMENT wile CB YouTube Music SOUNDCLOUD * TIDAL @wynxmusic
Slide 13: Harnessing New Technology to Drive Value of Catalog
HARNESSING NEW TECHNOLOGY TO DRIVE VALUE OF CATALOG ELTON JOHN ELTON JOHN ABBA THE BEATLES x x VOYAGE x ROBLOX DISNEY+ DOLBY ATMOS Elton John Live “Beyond The Yellow Brick Road” Farewell From Dodger Stadium Digital Avatar Live Concert Revolver
Slide 14: Committed to Building a Sustainable Business
UMG is committed to building a sustainable business and harnessing the collective power of our people, artists, and fans to protect the planet and create an equitable future for generations to come.
Slide 15: Strengthen, Expand, Grow Our Core Business
WE WILL STRENGTHEN TODAY’S CORE BUSINESS, EXPAND ACROSS HIGH GROWTH GEOGRAPHIES AND PLATFORMS, AND CREATE & SCALE NEW BUSINESSES STRENGTHEN EXPAND GROW OUR CORE BUSINESS OUR CORE BEYOND OUR CORE
Slide 16: Boyd Muir, EVP, CFO & President of Operations
BOYD MUIR EVP, CFO & PRESIDENT OF OPERATIONS UNIVERSAL MUSIC GROUP
Slide 17: FY2022 Consolidated Results
FY2022 CONSOLIDATED RESULTS REVENUE ADJUSTED EBITDA ADJUSTED EBITDA ADJUSTED EPS MARGIN +13.6% +11.7% -0.4pp +14.2% € 0.80 € 10,340 € 2,135 21.0% 20.6% € 8,504 € 1,788 € 0.70 FY21 FY22 FY21 FY22 FY21 FY22 FY21 FY22 Note: € in Millions; Revenue and Adjusted EBITDA growth shown in constant currency, A
Slide 18: Long-Term Growth and Margin Expansion
LONG-TERM GROWTH AND MARGIN EXPANSION SUSTAINED GROWTH IN REVENUE & ADJUSTED EBITDA MARGIN EXPANSION ADJUSTED EBITDA Revenue Adjusted EBITDA € 10,340 € 8,504 21.0% 20.6% € 7,432 20.1% € 7,159 17.8% € 2,135 € 1,788 € 1,272 € 1,497 2019 2020 2021 2022 2019 2020 2021 2022 Note: € in Millions; historica
Slide 19: Recorded Music
RECORDED MUSIC REVENUE ADJUSTED EBITDA ADJUSTED EBITDA MARGIN +8.8% +9.7% +0.2pp € 7,937 € 1,900 23.7% 23.9% € 6,822 € 1,614 FY21 FY22 FY21 FY22 FY21 FY22 Note: € in Millions; All growth rates are in constant currency.
Slide 20: Recorded Music Revenue
RECORDED MUSIC REVENUE FY2022 RECORDED MUSIC REGIONAL 2022 REVENUE BREAKDOWN BREAKDOWN FY21 FY22 +10.0% +9.3% -2.9% +4.1% +13.4% Europe € 2,191 € 3,901 +7.5% North America € 4,077 Asia +6.6% € 1,007 € 1,420 +14.0% € 1,207 Latin America € 1,072 € 302 Rest of World € 360 € 337 +28.0% +15.0% Subscripti
Slide 21: Music Publishing
MUSIC PUBLISHING REVENUE ADJUSTED EBITDA ADJUSTED EBITDA MARGIN +26.3% +18.3%* +25.0% +18.3%* -0.2pp +0.0pp* € 1,799 € 410 23.0% 22.8% € 1,335 € 307 FY21 FY22 FY21 FY22 FY21 FY22 Note: € in Millions; All growth rates are in constant currency. *Adjusted to exclude impact of Change in Society Accounti
Slide 22: Merchandising & Other
MERCHANDISING & OTHER REVENUE ADJUSTED EBITDA ADJUSTED EBITDA MARGIN +54.1% +111.8% +1.4pp € 36 € 618 5.8% 4.4% € 363 € 16 FY21 FY22 FY21 FY22 FY21 FY22 Note: € in Millions; All growth rates are in constant currency.
Slide 23: Free Cash Flow
FREE CASH FLOW • Dividend policy: 50% of net income • 2022 interim dividend: €435 million (€0.24/share) • Final dividend proposal 2022: €491 million (€0.27/share) +42% YoY • Total 2022 dividend: €926 million (€0.51/share) +15% (148) 74 YoY (255) 461 (359) +70% (161) YoY (100) (30) 4 1,987 1,600 1,08
Slide 24: Balance Sheet and Liquidity
BALANCE SHEET AND LIQUIDITY STRONG BALANCE SHEET TOTAL DEBT PROVIDES STRATEGIC FLEXIBILITY Net Debt € 2,595 Cash • Net Debt/Adjusted EBITDA of 0.9x € 2,250 • Investment grade rating € 585 • Average debt maturity: 5.2 years € 439 • Variable rate exposure halved in 2022 • Capital allocation priorities
Slide 25: Equity Plan
EQUITY PLAN Following the successful listing of UMG, the NON-CASH SHARE-BASED Board and Shareholders agreed to finalize an COMPENSATION EXPENSE equity plan that would: • Reduce cash compensation costs Annualized Run-Rate Timing Impact One-Time Transition Grant • Align and incentivize executives and
Slide 26: 1Q23 Consolidated Results
1Q23 CONSOLIDATED RESULTS REVENUE ADJUSTED EBITDA ADJUSTED EBITDA MARGIN +9.3% +13.0% +0.6pp € 2,451 € 522 21.3% € 2,199 € 455 20.7% 1Q22 1Q23 1Q22 1Q23 1Q22 1Q23 Note: € in Millions; All growth rates are in constant currency.
Slide 27: Q&A
Q&A
Slide 28: Agenda Item 3: Remuneration Report 2022
AGENDA ITEM 3 DISCUSSION OF AND ADVISORY VOTE ON THE REMUNERATION REPORT 2022
Slide 29: Q&A
Q&A
Slide 30: Remuneration Report 2022 (Advisory) Voting Item
REMUNERATION REPORT 2022 (ADVISORY) VOTING ITEM
Slide 31: Agenda Item 4: Financial Statements 2022
AGENDA ITEM 4 DISCUSSION AND ADOPTION OF THE FINANCIAL STATEMENTS 2022
Slide 32: Ernst & Young and Deloitte, External Auditors
ERNST & YOUNG ACCOUNTANTS LLP EXTERNAL AUDITOR DELOITTE ACCOUNTANTS B.V. EXTERNAL AUDITOR
Slide 33: The Independent Auditor's Report
THE INDEPENDENT AUDITOR’S REPORT SCOPE & OUTCOME BOARD REPORT • Scope of group audit included procedures performed by • The report was prepared in accordance with Part 9 component auditors (determined based on size, Book 2 of the Dutch Civil Code complexity and risk) and procedures performed at grou
Slide 34: Q&A
Q&A
Slide 35: Financial Statements 2022 Voting Item
FINANCIAL STATEMENTS 2022 VOTING ITEM
Slide 36: Agenda Item 5: Dividend
AGENDA ITEM 5 DIVIDEND
Slide 37: Agenda Item 5A: Discussion of Dividend Policy
AGENDA ITEM 5A DISCUSSION OF DIVIDEND POLICY
Slide 38: Q&A
Q&A
Slide 39: Agenda Item 5B: Adoption of the Dividend Proposal
AGENDA ITEM 5B ADOPTION OF THE DIVIDEND PROPOSAL
Slide 40: Q&A
Q&A
Slide 41: Dividend Proposal Voting Item
DIVIDEND PROPOSAL VOTING ITEM
Slide 42: Agenda Item 6: Discharge
AGENDA ITEM 6 DISCHARGE
Slide 43: Agenda Item 6A: Discharge of the Executive Directors
AGENDA ITEM 6A DISCHARGE OF THE EXECUTIVE DIRECTORS
Slide 44: Q&A
Q&A
Slide 45: Discharge of the Executive Directors Voting Item
DISCHARGE OF THE EXECUTIVE DIRECTORS VOTING ITEM
Slide 46: Agenda Item 6B: Discharge of the Non-Executive Directors
AGENDA ITEM 6B DISCHARGE OF THE NON-EXECUTIVE DIRECTORS
Slide 47: Q&A
Q&A
Slide 48: Discharge of the Non-Executive Directors Voting Item
DISCHARGE OF THE NON-EXECUTIVE DIRECTORS VOTING ITEM
Slide 49: Agenda Item 7: Executive Director
AGENDA ITEM 7 EXECUTIVE DIRECTOR
Slide 50: Agenda Item 7A: Re-appointment of Sir Lucian Grainge
AGENDA ITEM 7A RE-APPOINTMENT OF SIR LUCIAN GRAINGE AS EXECUTIVE DIRECTOR
Slide 51: Q&A
Q&A
Slide 52: Re-appointment of Sir Lucian Grainge as Executive Director
RE-APPOINTMENT OF SIR LUCIAN GRAINGE AS EXECUTIVE DIRECTOR VOTING ITEM
Slide 53: Agenda Item 7B: Supplement to Executive Directors Remuneration Policy
AGENDA ITEM 7B APPROVAL OF A SUPPLEMENT TO THE COMPANY’S EXISTING EXECUTIVE DIRECTORS REMUNERATION POLICY IN RESPECT OF SIR LUCIAN GRAINGE
Slide 54: Anna Jones, Chair of the Remuneration Committee
ANNA JONES CHAIR OF THE REMUNERATION COMMITTEE & INDEPENDENT NON-EXECUTIVE DIRECTOR
Slide 55: Agenda Item 7B: Supplement to Executive Directors Remuneration Policy
AGENDA ITEM 7B APPROVAL OF A SUPPLEMENT TO THE COMPANY’S EXISTING EXECUTIVE DIRECTORS REMUNERATION POLICY IN RESPECT OF SIR LUCIAN GRAINGE
Slide 56: Q&A
Q&A
Slide 57: Approval of Supplement to Executive Directors Remuneration Policy
APPROVAL OF A SUPPLEMENT TO THE COMPANY’S EXISTING EXECUTIVE DIRECTORS REMUNERATION POLICY IN RESPECT OF SIR LUCIAN GRAINGE VOTING ITEM
Slide 58: Agenda Item 8: Non-Executive Directors
AGENDA ITEM 8 NON-EXECUTIVE DIRECTORS
Slide 59: Agenda Item 8A: Re-appointment of Sherry Lansing
AGENDA ITEM 8A RE-APPOINTMENT OF SHERRY LANSING AS NON-EXECUTIVE DIRECTOR
Slide 60: Q&A
Q&A
Slide 61: Re-appointment of Sherry Lansing as Non-Executive Director
RE-APPOINTMENT OF SHERRY LANSING AS NON-EXECUTIVE DIRECTOR VOTING ITEM
Slide 62: Agenda Item 8B: Re-appointment of Anna Jones
AGENDA ITEM 8B RE-APPOINTMENT OF ANNA JONES AS NON-EXECUTIVE DIRECTOR
Slide 63: Q&A
Q&A
Slide 64: Re-appointment of Anna Jones as Non-Executive Director
RE-APPOINTMENT OF ANNA JONES AS NON-EXECUTIVE DIRECTOR VOTING ITEM
Slide 65: Agenda Item 8C: Re-appointment of Luc van Os
AGENDA ITEM 8C RE-APPOINTMENT OF LUC VAN OS AS NON-EXECUTIVE DIRECTOR
Slide 66: Q&A
Q&A
Slide 67: Re-appointment of Luc van Os as Non-Executive Director
RE-APPOINTMENT OF LUC VAN OS AS NON-EXECUTIVE DIRECTOR VOTING ITEM
Slide 68: Agenda Item 8D: Appointment of Haim Saban
AGENDA ITEM 8D APPOINTMENT OF HAIM SABAN AS NON-EXECUTIVE DIRECTOR
Slide 69: Q&A
Q&A
Slide 70: Appointment of Haim Saban as Non-Executive Director
APPOINTMENT OF HAIM SABAN AS NON-EXECUTIVE DIRECTOR VOTING ITEM
Slide 71: Agenda Item 9: Authorization to Repurchase Own Shares
AGENDA ITEM 9 AUTHORIZATION OF THE BOARD AS THE COMPETENT BODY TO REPURCHASE OWN SHARES
Slide 72: Q&A
Q&A
Slide 73: Authorization of the Board to Repurchase Own Shares
AUTHORIZATION OF THE BOARD AS THE COMPETENT BODY TO REPURCHASE OWN SHARES VOTING ITEM
Slide 74: Agenda Item 10: Appointment of the External Auditor
AGENDA ITEM 10 APPOINTMENT OF THE EXTERNAL AUDITOR FOR THE FINANCIAL YEARS 2023 UP TO AND INCLUDING 2025
Slide 75: Q&A
Q&A
Slide 76: Appointment of the External Auditor 2023-2025
APPOINTMENT OF THE EXTERNAL AUDITOR FOR THE FINANCIAL YEARS 2023 UP TO AND INCLUDING 2025 VOTING ITEM
Slide 77: Agenda Item 11: Any Other Business
AGENDA ITEM 11 ANY OTHER BUSINESS
Slide 78: Agenda Item 12: Closing
AGENDA ITEM 12 CLOSING UNIVERSAL MUSIC GROUP
Universal Music Group — Shareholder Meeting (May 2023) on 6ix