Universal Music Group N.v. · EURONEXT:UMG
Universal Music — Investor Presentation (June 2008)
18 slides from Universal Music's investor presentation, June 2008
Slide 1: Universal Music Group Overview
Universal Music Group Overview June 2008 IMPORTANT NOTICE: INVESTORS ARE STRONGLY URGED TO READ THE IMPORTANT DISCLAIMER AT THE END OF THIS PRESENTATION
Slide 2: Group Overview
Group Overview • UMG is the largest music content company in the world • It is comprised of two core businesses – Recorded Music: acquiring, marketing and distributing recorded music through a network of subsidiaries, joint ventures and licensees in 77 countries – Music Publishing: acquiring and exp
Slide 3: World's Largest Music Content Company
World’s Largest Music Content Company UMG is the market leader in recorded music and music publishing Recorded Music Music Publishing Market Share CY2007 Market Share CY2007 Indies UMG Indies UMG 30.4% 25.8% 22.2% 28.8% Sony-ATV WMG 11.6% 14.4% Warner Sony-BMG Chappell 20.1% 16.0% EMI EMI 10.9% 19.8
Slide 4: Key to UMG's Success
Key to UMG’s Success Deep pool of management Forefront of new talent and the ability to business initiatives in attract the best industry digital and mobile professionals when sectors necessary Size and strength in Leader in development of marketing and a new business model distribution. Large that
Slide 5: UMG Highlights
UMG Highlights US $ Trade Value Global Recorded Music Market UMG EBITDA Margins 30 Market Decline 26% 20% 25 UMG Decline 7% 17.5% 17.7% 16.6% 16.4% 15.3% 15.5% 15.1% 15% 20 15 10% 9.4% 10 5% 5 0% 0 2000 2001 2002 2003 2004 2005 2006 2007 2000 2001 2002 2003 2004 2005 2006 2007 Recorded Music UMG Mar
Slide 6: UMG Excels in Finding & Developing Artists
UMG Excels in Finding & Developing Artists US Market Share 35% 31.3% 31.2% 30% Best Sellers 2008 YTD * 25.0% 25.4% 25% 1) Jack Johnson 1,217 20.9% 2) Mariah Carey 1,025 20.0% 3) Lil Wayne 1,008 20% 4) Alicia Keys 968 5) Taylor Swift 808 15% 6) Leona Lewis 773 7) Juno OST 770 10.6% 10% 8.9% 8) NOW 27
Slide 7: UMG Excels In Finding & Developing Artists
UMG Excels In Finding & Developing Artists UK Market Share 35% 33.5% 31.6% 30% Best Sellers 2008 YTD * 25% 1) Duffy 657 2) Amy Winehouse 486 3) Nickelback 378 20% 4) Leona Lewis 343 16.4% 16.7% 15.9% 5) Scouting For Girls 343 15% 14.3% 6) Adele 330 12.2% 7) Mika 282 9.9% 8) Amy MacDonald 278 10% 9)
Slide 8: UMG Strategy
UMG Strategy Ensure leadership of the core business during the transition to digital Participate in a broader range of music revenue streams Maximize profitability through efficient cost management 8
Slide 9: The Artists are the brands
The Artists are the brands Global Global Actions sales: sales: €87m €59m Maintain A&R momentum and success in major markets Ensure successful roll out of global acts Further participate in artist brands that UMG helps to create by turning their products into hits Global Global sales: sales: Maximize
Slide 10: Shift to Digital
Shift to Digital '000s units '000s units Physical Album Sales 8.4 Physical Album Sales 6.4 On-line Albums 0.6 On-line Albums 0.2 Audio/Video Full Tracks 4.2 Audio/Video Full Tracks 15.7 Ring-tones 0.9 Ring-tones 8.5 Ring Back Tones 0.2 Ring Back Tones 2.1 € '000s € '000s Physical (92%) 80.2 Physical
Slide 11: Grow the digital business and participate in all new business models
Grow the digital business and participate in all new business models Digital will make music accessible everywhere, an opportunity for future growth including emerging markets Actions Secure profitability of existing deals Sign early strategic partnerships with key players poised for strong growth S
Slide 12: Participation in revenue beyond recording
Participation in revenue beyond recording Merchandising Rights Touring Music Publishing Endorsements/ Book/Magazine Sponsorships Publishing Websites Acting Branding Source: UMG 12
Slide 13: Music Publishing
Music Publishing Actions BMG Music Publishing planned results in line with forecast for 2008 • Successful integration of BMG MP • A&R roster stabilization • Savings targets planned to be exceeded Increase presence in growing territories (e.g., Asia) Accelerating pace of digital deals Source: UMG 13
Slide 14: Music Publishing
Music Publishing The combined Music Publishing company represents a larger slice of UMG’s revenue and has less reliance on mechanical revenues BEFORE AFTER Recorded Music & Other Recorded 93% Music & Other 87% Music Music Publishing Publishing 13% 7% Performance 32% Performance Mechanicals 33% 43% M
Slide 15: Bravado is the leading global merchandising brand
Bravado is the leading global merchandising brand Actions Activate Bravado in all major UMG territories Launch joint record/merchandising Expand distribution coverage and eliminate "white spaces" Enter new channels (fashion/mass) Sign merchandising contracts with our artists Increase sales through e
Slide 16: Performance and 2008 Guidance
Performance and 2008 Guidance • UMG maintains a double € Millions CY 2007 % C hange C onstant FX Q1/2008 % C hange C onstant FX digit EBITA margin, Physical 3,149 -7.9% 560 -15.2% 12.8% in 2007 Digital 645 50.0% 187 29.8% License & Other 459 -12.4% 128 35.0% Recorded Music 4,253 -2.6% 874 -2.5% • 20
Slide 17: Investor Relations Team
Investor Relations Team Daniel Scolan Executive Vice President Investor Relations +33.1.71.71.14.70 daniel.scolan@vivendi.com Paris New York 42, Avenue de Friedland 800 Third Avenue 75380 Paris cedex 08 / France New York, NY 10022 / USA Phone: +33.1.71.71.32.80 Phone: +1.212.572.1334 Fax: +33.1.71.7
Slide 18: Important Legal Disclaimer
Important Legal Disclaimer This presentation contains forward-looking statements with respect to the financial condition, results of operations, business, strategy and plans of Universal Music Group, a subsidiary of Vivendi. Although Vivendi believes that such forward-looking statements are based on
Universal Music Group — Investor Presentation (June 2008) on 6ix