By Mauro Orru
Universal Music Group NV – the music major behind The Weeknd, Billie Eilish and Taylor Swift – recorded higher revenue in the third quarter as it continued to benefit from the growing popularity of streaming services.
The world’s largest music company, which began trading on the Euronext Amsterdam exchange last month, said on Wednesday that revenues for the three months through September 30 climbed to € 2.15 billion (2 , 49 billion dollars) against 1.86 billion euros last year.
Earnings before interest, taxes, depreciation and amortization – a closely watched profit measure for Universal – fell from 380 million euros to 426 million euros, with a margin of 19.8%.
“Our operational and financial performance this quarter – our first as an independent, publicly traded company – demonstrates both why UMG is the world’s most successful music company, as well as how our commitment to the career development of artists and promoting innovation drives growth across the music ecosystem, ”said CEO Lucian Grainge.
Universal’s recorded music business, which encompasses subscription and streaming revenue, accounted for the lion’s share of the revenue growth. Subscription and streaming revenues jumped 15.2% at constant exchange rates to 1.13 billion euros.
Universal shares surged on their trading debut last month, a sign of investor confidence in a resurgent music industry that continues to benefit from consumers spending more time listening to music, a trend accelerated by the pandemic. of coronavirus.
The fortunes of the music industry began to reverse in 2016, when the growth of streaming services offered by Spotify Technology SA and Apple Inc. began to outweigh the decline in CD sales and digital downloads in a context of endemic online piracy.
The recorded music industry generated $ 21.6 billion in global revenue in 2020, with streaming accounting for 62% of the total, according to the International Federation of the Phonographic Industry, which represents the recording industry in the world. world.
However, Universal believes that streaming is still in its infancy, with additional expansion opportunities driven by the growth in paid subscribers, even in established markets.
The company is targeting revenue growth of more than 10% this year, with earnings before interest, taxes, depreciation and amortization expected to increase by more than 20%.
“Our results this quarter demonstrate the continued strength of our artist roster and catalog, our company’s increasingly diverse revenue streams and our ability to generate growth for our shareholders,” said Boyd Muir, financial director.
Write to Mauro Orru at [email protected]; @ MauroOrru94