Hilversum, The Netherlands (CelebrityAccess) — UMG (Universal Music Group) reported its Q4 2023 results with a revenue of €3,208 million, marking a 9.0% increase year-over-year or 15.6% in constant currency. The growth was supported by robust performances across Recorded Music, Music Publishing, and Merchandising and Other segments. EBITDA for the quarter grew by 6.6% year-over-year to €564 million, with an EBITDA margin of 17.6%, impacted by non-cash share-based compensation expenses. Adjusted EBITDA, excluding these expenses, stood at €677 million, up 9.2% year-over-year.
“2023 was another exceptional year for UMG: creatively; financially; and strategically. From our artists’ and songwriters’ record-breaking performance, to our work advancing the industry through innovative business models, to our leadership fostering responsible AI, to driving our long-term strategy through partnership and thoughtful investment, UMG is uniquely positioned to seize the next wave of growth opportunities on behalf of its artists, employees and shareholders,” said Sir Lucian Grainge, UMG’s Chairman and CEO.
For FY 2023, UMG’s revenue reached €11,108 million, a 7.4% increase over 2022, driven by double-digit growth across all segments. Operating profit declined 11.4% to €1,418 million, mainly due to higher non-cash share-based compensation expenses. EBITDA decreased by 10.8% to €1,808 million, with an EBITDA margin of 16.3%, impacted by the same expenses. Adjusted EBITDA improved to €2,369 million, up 11.0% year-over-year, with a margin of 21.3%.
Net profit attributable to equity holders increased to €1,259 million, resulting in Basic EPS of €0.69, and Adjusted net profit amounted to €1,595 million. Net debt decreased to €1,689 million, with a net leverage ratio of 0.9x. Cash provided by operating activities improved to €2,278 million, allowing strategic investments in long-term growth, including catalogue acquisitions and other strategic ventures.
UMG proposed a final dividend of €492 million for 2023, subject to shareholder approval, totaling €929 million for the year.
Segment breakouts for UMG include the company’s recorded music division, which saw revenue gains of 6.2% year over year to €8.4 billion. Subscription revenue grew 9.6% year-over-year, while overall streaming revenue eked up by just .4% for FY2023.
Physical revenue grew 14.3% during the fiscal year, while revenue from digital downloads, and other digital revenue continued its long slow slide into history, falling by 38.6% year-over-year.
Recorded Music EBITDA in 2023 was €1,618 million, down 11.4% year-over-year, while the EBITDA margin fell by almost 4% during fiscal year 2023.
According to UMG, the results were propelled by releases during the quarter that included albums from Taylor Swift, The Rolling Stones, Drake, Jung Kook, and Stray Kids, while top sellers in the prior-year quarter included Taylor Swift, The Beatles, Drake, Lil Baby, and SEVENTEEN.
UMG’s music publishing division generated €1.96 billion in FY 2023, up 8.7% year-over-year, bolstered by the CRB Phonorecords III royalties ruling. Accounting for that one time bump, music publishing revenue grew 11.9% year-over-year.
Music Publishing EBITDA in 2023 was €420 million, up 6.3% year-over-year, but margins declined slightly by half a percentage point during the period covered.
UMG’s merchandising and other revenue streams grew to €706 million in 2023, up 14.2% year-over-year, or 17.9% in constant currency, which the company attributed primarily to growth in direct-to-consumer sales.
“We continued our strong performance in 2023, with robust top- and bottom-line growth driven by both our artists’ and songwriters’ exceptional performance, as well as progress across our strategic initiatives. The strong cash flow generated by our operations also allows us to make strategic, long-term investments in our company, while maintaining a healthy balance sheet and still returning significant cash to shareholders through our dividend program,” added Boyd Muir, EVP, CFO and President of Operations.
