UMG revenues up 14% in 2019, Vivendi lines up IPO

UMG revenues up 14% in 2019, Vivendi lines up IPO

Universal Music Group’s revenues in 2019 were up 14% year-on-year at constant currency to €7.159 billion (£5.95bn). The increase was 18.9% on an actual basis.

Recorded music revenues grew by 11.6% year-on-year at constant currency, as a result of the growth in subscription and streaming revenues, which were up 21.5% compared to 2018.

Vivendi CEO Arnaud de Puyfontaine said the major run by Sir Lucian Grainge is “taking advantage of the streaming boom” 

The results were issued following the December 2019 deal with Tencent Holdings’ consortium to acquire 10% of UMG, based on a valuation of €30bn (£24.9bn). It is expected to close in the first half of 2020. The consortium has an option on a further 10%.

“We are all excited by the strategic rationale behind this move,” said de Puyfontaine, during the earnings call. While it opens up opportunities in China, the move has been challenged by IMPALA.

Parent company Vivendi confirmed that eight banks are assisting on the sale of futher minority stakes in UMG. An initial public offering is planned for 2023 at the latest.

While analysts were excited by that announcement, the nature of any IPO remains unclear. Vivendi had ruled out an IPO back in 2018 but appears to have changed tack.

"Terms and conditions of the IPO will be defined in due course," said de Puyfontaine on today's earnings call.

It follows the surprise move by Warner Music Group to go public again with an IPO.

UMG’s release schedule helped an improvement in physical sales (up 3.1% year-on-year), which offset the continued decline in download sales (down 23.2%).

Recorded music best sellers for 2019 included releases from Billie Eilish, Post Malone, Taylor Swift, Ariana Grande and the Japanese band King & Prince, as well as continued sales of the soundtrack from A Star Is Born, The Beatles' 50th anniversary release of Abbey Road and multiple albums from Queen. 

Music publishing revenues grew by 9.2% at constant currency compared to 2018, also driven by increased subscription and streaming revenues. This month Taylor Swift signed to Universal Music Publishing Group. 

Merchandising and other revenues were up 73.7% at constant currency compared to 2018, as a result of increased touring activity and growth in retail and D2C revenues.

UMG’s EBITA was €1.124bn (£933m), up 22.3% at constant currency.


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