Common Music Group printed its Q1 2023 monetary outcomes on Wednesday (April 26), for the three months to finish of March.

The headline determine from the outcomes: The corporate generated Q1 revenues of EUR €2.451 billion (USD $2.62bn) throughout all of its divisions (together with recorded music, publishing and extra).

That Q1 income determine was up 9.3% YoY at fixed forex, pushed by progress in Recorded Music and Music Publishing.

As you’ll learn in our evaluation beneath, highlights in UMG’s Q1 included a 10.3% bounce within the firm’s subscription streaming revenues, and robust bodily gross sales on this planet’s second-largest recorded music market, Japan.

RECORDED MUSIC

Common’s general recorded music revenues for Q1 2023 (together with streaming plus bodily and many others.) have been €1.923  billion ($2.06bn), up 9.6% YoY at fixed forex (see beneath).

Throughout the Recorded Music section, UMG’s ‘Subscription and streaming revenues’ (together with ad-supported and subscription streaming revenues) grew 7.1% YoY at fixed forex to €1.329 billion ($1.42bn).

Breaking UMG’s recorded music streaming determine down additional reveals that the corporate’s subscription streaming revenues particularly grew 10.3% YoY at fixed forex to €1.014 billion ($1.08bn).

It’s price noting that two distinguished music streaming providers, Apple Music and Amazon Music, raised the costs of their flagship particular person premium providers within the second half of 2022, which might doubtless have had a constructive affect on world recorded music revenues in Q1 2023, versus Q1 2022.

UMG doesn’t level to this as being an element, nonetheless, stating that its subscription streaming income lead to Q1 was pushed, “primarily by the expansion in world subscribers”.

This truth was evidenced by Spotify’s outcomes, printed yesterday (April 25), which revealed that its personal Premium Subscriber base grew 15% YoY, to succeed in 210 million complete paying customers – 3 million above the corporate’s steerage for the quarter.

Common’s ad-supported recorded music streaming income, in the meantime, was down 2.2% YoY at fixed forex (see above) to €315 million ($337.99m). UMG mentioned that “the promoting trade continued to be impacted by a troublesome financial setting”.

Inside Common’s recorded music enterprise, bodily revenues grew 32.6% YoY at fixed forex to €313 million ($335.84m).

UMG says that this progress was pushed “by sturdy CD and DVD gross sales in Japan and enhancements in vinyl gross sales”.

As highlighted by UMG Chairman and CEO Sir Lucian Grainge on the corporate’s name with analysts on Wednesday (April 26), Japanese pop stars King & Prince, considered one of UMG’s prime sellers within the quarter, offered over 1 million CD copies of their single Life Goes On in its first week. Grainge famous that was “the primary time in three years that gross sales threshold was crossed”.

Elsewhere in UMG’s recorded Music section, ‘License and different income’ grew 8.1% YoY at fixed forex to €226 million ($242.49m).

Along with King & Prince, prime sellers for the quarter included releases from Morgan Wallen, Taylor Swift, TOMORROW X TOGETHER and again quantity.

UMG’s revenues generated by ‘merchandising and different’ income in Q1 2023 was €107 million ($114.81m), which was down 3.6% at fixed forex.

Common says that this lower was “because of a troublesome comparability on touring merchandise gross sales towards final 12 months’s pent-up demand for touring following a post-Covid reopening, in addition to a decline in retail gross sales, offset by a rise in direct-to-consumer gross sales”.

Discussing the outcomes on the corporate’s earnings name, Boyd Muir, EVP, CFO and President of Operations for UMG, famous that this consequence was “partially offset by sturdy gross sales in [UMG’s] direct to shopper gross sales”.

Afterward the decision, Muir pointed to elements impacting merch revenues together with touring schedules, and famous that Q1 “is the quietest quarter for touring”.

He added: “Should you have a look at this with with adequate long run lens, we undoubtedly see progress for a substantial future for our merchandising enterprise”.

Music Publishing

Elsewhere, Common’s Music Publishing division, Common Music Publishing Group, generated revenues of €425 million ($456.02m) in Q1 2023.

That was up 11.5% YoY at fixed forex.

Inside Music Publishing, digital income grew 19.1% YoY at fixed forex to €231 million ($247.86m), pushed, in keeping with UMG, “by continued progress in streaming & subscription”.

Synchronisation income grew 7.8% YoY at fixed forex to €69 million ($74.03m), due “to continued progress in synchronization alternatives for music”, in keeping with UMG.

Mechanical income was flat YoY at fixed forex, at €23 million ($24.67m).

“Our sturdy begin to the 12 months demonstrates our consistency in growing nice artists and introducing their music to followers world wide.”

Sir Lucian Grainge, UMG

“Our sturdy begin to the 12 months demonstrates our consistency in growing nice artists and introducing their music to followers world wide,” mentioned Sir Lucian Grainge, UMG’s Chairman and CEO.

“We sit up for constructing on this momentum and furthering our observe document of reworking disruptive applied sciences into alternatives to speed up our enterprise for our artists, followers and shareholders.”

EBITDA ETC.

In Q1 2023, UMG’s EBITDA (earnings earlier than curiosity, taxes, and depreciation) fell 43.4% YoY at fixed forex, to €261 million ($280.05m).

EBITDA margin was 10.6%, in comparison with 20.6% within the first quarter of 2022 (see beneath).

In accordance with UMG,  “this decline was pushed by non-cash share-based compensation bills of €261 million ($280.05m) throughout the first quarter of 2023, in comparison with €1 million ($1.121m) of non-cash share-based compensation bills throughout the first quarter of 2022″, after the corporate rolled out its first world fairness compensation plan, which started in This autumn 2022.

Excluding non-cash share-based compensation bills, UMG stories that its Adjusted EBITDA for Q1 was €522 million ($560.1m), up 13% in fixed forex and that its Adjusted EBITDA margin expanded 0.6 share factors to 21.3%, in comparison with 20.7% within the first quarter of 2022, on account of income progress, working leverage and money compensation financial savings of €9 million related to the fairness plan rollout.

“With income up 9% and Adjusted EBITDA up 13%, we’re inspired by our first quarter and stay on observe to satisfy our plans for the 12 months.”

Boyd Muir, UMG

Boyd Muir, EVP, CFO and President of Operations for UMG added: “Our outcomes mirror the continued evolution of our enterprise in direction of constant and predictable income from a rising array of sources.

Boyd Muir, EVP, CFO and President of Operations for UMG added: “Our outcomes mirror the continued evolution of our enterprise in direction of constant and predictable income from a rising array of sources.

All EUR-USD conversions on this report for Q1 2023 have been made as the typical prevailing quarterly charge as recognized by the European Central Financial institution.Music Enterprise Worldwide