Universal Music Group generated over $1 billion per month on average in 2023

Universal Music Group has published its financial results for FY 2023 and Q4 (the three months to the end of December).

The headline figure from the world’s largest music rights company’s results: UMG generated revenues of EUR €11.108 billion during the year across all of its divisions (including recorded music, publishing and more).

That FY revenue figure was up 11.1% YoY at constant currency, according to the earnings report filed on Wednesday (February 28) by UMG, which trades on the Euronext in Amsterdam.

That FY revenue figure converts to USD $12.011 billion at the average annual exchange rate published by the European Central Bank, and means that UMG generated just over $1 billion, on average, every single month in 2023 across all of its divisions (including recorded music, publishing and more).

“2023 was another exceptional year for UMG: creatively; financially; and strategically,” said Sir Lucian Grainge, UMG’s Chairman and CEO, commenting on the company’s financial results.

“2023 was another exceptional year for UMG: creatively; financially; and strategically.”

Lucian Grainge, UMG

He added: “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.”

Q4 Summary

In Q4 (the three months ended December 31) UMG generated Revenues of €3.208 billion (see chart below) across all of its divisions (including recorded music, publishing and more).

That revenue figure was up 15.6% YoY at constant currency and converts to USD $3.448 billion at the average quarterly exchange rate published by the European Central Bank for the three months to end of December.

UMG’s Recorded Music revenue for Q4 2023 was up 14.7% YoY at constant currency to €2.421 billion ($2.602bn).

Within the Recorded Music segment, UMG’s ‘Subscription and streaming revenues’ (including ad-supported and subscription streaming revenues) grew 12.4% YoY at constant currency to €1.532 billion ($1.647bn) in Q4 2023.

Top Recorded music sellers in the quarter included Taylor Swift, The Rolling Stones, Drake, Jung Kook and Stray Kids.

Meanwhile, Universal’s Music Publishing division, Universal Music Publishing Group, generated revenues of €576 million ($619.257m) in Q4, which was up 15.4% YoY at constant currency.

UMG’s Merchandising and Other revenue in Q4 2023 was €215 million ($231.14m), up 26.5% YoY at constant currency, driven, according to UMG, by growth in direct-to-consumer sales, which it said on Wednesday “more than offset a decline in touring merchandise sales on lower touring activity compared to the prior year quarter”.

UMG notes in its investor filing that its FY 2023 revenues included the benefit of the Copyright Royalty Board Phonorecords III ruling. It also notes that its 2022 revenue included the benefit from the Change in Society Accounting and a Legal Settlement.

Excluding these items from both years, full-year revenue grew 12.4% YoY in constant currency.

RECORDED MUSIC FY summary

UMG’s Recorded Music revenues in the 12 months to end of December 2023 grew 10.2% YoY at constant currency to €8.461 billion ($9.148bn).

As detailed above, UMG’s Recorded Music revenue tally included the impact of the Legal Settlement in 2022. Excluding this item, Recorded Music revenue in 2023 grew 11.2% YoY at constant currency.

Within the Recorded Music segment, UMG’s ‘Subscription and streaming revenues’ (including ad-supported and subscription streaming revenues) grew 10.4% YoY at constant currency to €5.700 billion ($6.163bn) in 2023.

Breaking down UMG’s recorded music streaming figure for 2023 further reveals that the company’s subscription streaming revenues specifically grew 12.8% YoY at constant currency to €4.275 billion ($4.622bn).

Universal’s ad-supported recorded music streaming revenue, meanwhile, was up 3.6% YoY at constant currency (see below) to €1.425 billion ($1.540bn) in 2023. 

Top sellers for the year included multiple albums from Taylor Swift, and albums from Morgan Wallen, King & Prince, Karol G, and The Weeknd.

Top sellers in the prior year included Taylor Swift, BTS, Encanto OST, Olivia Rodrigo, and Morgan Wallen.

MUSIC PUBLISHING FY summary

Meanwhile, Universal’s Music Publishing division, Universal Music Publishing Group, generated revenues of €1.956 billion ($2.115bn) in 2023, up 12.3% YoY in constant currency.

Excluding the benefits from the CRB Phonorecords III Accrual in 2023 and the Change in Society Accounting in 2022, UMG’s Music Publishing revenue grew 15.8% YoY at constant currency.

UMG noted on Wednesday that “this strong underlying growth was primarily due to the continued growth in subscription and streaming revenue and improvements in Performance, Synchronisation and Mechanical revenue”.

Within Music Publishing, Digital revenue grew 12.5% YoY at constant currency to €1.128 billion (see below) which converts to USD $1.219 billion.

Performance revenue grew 15.9% YoY at constant currency to €416 million ($449.82m)

Sync revenue grew 10% YoY at constant currency to €254 million ($274.65m).

Merchandising FY summary

Universal’s ‘Merchandising and Other’ revenue segment grew 17.9% YoY at constant currency to €706 million ($763.397m) in 2023 (see below).

UMG reports that this growth was driven “primarily by growth in direct-to-consumer sales”.

Q4 EBITDA ETC.

In Q4 2023, UMG’s EBITDA (earnings before interest, taxes, and depreciation) was up 13.3% YoY at constant currency to €564 million ($606.356m).

EBITDA margin was 17.6% in Q4 2023 compared to 18% in Q4 2022 (see below).

UMG reported that its EBITDA and EBITDA margin in Q4 were impacted by non-cash share-based compensation expenses of €113 million during the fourth quarter of 2023, and by €91 million of non-cash share-based compensation expenses during Q4  2022.

Excluding these amounts, UMG’s Adjusted EBITDA for the quarter was €677 million ($727.842m), up 15.1% YoY at constant currency.

Adjusted EBITDA margin remained constant at 21.1% in Q4 2023, compared to 21.1% in Q4 2022.

FY 2023 EBITDA ETC.

In 2023, UMG’s EBITDA (earnings before interest, taxes, and depreciation) fell 7.8% YoY at constant currency, to €1.808 billion ($1.954bn).

EBITDA margin was 16.3%, compared to 19.6% in 2022 (see below).

UMG noted that its EBITDA and EBITDA margin in FY 2023 were impacted by noncash share-based compensation expenses of €561 million during 2023 compared to €107 million during 2022.

Excluding these amounts, Adjusted EBITDA for 2023 was €2.369 billion ($2.561bn), up 14.6% YoY at constant currency.

Adjusted EBITDA margin improved to 21.3% in 2023, compared to 20.6% in 2022.

Commenting on UMG’s earnings results, Boyd Muir, EVP, CFO and President of Operations for UMG, said: “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.”

Boyd Muir

Muir added: “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.”

Universal Music Group also confirmed today (February 28) details of a “re-designing” of its organizational structure, which it says will generate €250 million (USD $270 million) in annual cost savings, and which you can read more about over here.

All references to YoY percentages in this story, whether stated as such or not, are in constant currency. All EUR-USD conversions made at the average rate of the relevant period (quarterly/annual)according to the European Central BankMusic Business Worldwide