Common Music Group revealed 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 foreign money, pushed by progress in Recorded Music and Music Publishing.

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

RECORDED MUSIC

Common’s general recorded music revenues for Q1 2023 (together with streaming plus bodily and so on.) had been €1.923  billion ($2.06bn), up 9.6% YoY at fixed foreign money (see under).

Inside the Recorded Music section, UMG’s ‘Subscription and streaming revenues’ (together with ad-supported and subscription streaming revenues) grew 7.1% YoY at fixed foreign money 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 foreign money to €1.014 billion ($1.08bn).

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

UMG doesn’t level to this as being an element, nevertheless, 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, revealed yesterday (April 25), which revealed that its personal Premium Subscriber base grew 15% YoY, to succeed in 210 million whole paying customers – 3 million above the corporate’s steering for the quarter.

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

Inside Common’s recorded music enterprise, bodily revenues grew 32.6% YoY at fixed foreign money 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, certainly one of UMG’s high 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 foreign money to €226 million ($242.49m).

Along with King & Prince, high 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 foreign money.

Common says that this lower was “attributable to a tough comparability on touring merchandise gross sales in opposition to final yr’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 outcome 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: “If you happen to 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 foreign money.

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

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

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

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

Sir Lucian Grainge, UMG

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

“We stay 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 foreign money, to €261 million ($280.05m).

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

In keeping 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 experiences that its Adjusted EBITDA for Q1 was €522 million ($560.1m), up 13% in fixed foreign money and that its Adjusted EBITDA margin expanded 0.6 proportion 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 yr.”

Boyd Muir, UMG

Boyd Muir, EVP, CFO and President of Operations for UMG added: “Our outcomes replicate 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 replicate 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 common prevailing quarterly charge as recognized by the European Central Financial institution.Music Enterprise Worldwide