Universal Music Group’s Financial Performance
The Universal Music Group (UMG) has reported relatively low profits in the second quarter, but for the half year that ended on June 30, the company’s publishing division made a profit of over 11% in both categories. This solid performance was recorded despite a decline in goods sales, which the company’s managers explained was an expected decline after the success of Taylor Swift’s 2023-24 "Eras" tours.
Top Performers
The top recordings of the music sellers in the first half of the year included artists such as Lady Gaga, Morgan Wallen, Sabrina Carpenter, Kendrick Lamar, and The Weeknd. These artists helped drive the company’s revenue, with a total of €2,980 million generated in the first half of the year.
Revenue Breakdown
The company’s revenue breakdown shows that music streaming and subscription sales rose by 5.3% and 4.4% respectively, compared to the previous year. The adjusted EBITDA of €676 million rose by 4.2% or 7.3% in constant currency compared to the previous year. The physical turnover decreased by 13.2% compared to the previous year, due to a difficult comparison with the strong publication plan of last year.
First Half of the Year Performance
In the first half of the year, sales of €5,881 million increased by 6.4% or 6.9% in constant currency compared to the previous year. This growth was driven by the music and music publishing divisions. Accepted music revenue rose by 6.5% or 7.0% in constant currency compared to the previous year, while music publishing rose by 11.6% or 12.1% in constant currency.
EBITDA and Operating Profit
The adjusted EBITDA of €1,336 million rose by 7.7% or 8.5% in constant currency compared to the previous year. The operating profit improved by 25.3% compared to the previous year or 27.5% in a constant currency to €947 million. This was due to the increase in income, lower compensation costs for shares, and a decline in restructuring costs.
Dividend Payment
The board of UMG has announced a preliminary dividend for H1 2025 of €440 million or €0.24 per share, in accordance with the company’s dividend policy to pay a dividend of at least 50% of the adjusted net profit. The ex-dividend date is set for October 6, 2025, the record date will be October 7, 2025, and the payment date is October 28, 2025.
Outlook
The chairman of UMG, Lucian Grainge, attributed the company’s strong performance to the combination of creative excellence from its artists and songwriters, and the company’s strategic vision and execution. He spent the first 10 minutes of the earnings call discussing the company’s efforts in healthcare in the USA and several European countries. Overall, UMG’s financial performance in the first half of the year was strong, driven by the growth of its music and music publishing divisions.
