Know your Brands: Universal Music Group

Earlier this month, Kendrick Lamar, one of the world's most renowned rap artists, performed in South Africa at the Hey Neighbour concert. Other prominent artists like Swedish House Mafia and H.E.R were also present at the event. Interestingly, these artists are just a few of the artists signed under Universal Music Group N.V.'s record labels.

Universal Music Group N.V. operates as a music company worldwide, with segments including Recorded Music, Music Publishing, and Merchandising & Other. The Recorded Music segment discovers and develops recording artists, markets and promotes their music, and engages in live events, sponsorship, film, and television operations.

The Music Publishing segment discovers and develops songwriters, owns and administers the copyright for musical compositions used in recordings, public performances, and related uses. The Merchandising & Other segment produces and sells artist and other branded products through various sales channels, including fashion retail, concert touring, and the internet, as well as offering brand rights management services. The company has approximately 250 artists/brands and owns about 50 labels covering various music genres.

Disclaimer: The brands may not be limited to the logos on the image and may change. The use of logos are for educational purposes only.

Some of the segments include Republic Records, a division of Universal Music Group, which is the industry's #1 label according to Billboard. It is home to a diverse roster of artists, including Ariana Grande, Billy Porter, Drake, John Legend, Kid Cudi, Lil Wayne, Lorde, Nicki Minaj, Stevie Wonder, Swedish House Mafia, Taylor Swift, The Weeknd, and many more. Republic Records also oversees several innovative business ventures, including Casablanca Records, Cash Money, XO, Young Money, among others.

Interscope Geffen A&M, a major player in the global music scene since its unification on January 1, 1999, covers a diverse range of musical genres, including rock, rap, pop, and alternative. It houses labels such as Aftermath Entertainment, which throughout the years included notable artists like Eminem, Kendrick Lamar, Jon Connor, 50 Cent, Busta Rhymes, Game, and more. Other record labels like Darkroom, Dreamville, LVRN Records (Love Renaissance), and Shady Records are also part of the family.

For more details on record labels, you can view the full list here.

Financials & Dividends

Universal Music Group NV reported Q3 2023 revenue of €2,752M, a 3.3% YoY increase (9.9% in constant currency). Excluding one-time items, revenue grew 4.1% YoY (10.6% in constant currency). EBITDA declined 11.3% YoY to €478M (17.4% margin) due to non-cash share-based expenses of €103M. Adjusted EBITDA, excluding these, was €581M, up 5.1% YoY (11.3% in constant currency). Adjusted EBITDA, excluding specific benefits, increased 13.8% YoY (20.0% in constant currency), with a margin at 21.1%. EBITDA and Adjusted EBITDA were impacted by revenue mix and certain expenses, partially offset by timing factors and cost savings.

Sir Lucian Grainge, UMG´s Chairman, and CEO said: “Our performance this quarter was marked not only by continued growth across our businesses but also by strong progress on our long-term strategy,” adding that "We remain laser-focused on driving sustainable value creation for the company and its stakeholders: identifying and capitalizing on new revenue streams for UMG and our artists, responsibly advancing new technology, and expanding our global footprint."

For the full results, view them here.

When it comes to dividends, Universal Music Group pays dividends to its shareholders twice a year.

Acquisitions

There were several acquisitions by Universal Music Group in 2023. The recent acquisition was of Chabaka, a UAW-based music company.

According to the company: “The acquisition of Chabaka complements UMG’s current service offering and footprint in the fast-growing and dynamic MENA market, which saw growth in recorded music revenues of 23.8% in 2022. It will allow UMG to expand its services and reach within the independent label and artist community. The transaction is another demonstration of UMG’s strategy to increase its presence and accelerate its growth in high-potential music markets around the world."

Prior to this, UMG also acquired RS Group’s music catalogue, the second-largest in Thailand.

Earnings

Universal Music Group. is expected to release the financial results for the fourth quarter in February 2024. You can head over to your EasyEUR account to buy a whole or fraction of a share.