Universal Music Quarterly Earnings Total $1.7 Billion as Streaming Jumps 28 Percent


Vivendi says the process to sell up to half of UMG is making progress, with an independent review arriving in the coming weeks.

As it continues efforts to open its share capital to possible partners, Universal Music Group announced on Monday another blockbuster quarterly earnings, raking in €1.502 billion ($1.7 billion at current exchange rate) through the end of March — a nearly 19 percent jump at constant currency compared to the same period last year.

UMG's recorded music division accounted for €1.208 billion ($1.36 billion) of that tally, with the lion's share, unsurprisingly, owed to streaming, which saw revenues rocket 28.1 percent to €737 million ($832.7 million) for the quarter. No slouch, physical music also enjoyed a big quarter, jumping 20.8 percent to €193 million ($218 million), while download sales reduced losses, dropping 18 percent compared to 25.6 percent in the year-earlier period. Licensing revenue increased over 15 percent, to €174 million ($196 million).

Overall, recorded music enjoyed a 19.2 percent increase compared to Q1 2018. Big sellers included new releases from Ariana Grande, Billie Eilish, the Japanese band back number, and continued sales of albums with movie tie-ins, such as the A Star Is Born soundtrack and various Queen albums (Bohemian Rhapsody). Meanwhile, UMG artists occupied the top spot on the Billboard Hot 100 chart for 12 out of 13 weeks during the quarter.   

Additionally, UMG's publishing revenues grew by 4.7 percent to €225 million, driven by subscription streaming revenue. Merchandising and other revenues were up 72.7 percent at constant currency, to €72 million.

In terms of regional strength, UMG increased its revenue totals in North America to €576 million, up 17 percent year over year. Elsewhere, European revenue totaled €372 million, up 16 percent, and Asia jumped 25.4 percent to €153 million for the quarter. Latin America brought in an additional €41 million, while Africa and the the rest of the world generated €66 million.

UMG's revenue led all other divisions of parent company Vivendi, which saw totals of €3.459 billion for the quarter. Traditional leader in that category, Canal+ Group dipped 3.3 percent at constant currency to €1.252 billion, a drop it attributes to a decline in subscribers in France.

Vivendi said it was making progress in efforts to selling up to 50 percent of its share in UMG to one or more partners, which it believes will accelerate development and increase its overall vale. The company said the process of selecting potential partnering banks and advisors should be completed "shortly," and that a Vendor Due Diligence (an independent review of a company before a sale) should be completed in the coming weeks from PricewaterhouseCoopers.

"This process is being performed with the participation of the UMG management teams, calmly, deliberately and without haste," Vivendi said.