According to the new numbers revealed by parent Vivendi on 14th February, Universal Music Group (UMG)’s total annual revenues – across records, publishing, merch and more – hit € 6.023 bn ($ 7.15 bn) in 2018.
“2018 was another record-setting year for UMG on so many levels. The team from UMG globally sitting in this room today is responsible for our historic performance and i’d like to give credit to them and thank them,” UMG Chairman and CEO Sir Lucan Grainge told the crowd in his introductory remarks at the Grammy’s this year.
The company’s full-year 2018 EBITA (earnings before interest, taxes, and amortization) landed at € 902 mn ($1.07bn), up 22.1% year-on-year at constant currency. EBITA is the best indicator of profitability within Universal’s numbers.
Drilling down into recorded music, Universal’s labels turned over € 4.828 bn ($ 5.73 bn) last year, up 9.8% at constant currency. Within this figure, some € 2.596 bn ($ 3.08 bn) was generated by streaming, which was itself up 37.3%. Physical sales fell 16.1% at constant currency to € 949 mn ($ 1.13 bn), while licensing revenues rose 10.7% to € 804 mn ($ 954 mn).
Music publishing revenue increased 14.5% to € 941 mn ($ 1.1 bn). Revenue from merchandising and other decreased 1.5% year-over-year to € 273 mn ($ 303 mn).
Vivendi told shareholders that is is busy working on the prospective sale of up to 50% of UMG to a buyer (or buyers). It said that it launched due diligence of suitors at the start of 2019, with a floor price to be set soon.
According to Vivendi, meetings have been held with pre-selected banks with the final selection of financial advisors that will “assist in finding the best partners for UMG” should be completed in the coming weeks
Universal’s biggest recorded music artists/projects in the year, by revenue and in order includes Drake, Post Malone, the A Star Is Born OST, The Beatles and XXXTentacion.
“The teams at our labels couldn’t be more different… that’s by design and is a critical ingredient to our success. The fact is, we are not monolithic. We are collection of dynamic companies that form partnerships with phenomenal label entrepreneurs including Top Dawg, Coach and Pee, Drake and Future, Jay Z, Slim and Baby, Scott Borchetta, Scooter [Braun], Alex Da Kid, to name just a few – and of course our partners Disney and Concord. What our labels and these entrepreneurs have in common is this: we believe that an artist we discover will change culture and will make their mark,” added Grainge.
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