Universal Music shows resilience in half year results despite pandemic

Half-year results for Universal Music Group proved the major label resilient amid the impact of COVID-19 – so much so that its French conglomerate parent Vivendi is suggesting that it could list UMG on the open market before 2023.

The music division was the only one of Vivendi’s to show a positive result due to a staggering drop in sales and advertising.

UMG revenues for the first six months were up 3.5% YOY to €3.459 billion (A$5.69 billion) and core profit by close to 17%.

Recorded music receipts were up 3.7%, as subscription and streaming revenues continued to grow at a strong 12.4% to €1.81 billion ($2.98 billion).

Physical and download sales maintained their decline, physical down 22.4% compared to the first half of 2019, while downloads fell quicker at 23.1%.

Best sellers this year were new releases from The Weeknd, Justin Bieber, King & Prince, Eminem and Lil Baby, and continued performances from Billie Eilish and Post Malone.

The music publishing division had a strong six months, revenues growing by 21.2% to €573 million ($944 million) buoyed by subscriptions and a healthy A&R climate with new signings as Taylor Swift, Kenny Chesney, Surfaces, Luke Combs, Marisa Monte and Meduza.

Merchandising and other revenues were down 41.4% to €121 million ($199.3 million) due to the pandemic’s impact on touring and retail activity.

UMG has expanded its global presence with new offices in Morocco and Israel, launching Def Jam Africa and key partnerships with companies in Italy, Africa and India.

The label’s strong performance, along with the renaissance of the music industry and the success of Warner Music’s recent IPO, has strengthened Vivendi’s resolve to list its prized asset.

CEO Arnaud de Puyfontaine said, “We’re pleased by the success of Warner’s IPO in recent weeks.”

He expected Universal’s IPO by 2023, ”if the conditions were right, and confirmed that after Tencent’s taking a 10% stake, there would be more minority sales.

“We have been approached by many different interests. The process is currently happening.”