Universal Music Group N.V.
Interim Financial Review and Unaudited Condensed Consolidated Interim
Financial Statements
for the six-month period ended June 30, 2022

1

Interim Financial Review

In millions of euros, number of shares in millions, data per share in euros.
*non-IFRS measures.
This Interim Financial Review and Unaudited Condensed Consolidated Interim Financial Statements includes certain alternative performance indicators
which are not defined in the International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board as endorsed by the
EU. The descriptions of these alternative performance indicators and reconciliations of non-IFRS to IFRS measures are included in this report and reference
may also be made to the 2021 Annual Report.

Revenues
For the first half 2022, UMG’s revenues of €4,734 million were up 23.6% compared to the first half 2021 and up
16.9% at constant currency. This increase was driven by improvements across all divisions. Recorded Music grew
10.1% at constant currency compared to 2021, Music Publishing was up 42.1% at constant currency andMerchandising and Other grew by 67.6% at constant currency.
For a detailed analysis of revenues by business segment, please refer to the press release dated July 27, 2022 (the“press release”) and to Note 3 to the Unaudited Condensed Consolidated Interim Financial Statements for theperiod ended June 30, 2022.

Operating results
Cost of Revenues grew by €561 million to €2,608 million in the first 6 months of 2022 from €2,047 million in thefirst 6 months of 2021, reflecting the increase in revenues as discussed above. Cost of revenues as a percentage ofrevenues increased to 55.1% from 53.4% driven by higher artist costs as a result of revenue mix and especially agreater proportion of Music Publishing revenues. As disclosed in the UMG Annual Consolidated Financial
2

Statements for the year ended December 31, 2021, recognition of certain revenues that are collected throughsocieties is now based on UMG’s best available estimate of the amount of consideration which is probable to becollected (the “Change in Society Accounting”). As detailed in the press release, this has affected the timing of therecognition of certain Music Publishing revenues across financial reporting quarters and led to a catch-up for
certain revenues earned in relation to 2020 and 2021.

Artist costs increased by €496 million from €1,697 million in the first half 2021 to €2,193 million in the first half of2022 driven by the increase in revenues. As a percentage of revenues, artists’ costs increased from 44.3% in 2021
to 46.3% in 2022 driven by the mix of revenues including the greater proportion of Music Publishing revenues thisyear as well as the impact of a catch-up payment from a digital service provider (“the “DSP Catch-Up Payment”),
an exceptional recovery of an advance provision and release of historic royalties (the “Exceptional Recovery andRelease”) that all benefited artists’ costs relative to revenues in the prior year period.

Product costs increased by €65 million to €415 million in the first 6 months of 2022 from €350 million in the first 6
months of 2021 reflecting the growth in revenues. Product costs as a percentage of revenues decreased to 8.8%
from 9.1 % driven by the change in mix of revenues and especially the greater proportion of Music Publishingrevenues.

Selling, general and administrative expenses increased by €260 million to €1,359 million in the first half 2022
from €1,099 million in the first half 2021 but remained constant as a percentage of revenues at 28.7% in both
periods. Selling, general and administrative expenses in the first half 2022 included €2 million share-based
compensation expenses. Selling, general and administrative expenses in the first half 2021 included €3 million
expenses related to UMG’s listing on Euronext Amsterdam.

Operating profit was €765 million in the first half 2022, compared to €684 million in the first half 2021, an
increase of €81 million (+11.8%) driven by the growth in revenues. As a percentage of revenues, operating profit
decreased to 16.2% in the first half 2022 from 17.9% in the first half 2021 driven largely by the increase in artist
costs.

3

Reconciliation of Operating Profit to EBITDA and Adjusted EBITDA

EBITDA increased by €138 million to €960 million in the first half 2022 compared to €822 million in the first half
2021 driven by the increase in revenues. EBITDA margin decreased by 1.2pp to 20.3% in the first half 2022
compared to 21.5% in the first half of 2021 due to changes in revenue mix, including the impact of the Change in
Society Accounting in the first half of 2022, and the impact of the DSP Catch-Up Payment as well as the
Exceptional Recovery and Release that both benefited EBITDA margins in the prior year.
For a detailed analysis of EBITDA by business segment, please refer to the press release and to Note 3 to theUnaudited Condensed Consolidated Interim Financial Statements for the period ended June 30, 2022.

Adjusted EBITDA was €962 million in the first 6 months of 2022, up €137 million compared to €825 million in thefirst 6 months of 2021. Adjusted EBITDA margin decreased by 1.2pp to 20.3% in the first 6 months of 2022
compared to 21.5% in the first 6 months of 2021.

Financial results
Financial Income and Financial Expenses were a net expense of €572 million in the first half 2022, compared to a
net expense of €87 million in the first half 2021, an increase in expense of €485 million. For the first half 2022, therevaluation of the investments in listed companies including Spotify and Tencent Music Entertainment and otherfinancial investments was a net expense amount of €567 million, compared to a net expense of €170 million for
2021, an increase in expense of €397 million. In the first half 2021, UMG benefited from a €100 million gain on
disposal of Alamo Records.

4

Income taxes
For the first half 2022, income taxes were a net income of €49 million, compared to a net expense of €144 million
for the first half 2021. This improvement notably reflected the decrease in the deferred tax charge relating to therevaluation of the investments in listed companies including Spotify and Tencent Music Entertainment(€140 million for the first half 2022, compared to €36 million for the first half 2021) and the €89 million beneficial
impact of two litigations finalised before tax courts in the first half 2022.

Non-controlling interests
For the first half 2022, earnings attributable to non-controlling interests were €1 million, in line with the first half2021.

Net profit attributable to equity holders of the parent
For the first 6 months of 2022, net profit attributable to equity holders of the parent amounted to a profit of€241 million (or €0.13 per share - basic), compared to €452 million for the first 6 months of 2021 (or €0.25 pershare - basic), a decrease of €211 million. Earnings attributable to equity holders of the parent decreased by €211
million, reflecting:• the variance in revaluation of the investments in Spotify, Tencent Music Entertainment and other financial
assets (-€397 million);• the lower gain on disposal of consolidated companies (-€100 million) that in the first 6 months of 2021
included the gain on disposal of Alamo Records;
partially offset by:• the growth in Operating Profit (+€81 million); and• the decrease in income taxes reported to net income (+€193 million), due to the decrease in the deferred
tax charge relating to the revaluation of the investments in Spotify and Tencent Music Entertainment andthe beneficial impact of two litigations finalised before tax courts in the first half 2022.
Adjusted net profit
Reconciliation of Net profit attributable to equity holders of the parent to Adjusted net profit

5Adjusted net profit in the first half 2022 amounted to a profit of €763 million (or €0.42 per share - basic),
compared to €578 million for the first half 2021 (or €0.32 per share - basic), an increase of €185 million. Adjusted
net profit increased by €185 million, reflecting:• the growth in Adjusted EBITDA (+€137 million); and• the decrease in income taxes reported to adjusted net profit (+€52 million).
Changes in the Financial Net Debt

As of June 30, 2022, UMG’s Financial Net Debt amounted to €2,283 million, compared to a Financial Net Debt of€2,010 million as of December 31, 2021, i.e., an increase in net debt of €273 million. This change was mainly
attributable to the following items:•

UMG paid the final dividend with respect to fiscal year 2021 of which €334 million was paid in June 2022
and the associated withholding tax paid in July 2022;•

net cash used for investing activities of €320 million, primarily due to the €264 million investment in Music
Publishing and Recorded Music catalogues, €41 million net other intangible and capital expenditure and€20 million net purchase of consolidated companies, equity affiliates and financial assets; and•repayment of €51 million in relation to lease liabilities and associated interest.

These items were offset by the following:•

net cash provided by operating activities of €474 million.

On June 30, 2022, UMG issued €500 million of senior unsecured notes due on June 30, 2027 with a coupon of
3.000% and €500 million of senior unsecured notes due on June 30, 2032 with a coupon of 3.750%. The net
proceeds were used to fully repay the Term Loan on July 1, 2022.
UMG believes that the cash flow generated by its operating activities, its cash surpluses, net of amounts used toreduce UMG's debt, as well as funds available through undrawn bank credit facilities and additional funding
opportunities will be sufficient to cover expenses and investments necessary for its operations, its debt service,6the payment of income taxes, the distribution of dividends, as well as its investment projects, if any, for the next
12 months.

Equity portfolio
As of June 30, 2022, UMG held a portfolio of listed non-controlling equity interests (including Spotify and Tencent
Music Entertainment) with an aggregate market value of approximately €636 million (before taxes), compared to€1,413 million as of December 31, 2021.

Net cash provided by operating activities before income tax
For the first half 2022, Net cash provided by operating activities before income tax amounted to an inflow of€605 million compared to an inflow of €470 million for the first half 2021, an improvement of €135 million. This
increase was mainly attributable to the following items:
the increase in operating profit (+€81 million);
the favourable variance in adjustments (+€94 million) on higher depreciation and amortization in the firsthalf 2022 and favourable movement in provisions (see breakdown of Adjustments in the Appendix); and• the favourable variance in other working capital (+€53 million) on the increase in sales and timing of digitaland other revenues received in advance;
partially offset by:•••

the increase in royalty advances payments net of recoupments (-€93 million) due to the timing of major
artist renewals and unfavourable foreign exchange impact partly offset by higher recoupment of advances.

Net cash provided by operating activities
Net cash provided by operating activities in the first 6 months of 2022 amounted to an inflow of €474 million
compared to an inflow of €352 million for the first 6 months of 2021, an improvement of €122 million due to the€135 million increase in Changes in net cash provided by operating activities before income tax discussed above,
partially offset by the increase in taxes paid (€13 million).

Net cash used for investing activities
Net cash used for investing activities in the first half 2022 was a €320 million net outflow compared to a
€14 million net outflow for the first half 2021, an increase of €306 million. Catalogue investments in the first half2022 were higher than in the first half 2021 (-€221 million) due to the timing of deals, whilst 2021 benefited fromhigher proceeds from sales of investments and capex (-€119 million) that included the sale of Alamo Records for€102 million. This was partially offset by the lower outflow from the purchase of consolidated companies, equity
affiliates and other financial assets (+€52 million) that included various strategic investments in the prior year
period.

7

Net cash provided by/(used for) financing activities
Net cash provided by financing activities in the first 6 months of 2022 was a €786 million net inflow compared toa €584 million net outflow for the first 6 months of 2021, an increase of €1,370 million. This was mainly
attributable to the following items:••

An increase in debt in the first 6 months of 2022 of €1,171 million compared to a decrease in debt in
the first 6 months of 2021 of €103 million (+€1,274 million); andlower dividend payments in the first 6 months of 2022 (+€88 million).

Reconciliation of cash provided by operating activities to Free Cash Flow

Free Cash Flow
Free Cash Flow in the first half 2022 was a €104 million net inflow compared to a €280 million net inflow for the
first half 2021, a reduction of €176 million. This reduction was predominantly due to higher net cash used forinvesting activities (-€306 million) in the first half 2022 period compared to the first half 2021 due to the timing of
catalogue acquisitions (-€221 million), whilst the prior benefited from the disposal of Alamo Records (-€102
million). This was partly offset by the improvement in net cash provided by operating activities (+€122 million).

8

Risks and uncertainties
The 2021 Annual Report on pages 98 to 113 outlines a number of risk factors which UMG still believes are the key
risks and uncertainties concerning the business and industry in which UMG operates, and that alone or in
combination with other events or circumstances, could have a material adverse effect on UMG’s business, results
and financial position.
External auditors’ involvement
The Interim Financial Review and Unaudited Condensed Consolidated Interim Financial Statements have not been
audited or reviewed by UMG’s external auditors.
Related party transactions
Please refer to Note 10 of the Unaudited Condensed Consolidated Interim Financial Statements for details on
related party transactions.
Forward-looking statements
These Interim Financial Review and Unaudited Condensed Consolidated Interim Financial Statements may containstatements that constitute forward-looking statements with respect to UMG’s financial condition, results ofoperations, business, strategy and plans. Such forward-looking statements may be identified by the use of words
such as ‘profit forecast’, ‘expect’, ‘estimate’, ‘project’, ‘anticipate’, ‘should’, ‘intend’, ‘plan’, ‘probability’, ‘risk’,‘target’, ‘goal’, ‘objective’, ‘will’, ‘endeavour’, ‘optimistic’, ‘prospects’ and similar expressions or variations on such
expressions. Although UMG believes that such forward-looking statements are based on reasonable assumptions,they are not guarantees of future performance. Actual results may differ materially from such forward-looking
statements as a result of a number of risks and uncertainties, many of which are related to factors that areoutside UMG’s control, including, but not limited to, UMG’s inability to compete successfully and to identify,
attract, sign and retain successful recording artists and songwriters, failure of streaming and subscription
adoption or revenue to grow or to grow less rapidly than anticipated, UMG’s reliance on digital service providers,UMG’s inability to execute its business strategy, the global nature of UMG’s operations, UMG’s inability to protect
its intellectual property and against piracy, UMG’s inability to attract and retain key personnel, changes in laws
and regulations and the other risks that have been described in UMG’s 2021 annual report. Accordingly, UMG
cautions readers against placing undue reliance on such forward-looking statements. Such forward-looking
statements are made as of the date of these Interim Financial Review and Unaudited Condensed Consolidated
Interim Financial Statements. UMG disclaims any intention or obligation to provide, update or revise any suchforward-looking statements, whether as a result of new information, future events or otherwise.

9

Responsibility statement
In accordance with article 5:25d(2)(c) of the Dutch Financial Supervision Act (Wet op het financieel toezicht), we
confirm that, to the best of our knowledge:--

the Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2022,
which have been prepared in accordance with IAS 34 ‘Interim Financial Reporting’ as adopted by theEuropean Union, give a true and fair view of the assets, liabilities, financial position and result of theCompany and the undertakings included in the consolidation as a whole;
the Interim Financial Review provides a true and fair view of the important events that have occurred
during the first six months of the financial year, and their impact on the condensed consolidated interim
financial statements, together with a description of the principal risks and uncertainties for the remaining
six months of the financial year, as well as of the major related parties transactions.

On behalf of the Board,

Sir Lucian Grainge, Executive Director, Chairman and Chief Executive Officer

Vincent Vallejo, Executive Director, Deputy Chief Executive Officer

10Appendix
UMG results by segment

Note: % YoY indicates % change year-over-year; % const. indicates % change year-over-year adjusted for constant currency. Constantcurrency change is calculated by taking current year results and comparing against prior year results restated at current year rates.

11

Recorded Music revenues by geographic area

12

Net cash provided by/(used for) operating activities – Adjustments

Adjusted net profit per share13

Definitions
In this Interim Financial Review, UMG presents certain financial measures when discussing UMG’s performancethat are not measures of financial performance or liquidity under IFRS (“non-IFRS”). These non-IFRS measures(also known as alternative performance measures) are presented because management considers them
important supplemental measures of UMG’s performance and believes that they are widely used in the industry
in which UMG operates as a means of evaluating a company’s operating performance and liquidity. UMG believes
that an understanding of its sales performance, profitability, financial strength and funding requirements isenhanced by reporting the following non-IFRS measures. All non-IFRS measures should be considered in addition
to, and not as a substitute for, other IFRS measures of operating and financial performance as presented in UMG’s
Unaudited Condensed Consolidated Interim Financial Statements and the related Notes. In addition, it should be
noted that other companies may have definitions and calculations for these non-IFRS measures that differ fromthose used by UMG, thereby affecting comparability.
EBITDA and EBITDA margin
UMG considers EBITDA and EBITDA margin, non-IFRS measures, to be relevant measures to assess theperformance of its operating segments as reported in the segment data. It enables UMG to compare theoperating performance of operating segments regardless of whether their performance is driven by the operating
segment’s organic growth or by acquisitions. EBITDA margin is EBITDA divided by revenue. To calculate EBITDA,
the accounting impact of the following items is excluded from the income from Operating Profit:i.

amortization of intangible assets;ii.

impairment losses on goodwill and other intangibles;iii.

other income and expenses related to transactions with shareowners (except when directly recognized inequity);iv.

depreciation of tangible assets including right of use assets;v.

(gains)/losses on the sale of tangible assets, included right of use assets and intangible assets;vi.

(income)/losses from equity affiliates;vii.

restructuring expenses; andviii.

other non-recurring items.

Adjusted EBITDA and Adjusted EBITDA margin
The difference between EBITDA and Adjusted EBITDA consists of share-based compensation expenses and certain
one-time items that are deemed by management to be significant and incidental to normal business activity,
including but not limited to professional fees and listing fees related to UMG’s listing on the Euronext Amsterdam.
Adjusted EBITDA margin is Adjusted EBITDA divided by revenue. UMG considers Adjusted EBITDA and Adjusted
EBITDA margin, non-IFRS measures, to be relevant measures to assess performance of its operating activities
excluding items that may be incidental to normal business activity.
Adjusted Net Profit/Adjusted Net Profit per share
UMG considers the use of Adjusted net profit appropriate as UMG uses it as the basis for the Adjusted net profit
per share (in EUR) – diluted, both of which are non-IFRS measures. Adjusted net profit may be subject to14

limitations as an analytical tool for investors, as it excludes certain items and therefore does not reflect theexpense associated with such items, which may be significant and have a significant effect on UMG’s net profit.
The accounting impact of the following items is excluded from Net profit attributable to equity holders of theparent:i.

amortization of catalogues;ii.

impairment losses on goodwill and intangible assets;iii.

other charges and income related to transactions with shareowners;

iv.

financial income and expenses, excluding interest and income from investments;v.

earnings from discontinued operations;vi.

share-based compensation expenses;vii.

certain one-time items that are deemed by management to be significant and incidental to normal businessactivity;viii.

income taxes and adjustments attributable to non-controlling interests; andix.

non-recurring tax items.

Financial Net Debt
UMG considers Financial Net Debt, a non-IFRS measure, to be a relevant indicator of the group’s liquidity and capital
resources. UMG management uses this indicator for reporting, management and planning purposes. Financial Net
Debt is calculated as the sum of:i.
cash and cash equivalents, as reported in the Consolidated Statement of Financial Position, including (i)cash in banks and deposits, whether or not compensated, corresponding to cash, and (ii) money market
funds;
ii.

cash management financial assets, included in the Consolidated Statement of Financial Position under“financial assets”, relating to financial investments, which do not satisfy the criteria for classification as cash
equivalents set forth in IAS 7; andiii.

derivative financial instruments, net (assets and liabilities) where the underlying instruments are Financial
Net Debt items, as well as cash deposits securing borrowings included in the Consolidated Statement of
Financial Position under “financial assets”;

less:
i.

the value of borrowings at amortized cost as reported in the Consolidated Statement of Financial Position

Free Cash Flow
UMG defines Free Cash Flow as net cash provided by/(used for) operating activities plus net cash provided
by/(used for) investing activities, less repayment of lease liabilities, interest paid, net and other cash items related
to financing activities. UMG considers free cash flow, a non-IFRS measure, to be a relevant indicator of thegroup’s cashflow generated to fund dividend payments and repayment of debt. Free Cash Flow is not a measureof performance calculated in accordance with IFRS and therefore it should not be considered in isolation of, or asa substitute for cash flow provided by operating activities as a measure of liquidity. Free Cash Flow, as we
calculate it, may not be comparable to similarly titled measures employed by other companies. In addition, Free
15

Cash Flow does not necessarily represent funds available for discretionary use and is not necessarily a measure of
our ability to fund our cash needs.

16Unaudited Condensed Consolidated Interim Financial Statements
for the six-month period ended June 30, 2022

UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX-MONTHS ENDED
JUNE 30, 2022 .................................................................................................................................................... 3
CONDENSED CONSOLIDATED INTERIM STATEMENT OF PROFIT OR LOSS ............................................................ 3
CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME ............................................ 4
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION .................................................... 5
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS ................................................................. 6
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY ..................................................... 7
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS ................................................ 9
NOTE 1

GENERAL INFORMATION ............................................................................................................................... 9

NOTE 2BASIS OF PREPARATION ................................................................................................................................ 9

NOTE 3

SEGMENT DATA ......................................................................................................................................... 10

NOTE 4

FINANCIAL INCOME AND EXPENSES ............................................................................................................... 13

NOTE 5

INCOME TAXES .......................................................................................................................................... 13

NOTE 6

CONTENT ASSETS (CATALOGUES AND ROYALTY ADVANCES) AND OTHER INTANGIBLES ............................................13

NOTE 7

CASH POSITION AND BORROWINGS ............................................................................................................... 14

NOTE 8FINANCIAL ASSETS AND LIABILITIES ................................................................................................................ 14

NOTE 9EQUITY .................................................................................................................................................... 16

NOTE 10

RELATED PARTIES....................................................................................................................................... 16

NOTE 11

SUBSEQUENT EVENTS ................................................................................................................................. 18

Universal Music Group / 2

Unaudited Condensed Consolidated Interim
Financial Statements for the six-months ended
June 30, 2022
Condensed Consolidated Interim Statement ofProfit or Loss
Six months ended June 30,(unaudited)Note(in millions of euros)
Revenues

2022
3

2021
4,734

3,831

Cost of revenues(2,608)(2,047)

Selling, general and administrative expenses(1,359)(1,099)

Income/(loss) from equity affiliates

(2)

(1)

Operating profit

765

684

Financial income

4

20

110

Financial expenses

4(592) d

(197)

(572)

-

(87)

193

-

597

Profit before income taxes
Income taxes
Net profit

5

49
242

Of which
Net profit attributable to equity holders of the parent

-

(144)
-

453

241

452

1

1

Basic, earnings for the period attributable to equity holders of the parent

0.13

0.25

Diluted earnings for the period attributable to equity holders of theparent0.13

0.25

Net profit attributable to non-controlling interests
Earnings per share (in euros)

Universal Music Group / 3

Condensed Consolidated Interim Statement ofComprehensive Income
Six months ended June 30,(unaudited)(in millions of euros)

2022

2021

Net profit

242

453

Actuarial gains/(losses) related to employee defined benefit plans, net of tax

35-

Financial assets at fair value through other comprehensive income, net of tax

5-

Items not subsequently reclassified to profit or loss, net of tax

40-

Foreign currency translation adjustments

257

24

Comprehensive income/(loss) from equity affiliates, net of tax-

1

Items to be subsequently reclassified to profit or loss, net of tax

257

25

Income and expenses directly recognized in equity, net of tax

297

25

Total comprehensive income, net of tax

539

478

Total comprehensive income attributable to equity holders of the parent

538

477

Total comprehensive income attributable to non-controlling interests

1

1

Of which

Universal Music Group / 4

Condensed Consolidated Interim Statement of
Financial Position
June 30, 2022
(unaudited)

December 31,
2021

1,579
1,685
3,117
111
166
351
113
795
353
7
8,277

1,480
1,536
2,982
96
167
388
109
1,592
404
6
8,760

128
3
986
2,127
15
1,540
4,799

99
3
844
1,803
585
3,334

TOTAL ASSETS

13,076

12,094

EQUITY AND LIABILITIESShare capital
Additional paid-in capital
Treasury shares
Retained earnings
Non-controlling interests
Total equity

18,134
14,942(12)(30,858)
2,206

18,134
14,941(12)(31,033)
2,030

298
3,003
657
385
481
4,824

355
2,277
850
421
769
4,672

102
823
5,019
79
23
6,046

80
318
4,875
80
39
5,392

Total liabilities

10,87010,064TOTAL EQUITY AND LIABILITIES

13,076

12,094(in millions of euros)

Note

ASSETS
Goodwill
Non-current royalty advances
Catalogues
Other intangible assets
Property, plant and equipment
Rights-of-use relating to leases
Investments in equity affiliates
Non-current financial assets
Deferred tax assets
Other non-current assets
Non-current assets
Inventories
Current tax receivables
Current royalty advances
Trade and other receivables
Current financial assets
Cash and cash equivalents
Current assets

Non-current provisions
Long-term borrowings and other financial liabilities
Deferred tax liabilities
Long-term lease liabilities
Other non-current liabilities
Non-current liabilities
Current provisions
Short-term borrowings and other financial liabilities
Trade and other payables
Short-term lease liabilities
Current tax payables
Current liabilities

6
6
6

8

6
8
7

7
8

7

Universal Music Group / 5

Condensed Consolidated Interim Statement of
Cash Flows(in millions of euros)
Operating activities
Operating profit
Adjustments
Royalty advances payments, net of recoupments
Gross cash provided by/(used for) operating activities before income tax paid

Six months ended June 30,(unaudited)
2021
2022
Restated
765
182
(223)
724

684
88
(130)
642

Other changes in net working capital

(119)

(172)

Net cash provided by/(used for) operating activities before income tax paid

605

470

Income tax paid

(131)

(118)

Net cash provided by/(used for) operating activities

474

352

(264)
(31)
(10)
(2)
(18)
(325)
3
3
1
1

(43)
(19)
(4)
(2)
(23)
(47)
(138)
5
117
122
1
1

(320)

(14)

Distributions to shareowners
Other transactions with shareowners
Dividends paid by consolidated companies to their non-controlling interests
Transactions with shareowners
Proceeds from borrowings
Repayments of borrowings
Interest paid, net
Other cash items related to financing activities

(334)
(1)
(335)
2,576
(1,405)
-

(422)
(1)
(423)
59
(162)
(9)

1

(9)

Transactions on borrowings and other financial liabilities

1,172

(121)

Repayment of principal on lease liabilities
Payment of interest of lease liabilities
Net cash provided by/(used for) financing activities

(44)
(7)

(32)
(8)

786

(584)

Net change in cash and cash equivalents

940

(246)

Investing activities
Catalogue investments
Other intangible assets investments
Capital expenditures
Purchases of consolidated companies, after acquired cash
Investments in equity affiliates
Purchase of financial assets
Investments
Proceeds from sales of property, plant, equipment and intangible assets
Proceeds from sales of consolidated companies, after divested cash
Disposal of equity affiliates
Proceeds from sale of financial assets
Divestitures
Dividends received from equity affiliates
Dividends received from unconsolidated companies
Net cash provided by/(used for) investing activities
Financing activities

Foreign currency translation adjustments
Change in cash and cash equivalents

15

6

955

(240)

585

1,141

1,540

901

Cash and cash equivalents
At beginning of the period
At end of the period

Universal Music Group / 6

Condensed Consolidated Interim Statement of Changes in Equity
Six months ended June 30, 2022 (unaudited)(in millions of euros, except number of shares)
BALANCE AS OF DECEMBER 31, 2021
Net profit

Number ofshares(inthousands)

Share Capital

1,813,376

18,134

14,941(12)(31,033)

2,030

-

2,030

-

-

-

-

241

241

1

242

Additional
paid-in
capitalTreasuryshares

Total
Shareholders
EquityRetainedearnings

NonControlling
Interests

Total Equity

Income and expenses directly recognized in equity, net of tax

-

-

-

-

297

297

-

297

TOTAL COMPREHENSIVE INCOME

-

-

-

-

538

538

1

539

Dividends paid and payable by UMG N.V

-

-

-

-

(363)

(363)

-

(363)

Dividends paid by subsidiaries to non-controlling interests

-

-

-

-

-

-

(1)

(1)

Share-based compensation plans

-

-

1

-

-

1

-

1

TOTAL CHANGES OVER THE PERIOD

-

-

1

-

175

176

-

176

1,813,376

18,134

14,942(12)(30,858)

2,206

-

2,206

BALANCE AS OF JUNE 30, 2022

Universal Music Group / 7

Six months ended June 30, 2021 (unaudited)(in millions of euros, except number of shares)
BALANCE AS OF DECEMBER 31, 2020

Number ofshares(inthousands)

Share Capital--

Additional
paid-in
capitalTreasuryshares-

Total
Shareholders
EquityRetainedearnings

NonControlling
Interests

Total Equity

-

1,634

1,634

-

1,634

Net profit

-

-

-

-

452

452

1

453

Income and expenses directly recognized in equity, net of tax

-

-

-

-

25

25

-

25

TOTAL COMPREHENSIVE INCOME

-

-

-

-

477

477

1

478

Dividends paid and payable by UMG N.V

-

-

-

-

(422)

(422)

-

(422)

Dividends paid by subsidiaries to non-controlling interests

-

-

-

-

-

-

(1)

(1)

Contributions by shareowners of their UIM B.V and UMG Inc. shares to UMG B.V.

1,847,874

18,478

14,522-(33,000)---

Reduction in number of shares and effective capital contribution(34,633)

(346)

346

-

-

-

-

-

TOTAL CHANGES OVER THE PERIOD

1,813,241

18,132

14,868-(32,945)

55

-

55

BALANCE AS OF JUNE 30, 2021

1,813,241

18,132

14,868-(31,311)

1,689

-

1,689

Universal Music Group / 8

Notes to the Condensed Consolidated Interim
Financial Statements
Note 1

General information

Universal Music Group N.V. is a public company with limited liability incorporated under the laws of The Netherlands andlisted on Euronext Amsterdam under the symbol ‘UMG’. As used herein, the term UMG is used for Universal Music Group
N.V. (‘the Company’) and its subsidiaries within the meaning of Section 2:24b of the Dutch Civil Code. UMG’s statutory seat is
located in Amsterdam and its principal office is located at:'s-Gravelandseweg 80,
1217 EW Hilversum The Netherlands.
The Company is registered in the Commercial Register of the Chamber of Commerce under number 81106661 .

Note 2Basis of preparation

The Condensed consolidated interim financial statements are presented in millions of euros, unless stated otherwise. The
presentation currency of UMG is the euro.
2.1 Statement of compliance
The Condensed consolidated interim financial statements have been prepared in accordance with IAS 34 ‘Interim Financial
Reporting’ as adopted by the European Union. The new or amended IFRS standards and interpretations effective for annual
periods beginning on or after January 1, 2022, have been applied by UMG for the first time in these Condensed consolidated
interim financial statements, but have not had a material effect on them. These Condensed consolidated interim financial
statements do not include all the information and disclosures required in the annual financial statements, and should be readin conjunction with UMG’s annual consolidated financial statements for the year ended December 31, 2021.
2.2 Critical accounting judgments and key sources of estimation uncertainty
The preparation of the Condensed consolidated interim financial statements requires management to make judgments,
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities,
income and expenses. Actual results may differ from the estimates. The significant judgments and estimates are consistent
with those disclosed in UMG’s annual consolidated financial statements for the year ended December 31, 2021.
The income tax expense is recognized based on management’s estimate of the weighted average effective annual income tax
rate expected for the full year. The accounting policies applied in the Condensed consolidated interim financial statements
are consistent with those applied in UMG’s annual consolidated financial statements for the year ended December 31, 2021.
2.3 Financial statement presentation changes and prior years restatements
During the period, the presentation of the Condensed consolidated statement of cash flows for and as at June 30, 2021 was
updated compared to the 2021 Condensed consolidated interim financial statements.
The Condensed consolidated interim statement of cash flows and the 2021 Consolidated statement of cash flows previously
presented repayments of the principal and interest of lease liabilities together under repayment of lease liabilities. These
cash flows are now presented separately as part of cash flows from financing activities.

Universal Music Group / 9

Note 3

Segment data

Operating segment data
The operating segment reporting follows the internal reporting used by management of the Company, to manage thebusiness, assess the performance based on the available financial information and to allocate the resources. The mostimportant performance measure is EBITDA, a non-IFRS measure as management believes this is key in evaluating the resultsof the segments relative to other companies that operate within the same industry. EBITDA is defined in the appendix of the2022 Interim Financial Review.

Main aggregates of the Statement of profit or loss

(in millions of euros)

Recorded
Music

Music
Publishing

Merchandisingand otherElimination ofintersegment
transactions

Corporate
centreTotal

Six months ended June 30, 2022
External Revenue

3,643

845

246

-

-

4,734

-

6

2

-

(8)

-

3,643

851

248

-

(8)

4,734

Intercompany Revenue
Revenues
EBITDA

842

200

14

(96)

-

960

Amortisation and depreciation expense

(89)

(80)

-

(13)

-

(182)

Income/(loss) from equity affiliates

(1)

(1)

-

-

-

(2)

Restructuring expenses

(11)

-

-

-

-

(11)

Gain on sale of assets

-

-

-

-

-

-

-

-

-

-

-

-

741

119

14

(109)

-

765

Other non-recurring items
Operating profit
Financial income

20

Financial expenses(592)

Profit before income taxes

193(in millions of euros)

Recorded
Music

Music
Publishing

Merchandisingand otherElimination ofintersegment
transactions

Corporate
centreTotal

Six months ended June 30, 2021
External Revenue
Intercompany Revenue
Revenues

3,136

558

137

-

-

3,831

1

6

1

-

(8)

-

3,137

564

138

-

(8)

3,831

EBITDA

749

134

-

(61)

-

822

Amortisation and depreciation expense

(73)

(45)

(1)

(16)

-

(135)

-

-

-

(1)

-

(1)

Restructuring expenses

(9)

-

-

-

-

(9)

Gain on sale of assets

3

-

-

-

-

3

Income/(loss) from equity affiliates

Other non-recurring items
Operating profit

4

-

-

674

89

(1)

(78)

-

4

-

684

Financial income

110

Financial expenses(197)

Profit before income taxes

597

Universal Music Group / 10

Disaggregated revenue information
Recorded MusicSix months ended June 30,
2022

2021

(in millions of euros)
Streaming Revenue

658

526

Subscription Revenue

1,866

1,604

Downloads and Other Digital Revenue

137

153

Physical Revenue

540

463

License and Other Revenue

442

391

Recorded Music Revenue

3,643

3,137

Music Publishing
Six months ended June 30,
2022

2021

(in millions of euros)
Performance

127

130

Synchronisation

120

91

Digital537

282

Mechanical

46

38

Other

21

23

Music Publishing Revenue

851

564

Subscriptions and streaming represent the largest type of Recorded Music revenue and is recognised over time and is 53%(56% in HY 2021) of total UMG revenues. Physical Recorded Music revenues are recognised at a point in time and represent
11% (12% in HY 2021) of total UMG revenues. Other Recorded Music revenues mostly include neighbouring rights income
which are recognised over time.
Merchandising revenue is recognised at a point in time. Music Publishing revenue is mostly recognised over time.
Segment assets
Segment assets by segment
Segment assets that are reported to the Corporate Executives include items that are directly attributable to a segment aswell as those that can be allocated on a reasonable basis. Unallocated assets mainly comprise of cash and deferred tax
assets which are managed at the Group level.

Universal Music Group / 11

Recorded
Music

Music
Publishing

Merchandising
and Other

Corporate
CentreTotal

As of June 30, 2022
Goodwill

695

783

101

-

1,579

952

513

220

-

1,685

1,231

1,886

-

-

3,117

Property, plant & equipment

149

5

-

12

166

Other intangible assets

24

22

-

65

111

Right of use relating to leases

344

4

-

3

351

Royalty advances, current

513

413

60

-

986

Other assets

2,337

622

55

174

3,188

Total segment assets

6,245

4,248

436

254

11,183

Royalty advances, non-current
Catalogues

Unallocated assets

1,893

Total assets

13,076

Recorded
Music

Music
Publishing

Merchandising
and Other

653

727

100

Corporate
CentreTotal

As of December 31, 2021
Goodwill

-

1,480

877

559

100

-

1,536

1,165

1,817

-

-

2,982

Property, plant & equipment

111

6

-

50

167

Other intangible assets

24

21

-

51

96

Right of use relating to leases

235

27

-

126

388

Royalty advances, current

421

362

61

-

844

Other assets

2,913

469

36

191

3,609

Total segment assets

6,399

3,988

297

418

11,102

Royalty advances, non-current
Catalogues

Unallocated assets

992
12,094

Total assets

Content assets by segment
June 30, 2022
(in millions of euros)

Catalogues (of music and publishing rights)
Royalty advances (to artists and repertoire)
Of which: non – current
current
Content assets, net
Current content assets
Non-current content assets

Note

6

Recorded Music

Music Publishing

1,231
1,465
952
513
2,696
513
2,183

1,886
926
513
413
2,812
413
2,399

Merchandising and
Other
280
220
60
280
60
220

Total
3,117
2,671
1,685
986
5,788
986
4,802

Universal Music Group / 12

December 31, 2021
(in millions of euros)
Catalogues (of music and publishing rights)
Royalty advances (to artists and repertoire)
Of which: non – current
current
Content assets, net
Current content assets
Non-current content assets

Note 4Note

6Recorded Music

Music Publishing

1,165
1,298
877
421
2,463
421
2,042

1,817
921
559
362
2,738
362
2,376

Total
2,982
2,380
1,536
844
5,362
844
4,518

Financial income and expenses
Note(in millions of euros)Interest income from cash, cash equivalents and other
Change in fair value of financial instruments through profit or loss
Gain on disposal of consolidated companies
Expected return on plan assets related to employee benefit plans
Foreign exchange gain
Other
Financial income
Interest expense on borrowings
Change in fair value of financial instruments through profit or loss
Unwinding of interest component
Interest cost related to employee benefit plans
Interest expenses on lease liabilities
Cost of finance
Other
Financial expenses
Net total financial income and (expenses)

Note 5Merchandising and
Other
161
100
61
161
61
100

8

Six months ended June 30,
2022
2021
13
4
2
100
2
1
3
1
2
2
20
110
(13)
(13)
(567)
(170)
(3)
(2)
(7)
(8)
(1)
(3)
(1)
(1)
(592)
(197)
(572)
(87)

Income taxes

The income tax expense in the first six months of 2022 decreased by €193 million compared to the corresponding period of
the previous year. The decrease was mainly caused by the benefit related to the revaluation through profit or loss of theinterests in Spotify and other equity holdings and the beneficial impact of two tax litigations finalised before tax courts.

Note 6

Content assets (catalogues and royalty advances) and other intangibles

Net book value

Asset value, gross(in millions of euros)

Catalogues (of music and publishing rights)
Royalty advances (to artists and repertoire owners)
Content assets
Other intangible assets

5,685
2,671
8,356
472

June 30, 2022
Accumulated
amortization andimpairment losses(2,568)(2,568)(361)

Net book value
3,117
2,671
5,788
111

Universal Music Group / 13

Asset value, gross(in millions of euros)

Catalogues (of music and publishing rights)
Royalty advances (to artists and repertoire owners)
Content assets
Other intangible assets

Note 7

5,284
2,380
7,664
437

December 31, 2021
Accumulated
amortization andimpairment losses(2,302)(2,302)(341)

Net book value
2,982
2,380
5,362
96

Cash position and borrowings

Cash position(in millions of euros)
Cash equivalents

June 30, 2022

Cash
Cash and cash equivalents

235
1,305

December 31, 2021
297
288

1,540

585

Borrowings and other financial liabilities
Total
Term loan
Drawn revolving credit facilities
Bank overdrafts
Bonds
Other
Borrowings at amortized cost

June 30, 2022
Long-term
Short-term

999
1,650
5
987
185
3,826

799
1,175
987
42
3,003

200
475
5
143
823

Total

December 31, 2021
Long-term
Short-term

998
1,447
13
137
2,595

798
1,447
32
2,277

New financing
In February 2022, UMG entered into a short-term floating rate US$500 million revolving credit facility.
On June 30, 2022, UMG issued €500 million of senior unsecured notes due on June 30, 2027 with a coupon of 3.000% and€500 million of senior unsecured notes due on June 30, 2032 with a coupon of 3.750%. The net proceeds were used to fully
repay the Term loan on July 1, 2022. For more details refer to Note 11 Subsequent Events.

Note 8Financial assets and liabilities

The table below shows the carrying amounts and fair values of financial assets and liabilities according to their fair value
hierarchy. The following hierarchy is applied to classify the financial assets and liabilities:-

Level 1: fair value measurement based on quoted prices in active markets for identical assets or liabilities;-

Level 2: fair value measurement based on observable market data (other than quoted prices included under Level1), being for example, price on the last transactions on over-the-counter (OTC) markets; and-Level 3: fair value measurement based on valuation techniques using inputs for the asset or liability that are notbased on observable market data.

Based on the nature, maturity or the magnitude of the amounts, UMG considers that the fair value of trade and otherreceivables, short-term deposits, loans receivable, borrowings, trade and other payables are not materially different fromtheir carrying amount.

Universal Music Group / 14

200
13
105
318

(in millions of euros)
Financial Assets at fair value through profit and loss
Listed equity securities
Unlisted equity securities
Warrants
Derivative financial assets
Other financial assets
Financial assets at fair value through othercomprehensive income
Unlisted equity securities
Financial Assets at amortised cost
Trade and other receivables
Total Financial Assets
Financial liabilities at amortised cost
Trade and other payables
Bonds
Borrowings, excluding bank overdrafts and Bonds
Other non-current liabilities
Total financial liabilities(in millions of euros)
Financial Assets at fair value through profit and loss
Listed equity securities
Unlisted equity securities
Warrants
Other financial assets
Financial assets at fair value through othercomprehensive income
Unlisted equity securities
Financial Assets at amortised cost
Trade and other receivables
Total Financial Assets
Financial liabilities at amortised cost
Trade and other payables
Borrowings, excluding bank overdrafts
Other non-current liabilities
Total financial liabilities

Carrying
AmountJune 30, 2022
Fair Value
Level 1
Level 2

Level 3

636
31
11
3
114

636
-

31
11
3
-

114

15

-

-

15

2,127
2,937

636

45

129

(5,019)(987)(2,834)(481)(9,321)(1,000)(1,000)--Carrying
AmountDecember 31, 2021
Fair Value
Level 1
Level 2

Level 3

1,413
44
19
100

1,413
-

44
19
-

100

16

-

-

16

1,803
3,395

1,413

63

116

(4,875)(2,582)(769)(8,253)---

Universal Music Group / 15

Listed equity portfolio
June 30, 2022
Number ofshares held

Ownership
interest(in thousands)

Spotify
Tencent MusicEntertainment
Total

Averagepurchaseprice2

Stock market
price

Change invalue overthe period1

Carryingvalue(€/share)Cumulative
unrealized
capitalgain/(loss)

Sensitivity at+/-10 pts

(in millions of euros)

6,487

3.30%

6.58

89

578

(761)

535

+58/-58

12,246

0.75%

na

5

58

(16)

58

+6/-6

636

(777)

593

1net revaluation losses of €547 million in HY 2022 (€170 million in HY2021) were recognized in the Statement of Profit and Loss as disclosed in Note 4.

December 30, 2021
Number ofshares held

Ownership
interest(in thousands)

Spotify
Tencent MusicEntertainment
Total

Stock market
price

3.37%
0.74%

Change invalue overthe period

Carryingvalue(€/share)

6,487
12,246

Averagepurchaseprice2

Cumulative
unrealized
capitalgain/(loss)

Sensitivity at+/-10 pts

(in millions of euros)

6.58

206

1,339

(330))

1,296

na

6

74

(119))

74

1,413

(449)

1,370

+134/-134

2 Includes acquisition fees and taxes

Note 9EquityDividend distribution
The proposal submitted to the 2022 Annual General Meeting of Shareholders to pay a dividend of €0.20 per ordinary sharecorresponding to a total distribution of €363 million, in cash, from the 2021 retained earnings reserve of the Company, wasapproved and was paid in June 2022 and included within the condensed consolidated interim statement of changes in equity.

Note 10

Related parties

Related-party transactions
UMG’s related parties include:
•
•
•
•
•
•

companies fully consolidated by UMG. The transactions between these companies have been eliminated for the
preparation of UMG’s Condensed consolidated interim financial statements;
companies over which UMG exercises a significant influence (e.g. Vevo);
all companies that are controlled or jointly controlled by Corporate Executives or their close relatives;
minority shareholders exercising a significant influence over UMG’s subsidiaries;
all companies that have a significant influence over UMG, (e.g., Vivendi SE and the Bolloré Group) andcorporate executives and non-executive board members

Universal Music Group / 16

+7/-7

UMG distributes its cash surpluses to shareholders through dividends and share capital reductions (please refer to Note 9Equity). Vivendi and UMG entered into a transition and services agreement in connection with the separation, the terms ofwhich Vivendi and its subsidiaries provide to UMG, and UMG provides to Vivendi and its subsidiaries, on an interim,transitional basis various services as applicable, including but not limited to: (i) a limited selection of treasury related services
and applications; (ii) a limited selection of accounting services and accounting software related services and applications; (iii)taxation related services; and (iv) certain employee related principles in connection with the direct listing on the Euronext
Amsterdam.
The balances and transactions with the parties described above are summarised in the table below:(in millions of euros)Statement of Financial Position

June 30, 2022
Associates

Shareholders

Other

Total

AssetsCash and Cash equivalents

-

-

-

-

Trade accounts receivable

31

2

-

33

-

-

-

-

Royalty advances
Liabilities
Long-term borrowings and other financial liabilities

-

-

-

-

Trade accounts payable

-

(1)

-

(1)

Six months ended June 30, 2022
Statement of Profit or Loss

Associates

Shareholders

Other

Total

Revenue

130

5

-

135

Cost of revenues

(1)

(4)
(2)

(41)

(4)
(44)

Financial income

-

-

-

-

Financial expenses

-

-

-

-

Management fees

-

-

-

-

Share-based compensation plans

-

1

-

1

Selling, general and administrative expenses

Services billed by Shareholders included in profit and loss

Universal Music Group / 17

(in millions of euros)Statement of Financial Position

December 31, 2021
Associates

Shareholders

Other

Total

AssetsCash and Cash equivalents--

Trade accounts receivable31-

Long-term borrowings and other financial liabilities-

Trade accounts payable-

Royalty advances

-

-

4

-

35

-

21

21

(2)

(12)

(14)

Liabilities

Six months ended June 30, 2021
Statement of Profit or Loss

Associates

Shareholders

Other

Total

Revenue

108

4

-

112

Cost of revenues

(1)

(4)
(2)

(33)

(4)
(36)

Financial income

-

2

-

2

Financial expenses

-

(10)

-

(10)

Selling, general and administrative expenses

Services billed by Shareholders included in profit and loss
Management fees

-

-

-

-

Share-based compensation plans

-

(3)

-

(3)

Note 11

Subsequent events

On July 1, 2022, the net proceeds from the issuance of the unsecured senior notes of €1 billion were used to fully repay theterm loan.
On July 8, 2022, UMG established a EUR commercial paper program. Under the Program, UMG may issue, from time to time,commercial paper notes up to a maximum aggregate amount of €1 billion. The proceeds from the issuance will be used firstly
to pay down UMG’s revolving credit facility and manage short-term liquidity needs from the Group.

Universal Music Group / 18