Universal Music Group N.V. Reports Financial Results for the
Fourth Quarter and Full Year Ended December 31, 2023
Summary Q4 2023 Results1••••

Revenue of €3,208 million increased 9.0% year-over-year, or 15.6% in constant currency, driven by strong
growth across all segments.
Recorded Music subscription revenue grew 8.9% year-over-year, or 15.0% in constant currency andstreaming revenue declined 1.3% year-over-year, but grew 5.6% in constant currency.
Adjusted EBITDA of €677 million increased 9.2% year-over-year, or 15.1% in constant currency, and Adjusted
EBITDA margin remained constant at 21.1% due in part to the headwind from a €15 million one-time item.
Top sellers included Taylor Swift, The Rolling Stones, Drake, Jung Kook and Stray Kids.

Summary FY 2023 Results1
•
•
•

•
•

Revenue of €11,108 million increased 7.4% year-over-year, or 11.1% in constant currency, driven by strong
growth across all segments.
Recorded Music subscription revenue grew 9.6% year-over-year, or 12.8% in constant currency andstreaming revenue grew 0.4% year-over-year, or 3.6% in constant currency.
Adjusted EBITDA of €2,369 million increased 11.0% year-over-year, or 14.6% in constant currency, andAdjusted EBITDA margin expanded 0.7 percentage points to 21.3% including headwinds from one-time
items. Excluding all one-time items detailed in the Appendix, Adjusted EBITDA margin increased 1.2
percentage points year-over-year.
Net cash provided by operating activities before income tax paid of €2,278 million increased 14.6%
compared to €1,987 million in 2022.
Subject to shareholder approval, final dividend proposal of €492 million, or €0.27 per share, which would
bring total dividend for 2023 to €929 million, or €0.51 per share.

Strategic Organizational Redesign•••

Announced a strategic organizational redesign which will generate €250m in annual run-rate savingsby 2026, all of which is accretive to EBITDA, through a combination of headcount reduction and otheroperational efficiencies.
First phase will achieve €125m in annual run-rate savings in 2025, including €75m in 2024.
Plan is designed to achieve efficiencies in targeted cost areas while strengthening labels capabilities todeepen artist and fan connections.

2023 Business Highlights••

1

Global artist success, including: 9 of the Top 10 on the IFPI Global Recording Artist of the Year chart; 6 of theTop 10 global artists on Spotify; and 13 of the Top 20 most-streamed songs globally on Apple Music.
Implementation of first artist-centric royalty models with Deezer and Spotify: Initial deals have been
structured to better reward artists and music that are attracting and engaging fans, attack fraud andgaming, and reduce the amount of low-value content available on DSP platforms.
This press release includes certain alternative performance indicators which are not defined in the International Financial ReportingStandards (“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 the Appendix to this press release.

1

•

•

Progress on strategy to accelerate investment in high-growth music markets: Closed catalogue acquisitionsof RS Group in Thailand, and Oriental Star Agency, a British label focused on South Asian repertoire; and also
closed the acquisition of UAE artist services business Chabaka, among other items.
Responsible AI Initiatives: First music company to call on U.S. Congress for federal right ofpublicity to prevent deepfakes, and protect fans and artists from unethical uses of AI; establishedinnovative partnerships focused on AI content development and responsible practices with early-stage
entrepreneurs; forged a historic partnership with YouTube founded on key principles embracing creative
community interests.

Hilversum, The Netherlands, February 28, 2024 -- Universal Music Group N.V. (“UMG” or “the Company”) today
announced its financial results for the fourth quarter and full year ended December 31, 2023.
“2023 was another exceptional year for UMG: creatively; financially; and strategically. From our artists’ andsongwriters’ record-breaking performance, to our work advancing the industry through innovative businessmodels, to our leadership fostering responsible AI, to driving our long-term strategy through partnership andthoughtful investment, UMG is uniquely positioned to seize the next wave of growth opportunities on behalf of
its artists, employees and shareholders," said Sir Lucian Grainge, UMG’s Chairman and CEO.
Boyd Muir, EVP, CFO and President of Operations for UMG, said, “We continued our strong performance in 2023,
with robust top- and bottom-line growth driven by both our artists’ and songwriters’ exceptional performance,
as well as progress across our strategic initiatives. The strong cash flow generated by our operations also
allows us to make strategic, long-term investments in our company, while maintaining a healthy balance sheet
and still returning significant cash to shareholders through our dividend program."

UMG Results
Three Months Ended
December 31,(in millions of euros)

Revenue
EBITDA

2023

2022(unaudited)(unaudited)

3,208

564

2,942
529

%

%

YoY

const.

9.0%

15.6%

6.6%

EBITDA margin

17.6%

18.0% (0.4pp)

Adjusted
EBITDA margin

21.1%

21.1%

13.3%

Year ended December 31,
2023

2022

(unaudited)(unaudited)

11,108
1,808

10,340
2,028

%

%

YoY

const.

7.4%

11.1%

(10.8%)

16.3%

19.6%

(3.3pp)

21.3%

20.6%

0.7pp

Operating Profit

1,418

1,600

Adjusted Net Profit

1,595

1,454

2,278

1,987

Adjusted EBITDA

677

620

9.2%

0.0pp

15.1%

Net profit attributable to equity holders of the parent
Net Debt

Net cash provided by operating activities before income tax paid
Free Cash Flow

2,369

1,259
1,689
1,082

2,135

782

1,810
1,086

Weighted Average Number of Shares Outstanding

1,819

1,813

EPS - diluted

0.68

0.43

EPS - basic

Adjusted EPS - basic

Adjusted EPS - diluted

0.69
0.88
0.87

(7.8%)

11.0%

14.6%

(11.4%)(8.3%)

61.0%
9.7%(6.7%)

14.6%(0.4%)

0.43
0.80
0.80

Note: % YoY indicates % change year-over-year; % const. indicates % change year-over-year adjusted forconstant currency. Constant currency is calculated by taking current year results and comparing against prioryear results restated at current year rates.

2

Q4 2023 Results
Revenue for the fourth quarter of 2023 was €3,208 million, an increase of 9.0% year-over-year, or 15.6% in
constant currency. UMG’s Recorded Music, Music Publishing and Merchandising and Other segments all had
strong revenue growth, as discussed further below.
EBITDA for the quarter grew 6.6% year-over-year, or 13.3% in constant currency, to €564 million, driven by therevenue growth. EBITDA margin was 17.6%, compared to 18.0% in the fourth quarter of 2022. EBITDA and EBITDA
margin were impacted by non-cash share-based compensation expenses of €113 million during the fourth
quarter of 2023, and by €91 million of non-cash share-based compensation expenses during the fourth quarterof 2022. Excluding these amounts, Adjusted EBITDA for the quarter was €677 million, up 9.2% year-over-year,or 15.1% in constant currency, driven by the revenue growth and €22 million in cash compensation savings
associated with our equity plan rollout. Adjusted EBITDA margin remained constant at 21.1% compared to thefourth quarter of 2022.
As detailed in the Appendix, EBITDA and Adjusted EBITDA were negatively impacted by a €15 million Legal
Provision. Excluding this item, Adjusted EBITDA grew 11.6% year-over-year, or 17.7% in constant currency,
to €692 million and Adjusted EBITDA margin increased 0.5pp year-over-year to 21.6%, compared to 21.1% in
Q4 2022.
EBITDA margin and Adjusted EBITDA margin reflect a headwind from repertoire mix and revenue mix, withstrong growth in physical sales, which carry a lower EBITDA margin than digital sales, and with high growth inMerchandising and Other revenue, which carries a meaningfully lower EBITDA margin than Recorded Music andMusic Publishing revenue.
FY 2023 Results
Revenue for 2023 of €11,108 million increased by 7.4% compared to 2022, or 11.1% in constant currency. This
increase was driven by double-digit improvements across all segments, as discussed further below.
As detailed in the Appendix, 2023 revenue included the benefit of the Copyright Royalty Board Phonorecords
III ruling. 2022 revenue included the benefit from the Change in Society Accounting and the Legal Settlement.
Excluding these items from both years, full year revenue grew 8.7%, or 12.4% in constant currency.
Cost of revenues, consisting of artist and product costs, increased by 7.9% to €6,208 million in 2023 and Costof revenues as a percentage of revenue increased to 55.9% in 2023 from 55.6% in 2022. Cost of revenues as apercentage of revenues increased due a greater proportion of Music Publishing and Merchandising and Other
revenues, which have higher Cost of revenues compared to Recorded Music, and an increase in artist costs as ashare of revenue due to Recorded Music repertoire mix.
Operating profit declined 11.4%, or 8.3% in constant currency, to €1,418 million in 2023 due to the higher
non-cash share-based compensation expenses in 2023 compared to 2022 as discussed below.
EBITDA of €1,808 million decreased 10.8% year-over-year, or 7.8% in constant currency, and EBITDA margin
was 16.3%, compared to 19.6% in the prior year period. EBITDA and EBITDA margin were impacted by noncash share-based compensation expenses of €561 million during 2023 compared to €107 million during 2022.
Excluding these amounts, Adjusted EBITDA was €2,369 million, up 11.0% in 2023, or 14.6% in constant currency,
driven by the revenue growth. Adjusted EBITDA margin improved 0.7pp year-over-year to 21.3%.
As detailed in the Appendix, EBITDA and Adjusted EBITDA in 2023 were impacted by the Copyright Royalty Board
Phonorecords III ruling and the Legal Provision while EBITDA and Adjusted EBITDA in 2022 were impacted by
the Change in Society Accounting and the Legal Settlement. Excluding these items, Adjusted EBITDA grew 14.9%
year-over-year, or 18.5% in constant currency, and Adjusted EBITDA margin increased 1.2pp year-over-year
to 21.5%, compared to 20.3% in 2022, despite a margin headwind from repertoire mix and revenue mix, as
discussed above.

3

Net profit attributable to equity holders of the parent for 2023 amounted to €1,259 million compared to€782 million in 2022, resulting in Basic EPS of €0.69 in 2023, compared to €0.43 in 2022, and Diluted EPS of €0.68
in 2023, compared to €0.43 in 2022. The increase in Net profit attributable to equity holders of the parent wasdue in part to the variance in revaluation of investments in listed companies (including Spotify and Tencent
Music Entertainment, among others) that was a net income in 2023 of €425 million compared to a net expensein 2022 of €617 million. Adjusted net profit, which adjusts for the revaluation of investments, non-cash sharebased compensation expense, amortization of catalogues and other items detailed in the Appendix, amounted
to €1,595 million in 2023, compared to €1,454 million in 2022, resulting in Adjusted Basic EPS of €0.88 in 2023,
compared to €0.80 in 2022 and Adjusted Diluted EPS of €0.87 in 2023, compared to €0.80 in 2022. The increase in
Adjusted net profit was driven by the growth in Adjusted EBITDA.
Net debt, defined as total debt minus cash and cash equivalents, at the end of 2023 was €1,689 million
compared to €1,810 million at the end of 2022. The net leverage ratio at year-end 2023, defined as Net debt
over EBITDA, was 0.9x, consistent with 0.9x at year-end 2022.
Net cash provided by operating activities before income tax paid improved 14.6% to €2,278 million comparedto €1,987 million in 2022, despite €132 million paid to settle employee tax liabilities from equity grants on
non-cash share-based compensation. The improvement in Net cash provided by operating activities before
income tax paid was due to the increase in Adjusted EBITDA, favourable working capital movements and lower
royalty advance payments, net of recoupments, which declined 32% to €100 million in 2023 from €148 million in
2022, due to the timing of major artist renewals.
The strong Net cash provided by operating activities before income tax paid allowed the Company to continue tostrategically invest in the long-term growth of the business. Cash paid for catalogue acquisitions decreased to€178 million in 2023 compared to €359 million in 2022 and included the previously announced acquisitions ofcatalogues from RS Group in Thailand and Oriental Star Agencies, a British label focused on South Asian music,
as well as several artist catalogue deals. Separately, investing activities also included €75 million cash put into
escrow for another catalogue acquisition. Other strategic investments in the year included the acquisition of
a 50% stake in the entity that owns the iconic Capitol Records building in Hollywood and the acquisitions ofa brand services company, a niche record label and UAE-based music company Chabaka, among other items.
Free cash flow was largely flat at €1,082 million in 2023 compared to €1,086 million in 2022, even with theincrease in investing activities detailed above. Free cash flow also reflects higher income taxes paid and higher
net interest paid, both of which benefitted from previously disclosed tax settlements in the prior year.
In accordance with UMG’s dividend policy to pay a dividend of 50% of Net Profit (subject to agreed non-cash
items and applicable law), UMG has proposed to pay a final dividend of €492 million, or €0.27 per share for theyear ended December 31, 2023. If approved by shareholders, this would bring UMG’s total dividend for 2023 to€929 million, or €0.51 per share. This dividend proposal is subject to approval by shareholders at the Annual
General Meeting of Shareholders.

4

Recorded Music
Three Months Ended
December 31,(in millions of euros)

Subscriptions andstreaming revenueof which streamingof which subscription
Downloads and otherdigital revenue
Physical revenue

License andother revenue

RecordedMusic Revenues
EBITDA

2023

2022(unaudited)(unaudited)

1,532
395

1,137
32

%

%

YoY

const.

%

YoY

const.

10.4%

2022

(unaudited)(unaudited)
5,321

7.1%

5.6%

1,425

1,420

0.4%

207

6.1%

400

(1.3%)

63(49.2%)(45.8%)

8.9%

%

2023

1,444

1,044

Year ended December 31,

12.4%

15.0%

5,700

4,275

3,901

12.8%

337 (38.6%) (35.7%)

410

324

404

10.6%

17.0%

1,380

1,207

14.3%

19.4%

2,421

2,235

8.3%

14.7%

8,461

7,937

6.6%

10.2%

1,827 (11.4%)(8.5%)

7.5%

11.0%

447

26.5%

34.0%

1,174

1,618

1,072

9.5%

EBITDA margin

19.1%

23.0% (3.9pp)

Adjusted
EBITDA margin

24.1%

23.9%

Adjusted EBITDA

3.6%

9.6%

2,042

1,900

0.2pp

13.6%

Note: % YoY indicates % change year-over-year; % const. indicates % change year-over-year adjusted forconstant currency.
Q4 2023
Recorded Music revenue for the fourth quarter of 2023 was €2,421 million, up 8.3% compared to the fourth
quarter of 2022, or 14.7% in constant currency. Subscription revenue grew 8.9% year-over-year, or 15.0% in
constant currency, driven by the growth in global subscribers as well as the impact of price increases at certain
platforms. Streaming revenue declined 1.3% year-over-year, but increased 5.6% in constant currency, as thebroader advertising industry continued to gradually recover. Physical revenue increased by 10.6% year-overyear, or 17.0% in constant currency, driven by improvements in vinyl sales in the U.S. and Europe. Downloads
and other digital revenue declined 49.2% year-over-year, or 45.8% in constant currency, as download sales
continued their industry-wide decline and other digital revenue also declined. License and other revenue
improved 26.5% year-over-year, or 34.0% in constant currency driven by continued underlying licensing growth
as well as strength in neighboring rights, synchronization, touring, sponsorship and the timing related benefitof a new licensing deal. Top sellers for the quarter included albums from Taylor Swift, The Rolling Stones, Drake,
Jung Kook, and Stray Kids, while top sellers in the prior-year quarter included Taylor Swift, The Beatles, Drake, Lil
Baby, and SEVENTEEN.
FY 2023
Recorded Music revenue in 2023 was €8,461 million, up 6.6% compared to 2022, or 10.2% in constantcurrency. As detailed in the Appendix, Recorded Music revenue included the impact of the Legal Settlementin 2022. Excluding this item, Recorded Music revenue in 2023 grew 7.6%, or 11.2% in constant currency.
Subscription revenue grew 9.6% year-over-year, or 12.8% in constant currency. Streaming revenue grew 0.4%
year-over-year, or 3.6% in constant currency. Physical revenue grew 14.3% year-over-year, or 19.4% in constantcurrency. Downloads and other digital revenue declined 38.6% year-over-year, or 35.7% in constant currency,
including the impact of the Legal Settlement in 2022. License and other revenue improved 9.5% year-over-year,or 13.6% in constant currency. Top sellers for the year included multiple albums from Taylor Swift, and albums
from Morgan Wallen, King & Prince, Karol G, and The Weeknd. Top sellers in the prior year included Taylor Swift,
BTS, Encanto OST, Olivia Rodrigo, and Morgan Wallen.
Recorded Music EBITDA in 2023 was €1,618 million, down 11.4% year-over-year, or 8.5% in constant currency.
Recorded Music EBITDA margin in 2023 declined 3.9pp to 19.1% from 23.0% in 2022. Recorded Music EBITDA
and EBITDA margin were impacted by non-cash share-based compensation expenses of €424 million during52023, compared to €73 million during 2022. Excluding this, Recorded Music Adjusted EBITDA in 2023 was€2,042 million, up 7.5% year-over-year, or 11.0% in constant currency, driven by the growth in revenue.
Recorded Music Adjusted EBITDA margin improved 0.2pp to 24.1% from 23.9% in 2022.
EBITDA and Adjusted EBITDA include the negative impact of the Legal Provision in 2023, and the positive impactof the Legal Settlement in 2022. Excluding these items, Adjusted EBITDA grew 11.3% year-over-year, or 14.8%
in constant currency, and Adjusted EBITDA margin was 24.3%, compared to 23.5% in 2022, despite a margin
headwind from repertoire mix and revenue mix, as discussed above.

Music PublishingThree Months Ended
December 31,(in millions of euros)

Performance

Synchronisation
DigitalMechanical
Other

Music Publishing
Revenues
EBITDA

2023

2022(unaudited)(unaudited)

70

59

123

339

31

13

576

%

%

YoY

const.

152(19.1%)(15.8%)

269

26.0%

36.1%

25

25

530

18.6%

24.0%

(48.0%)
8.7%

25.0%

29.2%

(45.8%)
15.4%

Year ended December 31,
2023

2022

(unaudited)(unaudited)

254

236

416

1,128

371

1,040

%

%

YoY

const.

12.1%

15.9%

8.5%

12.5%

7.6%

97

11.3%

1,956

1,799

8.7%

12.3%

420

395

6.3%

9.4%

410

14.6%

17.8%

108

50

55

(9.1%)EBITDA margin

21.5%

22.0% (0.5pp)

Adjusted
EBITDA margin

24.0%

22.8%

Adjusted EBITDA

10.0%

470

1.2pp

14.9%

(7.4%)

Note: % YoY indicates % change year-over-year; % const. indicates % change year-over-year adjusted forconstant currency.
Q4 2023
Music Publishing revenue in the fourth quarter of 2023 was €576 million, up 8.7% year-over-year, or 15.4% in
constant currency. The strong revenue improvement was driven by the continued growth in subscription andstreaming revenue and improvements in Synchronisation and Mechanical revenue.
FY 2023
Music Publishing revenue was €1,956 million in 2023, up 8.7% year-over-year, or 12.3% in constant currency.
Excluding the benefits from the CRB Phonorecords III Accrual in 2023 and the Change in Society Accounting
in 2022, Music Publishing revenue grew 11.9% year-over-year, or 15.8% in constant currency. This strong
underlying growth was primarily due to the continued growth in subscription and streaming revenue andimprovements in Performance, Synchronisation and Mechanical revenue.
Music Publishing EBITDA in 2023 was €420 million, up 6.3% year-over-year, or 9.4% in constant currency, driven
by the growth in revenue. Music Publishing EBITDA margin declined by 0.5pp to 21.5% from 22.0% in 2022. Music
Publishing EBITDA and EBITDA margin were impacted by non-cash share-based compensation expenses of€50 million during 2023, compared to €15 million during 2022. Excluding this, Music Publishing Adjusted EBITDAof €470 million was up 14.6% year-over-year, or 17.8% in constant currency, and Music Publishing Adjusted
EBITDA margin increased by 1.2pp year-over-year to 24.0% from 22.8% in 2022. Excluding also the impact of the
CRB Phonorecords III Accrual and the Change in Society Accounting, Music Publishing Adjusted EBITDA grew
16.8% year-over-year, or 20.2% in constant currency, and Adjusted EBITDA margin improved 1.0pp to 24.1%.

6

Merchandising and Other
Three Months Ended
December 31,(in millionsof euros)

Merchandising
andOther Revenues

2023

2022

(unaudited)215(unaudited)
181

%

%

YoY

const.

18.8%

EBITDA

26.5%

Year ended December 31,

%

%

2023

YoY

const.

2022(unaudited)(unaudited)

618

14.2%

17.9%

43

36

19.4%

26.5%

36

30.6%

38.2%

706

EBITDA margin

6.1%

5.8%

Adjusted
EBITDA margin

6.7%

5.8%

Adjusted EBITDA

47

0.3pp
0.9pp

Note: % YoY indicates % change year-over-year; % const. indicates % change year-over-year adjusted forconstant currency.
Q4 2023
Merchandising and Other revenue in the fourth quarter of 2023 was €215 million, up 18.8% year-over-year, or
26.5% in constant currency, driven by growth in direct-to-consumer sales, which more than offset a decline intouring merchandise sales on lower touring activity compared to the prior year quarter.
FY 2023
Merchandising and Other revenue grew to €706 million in 2023, up 14.2% year-over-year, or 17.9% in constantcurrency, driven primarily by growth in direct-to-consumer sales.
Merchandising and Other EBITDA in 2023 was €43 million, up 19.4% year-over-year, or 26.5% in constantcurrency, driven by the growth in revenue, while Merchandising and Other EBITDA margin improved 0.3pp to6.1% from 5.8% in 2022. Merchandising and Other EBITDA and EBITDA margin were impacted by non-cash sharebased compensation expenses of €4 million in 2023 and there were no non-cash share-based compensation
expenses in Merchandising and Other in 2022. Excluding this, Merchandising and Other Adjusted EBITDA in 2023
was €47 million, up 30.6% year-over-year, or 38.2% in constant currency, and Merchandising and Other Adjusted
EBITDA margin improved by 0.9pp to 6.7% as a result of the shift in revenue mix towards higher-margin directto-consumer revenue.

Strategic Organizational Redesign
UMG’s long-term strategy is designed to capitalize on multiple growth priorities, including:•Accelerating the growth of, and monetization from, streaming and subscription through the development ofArtist-Centric, premium models;•Expanding music-based partnerships across social media, gaming, health and wellness, and other services
and platforms;•
Building and operating leading and scalable direct-to-consumer capabilities to engage fans and further
strengthen artist-fan relationships;•
Partnering with artists across a broader range of audio-visual, licensing, branding andsponsorship opportunities;•
Escalating our presence in high-growth music markets to further invest in local and regional artists andexpanding their global opportunities; and•Redesigning the organization to achieve cost efficiencies and enhanced capabilities, especially in areas ofgrowing importance to artists and fans.
The organizational redesign announced today underscores UMG's commitment to creating unparalleledexperiences for artists and fans. By reimagining our global structure, we are creating a blueprint for a future
where our labels are empowered with new capabilities and additional agility, ensuring they can sign andsupport artists with enhanced access to UMG's highest-performing internal teams and resources.
7

Our organizational redesign achieves efficiencies in targeted cost areas while providing our labels with
unprecedented capabilities to deepen artist and fan connections via new experiential, commerce, andcontent offerings.
After a careful review of our cost base for efficiencies, we expect to generate €250m in annual run-ratesavings by 2026, all of which is accretive to EBITDA, through a combination of headcount reduction and otheroperational efficiencies. In the redesign’s first phase, which we will execute on immediately, we anticipate
achieving €125m in annual run-rate savings, €75m of which will be realized in 2024, with the full amountin 2025.
At the same time, UMG's redesign is a carefully crafted balance that preserves the core of where our labels excel– creative A&R and artist-development, marketing and brand building innovation, unique identities and vision,and a shared entrepreneurial spirit. Our long-term growth strategy, including this organizational redesign,
represents a new paradigm for artist support and fan engagement.

Items Impacting Comparability of Results
TOTAL UMG
FY23
(in millions of euros)

1Q23

Revenue

2Q23

3Q23

FY22
4Q23

FY23

Total

1Q22

2Q22

Legal Settlement

-

-

-

-

-

-

CRB Phonorecords III Accrual

-

-

53

-

53

-

Change in Society Accounting-

Adjusted EBITDA

-

-

-

-

11

-

11

-

(15)

(15)

-

-

-

-

-

-

-

-

-

-

CRB Phonorecords III Accrual

-

-

-

-

Legal Provision

71

52

-

-

-

-

71

52

-

-

-

-

Total

98

-

FY22

4Q22

-

Legal Settlement

Change in Society Accounting

3Q22

-

17

-

-

-

-

-

-

-

98

17

-

-

RECORDED MUSIC
FY23(in millions of euros)

Revenue

Legal Settlement
Adjusted EBITDA

Legal Settlement
Legal Provision

1Q23

2Q23

3Q23

FY22
4Q23

FY23

Total

1Q22

2Q22

3Q22

FY22

4Q22

Total

-

-

-

-

-

-

-

71

-

71

-

-

-

-

-

-

-

52

-

52

-

-

-

(15)

(15)

-

-

-

-

-

8

MUSIC PUBLISHING
FY23(in millions of euros)

Revenue

Change in Society Accounting
CRB Phonorecords III Accrual
Adjusted EBITDA

Change in Society Accounting
CRB Phonorecords III Accrual

1Q23

2Q23

3Q23

-

-

-

-

-

-

-

-

FY22
FY23

4Q23

-

-

-

-

53

11

1Q22

Total

-

-

2Q22

3Q22

FY22

4Q22

Total

-

-

98

-

-

98

-

-

17

-

-

17

53

11

-

-

-

-

-

-

-

-

-

-

Change in Society Accounting
As disclosed in UMG’s Annual Consolidated Financial Statements for the year ended December 31, 2021, UMG
adjusted its accounting policy in relation to certain revenues that are collected through societies. In prioryears, these revenues were recognized when the relevant collection society notified UMG of the usage by theend customer and collectability was assured. Recognition of that revenue, in both 2022 and 2023, was based onan accrual for the best available estimate of when the usage occurs and the amount of consideration which
is probable to be collected. This has affected the timing of the recognition of certain revenues across financial
reporting quarters compared to periods before 2022 and also, notably in the second quarter of 2022, reflected
the receipt of higher income than was accrued at the end of 2021.
Legal Settlement
Revenue, EBITDA and Adjusted EBITDA in 2022 included a benefit from the settlement of a copyright
infringement lawsuit with an internet service provider previously disclosed and booked in Q3 2022.
CRB Phonorecords III Accrual
Revenue, EBITDA and Adjusted EBITDA in 2023 included the accrual for a catch-up payment from certain DSPs
related to the Copyright Royalty Board Phonorecords III ruling in 2023 disclosed and booked in Q3 2023.
Legal Provision
EBITDA and Adjusted EBITDA in Q4 2023 were negatively impacted by a provision reflected in relation to a
decades-old, ongoing artist estate litigation in Latin America.

9

Conference Call Details
The Company will host a conference call to discuss these results on Wednesday, February 28, 2024 at 6:15PM
CET. A link to the live audio webcast will be available on investors.universalmusic.com and a link to the replay
will be available after the call.
While listeners may use the webcast, a dial-in telephone number is required for investors and analysts
to ask questions. Investors and analysts interested in asking questions can pre-register for a dial-in line
at investors.universalmusic.com under the "Financial Reports" tab.

Cautionary NoticeThis press release is published by Universal Music Group N.V. and contains inside information within themeaning of article 7 (1) of Regulation (EU) No 596/2014 (Market Abuse Regulation).

Forward-looking statements
This press release may contain statements that constitute forward-looking statements with respect to UMG’sfinancial condition, results of operations, 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’ andsimilar 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 anduncertainties, many of which are related to factors that are outside 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 thatare described in our 2022 Annual Report and will be described in our 2023 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 this press release. UMG disclaims any intention or obligation to provide,
update or revise any such forward-looking statements, whether as a result of new information, future eventsor otherwise.

Alternative Performance Indicators
This press release includes certain alternative performance indicators which are not defined in 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 the Appendix to thispress release.

About Universal Music GroupAt Universal Music Group (EURONEXT: UMG), we exist to shape culture through the power of artistry. UMG is
the world leader in music-based entertainment, with a broad array of businesses engaged in recorded music,
music publishing, merchandising and audiovisual content. Featuring the most comprehensive catalogue ofrecordings and songs across every musical genre, UMG identifies and develops artists and produces anddistributes the most critically acclaimed and commercially successful music in the world. Committed toartistry, innovation and entrepreneurship, UMG fosters the development of services, platforms and businessmodels in order to broaden artistic and commercial opportunities for our artists and create new experiences forfans. For more information on Universal Music Group N.V. visit www.universalmusic.com.

Contacts
Media
James Murtagh-Hopkins - communicationsnl@umusic.com

10Investors
Erika Begun - investorrelations@umusic.com

Upcoming Calendar
2023 Annual Report: March 28, 2024
Annual General Meeting of Shareholders: May 16, 2024

Appendix
The Consolidated financial statements have been prepared in accordance with IFRS issued by the International
Accounting Standards Board as endorsed by the EU and comply with the statutory provisions of Part 9, Book 2 of
the Dutch Civil Code.
The financial information included in this press release is unaudited. The 2023 financial information includedin this press release contains only part of the 2023 financial statements which will be included in the 2023
Annual Report and which still must be adopted by the shareholders at the upcoming Annual General Meetingof Shareholders. The 2023 Annual Report has not yet been published and an auditors’ opinion has not yet
been issued.

Condensed Consolidated Financial Statements
Unaudited Consolidated Statement of Profit and LossYear ended December 31,(in millions of euros)

Revenues

Cost of revenues

Selling, general and administrative expenses

Amortisation and impairment losses on intangible assets

2023

2022

(unaudited)(unaudited)(6,208)(5,753)

11,108(3,213)(269)

Operating profit

1,418

Financial expenses(151)

Financial income

454

10,340(2,702)
(285)

1,600

37

(735)

303

(698)

Profit before income taxes

1,721

900

Income/(loss) from equity affiliates
Income taxes-(2)

Net profit

(458)

1,263

(115)

Net profit attributable to equity holders of the parent

1,259

782

0.69

0.43

Of which:

Net profit attributable to non-controlling interests

Earnings per share (in euros)

Earnings for the period attributable to equity holders of the parent - basic

Earnings for the period attributable to equity holders of the parent - diluted

4

0.68

785

3

0.43

11

Unaudited Consolidated Statement of Cash Flows
Year ended December 31,(in millions of euros)

2023

2022

(unaudited)(unaudited)

Operating profit

1,418

1,600

Royalty advances payments, net of recoupments

(100)

(148)

Operating activities
Adjustments

796

568

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

2,114

2,020

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

2,278

1,987

Net cash provided by/(used for) operating activities

1,885

1,732

Catalogue investments

(178)

(359)

Capital expenditures

(47)

(33)

Other changes in net working capital
Income tax paid

Investing activities

Other intangible assets investments
Purchases of consolidated companies, after acquired cash
Investments in equity affiliates
Purchase of financial assets
Investments

Proceeds from sales of consolidated companies, after divested cash
Proceeds from sale of financial assets

Divestitures

Dividends received from equity affiliates
Dividends received from investments

Net cash provided by/(used for) investing activities

164

(393)

(74)
(97)
(81)

(154)

(33)

(255)

(60)
(22)
(22)
(36)

(631)

(532)

1

9

1

2
4
3

-

9

2
1

(622)

(520)

Distributions to shareowners

(929)

(798)

Transactions with shareowners

(931)

(800)

Financing activities

Dividends paid by consolidated companies to their non-controlling interests
Proceeds from borrowings

Repayments of borrowings
Interest, net

Other cash items related to financing activities

(2)

6,647

(2)

5,938

(6,815)(6,359)

(10)

4

(77)

(30)

Transactions on borrowings and other financial liabilities

(255)

(447)

Payment of interest of lease liabilities

(14)

(14)

Repayment of lease liabilities

Net cash provided by/(used for) financing activities

(80)

(86)

(1,280)(1,347)

Net change in cash and cash equivalents

(17)

(135)

Change in cash and cash equivalents

(51)

(134)

438

572

Foreign currency translation adjustments
Cash and cash equivalents
At beginning of the period
At end of the period

(34)

387

1

438

12

Cost of Revenues
Year ended December 31,(in millions of euros)

Artist costs

2023

2022

(unaudited)(unaudited)

5,152

Product costs

4,704

1,056

Cost of Revenues

1,049

6,208

5,753

Non-IFRS Alternative Performance Indicators
and Reconciliations
Financial Net Debt
Year ended December 31,(in millions of euros)

Cash and cash equivalents
Derivative financial assets

Drawn revolving credit facilities

2023

2022

(unaudited)(unaudited)

2

1

413

439

-

(125)

Bonds

(1,808)(1,004)

Other

(73)

(191)

Bank overdrafts

Commercial papers
Borrowings at amortized cost
Financial Net Debt

(26)

(1)

(197)

(929)

(2,104)(2,250)(1,689)(1,810)Reconciliation of Operating Profit to EBITDA and Adjusted EBITDA
Year ended December 31,(in millions of euros)

2023

2022

(unaudited)(unaudited)

Amortization and depreciation expense

382

377

(Gain)/loss on sale of assets(26)

Operating Profit

Adjustments

Restructuring expenses

Impairment on intangible assets

1,418

41

(7)

1,600

32
2

17

EBITDA

1,808

2,028

Adjusted EBITDA

2,369

2,135

Non-cash share-based compensation expense

561

107

13

Reconciliation of net profit attributable to equity holders of the parent to
Adjusted net profit
Year ended,

December 31(in millions of euros)2023

Net profit attributable to equity holders of the parent

2022(unaudited)

1,259

Financial income and expenses, excluding interest and income from investments
Non-cash share-based compensation expense(unaudited)

782

(377)

671

-

(11)

561

Certain one time items

1

Impairment of intangible assets

107

(7)

Amortization of catalogues

236

Non-recurring tax items-

Income tax on adjustments
Adjusted Net Profit

17

233

(77)

(255)

1,595

1,454

(90)

1 Certain one time items in 2022 includes interest income in relation to the one-time non-recurring tax item.

Reconciliation of net cash provided by/(used for) operating activities to Free
Cash Flow
Year ended December 31,(in millions of euros)

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

2023

2022

(unaudited)(unaudited)

2,278

Income tax paid

1,987

(393)

Net cash provided by/(used for) operating activities
Net cash provided by/(used for) investing activities

(255)

1,885

1,732

(94)

(100)

(622)

Repayment of lease liabilities and related interest expenses
Interest, net

(520)

(77)

Other cash items related to financing activities

(30)

(10)

Free Cash Flow

4

1,082

1,086

Net cash provided by/(used for) operating activities – Adjustments
Operating profit includes certain non-cash items that are adjusted to get to Net cash provided by operating
activities as follows:Year ended,

December 31(in millions of euros)

Amortization and depreciation expense

Non-cash share-based compensation expense, net of employees tax withheld
Impairment of intangible assets
Changes in provisions, net(Gain)/loss on sale of assets
Adjustments

2023

2022

(unaudited)(unaudited)

382
429

(7)

18

(26)

796

377
107
17
65
2

568

14

Average currency rates
Three Months Ended December 31,
2023

EUR vs.

2022

Year ended December 31,
2023

2022

USD

0.93

1.01

0.92

0.95

JPY

6.27

6.90

6.64

7.29

GBP

1.15

1.15

1.15

1.18

Definitions
In this press release, UMG presents certain financial measures when discussing UMG’s performance that are
not measures of financial performance or liquidity under IFRS (“non-IFRS”). These non-IFRS measures (alsoknown as alternative performance indicators) 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 anunderstanding of its sales performance, profitability, financial strength and funding requirements is enhanced
by reporting the following non-IFRS measures. All non-IFRS measures should be considered in addition to, andnot as a substitute for, other IFRS measures of operating and financial performance as presented in UMG’s
Consolidated Financial Statements and the related Notes, or as described in this press release. In addition, it
should be noted that other companies may have definitions and calculations for these non-IFRS measures thatdiffer from those 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 its operating
performance and the performance of its operating segments as reported in the segment data. It enables UMG
to compare the operating performance of operating segments regardless of whether their performance is driven
by the operating segment’s organic growth or by acquisitions. It excludes restructuring expenses, which may
impact period-to-period comparability. EBITDA margin is EBITDA divided by revenue. To calculate EBITDA, theaccounting impact of the following items is excluded from the Operating Profit:i.
amortization of intangible assets;ii.
impairment on goodwill and other intangibles;iii.
depreciation of tangible assets including right of use assets;iv.
(gains)/losses on the sale of tangible assets, included right of use assets and intangible assets; andv.
restructuring expenses.
Adjusted EBITDA and Adjusted EBITDA margin
The difference between EBITDA and Adjusted EBITDA consists of non-cash share-based compensation expenses
and certain one-time items that are deemed by management to be significant and incidental to normal
business activity. 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 and excluding non-cash
share based compensation which may impact period-to-period comparability.
Adjusted Net Profit/Adjusted Net Profit per share
UMG's use of Adjusted net profit is 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 to limitations as ananalytical tool for investors, as it excludes certain items and therefore does not reflect the expense associatedwith such items, which may be significant and have a significant effect on UMG’s net profit. The accounting
impact of the following items are excluded from Net profit attributable to equity holders of the parent:i.
amortization of catalogues;ii.
impairment of goodwill and intangible assets;iii.
financial income and expenses, excluding interest and income from investments;iv.
earnings from discontinued operations;v.
non-cash share-based compensation expense;vi.
certain one-time items that are deemed by management to be significant and incidental to normal
business activity;
15

vii.
viii.
ix.

income tax impact on the above adjustments;
non-recurring tax items; andadjustments attributable to non-controlling interests.

Financial Net Debt
UMG considers Financial Net Debt, a non-IFRS measure, to be a relevant indicator of its 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 indicatorof its cash flow 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 as a 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 Cash Flow does not necessarily represent funds available for discretionary use and is not necessarily ameasure of our ability to fund our cash needs.

16