Universal Music Group N.V. Reports Financial Results for the
Fourth Quarter and Full Year Ended December 31, 2022
Summary Q4 2022 Results1••••

Revenue of €2,942 million increased 16.7% year-over-year, or 8.8% in constant currency, driven by growthacross all segments, and noteworthy strength in Music Publishing
Recorded Music subscription revenue grew 20.6% year-over-year, or 11.4% in constant currency andstreaming revenue grew 13.3% year-over-year, or 1.8% in constant currency
Adjusted EBITDA of €620 million increased 23.3% year-over-year, or 15.5% in constant currency, andAdjusted EBITDA margin expanded 1.1 percentage points to 21.1%
Top sellers included Taylor Swift, The Beatles, Drake, SEVENTEEN and Lil Baby

Summary FY 2022 Results1
•
•
•
•
•
•

Revenue of €10,340 million increased 21.6% year-over-year, or 13.6% in constant currency, driven by strong
growth across all segments
Recorded Music subscription revenue grew 18.4% year-over-year, or 10.0% in constant currency andstreaming revenue grew 19.7% year-over-year, or 9.3% in constant currency
Adjusted EBITDA of €2,135 million increased 19.4% year-over-year, or 11.7% in constant currency, andAdjusted EBITDA margin declined 0.4 percentage points to 20.6%
Net cash provided by operating activities before income tax paid of €1,987 million increased 42.4%
compared to €1,395 million in 2021
Free cash flow of €1,086 million increased 70.2% compared to €638 million in 2021
Subject to shareholder approval, final dividend proposal of €491 million, or €0.27 per share, which would
bring total dividend for 2022 to €926 million, or €0.51 per share2022 Business Highlights
•

•
•

1

Global artist success across platforms, including: 4 of the Top 5 and 15 of the Top 20 IFPI Global Artists of theYear; 4 of the Top 5 global artists on Spotify; 7 of the Top 10 albums in the U.S. on the Billboard 200; and 6 of
the Top 10 artists in the UK based on OCC data, among many other examples around the world
Evolving and expanding relationships with long-term partners including Amazon (Twitch), Meta (Revenue
Sharing), Apple (Spatial Audio)
Using technology to drive new opportunities for catalogue artists (“ABBA Voyage” digital avatar concert,
Elton John’s "Beyond the Yellow Brick Road" experience on Roblox, The Beatles' "Revolver" Spatial
Audio release)

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

Hilversum, The Netherlands, March 2, 2023 -- Universal Music Group N.V. (“UMG” or “the Company”) today
announced its financial results for the fourth quarter and full year ended December 31, 2022.
“Today’s report demonstrates that, once again, we continue to successfully manage the company for long term
growth while driving strong results in our core business—developing great artists and introducing their music
to fans around the world,” said Sir Lucian Grainge, UMG’s Chairman and CEO. “Our roster—which features fourof the top five, and 15 of the Top 20 IFPI Global Artists of the Year—once again achieved enormous commercial
and creative success in markets around the world. We also worked to evolve and expand relationships with ourexisting DSP partners as well as establish new ones in fitness, health, gaming and the metaverse, driving theindustry forward though leadership, creativity, innovation and collaboration.”
Boyd Muir, EVP, CFO and President of Operations for UMG, said, “2022 has been another year of sustained
growth at UMG, with particularly robust growth in Free cash flow, even as we continue to opportunistically andselectively invest in artists and catalogues that will be additive to the long-term health of our business. We
saw revenue growth of 14% in constant currency, Adjusted EBITDA growth of 12% in constant currency and Free
cash flow growth of 70%, positioning us well for 2023, as we continue to work towards our mid-term targets.”

UMG Results
Three Months Ended
December 31,

%

%

YoY

const.

8,504

21.6%

13.6%

19.6%

19.8%

(0.2pp)

20.6%

21.0%

(0.4pp)Operating Profit

1,600

1,394

Adjusted Net Profit

1,454

1,271

Net cash provided by operating activities before income tax paid

1,987

1,395

(in millions of euros)

Revenue
EBITDA

2022

2021(unaudited)(unaudited)

529

438

2,942

2,520

EBITDA margin

18.0%

17.4%

Adjusted
EBITDA margin

21.1%

20.0%

Adjusted EBITDA

620

503

%

%

YoY

const.

16.7%

8.8%

20.8%

12.6%

23.3%

15.5%

0.6pp
1.1pp

Net profit attributable to equity holders of the parent
Net Debt

Free Cash Flow

Year ended December 31,
2022

2021

(unaudited)(unaudited)

2,028

1,686

10,340

2,135

782

1,810
1,086

1,788

14.8%

7.9%

2,010

(10.0%)

638

70.2%

1,813

Adjusted EPS

0.80

0.70

0.43

11.7%

(11.7%)

1,813

12.5%

19.4%

886

Weighted Average Number of Shares Outstanding
EPS

20.3%

14.4%
42.4%

0.49

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.
Q4 2022 Results
Revenue for the fourth quarter of 2022 was €2,942 million, an increase of 16.7% year-over-year, or 8.8% inconstant currency. UMG’s Recorded Music, Music Publishing and Merchandising and Other segments all had
strong revenue growth, as discussed further below. As detailed in the Appendix, revenue in the quarter
includes a negative impact of €9 million from the Change in Society Accounting.
EBITDA for the quarter grew 20.8% year-over-year, or 12.6% in constant currency, to €529 million, driven
by the revenue growth and operating leverage. EBITDA margin was 18.0%, compared to 17.4% in the fourth
quarter of 2021. EBITDA and EBITDA margin were impacted by non-cash share-based compensation expensesof €91 million during the fourth quarter of 2022, and by €65 million of non-cash share-based compensation
expenses and one-time direct listing related expenses during the fourth quarter of 2021. Excluding these items,

2

Adjusted EBITDA for the quarter was €620 million, up 23.3% year-over-year, or 15.5% in constant currency,
driven by revenue growth. Adjusted EBITDA margin improved to 21.1%, compared to 20.0% in the fourth quarterof 2021, due to operating leverage driven by lower selling, general and administrative expenses as a share ofrevenue. EBITDA and Adjusted EBITDA in the quarter include a negative impact of €5 million from the Change in
Society Accounting.
FY 2022 Results
Revenue for 2022 of €10,340 million increased by 21.6% compared to 2021, or 13.6% in constant currency. This
increase was driven by double-digit improvements across all segments, as discussed further below.
As detailed in the Appendix, in addition to the Change in Society Accounting, revenue in 2022 includes theimpact of the previously disclosed Legal Settlement and revenue in 2021 includes the impact of the DSP CatchUp Payment. Excluding these items from both years, revenue in 2022 grew 20.0%, or 12.1% in constant currency.
Cost of revenues, consisting of artist and product costs, increased by 24.8% to €5,753 million in 2022, reflecting
higher revenue and revenue mix. Artist costs in Music Publishing make up a significantly larger share of thetotal cost structure than they do in Recorded Music. Therefore, the mix shift to Music Publishing in 2022 drove
up artist costs as a percentage of revenue. For the same reason, cost of revenue as a percentage of revenue
increased to 55.6% in 2022 from 54.2% in 2021. The increase was also driven by higher product costs from agreater proportion of merchandising sales when compared to 2021.
Operating profit improved 14.8%, or 7.9% in constant currency, to €1,600 million in 2022 driven by the growth inrevenue, partially offset by the increase in cost of revenues.
EBITDA of €2,028 million grew 20.3% year-over-year, or 12.5% in constant currency, and EBITDA margin was
19.6%, compared to 19.8% in the prior year period. EBITDA and EBITDA margin were impacted by non-cash
share-based compensation expenses of €107 million during 2022. During 2021, EBITDA and EBITDA margin
were impacted by certain one-time expenses, which amounted to €102 million and included one-time direct
listing related expenses, professional fees and non-cash share-based compensation expenses. Excluding theseamounts, Adjusted EBITDA was €2,135 million, up 19.4% in 2022, or 11.7% in constant currency, driven by therevenue growth. Adjusted EBITDA margin contracted 0.4pp year-over-year to 20.6%.
As detailed in the Appendix, EBITDA and Adjusted EBITDA in 2022 were impacted by the Change in Society
Accounting and the Legal Settlement, while EBITDA and Adjusted EBITDA in 2021 were impacted by the DSPCatch-Up Payment and the Exceptional Recovery and Release. Excluding these items, Adjusted EBITDA grew
18.3% year-over-year, or 10.5% in constant currency, and Adjusted EBITDA margin was 20.3%, compared to
20.6% in 2021. This 0.3pp contraction in Adjusted EBITDA margin was driven by revenue mix, as revenues weremore heavily weighted towards lower margin Merchandising and Music Publishing revenues in 2022. Adjusted
EBITDA margin was also impacted by several other factors including: 1) incremental corporate costs associatedwith operating as a stand-alone listed company; 2) reopening costs post-COVID, including an increase in travel
expenses in 2022 compared to 2021; and 3) currency, as the cost structure is more heavily weighted to U.S.
Dollars than revenue is.
Net profit attributable to equity holders of the parent for 2022 amounted to €782 million compared to€886 million in 2021, resulting in EPS of €0.43 in 2022, compared to €0.49 in 2021. The decline in Net profit
attributable to equity holders of the parent was due to the variance in revaluation of investments in listedcompanies (including Spotify and Tencent Music Entertainment, among others) that was a net expense in 2022of €617 million compared to a net expense in 2021 of €315 million. Adjusted net profit, which adjusts forthe revaluation of investments, non-cash share-based compensation expense, amortization of catalogues andother items detailed in the Appendix, amounted to €1,454 million in 2022, compared to €1,271 million in 2021,
resulting in Adjusted EPS of €0.80 in 2022, compared to €0.70 in 2021. 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 2022 was €1,810 million
compared to €2,010 million at the end of 2021. The net leverage ratio at year-end 2022, defined as Net debt
over EBITDA, was 0.9x, compared to 1.2x at year-end 2021.

3

Net cash provided by operating activities before income tax paid improved to €1,987 million compared to€1,395 million in 2021, an increase of 42.4%, mainly as a result of the increase in operating profit and lower
royalty advance payments, net of recoupments, which declined 59.3% to €148 million in 2022 from €364 million
in 2021, due to the timing of major artist renewals and increased recoupment.
Free cash flow increased 70.2% to €1,086 million in 2022 compared to €638 million in 2021, mainly as a result of
the improvement in Net cash provided by operating activities. In addition, cash paid for catalogue acquisitions
decreased to €359 million in 2022, compared to €388 million in 2021. Free cash flow in 2021 included the positive
benefit of the receipt of €102 million from the disposal of Alamo Records.
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 €491 million, or €0.27 per share for theyear ended December 31, 2022. If approved by shareholders, this would bring UMG’s total dividend for 2022 to€926 million, or €0.51 per share. This dividend proposal is subject to approval by shareholders at the Annual
General Meeting of Shareholders to be held on Thursday, May 11, 2023.

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%%

YoY

const.

2022

2021(unaudited)(unaudited)

1,219

18.5%

400

353

13.3%

63

89

1,444

1,044

866

Year ended December 31,

%

%

YoY

const.

9.8%

2022

2021

(unaudited)(unaudited)
4,481

18.7%

1.8%

1,420

1,186

19.7%

(29.2%)(33.0%)

337

324

4.0%

20.6%

8.6%

11.4%

5,321

3,901

3,295

18.4%

288

12.5%

6.6%

3.1%

1,207

1,121
896

19.6%

13.4%

2,235

1,975

13.2%

5.6%

7,937

6,822

16.3%

8.8%

13.2%

5.5%

17.7%

9.7%

379

8.0%

1,072

1,827

1,614

EBITDA margin

23.0%

23.7%

(0.7pp)Adjusted
EBITDA margin

23.9%

23.7%

0.2pp

Adjusted EBITDA(2.9%)

324

404

7.7%

9.3%

10.0%

1,900

1,614

4.1%

Note: % YoY indicates % change year-over-year; % const. indicates % change year-over-year adjusted forconstant currency.
Q4 2022
Recorded Music revenue for the fourth quarter of 2022 was €2,235 million, up 13.2% compared to the fourth
quarter of 2021, or 5.6% in constant currency. Subscription revenue grew 20.6%year-over-year, or 11.4% in
constant currency, driven by the growth in global subscribers, while streaming revenue grew 13.3% year-overyear, or 1.8% in constant currency, as the advertising industry continued to be impacted by a difficult economic
environment. Physical revenue increased by 6.6% year-over-year, or 3.1% in constant currency, driven by
improvements in vinyl sales. Downloads and other digital revenue declined 29.2% year-over-year, or 33.0%
in constant currency, as download sales continued their industry-wide decline. License and other revenue
improved 12.5% year-over-year, or 8.0% in constant currency, as a result of improvements in synchronization
and audio-visual production income. Top sellers for the quarter included releases from Taylor Swift, The Beatles,
Drake, SEVENTEEN, and Lil Baby, while top sellers in the prior-year quarter included ABBA, Taylor Swift, The
Beatles, Drake and BTS.

4

FY 2022
Recorded Music revenue in 2022 was €7,937 million, up 16.3% compared to 2021, or 8.8% in constant currency.
As detailed in the Appendix, Recorded Music revenue included the impact of the Legal Settlement in 2022 andthe impact of the DSP Catch-Up Payment in 2021. Excluding these items, Recorded Music revenue in 2022 grew
16.0%, or 8.4% in constant currency.
Subscription revenue grew 18.4% year-over-year, or 10.0% in constant currency. Excluding the DSP Catch-Up
Payment in 2021, subscription revenue grew 19.9% year-over-year, or 11.3% in constant currency. Streaming
revenue grew 19.7% year-over-year, or 9.3% in constant currency. Physical revenue grew 7.7% year-over-year,
or 4.1% in constant currency. Downloads and other digital revenue grew 4.0% year-over-year, but declined 2.9%
in constant currency, including the impact of the Legal Settlement. License and other revenue improved 19.6%
year-over-year, or 13.4% in constant currency. Top sellers for the year included Taylor Swift, BTS, Encanto OST,
Olivia Rodrigo, Morgan Wallen and The Beatles. Top sellers in the prior year included Olivia Rodrigo, Justin
Bieber, BTS, The Weeknd, Morgan Wallen and ABBA.
Recorded Music EBITDA in 2022 was €1,827 million, up 13.2% year-over-year, or 5.5% in constant currency,
driven by the growth in revenues. Recorded Music EBITDA margin in 2022 declined 0.7pp to 23.0% from 23.7%
in 2021. Recorded Music EBITDA and EBITDA margin were impacted by non-cash share-based compensation
expenses of €73 million during 2022. Excluding this, Recorded Music Adjusted EBITDA in 2022 was €1,900 million,
up 17.7% year-over-year, or 9.7% in constant currency, driven by the growth in revenue. Recorded Music
Adjusted EBITDA margin improved 0.2pp to 23.9% from 23.7% in 2021. As detailed in the Appendix, 2022 EBITDA
and Adjusted EBITDA include the impact of the Legal Settlement, while 2021 EBITDA and Adjusted EBITDA include
the impacts of the DSP Catch-Up Payment and the Exceptional Recovery and Release. Excluding these items,
Adjusted EBITDA grew 17.9% year-over-year, or 9.6% in constant currency, and Adjusted EBITDA margin was
23.5%, compared to 23.1% in 2021 due to operating leverage driven by lower selling, general and administrative
expenses as a share of revenue.

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

Performance

Synchronisation

2022

2021

(unaudited)(unaudited)

59

60

152

%

%

YoY

const.

76 100.0%(1.7%)

Digital

269

232

15.9%

Other

25

15

66.7%

MechanicalMusic Publishing
Revenues
EBITDA

25

530

25

408

0.0%

29.9%

90.0%

(9.2%)

Year ended December 31,

YoY

const.

297

24.9%

18.2%

698

49.0%

38.7%

2021

(unaudited)(unaudited)

236

199

371

1,040

66.7%

55

22.1%

%

2022

8.5%

(3.8%)

%

97

1,799
395

95
46

1,335
307

18.6%

2.1%

19.6%

28.7%

20.4%

33.6%

25.0%

23.0%

(1.0pp)Adjusted
EBITDA margin

22.8%

23.0%

(0.2pp)

307

14.6%

26.3%

22.0%
410

(1.0%)

34.8%

EBITDA margin

Adjusted EBITDA

10.3%

Note: % YoY indicates % change year-over-year; % const. indicates % change year-over-year adjusted forconstant currency.
Q4 2022
Music Publishing revenue in the fourth quarter of 2022 was €530 million, up 29.9% year-over-year, or 22.1%
in constant currency, despite a €9 million negative impact in the quarter from the Change in Society
Accounting. Excluding the Change in Society Accounting, Music Publishing revenue was up 32.1% year-overyear, or 24.2% in constant currency. Digital revenue grew 15.9% year-over-year, or 8.5% in constant currency,
as strong underlying growth more than offset the negative impact from the Change in Society Accounting.

5Performance revenue grew 100.0% year-over-year, or 90.0% in constant currency, due to a positive impact fromthe Change in Society Accounting as well as recovery from the prior year that was negatively impacted by
COVID. Synchronization revenue declined 1.7% year-over-year, or 9.2% in constant currency, due to the timingof deals. Mechanical revenue was in line with last year although down 3.8% in constant currency.
FY 2022
Music Publishing revenue was €1,799 million in 2022, up 34.8% year-over-year, or 26.3% in constant currency.
Excluding the impact of the Change in Society Accounting detailed in the Appendix, Music Publishing revenue
grew 26.2% year-over-year, or 18.3% in constant currency, primarily as a result of the continued organic growthin subscription and streaming revenue and recovery in synchronisation and performance revenue. Music
Publishing revenue also benefitted from catalogue acquisitions made in prior years.
Music Publishing EBITDA in 2022 was €395 million, up 28.7% year-over-year, or 20.4% in constant currency,
driven by the growth in revenue. Music Publishing EBITDA margin declined by 1.0pp to 22.0% from 23.0% in 2021.
Music Publishing EBITDA and EBITDA margin were impacted by non-cash share-based compensation expensesof €15 million during 2022. Excluding this, Music Publishing Adjusted EBITDA of €410 million was up 33.6% yearover-year, or 25.0% in constant currency, and Music Publishing Adjusted EBITDA margin decreased by 0.2pp
year-over-year to 22.8% from 23.0%. Excluding the Change in Society Accounting, Music Publishing Adjusted
EBITDA grew 26.7% year-over-year, or 18.6% in constant currency, and Adjusted EBITDA margin improved 0.1pp
to 23.1%.

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

Merchandising
andOther Revenues
EBITDA

2022

2021(unaudited)(unaudited)

181

141

%

%

YoY

const.

28.4%

14.6%

Year ended December 31,

%

%

2022

2021

YoY

const.

(unaudited)(unaudited)

363

70.2%

54.1%

36

16

125.0%

111.8%

16

125.0%

111.8%

618

EBITDA margin

5.8%

4.4%

Adjusted
EBITDA margin

5.8%

4.4%

Adjusted EBITDA

36

1.4pp
1.4pp

Note: % YoY indicates % change year-over-year; % const. indicates % change year-over-year adjusted forconstant currency.
Q4 2022
Merchandising and Other revenue in the fourth quarter of 2022 was €181 million, up 28.4% year-over-year, or
14.6% in constant currency, on growth in touring-related merchandising revenue.
FY 2022
Merchandising and Other revenue grew to €618 million in 2022, up 70.2% year-over-year, or 54.1% in constantcurrency, as touring-related merchandising revenue benefitted from the return of live touring post-COVID,
which began in the fourth quarter of 2021.
Merchandising and Other EBITDA in 2022 was €36 million, up 125.0% year-over-year, or 111.8% in constantcurrency, driven by the growth in revenue. Merchandising and Other EBITDA margin improved by 1.4pp to 5.8%
from 4.4% in 2021 as a result of lower artist costs, which more than offset the shift in revenue mix towards
lower-margin touring-related revenue.

6Conference Call Details
The Company will host a conference call to discuss these results on Thursday, March 2, 2023 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 beavailable 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 that aredescribed in our 2021 Annual Report and will be describer in the 2022 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 orrevise any such forward-looking statements, whether as a result of new information, future events or 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

7Investors
Erika Begun - investorrelations@umusic.com

Upcoming Calendar
2022 Annual Report: March 30, 2023
Q1 2023 Results: April 26, 2023
Annual General Meeting of Shareholders: May 11, 2023

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 2022 financial information includedin this press release contains only part of the 2022 financial statements which will be included in the 2022
Annual Report and which still must be adopted by the shareholders at the upcoming Annual General Meetingof Shareholders. The 2022 Annual Report has not yet been published and an auditors’ opinion has not yet
been issued.

8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

2022

2021

(unaudited)(unaudited)(5,753)(4,608)

(285)

(175)

10,340(2,702)8,504(2,327)

Operating profit

1,600

1,394

Financial expenses

(735)

(377)

Financial income

Income/(loss) from equity affiliates
Profit before income taxes
Income taxes
Net profit
Of which:

Net profit attributable to equity holders of the parent
Net profit attributable to non-controlling interests

Earnings per share (in euros)

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

Diluted earnings for the period attributable to equity holders of the parent

37

143

(698)

(234)

900

1,165

785

888

(2)

(115)

5

(277)

782

886

0.43

0.49

3

0.43

2

0.49

9

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

2022

2021

(unaudited)(unaudited)

Operating profit

1,600

1,394

Royalty advances payments, net of recoupments

(148)

(364)

Operating activities
Adjustments

461

280

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

1,913

1,310

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

1,987

1,395

Net cash provided by/(used for) operating activities

1,732

1,140

Catalogue investments

(359)

(388)

Capital expenditures

(33)

(13)

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

74

(255)

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

85

(255)

(48)
(11)
(28)
(43)

(532)

(531)

-

117

Divestitures

9

137

Dividends received from investments

1

1

Proceeds from sales of property, plant, equipment and intangible assets
Proceeds from sales of consolidated companies, after divested cash
Proceeds from sale of financial assets

Dividends received from equity affiliates
Net cash provided by/(used for) investing activities
Financing activities

Distributions to 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

Transactions on borrowings and other financial liabilities
Repayment of lease liabilities

Payment of interest of lease liabilities

Net cash provided by/(used for) financing activities

-

9
2

6

14
2

(520)

(391)

(798)

(785)

(2)

(800)

5,938

(2)

(787)

3,176

(6,359)(3,624)

4

(8)

(30)

(447)
(86)
(14)

(17)

(473)
(70)
(16)

(1,347)(1,346)

Net change in cash and cash equivalents

(135)

(597)

Change in cash and cash equivalents

(134)

(565)

572

1,137

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

1

438

32

572

10

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

Artist costs

2022

2021

(unaudited)(unaudited)

4,704

Product costs

3,800

1,049

Cost of Revenues

808

5,753

4,608

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
Term loan

Drawn revolving credit facilities
Bank overdrafts
Bonds

Commercial Papers
Other

Borrowings at amortized cost
Financial Net Debt

2022

2021

(unaudited)(unaudited)

1

-

439

585

-

(998)

(125)

(1,447)(1,004)

-

(1)

(13)

(929)

-

(191)

(137)

(2,250)(2,595)(1,810)(2,010)Reconciliation of Operating Profit to EBITDA and Adjusted EBITDA
Year ended December 31,(in millions of euros)

Operating Profit

Adjustments

Amortization and depreciation expense
Restructuring expenses(Gain)/loss on sale of assets

Impairment on intangible assets
Other non-recurring items
EBITDA

Non-cash share-based compensation expense
One time direct-listing related expenses
Adjusted EBITDA

2022

2021

(unaudited)(unaudited)

377

277

2

(2)

1,600

32
17
-

2,028
107
-

2,135

1,394

20
-

(3)

1,686

79
23

1,788

11

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

December 31(in millions of euros)2022

Net profit attributable to equity holders of the parent

2021(unaudited)782(unaudited)

886

Financial income and expenses, excluding interest and income from investments

671

220

Certain one time items

(11)

23

Non-cash share-based compensation expense

1071

Impairment of intangible assets

79

17

Amortization of catalogues

233

144

(90)

-

Income tax on adjustments(255)

Adjusted Net Profit

1,454

Non-recurring tax items

-

(81)

1,271

1 Certain one time items in 2022 includes interest income in relation to the one-time non-recurring tax item and in 2021 related to expenses related to thedirect listing of UMG on the Euronext Amsterdam.

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

2022

2021

(unaudited)(unaudited)

1,987

Income tax paid

1,395

(255)

(255)

Net cash provided by/(used for) operating activities

1,732

1,140

Repayment of lease liabilities and related interest expenses

(100)

(86)

Net cash provided by/(used for) investing activities(520)

Interest, net

(391)

(30)

Other cash items related to financing activities

(17)

4

Free Cash Flow

(8)

1,086

638

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
Impairment of intangible assets
Changes in provisions, net(Gain)/loss on sale of assets
Other non-recurring items
Adjustments

2022

2021

(unaudited)(unaudited)

377
17
65

277
-

8

2

(2)

461

280

-

(3)

12

Average currency rates
Three Months Ended December 31,
2022

EUR vs.

2021

Year ended December 31,
2022

2021

USD

1.01

0.87

0.95

0.84

JPY

6.90

7.70

7.29

7.72

GBP

1.15

1.18

1.18

1.16

13

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 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 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
Condensed 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 that differ 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. EBITDA margin is EBITDA divided by revenue. To
calculate EBITDA, the accounting impact of the following items is excluded from the 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 recognizedin equity);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.
restructuring expenses; andvii.
other non-recurring items.
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, including but not limited to professional fees and listing fees related to UMG’s listing on theEuronext 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 uses Adjusted net profit appropriate as UMG uses it as the basis for the Adjusted net profit per share (inEUR) – 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 is excluded from Net profit attributable to equity holders of the parent: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.
non-cash share-based compensation expense;vii.
certain one-time items that are deemed by management to be significant and incidental to normal
business activity;
viii.
income taxes and adjustments attributable to non-controlling interests; andix.
non-recurring tax items.

14

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.

15

Items Impacting Comparability of Results
Total UMG
FY22
(in millions of euros)

1Q22

2Q22

DSP Catch-Up Payment--

Change in Society Accounting

46-

Revenue

Legal Settlement
Adjusted EBITDADSP Catch-Up Payment

Exceptional Recovery and Release
Legal Settlement

Change in Society Accounting

-

-

17

FY21

3Q22

4Q22

-

-

98

(21)

-

-

-

52

-

17

71

1Q21

2Q21

3Q21

4Q21

-

-

41

-

-

41

(9)

114

-

-

-

-

-

-

-

-

52

-

-

-

(7)

(5)

FY22 Total

71

-

-

-

-

FY21 Total

-

-

26

-

-

26

-

-

-

-

-

-

20

22

-

-

-

-

-

20

-

-

Recorded Music
FY22(in millions of euros)

1Q22

2Q22

-

-

71

DSP Catch-Up Payment-

Legal Settlement-

Revenue

DSP Catch-Up Payment
Legal Settlement
Adjusted EBITDA

Exceptional Recovery and Release

-

-

FY21

3Q22

4Q22

-

-

71

-

-

-

52

-

-

1Q21

2Q21

3Q21

4Q21

-

-

41

-

-

41

-

-

-

26

-

-

26

-

52

-

-

-

-

-

-

FY22 Total

-

-

20

-

-

-

-

-

-

FY21 Total-

20

Music Publishing
FY22(in millions of euros)

Revenue

Change in Society Accounting
Adjusted EBITDA

Change in Society Accounting

FY21

1Q22

2Q22

3Q22

4Q22

46

98

(21)

(9)

17

17

(7)

(5)

FY22 Total

1Q21

2Q21

3Q21

4Q21

FY21 Total

114

-

-

-

-

-

22

-

-

-

-

-

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 (the “Change
in Society Accounting”). In prior years, these revenues were recognized when the relevant collection society
notified UMG of the usage by the end customer and collectability was assured. Recognition of that revenue
is now based on an accrual for the best available estimate of when the usage occurs and the amount ofconsideration which is probable to be collected. This has affected the timing of the recognition of certain
revenues across financial reporting quarters and notably in the second quarter of 2022 reflects the receipt ofhigher income than was accrued at the end of 2021.

16

Legal Settlement
Revenue, EBITDA and Adjusted EBITDA in 2022 include a benefit from the settlement of a copyright infringement
lawsuit with an internet service provider (the “Legal Settlement”) previously disclosed and booked in Q3 2022.
DSP Catch-Up Payment
Revenue, EBITDA and Adjusted EBITDA for 2021 include the benefit from a catch-up payment from a digital
service provider (the “DSP Catch-Up Payment”) previously disclosed and booked in Q2 2021.
Exceptional Recovery and Release
EBITDA and Adjusted EBITDA for 2021 includes the recovery of an advance provision and release of historicroyalties (the “Exceptional Recovery and Release”) previously disclosed and booked in Q1 2021.

17