Universal Music Group N.V. Reports Financial Results for theSecond Quarter and Half Year Ended June 30, 2023
Summary Q2 2023 Results1••••

Revenue of €2,697 million increased 6.4% year-over-year, or 8.8% in constant currency, driven by strong
growth in the Recorded Music and Merchandising and Other segments
Recorded Music subscription revenue grew 10.6% year-over-year, or 13.0% in constant currency andstreaming revenue grew 2.9% year-over-year, or 5.3% in constant currency
Adjusted EBITDA of €590 million increased 16.4% year-over-year, or 19.2% in constant currency, andAdjusted EBITDA margin expanded 1.9 percentage points to 21.9%
Recorded Music top sellers included King & Prince, Morgan Wallen, SEVENTEEN, Taylor Swift, and Stray Kids

Summary H1 2023 Results1
•
•
•
•
•

Revenue of €5,148 million increased 8.7% year-over-year, or 9.1% in constant currency, driven by growthacross all segments
Recorded Music subscription revenue grew 11.6% year-over-year on both a reported and constant currency
basis and streaming revenue grew 2.3% year-over-year, or 1.8% in constant currency
Adjusted EBITDA of €1,112 million increased 15.6% year-over-year, or 16.2% in constant currency, andAdjusted EBITDA margin expanded 1.3 percentage points to 21.6%
Net cash provided by operating activities before income tax paid of €703 million increased 16.2% comparedto €605 million in H1 2022
Interim dividend of €437 million, or €0.24 per share

Hilversum, The Netherlands, July 26, 2023 -- Universal Music Group N.V. (“UMG” or “the Company”) today
announced its financial results for the second quarter and half year ended June 30, 2023.
UMG´s Chairman and CEO Sir Lucian Grainge said, “As an artist-centric company, we’re not only proud of ourcontinued strong performance, but we’re also particularly excited that it enables us to accelerate our strategy
to promote a healthier streaming business—one that rewards real artists and real music—and drive growth
opportunities for the broader music ecosystem.”“Our strong growth in revenues, Adjusted EBITDA and operating cash flow has enabled our continued strategic
investment in the business, further driving long-term shareholder value as we continue to execute on our
vision,” said Boyd Muir, UMG's EVP, CFO and President of Operations.

1

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 Interim Financial Review and Unaudited
Condensed Consolidated Interim Financial Statements which is available on our website at investors.universalmusic.com/reports.

1

UMG Results
Three Months Ended June 30,(in millions of euros)

Revenue

2023

2022

(unaudited)(unaudited)

2,697

EBITDA

505

%

YoY

const.

6.4%

2,535
507

%

(0.4%)EBITDA margin

18.7%

20.0%

(1.3pp)Adjusted
EBITDA margin

21.9%

20.0%

1.9pp

8.8%
2.2%

Six Months Ended June 30,
2023

2022

(unaudited)(unaudited)

5,148

4,734

767

%

%

YoY

const.

8.7%

9.1%

960

(20.1%)(19.8%)

962

15.6%

16.2%

14.9%

20.3%

21.6%

20.3%

1.3pp

Operating profit1

591

767

(22.9%)

Adjusted net profit2

754

664

Adjusted EBITDA

590

507

16.4%

19.2%

Net profit attributable to equity holders of the parent
Net cash provided by operating activities before income tax paid
Free cash flow

1,112

625

703

241

159.3%

605

16.2%

1,817

1,813

Adjusted EPS

0.41

0.37

2

13.6%

(22.3%)

163.7%

104 (112.5%)(13)Weighted average number of shares outstanding
EPS(5.4pp)

0.34

0.13

1 2022 restated amounts are presented in Note 2.3 of the 2023 Unaudited Condensed Consolidated Interim Financial Statements
2 2022 restated amounts are presented in the reconciliation of Adjusted net profit and Adjusted net profit per share in the 2023 Interim Financial Review

As at(in millions of euros)

Net Debt%

June 30, 2023

December 31, 2022

(unaudited)(audited)(2,300)(1,810)

YoY

27.1%

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.
Q2 2023 Results
Revenue for the second quarter of 2023 was €2,697 million, an increase of 6.4% year-over-year, or 8.8% inconstant currency, driven by strong growth in the Recorded Music and Merchandising and Other segments.
EBITDA for the quarter declined 0.4% year-over-year, but increased by 2.2% in constant currency, to€505 million. As expected, EBITDA was impacted by non-cash share-based compensation expenses of€85 million during the second quarter of 2023, as the Company rolled out its first global equity compensation
plan, which began in the fourth quarter of 2022. There was no non-cash share-based compensation expense
during the second quarter of 2022. EBITDA margin was 18.7%, compared to 20.0% in the second quarter of 2022.
Excluding non-cash share-based compensation expense, Adjusted EBITDA for the quarter was €590 million,
up 16.4% year-over-year, or 19.2% in constant currency, and Adjusted EBITDA margin improved to 21.9%,
compared to 20.0% in the second quarter of 2022, as a result of revenue growth, operating leverage and cash
compensation savings of €24 million associated with the equity plan rollout.
H1 2023 Results
In the half year ended June 30, 2023 ("H1 2023"), UMG's revenue increased to €5,148 million, up by 8.7%
compared to the half year ended June 30, 2022 (“H1 2022"), or 9.1% in constant currency. This increase wasdriven by improvements across all segments, as discussed further below.
Cost of revenues, consisting of artist and product costs, increased by 7.8% to €2,811 million in H1 2023,
reflecting higher revenue. Cost of revenue as a percentage of revenue decreased to 54.6% in H1 2023 from
55.1% in H1 2022 primarily driven by lower merchandising product costs.
2

EBITDA of €767 million declined 20.1% year-over-year, or 19.8% in constant currency, and EBITDA margin was
14.9% compared to 20.3% in the first half of 2022. EBITDA and EBITDA margin were impacted by non-cash
share-based compensation expenses of €345 million during H1 2023 and €2 million during H1 2022. Excludingthese amounts, Adjusted EBITDA of €1,112 million, was up 15.6% year-over-year in H1 2023, or 16.2% in constantcurrency, and Adjusted EBITDA margin expanded 1.3pp year-over-year to 21.6% driven by revenue growth,
operating leverage and cash compensation savings of €33 million associated with the equity plan rollout.
Operating profit declined 22.9% year-over-year, or 22.3% in constant currency, to €591 million in H1 2023 due tothe higher non-cash share-based compensation expenses in the first half of 2023 compared to the first half of2022 as discussed above.
Net profit attributable to equity holders of the parent in H1 2023 amounted to €625 million compared to€241 million in H1 2022, resulting in EPS of €0.34 in H1 2023, compared to €0.13 in H1 2022. The improvementin Net profit attributable to equity holders of the parent was in part due to the variance in revaluationof investments in listed and other companies (including Spotify and Tencent Music Entertainment, among
others) that was a net income in H1 2023 of €313 million compared to a net expense in H1 2022 of€567 million. Adjusted net profit, which adjusts for the revaluation of investments, non-cash share-based
compensation expense, amortization of catalogues and other items, amounted to €754 million in H1 2023,
compared to €664 million in H1 2022, resulting in Adjusted EPS of €0.41 in H1 2023, compared to €0.37 in H1
2022. The increase in Adjusted net profit was driven by the growth in Adjusted EBITDA.
Net cash provided by operating activities before income tax paid improved 16.2% to €703 million compared to€605 million in H1 2022 despite the previously disclosed €125 million paid to settle employee tax liabilities fromequity grants on non-cash share-based compensation. The improvement in Net cash provided by operating
activities before income tax paid was helped by the decline in royalty advance payments, net of recoupments,
which was down 57.4% to €95 million in H1 2023 from €223 million in H1 2022, due to the timing of major artist
renewals and an increase in recoupment.
The strong Net cash provided by operating activities before income tax paid allowed the Company to continue
to strategically invest in the long-term growth of the business. Strategic investments in the period included
the acquisition of a 50% stake in the entity that owns the iconic Capitol Records building in Hollywood andacquisitions of a brand services company and a niche record label, among other items. Cash paid for catalogue
acquisitions decreased to €89 million in H1 2023 compared to €264 million in H1 2022. Separately, investing
activities also included €75 million cash put into escrow for another catalogue acquisition. Free cash flow
decreased to a €13 million outflow in H1 2023 compared to a €104 million inflow in H1 2022, mainly as a result of
the higher Net cash used for investing activities. The year-over-year decline in Free cash flow was also a resultof higher income taxes paid and higher net interest paid, both of which benefitted from previously disclosed tax
settlements in certain jurisdictions in the prior year.
UMG's dividend policy is to pay a dividend of at least 50% of adjusted net profit. UMG's Board of Directors
declared an interim dividend for H1 2023 of €437 million, or €0.24 per share. The ex-dividend date will be on
October 4, 2023, the record date will be on October 5, 2023 and the payment date will be on October 27, 2023.
Net debt, defined as total debt minus cash and cash equivalents, at the end of H1 2023 was €2,300 million
compared to €1,810 million at the end of 2022. The increase in net debt was primarily driven by theincrease in cash used for investments, tax and dividends partly compensated by strong cash generated byoperating activities.

3

Recorded Music
Three Months Ended June 30,(in millions of euros)

Subscriptions
and streamingof which streamingof which subscription
Downloads andother digital
PhysicalLicense and other
RecordedMusic revenues
EBITDA

2023

2022(unaudited)(unaudited)

358

348

61

69

1,426

1,068

1,314

966

326

303

2,080

1,922

267

236

%

%

YoY

const.

8.5%

11.0%

2.9%

10.6%

5.3%

Six Months Ended June 30,
2023

2022

(unaudited)(unaudited)

2,755
673

2,524
658

%

YoY

const.

9.2%

9.1%

2.3%

(11.6%)(10.3%)

2,082

1,866
137

(15.3%)(14.7%)

7.6%

11.3%

639

540

18.3%

20.8%

8.2%

10.9%

4,003

3,643

9.9%

10.3%

842

(17.1%)(16.7%)

842

15.1%

15.6%

13.1%

16.1%

116

493

698

442

17.4%

23.1%

Adjusted EBITDA margin

24.2%

23.1%

969

11.6%

1.8%

13.0%

EBITDA margin

Adjusted EBITDA

%

11.5%

(5.7pp)
1.1pp

11.6%

12.6%

Note: % YoY indicates % change year-over-year; % const. indicates % change year-over-year adjusted forconstant currency.
Q2 2023
Recorded Music revenue for the second quarter of 2023 was €2,080 million, up 8.2% compared to the second
quarter of 2022, or 10.9% in constant currency. Subscription revenue grew 10.6% year-over-year, or 13.0% in
constant currency, driven primarily by the growth in global subscribers as well as the impact of price increases
at certain platforms. Streaming revenue grew 2.9% year-over-year, or 5.3% in constant currency, as certain
platforms and countries grew, but the performance of the broader advertising industry was mixed. Physicalrevenue increased by 7.6% year-over-year, or 11.3% in constant currency, driven by strong CD sales in Japanand improvements in vinyl sales. Downloads and other digital revenue declined 11.6% year-over-year, or 10.3%
in constant currency, as download sales continued their industry-wide decline. License and other revenue
improved 13.1% year-over-year, or 16.1% in constant currency, as a result of improvements in neighbouring
rights, brand promotion and live income. Top sellers for the quarter included releases from King & Prince,
Morgan Wallen, SEVENTEEN, Taylor Swift, and Stray Kids, while top sellers in the prior-year quarter included BTS,King & Prince, Rammstein, Olivia Rodrigo and INI.
H1 2023
In H1 2023, Recorded Music revenue was €4,003 million, up 9.9% compared to H1 2022, or 10.3% inconstant currency.
Subscription revenue grew 11.6% year-over-year on both a reported and constant currency basis. Streaming
revenue grew 2.3% year-over-year, or 1.8% in constant currency. Physical revenue grew 18.3% year-over-year,or 20.8% in constant currency. Downloads and other digital revenue decreased by 15.3% year-over-year, or
14.7% in constant currency. License and other revenue improved 11.5% year-over-year, or 12.6% in constantcurrency. Top sellers for H1 2023 included King & Prince, Morgan Wallen, Taylor Swift, Metro Boomin and
TOMORROW X TOGETHER. Top sellers for H1 2022 included BTS, the Encanto soundtrack, Olivia Rodrigo, The
Weeknd and King & Prince.
Recorded Music EBITDA of €698 million declined 17.1% year-over-year, or 16.7% in constant currency, while
Recorded Music EBITDA margin declined 5.7pp to 17.4% from 23.1% in the first half of 2022. Recorded MusicEBITDA and EBITDA margin were impacted by non-cash share-based compensation expenses of €271 million in
the first half of 2023. There were no non-cash share-based compensation expenses in Recorded Music during
the first half of 2022. Excluding non-cash share-based compensation, Recorded Music Adjusted EBITDA in H1
2023 was €969 million, up 15.1% year-over-year, or 15.6% in constant currency, and Recorded Music Adjusted

4

EBITDA margin in H1 2023 improved 1.1pp to 24.2% from 23.1% in H1 2022 driven by the growth in revenues,
operating leverage and cash compensation savings associated with the equity plan rollout.

Music PublishingThree Months Ended June 30,(in millions of euros)

Performance

Synchronisation

2023

2022

(unaudited)(unaudited)

60

59

97

%

%

YoY

const.

36

169.4%

185.3%

1.7%

5.3%

Digital

264

346(23.7%)(22.6%)

Other

14

12

16.7%

7.7%

MechanicalMusic
Publishing revenues
EBITDA

29

464

23

476

26.1%

(2.5%)

31.8%(0.6%)Six Months Ended June 30,
2023

2022

(unaudited)(unaudited)

129

120

187
495
52
26

889
186

127
537

%

%

YoY

const.

47.2%

48.4%

7.5%

(7.8%)

13.0%

15.6%

851

4.5%

4.8%

21

200

23.8%

(7.0%)

8.0%

8.0%

23.5%

(2.6pp)Adjusted EBITDA margin

24.3%

23.5%

0.8pp

200

23.8%

(7.0%)

20.9%
216(7.5%)

46

EBITDA margin

Adjusted EBITDA

6.6%

Note: % YoY indicates % change year-over-year; % const. indicates % change year-over-year adjusted forconstant currency.
Q2 2023
Music Publishing revenue in the second quarter of 2023 was €464 million, down 2.5% year-over-year, or 0.6%
in constant currency. As previously 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”). Of particular note, the €98 million impact associatedwith the Change in Society Accounting in the second quarter of 2022 reflected a one-time catch-up for thereceipt of higher income than was accrued at the end of 2021. Excluding this one-time, prior-year benefit, Music
Publishing revenues grew 22.8% year-over-year or 25.7% in constant currency as a result of the continued
growth in streaming and subscription revenue and improvement in performance income. Digital revenue
declined 23.7% year-over-year, or 22.6% in constant currency due to the Change in Society Accounting partly
offset by growth in streaming and subscription revenue. Performance revenue grew 169.4% year-over-year, or
185.3% in constant currency, due to the Change in Society Accounting that had a negative impact in the prioryear as well as better than expected receipts following the COVID recovery. Synchronization revenue improved
1.7% year-over-year, or 5.3% in constant currency, due to the timing of deals. Mechanical revenue grew 26.1%
year-over-year, or 31.8% in constant currency, as a result of improvements in physical sales.
H1 2023
Music Publishing revenue amounted to €889 million in H1 2023, up 4.5% year-over-year, or 4.8% in constantcurrency, despite the previously disclosed Change in Society Accounting which resulted in a one-time benefit
in the second quarter of 2022. Excluding this prior-year benefit, Music Publishing revenues grew 18.1% yearover-year, or 18.5% in constant currency, as a result of the continued organic growth in streaming andsubscription revenue and improvement in synchronisation and performance revenue.
Music Publishing EBITDA of €186 million declined 7.0% year-over-year on both a reported and constantcurrency basis, while Music Publishing EBITDA margin declined 2.6pp to 20.9% from 23.5% in the first halfof 2022. Music Publishing EBITDA and EBITDA margin were impacted by non-cash share-based compensation
expenses of €30 million in the first half of 2023. There was no non-cash share-based compensation expensein Music Publishing during the first half of 2022. Excluding non-cash share-based compensation, Music
Publishing Adjusted EBITDA of €216 million in H1 2023 was up 8.0% year-over-year on both a reported andconstant currency basis, despite the previously disclosed Change in Society Accounting which resulted in abenefit of €17 million in EBITDA in H1 2022. Music Publishing Adjusted EBITDA margin improved by 0.8pp to24.3% from 23.5% in H1 2022.

5

Merchandising and Other
Three Months Ended June 30,(in millions of euros)

Merchandising andother revenues
EBITDA

2023

2022(unaudited)157(unaudited)

141

%

%

YoY

const.

11.3%

12.1%

Six Months Ended June 30,
2023

2022

%

YoY

const.

(unaudited)(unaudited)

248

6.5%

5.6%

17

14

21.4%

21.4%

14

42.9%

42.9%

264

EBITDA margin

6.4%

5.6%

Adjusted EBITDA margin

7.6%

5.6%

Adjusted EBITDA

%

20

0.8pp
2.0pp

Note: % YoY indicates % change year-over-year; % const. indicates % change year-over-year adjusted forconstant currency.
Q2 2023
Merchandising and Other revenue in the second quarter of 2023 was €157 million, up 11.3% year-over-year,or 12.1% in constant currency, driven by growth in direct-to-consumer sales and despite a decline in touring
merchandise sales on lower touring activity compared to the prior year quarter.
H1 2023
Merchandising and Other revenue grew to €264 million in H1 2023, up 6.5% year-over-year, or 5.6% in constantcurrency, driven by the growth in direct-to-consumer sales and despite lower touring merchandise andretail sales.
Merchandising and Other EBITDA of €17 million grew 21.4%, year-over-year on both a reported and constantcurrency basis, while Merchandising and Other EBITDA margin improved 0.8pp to 6.4% from 5.6% in thefirst half of 2022. Merchandising and Other EBITDA and EBITDA margin were impacted by non-cash sharebased compensation expenses of €3 million in the first half of 2023. There were no non-cash share-based
compensation expenses in Merchandising and Other during the first half of 2022. Merchandising and Other
Adjusted EBITDA in H1 2023 was €20 million, up 42.9% year-over-year on both a reported and constant currency
basis. Merchandising and Other Adjusted EBITDA margin improved by 2.0pp to 7.6% as a result of lower relative
product costs due to the shift in revenue mix towards higher-margin direct-to-consumer revenue as well as
cash compensation savings associated with the equity plan rollout.

6

Items Impacting Comparability of Results
TOTAL UMG

(in millions of euros)

HY23

Revenue

Change in Society Accounting
Adjusted EBITDA

Change in Society Accounting

HY22

-

98

-

17

MUSIC PUBLISHING(in millions of euros)

Revenue

Change in Society Accounting
Adjusted EBITDA

Change in Society Accounting

HY23

HY22

-

98

-

17

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, inboth 2022 and 2023, is based on an accrual for the best available estimate of when the usage occurs and theamount of consideration which is probable to be collected. This has affected the timing of the recognition ofcertain revenues across financial reporting quarters compared to periods before 2022 and also notably in thesecond quarter of 2022 reflected the receipt of higher income than was accrued at the end of 2021.

7

Conference Call Details
The Company will host a conference call to discuss these results on July 26, 2023 at 6:15PM CEST. A link to thelive 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. Accordingly, UMG cautions readers against placing undue relianceon 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 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 Interim Financial
Review and Unaudited Condensed Consolidated Interim Financial Statements which is available on our website
at investors.universalmusic.com/reports.

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

8Investors
Erika Begun - investorrelations@umusic.com

9