By Mauro Orru 
 

Universal Music Group NV--the music major behind The Weeknd, Billie Eilish and Taylor Swift--posted higher revenue in the third quarter as it continued to benefit from the growing popularity of streaming services.

The world's largest music company, which started trading on the Euronext Amsterdam stock exchange last month, said Wednesday that revenue for the three months to Sept. 30 climbed to 2.15 billion euros ($2.49 billion) from EUR1.86 billion last year.

Earnings before interest, taxes, depreciation, and amortization--a closely watched profit metric for Universal--rose to EUR426 million from EUR380 million, with a margin of 19.8%.

"Our operational and financial performance this quarter--our first as an independent, publicly traded company--demonstrates both why UMG is the world's most successful music company, as well as how our commitment to artists' career development and fostering innovation promotes growth across the music ecosystem," said Chief Executive Lucian Grainge.

Universal's recorded music business, which encompasses subscription and streaming revenue, accounted for the lion's share of revenue growth. Subscription and streaming revenue jumped 15.2% at constant currency to EUR1.13 billion.

Universal shares surged in their trading debut last month, a sign of investors' confidence in a resurgent music industry that continues to benefit from consumers spending more time listening to music, a trend accelerated by the coronavirus pandemic.

The music business's fortunes started to turn around in 2016, when growth from streaming services offered by the likes of Spotify Technology SA and Apple Inc. began to outweigh declining CD and digital download sales amid rampant online piracy.

The recorded music industry generated $21.6 billion in global revenue in 2020, with streaming accounting for 62% of the total, according to the International Federation of the Phonographic Industry, which represents the recording industry worldwide.

However, Universal believes streaming is still in its early days, with opportunities for further expansion driven by growth in the number of paid subscribers, even in established markets.

The company is targeting revenue growth of more than 10% this year, with earnings before interest, taxes, depreciation, and amortization expected to grow more than 20%.

"Our results this quarter demonstrate the continued strength of our artist roster and catalogue, the increasingly diversified revenue streams of our business, and our ability to deliver growth for our shareholders," said Chief Financial Officer Boyd Muir.

 

Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94

 

(END) Dow Jones Newswires

October 27, 2021 12:42 ET (16:42 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.
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