Universal Music Group posted almost $1bn in EBITDA profit in the first half of 2021

Justin Bieber released his latest album, Justice, via Def Jam / Universal Music in March 2021

Vivendi has just announced the fiscal results of Universal Music Group for Q2 – the quarter ending June 2021.

Should all go well with Universal’s proposed September spin-out listing in Amsterdam, Q2 was the last full quarter in which Vivendi will be UMG’s majority owner.

No doubt, then, the French company would want to make it one to remember.

It was.

For one thing, recorded music streaming revenue at UMG soared in Q2, up by 29.7% YoY on an organic basis.

Quarterly recorded music streaming revenues in the period weighed in at €1.12 billion ($1.35bn).

Universal’s total recorded music revenues (across all formats) also rose 29.7% YoY in the quarter, up to €1.65 billion ($1.99bn).

This rise was helped by a 72.6% YoY jump in quarterly physical music sales – up to €250m ($302m) – as well as a 24.3% YoY rise in licensing income.

Music publishing revenues at UMG in Q2 were very slightly up versus the same quarter of 2020 (+1.2%), while merchandise (and ‘other’) sales rose 67.2%.

Across all divisions, including publishing and recorded music, Universal Music Group posted €2.02bn ($2.44bn) in revenues in Q2… up by a whopping 25.5% YoY.

Perhaps the biggest story of Universal’s latest results, though, is the company’s profitability.

According to Vivendi’s numbers, UMG – across all its divisions, including publishing and recorded music – posted an EBITDA of €822 million in the first six months of 2021 (H1 2021), up by some 31.8% YoY.

That represented a half-year EBITDA margin of 21.5%, significantly up on an 18.8% margin in the same period of 2020, and a 16.9% margin in the same period of 2019.

In US dollar terms, UMG’s EBITDA in the first half of 2021 (€822m) weighed in at $995 million, meaning that Universal cleared just shy of a billion dollars in EBITDA profit within six months.

That salivary noise you can hear is the sound of would-be UMG investors smacking their lips in unison.

Universal’s biggest revenue-generating recording artist in the second quarter of 2021, confirms Vivendi’s results, was BTS.

That’s a touch confusing, as BTS is typically distributed outside of South Korea by Sony Music / The Orchard. However, UMG partners with Big Hit / HYBE on the band’s Japanese-language output.

UMG’s second biggest artist in revenue-generating terms in Q2 was Justin Bieber, followed by (in order), Olivia Rodrigo, The Weeknd, and Pop Smoke.

Vivendi is preparing to list 60% of Universal Music Group on the Amsterdam stock exchange on September 21.

The French company currently owns 80% of UMG, having already sold 20% of the music firm to a Tencent-led consortium.

Following the Amsterdam listing, Vivendi is expected to hold on to 10% ownership in UMG.

The remaining 10% will be owned by Pershing Square Holdings Ltd – either in its entirety, or alongside a fellow investor.

All EUR to USD currency conversions above made at prevailing rates as confirmed by Vivendi for the two periods mentioned (Q2 and H1 2021).Music Business Worldwide