The Universal Music Group’s revenue grew by more than 1 billion euros in 2021 to 8.5 billion euros ($9.64 billion) from 7.43 billion euros ($8.4 billion) for the year ended Dec. 31, 2021, the company announced on Thursday. That represents a 14.4% increase or a 17% increase year-over-year in constant currency.
Depending on what currency exchange rate is used, UMG becomes the first major music company to flirt with the $10 billion revenue milestone. (This story used the Dec. 31, 2021 OANDA.com exchange rate of one euro to $1.1324 for 2021 and for 2020, uses the 1.13 exchange rate experienced by UMG’s former parent Vivendi for 2020).
While UMG’s net income was down to 886 million euros ($1 billion), or 0.49 euro’s per diluted share, from last year’s 1.366 billion euros ($1.5 billion), or 0.75 euros per share, that decline was attributed to non-cash declines in the value of shares UMG owns in Spotify and Tencent; as well as 102 million euros ($116 million) in some one-time expenses relating to UMG becoming a publicly-traded, stand-alone company and non-cash-based compensation expenses. On an adjusted basis, net income for 2021 was 1.271 billion euros, versus 2020’s 1.03 billion euros ($1.16 billion).
“2021 was yet another historic year for UMG. We helped our artists achieve extraordinary success – including 8 of the IFPI’s top 10 global artists of the year, UMG chairman and CEO Sir Lucian Grainge said in a statement. “Our success in all these efforts showed in our financial performance – revenues increased by 17% on a constant currency basis, Adjusted EBITDA margin expanded and Free cash flow improved significantly. Going forward, we see the industry continuing to grow and – with our unique experience, our deep understanding of the business and the vast artist relationships and global creative networks – we expect to further strengthen our position as the industry leader as we continue to break new artists and build on our world-class catalogue.”
Top sellers for the year included music from Olivia Rodrigo, BTS, Justin Bieber, Morgan Wallen, ABBA and Taylor Swift as well as continued sales of The Weeknd and Billie Eilish.
Unsurprisingly, streaming drove revenue for the company as a whole and recorded music in particular. In 2021, UMG garnered 4.48 billion euros ($5.07 billion) from streams as compared with 3.8 billion euros ($4.33 billion) in 2020, or a 16.9% increase.
“In addition to strong performance in streaming, we drove new areas of opportunity for our artists – ranging from merchandise to brand management, sponsorship, e-commerce, and film & television,” Grainge added in a statement.
Overall, the recorded music company grew 14.3% to 6.82 billion euros ($7.73 billion) from 5.97 billion euros $6.7 billion), while Universal Music Publishing Group grew by nearly 150 million euros to 1.335 billion euros ($1.51 billion) from 1.19 billion euros ($1.34 billion), or a 12.6% increase. The latter company’s revenue intake was boosted by a full year of owning the Bob Dylan catalog, which it bought at the end of 2020 for slightly more than $400 million according to sources. That catalog generates anywhere from $10 million to $15 million a year in revenue.
Both operations also improved profitability with recorded music generating 1.6 billion euros ($1.83 billion) in earnings before interest, taxes, depreciation and amortization in 2021, or a 12.6% increase over the 1.28 billion euros ($1.45 billion) produced in 2020. Meanwhile, UMPG’s EBITDA grew almost the same amount by 14.1% to 307 million euros ($347 million) from 2020’s 269 million euros ($303 million).
Meanwhile, the company’s merchandising operation Bravado made a comeback with revenue growing 24.3% to 363 million euros ($411 million) from the pandemic-scarred prior year when revenue totaled 292 million euros ($330 million). But it still trails the 489 million in euros ($549 million) the operation tallied in 2019.
For the fourth quarter, UMG reported 438 million euros ($495 million) in EBITDA, on revenues of 2.52 billion euros ($2.85 billion). That represents a 4.2% decrease in that profit margin from the prior year when the company produced 457 million euros ($507 million) in EBITDA. But the revenue growth in the fourth quarter of 19% was even greater than the 14.3% for the year. Moreover, on an adjusted basis, 2021’s EBITDA totaled 503 million euros ($507 million), or a 9.8% increase over the 458 million euros($508 million) produced in 2020. (For the fourth quarter, this story uses one euro to $1.13 exchange for 2021 and a one euro to $1.109 for 2020.)
Top sellers for the quarter included releases from ABBA, Taylor Swift, The Beatles, Drake and BTS, according to the company.
Furthermore, UMG executive VP/CFO/ president of operations Boyd Muir said in a statement, “Our core business is well positioned for a strong 2022.”
2021 Highlights (Year-Over-Year)
Total revenue: $9.6 billion, up 14.4%
Recorded music revenue: $7.7 billion, up 14.3%
Streaming + Subscriptions: $5.07 billion, up 16.9%
Physical: $1.26 billion, up 18.6%
Licensing: $1 billion, up 15.5%
Music publishing revenue: $1.5 billion, up 12.6%
Merchandising revenue: $411 million, up 24.3%
EBITDA: $1.9 billion, up 13.4%
Operating income: $1.58 billion, up 14.6%
Q4 Highlights (Year-Over-Year)
Total revenue: $2.85 billion, up 19%
Recorded music revenue: $2.23 billion, up 15.2%
Streaming + Subscriptions: $1.38 billion, up 18%
Physical: $429 million, up 11%
Licensing: $326 million, up 11.6%
Music publishing revenue: $462, up 28.3%
Merchandising revenue: $159 million, up 45%
EBITDA: $495 million, down 4.2%
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