By Toby Sterling
AMSTERDAM (Reuters) -Universal Music Group NV (UMG (AS:UMG)), the record label behind many of the music industry's biggest stars, on Wednesday reported a 21% rise in third quarter core earnings it attributed to growing revenue from streaming and social media platforms.
UMG's adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) came in at 461 million euros ($535 million) compared with 382 million euros in the same period a year ago.
"I firmly believe the music industry is only at the beginning of a new wave of growth and evolution," said CEO Lucian Grainge in a presentation.
It is the first time the label behind stars such as Lady Gaga, Billie Eilish and Taylor Swift has published earnings as an independent public company after it was spun off from former parent Vivendi (OTC:VIVHY) in September in Europe's largest listing of the year.
Grainge said the results showed the strength and diversity of Universal's artist catalogue, noting important deals struck in recent months with South Korean pop band BTS, Indian rapper Badshah and German singer Helene Fischer, as well as innovative deals with U.S. rock band Aerosmith and Sweden's ABBA.
UMG is also betting that a boom in music streaming led by Spotify (NYSE:SPOT), that has fuelled royalty revenue and profit growth for several years, still has a long way to run in a music industry it dominates along with Warner and Sony (NYSE:SONY) Music.
Universal's quarterly revenue rose 16% to 2.15 billion euros, it said, citing growth in recordings, publishing and merchandising.
It has forecast full year 2021 revenue to grow by more than 10% and adjusted EBITDA by more than 20%.
Universal's shares surged on their first day of trading last month, at one point rising more than 30% from the listing reference price of 18.50 euros. They have since traded sideways, closing on Wednesday at 25.135 euros.
Spotify earlier on Wednesday reported better than expected third quarter subscriber growth.
CFO Boyd Muir told analysts Spotify's results were "very encouraging" but cautioned against assuming that UMG's results would "align with that of any one company".
He said when it reports full-year earnings, UMG will detail the share of revenue it receives from both subscriptions and from advertisements on platforms such as Spotify, TikTok, YouTube, Apple (NASDAQ:AAPL) Music, Instagram and others.
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