After Warner, UMG Plans IPO For 2023

The Universal Music Group's revenues passed $7.7 billion in 2019, up 14% thanks to another strong swell in streaming revenue, which was up 21.5% year over year. Recorded music revenues were up 11.6% year over year, while the publishing division's revenues rose 9.2%. That represents another mighty year for the world's biggest record company, which finished 2019 by completing the sale of 10% of UMG to Tencent in a deal that values the company at $33 billion. The agreement also includes an option for the Chinese conglomerate to purchase an additional 10 percent of UMG before January 15, 2021. Also, according to Vivendi's presentation to shareholders posted online, an initial public offering for Universal Music Group is "currently planned for early 2023 at the latest." This comes after a week of Warner Music Group announced plans for an IPO of its own. Universal's strong performance helped parent company Vivendi increase its revenues by 5.6%, to $17.2 billion, with adjusted net income up 50.5% to $1.8 billion for 2019. Vivendi also owns a French television company, as well as the Havas Group, Editis, Gameloft and others. Within recorded music, perhaps the most surprising number was that physical music sales increased by 3.1%, a marked change from years of decline in the format. Download sales continued their decline, down 23.2%, though the growth in physical counterbalance the losses in digital sales, according to Vivendi's press release. Meanwhile, the company said that on the top five major platforms - Amazon, Apple, Deezer, Spotify and YouTube, - it counted a different top artist: Taylor Swift, Billie Eilish, J Balvin, Post Malone and Daddy Yankee. Subsequently, merchandise and other revenues increased 73.7% year over year, which the company attributed to a growth in touring and direct-to-consumer sales. UMG's earnings before interest, taxes and amortization (EBITA) grew 22.3%to $1.22 million over 2018. For the fourth quarter of 2019, UMG produced $2.28 billion in revenue, up from $2.06 billion in the same period in 2018.