Universal Music Group revealed its intention to cut costs and reduce headcount as part of a strategic redesign following a successful year in 2023.
Record Earnings
The renowned record label disclosed on Wednesday that it achieved a net profit of 1.26 billion euros ($1.37 billion) for the year, marking a significant increase from EUR782 million in 2022. Revenue for the last quarter of the year reached EUR3.21 billion, representing a 9% year-over-year increase.
Revenue Growth
During this period, revenue from subscriptions saw a notable 15% rise to EUR1.14 billion at constant currency, while streaming revenue also increased by 5.6% to EUR395 million. Furthermore, recorded music revenue surged to EUR2.42 billion, reflecting a 15% growth.
Annual Performance
Universal Music Group reported a total revenue of EUR11.11 billion for the entire year, showcasing an 11% increase year-over-year at constant currency. The company’s adjusted earnings before interest, taxes, depreciation, and amortization reached EUR2.37 billion in 2023, representing a 15% rise at constant currency.
Strategic Redesign and Savings
To streamline operations and enhance profitability, Universal announced a strategic organizational redesign that aims to deliver EUR250 million in annual run-rate savings by 2026. This initiative will involve a combination of headcount reduction and operational efficiencies.
The first phase of the plan is set to achieve EUR125 million in annual run-rate savings by 2025, with EUR75 million anticipated for this year. Additionally, Universal proposed a final dividend of EUR0.27 per share, bringing the total dividend for 2023 to EUR0.51 per share.