Universal Music Group N.V. Netherlands

Universal Music Group N.V. Reports Financial Results for the Third Quarter and Nine Months Ended September 30, 2024

 

Investors
Erika Begun - [e-mail]  

Appendix

Non-IFRS Alternative Performance Indicators and Reconciliations

Reconciliation of Adjusted EBITDA

Three Months Ended

September 30,

%

Nine Months Ended

September 30,

%

(in millions of euros)

2024

2023

YoY

2024

2023

YoY

(unaudited)

(unaudited)

(unaudited)

(unaudited)

EBITDA

556

478

16.3 %

1,626

1,244

30.7 %

Non-cash share-based compensation expenses

65

103

(36.9 %)

236

448

(47.3 %)

Adjusted EBITDA

621

581

6.9 %

1,862

1,692

10.0 %

Definitions
In this press release, UMG presents certain financial measures when discussing UMG's performance that are not measures of financial performance or liquidity under IFRS Accounting Standards ("non-IFRS"). These non-IFRS measures (also known as alternative performance indicators) are presented because management considers them important supplemental measures of UMG's performance and believes that they are widely used in the industry in which UMG operates as a means of evaluating a company's operating performance and liquidity. UMG believes that an understanding of its sales performance, profitability, financial strength and funding requirements is enhanced by reporting the following non-IFRS measures. All non-IFRS measures should be considered in addition to, and not as a substitute for, other IFRS measures of operating and financial performance as described in this press release. In addition, it should be noted that other companies may have definitions and calculations for these non-IFRS measures that differ from those used by UMG, thereby affecting comparability.

EBITDA and EBITDA margin
UMG considers EBITDA and EBITDA margin, non-IFRS measures, to be relevant measures to assess its operating performance and the performance of its operating segments as reported in the segment data. It enables UMG to compare the performance of operating segments regardless of whether their performance is driven by the operating segment's organic growth or by acquisitions. It excludes restructuring expenses, which may impact period-to-period comparability. EBITDA margin is EBITDA divided by revenue. To calculate EBITDA, the accounting impact of the following items is excluded from the Operating Profit:

i.     amortization of intangible assets;
ii.     impairment losses on goodwill and other intangibles;
iii.     depreciation of tangible assets including right of use assets;
iv.     (gains)/losses on the sale of tangible assets, including right of use assets and intangible assets; and
v.     restructuring expenses.

Adjusted EBITDA and Adjusted EBITDA margin
The difference between EBITDA and Adjusted EBITDA consists of non-cash share-based compensation expenses and, if applicable, certain one-time items that are deemed by management to be significant and incidental to normal business activity. Adjusted EBITDA margin is Adjusted EBITDA divided by revenue. UMG considers Adjusted EBITDA and Adjusted EBITDA margin, non-IFRS measures, to be relevant measures to assess performance of its operating segments excluding items that may be incidental to normal business activity and excluding non-cash share based compensation which may impact period-to-period comparability.

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