Warner Music Group Corp. results
07 February 2017 - Press releaseWARNER MUSIC GROUP CORP. REPORTS RESULTS FOR FISCAL FIRST QUARTER ENDED DECEMBER 31, 2016
· Total revenue grew 8.0% or was up 10.6% in constant currency
· Digital revenue grew 27.6% or was up 30.2% in constant currency
· Net income was $24 million versus $28 million in the prior-year quarter
· OIBDA was $157 million versus $137 million in the prior-year quarter
NEW YORK, New York, February 7, 2017—Warner Music Group Corp. today announced its first-quarter financial results for the period ended December 31, 2016.
"Our strong momentum continues with excellent first-quarter results including 11% constant-currency revenue growth on top of 11% growth in the prior-year quarter," said Steve Cooper, Warner Music Group's CEO. "While streaming continues to drive industry growth, we are outperforming the market thanks to extraordinary music from our artists coupled with first-class execution from our operators around the world."
"We had another great quarter and I am very pleased with our revenue, OIBDA and cash flow performance," added Eric Levin, Warner Music Group's Executive Vice President and CFO. "Our formula for sustainable growth is clearly working."
Total WMG
|
Total WMG Summary Results |
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended December 31, 2016 |
|
|
For the Three Months Ended December 31, 2015 |
|
|
% Change |
|
|||
|
|
(unaudited) |
|
|
(unaudited) |
|
|
|
|
|
||
|
Revenue |
$ |
917 |
|
|
$ |
849 |
|
|
|
8 |
% |
|
Digital revenue |
|
444 |
|
|
|
348 |
|
|
|
28 |
% |
|
Operating income |
|
94 |
|
|
|
62 |
|
|
|
52 |
% |
|
Adjusted operating income(1) |
|
98 |
|
|
|
62 |
|
|
|
58 |
% |
|
OIBDA(1) |
|
157 |
|
|
|
137 |
|
|
|
15 |
% |
|
Adjusted OIBDA(1) |
|
161 |
|
|
|
137 |
|
|
|
18 |
% |
|
Net income |
|
24 |
|
|
|
28 |
|
|
|
-14 |
% |
|
Adjusted net income (1) |
|
28 |
|
|
|
28 |
|
|
|
0 |
% |
|
Net cash provided by operating activities |
|
156 |
|
|
|
61 |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See "Supplemental Disclosures Regarding Non-GAAP Financial Measures" at the end of this release for details regarding these measures. |
|
||||||||||
Revenue grew 8.0% (or 10.6% in constant currency). Growth in Recorded Music digital and artist services and expanded-rights revenue and Music Publishing digital and synchronization revenue was partially offset by declines in Recorded Music physical and licensing revenue and Music Publishing mechanical and performance revenue. Revenue grew in all regions. Digital revenue grew 27.6% (or 30.2% in constant currency), and represented 48.4% of total revenue, compared to 41.0% in the prior-year quarter.
Operating income was $94 million compared to $62 million in the prior-year quarter. OIBDA increased 14.6% to $157 million from $137 million in the prior-year quarter and OIBDA margin rose 1.0 percentage point to 17.1% from 16.1% in the prior-year quarter. The improvement in operating income and OIBDA was the result of increased revenue and the absence of legal settlement costs which impacted the prior-year quarter. The improvement in OIBDA margin was due to revenue mix. Adjusted OIBDA rose 17.5% and Adjusted OIBDA margin rose 1.5 percentage points to 17.6% from 16.1% as a result of the same factors which impacted OIBDA and OIBDA margin.
Net income was $24 million compared to $28 million in the prior-year quarter and Adjusted net income was $28 million, flat with the prior-year quarter. The decline was primarily attributable to a loss on extinguishment of debt and increased tax expense related to higher pre-tax income in the quarter and the absence of a deferred tax benefit which impacted the prior-year quarter. These factors more than offset higher other income largely due to a gain related to the company's Euro-denominated debt and increased OIBDA.
Adjusted operating income, Adjusted OIBDA and Adjusted net income exclude certain losses in the quarter related to PLG-related divestitures and the company's shared service center move. See below for calculations and reconciliations of OIBDA, Adjusted operating income, Adjusted OIBDA and Adjusted net income.