US singer-songwriter Taylor Swift arrives to attend the MTV Video Music Awards at UBS Arena in Elmont, New York, on September 11, 2024. ANGELA WEISS/AFP via Getty Images
Ahead of capital markets day, Universal Music Group (UMG) reported higher profits this year and the next few years, until 2028, with the majority coming from 'superfans' of their label artists.
To be specific, Reuters named Taylor Swift, BTS and Drake's fans, alongside subscription revenues and new partnerships. The annual core profit growth is expected to be more than 10% until 2028 with 7% annual revenue growth.
UMG's recent forecast is much better than the outlook posed for this year, the 6.1% annual revenue growth and 8.8% EBITDA growth.
For the upcoming capital markets day, which will be held at Abbey Road Studios, UMG will have a chance to address slowing subscriber and streaming growth, and their applied strategies. Yahoo Finance reported that it triggered a 30% decline in its stock around July, which came beside their second quarter revenue reports.
Now with new profit figures, UMG projects that the annual subscription will increase between 8% and 10%, a strong recovery boosted by Swift's fanbases, or their top artist for the year. In line with this, the music label will be expecting a strong free cash flow conversation rate of 70%, which indicates solid financial compared to the second quarter.
Unlike this year, 2023 saw UMG with an increased 11% adjusted EBITDA, which should total €2.4 billion ($2.67 billion) and 3.4% rise in share price. Summing it up would mean UMG's strategies following their stream and subscriber dilemma had paid off this year and will be reflected in the next few years.
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