Universal Music Group (UMG), the global leader in music entertainment, has outlined its financial and strategic goals for the next five years at its 2024 Capital Markets Day, held today in London. During the event, senior executives provided a business outlook and presented financial targets, setting the stage for the company’s growth through 2028.
UMG, listed on the Euronext stock exchange (EURONEXT: UMG), expects to continue its upward trajectory in revenue and profit, driven largely by the rise in subscription services, enhanced monetisation of superfans, and an expanding network of strategic partners. These growth drivers are forecast to significantly boost the company’s cash flow in the coming years.
Speaking at the event, UMG’s management shared specific financial targets through the fiscal year 2028, including a compound annual growth rate (CAGR) for revenue of over 7%. The company also projects a subscription revenue CAGR of between 8-10% and a double-digit growth in adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA), with a target CAGR of 10%. Additionally, UMG anticipates a free cash flow conversion rate of 60-70%, providing further evidence of its financial health and future potential.
UMG’s management emphasised the company’s ability to capitalise on new revenue streams within its growing partner ecosystem, which includes major digital streaming platforms and other emerging media partnerships. It was noted that this would result in robust free cash flow generation, helping to fund further innovation and strategic investments.
During the event, UMG executives elaborated on the company’s vision to sustain its market leadership. The management team highlighted its focus on superfans, stating that monetisation of this segment would be key to boosting long-term profitability. Superfans, defined as the most engaged consumers of music, are expected to drive future revenue growth through direct fan-artist relationships, live events, merchandise, and other exclusive content offerings.
The Capital Markets Day also provided UMG’s shareholders and investors with a glimpse into the company’s strategic goals, with senior management setting out plans to continue expanding in the digital music space while maintaining its lead in global music rights and publishing.
The event, held from 2:00 PM to 6:00 PM BST, also featured a Q&A session, allowing investors to engage directly with UMG’s senior management team. Although a livestream of the presentations was available, UMG confirmed that a replay of the event would not be offered. However, presentation materials will be accessible via the company’s Investor Relations website following the event.
UMG’s forward-looking statements indicated confidence in achieving its ambitious financial targets, but the company also acknowledged risks and uncertainties that could impact performance. These include challenges posed by piracy, shifts in consumer behaviour, regulatory changes, and the reliance on key digital service providers. UMG stressed that its growth outlook was based on reasonable assumptions but cautioned that actual results could differ due to factors beyond its control.
The music industry giant reaffirmed its commitment to delivering strong returns for shareholders, supported by its dominant position in the global music market and ongoing innovations in music-based entertainment.
The full details of UMG’s targets and performance metrics are available on the company’s Investor Relations page.
