NEW YORK, NY -- (Marketwire) -- 02/14/13 --
•Digital revenue up 16% from prior-year quarter •OIBDA grew 13% and OIBDA margin expanded by two percentage points
Warner Music Group Corp. today announced its fiscal first quarter financial results for the period ended December 31, 2012.
"We are pleased with the start we've had to our fiscal year," said Stephen Cooper, Warner Music Group's CEO. "We continue to make progress throughout our organization, while maintaining our focus on long-term artist development, innovation and growth and carefully managing costs."
"Digital revenue, OIBDA and OIBDA margin all showed solid growth," added Brian Roberts, Warner Music Group's Executive Vice President and CFO. "Even with $132 million in cash outflows in the quarter associated with our refinancing, we had $189 million of cash on our balance sheet as of December 31, 2012."
Total WMG Summary Results(dollars in millions) For the Three For the Three Months ended Months ended December 31, December 31, 2012 2011 % Change ------------- ------------- --------- (unaudited) (unaudited)Revenue $ 769 $ 775 (1%)Digital Revenue 255 219 16%Operating income 51 39 31%OIBDA 112 99 13%Net loss attributable to Warner Music Group Corp. (80) (26) -
For the quarter, revenue declined 0.8%, but grew 0.3% in constant currency. Despite a difficult year-over-year comparison resulting from strong physical sales of Michael Bublé's "Christmas" in the prior-year quarter, the company's stable revenue results reflect solid digital revenue growth in both Recorded Music and Music Publishing, as well as growth in Recorded Music licensing revenue, offset by a decline in physical sales and non-digital Music Publishing revenue. Digital revenue represented 33.2% of total revenue for the quarter, compared to 28.3% in the prior-year quarter. The growth in digital revenue reflects growth in subscription and streaming revenue as well as download revenue.
Operating margin expanded 1.6 percentage points to 6.6% from 5.0%. OIBDA margin expanded 1.8 percentage points to 14.6% from 12.8%. Improvements in OIBDA and OIBDA margin reflect lower artist and repertoire costs, severance charges, variable compensation expense and professional fees incurred in connection with the sale of EMI and subsequent regulatory proceedings. Operating income and OIBDA for the quarter included $5 million of severance charges (all in Recorded Music), compared to $7 million of severance charges in the prior-year quarter ($5 million in Recorded Music and $2 million in Corporate). (See Figures 4 and 5 below for calculations and reconciliations of OIBDA and OIBDA margin.)