NEW YORK, NY -- (Marketwired) -- 05/14/13 --
•Both physical and digital Recorded Music revenue grew in the quarter •Digital revenue increased 20% from the prior-year quarter •OIBDA grew 37% and OIBDA margin expanded by nearly four percentage points •Free Cash Flow of $121 million for the quarter compared to $103 million for the prior-year quarter •March 31, 2013 cash balance of $294 million
Warner Music Group Corp. today announced its fiscal second quarter financial results for the period ended March 31, 2013.
"We recorded an impressive quarter, thanks to great releases from our artists and excellent execution from our operators," said Stephen Cooper, Warner Music Group's CEO. "These are the results of a very strong release schedule, solid performance from carryover releases and continued financial discipline."
"We achieved robust growth in OIBDA and OIBDA margin," added Brian Roberts, Warner Music Group's Executive Vice President and CFO. "And we realized strong free cash flow of $121 million, closing the quarter with $294 million in cash on our balance sheet which gave us the ability to pay down $102.5 million of our existing term loan on May 9, 2013. In addition, on May 13, 2013, we issued an irrevocable notice of redemption relating to $50 million of our currently outstanding 6.000% Senior Secured Notes due 2021 and EUR17.5 million of our currently outstanding 6.250% Senior Secured Notes due 2021."
Total WMG Summary Results(dollars in millions) For the For the Three Three Months Months ended March ended March 31, 2013 31, 2012 % Change ----------- ----------- -------- (unaudited) (unaudited)Revenue $ 675 $ 623 8%Digital Revenue 281 235 20%Operating income 57 22 159%OIBDA 116 85 37%Net income (loss) attributable to Warner Music Group Corp. 2 (36) -
For the quarter, revenue grew 8.3%, or 9.6% in constant currency. Physical and digital Recorded Music revenue, Recorded Music licensing revenue and Music Publishing digital and performance revenue all increased. Digital revenue represented 41.6% of total revenue for the quarter, compared to 37.7% 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 4.9 percentage points to 8.4% from 3.5%. OIBDA margin expanded 3.6 percentage points to 17.2% from 13.6%. Improvements in OIBDA and OIBDA margin were due to the growth in revenue, the decrease in costs as a percentage of revenue and the continued transition from physical to digital sales. Operating income and OIBDA for the quarter included $1 million of severance charges (all in Recorded Music), compared to $4 million of severance charges in the prior-year quarter ($3 million in Recorded Music and $1 million in Music Publishing). (See Figures 4 and 5 below for calculations and reconciliations of OIBDA and OIBDA margin.)