Believe: Significant profitability improvement and solid organic
growth despite currency impacts in H1’23
Significant profitability
improvement and solid organic growth despite currency impacts in
H1’23 Paris, France – August 2, 2023
H1 2023 Key Figures1
- Revenues of €415.4 million in H1’23, up +17.9% at current rate
with an organic growth of +17.5%.
- Digital organic revenue growth up +18.0% in H1’23 reflecting a
lower growth rate in Q2’23 (+14.0%) due to currency headwinds
embedded in revenues received from digital partners and moderate
ad-supported monetization. Restated from these currency impacts,
Q2’23 digital growth would have amounted to c. +20.5%.
- Strong increase in Adjusted EBITDA at €24.2 million or a margin
of 5.8%, up +250bps YoY reflecting efficiency, control on
investments and operating leverage. Positive EBIT of €1.0
million.
- Attractive opportunities driving strong commercial activity,
leading to a higher level of advances paid to labels and artists
and negative free cash flow of €32.9 million in H1’23.
- Net cash at the end of June’23 was €210.2 million, providing
solid firepower for advances and acquisitions.
H1 2023
Highlights
- Strong performance of the roster of artists and labels
reflecting the quality of service in digital. Digital market share
gains at the same level in Q1’23 and in Q2’23.
- Attractive commercial opportunities to sign and renew contracts
at better conditions for the Group (margin, duration, …) with
several Tier 1 labels and top artists.
- Confirmed leadership and recognized impact on local music
industries, notably in Southeast Asia where the Group celebrated a
successful first decade.
- Acquisition of the publishing platform Sentric in March’23,
with plans to roll out first publishing solutions for selected
songwriters and publishers before the end of the year.
- Embracing Artificial Intelligence across the entire business
with a responsible approach to foster opportunities.
2023 Outlook
- For H2’23, Believe maintains the main assumptions underlying
its growth scenario presented last March, e.g. continued increase
in paid streaming, continued market share gains and challenging
ad-funded streaming monetization. Given current currency
translation impacts embedded in the revenues from digital partners
(with c. -9% expected now for H2’23), Believe is cautious regarding
its organic growth. The Group will pursue its focus on improving
efficiency, which will positively impact profitability for the full
year. As a result, assumptions for FY’23 are now as follows:
- Organic growth of +14% (vs. +18% previously anticipated).
Restated from currency impacts, organic growth would be c.
+19.5%.
- Sustained progress in Adjusted EBITDA margin: c. 5.5% (vs. 5%
previously anticipated)
- The Group’s reinforced appeal is generating a higher level of
attractive commercial opportunities and therefore of advances. In
H2’23, the Group will continue to privilege financing advances over
acquisitions given their very attractive returns and support to
future revenue growth. Consequently, Believe now anticipates a
negative free cash flow for FY’23, with a positive free cash flow
in H2’23.
Denis Ladegaillerie, Founder and
CEO said: “The start of the year has been marked by
another strong performance of the roster thanks to our unique model
and digital expertise despite currency headwinds and lower
ad-supported monetization. This is a testament to the quality of
service, which is at the core of our positioning in the industry.
We recorded a significant level of signings as well as renewals by
Labels and Artists on longer term and improved conditions. We have
been focused on improving profitability and efficiency across the
organization. We have also been in a great position to seize
commercial opportunities and to invest in advances against better
conditions to fuel long-term growth. We are heavily engaged in
several innovative AI and Generative AI exploratory partnership
discussions in H1 and strongly believe that AI and Generative AI
will have a strong positive impact for the music industry and
particularly for Believe, as a digital end-to-end large-scale music
and technology driven business.”
H1 2023 KEY FIGURES
in
€million |
H1 2022 |
H1 2023 |
Change YoY |
Organic change |
Group Revenues |
352.2 |
415.4 |
+17.9% |
+17.5% |
Premium Solutions |
329.2 |
388.5 |
+18.0% |
+18.1% |
Automated Solutions |
23.0 |
26.9 |
+17.1% |
+9.2% |
Adjusted EBITDA pre-Central
Platform |
47.5 |
61.7 |
+30.0% |
|
in % of revenues |
13.5% |
14.9% |
140bps |
|
Premium Solutions |
43.2 |
57.2 |
+32.4% |
|
Automated Solutions |
4.3 |
4.5 |
+5.0% |
|
Central Platform |
(35.7) |
(37.5) |
+4.9% |
|
Group's Adjusted
EBITDA |
11.7 |
24.2 |
+106.3% |
|
in % of revenues |
3.3% |
5.8% |
+250bps |
|
Operating income / loss (EBIT) |
(11.3) |
1.0 |
|
|
Net cash from operating activities |
21.4 |
(27.2) |
|
|
Free cash flow |
10.8 |
(32.9) |
|
|
Net cash and cash
equivalents |
263.4 |
210.2 |
|
|
H1 2023 HIGHLIGHTS
Strong performance of the roster and very dynamic
commercial activity despite Q2’23 headwind
After a strong start to the year, Believe
further grew its revenues in Q2’23 reflecting a solid performance
of the existing roster of artists and labels. Over the course of
H1’23, the Group remained at the forefront of audience development,
fostering digital monetization in an ever-growing number of digital
music genres. Believe gained significant market share throughout
the semester, notably in Premium Solutions, and brought back solid
value to artists and labels. Digital monetization was, however,
affected by very moderate growth in ad-funded streaming
monetization and a forex impact related to the euro exchange rate
appreciation versus the dollar and several local currencies. The
currency translation effect directly embedded in royalties paid out
by DSPs2, which was positive until 2022-year end enhancing last
year organic growth, became negative in Q1’23 and even more in
Q2’23. The currency translation had a negative impact estimated at
-6.5% on Q2’23 organic growth driven by the strengthening of the
euro, which accelerated during the quarter.
Commercial dynamism continued to be resilient
throughout H1’23. Believe’s appeal to artists and labels further
increased thanks to a strong track record and recognized quality of
service, resulting in new signings of artists and labels. The Group
also broadened its relationships with several artists and labels,
under better margin conditions and with longer terms than
previously expected. The level of advances was therefore elevated
compared to the end of December’22 and even H1’21. As an example of
the main advances paid in the period, Believe signed one of the
largest independent label in China and one of the top 10 UK
independent Electro & Dance label on a 10-year deal. Believe
also renewed by anticipation the second largest label in Turkey
until 2030, and one of the largest labels in India until 2033. The
Group privileged providing financing through advances over
acquisitions notably in Q2’23 as few external opportunities provide
equivalent returns (the historical average return on investment of
advances paid to labels served by Believe amounted to 31%3) and
growth prospects. Believe will pursue this cash allocation policy
in H2’23, leveraging data from streaming and social media along
with superior service levels to foster development trajectory and
potential return.
Celebrating first decade in Southeast
AsiaBelieve celebrated in June’23 10 years of empowering
music in Southeast Asia, where the Group played a pivotal role in
shaping the music landscape since 2013. Through royalty payments
and advances, Believe returned a significant amount of revenues to
Southeast Asian artists and labels, further fueling the growth of a
sustainable local music ecosystem by fostering new artist
development, funding the launch of new labels, exploring new genres
of music and addressing new audiences. Overall, the Southeast
Asian roster generated more than 634 billion of streams and views
over the past ten years, making Believe the leading music company
in the region.
Southeast Asia is at the very beginning of its
digital growth with a growing penetration of paid music
subscriptions at only 1.8% of the population. Based on industry
experts and company estimates, paid streaming users are expected to
grow from 15 million today to 67 million in 2030. Believe holds
leading positions in the largest music markets of the region such
as Indonesia, the Philippines and Thailand, but also in booming
markets like Malaysia, Vietnam, and Singapore. With its full
services’ offer deployed in most of those territories, Believe’s
expert teams leverage the Group’s strong network of digital music
partners and innovative partnerships with DSPs to successfully
accompany an ever-growing roster of local labels and artists in
building their careers and expanding their audiences.
Confirmed leadership and recognized
quality of serviceIn France, Believe confirmed its
leadership in new releases and its success in developing artists
durably. Believe ranked #2 on local acts in H1’23, with a 27%
market share for the top albums locally with 40 of the 149 local
albums from the Top 200 (physical + digital according to SNEP
data). This is a testament to the focused strategy on local acts
and the digital expertise of the Group. Believe had 4 best-selling
artists in the Top 10 in H1’23, proving its unique capacity to
develop several artists in several genres at the very top of the
market.
Additionally, Believe won several awards during
the semester. As an example, in India, where the Group has built a
leading position, artists services won three awards at the 2023
radioandmusic.com CLEF Music Awards. In the UK, where the
Group emerges as an attractive alternative to large incumbent music
companies, Believe won Best Label/Artist Services at the Music Week
Awards 2023, which is a true testament to the strength and its
quality of service in digital. The Music Week Awards are the UK’s
only music awards that recognize labels, publishing, live, retail,
A&R, radio, marketing and PR – all segments of this
industry.
Embracing Artificial Intelligence with a
responsible approach to foster opportunities Generative AI
and AI will impact in a positive manner Believe’s relationships
with artists and labels, the way the Group partners with digital
music services and how it manages its end-to-end digital
operations. Generative AI will empower every artist to create
greater high-quality music while AI-based marketing will give every
artist a chance to better target audience; as a result, the Group
expects continued fragmentation to play to Believe strengths. AI
and Generative AI will allow for greater efficiency gains and
opportunities to raise long term margins leveraging Believe’s
Central Platform solutions through accelerated automation. During
H1’23, the Group further developed its AI-enabled discovery
solutions, explored partnerships conversations with several leading
digital service providers around generative AI and explored
investments on core internal AI and Generative AI use cases.
Aligned with its driving forces of expertise, respect, fairness and
transparency, which are the foundation of its long-term trusted
relationships with artists and labels, the Group assesses each AI
opportunity under the following Responsibility principles: consent,
control, compensation and transparency. Key findings of the recent
survey conducted by its subsidiary TuneCore of nearly 1,600
independent artists highlighted the need for a responsible approach
to unlock AI and gen AI opportunities. Believe also launched
in June a first public experiment through TuneCore with its
partnership with Grimes and CreateSafe, which consists in using AI
to facilitate collaborations with other artists and thus enlarge
Grimes’ potential for collaboration.
Another brick to build trusting
relationships in the industry to further Shape Music for
Good
Believe and TuneCore joined as a founding member
of the Music Fights Fraud alliance, a global task force aimed at
eradicating streaming fraud. Supported by key industry associations
including the RIAA (Recording Industry Association of America), the
alliance represents for the first time all corners of the music
industry aligned as a united front to combat fraud in music
streaming. The founding members of Music Fights Fraud are all
strong advocates for artists’ rights. Each participating company
has instituted internal measures to contend with fraud and, by
launching this task force, ultimately creating a healthier music
industry where genuine content creators are able to thrive. This is
fully aligned with Believe’s commitment to fostering a fairer,
balanced, and more diverse artist and label market.
H1 2023 FINANCIALS
Organic revenue growth of +17.5% in
H1’23 reflecting a strong level of activity affected by currency
headwinds in Q2’23H1'23 revenues grew by +17.9% to reach
€415.4 million, reflecting an organic growth of +17.5%. The change
in perimeter driven by the integration of Sentric amounted to €7.5
million of revenues (c. 2% to revenue growth in H1’23), but this
contribution was compensated by a negative forex impact related to
the depreciation of the Turkish lira. Sentric revenues have been
accounted for in non-digital sales, which were therefore up
strongly in H1’23 (+32.9%), including +11.0% of organic growth. The
ongoing decrease in physical sales was fully offset by a strong
increase at the start of the semester in merchandising, branding
and other activities.
Digital sales were up +18.0% organically in
H1’23, reflecting a lower quarterly organic growth rate in Q2’23
(+14.0%) than in Q1’23 (+22.6% in Q1’23). Paid subscription
monetization remained strong throughout the quarter, while
ad-funded monetization slightly improved, but kept growing single
digit at the main stores, including in June despite an easier
comparison base (as a reminder the growth rate in ad-funded
revenues started decelerating in June’22). This sustained level of
activity was, however, affected by negative forex impacts due to
the rapid strengthening of the euro during the period. The currency
translation effect, directly embedded in the royalties that Believe
received from its digital partners, went negative in Q1’23. The
dragging effect was limited in Q1’23 (c. -1.0%) but represented a
headwind to organic growth estimated at around -6.5% in Q2’23
(-3.6% for H1’23) significantly above Group’s anticipation and
mainly impacting Premium Solutions’ organic growth. Restated from
this currency impact, organic growth of digital sales would have
been around +20.5% in Q2’23 and c. +21.6% in H1’23. The Group
continued to increase its digital market share at the same pace
throughout H1’23 with stable gains quarter-over-quarter, enabling
Premium Solutions to further strengthen their positions notably in
Asia and Europe.
Premium Solutions driving organic
growth, Automated Solutions revenue growth enhanced by
Sentric Digital Music Sales4 (DMS) amounted to €584.4
million in H1’23, reflecting double digit growth in Premium
Solutions offset by lower DMS at TuneCore.
In Premium Solutions, revenues amounted to
€388.5 million, up c. +18% (at current and organic growth rate),
resulting from a strong organic growth in Q1’23 (+23.8%) and a
solid Q2’23 (+13.2%). The positive perimeter effect related to
Sentric integration was fully offset by a negative forex impact
related to the Turkish lira, as mentioned above. Digital organic
monetization was further affected by negative currency impacts as
explained above, while presenting the same trends throughout the
semester (resilient paid streaming, additional market share gains
and lower growth in ad-funded monetization).
Automated Solutions revenues amounted to €26.9
million up by +17.1% in H1’23, reflecting +11.2% in Q1’23 and
+22.9% in Q2’23. Non-digital sales recorded a significant increase
driven by the integration of Sentric self-served activities, which
added +8.4% of revenue growth in H1’23 (+16.6% in Q2’23, first
quarter of integration). Digital revenues grew single digit in
Q2’23 after being slightly above +10% in Q1’23. Organic growth
amounted to +8.6% in Q2’23, but revenue also embedded negative
forex related to the weakening of the dollar versus the euro. This
relative slowdown was expected as TuneCore increased its exposure
to ad-funded monetization with the introduction of the Discovery
Plan in November’21, which reported a strong traction in H1’22 and
notably in Q2’22. The new Unlimited Pricing plan, introduced in
June’22 continues to have a positive effect on new customers
acquisition but with a lower ARPU (average revenue per user),
affecting the revenue growth rate.
Strong growth in Asia-Pacific / Africa,
Americas and Europe
in €
million |
H1 2022 |
H1 2023 |
Change YoY |
Europe (excl. France &
Germany) |
98.4 |
121.9 |
+23.9% |
APAC / Africa |
90.8 |
112.2 |
+23.6% |
Americas |
49.8 |
60.6 |
+21.7% |
France |
59.4 |
66.5 |
+12.0% |
Germany |
53.9 |
54.1 |
+0.5% |
Total |
352.2 |
415.4 |
+17.9% |
Revenue growth amounted to +23.9% in
Europe (excluding France and Germany) and
represented 29.3% of total revenues in H1’23. The Group remained on
a strong growth trajectory in Southern Europe and Eastern Europe.
The UK was also very dynamic and positively impacted by the
integration of Sentric in Q2’23, while the level of activity
remained sustained in Italy. Revenue growth in Turkey was affected
by the depreciation of the Turkish lira versus the euro, while
other markets continued to progress.
In H1’23, revenue growth reached +23.6%
in Asia Pacific and Africa, which represented
27.0% of Group revenues. The market environment remained dynamic
throughout the semester, but ad-funded streaming revenues remained
depressed. Digital monetization was also affected by negative
currency headwinds directly embedded in the royalties paid out by
digital partners in Q2’23, affecting the overall performance.
Consequently, India and Southeast Asia recorded lower growth in Q2
versus Q1, while the level of activity in Japan and Greater China
remained very strong. Americas grew by +21.7% and
represented 14.6% of Group revenues. The level of activity in
Brazil and Mexico was strong throughout the semester. TuneCore
remained on its positive trajectory, but the weakening of the
dollar and less favorable comparison basis dragged on its overall
performance.
In France, revenues increased
by +12.0% in H1’23 and represented 16.0% of Group revenues. The
Group confirmed its position as a key player in France and its
capacity to better and further develop artists and labels at any
stage of their career. Digital revenues returned to double digit
growth in Q2’23 after growing single digit in Q1’23 and Believe
succeeded in growing its digital market share. Non-digital sales
were however lower than in H1’22, which had been boosted by the
massive concert in Marseille of top artist Jul in June’22.
In Germany, revenues increased
by +0.5% in H1’23 and represented 13.0% of Group revenues. Digital
sales were less dynamic at the end of the quarter, but the Group
had successes in developing artists in digital genres. The recent
joint venture with Madizin started its commercial roll-out with
promising signings. Revenues remained, however, affected by the
exit from contracts that were too heavy in physical
sales.
Strong increase in Adjusted EBITDA
margin illustrating control on investments and operating
leverage
Believe adapted its investment pace to the
growth level and focused on further improving efficiency in H1’23.
The Group continued investing in local teams to fuel its future
revenue growth, adding sourcing and servicing capabilities in its
key markets, but at a slower pace to manage investments. The focus
on efficiency had positive outcomes, notably at the Central
Platform level.
Adjusted EBITDA pre-Central Platform
costs5 grew by +30.0% in H1’23 to reach €61.7 million
(versus €47.5 million in H1’22). Believe pursued its investment
strategy in H1’23 to support its profitable growth plan. The Group
deployed additional sourcing and servicing capabilities in Premium
Solutions, while introducing new features and functionalities on
the TuneCore platform. Investments were, in parallel, closely
monitored and adapted to the level of growth in each market. As a
result, the Adjusted EBITDA margin pre-Central Platform reached
14.9%, an increase of 140bps compared with H1’22. This margin
included growth investments in both segments, which represented
4.4% of total revenues in H1’23 (vs 5.4% in H1’22).
Central Platform costs (€37.5
million in H1’23 versus €35.7 million in H1’22) increased by +4.9%
year-over-year, but further decreased over revenue representing
9.0% in H1’23 compared with 10.1% in H1’22. Efficiency plans
enabled the Group to optimize its investments in the Central
Platform and some secondary investment projects were delayed.
Believe continued deploying more spending in data analysis and
digital marketing, and further developed AI-backed tools for
discovery and audience development solutions. The planned decline
in Central Platform costs over revenue provided solid operating
leverage in H1’23.
As for previous years, some Central Platform
investments are capitalized under IFRS accounting principles. In
H1’23, total investment (P&L and capitalized costs) in the
Central Platform amounted to €45.3 million. Total investment went
up +3.8% year-over-year and represented 10.9% of total Group
revenues compared with 12.4% in H1’22.
The Group’s Adjusted EBITDA
more than doubled in H1’23 to reach €24.2 million compared with
€11.7 million in H1’22. Adjusted EBITDA margin stood at 5.8% in
H1’23 compared with 3.3% in H1’22 thanks to the Adjusted EBITDA
margin increase at the segment level and better amortization of
Central Platform and was consequently at the mid-term objective
level (Group adjusted EBITDA margin of 5% to 7% by 2025).
Positive operating income
(EBIT) Depreciation & Amortization amounted to €21.2
million in H1’23, roughly stable compared with H1’22 (€20.2
million), as the acquisition strategy was put on hold last year and
resumed only in Q1’23. Acquisitions have been the main driver for
the past D&A increases reported by the Group. The increase in
Adjusted EBITDA combined with D&A stability resulted in a
positive EBIT of €1.0 million.
Free cash flow reflecting commercial
dynamism and solid cash level at the end of June’23
Working capital variation was negative by €42.9 million, reflecting
higher artist and label advances that grew by €75.7 million
compared with the end of December’22. The growing attractiveness of
Believe toward Tier 1 labels and top artists and in a wider variety
of music genres enabled the Group to sign longer-term contracts, to
deepen its relationships with existing roster and to further add
large-sized newcomers. Those signings support greater revenue
generation, while economic terms of the advances improved,
therefore increasing potential returns. Current activity extracted
€32.8 million of cash from working capital in H1’23, partially
compensating for the elevated level of advances.
Free cash flow was negative by €32.9 million in
H1’23, reflecting negative working capital variation. Capex
amounted to €18.4 million and represented 4.4% of Group revenue,
compared with €11.6 million or 3.3% of Group revenue in H1’22, with
stable capitalized costs.
Cash on the balance sheet amounted to €210.2
million at the end of June’23 compared with €263.4 million at the
end of June’22 and €303.3 million at the end of December’22, mostly
reflecting the acquisition of Sentric and higher artist and label
advances.
In the current environment, which remains fluid
and challenging, the Group will continue to manage its cash and is
likely to further allocate cash to advances over acquisitions in
the next few months, opting for opportunities with greater return
(historical average ROI of advances paid to labels: 31%) and
revenue growth prospects.
FY 2023 OUTLOOK AND MID-TERM OBJECTIVES
In H2’23, the Group will continue to drive a
profitable growth trajectory towards its long-term profitability
objective of 15% Adjusted EBITDA margin. The Group is organized to
deliver such profitable growth in a degraded economic environment
impacting ad-funded streaming activities and currency rates.
With regards to H1’23 performance and current
environment, the Group revised its initial growth scenario
presented in March’23 at FY earnings presentation, which now
includes a less favorable currency environment in H2’23 than
initially anticipated, which will impact digital monetization (c.
-9% currency impact embedded in the revenues from digital partners
estimated for H2’23). The growth scenario also implies further
increase and deployment of paid streaming, additional market share
gains, and no recovery in ad-funded streaming monetization.
Consequently, Believe revised its expectations of FY’23 organic
growth and now anticipates around +14% for the Group (versus +18%
initially expected). Restated from those currency impacts, organic
growth would represent c. +19.5%. This would represent an organic
CAGR of c. +22.6% for the period 2021-2023.
Believe will keep investing in the Central
Platform in H2’23 at the same controlled level as in H1’23, further
driving improved amortization of associated costs. The Group
adapted its investment pace to the growth level with success, while
improving efficiency across the organization in H1’23 and intends
to pursue those actions in H2’23. As a result, Believe revised its
expectations of Adjusted EBITDA margin and now anticipates c. 5.5%
in FY’23 (versus 5.0% initially anticipated).
In H1’23, the Group’s track record and quality
of service attracted an increased number of established and top
artists and Tier 1 labels, leading the Group to allocate more cash
to advances given their attractive returns and strong support to
future long-term growth. This trend is likely to continue in H2’23,
as the Group is in a good position to sign longer-term contracts
offering attractive returns in a wider variety of music genres and
in more geographies. Given the level of economic uncertainty, which
remains high, the Group is actively managing its investments
policy, between new hirings, new advances and M&A. After the
acquisition of Sentric in March’23, which is expected to add around
3% of revenue growth on a full year basis with a neutral impact on
Adjusted EBITDA margin after accounting for integration costs, the
Group will continue identifying interesting acquisition targets but
will remain highly selective in seizing opportunities.
Believe now anticipates a higher level of
advances during the year, while working capital extraction will be
negatively impacted by the currency translation effects that are
affecting digital monetization. In this context, the Group is now
anticipating a negative free cash flow for FY’23 nevertheless
showing improvement versus H1’23.
Notwithstanding the current environment, the
Group is on track to deliver on its medium-term trajectory
communicated at the IPO, including a 2021-2025 CAGR of between +22%
and +25% and a Group Adjusted EBITDA of 5%-7% by 2025, implying a
segment Adjusted EBITDA margin of 15%-16% (which is a "high growth
period" margin, as the revenue growth is partially reinvested).
Believe reiterates its confidence in its ability to achieve its
long-term target of at least 15% Group Adjusted EBITDA margin.
The interim earnings report is available on our investor
website: Investors | Believe
Webcast:
We will host a webcast
https://edge.media-server.com/mmc/p/w2fuyhpt and conference call
starting at 6:30 p.m. CET (5:30 p.m. GMT) today. Denis
Ladegaillerie, our Founder and CEO, and Xavier Dumont, our Chief
Financial and Strategy Officer, will present H1’23 earnings and
answer questions addressed in the call or submitted through the
webcast. All information related to the half-year results are
available on our investor website.
Conference call details:France, Paris: +33
(0) 1 70 91 87 04United Kingdom, London: +44 1 212 818
004United States, New York: +1 718 705 87 96Conference
ID: 88365
Investor
Relations & Financial Media Emilie
MEGEL investors@believe.comTel: +33 1 53 09 33
91 Cell: + 33 6 07 09 98
60 |
Press
Relations Manon
JESSUAmanon.jessua@believe.comAnass Bendafi :
+33 6 80 42 51 84 anass.bendafi@agenceproches.com |
Financial agenda Believe (Ticker: BLV, ISIN:
FR0014003FE9):24 October 2023: Q3 2023 revenues - Press
release to be issued after market close.
13 March 2024: FY 2023 earnings – Press release to be issued
after market close.
24 April 2024: Q1 2024 revenue – Press release to be issued
after market close.
1st August 2024: H1 2024 earnings – Press release to be issued
after market close.
23 October 2024: Q3 2024 revenue – Press release to be issued
after market close.
Appendix
1. Use of Alternative Performance
Indicators
To supplement our financial information
presented in accordance with IFRS, we use the following non-IFRS
financial measures:
- DMS is the revenue generated from digital store partners and
social media platforms before royalty payment to artists and
labels.
- Organic growth accounts for revenue growth at a like-for-like
perimeter and at constant exchange rate.
- Adjusted EBITDA is calculated based on operating income (loss)
before (i) depreciation, amortization and impairment, (ii)
share-based payments (IFRS 2) including social security
contributions and employer contributions (iii) other operating
income and expense; and (iv) depreciation of assets identified at
the acquisition date net of deferred taxes from the share of net
income (loss) of equity-accounted companies.
- Free cash flow corresponds to net cash flows from operating
activities, after taking into account acquisitions and disposals of
intangible assets and property, plant and equipment, and restated
for (i) costs related to acquisitions, (ii) acquisition costs of a
group of assets, that does not meet the definition of a business
combination and (iii) advances related to distribution contracts
intended specifically for the acquisition of assets (acquisition of
companies, catalogs, etc).
2. Quarterly revenue by division
in € million |
Q1 2022 |
Q1 2023 |
Change |
Organic at constant rate |
Premium solutions |
151.1 |
186.0 |
+23.0% |
+23.8% |
Automated solutions |
11.4 |
12.7 |
+11.2% |
+9.8% |
Total revenues |
162.5 |
198.6 |
+22.2% |
+22.8% |
in € million |
Q2 2022 |
Q2 2023 |
Change |
Organic at constant rate |
Premium solutions |
178.1 |
202.5 |
+13.7% |
+13.2% |
Automated solutions |
11.6 |
14.3 |
+22.9% |
+8.6% |
Total revenues |
189.7 |
216.8 |
+14.3% |
+12.9% |
3. Q2 revenue by geography
in € million |
Q2 2022 |
Q2 2023 |
Change YoY |
Europe (excl. France &
Germany) |
53.4 |
67.5 |
+26.3% |
Americas |
26.3 |
31.2 |
+18.6% |
France |
31.0 |
34.4 |
+11.0% |
APAC / Africa |
50.7 |
56.2 |
+10.8% |
Germany |
28.2 |
27.5 |
-2.5% |
Total |
189.7 |
216.8 |
+14.3% |
4. Revenue breakdown between digital and non-digital
sales (a reported)
|
Q1 2022 |
Q2 2022 |
H1 2022 |
Q1 2023 |
Q2 2023 |
H1 2023 |
Digital sales |
93% |
92% |
92% |
93% |
90% |
91% |
Non-digital sales |
7% |
8% |
8% |
7% |
10% |
9% |
5. Digital and non-digital sales growth (as
reported)
|
Q1 2023 |
Q2 2023 |
H1 2023 |
Digital sales |
+ 22.2% |
+ 11.9% |
+ 16.7% |
Non-digital sales |
+ 21.8% |
+ 42.1% |
+ 32.9% |
6. Digital and non-digital sales organic
growth
|
Q1 2023 |
Q2 2023 |
H1 2023 |
Digital sales |
+ 22.6% |
+ 14.0% |
+ 18.0% |
Non-digital sales |
+ 24.9% |
- 0.5% |
+ 11.0% |
About BelieveBelieve is one of
the world’s leading digital music companies. Believe’s mission is
to develop independent artists and labels in the digital world by
providing them the solutions they need to grow their audience at
each stage of their career and development. Believe’s passionate
team of digital music experts around the world leverages the
Group’s global technology platform to advise artists and labels,
distribute and promote their music. Its 1,720 employees in more
than 50 countries aim to support independent artists and labels
with a unique digital expertise, respect, fairness and
transparency. Believe offers its various solutions through a
portfolio of brands including Believe, TuneCore, Nuclear Blast,
Naïve, Groove Attack, AllPoints, Ishtar and Byond. Believe is
listed on compartment B of the regulated market of Euronext Paris
(Ticker: BLV, ISIN: FR0014003FE9). www.believe.com
Forward Looking statement This
press release contains forward-looking statements regarding the
prospects and growth strategies of Believe and its subsidiaries
(the “Group”). These statements include statements relating to the
Group’s intentions, strategies, growth prospects, and trends in its
results of operations, financial situation and liquidity. Although
such statements are based on data, assumptions and estimates that
the Group considers reasonable, they are subject to numerous risks
and uncertainties and actual results could differ from those
anticipated in such statements due to a variety of factors,
including those discussed in the Group’s filings with the French
Autorité des Marchés Financiers (AMF) which are available on the
website of Believe (www.believe.com). Prospective information
contained in this press release is given only as of the date
hereof. Other than as required by law, the Group expressly
disclaims any obligation to update its forward-looking statements
in light of new information or future developments. Some of the
financial information contained in this press release is not IFRS
(International Financial Reporting Standards) accounting
measures.
1 Alternative performance indicators are presented, defined and
reconciled with IFRS in appendices 1 of this press release (page
9).
2 Subscriptions or Advertising collected by Digital Service
Providers are in local currencies, while royalties reversed to
Believe are paid in euros. The Group therefore captures currency
variations even in its organic revenue.
3 The ROI has been calculated based on cumulated advances paid
to external labels from 2017 to 2022.
4. Digital Music Sales or DMS is a non IFRS measure defined in
appendix 1.
5. The Adjusted EBITDA pre-central platform costs consists in
the Adjusted EBITDA of the Automated and Premium Solutions segments
before considering central platform costs. Central platform costs
account for the costs that cannot be allocated by segment.
- 2023-08-02-Believe-H1 2023 earnings-ENG
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