Q1’24 adjusted organic growth of +16,1%, with digital revenue growth in line with Q4’23
Confirmed outlook with organic growth expected to accelerate in the next quarters
Q1 2024 Key Figures
- Revenue of €230.3 million in Q1’24, up +15.9% at current rate, with organic growth of +12.5% including currency headwinds embedded in Premium solutions digital sales. Quarterly adjusted organic growth1 amounted to +16.1% in Q1’24.
- Digital sales grew at par with Q4’23 on an organic basis, while non-digital sales were flat during the quarter after strong double-digit growth at the end of last year due to strong live and branding activities.
Q1 2024 Highlights
- Healthy paid streaming growth continued, uplifted by several DSPs’ price increases. These positive trends were however mitigated by persistent currency headwinds directly embedded in digital monetization.
- Strong revenue growth in
France andEurope driven by success in developing local acts. - Performance in
Asia reflecting the absence of ad-funded streaming recovery, value decrease of several Southeast Asian markets and a soft performance inIndia at par with the local market. - Focus on artist development through the launch of new features and development of new solutions.
- Reviewed organization to further increase strategic and execution capabilities and prepare for the next phase of expansion.
2024 Outlook
- Organic growth was in line with expectations in Q1’24 and is anticipated to accelerate in Q2’24. Believe confirms its growth scenario for FY’24: increase in paid streaming driven by volume and price, progressive recovery in ad-funded streaming and additional market share gains. Believe assumes limited currency headwinds embedded in the market (c. -2% expected for FY’24). Believe will further invest in its development during the year, while pursuing efficiency gains. Based on those assumptions, Believe expects:
- Organic growth of c. +18%. Adjusted organic growth for embedded market FX of c. +20%.
- Further progress in Adjusted EBITDA margin: c. 6.5%.
- The Group’s reinforced appeal is generating a higher level of attractive commercial opportunities and therefore of advances. The Group anticipates that artists and labels’ advances will increase in FY’24 in line with revenue, further building its long-term revenue base. Overall, advances will continue impacting free cash flow generation and the Group therefore anticipates free cash flow to be slightly positive in FY’24.
Q1 2024 Revenue
in € million | Q1 2023 | Q1 2024 | Change YoY | Organic change2 |
Group Revenues | 198.6 | 230.3 | +15.9% | +12.5% |
Premium Solutions | 186.0 | 215.3 | +15.8% | +12.6% |
Automated Solutions | 12.7 | 14.9 | +18.2% | +10.8% |
Q1 2024 HIGHLIGHTS
Organic revenue growth adjusted from currency headwinds is up c. +16.1%
In Q1’24, Believe recorded as anticipated a lower organic growth than in Q4’23, which benefited from a very strong level of live and branding activities. Revenue was still penalized by negative embedded market FX. As previously described, the Group’s organic growth captures currency translation effects directly embedded in the royalties that Believe receives from its digital partners.
Paid streaming trends were solid and uplifted by price increases at several large digital platforms. Ad-funded streaming monetization presented better trends in
Q1’24 revenue grew by +15.9% to reach €230.3 million, reflecting organic growth of +12.5%, a positive perimeter effect related to the acquisition of
Pursuing investment locally to support artist development and increase artists’ commercial value at each stage of their career
In
In addition, Believe demonstrated its ability to develop innovative solutions to promote the development of artists and their engagement with their fans, as illustrated by the launch of ‘The Girliverse’ in the
With sustained growth in the past few years, Believe is now positioned in
New partnership to support the development of self-releasing artists
At the end of Q1’24, TuneCore successfully launched an integrated partnership with Presonus®’ digital audio workstation Studio One®. The partnership will allow Studio One® users to send their music to stores and streaming platforms as soon as they finish the recording process and will drastically enhance the user experience by simplifying the distribution process for self-releasing artists.
Reviewed organization to prepare the next phase of expansion
Believe shaped a new organization to improve its strategic and execution capabilities with two notable changes: the introduction of a new role of Global head of music and an increased focus on regionalization.
The Global Head of Music is responsible for designing Believe’s global music strategy, overseeing the acceleration in Artist Services which has been deployed in over 14 countries in the past few years and the full deployment of a value-based strategy for Label & Artist Solutions. This will be key to further growing the commercial value of artists and labels at any stage of their career.
The Group also implemented a regional organization for the local teams. On the back of his success in developing Believe in
Q1 2024 FINANCIALS
Solid trends in Premium and Automated Solutions despite persistent currency headwinds
In Premium Solutions, revenues amounted to €215.3 million, up +15.8% at current rate. Believe faced persistent currency headwinds, which affected digital monetization of the segment. Organic growth adjusted for estimated embedded market FX amounted to +16.5%, resulting from organic growth amounting to +12.6%. Revenue included a perimeter effect of +4.8% driven by the acquisition of
Automated Solutions revenues amounted to €14.9 million, up +18.2% year-over-year reflecting organic growth of +10.8% and a perimeter effect linked to
Strong growth in
in € million | Q1 2023 | Q1 2024 | Change YoY |
54.4 | 76.8 | +41.0% | |
32.1 | 38.6 | +20.0% | |
29.4 | 32.7 | +11.2% | |
56.1 | 56.3 | +0.5% | |
26.6 | 26.0 | -2.5% | |
Total | 198.6 | 230.3 | +15.9% |
Revenue growth amounted to +41.0% in
In
In Q1’24, revenue growth was up slightly in
In
FY 2024 OUTLOOK AND MID-TERM OBJECTIVES
In FY’24, the Group will continue to drive a profitable growth trajectory towards its long-term profitability objective of 15% Adjusted EBITDA margin.
As anticipated, Q1’24 organic growth was below Q4’23 rate, which benefited from a very strong level of live and branding activities while digital revenue growth in Q1’24 was on par with Q4’23. The growth scenario for the rest of the year implies solid paid streaming trends, which will combine new subscribers and price increases at some DSPs and a progressive recovery of ad-funded streaming. Ad-funded streaming is not anticipated to recover in emerging markets before the second half of the year. The growth scenario also implies additional market share gains across regions, and notably in countries where the Group is not yet ranking in the Top 3 for local acts. Believe also anticipates an improved currency environment for digital monetization. The Group assumes that the negative embedded market forex effect will reduce over time and amount to -2% in FY’24, compared with -5.1% in FY’23. Consequently, Believe expects Adjusted Organic growth of c. +20% in FY’24.
The Group will continue to adapt the investment cycle to market growth and will therefore size its investment in each key market. Believe will also continue to optimize investments in the Central Platform and increase efficiency through automatization. The Group will further focus on efficiency during the year, but margin improvement will be lower than in FY’23 due to the higher level of Tech & Product spending. As a result, the Group anticipates an Adjusted EBITDA margin of c. 6.5%.
The Group will continue to allocate cash between advances and acquisitions in the next months. Believe’s reinforced appeal to a greater number of artists and labels in a wider variety of music genres and the ongoing industry consolidation provide more attractive opportunities for the Group, which will therefore allocate more cash to internal and external investments going forward.
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.
Webcast:
We will host a webcast https://edge.media-server.com/mmc/p/pzqhsc5g and conference call starting at
Conference call details:
Conference ID: 88365
Investor Relations & Financial Media Emilie MEGEL investors@believe.com Tel: +33 1 53 09 33 91 Cell: + 33 6 07 09 98 60 | Press Relations Manon JESSUA manon.jessua@believe.com Anass BENDAFI : +33 6 80 42 51 84 anass.bendafi@agenceproches.com |
Financial agenda Believe (Ticker: BLV, ISIN: FR0014003FE9):
1st
Appendix
- Revenue breakdown between Digital and non-digital sales growth (as reported)
Q1’23 | Q2’23 | Q3’23 | Q4’23 | FY’23 | Q1’24 | |
Digital sales | 93% | 90% | 92% | 86% | 90% | 90% |
Non-digital sales | 7% | 10% | 8% | 14% | 10% | 10% |
- Revenue breakdown between Digital and non-digital sales growth (as reported)
Q1’23 | Q2’23 | Q3’23 | Q4’23 | FY’23 | Q1’24 | |
Digital sales | + 22.2% | + 11.9% | + 7.1% | + 12.3% | +13.0% | + 12.1% |
Non-digital sales | + 21.8% | + 42.1% | + 39.6% | + 74.6% | +48.2% | + 64.0% |
- Adjusted Organic Growth (organic growth adjusted from embedded market forex impact)
Q1’23 | Q2’23 | Q3’23 | Q4’23 | FY’23 | Q1’24 | |
Adjusted organic growth | +23.1% | +18.0% | +15.4% | +21.8% | +19.5% | + 16.1% |
About Believe
Believe 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 1,919 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 (Investors | Believe). 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 n
1 Adjusted organic growth aims at providing a view on Believe’s organic revenue growth after neutralizing embedded market forex impact: Believe assesses the forex impact on each digital market served by the Group to estimate the market forex embedded into its digital revenues collected from its digital partners. Digital sales embed currency translation effects as the amounts collected from Subscriptions and Ad-funded by digital stores are in local currencies and perceived by Believe mainly in euros.
2 Organic growth accounts for revenue at constant perimeter and constant exchange reports
Attachment
- 2024-04-24-Believe-Q1 2024 revenue-ENG
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