Very dynamic Q3 driven by Believe’s attractivity to artists and labels
demonstrating Believe’s strong digital platform model
Revenue growth: +27% in Q3, +31% year-to-date
Organic revenue growth: +27% in Q3, +29% year-to-date
Digital sales growth: +30% in Q3, +33% in year-to-date
FY 2021 guidance uplifted with organic growth now anticipated at least at +27%
in € million | Q3 2020 | Q3 2021 | Change YoY | Organic change |
Group Revenues | 113 | 144 | +27.1% | +26.8% |
Premium Solutions | 105 | 135 | +29.0% | +28.8% |
Automated Solutions | 8 | 9 | +2.6% | +2.1% |
in € million | 9M 2020 | 9M 2021 | Change YoY | Organic change |
Group Revenues | 309 | 404 | +30.7% | +28.9% |
Premium Solutions | 286 | 378 | +32.2% | +29.8% |
Automated Solutions | 23 | 26 | +11.8% | +17.4% |
Key highlights
Q3 robust performance was driven by the unparalleled attractivity of Believe for artists and labels looking for digital solutions and expertise, at each stage of their development. For another quarter, digital sales outperformed the market as recent investment in local sales and marketing teams resulted in a record level of signings in the concerned countries. Believe has been able to deliver top quality services for all its artists and labels, at scale thanks to its unique model based on a central data-driven, scalable technology platform and strong local presence.
Aligned with its growth strategy based on increased investment in local sales and marketing, Believe reinforced its local management team in
The M&A transaction announced today is another illustration of the Group’s proven attractivity for independent labels, which see the benefits of the Group’s digital expertise to grow audiences of their artists. Believe entered in a strategic partnership with Play Two, a highly reputed and the 1st independent label in
Believe continued to strengthen its attractivity by accelerating digital innovation and developing best-in-class technology solutions. Believe continued to invest and innovate in building a suite of data-based and marketing automation solutions to support artists’ by helping them build efficient go-to-market strategies. In Q3, Believe strengthened its market differentiation by its investment in a SaaS media buying automation platform, a future-proof marketing solution to develop and engage audiences of artists and labels by automatically building and executing targeted media-buy marketing campaign. The Group has enriched an advertising platform and tailored it for the music industry to offer a unique multi-local solution from emerging to top artists and labels. The Group has deployed the solution in 12 countries so far. Believe also in-house developed an algorithmic technology which aims at predicting the virality of a track on
Overall, Believe further benefitted from the positive structural market trends combining acceleration of paid streaming penetration and diversifying monetization sources for music. The Group also took advantage of its solid market share in several fast-growing emerging markets (
Believe continued to deploy its CSR strategy as a core objective to shape the music industry for the better. Believe also demonstrated during the quarter its commitment to shape the music for good by signing two key partnerships to promote parity in the music industry and to offer women greater access to tech companies. This includes a partnership with Key Change (global network working to reach full gender equality in the music industry) and a partnership with 50inTech (for a 50% representation of women in tech). This is fully aligned with its CSR pillar - Developing diverse and local talent in local markets first - which aims in priority at promoting gender equality in the music industry and positions Believe as an exemplary inclusive and responsible actor in the sector.
Revenues
Q3 2021 revenues grew by +27.1% to reach €144 million (versus €113 million in Q3 2020) mainly reflecting strong organic growth (+26.8%), with digital sales up +30.4%. Overall, the Group continued benefitting from the favourable structural trends in the digital music industry and from its positioning on the fastest growing markets strengthened by investment in local sales and marketing over the past 24 months. Revenue growth was mostly driven by gain of new artists and labels, expansion of services offering in key markets and by the roster’s performance.
Revenue growth in Q3 was stronger than anticipated due to market share gains above initial expectations in several key regions (
Revenues by geography: growth in all geographies
in € million | Q3 2020 | Q3 2021 | Change YoY |
APAC / | 21 | 32 | +58.0% |
16 | 21 | +35.5% | |
32 | 41 | +30.0% | |
21 | 24 | +15.4% | |
25 | 25 | +2.2% | |
Total | 113 | 144 | +27.1% |
In Q3, revenues in
In
In
Revenues by segment
In terms of segment, Premium Solutions revenues amounted to €135 million in Q3 2021, a year-over-year organic increase of +28.8% versus Q3 2020. Premium Solutions continued building up its position in key markets thanks to investment in local sales and marketing and by expanding the range of services offering in several countries. In addition, the Group leveraged its early move in emerging markets which are now fully benefiting from new digital listening trend. Overall, market growth remained strong notwithstanding a less favorable comparison basis as add-funded streaming services started recovering in Q3 2020.
Automated Solutions amounted to €9 million and grew by +2.6% in Q3 2021 compared to last year, mostly reflecting an organic growth of +2.1%. Q3 growth rate experienced headwinds compared to the prior year, as Automated Solutions grew strongly in H2 2020. The extension of lockdowns resulted in an unprecedented boom in new customers with an elevated rate of distribution in Q3 and Q4 2020, which did not continue with the reopening of the economies.
FY 2021 outlook and organic growth guidance update
Digital services activities recorded strong revenue growth in Q3 and are expected to pursue this trajectory as a result of structural market trends and Group’s focus on investing in local sales and marketing to consolidate its global position. Physical sales which recorded a slight decrease in Q3 are expected to decrease in the last quarter. The trend has, however, improved and the decrease will have a more limited impact on total revenues than anticipated by the Group beginning September. In this context, Believe now anticipates an annual organic growth of at least +27% in 2021 (compared to previous forecast of organic growth of at least +23%). The recent transaction regarding Play Two, the 1st independent label in
As a result of higher organic growth expectations, the Group is now anticipating an adjusted EBITDA margin above 3% for 2021, a steep increase compared to last year level which amounted to 1.7% (compared to previous indication “slightly above FY2020 level”). Believe will continue to substantially invest in its commercial and marketing development and central platform to support the strong growth of its businesses and therefore margin expansion will remain limited.
Webcast:
We will host a webcasthttps://edge.media-server.com/mmc/p/dnkvuw5v and conference call starting at
Conference call details:
Conference ID: 2883166
2022 financial agenda:
Investor Relations
Emilie MEGEL
investors@believe.com
Tel: +33 1 53093391 - Cell: + 33 6 07099860
Press Relations
Corporate Communication
Kelly MARTIN
kelly.martin@agenceproches.com
Cell: +33 6 63 52 94 74
Appendix
- Revenue breakdown between digital and non-digital sales
Q1 2020 | Q2 2020 | Q3 2020 | Q1 2021 | Q2 2021 | Q3 2021 | 9M 2020 | 9M 2021 | |
Digital sales | 90% | 90% | 90% | 90% | 92% | 92% | 90% | 91% |
Non-digital sales | 10% | 10% | 10% | 10% | 8% | 8% | 10% | 9% |
Digital sales growth
Q1 2021 | Q2 2021 | H1 2021 | Q3 2021 | 9M 2021 | |
Digital sales | +26.0% | +41.7% | +33.8% | +30.4% | +32.6% |
Non-digital sales | +29.6% | +17.2% | +23.5% | -1.5% | +14.1% |
- Revenue breakdown by geography 9M 2021
in € million | 9M 2020 | 9M 2021 | Change YoY |
54 | 89 | +65.0% | |
84 | 116 | +38.9% | |
43 | 58 | +36.5% | |
57 | 68 | +19.2% | |
72 | 73 | +1.2% | |
Total | 309 | 404 | +30.7% |
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 1,401 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 TuneCore, Nuclear Blast, Naïve, Groove Attack and AllPoints. Believe is listed on compartment A 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 Organic change accounts for revenue growth at a like-for-like perimeter and at constant exchange rate. The change in perimeter only concerned Premium Solutions in Q3 2021, no perimeter impact in Automated Solutions.
Attachment
- 2021-11-03-Believe Q3 2021 revenue-ENG
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