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Note 1. General information
Universal Music Group N.V. is a public company with limited liability incorporated under the laws of the Netherlands
and listed on Euronext Amsterdam under the symbol \u2018UMG.AS\u2019. As used herein, the term UMG (\"The Group\") is used for
Universal Music Group N.V. (\u2018the Company\u2019) and its subsidiaries within the meaning of Section 2:24b of the Dutch Civil
Code. UMG\u2019s statutory seat is located in Amsterdam and its principal office is located at:
\u2018s-Gravelandseweg 80,
1217 EW Hilversum The Netherlands.
2.2. Basis of preparation and consolidation The Consolidated financial statements are: \u2022 prepared on a historical cost basis, unless stated otherwise \u2022 are presented in millions of euros, and rounded to the nearest million, unless stated otherwise \u2022 prepared on the basis that UMG will continue to operate as a going concern The Consolidated financial statements comprise the financial statements of the UMG N.V. and its subsidiaries as at 31 December 2023. ", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-1": { "value": "Universal Music Group N.V.", "dimensions": { "concept": "ifrs-full:NameOfReportingEntityOrOtherMeansOfIdentification", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-5": { "value": "public company with limited liability", "dimensions": { "concept": "ifrs-full:LegalFormOfEntity", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-2": { "value": "Netherlands", "dimensions": { "concept": "ifrs-full:CountryOfIncorporation", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-3": { "value": "\u2018s-Gravelandseweg 80, 1217 EW Hilversum The Netherlands", "dimensions": { "concept": "ifrs-full:AddressOfRegisteredOfficeOfEntity", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-334": { "value": "Netherlands", "dimensions": { "concept": "ifrs-full:DomicileOfEntity", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-4": { "value": "UMG is the worldwide leader in music, engaged in recorded music, music publishing and merchandising. It owns more than 50 labels covering all music genres. UMG is home to some of the greatest local and international artists of all time, including The Beatles, Rolling Stones, U2, Andrea Bocelli, Lady Gaga, Helene Fischer and more, as well as many of the biggest artists of the year, such as Taylor Swift, Drake, King & Prince, Morgan Wallen and The Weeknd. \u2022 The recorded music business discovers and develops recording artists, marketing and promoting their music across a wide array of formats and platforms. Its activities also extend to other areas, such as live events, sponsorship, film and television. \u2022 The music publishing business discovers and develops songwriters and owns and administers the copyright for musical compositions used in recordings, public performances and related uses, such as films and advertisements. \u2022 The merchandising business produces and sells artist-branded and other branded products through multiple sales channels, including fashion retail, concert touring and the Internet. Its activities also extend to other areas, such as brand rights management.", "dimensions": { "concept": "ifrs-full:DescriptionOfNatureOfEntitysOperationsAndPrincipalActivities", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-384": { "value": "
2.1. Statement of compliance
The Consolidated financial statements have been prepared in accordance with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board (IASB), IFRS as endorsed by the European
Union (EU) and comply with the statutory provisions of Part 9, Book 2 of the Dutch Civil Code. IFRS as endorsed by the EU
differs in some respects from IFRS as issued by the IASB. The differences have no impact on the Consolidated financial
statements for the years presented.
", "dimensions": { "concept": "ifrs-full:StatementOfIFRSCompliance", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-336": { "value": "
The Consolidated financial statements are prepared by the Board of Management of UMG and authorized for issue on
March 28, 2024 and will be submitted for adoption to the Annual General Meeting of Shareholders on May 16, 2024.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAuthorisationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-335": { "value": "
2.2. Basis of preparation and consolidation
The Consolidated financial statements are:
\u2022
prepared on a historical cost basis, unless stated otherwise
\u2022 are presented in millions of euros, and rounded to the nearest million, unless stated otherwise
\u2022 prepared on the basis that UMG will continue to operate as a going concern
The Consolidated financial statements comprise the financial statements of the UMG N.V. and its subsidiaries as at
31 December 2023.
Subsidiaries Subsidiaries are all companies over which UMG has control. Control over an entity exists when UMG is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control commences until the date on which control ceases. Intra-group balances and transactions, any unrealized gains and losses or income and expenses arising from intra- group transactions are eliminated in preparing the Consolidated financial statements. Unrealized gains arising from transactions with associates and joint ventures are eliminated against the investment to the extent of UMG\u2019s interest in the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.
2.4. Material accounting policy information
2.4.1. Foreign currency
Foreign currency transactions
Foreign currency transactions are initially recorded in the functional currency of the entity at the exchange rate
prevailing at the date of the transaction. At the closing date, foreign currency monetary assets and liabilities are
translated into the entity's functional currency at the exchange rate prevailing on that date with foreign currency
differences recorded to profit and loss.
Financial statements denominated in a foreign currency
The assets and liabilities of foreign operations with functional currencies other than the Euro are translated using
exchange rates prevailing at the reporting date. The income and expenses of foreign operations are translated
using monthly average exchange rates which approximate prevailing exchange rates at the dates of the underlying
transactions. The resulting translation gains and losses are recognised in other comprehensive income and presented
within equity. For foreign operations that are not wholly-owned subsidiaries, the proportionate share of the translation
differences are allocated to non-controlling interests. The cumulative amount in the translation reserve is (either fully or
partly) reclassified to the income statement upon disposal (either fully or partly) or liquidation.
In 2023, UMG did not have any significant foreign operations in hyper-inflationary economies.
2.4.2.
Earnings per share
UMG presents basic and diluted earnings per share (EPS) data for its shares. Basic EPS is calculated by dividing the net
profit or loss attributable to shareholders of UMG by the weighted average number of shares outstanding during the year,
adjusted for the weighted average number of own shares held in the year. Diluted EPS is determined by dividing the profit
or loss attributable to shareholders by the weighted average number of shares outstanding, adjusted for the weighted
average number of own shares held in the year and for the effects of all dilutive potential shares which comprise share rights and options granted to employees. 2.4.3. Consolidated Statement of Cash Flows The Consolidated Statement of Cash Flows is prepared using the indirect method starting from Operating profit. Dividends received from equity affiliates and investments are included in the investing cash flow. It also includes any cash flows arising from the gain or loss of control of subsidiaries. Interest paid, including interest paid on lease liability, is included in the financing activities. 2.4.4. Accounting for associates and joint ventures Associates are entities in which UMG has significant influence, but not control or joint control. Significant influence is generally obtained by ownership of more than 20% but less than 50% of the voting rights. Joint ventures are the arrangements in which UMG has joint control. UMG\u2019s investments in associates and joint ventures are accounted for using the equity method of accounting, meaning they are initially recognised at cost. The Consolidated financial statements include UMG\u2019s share of the net profit or loss of the associates and joint ventures whereby the result is determined using the accounting policies of UMG. When UMG\u2019s share of losses exceeds the carrying amount of the associate or joint venture, the carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that UMG has an obligation or has made a payment on behalf of the associate or joint venture. 2.4.5. Revenues and associated costs Revenues from contracts with customers are recorded when performance obligations promised in the contract are satisfied, and for an amount for which it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Revenues are reported net of discounts. Intellectual property licensing (musical works) These licenses transfer to a customer either a right to use an entity's intellectual property as it exists at the point in time at which the license is granted (static license), or a right to access an entity's intellectual property as it exists throughout the license period (dynamic license). Revenues are accounted for when the performance obligation promised in the contract is satisfied (static license) or over time upon satisfaction (dynamic license), i.e., when the seller transfers the control over the right to use/access the intellectual property and the customer obtains control of the use/access of that license. Consequently, revenues from static licenses are recognized at the point in time when the license is transferred and the customer is able to use and benefit from the license. Revenues from dynamic licenses are accounted for over time, over the license period from the date the customer is able to use and benefit from the license and in line with the sale or usage. Consideration received in the current year, which represents income from ordinary activities related to the prior years, is recorded within revenue, unless it was accrued before. Court settlements in relation to the unauthorized usage of UMG's intellectual property in previous years are recorded in revenue as they relate to activities carried out within the ordinary course of business. Analysis of the Agent/Principal relationship in sales transactions involving a third party If the nature of the entity's undertaking is a performance obligation to provide the specified goods or services itself, then the entity acts on its own behalf and it is \u201cprincipal\u201d in the sale transaction: it accounts for revenue as the gross amount of consideration to which it expects to be entitled in exchange for the goods or services provided, and the commission due to the third-party as cost of revenues. If the entity arranges for a third-party to provide the goods or services specified in the contract, then it recognizes as revenues the net amount of consideration to which it expects to be entitled in exchange for the goods or services provided. Financing Component and other UMG does not adjust the transaction price for the effects of significant financing component if, at contract inception, it is expected that the period between customer payment and the transfer of goods or services is one year or less. This applies to the majority of sales transactions. The transaction price may be variable due to discounts, rebates, or similar arrangements. In determining the transaction price UMG considers the fair value of any non-cash consideration. Revenue is only recognized for the part of the consideration for which it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Judgement is required in determining the probability and level of discounts and rebates that will be granted. The estimate is updated throughout the term of the contract. Revenue recognition by business segment Recorded Music The sales of recorded music (physical, digital downloading or streaming) are intellectual property licenses granted by UMG to distributors or digital platforms and which give them certain rights over UMG's musical works. Physical sales of recorded music (CDs, DVDs and Vinyls) These intellectual property licenses are static licenses transferring to the customer a right to use UMG\u2018s recordings as they exist at the point in time at which the license is granted, i.e., on the physical device sold. Revenues from the physical sales of recorded music, net of a provision for estimated returns and rebates, if any, are accounted for, either: (i) upon the sale to the distributor, at the shipping point for products sold free on board (FOB) or on delivery for products sold free on destination; or (ii) upon the sale to the final customer for consignment sales. Digital sales of recorded music, via streaming by paid subscription, ad-supported or downloading. These intellectual property licenses are generally dynamic licenses providing a right to access the entire catalogue of recorded music as it exists throughout the license period considering potential add-ons to, or withdrawals from, the catalogue during that period. The consideration paid by the digital platform is variable in the form of a sales-based or a usage-based royalty. Revenues are then accounted for when these subsequent sales or usages occur. Revenues from digital sales of recorded music, for which UMG has sufficient, accurate, and reliable data from digital platforms, are recognized at the end of the month in which the sale or usage is made by the end customer. For digital sales of recorded music via paid subscription or ad-supported streaming, certain contracts may include a non-refundable minimum guarantee which is generally recoupable and is in substance an advance payment. In the case of a dynamic license, the minimum guarantee is spread over the period to which it relates and takes into account the amount of royalties that are actually recoupable. The minimum guarantee is apportioned in accordance with the accounting for these royalties. Music Publishing Music Publishing relates to the use by a third party of the copyrights on musical works owned or administered by UMG, which are intellectual property licenses that UMG grants to the third party and which provides a right to access a catalogue of recorded music, as these intellectual property licenses are dynamic licenses. For these contracts, revenues are recognised on the basis of sales and usage royalties, using the best available estimate on the timing of the consequent usage and the amounts that are probable to be collected. Merchandising Revenues from merchandising are recognized when control has been passed either upon sale to the end customer, from direct sales during touring, concessions and over the internet; on delivery for sales by a third-party distributor; or for sales of rights attached to merchandising products when a contract is signed and collectability is probable and on a sales and usage basis. Provisions for estimated returns and price guarantees are deducted from sales of products to customers through distributors. The provisions are estimated based on past sales statistics and take into account the economic environment and product sales forecast to final customers. Associated costs of revenues Cost of revenues primarily includes product costs and artists costs. Selling, general and administrative expenses primarily include salaries and employee benefits, consulting and service fees, insurance costs, travel and entertainment expenses, depreciation of capital expenditure and right of use assets, administrative department costs, value allowances for receivables, restructuring expenses and other operating expenses and are expensed when incurred. Advertising costs are expensed when incurred. Slotting fees and cooperative advertising expenses are recorded as a reduction in revenues. However, cooperative advertising is not treated as a reduction of transaction price but marketing expense and expensed when it is distinct and can be estimated. 2.4.6. Business combinations UMG accounts for business combinations using the acquisition method when the acquired set of activities and assets meets the definition of a business and control is transferred to the Group. In determining whether a particular set of activities and assets is a business, UMG assesses whether the set of assets and activities acquired includes, at a minimum, an input and substantive process and whether the acquired set has the ability to produce outputs. Under this the acquisition method, upon the initial consolidation of an entity over which UMG has acquired exclusive control: \u2022 the identifiable assets acquired, and the liabilities assumed are recognized at their fair values on the acquisition date; and \u2022 non-controlling interests are measured either at fair value or at the non-controlling interest's proportionate share of the acquiree\u2019s net identifiable assets. This option is available on a transaction-by-transaction basis. Contingent consideration in a business combination is recorded at fair value on the acquisition date, and any subsequent adjustment occurring after the purchase price allocation period is recognized in the Statement of Profit or Loss. Acquisition-related costs are recognized as expenses when incurred. 2.4.7. Goodwill Goodwill represents the difference between the fair value of the net assets acquired and the transaction price in a business combination. Goodwill arising on the acquisition of associates and joint ventures is included in their carrying amounts. Subsequently, goodwill is measured at its initial amount less accumulated impairment losses. On the acquisition date, to the extent possible, goodwill is allocated to each cash-generating unit likely to benefit from the business combination. 2.4.8. Content assets and other intangibles Content assets include royalty advances to artists, songwriters and co-publishers as well as recorded music and music publishing catalogues, artists\u2019 contracts and rights. Music catalogues, trade names, subscribers\u2019 bases and market shares generated internally are not recognized as intangible assets. Intangible assets separately acquired are recorded at cost, and intangible assets acquired in a business combination are recorded at their fair value at the acquisition date. Amortisation is charged to profit or loss on a straight-line basis over the estimated useful life. UMG believes that straight-line depreciation most accurately reflects the expected pattern of consumption of the future economic benefits embodied in these intangible assets. Useful lives are determined based on the asset\u2019s expected pattern of the future earnings and the period of the contractual arrangements. Useful lives are reviewed at the end of each reporting period. Music catalogues and publishing rights The majority of the music catalogues are amortised over 20 years on a straight-line basis. Some significant catalogues can be amortized over a longer period of time. Advances to artists and repertoire owners Royalty advances to artists, songwriters, and co-publishers are capitalized as an asset when their current popularity and past performances provide a reasonable basis to conclude that the probable future recoupment of such royalty advances against earnings otherwise payable to them is reasonably assured. Royalty advances are recognized as an expense as subsequent royalties are earned by the artist, songwriter or co-publisher. Any portion of capitalized royalty advances not deemed to be recoverable against future royalties is expensed during the period in which the loss becomes evident. These expenses are recorded in cost of revenues. Other intangible assets Other intangibles mainly includes software for internal use. Direct internal and external costs incurred for the development of software for internal use are capitalized during the development stage if the resulting product or process is technically and commercially feasible, cost can be reliably measured, UMG has sufficient resources and the intention to complete its development. Research costs are expensed when incurred. Costs of significant upgrades and enhancements resulting in additional functionality are also capitalized. The software for internal use is generally amortized over 3 years and included within amortisation expense. 2.4.9. Property, plant and equipment Property, plant and equipment are carried at historical cost less any accumulated depreciation and impairment losses. Land and assets under construction are not depreciated. Depreciation is calculated using the straight-line method based on the estimated useful life of the assets. Leasehold improvements are depreciated over a period not longer than the lease term. Useful lives are reviewed at the end of each reporting period and are as follows: \u2022 buildings: 5 to 40 years; \u2022 equipment and machinery: 3 to 8 years; and \u2022 other: 2 to 10 years. 2.4.10. Leases The main lease contracts for UMG correspond to real estate leases for which UMG is the lessee. Real estate leases for which UMG is the lessee are recorded at the commencement date and result in the recognition of a lease liability equal to the present value of future lease payments against a right-of-use asset relating to leases. Right-of-use assets Right-of-use assets are initially measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. The recognized right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment. Lease liabilities UMG recognizes lease liabilities initially measured at the present value of future lease payments over the lease term. The lease payments include in-substance fixed payments (less any lease incentives), variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include payments of penalties for terminating a lease, if UMG has the option to terminate and it is reasonably certain that this option will be exercised. In calculating the present value of lease payments, UMG uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. The carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term or a change in the in-substance fixed lease payments. Short-term leases and leases of low-value assets UMG applies the short-term lease recognition exemption to the real-estate leases with a lease term of 12 months or less from the commencement date and do not contain a purchase option. It also applies the lease of low-value assets recognition exemption to leases of office chattels and other equipment that are considered of low value. Lease payments on short-term leases and leases of low-value assets are recognized as an expense on a straight-line basis over the lease term. Estimates in accounting for leases UMG determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. When determining the lease term, UMG considers all relevant facts and circumstances that create an economic incentive to exercise an extension option, or not to exercise a termination option. These circumstances include UMG\u2019s real estate planning. In estimating the lessee\u2019s incremental borrowing rate, UMG takes into account the residual lease term and its duration to reflect the interest rate of a loan with a similar payment profile to the lease payments. 2.4.11. Impairment of non-financial assets Each time events or changes in the economic environment indicate a risk of impairment of goodwill, content assets and other intangible assets, property, plant and equipment, investments in associates and joint ventures, rights-of-use assets, UMG re-examines the value of these assets. In addition, in accordance with applicable accounting standards, goodwill and intangible assets in progress are all subject to an annual impairment test undertaken in the fourth quarter of each fiscal year. This impairment test is performed to compare the recoverable amount of each Cash Generating Unit (CGU) to the carrying value of the corresponding assets (including goodwill). A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. UMG operates through different content businesses. Each business offers different products and services that are marketed through various channels. CGUs for goodwill correspond to the UMG's operating segments. The recoverable amount is determined for each individual asset as the higher of: (i) its value in use; and (ii) its fair value (less costs to sell) as described hereafter. If the asset does not generate cash inflows that are largely independent of other assets or groups of assets, the recoverable amount is determined for the group of assets. In particular, in the case of goodwill, an impairment test is performed by UMG for each CGU. The value in use of each asset or group of assets is determined, subject to exceptions, by the Discounted Cash Flow method (DCF) using cash flow projections consistent with the budget of the following year and the most recent forecasts prepared by the operating segments. Applied discount rates are determined by reference to available external sources of information, usually based on financial institutions\u2019 benchmarks, and reflect the current assessment by UMG of the time value of money and risks specific to each asset or group of assets. Perpetual growth rates used for the evaluation are those used to prepare budgets for each CGU, and beyond the period covered, are consistent with growth rates estimated by the business by extrapolating growth rates used in the budgets, without exceeding the long-term average growth rate for the markets in which UMG operates. The fair value (less costs to sell) is the price that would be received from the sale of an asset or group of assets in an orderly transaction between market participants at the measurement date, less costs to sell of the asset or group of assets. These values are generally determined based on market data (stock market prices or comparison with similar listed companies, with the value attributed to similar assets or companies in recent transactions) or, in the absence of such data, based on discontinued cash flows. If the recoverable amount is lower than the carrying value of an asset or group of assets, an impairment loss equal to the difference is recognized in Operating profit. In the case of operating segments, this impairment loss is first recorded against goodwill. The impairment losses recognized in respect of property, plant and equipment, and intangible assets (other than goodwill) may be reversed in a later period if the recoverable amount becomes greater than the carrying value, within the limit of impairment losses previously recognized. Impairment losses recognized in respect of goodwill cannot be reversed at a later date. 2.4.12. Financial assets Financial assets are initially recognized at fair value corresponding, in general, to the consideration paid, which is best evidenced by the acquisition cost (including transaction costs, if any). Thereafter, financial assets are measured at fair value or at amortized cost depending on which financial asset category they belong to. Financial assets are classified into the accounting categories \u201cfinancial assets at amortized cost\u201d, \u201cfinancial assets at fair value through other comprehensive income\u201d and \u201cfinancial assets at fair value through profit or loss\u201d. This classification depends on UMG\u2018s business model for managing the financial assets and on contractual terms enabling to determine whether the cash flows are solely payments of principal and interest (SPPI). The financial assets that contain an embedded derivative are considered in full to determine whether their cash flows are SPPI. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and UMG has transferred substantially all the risks and rewards of ownership. Financial assets at fair value These include financial assets at fair value through other comprehensive income, derivative financial instruments with a positive value and other financial assets measured at fair value through profit or loss. Most of these financial assets are actively traded in organized financial markets, as their fair value is calculated by reference to the published market price at the period end. Fair value is estimated for financial assets which do not have a published market price on an active market. As a last resort, when a reliable estimate of fair value cannot be made using valuation techniques in the absence of an active market, UMG values financial assets at historical cost, less any impairment losses. These financial assets are recognized initially on trade date when UMG becomes a party to the contractual provisions of the instrument. Dividend income is recognised when the UMG's right to receive payment is established. Financial assets at amortized cost Financial assets at amortised cost include trade receivables, other receivables, loans issued and bank deposits which are not cash equivalents. Loans, receivables and deposits are recognized on the date they are originated. Financial assets at amortized cost consist of debt instruments as described above held within a business model whose objective is to hold financial assets to collect contractual cash flows that are solely payments of principal and interest on the principal amount outstanding. At the end of each period, these assets are measured at amortized cost using the effective interest method. 2.4.13. Impairment of financial assets UMG assesses the expected credit loss associated with its financial assets recognized at amortized cost on a prospective basis. A loss allowance for expected credit loss based on probability of default is recognized at initial recognition. The loss allowance is updated for changes in these expected credit losses at each reporting date to reflect changes in credit risk since initial recognition. To assess whether there has been a significant increase in credit risk, UMG compares the credit risk at the reporting date with the credit risk at the date of initial recognition based on reasonable forward-looking information and events, including credit ratings if available, significant adverse economic changes (actual or expected), financial or business environment that are expected to result in a material change in the borrower's ability to meet its obligations. Trade accounts receivable are initially recognised at their transaction price. Expected loss rates on trade receivables and contract assets are calculated by the relevant operating entities over their lifetime from initial recognition and are based on historical data that also incorporates forward-looking information. In addition, account receivables from customers subject to insolvency proceedings or customers with whom UMG is involved in litigation or a dispute are generally impaired in full. 2.4.14. Cash and cash equivalents Cash and cash equivalents include all cash balances and short-term highly liquid investments with an original maturity of three months or less that are readily convertible into known amounts of cash. Bank overdrafts form an integral part of UMG\u2019s cash management and often fluctuate from being positive to overdrawn and are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. Investments in securities, investments with initial maturities of more than three months without an early termination option and bank accounts subject to restrictions (blocked accounts), other than restrictions due to regulations specific to a country or activity sector (e.g., exchange controls), are not classified as cash equivalents but as financial assets. 2.4.15. Financial liabilities A liability is recognized when UMG becomes party to a contract. Regular way purchases and sales of financial instruments are accounted for at the trade date. Initial measurement of financial liabilities is at fair value, including any attributable transaction costs. Financial liabilities are all classified and subsequently measured at amortized cost, except for financial liabilities at fair value through profit or loss, for example derivatives or contingent consideration in a business acquisition. Such contingent consideration shall subsequently be measured at fair value with changes recognized in profit or loss. For the financial liabilities subsequently measured at amortised cost, the effective interest method is applied. The effective interest rate is the internal yield rate that discounts future cash flows over the term of the financial instrument. In addition, where the financial liability comprises an embedded derivative or an equity instrument, the amortized cost is calculated for the debt component only, after separation of the embedded derivative or equity instrument, if the embedded derivative is not closely related to the host contract and therefore needs to be separated. 2.4.16. Derivative financial instruments Derivative financial instruments are recognised initially at fair value. Subsequent accounting for derivatives depends on whether or not the derivatives are designated as hedging instruments in a cash flow, fair value or net investment hedge. Derivatives with positive fair values are recorded as assets and negative fair values as liabilities. UMG did not apply hedge accounting to the derivatives in 2022. Beginning in 2023, foreign currency translation risks are hedged to a limited extent, as the underlying currency positions are generally considered to be long-term in nature. If a hedge is entered into, it is accounted for as a net investment hedge. UMG measures all derivative financial instruments at fair value derived from market prices of the instruments or calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates. These calculations are tested for reasonableness by comparing the outcome of the internal valuation with the valuation received from the counterparty. 2.4.17. Inventories Inventories are valued at the lower of cost or net realizable value. Cost comprises purchase costs, production costs and other supply and packaging costs. These are usually calculated using the weighted average cost method. Net realizable value is the estimated selling price in the normal course of business, less estimated completion costs and selling costs. Inventories at UMG mostly comprise of finished goods. 2.4.18. Provisions Provisions are recognized when, at the end of the reporting period, UMG has a legal obligation (statutory, regulatory or contractual) or a constructive obligation, as a result of past events, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the obligation can be reliably estimated. Where the effect of the time value of money is material, provisions are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money. If the amount of the obligation cannot be reliably estimated, no provision is recorded and a disclosure is made in the Notes to the Consolidated Financial Statements. Significant judgment is required in determining the amount and probability of resources outflow and discount rates used to calculate the present value of this outflow. Provisions for royalty audit claims Up to the completion of the royalty claim audit, the timing and the amount of the potential pay-outs is uncertain. UMG makes its best possible estimate of the outcome using any available data, including history of claims with rights owners. When the estimate is performed for large homogeneous claims and contract terms, the statistical valuation method is used. Litigation provisions In the ordinary course of business, UMG may be involved in a number of legal and arbitration proceedings and administrative actions. The costs which may result from these proceedings are accrued at the reporting date if UMG has a present obligation toward a third party resulting from a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the amount of that liability can be quantified or estimated within a reasonable range. The amount of provision recorded is based on a case-by-case assessment of the risk level, and events arising during the course of legal proceedings may require a reassessment of this risk at any time. 2.4.19. Employee benefit plans Defined contribution plans Contributions to defined contribution and multi-employer plans are expensed during the year when related services are provided. Defined benefit plans Defined benefit plans may be funded by investments in various instruments such as insurance contracts or equity and debt investment securities, excluding shares in any UMG entity or debt instruments. Pension expenses and defined benefit obligations are calculated by independent actuaries using the projected unit credit method. This method is based on annually updated assumptions, which include the probability of employees remaining with UMG until retirement, expected changes in future compensation and an appropriate discount rate for each country in which UMG maintains a pension plan. The discount rate is determined for each country by reference to yields on notes issued by investment grade companies having a credit rating of AA and maturities identical to that of the valued plans, generally based on relevant rate indices. The expected return on plan assets is estimated by using the selected discount rate to value the obligations of the previous year. The calculation is performed separately for each plan. A provision is recorded in the Statement of Financial Position equal to the difference between the actuarial value of the related benefits (actuarial liability) and the fair value of any associated plan assets, and this includes past service costs and actuarial gains and losses. The cost of defined benefit plans consists of three components recognized as follows: \u2022 the service cost is included in selling, general and administrative expenses. It comprises current service cost, past service cost resulting from a plan amendment or a curtailment, immediately recognized in profit and loss, and gains and losses on settlement; \u2022 the financial component, recorded in other financial expenses and income, consists of the unwinding of the interest component of the discount, less the expected return on plan assets determined using the discount rate retained for the valuation of the benefit obligation; and \u2022 the remeasurements of the net defined benefit liability (asset), recognized in items of other comprehensive income not reclassified as profit and loss, mainly consist of actuarial gains and losses, i.e., changes in the present value of the defined benefit obligation and plan assets resulting from changes in actuarial assumptions and experience adjustments (representing the differences between the expected effect of some actuarial assumptions applied to previous valuations and the effective impact). Where the value of plan assets exceeds benefit obligations, a financial asset is recognized up to the present value of future refunds and the expected reduction in future contributions. Some other post-employment benefits, such as life insurance and medical coverage (mainly in the United States) are subject to provisions which are assessed through an actuarial calculation comparable to the method used for pension provisions. 2.4.20. Income taxes Differences existing at closing between the tax base value of assets and liabilities and their carrying value in the Consolidated Statement of Financial Position give rise to temporary differences. Pursuant to the liability method, these temporary differences result in the accounting of: \u2022 deferred tax assets, when the tax base value is greater than the carrying value (expected future tax saving); and \u2022 deferred tax liabilities, when the tax base value is lower than the carrying value (expected future tax expense). Deferred tax assets and liabilities are measured at the expected tax rates for the year during which the asset will be realized or the liability settled, based on tax rates (and tax regulations) enacted or substantially enacted by the closing date. They are reviewed at the end of each year, in line with any changes in applicable tax rates. Deferred tax assets are recognized for all deductible temporary differences, tax loss carry-forwards and unused tax credits, insofar as it is probable that a taxable profit will be available, or when a current tax liability exists to make use of those deductible temporary differences, tax loss carry-forwards and unused tax credits, except where the deferred tax asset associated with the deductible temporary difference is generated by initial recognition of an asset or liability in a transaction which is not a business combination, and that, at the transaction date, does not impact net profit, nor tax income or loss. For deductible temporary differences resulting from investments in subsidiaries, joint ventures and other associated entities, deferred tax assets are recorded to the extent that it is probable that the temporary difference will reverse in the foreseeable future and that a taxable profit will be available against which the temporary difference can be utilized. The carrying value of deferred tax assets is reviewed at each closing date, and revalued or reduced to the extent that it is more or less probable that a taxable profit will be available to allow the deferred tax asset to be utilized. When assessing the probability of a taxable profit being available, account is taken, primarily, of prior years\u2019 results, forecasted future results, non-recurring items unlikely to occur in the future and the tax strategy. As such, the assessment of UMG's ability to utilize tax losses carried forward is to a large extent judgement-based. If the future taxable results of UMG proved to differ significantly from those expected, UMG would be required to increase or decrease the carrying value of deferred tax assets with a potentially material impact on UMG's Statement of Financial Position and Statement of Profit or Loss. Deferred tax liabilities are recognized for all taxable temporary differences, except where the deferred tax liability results from goodwill or initial recognition of an asset or liability in a transaction which is not a business combination, and that, at the transaction date, does not impact net profit, tax income or loss. For taxable temporary differences resulting from investments in subsidiaries, joint ventures and other associated entities, deferred tax liabilities are recorded except to the extent that both of the following conditions are satisfied: the parent, investor or venturer is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not be reversed in the foreseeable future. Current tax and deferred tax shall be charged or credited directly to equity, and not profit if the tax relates to items that are credited or charged directly to equity. Current tax liabilities not expected to be paid within the next 12 months are recorded as long term current tax liability . 2.4.21. Share-based payments Equity-settled share-based compensation expense is recognized as a personnel cost over the vesting period of the award at the fair value of the equity instruments granted at the grant date with a corresponding increase in equity. For cases in which the grant date occurs after the employees to whom the equity instruments were granted have begun rendering services (for example, if a grant of equity instruments is subject to shareholder approval), UMG estimates the grant date fair value of the equity instruments by estimating the fair value of the equity instruments at the end of the reporting period, for the purposes of recognising the services received during the period between service commencement date and grant date. Once the date of grant has been established, UMG revises the earlier estimate so that the amounts recognised for services received in respect of the grant are ultimately based on the grant date fair value of the equity instruments. Fair value of the shares granted is fixed at the grant date and is equal to the share price at the grant date with a deduction for the aggregate discounted value of the dividends that will not be received over the vesting period, unless the conditions of the plan prescribe compensation for the vesting period dividends, and after taking into account the discount for non-transferability during the retention period. The cumulative expense recognized for equity-settled transactions at each reporting date reflects the extent to which the vesting period has expired and UMG\u2019s best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the Statement of Profit or Loss for a period represents the movement in cumulative expense recognized as at the beginning and end of that period. Service and non-market performance conditions are not considered when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of UMG\u2019s best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. 2.4.22. Related parties A related party is a person or an entity that is related to UMG. These include both people and entities that have, or are subject to, the influence or control of UMG (e.g. key management personnel). Transactions with related parties are accounted for in accordance with the requirements of relevant IFRSs and take into account the substance as well as the legal form. 2.4.23. Contingent liabilities Non-financial guarantees are accounted for as a contingent liability until such time it becomes probable that UMG will be required to make a payment under the guarantee. Contingent liabilities are possible or present obligations of sufficient uncertainty that it does not quality for recognition as a provision, unless it is assumed in a business combination. Contingent liabilities are reviewed continuously to assess whether an outflow of resources has become probable. 2.4.24. Financial guarantees Financial guarantee is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument. Financial guarantees are initially recognised at fair value and are subject to the expected credit loss model, with a credit loss is recognized for expected cash shortfalls.
Note 3. Segment data
Operating segment data
The segment reporting that follows is aligned with internal reporting used by UMG Management to assess UMG\u2019s
performance. UMG\u2019s operating segments are organised by nature of the business and are the same as its reportable
segments: Recorded Music, Music Publishing and Merchandising and Other. Each of these is described at Note 1.
Corporate centre represent amounts not allocated to the operating segments and includes certain costs related to central
activities as well as group enabling functions. Management also receives information about the segment's revenue and
assets. Inter-segment pricing is determined on an arm's length basis. Segment results, assets and liabilities include
items directly attributable to a segment as well as those that can be allocated on a reasonable basis.
", "dimensions": { "concept": "ifrs-full:DisclosureOfMaterialAccountingPolicyInformationExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-337": { "value": "2.2. Basis of preparation and consolidation The Consolidated financial statements are: \u2022 prepared on a historical cost basis, unless stated otherwise \u2022 are presented in millions of euros, and rounded to the nearest million, unless stated otherwise \u2022 prepared on the basis that UMG will continue to operate as a going concern The Consolidated financial statements comprise the financial statements of the UMG N.V. and its subsidiaries as at 31 December 2023. Seperation from Vivendi Until February 26, 2021, the arrangement that constituted the combined UMG Group was not a legal entity in its own right and was made up of entities under the common control of Vivendi. Until this date, UMG\u2019s scope of combination principally comprised the entities held directly and indirectly by UMG Inc. and UIM B.V. On February 26, 2021, in UMG B.V.\u2019s Consolidated financial statements, the contribution of \u20ac33,000 million was directly recorded as an increase in equity attributable to UMG B.V. shareowners (\u20ac18,500 million in share capital and \u20ac14,500 million in additional paid-in capital), and the contribution of \u20ac33,000 million was fully neutralized in UMG B.V.\u2019s retained earnings. The reorganization of its shareholding structure, which is a common control business combination, has no impact on UMG\u2019s scope of combination or consolidation. On September 21, 2021, the shares of Universal Music Group N.V. (UMG N.V.) started trading on the regulated market of Euronext Amsterdam. Vivendi completed the distribution in kind of UMG shares to Vivendi shareholders on the basis of one UMG N.V. share for every eligible Vivendi share. The detachment date (ex-date) of the distribution in kind was September 21, 2021. Settlement occurred on September 23, 2021. UMG B.V. was converted to UMG N.V. on this date accordingly.", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-440": { "value": "2.2. Basis of preparation and consolidation Subsidiaries Subsidiaries are all companies over which UMG has control. Control over an entity exists when UMG is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control commences until the date on which control ceases. Intra-group balances and transactions, any unrealized gains and losses or income and expenses arising from intra- group transactions are eliminated in preparing the Consolidated financial statements. Unrealized gains arising from transactions with associates and joint ventures are eliminated against the investment to the extent of UMG\u2019s interest in the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment. ", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-383": { "value": "The Consolidated financial statements are: \u2022 prepared on the basis that UMG will continue to operate as a going concern ", "dimensions": { "concept": "ifrs-full:DisclosureOfGoingConcernExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-385": { "value": "
Subsidiaries
Subsidiaries are all companies over which UMG has control. Control over an entity exists when UMG is exposed, or has
rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its
power over the entity. Subsidiaries are fully consolidated from the date on which control commences until the date on
which control ceases.
Intra-group balances and transactions, any unrealized gains and losses or income and expenses arising from intra-
group transactions are eliminated in preparing the Consolidated financial statements. Unrealized gains arising from
transactions with associates and joint ventures are eliminated against the investment to the extent of UMG\u2019s interest in
the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no
evidence of impairment.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSubsidiariesExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-467": { "value": "
Significant events in the period and accounting estimates and judgements
Accounting estimates and judgements Application of the accounting policies requires judgements that impact the amounts recognised. All significant judgements and estimates are disclosed in the notes to the Consolidated financial statements. Information and considerations regarding areas of significant judgements and estimates have been included in the table below. It is reasonably possible, that outcomes of these judgements and estimates within the next financial year are different from the assumptions, which could require a material adjustment to the carrying amount of the asset or liability affected.
Area
Significant judgement
Note
Significant judgement is required to identify performance obligations under
Revenue contracts with customers, whether these performance obligations are satisfied 2.4.5. Revenues and
at a point of time or over time, and probability that collectability is assured associated costs
and significant reversal will not occur.
Uncertain tax Judgement in assessing the uncertainty of whether it is probable that a
positions and taxation authority will accept or revise the uncertain tax treatment and, future 2.4.20. Income taxes
deferred taxes results enabling realisation of deferred taxes.
Lease liabilities and Judgement in determining the lease term of contracts with renewal and 2.4.10. Leases
right-of-use assets termination options at the commencement date of each lease contract.
Area
Significant estimate
Note
Revenue Estimation on the timing of the consequent usage and the amounts that are 2.4.5. Revenues and
probable to be collected. associated costs
Intangible assets, Assumptions relating to impairment tests performed on each of the Group\u2019s 2.4.7. Goodwill and 2.4.8.
including goodwill cash-generating units (CGUs) or intangible assets, future cash flows and Content assets and
and content assets discount rates are updated annually. Estimation of (remaining) useful life for other intangibles
intangible assets, other than goodwill.
Provisions Estimating the likelihood and timing of potential cash flows relating to royalty 2.4.18. Provisions
claims and litigation.
Artist Estimates of the future performance of artists and repertoire owners who 2.4.8. Content assets
royalty advances are paid advances that are recognized in the Consolidated Statement of and other intangibles
Financial Position.
Share- Estimation of the grant date fair value and number of equity instruments. 2.4.21. Share-
based payments based payments
Pension liability Assumptions for discount rates, inflation, future pension increases and life 2.4.19. Employee
expectancy to calculate the defined benefit obligation. benefit plans
For more details on these significant judgement areas and resulting estimates refer to the accounting policies below. 2.4.5. Revenues and associated costs Revenues from contracts with customers are recorded when performance obligations promised in the contract are satisfied, and for an amount for which it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Revenues are reported net of discounts. Intellectual property licensing (musical works) These licenses transfer to a customer either a right to use an entity's intellectual property as it exists at the point in time at which the license is granted (static license), or a right to access an entity's intellectual property as it exists throughout the license period (dynamic license). Revenues are accounted for when the performance obligation promised in the contract is satisfied (static license) or over time upon satisfaction (dynamic license), i.e., when the seller transfers the control over the right to use/access the intellectual property and the customer obtains control of the use/access of that license. Consequently, revenues from static licenses are recognized at the point in time when the license is transferred and the customer is able to use and benefit from the license. Revenues from dynamic licenses are accounted for over time, over the license period from the date the customer is able to use and benefit from the license and in line with the sale or usage. Consideration received in the current year, which represents income from ordinary activities related to the prior years, is recorded within revenue, unless it was accrued before. Court settlements in relation to the unauthorized usage of UMG's intellectual property in previous years are recorded in revenue as they relate to activities carried out within the ordinary course of business. Analysis of the Agent/Principal relationship in sales transactions involving a third party If the nature of the entity's undertaking is a performance obligation to provide the specified goods or services itself, then the entity acts on its own behalf and it is \u201cprincipal\u201d in the sale transaction: it accounts for revenue as the gross amount of consideration to which it expects to be entitled in exchange for the goods or services provided, and the commission due to the third-party as cost of revenues. If the entity arranges for a third-party to provide the goods or services specified in the contract, then it recognizes as revenues the net amount of consideration to which it expects to be entitled in exchange for the goods or services provided. Financing Component and other UMG does not adjust the transaction price for the effects of significant financing component if, at contract inception, it is expected that the period between customer payment and the transfer of goods or services is one year or less. This applies to the majority of sales transactions. The transaction price may be variable due to discounts, rebates, or similar arrangements. In determining the transaction price UMG considers the fair value of any non-cash consideration. Revenue is only recognized for the part of the consideration for which it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Judgement is required in determining the probability and level of discounts and rebates that will be granted. The estimate is updated throughout the term of the contract. Revenue recognition by business segment Recorded Music The sales of recorded music (physical, digital downloading or streaming) are intellectual property licenses granted by UMG to distributors or digital platforms and which give them certain rights over UMG's musical works. Physical sales of recorded music (CDs, DVDs and Vinyls) These intellectual property licenses are static licenses transferring to the customer a right to use UMG\u2018s recordings as they exist at the point in time at which the license is granted, i.e., on the physical device sold. Revenues from the physical sales of recorded music, net of a provision for estimated returns and rebates, if any, are accounted for, either: (i) upon the sale to the distributor, at the shipping point for products sold free on board (FOB) or on delivery for products sold free on destination; or (ii) upon the sale to the final customer for consignment sales. Digital sales of recorded music, via streaming by paid subscription, ad-supported or downloading. These intellectual property licenses are generally dynamic licenses providing a right to access the entire catalogue of recorded music as it exists throughout the license period considering potential add-ons to, or withdrawals from, the catalogue during that period. The consideration paid by the digital platform is variable in the form of a sales-based or a usage-based royalty. Revenues are then accounted for when these subsequent sales or usages occur. Revenues from digital sales of recorded music, for which UMG has sufficient, accurate, and reliable data from digital platforms, are recognized at the end of the month in which the sale or usage is made by the end customer. For digital sales of recorded music via paid subscription or ad-supported streaming, certain contracts may include a non-refundable minimum guarantee which is generally recoupable and is in substance an advance payment. In the case of a dynamic license, the minimum guarantee is spread over the period to which it relates and takes into account the amount of royalties that are actually recoupable. The minimum guarantee is apportioned in accordance with the accounting for these royalties. Music Publishing Music Publishing relates to the use by a third party of the copyrights on musical works owned or administered by UMG, which are intellectual property licenses that UMG grants to the third party and which provides a right to access a catalogue of recorded music, as these intellectual property licenses are dynamic licenses. For these contracts, revenues are recognised on the basis of sales and usage royalties, using the best available estimate on the timing of the consequent usage and the amounts that are probable to be collected. Merchandising Revenues from merchandising are recognized when control has been passed either upon sale to the end customer, from direct sales during touring, concessions and over the internet; on delivery for sales by a third-party distributor; or for sales of rights attached to merchandising products when a contract is signed and collectability is probable and on a sales and usage basis. Provisions for estimated returns and price guarantees are deducted from sales of products to customers through distributors. The provisions are estimated based on past sales statistics and take into account the economic environment and product sales forecast to final customers. Associated costs of revenues Cost of revenues primarily includes product costs and artists costs. Selling, general and administrative expenses primarily include salaries and employee benefits, consulting and service fees, insurance costs, travel and entertainment expenses, depreciation of capital expenditure and right of use assets, administrative department costs, value allowances for receivables, restructuring expenses and other operating expenses and are expensed when incurred. Advertising costs are expensed when incurred. Slotting fees and cooperative advertising expenses are recorded as a reduction in revenues. However, cooperative advertising is not treated as a reduction of transaction price but marketing expense and expensed when it is distinct and can be estimated. 2.4.7. Goodwill Goodwill represents the difference between the fair value of the net assets acquired and the transaction price in a business combination. Goodwill arising on the acquisition of associates and joint ventures is included in their carrying amounts. Subsequently, goodwill is measured at its initial amount less accumulated impairment losses. On the acquisition date, to the extent possible, goodwill is allocated to each cash-generating unit likely to benefit from the business combination. 2.4.8. Content assets and other intangibles Content assets include royalty advances to artists, songwriters and co-publishers as well as recorded music and music publishing catalogues, artists\u2019 contracts and rights. Music catalogues, trade names, subscribers\u2019 bases and market shares generated internally are not recognized as intangible assets. Intangible assets separately acquired are recorded at cost, and intangible assets acquired in a business combination are recorded at their fair value at the acquisition date. Amortisation is charged to profit or loss on a straight-line basis over the estimated useful life. UMG believes that straight-line depreciation most accurately reflects the expected pattern of consumption of the future economic benefits embodied in these intangible assets. Useful lives are determined based on the asset\u2019s expected pattern of the future earnings and the period of the contractual arrangements. Useful lives are reviewed at the end of each reporting period. Music catalogues and publishing rights The majority of the music catalogues are amortised over 20 years on a straight-line basis. Some significant catalogues can be amortized over a longer period of time. Advances to artists and repertoire owners Royalty advances to artists, songwriters, and co-publishers are capitalized as an asset when their current popularity and past performances provide a reasonable basis to conclude that the probable future recoupment of such royalty advances against earnings otherwise payable to them is reasonably assured. Royalty advances are recognized as an expense as subsequent royalties are earned by the artist, songwriter or co-publisher. Any portion of capitalized royalty advances not deemed to be recoverable against future royalties is expensed during the period in which the loss becomes evident. These expenses are recorded in cost of revenues. Other intangible assets Other intangibles mainly includes software for internal use. Direct internal and external costs incurred for the development of software for internal use are capitalized during the development stage if the resulting product or process is technically and commercially feasible, cost can be reliably measured, UMG has sufficient resources and the intention to complete its development. Research costs are expensed when incurred. Costs of significant upgrades and enhancements resulting in additional functionality are also capitalized. The software for internal use is generally amortized over 3 years and included within amortisation expense. 2.4.10. Leases The main lease contracts for UMG correspond to real estate leases for which UMG is the lessee. Real estate leases for which UMG is the lessee are recorded at the commencement date and result in the recognition of a lease liability equal to the present value of future lease payments against a right-of-use asset relating to leases. Right-of-use assets Right-of-use assets are initially measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. The recognized right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment. Lease liabilities UMG recognizes lease liabilities initially measured at the present value of future lease payments over the lease term. The lease payments include in-substance fixed payments (less any lease incentives), variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include payments of penalties for terminating a lease, if UMG has the option to terminate and it is reasonably certain that this option will be exercised. In calculating the present value of lease payments, UMG uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable.
After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced
for the lease payments made. The carrying amount of lease liabilities is remeasured if there is a modification, a change
in the lease term or a change in the in-substance fixed lease payments.
Short-term leases and leases of low-value assets
UMG applies the short-term lease recognition exemption to the real-estate leases with a lease term of 12 months or
less from the commencement date and do not contain a purchase option. It also applies the lease of low-value assets
recognition exemption to leases of office chattels and other equipment that are considered of low value. Lease payments
on short-term leases and leases of low-value assets are recognized as an expense on a straight-line basis over the
lease term.
Estimates in accounting for leases
UMG determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option
to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease,
if it is reasonably certain not to be exercised. When determining the lease term, UMG considers all relevant facts and
circumstances that create an economic incentive to exercise an extension option, or not to exercise a termination option.
These circumstances include UMG\u2019s real estate planning.
In estimating the lessee\u2019s incremental borrowing rate, UMG takes into account the residual lease term and its duration to
reflect the interest rate of a loan with a similar payment profile to the lease payments.
2.4.18. Provisions Provisions are recognized when, at the end of the reporting period, UMG has a legal obligation (statutory, regulatory or contractual) or a constructive obligation, as a result of past events, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the obligation can be reliably estimated. Where the effect of the time value of money is material, provisions are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money. If the amount of the obligation cannot be reliably estimated, no provision is recorded and a disclosure is made in the Notes to the Consolidated Financial Statements. Significant judgment is required in determining the amount and probability of resources outflow and discount rates used to calculate the present value of this outflow. Provisions for royalty audit claims Up to the completion of the royalty claim audit, the timing and the amount of the potential pay-outs is uncertain. UMG makes its best possible estimate of the outcome using any available data, including history of claims with rights owners. When the estimate is performed for large homogeneous claims and contract terms, the statistical valuation method is used. Litigation provisions In the ordinary course of business, UMG may be involved in a number of legal and arbitration proceedings and administrative actions. The costs which may result from these proceedings are accrued at the reporting date if UMG has a present obligation toward a third party resulting from a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the amount of that liability can be quantified or estimated within a reasonable range. The amount of provision recorded is based on a case-by-case assessment of the risk level, and events arising during the course of legal proceedings may require a reassessment of this risk at any time. 2.4.19. Employee benefit plans Defined contribution plans Contributions to defined contribution and multi-employer plans are expensed during the year when related services are provided. Defined benefit plans Defined benefit plans may be funded by investments in various instruments such as insurance contracts or equity and debt investment securities, excluding shares in any UMG entity or debt instruments. Pension expenses and defined benefit obligations are calculated by independent actuaries using the projected unit credit method. This method is based on annually updated assumptions, which include the probability of employees remaining with UMG until retirement, expected changes in future compensation and an appropriate discount rate for each country in which UMG maintains a pension plan. The discount rate is determined for each country by reference to yields on notes issued by investment grade companies having a credit rating of AA and maturities identical to that of the valued plans, generally based on relevant rate indices. The expected return on plan assets is estimated by using the selected discount rate to value the obligations of the previous year. The calculation is performed separately for each plan. A provision is recorded in the Statement of Financial Position equal to the difference between the actuarial value of the related benefits (actuarial liability) and the fair value of any associated plan assets, and this includes past service costs and actuarial gains and losses. The cost of defined benefit plans consists of three components recognized as follows: \u2022 the service cost is included in selling, general and administrative expenses. It comprises current service cost, past service cost resulting from a plan amendment or a curtailment, immediately recognized in profit and loss, and gains and losses on settlement; \u2022 the financial component, recorded in other financial expenses and income, consists of the unwinding of the interest component of the discount, less the expected return on plan assets determined using the discount rate retained for the valuation of the benefit obligation; and \u2022 the remeasurements of the net defined benefit liability (asset), recognized in items of other comprehensive income not reclassified as profit and loss, mainly consist of actuarial gains and losses, i.e., changes in the present value of the defined benefit obligation and plan assets resulting from changes in actuarial assumptions and experience adjustments (representing the differences between the expected effect of some actuarial assumptions applied to previous valuations and the effective impact). Where the value of plan assets exceeds benefit obligations, a financial asset is recognized up to the present value of future refunds and the expected reduction in future contributions. Some other post-employment benefits, such as life insurance and medical coverage (mainly in the United States) are subject to provisions which are assessed through an actuarial calculation comparable to the method used for pension provisions. 2.4.20. Income taxes Differences existing at closing between the tax base value of assets and liabilities and their carrying value in the Consolidated Statement of Financial Position give rise to temporary differences. Pursuant to the liability method, these temporary differences result in the accounting of: \u2022 deferred tax assets, when the tax base value is greater than the carrying value (expected future tax saving); and \u2022 deferred tax liabilities, when the tax base value is lower than the carrying value (expected future tax expense). Deferred tax assets and liabilities are measured at the expected tax rates for the year during which the asset will be realized or the liability settled, based on tax rates (and tax regulations) enacted or substantially enacted by the closing date. They are reviewed at the end of each year, in line with any changes in applicable tax rates. Deferred tax assets are recognized for all deductible temporary differences, tax loss carry-forwards and unused tax credits, insofar as it is probable that a taxable profit will be available, or when a current tax liability exists to make use of those deductible temporary differences, tax loss carry-forwards and unused tax credits, except where the deferred tax asset associated with the deductible temporary difference is generated by initial recognition of an asset or liability in a transaction which is not a business combination, and that, at the transaction date, does not impact net profit, nor tax income or loss. For deductible temporary differences resulting from investments in subsidiaries, joint ventures and other associated entities, deferred tax assets are recorded to the extent that it is probable that the temporary difference will reverse in the foreseeable future and that a taxable profit will be available against which the temporary difference can be utilized. The carrying value of deferred tax assets is reviewed at each closing date, and revalued or reduced to the extent that it is more or less probable that a taxable profit will be available to allow the deferred tax asset to be utilized. When assessing the probability of a taxable profit being available, account is taken, primarily, of prior years\u2019 results, forecasted future results, non-recurring items unlikely to occur in the future and the tax strategy. As such, the assessment of UMG's ability to utilize tax losses carried forward is to a large extent judgement-based. If the future taxable results of UMG proved to differ significantly from those expected, UMG would be required to increase or decrease the carrying value of deferred tax assets with a potentially material impact on UMG's Statement of Financial Position and Statement of Profit or Loss. Deferred tax liabilities are recognized for all taxable temporary differences, except where the deferred tax liability results from goodwill or initial recognition of an asset or liability in a transaction which is not a business combination, and that, at the transaction date, does not impact net profit, tax income or loss. For taxable temporary differences resulting from investments in subsidiaries, joint ventures and other associated entities, deferred tax liabilities are recorded except to the extent that both of the following conditions are satisfied: the parent, investor or venturer is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not be reversed in the foreseeable future. Current tax and deferred tax shall be charged or credited directly to equity, and not profit if the tax relates to items that are credited or charged directly to equity. Current tax liabilities not expected to be paid within the next 12 months are recorded as long term current tax liability 2.4.21. Share-based payments Equity-settled share-based compensation expense is recognized as a personnel cost over the vesting period of the award at the fair value of the equity instruments granted at the grant date with a corresponding increase in equity. For cases in which the grant date occurs after the employees to whom the equity instruments were granted have begun rendering services (for example, if a grant of equity instruments is subject to shareholder approval), UMG estimates the grant date fair value of the equity instruments by estimating the fair value of the equity instruments at the end of the reporting period, for the purposes of recognising the services received during the period between service commencement date and grant date. Once the date of grant has been established, UMG revises the earlier estimate so that the amounts recognised for services received in respect of the grant are ultimately based on the grant date fair value of the equity instruments. Fair value of the shares granted is fixed at the grant date and is equal to the share price at the grant date with a deduction for the aggregate discounted value of the dividends that will not be received over the vesting period, unless the conditions of the plan prescribe compensation for the vesting period dividends, and after taking into account the discount for non-transferability during the retention period. The cumulative expense recognized for equity-settled transactions at each reporting date reflects the extent to which the vesting period has expired and UMG\u2019s best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the Statement of Profit or Loss for a period represents the movement in cumulative expense recognized as at the beginning and end of that period. Service and non-market performance conditions are not considered when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of UMG\u2019s best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. ", "dimensions": { "concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-463": { "value": "
Accounting estimates and judgements
Application of the accounting policies requires judgements that impact the amounts recognised. All significant
judgements and estimates are disclosed in the notes to the Consolidated financial statements. Information and
considerations regarding areas of significant judgements and estimates have been included in the table below. It is
reasonably possible, that outcomes of these judgements and estimates within the next financial year are different from
the assumptions, which could require a material adjustment to the carrying amount of the asset or liability affected.
Area
Significant judgement
Note
Significant judgement is required to identify performance obligations under
Revenue contracts with customers, whether these performance obligations are satisfied 2.4.5. Revenues and
at a point of time or over time, and probability that collectability is assured associated costs
and significant reversal will not occur.
Uncertain tax Judgement in assessing the uncertainty of whether it is probable that a
positions and taxation authority will accept or revise the uncertain tax treatment and, future 2.4.20. Income taxes
deferred taxes results enabling realisation of deferred taxes.
Lease liabilities and Judgement in determining the lease term of contracts with renewal and 2.4.10. Leases
right-of-use assets termination options at the commencement date of each lease contract.
Area
Significant estimate
Note
Revenue Estimation on the timing of the consequent usage and the amounts that are 2.4.5. Revenues and
probable to be collected. associated costs
Intangible assets, Assumptions relating to impairment tests performed on each of the Group\u2019s 2.4.7. Goodwill and 2.4.8.
including goodwill cash-generating units (CGUs) or intangible assets, future cash flows and Content assets and
and content assets discount rates are updated annually. Estimation of (remaining) useful life for other intangibles
intangible assets, other than goodwill.
Provisions Estimating the likelihood and timing of potential cash flows relating to royalty 2.4.18. Provisions
claims and litigation.
Artist Estimates of the future performance of artists and repertoire owners who 2.4.8. Content assets
royalty advances are paid advances that are recognized in the Consolidated Statement of and other intangibles
Financial Position.
Share- Estimation of the grant date fair value and number of equity instruments. 2.4.21. Share-
based payments based payments
Pension liability Assumptions for discount rates, inflation, future pension increases and life 2.4.19. Employee
expectancy to calculate the defined benefit obligation. benefit plans
For more details on these significant judgement areas and resulting estimates refer to the accounting policies below.
2.4.5. Revenues and associated costs Revenues from contracts with customers are recorded when performance obligations promised in the contract are satisfied, and for an amount for which it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Revenues are reported net of discounts. Intellectual property licensing (musical works) These licenses transfer to a customer either a right to use an entity's intellectual property as it exists at the point in time at which the license is granted (static license), or a right to access an entity's intellectual property as it exists throughout the license period (dynamic license). Revenues are accounted for when the performance obligation promised in the contract is satisfied (static license) or over time upon satisfaction (dynamic license), i.e., when the seller transfers the control over the right to use/access the intellectual property and the customer obtains control of the use/access of that license. Consequently, revenues from static licenses are recognized at the point in time when the license is transferred and the customer is able to use and benefit from the license. Revenues from dynamic licenses are accounted for over time, over the license period from the date the customer is able to use and benefit from the license and in line with the sale or usage. Consideration received in the current year, which represents income from ordinary activities related to the prior years, is recorded within revenue, unless it was accrued before. Court settlements in relation to the unauthorized usage of UMG's intellectual property in previous years are recorded in revenue as they relate to activities carried out within the ordinary course of business. Analysis of the Agent/Principal relationship in sales transactions involving a third party If the nature of the entity's undertaking is a performance obligation to provide the specified goods or services itself, then the entity acts on its own behalf and it is \u201cprincipal\u201d in the sale transaction: it accounts for revenue as the gross amount of consideration to which it expects to be entitled in exchange for the goods or services provided, and the commission due to the third-party as cost of revenues. If the entity arranges for a third-party to provide the goods or services specified in the contract, then it recognizes as revenues the net amount of consideration to which it expects to be entitled in exchange for the goods or services provided. Financing Component and other UMG does not adjust the transaction price for the effects of significant financing component if, at contract inception, it is expected that the period between customer payment and the transfer of goods or services is one year or less. This applies to the majority of sales transactions. The transaction price may be variable due to discounts, rebates, or similar arrangements. In determining the transaction price UMG considers the fair value of any non-cash consideration. Revenue is only recognized for the part of the consideration for which it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Judgement is required in determining the probability and level of discounts and rebates that will be granted. The estimate is updated throughout the term of the contract. Revenue recognition by business segment Recorded Music The sales of recorded music (physical, digital downloading or streaming) are intellectual property licenses granted by UMG to distributors or digital platforms and which give them certain rights over UMG's musical works. Physical sales of recorded music (CDs, DVDs and Vinyls) These intellectual property licenses are static licenses transferring to the customer a right to use UMG\u2018s recordings as they exist at the point in time at which the license is granted, i.e., on the physical device sold. Revenues from the physical sales of recorded music, net of a provision for estimated returns and rebates, if any, are accounted for, either: (i) upon the sale to the distributor, at the shipping point for products sold free on board (FOB) or on delivery for products sold free on destination; or (ii) upon the sale to the final customer for consignment sales. Digital sales of recorded music, via streaming by paid subscription, ad-supported or downloading. These intellectual property licenses are generally dynamic licenses providing a right to access the entire catalogue of recorded music as it exists throughout the license period considering potential add-ons to, or withdrawals from, the catalogue during that period. The consideration paid by the digital platform is variable in the form of a sales-based or a usage-based royalty. Revenues are then accounted for when these subsequent sales or usages occur. Revenues from digital sales of recorded music, for which UMG has sufficient, accurate, and reliable data from digital platforms, are recognized at the end of the month in which the sale or usage is made by the end customer. For digital sales of recorded music via paid subscription or ad-supported streaming, certain contracts may include a non-refundable minimum guarantee which is generally recoupable and is in substance an advance payment. In the case of a dynamic license, the minimum guarantee is spread over the period to which it relates and takes into account the amount of royalties that are actually recoupable. The minimum guarantee is apportioned in accordance with the accounting for these royalties. Music Publishing Music Publishing relates to the use by a third party of the copyrights on musical works owned or administered by UMG, which are intellectual property licenses that UMG grants to the third party and which provides a right to access a catalogue of recorded music, as these intellectual property licenses are dynamic licenses. For these contracts, revenues are recognised on the basis of sales and usage royalties, using the best available estimate on the timing of the consequent usage and the amounts that are probable to be collected. Merchandising Revenues from merchandising are recognized when control has been passed either upon sale to the end customer, from direct sales during touring, concessions and over the internet; on delivery for sales by a third-party distributor; or for sales of rights attached to merchandising products when a contract is signed and collectability is probable and on a sales and usage basis. Provisions for estimated returns and price guarantees are deducted from sales of products to customers through distributors. The provisions are estimated based on past sales statistics and take into account the economic environment and product sales forecast to final customers. Associated costs of revenues Cost of revenues primarily includes product costs and artists costs. Selling, general and administrative expenses primarily include salaries and employee benefits, consulting and service fees, insurance costs, travel and entertainment expenses, depreciation of capital expenditure and right of use assets, administrative department costs, value allowances for receivables, restructuring expenses and other operating expenses and are expensed when incurred. Advertising costs are expensed when incurred. Slotting fees and cooperative advertising expenses are recorded as a reduction in revenues. However, cooperative advertising is not treated as a reduction of transaction price but marketing expense and expensed when it is distinct and can be estimated. 2.4.7. Goodwill Goodwill represents the difference between the fair value of the net assets acquired and the transaction price in a business combination. Goodwill arising on the acquisition of associates and joint ventures is included in their carrying amounts. Subsequently, goodwill is measured at its initial amount less accumulated impairment losses. On the acquisition date, to the extent possible, goodwill is allocated to each cash-generating unit likely to benefit from the business combination. 2.4.8. Content assets and other intangibles Content assets include royalty advances to artists, songwriters and co-publishers as well as recorded music and music publishing catalogues, artists\u2019 contracts and rights. Music catalogues, trade names, subscribers\u2019 bases and market shares generated internally are not recognized as intangible assets. Intangible assets separately acquired are recorded at cost, and intangible assets acquired in a business combination are recorded at their fair value at the acquisition date. Amortisation is charged to profit or loss on a straight-line basis over the estimated useful life. UMG believes that straight-line depreciation most accurately reflects the expected pattern of consumption of the future economic benefits embodied in these intangible assets. Useful lives are determined based on the asset\u2019s expected pattern of the future earnings and the period of the contractual arrangements. Useful lives are reviewed at the end of each reporting period. Music catalogues and publishing rights The majority of the music catalogues are amortised over 20 years on a straight-line basis. Some significant catalogues can be amortized over a longer period of time. Advances to artists and repertoire owners Royalty advances to artists, songwriters, and co-publishers are capitalized as an asset when their current popularity and past performances provide a reasonable basis to conclude that the probable future recoupment of such royalty advances against earnings otherwise payable to them is reasonably assured. Royalty advances are recognized as an expense as subsequent royalties are earned by the artist, songwriter or co-publisher. Any portion of capitalized royalty advances not deemed to be recoverable against future royalties is expensed during the period in which the loss becomes evident. These expenses are recorded in cost of revenues. Other intangible assets Other intangibles mainly includes software for internal use. Direct internal and external costs incurred for the development of software for internal use are capitalized during the development stage if the resulting product or process is technically and commercially feasible, cost can be reliably measured, UMG has sufficient resources and the intention to complete its development. Research costs are expensed when incurred. Costs of significant upgrades and enhancements resulting in additional functionality are also capitalized. The software for internal use is generally amortized over 3 years and included within amortisation expense. 2.4.18. Provisions Provisions are recognized when, at the end of the reporting period, UMG has a legal obligation (statutory, regulatory or contractual) or a constructive obligation, as a result of past events, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the obligation can be reliably estimated. Where the effect of the time value of money is material, provisions are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money. If the amount of the obligation cannot be reliably estimated, no provision is recorded and a disclosure is made in the Notes to the Consolidated Financial Statements. Significant judgment is required in determining the amount and probability of resources outflow and discount rates used to calculate the present value of this outflow. Provisions for royalty audit claims Up to the completion of the royalty claim audit, the timing and the amount of the potential pay-outs is uncertain. UMG makes its best possible estimate of the outcome using any available data, including history of claims with rights owners. When the estimate is performed for large homogeneous claims and contract terms, the statistical valuation method is used. Litigation provisions In the ordinary course of business, UMG may be involved in a number of legal and arbitration proceedings and administrative actions. The costs which may result from these proceedings are accrued at the reporting date if UMG has a present obligation toward a third party resulting from a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the amount of that liability can be quantified or estimated within a reasonable range. The amount of provision recorded is based on a case-by-case assessment of the risk level, and events arising during the course of legal proceedings may require a reassessment of this risk at any time. 2.4.19. Employee benefit plans Defined contribution plans Contributions to defined contribution and multi-employer plans are expensed during the year when related services are provided. Defined benefit plans Defined benefit plans may be funded by investments in various instruments such as insurance contracts or equity and debt investment securities, excluding shares in any UMG entity or debt instruments. Pension expenses and defined benefit obligations are calculated by independent actuaries using the projected unit credit method. This method is based on annually updated assumptions, which include the probability of employees remaining with UMG until retirement, expected changes in future compensation and an appropriate discount rate for each country in which UMG maintains a pension plan. The discount rate is determined for each country by reference to yields on notes issued by investment grade companies having a credit rating of AA and maturities identical to that of the valued plans, generally based on relevant rate indices. The expected return on plan assets is estimated by using the selected discount rate to value the obligations of the previous year. The calculation is performed separately for each plan. A provision is recorded in the Statement of Financial Position equal to the difference between the actuarial value of the related benefits (actuarial liability) and the fair value of any associated plan assets, and this includes past service costs and actuarial gains and losses. The cost of defined benefit plans consists of three components recognized as follows: \u2022 the service cost is included in selling, general and administrative expenses. It comprises current service cost, past service cost resulting from a plan amendment or a curtailment, immediately recognized in profit and loss, and gains and losses on settlement; \u2022 the financial component, recorded in other financial expenses and income, consists of the unwinding of the interest component of the discount, less the expected return on plan assets determined using the discount rate retained for the valuation of the benefit obligation; and \u2022 the remeasurements of the net defined benefit liability (asset), recognized in items of other comprehensive income not reclassified as profit and loss, mainly consist of actuarial gains and losses, i.e., changes in the present value of the defined benefit obligation and plan assets resulting from changes in actuarial assumptions and experience adjustments (representing the differences between the expected effect of some actuarial assumptions applied to previous valuations and the effective impact). Where the value of plan assets exceeds benefit obligations, a financial asset is recognized up to the present value of future refunds and the expected reduction in future contributions. Some other post-employment benefits, such as life insurance and medical coverage (mainly in the United States) are subject to provisions which are assessed through an actuarial calculation comparable to the method used for pension provisions. 2.4.21. Share-based payments Equity-settled share-based compensation expense is recognized as a personnel cost over the vesting period of the award at the fair value of the equity instruments granted at the grant date with a corresponding increase in equity. For cases in which the grant date occurs after the employees to whom the equity instruments were granted have begun rendering services (for example, if a grant of equity instruments is subject to shareholder approval), UMG estimates the grant date fair value of the equity instruments by estimating the fair value of the equity instruments at the end of the reporting period, for the purposes of recognising the services received during the period between service commencement date and grant date. Once the date of grant has been established, UMG revises the earlier estimate so that the amounts recognised for services received in respect of the grant are ultimately based on the grant date fair value of the equity instruments. Fair value of the shares granted is fixed at the grant date and is equal to the share price at the grant date with a deduction for the aggregate discounted value of the dividends that will not be received over the vesting period, unless the conditions of the plan prescribe compensation for the vesting period dividends, and after taking into account the discount for non-transferability during the retention period. The cumulative expense recognized for equity-settled transactions at each reporting date reflects the extent to which the vesting period has expired and UMG\u2019s best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the Statement of Profit or Loss for a period represents the movement in cumulative expense recognized as at the beginning and end of that period. Service and non-market performance conditions are not considered when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of UMG\u2019s best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. ", "dimensions": { "concept": "ifrs-full:DisclosureOfAssetsAndLiabilitiesWithSignificantRiskOfMaterialAdjustmentExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-465": { "value": "Accounting estimates and judgements Application of the accounting policies requires judgements that impact the amounts recognised. All significant judgements and estimates are disclosed in the notes to the Consolidated financial statements. Information and considerations regarding areas of significant judgements and estimates have been included in the table below. It is reasonably possible, that outcomes of these judgements and estimates within the next financial year are different from the assumptions, which could require a material adjustment to the carrying amount of the asset or liability affected.
Area
Significant judgement
Note
Significant judgement is required to identify performance obligations under
Revenue contracts with customers, whether these performance obligations are satisfied 2.4.5. Revenues and
at a point of time or over time, and probability that collectability is assured associated costs
and significant reversal will not occur.
Uncertain tax Judgement in assessing the uncertainty of whether it is probable that a
positions and taxation authority will accept or revise the uncertain tax treatment and, future 2.4.20. Income taxes
deferred taxes results enabling realisation of deferred taxes.
Lease liabilities and Judgement in determining the lease term of contracts with renewal and 2.4.10. Leases
right-of-use assets termination options at the commencement date of each lease contract.
Area
Significant estimate
Note
Revenue Estimation on the timing of the consequent usage and the amounts that are 2.4.5. Revenues and
probable to be collected. associated costs
Intangible assets, Assumptions relating to impairment tests performed on each of the Group\u2019s 2.4.7. Goodwill and 2.4.8.
including goodwill cash-generating units (CGUs) or intangible assets, future cash flows and Content assets and
and content assets discount rates are updated annually. Estimation of (remaining) useful life for other intangibles
intangible assets, other than goodwill.
Provisions Estimating the likelihood and timing of potential cash flows relating to royalty 2.4.18. Provisions
claims and litigation.
Artist Estimates of the future performance of artists and repertoire owners who 2.4.8. Content assets
royalty advances are paid advances that are recognized in the Consolidated Statement of and other intangibles
Financial Position.
Share- Estimation of the grant date fair value and number of equity instruments. 2.4.21. Share-
based payments based payments
Pension liability Assumptions for discount rates, inflation, future pension increases and life 2.4.19. Employee
expectancy to calculate the defined benefit obligation. benefit plans
For more details on these significant judgement areas and resulting estimates refer to the accounting policies below. 2.4.5. Revenues and associated costs Revenues from contracts with customers are recorded when performance obligations promised in the contract are satisfied, and for an amount for which it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Revenues are reported net of discounts. Intellectual property licensing (musical works) These licenses transfer to a customer either a right to use an entity's intellectual property as it exists at the point in time at which the license is granted (static license), or a right to access an entity's intellectual property as it exists throughout the license period (dynamic license). Revenues are accounted for when the performance obligation promised in the contract is satisfied (static license) or over time upon satisfaction (dynamic license), i.e., when the seller transfers the control over the right to use/access the intellectual property and the customer obtains control of the use/access of that license. Consequently, revenues from static licenses are recognized at the point in time when the license is transferred and the customer is able to use and benefit from the license. Revenues from dynamic licenses are accounted for over time, over the license period from the date the customer is able to use and benefit from the license and in line with the sale or usage. Consideration received in the current year, which represents income from ordinary activities related to the prior years, is recorded within revenue, unless it was accrued before. Court settlements in relation to the unauthorized usage of UMG's intellectual property in previous years are recorded in revenue as they relate to activities carried out within the ordinary course of business. Analysis of the Agent/Principal relationship in sales transactions involving a third party If the nature of the entity's undertaking is a performance obligation to provide the specified goods or services itself, then the entity acts on its own behalf and it is \u201cprincipal\u201d in the sale transaction: it accounts for revenue as the gross amount of consideration to which it expects to be entitled in exchange for the goods or services provided, and the commission due to the third-party as cost of revenues. If the entity arranges for a third-party to provide the goods or services specified in the contract, then it recognizes as revenues the net amount of consideration to which it expects to be entitled in exchange for the goods or services provided. Financing Component and other UMG does not adjust the transaction price for the effects of significant financing component if, at contract inception, it is expected that the period between customer payment and the transfer of goods or services is one year or less. This applies to the majority of sales transactions. The transaction price may be variable due to discounts, rebates, or similar arrangements. In determining the transaction price UMG considers the fair value of any non-cash consideration. Revenue is only recognized for the part of the consideration for which it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Judgement is required in determining the probability and level of discounts and rebates that will be granted. The estimate is updated throughout the term of the contract. Revenue recognition by business segment Recorded Music The sales of recorded music (physical, digital downloading or streaming) are intellectual property licenses granted by UMG to distributors or digital platforms and which give them certain rights over UMG's musical works. Physical sales of recorded music (CDs, DVDs and Vinyls) These intellectual property licenses are static licenses transferring to the customer a right to use UMG\u2018s recordings as they exist at the point in time at which the license is granted, i.e., on the physical device sold. Revenues from the physical sales of recorded music, net of a provision for estimated returns and rebates, if any, are accounted for, either: (i) upon the sale to the distributor, at the shipping point for products sold free on board (FOB) or on delivery for products sold free on destination; or (ii) upon the sale to the final customer for consignment sales. Digital sales of recorded music, via streaming by paid subscription, ad-supported or downloading. These intellectual property licenses are generally dynamic licenses providing a right to access the entire catalogue of recorded music as it exists throughout the license period considering potential add-ons to, or withdrawals from, the catalogue during that period. The consideration paid by the digital platform is variable in the form of a sales-based or a usage-based royalty. Revenues are then accounted for when these subsequent sales or usages occur. Revenues from digital sales of recorded music, for which UMG has sufficient, accurate, and reliable data from digital platforms, are recognized at the end of the month in which the sale or usage is made by the end customer. For digital sales of recorded music via paid subscription or ad-supported streaming, certain contracts may include a non-refundable minimum guarantee which is generally recoupable and is in substance an advance payment. In the case of a dynamic license, the minimum guarantee is spread over the period to which it relates and takes into account the amount of royalties that are actually recoupable. The minimum guarantee is apportioned in accordance with the accounting for these royalties. Music Publishing Music Publishing relates to the use by a third party of the copyrights on musical works owned or administered by UMG, which are intellectual property licenses that UMG grants to the third party and which provides a right to access a catalogue of recorded music, as these intellectual property licenses are dynamic licenses. For these contracts, revenues are recognised on the basis of sales and usage royalties, using the best available estimate on the timing of the consequent usage and the amounts that are probable to be collected. Merchandising Revenues from merchandising are recognized when control has been passed either upon sale to the end customer, from direct sales during touring, concessions and over the internet; on delivery for sales by a third-party distributor; or for sales of rights attached to merchandising products when a contract is signed and collectability is probable and on a sales and usage basis. Provisions for estimated returns and price guarantees are deducted from sales of products to customers through distributors. The provisions are estimated based on past sales statistics and take into account the economic environment and product sales forecast to final customers. Associated costs of revenues Cost of revenues primarily includes product costs and artists costs. Selling, general and administrative expenses primarily include salaries and employee benefits, consulting and service fees, insurance costs, travel and entertainment expenses, depreciation of capital expenditure and right of use assets, administrative department costs, value allowances for receivables, restructuring expenses and other operating expenses and are expensed when incurred. Advertising costs are expensed when incurred. Slotting fees and cooperative advertising expenses are recorded as a reduction in revenues. However, cooperative advertising is not treated as a reduction of transaction price but marketing expense and expensed when it is distinct and can be estimated. 2.4.7. Goodwill Goodwill represents the difference between the fair value of the net assets acquired and the transaction price in a business combination. Goodwill arising on the acquisition of associates and joint ventures is included in their carrying amounts. Subsequently, goodwill is measured at its initial amount less accumulated impairment losses. On the acquisition date, to the extent possible, goodwill is allocated to each cash-generating unit likely to benefit from the business combination. 2.4.8. Content assets and other intangibles Content assets include royalty advances to artists, songwriters and co-publishers as well as recorded music and music publishing catalogues, artists\u2019 contracts and rights. Music catalogues, trade names, subscribers\u2019 bases and market shares generated internally are not recognized as intangible assets. Intangible assets separately acquired are recorded at cost, and intangible assets acquired in a business combination are recorded at their fair value at the acquisition date. Amortisation is charged to profit or loss on a straight-line basis over the estimated useful life. UMG believes that straight-line depreciation most accurately reflects the expected pattern of consumption of the future economic benefits embodied in these intangible assets. Useful lives are determined based on the asset\u2019s expected pattern of the future earnings and the period of the contractual arrangements. Useful lives are reviewed at the end of each reporting period. Music catalogues and publishing rights The majority of the music catalogues are amortised over 20 years on a straight-line basis. Some significant catalogues can be amortized over a longer period of time. Advances to artists and repertoire owners Royalty advances to artists, songwriters, and co-publishers are capitalized as an asset when their current popularity and past performances provide a reasonable basis to conclude that the probable future recoupment of such royalty advances against earnings otherwise payable to them is reasonably assured. Royalty advances are recognized as an expense as subsequent royalties are earned by the artist, songwriter or co-publisher. Any portion of capitalized royalty advances not deemed to be recoverable against future royalties is expensed during the period in which the loss becomes evident. These expenses are recorded in cost of revenues. Other intangible assets Other intangibles mainly includes software for internal use. Direct internal and external costs incurred for the development of software for internal use are capitalized during the development stage if the resulting product or process is technically and commercially feasible, cost can be reliably measured, UMG has sufficient resources and the intention to complete its development. Research costs are expensed when incurred. Costs of significant upgrades and enhancements resulting in additional functionality are also capitalized. The software for internal use is generally amortized over 3 years and included within amortisation expense. 2.4.18. Provisions Provisions are recognized when, at the end of the reporting period, UMG has a legal obligation (statutory, regulatory or contractual) or a constructive obligation, as a result of past events, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the obligation can be reliably estimated. Where the effect of the time value of money is material, provisions are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money. If the amount of the obligation cannot be reliably estimated, no provision is recorded and a disclosure is made in the Notes to the Consolidated Financial Statements. Significant judgment is required in determining the amount and probability of resources outflow and discount rates used to calculate the present value of this outflow. Provisions for royalty audit claims Up to the completion of the royalty claim audit, the timing and the amount of the potential pay-outs is uncertain. UMG makes its best possible estimate of the outcome using any available data, including history of claims with rights owners. When the estimate is performed for large homogeneous claims and contract terms, the statistical valuation method is used. Litigation provisions In the ordinary course of business, UMG may be involved in a number of legal and arbitration proceedings and administrative actions. The costs which may result from these proceedings are accrued at the reporting date if UMG has a present obligation toward a third party resulting from a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the amount of that liability can be quantified or estimated within a reasonable range. The amount of provision recorded is based on a case-by-case assessment of the risk level, and events arising during the course of legal proceedings may require a reassessment of this risk at any time. 2.4.19. Employee benefit plans Defined contribution plans Contributions to defined contribution and multi-employer plans are expensed during the year when related services are provided. Defined benefit plans Defined benefit plans may be funded by investments in various instruments such as insurance contracts or equity and debt investment securities, excluding shares in any UMG entity or debt instruments. Pension expenses and defined benefit obligations are calculated by independent actuaries using the projected unit credit method. This method is based on annually updated assumptions, which include the probability of employees remaining with UMG until retirement, expected changes in future compensation and an appropriate discount rate for each country in which UMG maintains a pension plan. The discount rate is determined for each country by reference to yields on notes issued by investment grade companies having a credit rating of AA and maturities identical to that of the valued plans, generally based on relevant rate indices. The expected return on plan assets is estimated by using the selected discount rate to value the obligations of the previous year. The calculation is performed separately for each plan. A provision is recorded in the Statement of Financial Position equal to the difference between the actuarial value of the related benefits (actuarial liability) and the fair value of any associated plan assets, and this includes past service costs and actuarial gains and losses. The cost of defined benefit plans consists of three components recognized as follows: \u2022 the service cost is included in selling, general and administrative expenses. It comprises current service cost, past service cost resulting from a plan amendment or a curtailment, immediately recognized in profit and loss, and gains and losses on settlement; \u2022 the financial component, recorded in other financial expenses and income, consists of the unwinding of the interest component of the discount, less the expected return on plan assets determined using the discount rate retained for the valuation of the benefit obligation; and \u2022 the remeasurements of the net defined benefit liability (asset), recognized in items of other comprehensive income not reclassified as profit and loss, mainly consist of actuarial gains and losses, i.e., changes in the present value of the defined benefit obligation and plan assets resulting from changes in actuarial assumptions and experience adjustments (representing the differences between the expected effect of some actuarial assumptions applied to previous valuations and the effective impact). Where the value of plan assets exceeds benefit obligations, a financial asset is recognized up to the present value of future refunds and the expected reduction in future contributions. Some other post-employment benefits, such as life insurance and medical coverage (mainly in the United States) are subject to provisions which are assessed through an actuarial calculation comparable to the method used for pension provisions. 2.4.21. Share-based payments Equity-settled share-based compensation expense is recognized as a personnel cost over the vesting period of the award at the fair value of the equity instruments granted at the grant date with a corresponding increase in equity. For cases in which the grant date occurs after the employees to whom the equity instruments were granted have begun rendering services (for example, if a grant of equity instruments is subject to shareholder approval), UMG estimates the grant date fair value of the equity instruments by estimating the fair value of the equity instruments at the end of the reporting period, for the purposes of recognising the services received during the period between service commencement date and grant date. Once the date of grant has been established, UMG revises the earlier estimate so that the amounts recognised for services received in respect of the grant are ultimately based on the grant date fair value of the equity instruments. Fair value of the shares granted is fixed at the grant date and is equal to the share price at the grant date with a deduction for the aggregate discounted value of the dividends that will not be received over the vesting period, unless the conditions of the plan prescribe compensation for the vesting period dividends, and after taking into account the discount for non-transferability during the retention period. The cumulative expense recognized for equity-settled transactions at each reporting date reflects the extent to which the vesting period has expired and UMG\u2019s best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the Statement of Profit or Loss for a period represents the movement in cumulative expense recognized as at the beginning and end of that period. Service and non-market performance conditions are not considered when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of UMG\u2019s best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. ", "dimensions": { "concept": "ifrs-full:ExplanationOfAssumptionAboutFutureWithSignificantRiskOfResultingInMaterialAdjustments", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-338": { "value": "
2.3.
Financial statement presentation changes
During 2023 UMG made a prior year presentation change and updated, compared to the 2022 Consolidated financial
statements, the presentation of the Consolidated Statement of Cash Flows to further improve transparency and
readability of these statements.
The update to the Consolidated Statement of Cash Flows relates to a reclassificiation of the prior year non-cash share-
based compensation expense from other changes in working capital line to the adjustments line. Details on the impact
on 2022 comparatives for the year ended December 31, 2022 is presented in the table below.
Year ended December 31, 2022
Presentation
Before Changes After Changes
Changes
Operating activities
Operating profit
1,600
-
1,600
Adjustments
461
107
568
Royalty advances payments, net of recoupments
(148)
-
(148)
Gross cash provided by/(used for) operating activities before income tax paid
1,913
107
2,020
Other changes in net working capital
74
(107)
(33)
Net cash provided by/(used for) operating activities before income tax paid
1,987
-
1,987
Income tax paid
(255)
-
(255)
Net cash provided by/(used for) operating activities
1,732
-
1,732
Net cash provided by/(used for) investing activities
(520)
-
(520)
Net cash provided by/(used for) financing activities
(1,347)
-
(1,347)
Net change in cash and cash equivalents
(135)
-
(135)
Foreign currency translation adjustments
1
-
1
Change in cash and cash equivalents
(134)
-
(134)
Cash and cash equivalents
At beginning of the period
572
-
572
At end of the period
438
-
438
", "dimensions": { "concept": "ifrs-full:DisclosureOfReclassificationsOrChangesInPresentationExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-339": { "value": "2.4.1. Foreign currency Foreign currency transactions Foreign currency transactions are initially recorded in the functional currency of the entity at the exchange rate prevailing at the date of the transaction. At the closing date, foreign currency monetary assets and liabilities are translated into the entity's functional currency at the exchange rate prevailing on that date with foreign currency differences recorded to profit and loss. Financial statements denominated in a foreign currency The assets and liabilities of foreign operations with functional currencies other than the Euro are translated using exchange rates prevailing at the reporting date. The income and expenses of foreign operations are translated using monthly average exchange rates which approximate prevailing exchange rates at the dates of the underlying transactions. The resulting translation gains and losses are recognised in other comprehensive income and presented within equity. For foreign operations that are not wholly-owned subsidiaries, the proportionate share of the translation differences are allocated to non-controlling interests. The cumulative amount in the translation reserve is (either fully or partly) reclassified to the income statement upon disposal (either fully or partly) or liquidation. In 2023, UMG did not have any significant foreign operations in hyper-inflationary economies. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-386": { "value": "Foreign currency transactions Foreign currency transactions are initially recorded in the functional currency of the entity at the exchange rate prevailing at the date of the transaction. At the closing date, foreign currency monetary assets and liabilities are translated into the entity's functional currency at the exchange rate prevailing on that date with foreign currency differences recorded to profit and loss. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-340": { "value": "2.4.2. Earnings per share UMG presents basic and diluted earnings per share (EPS) data for its shares. Basic EPS is calculated by dividing the net profit or loss attributable to shareholders of UMG by the weighted average number of shares outstanding during the year, adjusted for the weighted average number of own shares held in the year. Diluted EPS is determined by dividing the profit or loss attributable to shareholders by the weighted average number of shares outstanding, adjusted for the weighted
average number of own shares held in the year and for the effects of all dilutive potential shares which comprise share
rights and options granted to employees.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEarningsPerShareExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-341": { "value": "
2.4.3. Consolidated Statement of Cash Flows
The Consolidated Statement of Cash Flows is prepared using the indirect method starting from Operating profit. Dividends
received from equity affiliates and investments are included in the investing cash flow. It also includes any cash flows
arising from the gain or loss of control of subsidiaries. Interest paid, including interest paid on lease liability, is included
in the financing activities.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForCashFlowsExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-342": { "value": "
2.4.4. Accounting for associates and joint ventures
Associates are entities in which UMG has significant influence, but not control or joint control. Significant influence
is generally obtained by ownership of more than 20% but less than 50% of the voting rights. Joint ventures are the
arrangements in which UMG has joint control.
UMG\u2019s investments in associates and joint ventures are accounted for using the equity method of accounting, meaning
they are initially recognised at cost. The Consolidated financial statements include UMG\u2019s share of the net profit or loss of
the associates and joint ventures whereby the result is determined using the accounting policies of UMG. When UMG\u2019s
share of losses exceeds the carrying amount of the associate or joint venture, the carrying amount is reduced to nil and
recognition of further losses is discontinued except to the extent that UMG has an obligation or has made a payment on
behalf of the associate or joint venture.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociatesAndJointVenturesExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-420": { "value": "2.4.4. Accounting for associates and joint ventures Associates are entities in which UMG has significant influence, but not control or joint control. Significant influence is generally obtained by ownership of more than 20% but less than 50% of the voting rights. Joint ventures are the arrangements in which UMG has joint control. UMG\u2019s investments in associates and joint ventures are accounted for using the equity method of accounting, meaning they are initially recognised at cost. The Consolidated financial statements include UMG\u2019s share of the net profit or loss of the associates and joint ventures whereby the result is determined using the accounting policies of UMG. When UMG\u2019s share of losses exceeds the carrying amount of the associate or joint venture, the carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that UMG has an obligation or has made a payment on behalf of the associate or joint venture. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsInJointVentures", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-387": { "value": "2.4.4. Accounting for associates and joint ventures Associates are entities in which UMG has significant influence, but not control or joint control. Significant influence is generally obtained by ownership of more than 20% but less than 50% of the voting rights. Joint ventures are the arrangements in which UMG has joint control. UMG\u2019s investments in associates and joint ventures are accounted for using the equity method of accounting, meaning they are initially recognised at cost. The Consolidated financial statements include UMG\u2019s share of the net profit or loss of the associates and joint ventures whereby the result is determined using the accounting policies of UMG. When UMG\u2019s share of losses exceeds the carrying amount of the associate or joint venture, the carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that UMG has an obligation or has made a payment on behalf of the associate or joint venture. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociates", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-343": { "value": "
2.4.5.
Revenues and associated costs
Revenues from contracts with customers are recorded when performance obligations promised in the contract are
satisfied, and for an amount for which it is highly probable that a significant reversal in the amount of cumulative
revenue recognized will not occur. Revenues are reported net of discounts.
Intellectual property licensing (musical works)
These licenses transfer to a customer either a right to use an entity's intellectual property as it exists at the point in time
at which the license is granted (static license), or a right to access an entity's intellectual property as it exists throughout
the license period (dynamic license).
Revenues are accounted for when the performance obligation promised in the contract is satisfied (static license) or
over time upon satisfaction (dynamic license), i.e., when the seller transfers the control over the right to use/access the
intellectual property and the customer obtains control of the use/access of that license. Consequently, revenues from
static licenses are recognized at the point in time when the license is transferred and the customer is able to use and
benefit from the license. Revenues from dynamic licenses are accounted for over time, over the license period from the
date the customer is able to use and benefit from the license and in line with the sale or usage.
Consideration received in the current year, which represents income from ordinary activities related to the prior years, is
recorded within revenue, unless it was accrued before. Court settlements in relation to the unauthorized usage of UMG's
intellectual property in previous years are recorded in revenue as they relate to activities carried out within the ordinary
course of business.
Analysis of the Agent/Principal relationship in sales transactions involving a third party
If the nature of the entity's undertaking is a performance obligation to provide the specified goods or services itself,
then the entity acts on its own behalf and it is \u201cprincipal\u201d in the sale transaction: it accounts for revenue as the gross
amount of consideration to which it expects to be entitled in exchange for the goods or services provided, and the
commission due to the third-party as cost of revenues. If the entity arranges for a third-party to provide the goods or
services specified in the contract, then it recognizes as revenues the net amount of consideration to which it expects to
be entitled in exchange for the goods or services provided.
Financing Component and other
UMG does not adjust the transaction price for the effects of significant financing component if, at contract inception, it
is expected that the period between customer payment and the transfer of goods or services is one year or less. This
applies to the majority of sales transactions.
The transaction price may be variable due to discounts, rebates, or similar arrangements. In determining the transaction
price UMG considers the fair value of any non-cash consideration. Revenue is only recognized for the part of the
consideration for which it is highly probable that a significant reversal in the amount of cumulative revenue recognized
will not occur. Judgement is required in determining the probability and level of discounts and rebates that will be
granted. The estimate is updated throughout the term of the contract.
Revenue recognition by business segment
Recorded Music
The sales of recorded music (physical, digital downloading or streaming) are intellectual property licenses granted by
UMG to distributors or digital platforms and which give them certain rights over UMG's musical works.
Physical sales of recorded music (CDs, DVDs and Vinyls)
These intellectual property licenses are static licenses transferring to the customer a right to use UMG\u2018s recordings as
they exist at the point in time at which the license is granted, i.e., on the physical device sold.
Revenues from the physical sales of recorded music, net of a provision for estimated returns and rebates, if any, are
accounted for, either: (i) upon the sale to the distributor, at the shipping point for products sold free on board (FOB) or on
delivery for products sold free on destination; or (ii) upon the sale to the final customer for consignment sales.
Digital sales of recorded music, via streaming by paid subscription, ad-supported or downloading.
These intellectual property licenses are generally dynamic licenses providing a right to access the entire catalogue of
recorded music as it exists throughout the license period considering potential add-ons to, or withdrawals from, the
catalogue during that period.
The consideration paid by the digital platform is variable in the form of a sales-based or a usage-based royalty. Revenues
are then accounted for when these subsequent sales or usages occur. Revenues from digital sales of recorded music, for
which UMG has sufficient, accurate, and reliable data from digital platforms, are recognized at the end of the month in
which the sale or usage is made by the end customer.
For digital sales of recorded music via paid subscription or ad-supported streaming, certain contracts may include a
non-refundable minimum guarantee which is generally recoupable and is in substance an advance payment. In the
case of a dynamic license, the minimum guarantee is spread over the period to which it relates and takes into account
the amount of royalties that are actually recoupable. The minimum guarantee is apportioned in accordance with the
accounting for these royalties.
Music Publishing
Music Publishing relates to the use by a third party of the copyrights on musical works owned or administered by
UMG, which are intellectual property licenses that UMG grants to the third party and which provides a right to access a
catalogue of recorded music, as these intellectual property licenses are dynamic licenses. For these contracts, revenues
are recognised on the basis of sales and usage royalties, using the best available estimate on the timing of the
consequent usage and the amounts that are probable to be collected.
Merchandising
Revenues from merchandising are recognized when control has been passed either upon sale to the end customer, from
direct sales during touring, concessions and over the internet; on delivery for sales by a third-party distributor; or for
sales of rights attached to merchandising products when a contract is signed and collectability is probable and on a
sales and usage basis.
Provisions for estimated returns and price guarantees are deducted from sales of products to customers through
distributors. The provisions are estimated based on past sales statistics and take into account the economic
environment and product sales forecast to final customers.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-441": { "value": "
Associated costs of revenues
Cost of revenues primarily includes product costs and artists costs.
Selling, general and administrative expenses primarily include salaries and employee benefits, consulting and service
fees, insurance costs, travel and entertainment expenses, depreciation of capital expenditure and right of use assets,
administrative department costs, value allowances for receivables, restructuring expenses and other operating expenses
and are expensed when incurred.
Advertising costs are expensed when incurred.
Slotting fees and cooperative advertising expenses are recorded as a reduction in revenues. However, cooperative
advertising is not treated as a reduction of transaction price but marketing expense and expensed when it is distinct
and can be estimated.
2.4.9. Property, plant and equipment Property, plant and equipment are carried at historical cost less any accumulated depreciation and impairment losses. Land and assets under construction are not depreciated. Depreciation is calculated using the straight-line method based on the estimated useful life of the assets. Leasehold improvements are depreciated over a period not longer than the lease term. Useful lives are reviewed at the end of each reporting period and are as follows: \u2022 buildings: 5 to 40 years; \u2022 equipment and machinery: 3 to 8 years; and \u2022 other: 2 to 10 years. Right-of-use assets Right-of-use assets are initially measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. The recognized right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForExpensesExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-344": { "value": "
2.4.6. Business combinations
UMG accounts for business combinations using the acquisition method when the acquired set of activities and assets
meets the definition of a business and control is transferred to the Group. In determining whether a particular set
of activities and assets is a business, UMG assesses whether the set of assets and activities acquired includes, at a
minimum, an input and substantive process and whether the acquired set has the ability to produce outputs.
Under this the acquisition method, upon the initial consolidation of an entity over which UMG has acquired
exclusive control:
\u2022 the identifiable assets acquired, and the liabilities assumed are recognized at their fair values on the acquisition
date; and
\u2022 non-controlling interests are measured either at fair value or at the non-controlling interest's proportionate share of
the acquiree\u2019s net identifiable assets. This option is available on a transaction-by-transaction basis.
Contingent consideration in a business combination is recorded at fair value on the acquisition date, and any
subsequent adjustment occurring after the purchase price allocation period is recognized in the Statement of Profit
or Loss. Acquisition-related costs are recognized as expenses when incurred.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-421": { "value": "2.4.6. Business combinations UMG accounts for business combinations using the acquisition method when the acquired set of activities and assets meets the definition of a business and control is transferred to the Group. In determining whether a particular set of activities and assets is a business, UMG assesses whether the set of assets and activities acquired includes, at a minimum, an input and substantive process and whether the acquired set has the ability to produce outputs. Under this the acquisition method, upon the initial consolidation of an entity over which UMG has acquired exclusive control: \u2022 the identifiable assets acquired, and the liabilities assumed are recognized at their fair values on the acquisition date; and \u2022 non-controlling interests are measured either at fair value or at the non-controlling interest's proportionate share of the acquiree\u2019s net identifiable assets. This option is available on a transaction-by-transaction basis. Contingent consideration in a business combination is recorded at fair value on the acquisition date, and any subsequent adjustment occurring after the purchase price allocation period is recognized in the Statement of Profit or Loss. Acquisition-related costs are recognized as expenses when incurred. 2.4.7. Goodwill Goodwill represents the difference between the fair value of the net assets acquired and the transaction price in a business combination. Goodwill arising on the acquisition of associates and joint ventures is included in their carrying amounts. Subsequently, goodwill is measured at its initial amount less accumulated impairment losses. On the acquisition date, to the extent possible, goodwill is allocated to each cash-generating unit likely to benefit from the business combination. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsAndGoodwillExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-388": { "value": "
2.4.7.
Goodwill
Goodwill represents the difference between the fair value of the net assets acquired and the transaction price in
a business combination. Goodwill arising on the acquisition of associates and joint ventures is included in their
carrying amounts.
Subsequently, goodwill is measured at its initial amount less accumulated impairment losses. On the acquisition date, to
the extent possible, goodwill is allocated to each cash-generating unit likely to benefit from the business combination.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-345": { "value": "2.4.7. Goodwill Goodwill represents the difference between the fair value of the net assets acquired and the transaction price in a business combination. Goodwill arising on the acquisition of associates and joint ventures is included in their carrying amounts. Subsequently, goodwill is measured at its initial amount less accumulated impairment losses. On the acquisition date, to the extent possible, goodwill is allocated to each cash-generating unit likely to benefit from the business combination. 2.4.8. Content assets and other intangibles Content assets include royalty advances to artists, songwriters and co-publishers as well as recorded music and music publishing catalogues, artists\u2019 contracts and rights. Music catalogues, trade names, subscribers\u2019 bases and market shares generated internally are not recognized as intangible assets. Intangible assets separately acquired are recorded at cost, and intangible assets acquired in a business combination are recorded at their fair value at the acquisition date. Amortisation is charged to profit or loss on a straight-line basis over the estimated useful life. UMG believes that straight-line depreciation most accurately reflects the expected pattern of consumption of the future economic benefits embodied in these intangible assets.
Useful lives are determined based on the asset\u2019s expected pattern of the future earnings and the period of the
contractual arrangements. Useful lives are reviewed at the end of each reporting period.
Music catalogues and publishing rights
The majority of the music catalogues are amortised over 20 years on a straight-line basis. Some significant catalogues
can be amortized over a longer period of time.
Other intangible assets Other intangibles mainly includes software for internal use. Direct internal and external costs incurred for the development of software for internal use are capitalized during the development stage if the resulting product or process is technically and commercially feasible, cost can be reliably measured, UMG has sufficient resources and the intention to complete its development. Research costs are expensed when incurred. Costs of significant upgrades and enhancements resulting in additional functionality are also capitalized. The software for internal use is generally amortized over 3 years and included within amortisation expense. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-389": { "value": "2.4.8. Content assets and other intangibles Content assets include royalty advances to artists, songwriters and co-publishers as well as recorded music and music publishing catalogues, artists\u2019 contracts and rights. Music catalogues, trade names, subscribers\u2019 bases and market shares generated internally are not recognized as intangible assets. Intangible assets separately acquired are recorded at cost, and intangible assets acquired in a business combination are recorded at their fair value at the acquisition date. Amortisation is charged to profit or loss on a straight-line basis over the estimated useful life. UMG believes that straight-line depreciation most accurately reflects the expected pattern of consumption of the future economic benefits embodied in these intangible assets. Useful lives are determined based on the asset\u2019s expected pattern of the future earnings and the period of the contractual arrangements. Useful lives are reviewed at the end of each reporting period. Music catalogues and publishing rights The majority of the music catalogues are amortised over 20 years on a straight-line basis. Some significant catalogues can be amortized over a longer period of time. Other intangible assets Other intangibles mainly includes software for internal use. Direct internal and external costs incurred for the development of software for internal use are capitalized during the development stage if the resulting product or process is technically and commercially feasible, cost can be reliably measured, UMG has sufficient resources and the intention to complete its development. Research costs are expensed when incurred. Costs of significant upgrades and enhancements resulting in additional functionality are also capitalized. The software for internal use is generally amortized over 3 years and included within amortisation expense. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-442": { "value": "
Advances to artists and repertoire owners
Royalty advances to artists, songwriters, and co-publishers are capitalized as an asset when their current popularity and
past performances provide a reasonable basis to conclude that the probable future recoupment of such royalty advances
against earnings otherwise payable to them is reasonably assured. Royalty advances are recognized as an expense as
subsequent royalties are earned by the artist, songwriter or co-publisher. Any portion of capitalized royalty advances
not deemed to be recoverable against future royalties is expensed during the period in which the loss becomes evident.
These expenses are recorded in cost of revenues.
", "dimensions": { "concept": "universalmusicgroupnv:DescriptionOfAccountingPolicyForPrepayments", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-422": { "value": "
Other intangible assets
Other intangibles mainly includes software for internal use. Direct internal and external costs incurred for the
development of software for internal use are capitalized during the development stage if the resulting product or
process is technically and commercially feasible, cost can be reliably measured, UMG has sufficient resources and the
intention to complete its development. Research costs are expensed when incurred. Costs of significant upgrades and
enhancements resulting in additional functionality are also capitalized.
The software for internal use is generally amortized over 3 years and included within amortisation expense.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForResearchAndDevelopmentExpenseExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-423": { "value": "
2.4.9.
Property, plant and equipment
Property, plant and equipment are carried at historical cost less any accumulated depreciation and impairment losses.
Land and assets under construction are not depreciated. Depreciation is calculated using the straight-line method based
on the estimated useful life of the assets. Leasehold improvements are depreciated over a period not longer than the
lease term. Useful lives are reviewed at the end of each reporting period and are as follows:
\u2022 buildings: 5 to 40 years;
\u2022 equipment and machinery: 3 to 8 years; and
\u2022 other: 2 to 10 years.
Right-of-use assets
Right-of-use assets are initially measured at cost, less any accumulated depreciation and impairment losses, and
adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease
liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date
less any lease incentives received. The recognized right-of-use assets are depreciated on a straight-line basis over the
shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDepreciationExpenseExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-346": { "value": "2.4.9. Property, plant and equipment Property, plant and equipment are carried at historical cost less any accumulated depreciation and impairment losses. Land and assets under construction are not depreciated. Depreciation is calculated using the straight-line method based on the estimated useful life of the assets. Leasehold improvements are depreciated over a period not longer than the lease term. Useful lives are reviewed at the end of each reporting period and are as follows: \u2022 buildings: 5 to 40 years; \u2022 equipment and machinery: 3 to 8 years; and \u2022 other: 2 to 10 years. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-347": { "value": "2.4.10. Leases The main lease contracts for UMG correspond to real estate leases for which UMG is the lessee. Real estate leases for which UMG is the lessee are recorded at the commencement date and result in the recognition of a lease liability equal to the present value of future lease payments against a right-of-use asset relating to leases. Right-of-use assets Right-of-use assets are initially measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. The recognized right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment. Lease liabilities UMG recognizes lease liabilities initially measured at the present value of future lease payments over the lease term. The lease payments include in-substance fixed payments (less any lease incentives), variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include payments of penalties for terminating a lease, if UMG has the option to terminate and it is reasonably certain that this option will be exercised. In calculating the present value of lease payments, UMG uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. The carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term or a change in the in-substance fixed lease payments. Short-term leases and leases of low-value assets UMG applies the short-term lease recognition exemption to the real-estate leases with a lease term of 12 months or less from the commencement date and do not contain a purchase option. It also applies the lease of low-value assets recognition exemption to leases of office chattels and other equipment that are considered of low value. Lease payments on short-term leases and leases of low-value assets are recognized as an expense on a straight-line basis over the lease term. Estimates in accounting for leases UMG determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. When determining the lease term, UMG considers all relevant facts and circumstances that create an economic incentive to exercise an extension option, or not to exercise a termination option. These circumstances include UMG\u2019s real estate planning. In estimating the lessee\u2019s incremental borrowing rate, UMG takes into account the residual lease term and its duration to reflect the interest rate of a loan with a similar payment profile to the lease payments. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-348": { "value": "
2.4.11. Impairment of non-financial assets
Each time events or changes in the economic environment indicate a risk of impairment of goodwill, content assets
and other intangible assets, property, plant and equipment, investments in associates and joint ventures, rights-of-use
assets, UMG re-examines the value of these assets. In addition, in accordance with applicable accounting standards,
goodwill and intangible assets in progress are all subject to an annual impairment test undertaken in the fourth quarter
of each fiscal year. This impairment test is performed to compare the recoverable amount of each Cash Generating Unit
(CGU) to the carrying value of the corresponding assets (including goodwill). A CGU is the smallest identifiable group
of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of
assets. UMG operates through different content businesses. Each business offers different products and services that are
marketed through various channels. CGUs for goodwill correspond to the UMG's operating segments.
The recoverable amount is determined for each individual asset as the higher of: (i) its value in use; and (ii) its fair value
(less costs to sell) as described hereafter. If the asset does not generate cash inflows that are largely independent of other
assets or groups of assets, the recoverable amount is determined for the group of assets. In particular, in the case of
goodwill, an impairment test is performed by UMG for each CGU.
The value in use of each asset or group of assets is determined, subject to exceptions, by the Discounted Cash Flow
method (DCF) using cash flow projections consistent with the budget of the following year and the most recent forecasts
prepared by the operating segments.
Applied discount rates are determined by reference to available external sources of information, usually based on
financial institutions\u2019 benchmarks, and reflect the current assessment by UMG of the time value of money and risks
specific to each asset or group of assets.
Perpetual growth rates used for the evaluation are those used to prepare budgets for each CGU, and beyond the period
covered, are consistent with growth rates estimated by the business by extrapolating growth rates used in the budgets,
without exceeding the long-term average growth rate for the markets in which UMG operates.
The fair value (less costs to sell) is the price that would be received from the sale of an asset or group of assets in an
orderly transaction between market participants at the measurement date, less costs to sell of the asset or group of
assets. These values are generally determined based on market data (stock market prices or comparison with similar
listed companies, with the value attributed to similar assets or companies in recent transactions) or, in the absence of
such data, based on discontinued cash flows.
If the recoverable amount is lower than the carrying value of an asset or group of assets, an impairment loss equal to
the difference is recognized in Operating profit. In the case of operating segments, this impairment loss is first recorded
against goodwill.
The impairment losses recognized in respect of property, plant and equipment, and intangible assets (other than
goodwill) may be reversed in a later period if the recoverable amount becomes greater than the carrying value, within
the limit of impairment losses previously recognized. Impairment losses recognized in respect of goodwill cannot be
reversed at a later date.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-424": { "value": "2.4.11. Impairment of non-financial assets Each time events or changes in the economic environment indicate a risk of impairment of goodwill, content assets and other intangible assets, property, plant and equipment, investments in associates and joint ventures, rights-of-use assets, UMG re-examines the value of these assets. In addition, in accordance with applicable accounting standards, goodwill and intangible assets in progress are all subject to an annual impairment test undertaken in the fourth quarter of each fiscal year. This impairment test is performed to compare the recoverable amount of each Cash Generating Unit (CGU) to the carrying value of the corresponding assets (including goodwill). A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. UMG operates through different content businesses. Each business offers different products and services that are marketed through various channels. CGUs for goodwill correspond to the UMG's operating segments. The recoverable amount is determined for each individual asset as the higher of: (i) its value in use; and (ii) its fair value (less costs to sell) as described hereafter. If the asset does not generate cash inflows that are largely independent of other assets or groups of assets, the recoverable amount is determined for the group of assets. In particular, in the case of goodwill, an impairment test is performed by UMG for each CGU. The value in use of each asset or group of assets is determined, subject to exceptions, by the Discounted Cash Flow method (DCF) using cash flow projections consistent with the budget of the following year and the most recent forecasts prepared by the operating segments. Applied discount rates are determined by reference to available external sources of information, usually based on financial institutions\u2019 benchmarks, and reflect the current assessment by UMG of the time value of money and risks specific to each asset or group of assets. Perpetual growth rates used for the evaluation are those used to prepare budgets for each CGU, and beyond the period covered, are consistent with growth rates estimated by the business by extrapolating growth rates used in the budgets, without exceeding the long-term average growth rate for the markets in which UMG operates. The fair value (less costs to sell) is the price that would be received from the sale of an asset or group of assets in an orderly transaction between market participants at the measurement date, less costs to sell of the asset or group of assets. These values are generally determined based on market data (stock market prices or comparison with similar listed companies, with the value attributed to similar assets or companies in recent transactions) or, in the absence of such data, based on discontinued cash flows. If the recoverable amount is lower than the carrying value of an asset or group of assets, an impairment loss equal to the difference is recognized in Operating profit. In the case of operating segments, this impairment loss is first recorded against goodwill. The impairment losses recognized in respect of property, plant and equipment, and intangible assets (other than goodwill) may be reversed in a later period if the recoverable amount becomes greater than the carrying value, within the limit of impairment losses previously recognized. Impairment losses recognized in respect of goodwill cannot be reversed at a later date. 2.4.13. Impairment of financial assets UMG assesses the expected credit loss associated with its financial assets recognized at amortized cost on a prospective basis. A loss allowance for expected credit loss based on probability of default is recognized at initial recognition. The loss allowance is updated for changes in these expected credit losses at each reporting date to reflect changes in credit risk since initial recognition. To assess whether there has been a significant increase in credit risk, UMG compares the credit risk at the reporting date with the credit risk at the date of initial recognition based on reasonable forward-looking information and events, including credit ratings if available, significant adverse economic changes (actual or expected), financial or business environment that are expected to result in a material change in the borrower's ability to meet its obligations. Trade accounts receivable are initially recognised at their transaction price. Expected loss rates on trade receivables and contract assets are calculated by the relevant operating entities over their lifetime from initial recognition and are based on historical data that also incorporates forward-looking information. In addition, account receivables from customers subject to insolvency proceedings or customers with whom UMG is involved in litigation or a dispute are generally impaired in full. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-391": { "value": "
2.4.12. Financial assets
Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have
been transferred and UMG has transferred substantially all the risks and rewards of ownership.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerecognitionOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-464": { "value": "2.4.12. Financial assets Financial assets are initially recognized at fair value corresponding, in general, to the consideration paid, which is best evidenced by the acquisition cost (including transaction costs, if any). Thereafter, financial assets are measured at fair value or at amortized cost depending on which financial asset category they belong to. Financial assets are classified into the accounting categories \u201cfinancial assets at amortized cost\u201d, \u201cfinancial assets at fair value through other comprehensive income\u201d and \u201cfinancial assets at fair value through profit or loss\u201d. This classification depends on UMG\u2018s business model for managing the financial assets and on contractual terms enabling to determine whether the cash flows are solely payments of principal and interest (SPPI). The financial assets that contain an embedded derivative are considered in full to determine whether their cash flows are SPPI. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and UMG has transferred substantially all the risks and rewards of ownership. Financial assets at amortized cost Financial assets at amortised cost include trade receivables, other receivables, loans issued and bank deposits which are not cash equivalents. Loans, receivables and deposits are recognized on the date they are originated. Financial assets at amortized cost consist of debt instruments as described above held within a business model whose objective is to hold financial assets to collect contractual cash flows that are solely payments of principal and interest on the principal amount outstanding. At the end of each period, these assets are measured at amortized cost using the effective interest method. 2.4.13. Impairment of financial assets UMG assesses the expected credit loss associated with its financial assets recognized at amortized cost on a prospective basis. A loss allowance for expected credit loss based on probability of default is recognized at initial recognition. The loss allowance is updated for changes in these expected credit losses at each reporting date to reflect changes in credit risk since initial recognition. To assess whether there has been a significant increase in credit risk, UMG compares the credit risk at the reporting date with the credit risk at the date of initial recognition based on reasonable forward-looking information and events, including credit ratings if available, significant adverse economic changes (actual or expected), financial or business environment that are expected to result in a material change in the borrower's ability to meet its obligations. Trade accounts receivable are initially recognised at their transaction price. Expected loss rates on trade receivables and contract assets are calculated by the relevant operating entities over their lifetime from initial recognition and are based on historical data that also incorporates forward-looking information. In addition, account receivables from customers subject to insolvency proceedings or customers with whom UMG is involved in litigation or a dispute are generally impaired in full. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-457": { "value": "2.4.12. Financial assets Financial assets are initially recognized at fair value corresponding, in general, to the consideration paid, which is best evidenced by the acquisition cost (including transaction costs, if any). Thereafter, financial assets are measured at fair value or at amortized cost depending on which financial asset category they belong to. Financial assets are classified into the accounting categories \u201cfinancial assets at amortized cost\u201d, \u201cfinancial assets at fair value through other comprehensive income\u201d and \u201cfinancial assets at fair value through profit or loss\u201d. This classification depends on UMG\u2018s business model for managing the financial assets and on contractual terms enabling to determine whether the cash flows are solely payments of principal and interest (SPPI). The financial assets that contain an embedded derivative are considered in full to determine whether their cash flows are SPPI. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and UMG has transferred substantially all the risks and rewards of ownership. Financial assets at fair value These include financial assets at fair value through other comprehensive income, derivative financial instruments with a positive value and other financial assets measured at fair value through profit or loss. Most of these financial assets are actively traded in organized financial markets, as their fair value is calculated by reference to the published market price at the period end. Fair value is estimated for financial assets which do not have a published market price on an active market. As a last resort, when a reliable estimate of fair value cannot be made using valuation techniques in the absence of an active market, UMG values financial assets at historical cost, less any impairment losses. These financial assets are recognized initially on trade date when UMG becomes a party to the contractual provisions of the instrument. Dividend income is recognised when the UMG's right to receive payment is established. Financial assets at amortized cost Financial assets at amortised cost include trade receivables, other receivables, loans issued and bank deposits which are not cash equivalents. Loans, receivables and deposits are recognized on the date they are originated. Financial assets at amortized cost consist of debt instruments as described above held within a business model whose objective is to hold financial assets to collect contractual cash flows that are solely payments of principal and interest on the principal amount outstanding. At the end of each period, these assets are measured at amortized cost using the effective interest method. 2.4.13. Impairment of financial assets UMG assesses the expected credit loss associated with its financial assets recognized at amortized cost on a prospective basis. A loss allowance for expected credit loss based on probability of default is recognized at initial recognition. The loss allowance is updated for changes in these expected credit losses at each reporting date to reflect changes in credit risk since initial recognition. To assess whether there has been a significant increase in credit risk, UMG compares the credit risk at the reporting date with the credit risk at the date of initial recognition based on reasonable forward-looking information and events, including credit ratings if available, significant adverse economic changes (actual or expected), financial or business environment that are expected to result in a material change in the borrower's ability to meet its obligations. Trade accounts receivable are initially recognised at their transaction price. Expected loss rates on trade receivables and contract assets are calculated by the relevant operating entities over their lifetime from initial recognition and are based on historical data that also incorporates forward-looking information. In addition, account receivables from customers subject to insolvency proceedings or customers with whom UMG is involved in litigation or a dispute are generally impaired in full. 2.4.14. Cash and cash equivalents Cash and cash equivalents include all cash balances and short-term highly liquid investments with an original maturity of three months or less that are readily convertible into known amounts of cash. Bank overdrafts form an integral part of UMG\u2019s cash management and often fluctuate from being positive to overdrawn and are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. Investments in securities, investments with initial maturities of more than three months without an early termination option and bank accounts subject to restrictions (blocked accounts), other than restrictions due to regulations specific to a country or activity sector (e.g., exchange controls), are not classified as cash equivalents but as financial assets. 2.4.15. Financial liabilities A liability is recognized when UMG becomes party to a contract. Regular way purchases and sales of financial instruments are accounted for at the trade date. Initial measurement of financial liabilities is at fair value, including any attributable transaction costs. Financial liabilities are all classified and subsequently measured at amortized cost, except for financial liabilities at fair value through profit or loss, for example derivatives or contingent consideration in a business acquisition. Such contingent consideration shall subsequently be measured at fair value with changes recognized in profit or loss. For the financial liabilities subsequently measured at amortised cost, the effective interest method is applied. The effective interest rate is the internal yield rate that discounts future cash flows over the term of the financial instrument. In addition, where the financial liability comprises an embedded derivative or an equity instrument, the amortized cost is calculated for the debt component only, after separation of the embedded derivative or equity instrument, if the embedded derivative is not closely related to the host contract and therefore needs to be separated. 2.4.16. Derivative financial instruments Derivative financial instruments are recognised initially at fair value. Subsequent accounting for derivatives depends on whether or not the derivatives are designated as hedging instruments in a cash flow, fair value or net investment hedge. Derivatives with positive fair values are recorded as assets and negative fair values as liabilities. UMG did not apply hedge accounting to the derivatives in 2022. Beginning in 2023, foreign currency translation risks are hedged to a limited extent, as the underlying currency positions are generally considered to be long-term in nature. If a hedge is entered into, it is accounted for as a net investment hedge. UMG measures all derivative financial instruments at fair value derived from market prices of the instruments or calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates. These calculations are tested for reasonableness by comparing the outcome of the internal valuation with the valuation received from the counterparty. 2.4.24. Financial guarantees Financial guarantee is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument. Financial guarantees are initially recognised at fair value and are subject to the expected credit loss model, with a credit loss is recognized for expected cash shortfalls. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-454": { "value": "2.4.12. Financial assets Financial assets are initially recognized at fair value corresponding, in general, to the consideration paid, which is best evidenced by the acquisition cost (including transaction costs, if any). Thereafter, financial assets are measured at fair value or at amortized cost depending on which financial asset category they belong to. Financial assets are classified into the accounting categories \u201cfinancial assets at amortized cost\u201d, \u201cfinancial assets at fair value through other comprehensive income\u201d and \u201cfinancial assets at fair value through profit or loss\u201d. This classification depends on UMG\u2018s business model for managing the financial assets and on contractual terms enabling to determine whether the cash flows are solely payments of principal and interest (SPPI). The financial assets that contain an embedded derivative are considered in full to determine whether their cash flows are SPPI. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and UMG has transferred substantially all the risks and rewards of ownership. Financial assets at fair value These include financial assets at fair value through other comprehensive income, derivative financial instruments with a positive value and other financial assets measured at fair value through profit or loss. Most of these financial assets are actively traded in organized financial markets, as their fair value is calculated by reference to the published market price at the period end. Fair value is estimated for financial assets which do not have a published market price on an active market. As a last resort, when a reliable estimate of fair value cannot be made using valuation techniques in the absence of an active market, UMG values financial assets at historical cost, less any impairment losses. These financial assets are recognized initially on trade date when UMG becomes a party to the contractual provisions of the instrument. Dividend income is recognised when the UMG's right to receive payment is established. 2.4.15. Financial liabilities A liability is recognized when UMG becomes party to a contract. Regular way purchases and sales of financial instruments are accounted for at the trade date. Initial measurement of financial liabilities is at fair value, including any attributable transaction costs. Financial liabilities are all classified and subsequently measured at amortized cost, except for financial liabilities at fair value through profit or loss, for example derivatives or contingent consideration in a business acquisition. Such contingent consideration shall subsequently be measured at fair value with changes recognized in profit or loss. For the financial liabilities subsequently measured at amortised cost, the effective interest method is applied. The effective interest rate is the internal yield rate that discounts future cash flows over the term of the financial instrument. In addition, where the financial liability comprises an embedded derivative or an equity instrument, the amortized cost is calculated for the debt component only, after separation of the embedded derivative or equity instrument, if the embedded derivative is not closely related to the host contract and therefore needs to be separated. 2.4.16. Derivative financial instruments Derivative financial instruments are recognised initially at fair value. Subsequent accounting for derivatives depends on whether or not the derivatives are designated as hedging instruments in a cash flow, fair value or net investment hedge. Derivatives with positive fair values are recorded as assets and negative fair values as liabilities. UMG did not apply hedge accounting to the derivatives in 2022. Beginning in 2023, foreign currency translation risks are hedged to a limited extent, as the underlying currency positions are generally considered to be long-term in nature. If a hedge is entered into, it is accounted for as a net investment hedge. UMG measures all derivative financial instruments at fair value derived from market prices of the instruments or calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates. These calculations are tested for reasonableness by comparing the outcome of the internal valuation with the valuation received from the counterparty. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-349": { "value": "2.4.12. Financial assets Financial assets are initially recognized at fair value corresponding, in general, to the consideration paid, which is best evidenced by the acquisition cost (including transaction costs, if any). Thereafter, financial assets are measured at fair value or at amortized cost depending on which financial asset category they belong to. Financial assets are classified into the accounting categories \u201cfinancial assets at amortized cost\u201d, \u201cfinancial assets at fair value through other comprehensive income\u201d and \u201cfinancial assets at fair value through profit or loss\u201d. This classification depends on UMG\u2018s business model for managing the financial assets and on contractual terms enabling to determine whether the cash flows are solely payments of principal and interest (SPPI). The financial assets that contain an embedded derivative are considered in full to determine whether their cash flows are SPPI. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and UMG has transferred substantially all the risks and rewards of ownership. Financial assets at fair value These include financial assets at fair value through other comprehensive income, derivative financial instruments with a positive value and other financial assets measured at fair value through profit or loss. Most of these financial assets are actively traded in organized financial markets, as their fair value is calculated by reference to the published market price at the period end. Fair value is estimated for financial assets which do not have a published market price on an active market. As a last resort, when a reliable estimate of fair value cannot be made using valuation techniques in the absence of an active market, UMG values financial assets at historical cost, less any impairment losses. These financial assets are recognized initially on trade date when UMG becomes a party to the contractual provisions of the instrument. Dividend income is recognised when the UMG's right to receive payment is established. Financial assets at amortized cost Financial assets at amortised cost include trade receivables, other receivables, loans issued and bank deposits which are not cash equivalents. Loans, receivables and deposits are recognized on the date they are originated. Financial assets at amortized cost consist of debt instruments as described above held within a business model whose objective is to hold financial assets to collect contractual cash flows that are solely payments of principal and interest on the principal amount outstanding. At the end of each period, these assets are measured at amortized cost using the effective interest method. 2.4.13. Impairment of financial assets UMG assesses the expected credit loss associated with its financial assets recognized at amortized cost on a prospective basis. A loss allowance for expected credit loss based on probability of default is recognized at initial recognition. The loss allowance is updated for changes in these expected credit losses at each reporting date to reflect changes in credit risk since initial recognition. To assess whether there has been a significant increase in credit risk, UMG compares the credit risk at the reporting date with the credit risk at the date of initial recognition based on reasonable forward-looking information and events, including credit ratings if available, significant adverse economic changes (actual or expected), financial or business environment that are expected to result in a material change in the borrower's ability to meet its obligations. Trade accounts receivable are initially recognised at their transaction price. Expected loss rates on trade receivables and contract assets are calculated by the relevant operating entities over their lifetime from initial recognition and are based on historical data that also incorporates forward-looking information. In addition, account receivables from customers subject to insolvency proceedings or customers with whom UMG is involved in litigation or a dispute are generally impaired in full. 2.4.14. Cash and cash equivalents Cash and cash equivalents include all cash balances and short-term highly liquid investments with an original maturity of three months or less that are readily convertible into known amounts of cash. Bank overdrafts form an integral part of UMG\u2019s cash management and often fluctuate from being positive to overdrawn and are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. Investments in securities, investments with initial maturities of more than three months without an early termination option and bank accounts subject to restrictions (blocked accounts), other than restrictions due to regulations specific to a country or activity sector (e.g., exchange controls), are not classified as cash equivalents but as financial assets. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-425": { "value": "Financial assets at fair value These include financial assets at fair value through other comprehensive income, derivative financial instruments with a positive value and other financial assets measured at fair value through profit or loss. Most of these financial assets are actively traded in organized financial markets, as their fair value is calculated by reference to the published market price at the period end. Fair value is estimated for financial assets which do not have a published market price on an active market. As a last resort, when a reliable estimate of fair value cannot be made using valuation techniques in the absence of an active market, UMG values financial assets at historical cost, less any impairment losses. 2.4.16. Derivative financial instruments UMG measures all derivative financial instruments at fair value derived from market prices of the instruments or calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates. These calculations are tested for reasonableness by comparing the outcome of the internal valuation with the valuation received from the counterparty. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-390": { "value": "
2.4.13.
Impairment of financial assets
UMG assesses the expected credit loss associated with its financial assets recognized at amortized cost on a prospective
basis. A loss allowance for expected credit loss based on probability of default is recognized at initial recognition. The loss
allowance is updated for changes in these expected credit losses at each reporting date to reflect changes in credit risk
since initial recognition.
To assess whether there has been a significant increase in credit risk, UMG compares the credit risk at the reporting
date with the credit risk at the date of initial recognition based on reasonable forward-looking information and events,
including credit ratings if available, significant adverse economic changes (actual or expected), financial or business
environment that are expected to result in a material change in the borrower's ability to meet its obligations.
Trade accounts receivable are initially recognised at their transaction price. Expected loss rates on trade receivables and
contract assets are calculated by the relevant operating entities over their lifetime from initial recognition and are based
on historical data that also incorporates forward-looking information. In addition, account receivables from customers
subject to insolvency proceedings or customers with whom UMG is involved in litigation or a dispute are generally
impaired in full.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfFinancialAssetsExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-392": { "value": "
2.4.14. Cash and cash equivalents
Cash and cash equivalents include all cash balances and short-term highly liquid investments with an original maturity
of three months or less that are readily convertible into known amounts of cash.
Bank overdrafts form an integral part of UMG\u2019s cash management and often fluctuate from being positive to overdrawn
and are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.
Investments in securities, investments with initial maturities of more than three months without an early termination
option and bank accounts subject to restrictions (blocked accounts), other than restrictions due to regulations specific to
a country or activity sector (e.g., exchange controls), are not classified as cash equivalents but as financial assets.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-448": { "value": "2.4.14. Cash and cash equivalents Investments in securities, investments with initial maturities of more than three months without an early termination option and bank accounts subject to restrictions (blocked accounts), other than restrictions due to regulations specific to a country or activity sector (e.g., exchange controls), are not classified as cash equivalents but as financial assets. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRestrictedCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-352": { "value": "2.4.15. Financial liabilities A liability is recognized when UMG becomes party to a contract. Regular way purchases and sales of financial instruments are accounted for at the trade date. Initial measurement of financial liabilities is at fair value, including any attributable transaction costs. Financial liabilities are all classified and subsequently measured at amortized cost, except for financial liabilities at fair value through profit or loss, for example derivatives or contingent consideration in a business acquisition. Such contingent consideration shall subsequently be measured at fair value with changes recognized in profit or loss. For the financial liabilities subsequently measured at amortised cost, the effective interest method is applied. The effective interest rate is the internal yield rate that discounts future cash flows over the term of the financial instrument. In addition, where the financial liability comprises an embedded derivative or an equity instrument, the amortized cost is calculated for the debt component only, after separation of the embedded derivative or equity instrument, if the embedded derivative is not closely related to the host contract and therefore needs to be separated. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialLiabilitiesExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-350": { "value": "
2.4.16.
Derivative financial instruments
Derivative financial instruments are recognised initially at fair value. Subsequent accounting for derivatives depends on
whether or not the derivatives are designated as hedging instruments in a cash flow, fair value or net investment hedge.
Derivatives with positive fair values are recorded as assets and negative fair values as liabilities. UMG did not apply
hedge accounting to the derivatives in 2022. Beginning in 2023, foreign currency translation risks are hedged to a limited
extent, as the underlying currency positions are generally considered to be long-term in nature. If a hedge is entered
into, it is accounted for as a net investment hedge.
UMG measures all derivative financial instruments at fair value derived from market prices of the instruments or
calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis
spread and foreign exchange rates. These calculations are tested for reasonableness by comparing the outcome of the
internal valuation with the valuation received from the counterparty.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-466": { "value": "2.4.16. Derivative financial instruments Derivative financial instruments are recognised initially at fair value. Subsequent accounting for derivatives depends on whether or not the derivatives are designated as hedging instruments in a cash flow, fair value or net investment hedge. Derivatives with positive fair values are recorded as assets and negative fair values as liabilities. UMG did not apply hedge accounting to the derivatives in 2022. Beginning in 2023, foreign currency translation risks are hedged to a limited extent, as the underlying currency positions are generally considered to be long-term in nature. If a hedge is entered into, it is accounted for as a net investment hedge. UMG measures all derivative financial instruments at fair value derived from market prices of the instruments or calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates. These calculations are tested for reasonableness by comparing the outcome of the internal valuation with the valuation received from the counterparty. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsAndHedgingExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-460": { "value": "2.4.16. Derivative financial instruments Derivative financial instruments are recognised initially at fair value. Subsequent accounting for derivatives depends on whether or not the derivatives are designated as hedging instruments in a cash flow, fair value or net investment hedge. Derivatives with positive fair values are recorded as assets and negative fair values as liabilities. UMG did not apply hedge accounting to the derivatives in 2022. Beginning in 2023, foreign currency translation risks are hedged to a limited extent, as the underlying currency positions are generally considered to be long-term in nature. If a hedge is entered into, it is accounted for as a net investment hedge. UMG measures all derivative financial instruments at fair value derived from market prices of the instruments or calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates. These calculations are tested for reasonableness by comparing the outcome of the internal valuation with the valuation received from the counterparty. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForHedgingExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-351": { "value": "
2.4.17.
Inventories
Inventories are valued at the lower of cost or net realizable value. Cost comprises purchase costs, production costs and
other supply and packaging costs. These are usually calculated using the weighted average cost method. Net realizable
value is the estimated selling price in the normal course of business, less estimated completion costs and selling costs.
Inventories at UMG mostly comprise of finished goods.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForMeasuringInventories", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-426": { "value": "
2.4.18. Provisions
Provisions are recognized when, at the end of the reporting period, UMG has a legal obligation (statutory, regulatory
or contractual) or a constructive obligation, as a result of past events, and it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation and the obligation can be reliably estimated. Where
the effect of the time value of money is material, provisions are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money. If the amount of the obligation
cannot be reliably estimated, no provision is recorded and a disclosure is made in the Notes to the Consolidated
Financial Statements. Significant judgment is required in determining the amount and probability of resources outflow
and discount rates used to calculate the present value of this outflow.
Provisions for royalty audit claims
Up to the completion of the royalty claim audit, the timing and the amount of the potential pay-outs is uncertain. UMG
makes its best possible estimate of the outcome using any available data, including history of claims with rights owners.
When the estimate is performed for large homogeneous claims and contract terms, the statistical valuation method
is used.
Litigation provisions
In the ordinary course of business, UMG may be involved in a number of legal and arbitration proceedings and
administrative actions. The costs which may result from these proceedings are accrued at the reporting date if UMG
has a present obligation toward a third party resulting from a past event and it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation and the amount of that liability can be quantified
or estimated within a reasonable range. The amount of provision recorded is based on a case-by-case assessment of the
risk level, and events arising during the course of legal proceedings may require a reassessment of this risk at any time.
2.4.19. Employee benefit plans Defined benefit plans Defined benefit plans may be funded by investments in various instruments such as insurance contracts or equity and debt investment securities, excluding shares in any UMG entity or debt instruments. Pension expenses and defined benefit obligations are calculated by independent actuaries using the projected unit credit method. This method is based on annually updated assumptions, which include the probability of employees remaining with UMG until retirement, expected changes in future compensation and an appropriate discount rate for each country in which UMG maintains a pension plan. The discount rate is determined for each country by reference to yields on notes issued by investment grade companies having a credit rating of AA and maturities identical to that of the valued plans, generally based on relevant rate indices. The expected return on plan assets is estimated by using the selected discount rate to value the obligations of the previous year. The calculation is performed separately for each plan. A provision is recorded in the Statement of Financial Position equal to the difference between the actuarial value of the related benefits (actuarial liability) and the fair value of any associated plan assets, and this includes past service costs and actuarial gains and losses. The cost of defined benefit plans consists of three components recognized as follows: \u2022 the service cost is included in selling, general and administrative expenses. It comprises current service cost, past service cost resulting from a plan amendment or a curtailment, immediately recognized in profit and loss, and gains and losses on settlement; \u2022 the financial component, recorded in other financial expenses and income, consists of the unwinding of the interest component of the discount, less the expected return on plan assets determined using the discount rate retained for the valuation of the benefit obligation; and \u2022 the remeasurements of the net defined benefit liability (asset), recognized in items of other comprehensive income not reclassified as profit and loss, mainly consist of actuarial gains and losses, i.e., changes in the present value of the defined benefit obligation and plan assets resulting from changes in actuarial assumptions and experience adjustments (representing the differences between the expected effect of some actuarial assumptions applied to previous valuations and the effective impact). Where the value of plan assets exceeds benefit obligations, a financial asset is recognized up to the present value of future refunds and the expected reduction in future contributions. Some other post-employment benefits, such as life insurance and medical coverage (mainly in the United States) are subject to provisions which are assessed through an actuarial calculation comparable to the method used for pension provisions. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-393": { "value": "
2.4.19.
Employee benefit plans
Defined contribution plans
Contributions to defined contribution and multi-employer plans are expensed during the year when related services
are provided.
Defined benefit plans
Defined benefit plans may be funded by investments in various instruments such as insurance contracts or equity and
debt investment securities, excluding shares in any UMG entity or debt instruments.
Pension expenses and defined benefit obligations are calculated by independent actuaries using the projected unit credit
method. This method is based on annually updated assumptions, which include the probability of employees remaining
with UMG until retirement, expected changes in future compensation and an appropriate discount rate for each country
in which UMG maintains a pension plan. The discount rate is determined for each country by reference to yields on notes
issued by investment grade companies having a credit rating of AA and maturities identical to that of the valued plans,
generally based on relevant rate indices. The expected return on plan assets is estimated by using the selected discount
rate to value the obligations of the previous year.
The calculation is performed separately for each plan. A provision is recorded in the Statement of Financial Position
equal to the difference between the actuarial value of the related benefits (actuarial liability) and the fair value of any
associated plan assets, and this includes past service costs and actuarial gains and losses.
The cost of defined benefit plans consists of three components recognized as follows:
\u2022 the service cost is included in selling, general and administrative expenses. It comprises current service cost, past
service cost resulting from a plan amendment or a curtailment, immediately recognized in profit and loss, and gains
and losses on settlement;
\u2022 the financial component, recorded in other financial expenses and income, consists of the unwinding of the interest
component of the discount, less the expected return on plan assets determined using the discount rate retained for
the valuation of the benefit obligation; and
\u2022 the remeasurements of the net defined benefit liability (asset), recognized in items of other comprehensive income
not reclassified as profit and loss, mainly consist of actuarial gains and losses, i.e., changes in the present value
of the defined benefit obligation and plan assets resulting from changes in actuarial assumptions and experience
adjustments (representing the differences between the expected effect of some actuarial assumptions applied to
previous valuations and the effective impact).
Where the value of plan assets exceeds benefit obligations, a financial asset is recognized up to the present value of
future refunds and the expected reduction in future contributions.
Some other post-employment benefits, such as life insurance and medical coverage (mainly in the United States)
are subject to provisions which are assessed through an actuarial calculation comparable to the method used for
pension provisions.
2.4.21. Share-based payments Equity-settled share-based compensation expense is recognized as a personnel cost over the vesting period of the award at the fair value of the equity instruments granted at the grant date with a corresponding increase in equity. For cases in which the grant date occurs after the employees to whom the equity instruments were granted have begun rendering services (for example, if a grant of equity instruments is subject to shareholder approval), UMG estimates the grant date fair value of the equity instruments by estimating the fair value of the equity instruments at the end of the reporting period, for the purposes of recognising the services received during the period between service commencement date and grant date. Once the date of grant has been established, UMG revises the earlier estimate so that the amounts recognised for services received in respect of the grant are ultimately based on the grant date fair value of the equity instruments. Fair value of the shares granted is fixed at the grant date and is equal to the share price at the grant date with a deduction for the aggregate discounted value of the dividends that will not be received over the vesting period, unless the conditions of the plan prescribe compensation for the vesting period dividends, and after taking into account the discount for non-transferability during the retention period. The cumulative expense recognized for equity-settled transactions at each reporting date reflects the extent to which the vesting period has expired and UMG\u2019s best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the Statement of Profit or Loss for a period represents the movement in cumulative expense recognized as at the beginning and end of that period. Service and non-market performance conditions are not considered when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of UMG\u2019s best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-353": { "value": "
2.4.20. Income taxes
Differences existing at closing between the tax base value of assets and liabilities and their carrying value in the
Consolidated Statement of Financial Position give rise to temporary differences. Pursuant to the liability method, these
temporary differences result in the accounting of:
\u2022
deferred tax assets, when the tax base value is greater than the carrying value (expected future tax saving); and
\u2022
deferred tax liabilities, when the tax base value is lower than the carrying value (expected future tax expense).
Deferred tax assets and liabilities are measured at the expected tax rates for the year during which the asset will be
realized or the liability settled, based on tax rates (and tax regulations) enacted or substantially enacted by the closing
date. They are reviewed at the end of each year, in line with any changes in applicable tax rates.
Deferred tax assets are recognized for all deductible temporary differences, tax loss carry-forwards and unused tax
credits, insofar as it is probable that a taxable profit will be available, or when a current tax liability exists to make use
of those deductible temporary differences, tax loss carry-forwards and unused tax credits, except where the deferred tax
asset associated with the deductible temporary difference is generated by initial recognition of an asset or liability in a
transaction which is not a business combination, and that, at the transaction date, does not impact net profit, nor tax
income or loss.
For deductible temporary differences resulting from investments in subsidiaries, joint ventures and other associated
entities, deferred tax assets are recorded to the extent that it is probable that the temporary difference will reverse in the
foreseeable future and that a taxable profit will be available against which the temporary difference can be utilized.
The carrying value of deferred tax assets is reviewed at each closing date, and revalued or reduced to the extent that it is
more or less probable that a taxable profit will be available to allow the deferred tax asset to be utilized. When assessing
the probability of a taxable profit being available, account is taken, primarily, of prior years\u2019 results, forecasted future
results, non-recurring items unlikely to occur in the future and the tax strategy. As such, the assessment of UMG's ability
to utilize tax losses carried forward is to a large extent judgement-based. If the future taxable results of UMG proved to
differ significantly from those expected, UMG would be required to increase or decrease the carrying value of deferred tax
assets with a potentially material impact on UMG's Statement of Financial Position and Statement of Profit or Loss.
Deferred tax liabilities are recognized for all taxable temporary differences, except where the deferred tax liability results
from goodwill or initial recognition of an asset or liability in a transaction which is not a business combination, and that,
at the transaction date, does not impact net profit, tax income or loss.
For taxable temporary differences resulting from investments in subsidiaries, joint ventures and other associated
entities, deferred tax liabilities are recorded except to the extent that both of the following conditions are satisfied: the
parent, investor or venturer is able to control the timing of the reversal of the temporary difference and it is probable that
the temporary difference will not be reversed in the foreseeable future.
Current tax and deferred tax shall be charged or credited directly to equity, and not profit if the tax relates to items that
are credited or charged directly to equity. Current tax liabilities not expected to be paid within the next 12 months are
recorded as long term current tax liability .
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-394": { "value": "2.4.20. Income taxes Differences existing at closing between the tax base value of assets and liabilities and their carrying value in the Consolidated Statement of Financial Position give rise to temporary differences. Pursuant to the liability method, these temporary differences result in the accounting of: \u2022 deferred tax assets, when the tax base value is greater than the carrying value (expected future tax saving); and \u2022 deferred tax liabilities, when the tax base value is lower than the carrying value (expected future tax expense). Deferred tax assets and liabilities are measured at the expected tax rates for the year during which the asset will be realized or the liability settled, based on tax rates (and tax regulations) enacted or substantially enacted by the closing date. They are reviewed at the end of each year, in line with any changes in applicable tax rates. Deferred tax assets are recognized for all deductible temporary differences, tax loss carry-forwards and unused tax credits, insofar as it is probable that a taxable profit will be available, or when a current tax liability exists to make use of those deductible temporary differences, tax loss carry-forwards and unused tax credits, except where the deferred tax asset associated with the deductible temporary difference is generated by initial recognition of an asset or liability in a transaction which is not a business combination, and that, at the transaction date, does not impact net profit, nor tax income or loss. For deductible temporary differences resulting from investments in subsidiaries, joint ventures and other associated entities, deferred tax assets are recorded to the extent that it is probable that the temporary difference will reverse in the foreseeable future and that a taxable profit will be available against which the temporary difference can be utilized. The carrying value of deferred tax assets is reviewed at each closing date, and revalued or reduced to the extent that it is more or less probable that a taxable profit will be available to allow the deferred tax asset to be utilized. When assessing the probability of a taxable profit being available, account is taken, primarily, of prior years\u2019 results, forecasted future results, non-recurring items unlikely to occur in the future and the tax strategy. As such, the assessment of UMG's ability to utilize tax losses carried forward is to a large extent judgement-based. If the future taxable results of UMG proved to differ significantly from those expected, UMG would be required to increase or decrease the carrying value of deferred tax assets with a potentially material impact on UMG's Statement of Financial Position and Statement of Profit or Loss. Deferred tax liabilities are recognized for all taxable temporary differences, except where the deferred tax liability results from goodwill or initial recognition of an asset or liability in a transaction which is not a business combination, and that, at the transaction date, does not impact net profit, tax income or loss. For taxable temporary differences resulting from investments in subsidiaries, joint ventures and other associated entities, deferred tax liabilities are recorded except to the extent that both of the following conditions are satisfied: the parent, investor or venturer is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not be reversed in the foreseeable future. Current tax and deferred tax shall be charged or credited directly to equity, and not profit if the tax relates to items that are credited or charged directly to equity. Current tax liabilities not expected to be paid within the next 12 months are recorded as long term current tax liability . ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-357": { "value": "
2.4.21. Share-based payments
Equity-settled share-based compensation expense is recognized as a personnel cost over the vesting period of the award
at the fair value of the equity instruments granted at the grant date with a corresponding increase in equity. For cases
in which the grant date occurs after the employees to whom the equity instruments were granted have begun rendering
services (for example, if a grant of equity instruments is subject to shareholder approval), UMG estimates the grant date
fair value of the equity instruments by estimating the fair value of the equity instruments at the end of the reporting
period, for the purposes of recognising the services received during the period between service commencement date and
grant date. Once the date of grant has been established, UMG revises the earlier estimate so that the amounts recognised
for services received in respect of the grant are ultimately based on the grant date fair value of the equity instruments.
Fair value of the shares granted is fixed at the grant date and is equal to the share price at the grant date with a
deduction for the aggregate discounted value of the dividends that will not be received over the vesting period, unless
the conditions of the plan prescribe compensation for the vesting period dividends, and after taking into account the
discount for non-transferability during the retention period.
The cumulative expense recognized for equity-settled transactions at each reporting date reflects the extent to which
the vesting period has expired and UMG\u2019s best estimate of the number of equity instruments that will ultimately
vest. The expense or credit in the Statement of Profit or Loss for a period represents the movement in cumulative
expense recognized as at the beginning and end of that period. Service and non-market performance conditions are
not considered when determining the grant date fair value of awards, but the likelihood of the conditions being met
is assessed as part of UMG\u2019s best estimate of the number of equity instruments that will ultimately vest. Market
performance conditions are reflected within the grant date fair value.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-354": { "value": "
2.4.22.
Related parties
A related party is a person or an entity that is related to UMG. These include both people and entities that have, or
are subject to, the influence or control of UMG (e.g. key management personnel). Transactions with related parties are
accounted for in accordance with the requirements of relevant IFRSs and take into account the substance as well as the
legal form.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTransactionsWithRelatedPartiesExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-355": { "value": "
2.4.23.
Contingent liabilities
Non-financial guarantees are accounted for as a contingent liability until such time it becomes probable that UMG will be
required to make a payment under the guarantee.
Contingent liabilities are possible or present obligations of sufficient uncertainty that it does not quality for recognition
as a provision, unless it is assumed in a business combination. Contingent liabilities are reviewed continuously to
assess whether an outflow of resources has become probable.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForContingentLiabilitiesAndContingentAssetsExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-356": { "value": "
2.4.24.
Financial guarantees
Financial guarantee is a contract that requires the issuer to make specified payments to reimburse the holder for a loss
it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument.
Financial guarantees are initially recognised at fair value and are subject to the expected credit loss model, with a credit
loss is recognized for expected cash shortfalls.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialGuaranteesExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-358": { "value": "
2.5. Accounting policy changes
2.5.1. Accounting policy changes originating from the IFRS amendments
UMG has amended its accounting policies for new or amended IFRS standards and interpretations that became effective
as of 1 January 2023. None of these new or amended standards and interpretations had a material impact on adoption.
These are:
\u2022 IFRS 17 Insurance Contracts
\u2022 Definition of Accounting Estimates \u2013 Amendments to IAS 8
\u2022 Deferred Tax related to Assets and Liabilities arising from a Single Transaction \u2013 Amendments to IAS 12
\u2022 International Tax Reform - Pillar Two Model Rules \u2013 Amendments to IAS 12
UMG has not early adopted any standards, interpretations or amendments that have been issued but are not
yet effective.
In March 2022, the Organisation for Economic Co-operation and Development (OECD) released technical guidance on its
15% global minimum tax agreed as the Pillar Two. The Company has significant operations in several jurisdictions where
the Pillar Two rules will firstly become in effect as of financial years starting in 2024. On May 23, 2023, the IASB issued
International Tax Reform\u2014Pillar Two Model Rules \u2013 Amendments to IAS 12. These amendments introduced a mandatory
temporary exception to IAS 12 recognition and disclosure requirements resulting from tax laws enacted or substantively
enacted to implement the (OECD) Pillar Two tax reform.
2.5.2. Impact of standards issued but not yet effective The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of UMG's financial statements are disclosed below. UMG intends to adopt these new and amended standards and interpretations, if applicable, when they become effective. \u2022 Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures, effective 1 January 2024 \u2022 Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback, effective 1 January 2024 \u2022 Amendments to IAS 1 Presentation of Financial Statements - Classification of Liabilities as Current or Non-current and Non-current Liabilities with Covenants, effective 1 January 2024 \u2022 Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability, effective 1 January 2025 Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures The amendments, effective for UMG beginning on January 1, 2024, require an entity to provide certain information about the impact of supplier finance arrangements on liabilities and cash flows. UMG does not expect that adoption of this standard will have a material impact on the Consolidated financial statements. Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback The amendments, effective for UMG beginning on January 1, 2024, specify how a seller-lessee measures the lease liability arising in a sale and leaseback transaction so that it does not recognise any amount of the gain or loss that relates to the right of use retained. UMG does not expect that adoption of this standard will have a material impact on the Consolidated financial statements. Amendments to IAS 1 Presentation of Financial Statements - Classification of Liabilities as Current or Non-current and Non-current Liabilities with Covenants The amendments, effective for UMG beginning on January 1, 2024, clarify the criteria for determining whether to classify a liability as current or non-current. The amendments also include additional disclosure requirements for liabilities classified as non-current where an entity's right to defer settlement depends on future compliance with a loan covenant within a 12-month period. UMG does not expect that adoption of this standard will have a material impact on the Consolidated financial statements.
Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rate: Lack of Exchangeability
The amendments, effective for UMG on January 1, 2025, specify how an entity should assess whether a currency is
exchangeable and how it should determine a spot exchange rate when exchangeability is lacking. The amendments
also require disclosure of information that enables users of financial statements to understand the impact of a
currency not being exchangeable. UMG is currently assessing the impact the amendments will have on the Consolidated
financial statements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-427": { "value": "2.5. Accounting policy changes 2.5.1. Accounting policy changes originating from the IFRS amendments UMG has amended its accounting policies for new or amended IFRS standards and interpretations that became effective as of 1 January 2023. None of these new or amended standards and interpretations had a material impact on adoption. These are: \u2022 IFRS 17 Insurance Contracts \u2022 Definition of Accounting Estimates \u2013 Amendments to IAS 8 \u2022 Deferred Tax related to Assets and Liabilities arising from a Single Transaction \u2013 Amendments to IAS 12 \u2022 International Tax Reform - Pillar Two Model Rules \u2013 Amendments to IAS 12 UMG has not early adopted any standards, interpretations or amendments that have been issued but are not yet effective. In March 2022, the Organisation for Economic Co-operation and Development (OECD) released technical guidance on its 15% global minimum tax agreed as the Pillar Two. The Company has significant operations in several jurisdictions where the Pillar Two rules will firstly become in effect as of financial years starting in 2024. On May 23, 2023, the IASB issued International Tax Reform\u2014Pillar Two Model Rules \u2013 Amendments to IAS 12. These amendments introduced a mandatory temporary exception to IAS 12 recognition and disclosure requirements resulting from tax laws enacted or substantively enacted to implement the (OECD) Pillar Two tax reform. 2.5.2. Impact of standards issued but not yet effective The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of UMG's financial statements are disclosed below. UMG intends to adopt these new and amended standards and interpretations, if applicable, when they become effective. \u2022 Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures, effective 1 January 2024 \u2022 Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback, effective 1 January 2024 \u2022 Amendments to IAS 1 Presentation of Financial Statements - Classification of Liabilities as Current or Non-current and Non-current Liabilities with Covenants, effective 1 January 2024 \u2022 Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability, effective 1 January 2025 Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures The amendments, effective for UMG beginning on January 1, 2024, require an entity to provide certain information about the impact of supplier finance arrangements on liabilities and cash flows. UMG does not expect that adoption of this standard will have a material impact on the Consolidated financial statements. Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback The amendments, effective for UMG beginning on January 1, 2024, specify how a seller-lessee measures the lease liability arising in a sale and leaseback transaction so that it does not recognise any amount of the gain or loss that relates to the right of use retained. UMG does not expect that adoption of this standard will have a material impact on the Consolidated financial statements. Amendments to IAS 1 Presentation of Financial Statements - Classification of Liabilities as Current or Non-current and Non-current Liabilities with Covenants The amendments, effective for UMG beginning on January 1, 2024, clarify the criteria for determining whether to classify a liability as current or non-current. The amendments also include additional disclosure requirements for liabilities classified as non-current where an entity's right to defer settlement depends on future compliance with a loan covenant within a 12-month period. UMG does not expect that adoption of this standard will have a material impact on the Consolidated financial statements. Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rate: Lack of Exchangeability The amendments, effective for UMG on January 1, 2025, specify how an entity should assess whether a currency is exchangeable and how it should determine a spot exchange rate when exchangeability is lacking. The amendments also require disclosure of information that enables users of financial statements to understand the impact of a currency not being exchangeable. UMG is currently assessing the impact the amendments will have on the Consolidated financial statements.", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-396": { "value": "2.5. Accounting policy changes 2.5.1. Accounting policy changes originating from the IFRS amendments UMG has amended its accounting policies for new or amended IFRS standards and interpretations that became effective as of 1 January 2023. None of these new or amended standards and interpretations had a material impact on adoption. These are: \u2022 IFRS 17 Insurance Contracts \u2022 Definition of Accounting Estimates \u2013 Amendments to IAS 8 \u2022 Deferred Tax related to Assets and Liabilities arising from a Single Transaction \u2013 Amendments to IAS 12 \u2022 International Tax Reform - Pillar Two Model Rules \u2013 Amendments to IAS 12 UMG has not early adopted any standards, interpretations or amendments that have been issued but are not yet effective. In March 2022, the Organisation for Economic Co-operation and Development (OECD) released technical guidance on its 15% global minimum tax agreed as the Pillar Two. The Company has significant operations in several jurisdictions where the Pillar Two rules will firstly become in effect as of financial years starting in 2024. On May 23, 2023, the IASB issued International Tax Reform\u2014Pillar Two Model Rules \u2013 Amendments to IAS 12. These amendments introduced a mandatory temporary exception to IAS 12 recognition and disclosure requirements resulting from tax laws enacted or substantively enacted to implement the (OECD) Pillar Two tax reform. ", "dimensions": { "concept": "ifrs-full:DescriptionOfInitialApplicationOfStandardsOrInterpretations", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-395": { "value": "2.5.2. Impact of standards issued but not yet effective The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of UMG's financial statements are disclosed below. UMG intends to adopt these new and amended standards and interpretations, if applicable, when they become effective. \u2022 Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures, effective 1 January 2024 \u2022 Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback, effective 1 January 2024 \u2022 Amendments to IAS 1 Presentation of Financial Statements - Classification of Liabilities as Current or Non-current and Non-current Liabilities with Covenants, effective 1 January 2024 \u2022 Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability, effective 1 January 2025 Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures The amendments, effective for UMG beginning on January 1, 2024, require an entity to provide certain information about the impact of supplier finance arrangements on liabilities and cash flows. UMG does not expect that adoption of this standard will have a material impact on the Consolidated financial statements. Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback The amendments, effective for UMG beginning on January 1, 2024, specify how a seller-lessee measures the lease liability arising in a sale and leaseback transaction so that it does not recognise any amount of the gain or loss that relates to the right of use retained. UMG does not expect that adoption of this standard will have a material impact on the Consolidated financial statements. Amendments to IAS 1 Presentation of Financial Statements - Classification of Liabilities as Current or Non-current and Non-current Liabilities with Covenants The amendments, effective for UMG beginning on January 1, 2024, clarify the criteria for determining whether to classify a liability as current or non-current. The amendments also include additional disclosure requirements for liabilities classified as non-current where an entity's right to defer settlement depends on future compliance with a loan covenant within a 12-month period. UMG does not expect that adoption of this standard will have a material impact on the Consolidated financial statements. Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rate: Lack of Exchangeability The amendments, effective for UMG on January 1, 2025, specify how an entity should assess whether a currency is exchangeable and how it should determine a spot exchange rate when exchangeability is lacking. The amendments also require disclosure of information that enables users of financial statements to understand the impact of a currency not being exchangeable. UMG is currently assessing the impact the amendments will have on the Consolidated financial statements.", "dimensions": { "concept": "ifrs-full:DescriptionOfExpectedImpactOfInitialApplicationOfNewStandardsOrInterpretations", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-397": { "value": "Note 3. Segment data Operating segment data The segment reporting that follows is aligned with internal reporting used by UMG Management to assess UMG\u2019s performance. UMG\u2019s operating segments are organised by nature of the business and are the same as its reportable segments: Recorded Music, Music Publishing and Merchandising and Other. Each of these is described at Note 1. Corporate centre represent amounts not allocated to the operating segments and includes certain costs related to central activities as well as group enabling functions. Management also receives information about the segment's revenue and assets. Inter-segment pricing is determined on an arm's length basis. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSegmentReportingExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-359": { "value": "Note 3. Segment data Operating segment data The segment reporting that follows is aligned with internal reporting used by UMG Management to assess UMG\u2019s performance. UMG\u2019s operating segments are organised by nature of the business and are the same as its reportable segments: Recorded Music, Music Publishing and Merchandising and Other. Each of these is described at Note 1. Corporate centre represent amounts not allocated to the operating segments and includes certain costs related to central activities as well as group enabling functions. Management also receives information about the segment's revenue and assets. Inter-segment pricing is determined on an arm's length basis. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Segment EBITDA and Adjusted EBITDA are included in these disclosures because they are the primary measures of profit or loss used by UMG Management to assess each segment\u2019s performance and make decisions about allocating resources. EBITDA and Adjusted EBITDA are non-IFRS measures defined in the Appendix of the Annual Report accompanying these Consolidated financial statements. Main aggregates of the Statement of profit or loss
Recorded Music Merchandising Corporate Elimination of
Note Music Publishing and other centre intersegment Total
(millions of euros) transactions
Year ended December 31, 2023
External revenue
8,461
1,943
704
-
-
11,108
Intercompany revenue
-
13
2
-
(15)
-
Revenues
8,461
1,956
706
-
(15)
11,108
Adjusted EBITDA
2,042
470
47
(190)
-
2,369
Non-cash share-based
23
(424)
(50)
(4)
(83)
-
(561)
compensation expense
EBITDA
1,618
420
43
(273)
-
1,808
Amortisation and
depreciation expense
(217)
(156)
(2)
(7)
-
(382)
Restructuring expenses
(34)
(2)
-
(5)
-
(41)
Gain/(loss) on sale of assets
26
-
-
-
-
26
Impairment reversal/(charge)
-
7
-
-
-
7
on intangible assets
Operating profit
1,393
269
41
(285)
-
1,418
Financial income
454
Financial expenses
(151)
Income/(loss) from
equity affiliates
-
Profit before income taxes
1,721
Recorded Music Merchandising Corporate Elimination of
Note Music Publishing and other centre intersegment Total
(millions of euros) transactions
Year ended December 31, 2022
External revenue
7,937
1,787
616
-
-
10,340
Intercompany revenue
-
12
2
-
(14)
-
Revenues
7,937
1,799
618
-
(14)
10,340
Adjusted EBITDA
1,900
410
36
(211)
-
2,135
Non-cash share-based
23
(73)
(15)
-
(19)
-
(107)
compensation expense
EBITDA
1,827
395
36
(230)
-
2,028
Amortisation and
depreciation expense
(204)
(162)
(2)
(9)
-
(377)
Restructuring expenses
(29)
-
(2)
(1)
-
(32)
Gain/(loss) on sale of assets
(1)
(1)
-
-
-
(2)
Impairment reversal/(charge)
-
(17)
-
-
-
(17)
on intangible assets
Operating profit
1,593
215
32
(240)
-
1,600
Financial income
37
Financial expenses
(735)
Income/(loss) from
equity affiliates
(2)
Profit before income taxes
900
1 1 2022 External revenues includes a \u20ac71 million benefit in Recorded Music from the settlement of a copyright infringement lawsuit with an internet service provider that represents revenue other than revenue from contracts with customers. Revenues by geographic area UMG has a global network and operates in local countries, which enables it to maintain the relationships with clients and to understand the local market, legal and other conditions. As a result, the geographic basis of the operating companies is the basis in determining the split of revenues from external customers per geographical areas.
Year ended December 31, Year ended December 31,
(millions of euros)
2023
2022
U.S.
5,579
50%
5,163
50%
UK
941
9%
936
9%
Japan
768
7%
699
7%
Germany
576
5%
499
5%
France
444
4%
399
4%
Rest of the world
2,800
25%
2,644
25%
Total revenues
11,108
100%
10,340
100%
1 1 Revenues for the Netherlands was \u20ac179 million in 2023 and \u20ac229 million in 2022.
Disaggregated revenue information
Recorded Music
Year ended December 31,
(millions of euros)
2023
2022
Streaming revenue
1,425
1,420
Subscription revenue
4,275
3,901
Downloads and other digital revenue
207
337
Physical revenue
1,380
1,207
License and other revenue
1,174
1,072
Recorded Music revenue
8,461
7,937
1
1 2022 Downloads and other digital revenue includes a \u20ac71 million benefit from the settlement of a copyright infringement lawsuit with an internet service provider that
represents revenue other than revenue from contracts with customers.
Music Publishing
Year ended December 31,
(millions of euros)
2023
2022
Performance revenue
416
371
Synchronisation revenue
254
236
Digital revenue
1,128
1,040
Mechanical revenue
108
97
Other revenue
50
55
Music Publishing revenue
1,956
1,799
Subscriptions and streaming represents the largest type of recorded music revenue and is recognised over time and
is 51% (51% in 2022) of total UMG revenues. Physical recorded music revenues are recognised at a point in time and
represent 12% (12% in 2022) of total UMG revenues.
Other Recorded Music revenues mostly include neighbouring rights income which are recognized over time.
Merchandising revenue is recognised at a point in time. Music Publishing revenue is mostly recognised over time.
In 2023, UMG had 3 customers that each individually represented over 10% of total revenues (3 customers in 2022) and
which represented total revenues of 19%, 11% and 10% respectively (18%, 12% and 10% in 2022). Each customer reports
revenues in both Recorded Music and Music Publishing segments.
The amount of revenue recognized for the year ended December 31, 2023 from performance obligations satisfied (or
partially satisfied) in previous periods amounts to \u20ac203 million.
Segment assets
Segment assets by Segment
Segment assets that are reported to the executive board include items that are directly attributable to a segment as
well as those that can be allocated on a reasonable basis. Unallocated assets mainly comprise of cash and deferred tax
assets which are managed at the Group level.
Note Recorded Music Merchandising Corporate Total
(millions of euros) Music Publishing and other centre
Year ended December 31, 2023
Goodwill
8
779
745
100
-
1,624
Royalty advances, non-
current
9
862
508
204
-
1,574
Catalogues
9
1,335
1,685
-
-
3,020
Property, plant & equipment
10
165
4
-
8
177
Other intangible assets
9
50
31
-
99
180
Right of use relating
11
310
4
-
2
316
to leases
Royalty advances, current
9
520
481
59
-
1,060
Other assets
3,171
753
54
234
4,212
Total segment assets
7,192
4,211
417
343
12,163
Unallocated assets
928
Total assets
13,091
Year ended December 31, 2022
Goodwill
8
709
769
100
-
1,578
Royalty advances, non-
current
9
938
441
214
-
1,593
Catalogues
9
1,247
1,811
-
-
3,058
Property, plant & equipment
10
152
5
-
10
167
Other intangible assets
9
23
23
-
73
119
Right of use relating
11
311
4
1
2
318
to leases
Royalty advances, current
9
464
476
44
-
984
Other assets
2,140
616
48
227
3,031
Total segment assets
5,984
4,145
407
312
10,848
Unallocated assets
791
Total assets
11,639
1
1
1 Total segment assets in the Netherlands was \u20ac1,607 million in 2023 (\u20ac931 million in 2022).
Content assets by segment
December 31, 2023
Note Recorded Music Merchandising Total
(millions of euros) Music Publishing and other
Catalogues (of music and publishing rights)
1,335
1,685
-
3,020
Royalty advances (to artists and repertoire owners)
1,382
989
263
2,634
Of which:
Non-current
862
508
204
1,574
Current
520
481
59
1,060
Content assets, net
9
2,717
2,674
263
5,654
Current content assets
520
481
59
1,060
Non-current content assets
2,197
2,193
204
4,594
December 31, 2022
Note Recorded Music Merchandising Total
(millions of euros) Music Publishing and other
Catalogues (of music and publishing rights)
1,247
1,811
-
3,058
Royalty advances (to artists and repertoire owners)
1,402
917
258
2,577
Of which:
Non-current
938
441
214
1,593
Current
464
476
44
984
Content assets, net
9
2,649
2,728
258
5,635
Current content assets
464
476
44
984
Non-current content assets
2,185
2,252
214
4,651
", "dimensions": { "concept": "ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-398": { "value": "
Revenues by geographic area
UMG has a global network and operates in local countries, which enables it to maintain the relationships with clients and
to understand the local market, legal and other conditions. As a result, the geographic basis of the operating companies
is the basis in determining the split of revenues from external customers per geographical areas.
Year ended December 31, Year ended December 31,
(millions of euros)
2023
2022
U.S.
5,579
50%
5,163
50%
UK
941
9%
936
9%
Japan
768
7%
699
7%
Germany
576
5%
499
5%
France
444
4%
399
4%
Rest of the world
2,800
25%
2,644
25%
Total revenues
11,108
100%
10,340
100%
1
1 Revenues for the Netherlands was \u20ac179 million in 2023 and \u20ac229 million in 2022.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGeographicalAreasExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-449": { "value": "Revenues by geographic area UMG has a global network and operates in local countries, which enables it to maintain the relationships with clients and to understand the local market, legal and other conditions. As a result, the geographic basis of the operating companies is the basis in determining the split of revenues from external customers per geographical areas.
Year ended December 31, Year ended December 31,
(millions of euros)
2023
2022
U.S.
5,579
50%
5,163
50%
UK
941
9%
936
9%
Japan
768
7%
699
7%
Germany
576
5%
499
5%
France
444
4%
399
4%
Rest of the world
2,800
25%
2,644
25%
Total revenues
11,108
100%
10,340
100%
1 1 Revenues for the Netherlands was \u20ac179 million in 2023 and \u20ac229 million in 2022. Disaggregated revenue information Recorded Music
Year ended December 31,
(millions of euros)
2023
2022
Streaming revenue
1,425
1,420
Subscription revenue
4,275
3,901
Downloads and other digital revenue
207
337
Physical revenue
1,380
1,207
License and other revenue
1,174
1,072
Recorded Music revenue
8,461
7,937
1 1 2022 Downloads and other digital revenue includes a \u20ac71 million benefit from the settlement of a copyright infringement lawsuit with an internet service provider that represents revenue other than revenue from contracts with customers. Music Publishing
Year ended December 31,
(millions of euros)
2023
2022
Performance revenue
416
371
Synchronisation revenue
254
236
Digital revenue
1,128
1,040
Mechanical revenue
108
97
Other revenue
50
55
Music Publishing revenue
1,956
1,799
Subscriptions and streaming represents the largest type of recorded music revenue and is recognised over time and is 51% (51% in 2022) of total UMG revenues. Physical recorded music revenues are recognised at a point in time and represent 12% (12% in 2022) of total UMG revenues. Other Recorded Music revenues mostly include neighbouring rights income which are recognized over time. Merchandising revenue is recognised at a point in time. Music Publishing revenue is mostly recognised over time. In 2023, UMG had 3 customers that each individually represented over 10% of total revenues (3 customers in 2022) and which represented total revenues of 19%, 11% and 10% respectively (18%, 12% and 10% in 2022). Each customer reports revenues in both Recorded Music and Music Publishing segments. The amount of revenue recognized for the year ended December 31, 2023 from performance obligations satisfied (or partially satisfied) in previous periods amounts to \u20ac203 million. Note 15. Trade and other accounts payable
Year ended December 31,
(millions of euros)
2023
2022
Trade accounts payable
118
138
Music royalties to artists and repertoire owners
3,944
3,523
Accrued expenses
389
401
Other payables
852
711
Trade and other accounts payable
5,303
4,773
Current contract liabilities
408
377
Trade accounts payable and other
5,711
5,150
Out of the total amount of \u20ac377 million recognized in contract liabilities at the beginning of 2023, \u20ac321 million has been recognized as revenue for the year ended December 31, 2023. The total amount of current and non-current contract liabilities as at December 31, 2023 is \u20ac428 million. ", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueFromContractsWithCustomersExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-428": { "value": "Revenues by geographic area UMG has a global network and operates in local countries, which enables it to maintain the relationships with clients and to understand the local market, legal and other conditions. As a result, the geographic basis of the operating companies is the basis in determining the split of revenues from external customers per geographical areas.
Year ended December 31, Year ended December 31,
(millions of euros)
2023
2022
U.S.
5,579
50%
5,163
50%
UK
941
9%
936
9%
Japan
768
7%
699
7%
Germany
576
5%
499
5%
France
444
4%
399
4%
Rest of the world
2,800
25%
2,644
25%
Total revenues
11,108
100%
10,340
100%
1 1 Revenues for the Netherlands was \u20ac179 million in 2023 and \u20ac229 million in 2022. Disaggregated revenue information Recorded Music
Year ended December 31,
(millions of euros)
2023
2022
Streaming revenue
1,425
1,420
Subscription revenue
4,275
3,901
Downloads and other digital revenue
207
337
Physical revenue
1,380
1,207
License and other revenue
1,174
1,072
Recorded Music revenue
8,461
7,937
1 1 2022 Downloads and other digital revenue includes a \u20ac71 million benefit from the settlement of a copyright infringement lawsuit with an internet service provider that represents revenue other than revenue from contracts with customers. Music Publishing
Year ended December 31,
(millions of euros)
2023
2022
Performance revenue
416
371
Synchronisation revenue
254
236
Digital revenue
1,128
1,040
Mechanical revenue
108
97
Other revenue
50
55
Music Publishing revenue
1,956
1,799
Subscriptions and streaming represents the largest type of recorded music revenue and is recognised over time and is 51% (51% in 2022) of total UMG revenues. Physical recorded music revenues are recognised at a point in time and represent 12% (12% in 2022) of total UMG revenues. Other Recorded Music revenues mostly include neighbouring rights income which are recognized over time. Merchandising revenue is recognised at a point in time. Music Publishing revenue is mostly recognised over time. In 2023, UMG had 3 customers that each individually represented over 10% of total revenues (3 customers in 2022) and which represented total revenues of 19%, 11% and 10% respectively (18%, 12% and 10% in 2022). Each customer reports revenues in both Recorded Music and Music Publishing segments. The amount of revenue recognized for the year ended December 31, 2023 from performance obligations satisfied (or partially satisfied) in previous periods amounts to \u20ac203 million. ", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-360": { "value": "
Note 4. Cost of revenues and selling, general and administrative
expenses
Year ended December 31,
(millions of euros)
Note
2023
2022
Included in cost of revenues:
Artist costs
5,152
4,704
Product costs
1,056
1,049
Of which:
Personnel costs
33
30
Included in selling, general and administrative expenses:
Depreciation of tangible assets
10
34
35
Depreciation of right of use assets
11
72
74
Personnel costs
2,048
1,537
", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralAndAdministrativeExpenseExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-450": { "value": "Note 4. Cost of revenues and selling, general and administrative expenses
Year ended December 31,
(millions of euros)
Note
2023
2022
Included in cost of revenues:
Artist costs
5,152
4,704
Product costs
1,056
1,049
Of which:
Personnel costs
33
30
Included in selling, general and administrative expenses:
Depreciation of tangible assets
10
34
35
Depreciation of right of use assets
11
72
74
Personnel costs
2,048
1,537
Personnel costs and average employee numbers
Year ended December 31,
(millions of euros)
Note
2023
2022
Salaries
1,196
1,202
Social security and other employment expenses
209
167
Wages and expenses
1,405
1,369
Share-based compensation plans
23
600
128
Employee defined contribution plans
52
48
Employee defined benefit plans
22
2
3
Other
22
19
Personnel costs
2,081
1,567
Annual average number of full-time equivalent employees (in thousands)
10.0
9.5
", "dimensions": { "concept": "ifrs-full:DisclosureOfExpensesByNatureExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-443": { "value": "Note 4. Cost of revenues and selling, general and administrative expenses
Year ended December 31,
(millions of euros)
Note
2023
2022
Included in cost of revenues:
Artist costs
5,152
4,704
Product costs
1,056
1,049
Of which:
Personnel costs
33
30
Included in selling, general and administrative expenses:
Depreciation of tangible assets
10
34
35
Depreciation of right of use assets
11
72
74
Personnel costs
2,048
1,537
Personnel costs and average employee numbers
Year ended December 31,
(millions of euros)
Note
2023
2022
Salaries
1,196
1,202
Social security and other employment expenses
209
167
Wages and expenses
1,405
1,369
Share-based compensation plans
23
600
128
Employee defined contribution plans
52
48
Employee defined benefit plans
22
2
3
Other
22
19
Personnel costs
2,081
1,567
Annual average number of full-time equivalent employees (in thousands)
10.0
9.5
", "dimensions": { "concept": "ifrs-full:DisclosureOfExpensesExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-429": { "value": "Note 4. Cost of revenues and selling, general and administrative expenses
Year ended December 31,
(millions of euros)
Note
2023
2022
Included in cost of revenues:
Artist costs
5,152
4,704
Product costs
1,056
1,049
Of which:
Personnel costs
33
30
Included in selling, general and administrative expenses:
Depreciation of tangible assets
10
34
35
Depreciation of right of use assets
11
72
74
Personnel costs
2,048
1,537
", "dimensions": { "concept": "ifrs-full:DisclosureOfDepreciationAndAmortisationExpenseExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-399": { "value": "Note 4. Cost of revenues and selling, general and administrative expenses
Year ended December 31,
(millions of euros)
Note
2023
2022
Included in cost of revenues:
Artist costs
5,152
4,704
Product costs
1,056
1,049
Of which:
Personnel costs
33
30
Included in selling, general and administrative expenses:
Depreciation of tangible assets
10
34
35
Depreciation of right of use assets
11
72
74
Personnel costs
2,048
1,537
", "dimensions": { "concept": "ifrs-full:DisclosureOfCostOfSalesExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-361": { "value": "
Personnel costs and average employee numbers
Year ended December 31,
(millions of euros)
Note
2023
2022
Salaries
1,196
1,202
Social security and other employment expenses
209
167
Wages and expenses
1,405
1,369
Share-based compensation plans
23
600
128
Employee defined contribution plans
52
48
Employee defined benefit plans
22
2
3
Other
22
19
Personnel costs
2,081
1,567
Annual average number of full-time equivalent employees (in thousands)
10.0
9.5
", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutEmployeesExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-430": { "value": "Personnel costs and average employee numbers
Year ended December 31,
(millions of euros)
Note
2023
2022
Salaries
1,196
1,202
Social security and other employment expenses
209
167
Wages and expenses
1,405
1,369
Share-based compensation plans
23
600
128
Employee defined contribution plans
52
48
Employee defined benefit plans
22
2
3
Other
22
19
Personnel costs
2,081
1,567
Annual average number of full-time equivalent employees (in thousands)
10.0
9.5
Note 22. Post-retirement employee benefits
In accordance with the laws and practices of each country in which it operates, UMG participates in, or maintains,
employee benefit plans providing retirement pensions, post-retirement health care, life insurance and other post-
employment benefits to eligible (former) employees and such of their beneficiaries who meet the required conditions.
Post-retirement benefits are provided for substantially all employees through defined contribution plans, which are
integrated with local social security, or defined benefit plans, which are generally managed via group pension plans.
The plan funding policy implemented by UMG is consistent with applicable government funding requirements and
regulations. Refer to Note 4 for the contribution to defined contribution plans. Post-employment benefits covered in this
note relate to defined-benefit pension and other post-retirement defined benefit plans, including medical plans and life
insurance. The benefits provided by these plans are based on employees\u2019 years of service and compensation levels.
Refer to the table below for the present value of the net defined benefit obligations and plan assets per country as at
31 December.
2023 2022
Obligation Fair value of Net obligation/ Obligation Fair value of Net obligation/
(millions of euros) plan assets (asset) plan assets (asset)
Germany
136
(1)
135
134
(2)
132
U.S.
18
-
18
19
-
19
Other
38
(35)
3
41
(39)
2
Total
192
(36)
156
194
(41)
153
of which
assets related to employee
benefit plans
(10)
(13)
liabilities for employee
benefit plans
166
166
Germany The post-retirement benefit plans in Germany aim to provide pension benefits to eligible (former) employees and such of their beneficiaries who meet certain conditions. The total obligation as presented above includes multiple plans, from which three are material. These plans are closed to new entrants since 2003 and earlier. In accordance with current regulations, these plans are not funded and are not covered by the plan assets. The main risks for UMG relate to changes in discount rates. United States The defined benefit liability in the United States mainly relates to the post-retirement medical care benefits. Post- retirement medical benefit plans in the United States are not covered by plan assets in accordance with local laws and practices. Cash flow impact for 2024 In 2024 UMG expects a cash outflow of \u20ac13 million in relation to all defined benefit plans. Net defined benefit obligations/(assets) Movements of the net defined benefit obligations and plan assets for the year ended on December 31, are presented in the table below.
2023 2022
Fair value Net Fair value Net
Note
Obligation
of plan obligation/ Obligation of plan obligation/
(millions of euros) assets (asset) assets (asset)
Opening balance
194
(41)
153
427
(219)
208
Current service cost
4
2
-
2
3
-
3
(Gain)/loss on settlements
-
-
-
-
-
-
Other
-
-
-
-
-
-
Impact on selling &
2
-
2
3
-
3
administrative expenses
Interest cost
5
7
-
7
6
-
6
Expected return on plan assets
5
-
(1)
(1)
-
(3)
(3)
Impact on other financial income
7
(1)
6
6
(3)
3
Included in the statement of profit
9
(1)
8
9
(3)
6
or loss
Actuarial losses/(gains) related to:
Experience adjustments
(3)
-
(3)
10
51
61
Financial assumptions
9
-
9
(111)
-
(111)
Demographic assumptions
(1)
-
(1)
1
-
1
Included in other
comprehensive income
20
5
-
5
(100)
51
(49)
Contributions by employers
-
(12)
(12)
-
(12)
(12)
Benefits paid by the fund
(2)
2
-
(121)
121
-
Benefits paid by the employer
(12)
12
-
(12)
12
-
Foreign currency and other
(2)
4
2
(9)
9
-
Closing balance
192
(36)
156
194
(41)
153
of which
wholly or partly funded benefits
33
38
wholly unfunded benefits
1
159
156
assets related to employee
(10)
(13)
benefit plans
liabilities for employee benefit plans
166
166
1 Included a current liability of \u20ac13 million as of December 31, 2023 and \u20ac14 million as of December 31, 2022
Assumptions used in the valuation of the net defined benefit liability
The mortality tables used for UMG\u2019s major defined benefit schemes in Germany are Richttafeln 2018 G K. Heubeck.
Other key assumptions used in the valuation of the net defined benefit plans liability are: rate of compensation increase,
discount rate, and expected return on plan assets. The weighted-average assumptions used to calculate the defined-
benefit obligation as of December 31 were as follows:
Germany
U.S.
Weighted average of all plans
2023
2022
2023
2022
2023
2022
Discount rate
3.50%
3.75%
5.28%
5.00%
3.51%
3.58%
Inflation rate
2.00%
2.00%
na
na
2.00%
2.00%
Rate of compensation increase
2.50%
2.50%
na
na
2.39%
1.93%
Duration of the benefit obligation
9.6
10.4
(in years)
na: not applicable.
A 50 basis point increase (or a 50 basis point decrease, respectively) to the 2023 discount rate would have led to a
decrease in the defined benefit obligation of \u20ac9.1 million (or an increase of \u20ac9.9 million, respectively), assuming all other
assumptions remain unchanged.
Pension plan assets allocation
Year ended December 31,
(millions of euros)
2023
2022
Insurance contracts
54%
55%
Equity securities
21%
20%
Debt securities
15%
14%
Diversified funds
0%
0%
Cash and other
10%
11%
Total
100%
100%
", "dimensions": { "concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-362": { "value": "
Note 5. Financial income and expenses
Year ended December 31,
(millions of euros)
Note
2023
2022
Interest income from cash, cash equivalents and other
14
20
Change in fair value of financial instruments through profit or loss
431
-
Expected return on plan assets related to employee benefit plans
22
1
3
Gain on derivative instruments at fair value through profit or loss
5
13
Income from investments
3
1
Financial income
454
37
Interest expense on borrowings
(91)
(47)
Change in fair value of financial instruments through profit or loss
(14)
(654)
Unwinding of interest component
(1)
(1)
Interest cost related to employee benefit plans
22
(7)
(6)
Interest expenses on lease liabilities
11
(14)
(14)
Foreign exchange loss
(11)
(1)
Cost of finance
(7)
(9)
Other
(6)
(3)
Financial expenses
(151)
(735)
Net total financial income and (expenses)
303
(698)
1
1 The net gain on derivative instruments at fair value through profit or loss relates to foreign exchange forward contracts that did not qualify for hedge accounting.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExpenseExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-461": { "value": "Note 5. Financial income and expenses
Year ended December 31,
(millions of euros)
Note
2023
2022
Interest income from cash, cash equivalents and other
14
20
Change in fair value of financial instruments through profit or loss
431
-
Expected return on plan assets related to employee benefit plans
22
1
3
Gain on derivative instruments at fair value through profit or loss
5
13
Income from investments
3
1
Financial income
454
37
Interest expense on borrowings
(91)
(47)
Change in fair value of financial instruments through profit or loss
(14)
(654)
Unwinding of interest component
(1)
(1)
Interest cost related to employee benefit plans
22
(7)
(6)
Interest expenses on lease liabilities
11
(14)
(14)
Foreign exchange loss
(11)
(1)
Cost of finance
(7)
(9)
Other
(6)
(3)
Financial expenses
(151)
(735)
Net total financial income and (expenses)
303
(698)
1 1 The net gain on derivative instruments at fair value through profit or loss relates to foreign exchange forward contracts that did not qualify for hedge accounting. ", "dimensions": { "concept": "ifrs-full:DisclosureOfEffectOfChangesInForeignExchangeRatesExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-458": { "value": "Note 5. Financial income and expenses
Year ended December 31,
(millions of euros)
Note
2023
2022
Interest income from cash, cash equivalents and other
14
20
Change in fair value of financial instruments through profit or loss
431
-
Expected return on plan assets related to employee benefit plans
22
1
3
Gain on derivative instruments at fair value through profit or loss
5
13
Income from investments
3
1
Financial income
454
37
Interest expense on borrowings
(91)
(47)
Change in fair value of financial instruments through profit or loss
(14)
(654)
Unwinding of interest component
(1)
(1)
Interest cost related to employee benefit plans
22
(7)
(6)
Interest expenses on lease liabilities
11
(14)
(14)
Foreign exchange loss
(11)
(1)
Cost of finance
(7)
(9)
Other
(6)
(3)
Financial expenses
(151)
(735)
Net total financial income and (expenses)
303
(698)
1 1 The net gain on derivative instruments at fair value through profit or loss relates to foreign exchange forward contracts that did not qualify for hedge accounting. ", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestExpenseExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-455": { "value": "Note 5. Financial income and expenses
Year ended December 31,
(millions of euros)
Note
2023
2022
Interest income from cash, cash equivalents and other
14
20
Change in fair value of financial instruments through profit or loss
431
-
Expected return on plan assets related to employee benefit plans
22
1
3
Gain on derivative instruments at fair value through profit or loss
5
13
Income from investments
3
1
Financial income
454
37
Interest expense on borrowings
(91)
(47)
Change in fair value of financial instruments through profit or loss
(14)
(654)
Unwinding of interest component
(1)
(1)
Interest cost related to employee benefit plans
22
(7)
(6)
Interest expenses on lease liabilities
11
(14)
(14)
Foreign exchange loss
(11)
(1)
Cost of finance
(7)
(9)
Other
(6)
(3)
Financial expenses
(151)
(735)
Net total financial income and (expenses)
303
(698)
1 1 The net gain on derivative instruments at fair value through profit or loss relates to foreign exchange forward contracts that did not qualify for hedge accounting. ", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExpenseExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-451": { "value": "Note 5. Financial income and expenses
Year ended December 31,
(millions of euros)
Note
2023
2022
Interest income from cash, cash equivalents and other
14
20
Change in fair value of financial instruments through profit or loss
431
-
Expected return on plan assets related to employee benefit plans
22
1
3
Gain on derivative instruments at fair value through profit or loss
5
13
Income from investments
3
1
Financial income
454
37
Interest expense on borrowings
(91)
(47)
Change in fair value of financial instruments through profit or loss
(14)
(654)
Unwinding of interest component
(1)
(1)
Interest cost related to employee benefit plans
22
(7)
(6)
Interest expenses on lease liabilities
11
(14)
(14)
Foreign exchange loss
(11)
(1)
Cost of finance
(7)
(9)
Other
(6)
(3)
Financial expenses
(151)
(735)
Net total financial income and (expenses)
303
(698)
1 1 The net gain on derivative instruments at fair value through profit or loss relates to foreign exchange forward contracts that did not qualify for hedge accounting. ", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-444": { "value": "Note 5. Financial income and expenses
Year ended December 31,
(millions of euros)
Note
2023
2022
Interest income from cash, cash equivalents and other
14
20
Change in fair value of financial instruments through profit or loss
431
-
Expected return on plan assets related to employee benefit plans
22
1
3
Gain on derivative instruments at fair value through profit or loss
5
13
Income from investments
3
1
Financial income
454
37
Interest expense on borrowings
(91)
(47)
Change in fair value of financial instruments through profit or loss
(14)
(654)
Unwinding of interest component
(1)
(1)
Interest cost related to employee benefit plans
22
(7)
(6)
Interest expenses on lease liabilities
11
(14)
(14)
Foreign exchange loss
(11)
(1)
Cost of finance
(7)
(9)
Other
(6)
(3)
Financial expenses
(151)
(735)
Net total financial income and (expenses)
303
(698)
1 1 The net gain on derivative instruments at fair value through profit or loss relates to foreign exchange forward contracts that did not qualify for hedge accounting. Changes in working capital 1
Changes
December Changes in Business in foreign December
31, 2022 operating combinations currency Other 31, 2023
working capital translation
(millions of euros) adjustments
Inventories
163
52
-
(5)
-
210
Trade accounts receivable
2,014
309
3
(41)
(39)
2,246
and other
Of which:
Trade accounts receivable
580
102
3
(16)
(23)
646
Expected credit losses
(62)
13
(1)
2
(1)
(49)
Working capital assets
2,177
361
3
(46)
(39)
2,456
Trade accounts payable
(5,150)
(527)
(9)
134
(159)
(5,711)
and other
Other non-
current liabilities
(437)
2
(40)
5
(245)
(715)
Working capital liabilities
(5,587)
(525)
(49)
139
(404)
(6,426)
Net working capital
(3,410)
(164)
(46)
93
(443)
(3,970)
2 3 1 Excludes content investments. 2 Mainly includes the change in net working capital relating to content investments, capital expenditures and other investments. 3 Total inventory obsolescence expense for the period was \u20ac59 million. 1
Changes
December Changes in Business in foreign December
31, 2021 operating combinations currency Other 31, 2022
working capital translation
(millions of euros) adjustments
Inventories
99
62
-
2
-
163
Trade accounts receivable
1,803
203
1
11
(4)
2,014
and other
Of which:
Trade accounts receivable
550
22
1
4
3
580
Expected credit losses
(46)
(14)
-
-
(2)
(62)
Working capital assets
1,902
265
1
13
(4)
2,177
Trade accounts payable
(4,875)
(226)
(2)
(113)
66
(5,150)
and other
Other non-
current liabilities
(769)
(6)
(3)
(14)
355
(437)
Working capital liabilities
(5,644)
(232)
(5)
(127)
421
(5,587)
Net working capital
(3,742)
33
(4)
(114)
417
(3,410)
2 3 1 Excludes content investments. 2 Mainly includes the change in net working capital relating to content investments, capital expenditures and other investments. 3 Total inventory obsolescence expense for the period was \u20ac69 million. Financial risk management UMG business activities expose the Group to financial risks, including credit risk, liquidity risk, and market risk. Market risk comprises three types of risk: interest rate risk, foreign currency risk and other price risks. These risks are inherent to how UMG operates as a multinational with locally operating subsidiaries. To manage these risks, UMG has developed specific policies. The essence of measuring the performance of these policies is to strike a balance between managing risks and contributing to the financial results of UMG. UMG policies are risk-averse in that regard. Enforcement of procedures related to financial risk management is carried out by UMG Group Treasury in line with the guiding principles of the Group Treasury Policies. Credit risk Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by falling to discharge an obligation. UMG's maximum credit risk exposure is equal to the carrying amounts of Trade and other receivables, refer to Note 14, and Cash position and borrowings, refer to Note 16, as presented in the Statement of Financial Position. Also, for the derivatives and assets at fair value via profit and loss, the maximum exposure to credit risk at the end of the reporting period is equal to the carrying amount, refer to Note 18 . The maximum credit risk exposure on guarantees issued corresponds to their nominal amounts, as presented in Note 17 .UMG aims to centralize its cash management with its Tier 1 banks, of which all the banks have credit ratings of minimum of A-. UMG performs ongoing evaluations of the financial and non-financial condition of UMG customers and adjusts credit limits when appropriate. In instances where a customer's creditworthiness is determined not to be sufficient to grant the required credit limit, there are several mitigation tools that can be utilized to close the gap, including reducing payment terms, cash on delivery, prepayments and pledges on assets. UMG\u2019s operational subsidiaries have set up procedures and systems to track their trade accounts receivable and recover outstanding amounts. In addition, some subsidiaries have insured their main client credit risks worldwide with a leading credit insurer. Liquidity risk Liquidity risk is the risk that UMG will not be able to meet its financial obligations as they fall due. The primary objective of liquidity management is providing sufficient cash to enable UMG to meet its liabilities when due, under normal and stressed conditions, without incurring losses. Neither the aged receivables of individual customers, nor the profile of the accounts receivable portfolio per segment, impose a significant threat to UMG\u2019s liquidity planning. UMG Treasury provides for the short-term day-to-day cash management needs of the Group by organizing sweeps between international cash poolings. For medium term financing requirements, UMG Group Treasury determines the Group's overall debt position and its planned evolution based on the Group\u2019s 13-month rolling cash forecast. A liquidity analysis is performed to ensure the proper funding is in place to face medium-term needs. Cash is pooled up to UMG NV from all territories participating in the international cash pooling arrangement. Cash is extracted from countries outside the cash pooling through dividends or upstream loans. The objectives of liquidity management are to repay UMG's external debt and to pay UMG's dividend to the Group's shareholders. The list of permitted banks for liquidity management includes nine banks with minimum rating of A-. The liquidity analysis includes a buffer of \u20ac400 million to provide for intra-month treasury swings and the incompressible treasury float. Adequate bank facilities are available as backup for Commercial paper. The maturity schedule for long- term external debt is maintained above 3 years and the current average maturity for long term external debt is 5 years. UMG Treasury ensures central compliance with financial covenants, pari-passu, and negative pledge clauses. Total cash and cash equivalents position as at December 31, 2023, is disclosed in Note 16. Contractual obligations and their timing are disclosed in Note 17. In addition, as at December 31, 2023, UMG has undrawn Revolving Credit Facilities (RCF) of \u20ac2,301 million. Market risk Market risk is the possibility that an entity will experience losses due to factors that affect the financial markets. Market risk includes currency risk and interest rate risk as addressed below, but also risk of change in fair value of the financial instruments, including those traded on the active markets. At December 31, 2023, UMG held financial instruments measured at fair value as disclosed in Note 18, where the exposure of the risk and sensitivity are presented. UMG risk management policies cover refinancing risk to ensure that under any market circumstances, UMG can refinance its debt on time and a reasonable cost. The objectives of refinancing risk management are to benefit from sufficient flexibility granted by the access to capital markets (in particular, Euro commercial papers, private placement and bond markets) and not rely solely on bank borrowings. Interest rate risk Interest rate risk is the risk of the fair value or future cash flows of a financial instrument fluctuating because of changes in the market interest rates. Financial instruments included in borrowings create an inherent interest rate risk. UMG seeks to limit the period over which it is exposed to interest rate risk on the Group's borrowings. The preferred method of hedging interest rate risk is issuing long-term fixed-rate bonds. The use of interest-rate plain vanilla derivatives is also authorized. The list of authorized instruments includes interest rate swaps, FRAs, caps, and floors. As for currency risk management, interest rate hedging operations are handled solely by UMG Treasury according to the Group\u2019s strategic goals set by the Group Chief Financial Officer. The speculative use of interest rate derivatives is strictly prohibited. As of December 31, 2023, UMG had a ratio of fixed-rate debt to total outstanding debt of approximately 85%. A sensitivity analysis conducted in January 2024 on the gross debt portfolio shows that if short term EURIBOR were to increase instantaneously by 0.5% from their level of December 31, 2023, with all other variables held constant, the total change in annualized interest expense result would be \u20ac1 million. Foreign currency risk As any multinational group, UMG is exposed to transactional foreign currency risk on committed and forecast cash flows, that are denominated in a currency other than the transacting entity's functional currency. UMG is also exposed to translational risk, resulting from the translation of foreign operations into Euros. The main currencies that drive UMG's foreign currency risk are U.S. Dollar, British Pound and Japanese Yen. UMG\u2019s exposure to foreign exchange transactional risk is greatly limited due to the offsetting of inflows and outflows in local currencies to the extent possible as a natural hedge. UMG Treasury mainly manages foreign currency risk exposure on balance sheet positions, primarily cash concentrations in non-Euro currencies held under the Group's cash pooling arrangements. UMG Treasury's foreign currency risk management policy is to hedge recognized assets and liabilities denominated in foreign currencies above a predefined threshold. UMG uses forward exchange rate contracts and foreign exchange swaps to manage this exposure. All material foreign currency balance sheet exposures are offset by derivatives, so potential foreign currency rate fluctuations as of December 31, 2023 would have no significant impacts on UMG\u2019s financial results. UMG did not apply hedge accounting to these derivatives in 2023 or 2022. Currency derivatives are not used for speculative purposes. The average maturity of these contracts is one month. The table below summarises the net nominal value of the foreign currency balance sheet exposure and foreign exchange rate derivatives used to offset it as of December 31, 2023.
(millions of euros)
USD
GBP
JPY
Other
Total
Nominal value of Balance sheet exposure
535
475
106
412
1,528
Foreign exchange rate derivatives
(535)
(475)
(106)
(412)
(1,528)
Net exposure
-
-
-
-
-
Beginning in 2023, foreign currency translation risks are hedged to a limited extent, as the underlying currency positions are generally considered to be long-term in nature. If a hedge is entered into, it is accounted for as a net investment hedge. Note 14. Trade and other receivables
Year ended December 31,
(millions of euros)
2023
2022
Trade receivables
1,986
1,765
Other receivables
260
249
Trade receivables, net of value allowance
2,246
2,014
Year ended December 31,
(millions of euros)
2023
2022
Current
1,895
1,698
Overdue 0-30 days
58
46
Overdue 31-150 days
25
21
Overdue >150 days
8
-
Trade receivables, net of value allowance
1,986
1,765
For the movements of the expected credit loss allowance and the credit risk management policies and procedures of UMG please refer to Note 13. Note 15. Trade and other accounts payable
Year ended December 31,
(millions of euros)
2023
2022
Trade accounts payable
118
138
Music royalties to artists and repertoire owners
3,944
3,523
Accrued expenses
389
401
Other payables
852
711
Trade and other accounts payable
5,303
4,773
Current contract liabilities
408
377
Trade accounts payable and other
5,711
5,150
Out of the total amount of \u20ac377 million recognized in contract liabilities at the beginning of 2023, \u20ac321 million has been recognized as revenue for the year ended December 31, 2023. The total amount of current and non-current contract liabilities as at December 31, 2023 is \u20ac428 million. Note 16. Cash position and borrowings Cash position
Year ended December 31,
(millions of euros)
2023
2022
Cash and cash equivalents
413
439
Bank overdrafts
(26)
(1)
Cash and cash equivalents in the statement of cash flows
387
438
UMG operates in a number of territories where regulations do not authorise participation of local entities to the UMG global cash pooling. Only dividends and intra-group invoices are available to extract cash from these territories. The amount of cash held by UMG entities in these countries amounted to \u20ac394 million as of December 31, 2023. Borrowings and other financial liabilities
December 31, 2023
December 31, 2022
(millions of euros)
Total
Long-term
Short-term
Total
Long-term
Short-term
Bonds
1,808
1,774
34
1,004
987
17
Drawn revolving
-
-
-
125
125
-
credit facilities
Commercial papers
197
-
197
929
-
929
Bank overdrafts
26
-
26
1
-
1
Other
73
52
21
191
1
190
Borrowings at
amortized cost
2,104
1,826
278
2,250
1,113
1,137
Cash and cash equivalents
(413)
-
(413)
(439)
-
(439)
Derivative financial assets
(2)
-
(2)
(1)
-
(1)
Net debt
1,689
1,810
New borrowings In July 2023, UMG issued \u00a57 billion (\u20ac45 million) of senior notes due on July 5, 2038 with a coupon of 1.61%. In June 2023, UMG issued \u20ac750 million of senior unsecured notes due on June 13, 2031 with a coupon of 4.00%. In March 2023, UMG entered into a short-term bilateral floating rate \u20ac500 million revolving credit facility. The facility matures 12 months from the signing date. In February 2023, UMG extended the original maturity of the syndicated floating rate \u20ac2 billion revolving credit facility. The maturity date was extended for two years up to April 26, 2028. All other conditions remained unchanged. Movements of borrowings
Drawn
Term facility revolving Bonds Bank Commercial
Other debt
Total
credit overdrafts papers
(millions of euros) facilities
Balance December 31, 2021
998
1,447
-
13
-
137
2,595
New borrowings
8
1,722
1,004
1
3,117
87
5,939
Repayments
(1,006)
(3,126)
-
(13)
(2,188)
(34)
(6,367)
Translation differences and other movements
-
82
-
-
-
1
83
Balance December 31, 2022
-
125
1,004
1
929
191
2,250
New borrowings
-
1,075
794
26
4,738
34
6,667
Repayments
-
(1,200)
-
(1)
(5,469)
(145)
(6,815)
Translation differences and other movements
-
-
10
-
(1)
(7)
2
Balance December 31, 2023
-
-
1,808
26
197
73
2,104
Contractual obligations The table below analyses UMG\u2019s financial liabilities into relevant maturity groupings based on their contractual maturities. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant. Interest on long-term debt is based on floating rate adjustments according to market expectations.
Total minimum future
Minimum future payments as of December 31, 2023 payments as of
Payments due in
(millions of euros)
Total
1 year
2-5 years
After 5 years
December 31, 2022
Borrowings and other
financial liabilities
2,449
274
735
1,440
2,506
Lease liabilities
463
94
251
118
472
Music royalties to artists and
repertoire owners
3,957
3,944
13
-
3,542
Creative talent and employment
603
362
240
1
470
agreements and others
Other payables
1,411
949
55
407
1,156
Consolidated statement of
financial position items
8,883
5,623
1,294
1,966
8,146
Contractual
1,595
815
737
43
1,562
content commitments
Other commitments
287
82
135
70
244
Total off-balance
1,882
897
872
113
1,806
sheet commitments
Total
10,765
6,520
2,166
2,079
9,952
Note 18. Financial assets and liabilities The following table shows the carrying amounts and fair values of financial assets and liabilities according to their fair value hierarchy. Based on the nature, maturity or the magnitude of the amounts, UMG considers that the fair value of trade and other receivables, short-term deposits, loans receivable, borrowings, trade and other payables are not materially different from their carrying value. Fair value hierarchy is based on the transparency of the inputs used and is as follows: \u2022 Level 1: fair value measurement based on quoted prices in active markets for identical assets or liabilities; \u2022 Level 2: fair value measurement based on observable market data (other than quoted prices included under Level 1), being for example, price on the last transactions on over-the-counter (OTC) markets; and \u2022 Level 3: fair value measurement based on valuation techniques using inputs for the asset or liability that are not based on observable market data.
December 31, 2023
Fair value
Carrying
Level 1
Level 2
Level 3
(millions of euros) amount
Financial assets at fair value through profit and loss
Listed equity securities
1,227
1,227
-
-
Other financial assets
75
-
55
20
Trade and other receivables
-
-
-
-
Financial assets at fair value through other
comprehensive income
Listed equity securities through OCI
-
-
-
-
Unlisted equity securities
20
-
-
20
Financial assets at amortised cost
Trade and other receivables
2,246
-
-
-
Other financial assets
205
-
-
-
Total financial assets
3,773
1,227
55
40
Financial liabilities at fair value through profit and loss
Trade and other payables
(4)
(4)
-
-
Other non-current liabilities
(35)
(5)
-
(30)
Financial liabilities at amortised cost
Trade and other payables
(5,707)
-
-
-
Bonds
(1,808)
(1,808)
-
-
Borrowings, excluding bank overdrafts and bonds
(270)
-
-
-
Other non-current liabilities
(680)
-
-
-
Total financial liabilities
(8,504)
(1,817)
-
(30)
December 31, 2022
Fair value
Carrying Level 1
Level 2
Level 3
(millions of euros) amount
Financial assets at fair value through profit and loss
Listed equity securities
597
597
-
-
Other financial assets
51
-
31
20
Trade and other receivables
1
-
1
-
Financial assets at fair value through other
comprehensive income
Listed equity securities through OCI
1
1
-
-
Unlisted equity securities
19
-
-
19
Financial assets at amortised cost
Trade and other receivables
2,013
-
-
-
Other financial assets
22
-
-
-
Total financial assets
2,704
598
32
39
Financial liabilities at fair value through profit and loss
Trade and other payables
-
-
-
-
Other non-current liabilities
-
-
-
-
Financial liabilities at amortised cost
Trade and other payables
(5,150)
-
-
-
Bonds
(1,004)
(987)
-
-
Borrowings, excluding bank overdrafts and bonds
(1,245)
-
-
-
Other non-current liabilities
(437)
-
-
-
Total financial liabilities
(7,836)
(987)
-
-
1 1 Includes transfer of \u20ac31 million of equity securities from level 2 to level 1. Listed equity portfolio
December 31, 2023
Number Average Stock Change Cumulative
of shares Ownership purchase market Carrying in value unrealized Sensitivity
held interest price price value over captial at +/- 10 pts
the period gain/(loss)
(thousands) (\u20ac/share)
(millions of euros)
Spotify
6,487
3.27%
6.58
171.36
1,112
629
1,069
+111/-111
Tencent
12,246
0.78%
na
8.22
101
5
101
+10/-10
Music Entertainment
Other
14
(4)
14
Total
1,227
630
1,184
1,2 3 1 Includes acquisition fees and taxes. 2 na: not applicable. 3 Includes revaluation gains, net of liabilities, of \u20ac425 million in 2023 as recognized in Note 5.
December 31, 2022
Number Average Stock Change Cumulative
of shares Ownership purchase market Carrying in value unrealized Sensitivity
held interest price price value over captial at +/- 10 pts
the period gain/(loss)
(thousands) (\u20ac/share)
(millions of euros)
Spotify
6,487
3.30%
6.58
74.41
483
(856)
440
+48/-48
Tencent
12,246
0.76%
na
7.80
96
22
96
+10/-10
Music Entertainment
Other
18
18
18
Total
597
(816)
554
1,2 3 1 Includes acquisition fees and taxes. 2 na: not applicable. 3 Includes revaluation losses, net of liabilities, of \u20ac617 million in 2022 as recognized in Note 5.", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-431": { "value": "Note 5. Financial income and expenses
Year ended December 31,
(millions of euros)
Note
2023
2022
Interest income from cash, cash equivalents and other
14
20
Change in fair value of financial instruments through profit or loss
431
-
Expected return on plan assets related to employee benefit plans
22
1
3
Gain on derivative instruments at fair value through profit or loss
5
13
Income from investments
3
1
Financial income
454
37
Interest expense on borrowings
(91)
(47)
Change in fair value of financial instruments through profit or loss
(14)
(654)
Unwinding of interest component
(1)
(1)
Interest cost related to employee benefit plans
22
(7)
(6)
Interest expenses on lease liabilities
11
(14)
(14)
Foreign exchange loss
(11)
(1)
Cost of finance
(7)
(9)
Other
(6)
(3)
Financial expenses
(151)
(735)
Net total financial income and (expenses)
303
(698)
1 1 The net gain on derivative instruments at fair value through profit or loss relates to foreign exchange forward contracts that did not qualify for hedge accounting. ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceCostExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-400": { "value": "Note 5. Financial income and expenses
Year ended December 31,
(millions of euros)
Note
2023
2022
Interest income from cash, cash equivalents and other
14
20
Change in fair value of financial instruments through profit or loss
431
-
Expected return on plan assets related to employee benefit plans
22
1
3
Gain on derivative instruments at fair value through profit or loss
5
13
Income from investments
3
1
Financial income
454
37
Interest expense on borrowings
(91)
(47)
Change in fair value of financial instruments through profit or loss
(14)
(654)
Unwinding of interest component
(1)
(1)
Interest cost related to employee benefit plans
22
(7)
(6)
Interest expenses on lease liabilities
11
(14)
(14)
Foreign exchange loss
(11)
(1)
Cost of finance
(7)
(9)
Other
(6)
(3)
Financial expenses
(151)
(735)
Net total financial income and (expenses)
303
(698)
1 1 The net gain on derivative instruments at fair value through profit or loss relates to foreign exchange forward contracts that did not qualify for hedge accounting. ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-363": { "value": "
Note 6. Income taxes
Income taxes and income tax paid by geographic area
Year ended December 31,
(millions of euros)
2023
2022
(Expense)/income
Current
U.S.
(224)
(185)
UK
(30)
(24)
Rest of Europe
(117)
(127)
Rest of the world
(105)
(11)
(476)
(347)
Deferred
U.S.
89
9
UK
12
(1)
Rest of Europe
(105)
189
Rest of the world
22
35
18
232
Income taxes
(458)
(115)
1
1 Included the deferred tax charge relating to the revaluation gain recorded through profit or loss related to the investments in Spotify, Tencent Music Entertainment and
other listed investments for an aggregate expense amount of \u20ac111 million in 2023, compared to \u20ac166 million benefit in 2022 .
Income tax paid
Year ended December 31,
(millions of euros)
2023
2022
U.S.
(208)
(187)
UK
(30)
(22)
Rest of Europe
(57)
(36)
Rest of the world
(98)
(10)
Income tax (paid)/collected
(393)
(255)
1
1 The 2022 amount includes \u20ac62 million in refunds from litigations before court.
Effective tax rate
Year ended December 31,
(millions of euros)
2023
2022
Net profit /(loss) from continuing operations
1,263
785
(Income)/loss from equity affiliates
-
2
Income taxes
458
115
Profit before income taxes excluding (income)/loss from equity affiliates
1,721
902
Dutch statutory tax rate
25.8%
25.8%
Theoretical provision for income taxes based on Dutch statutory tax rate
(444)
(233)
Reconciliation of the theoretical and effective provision for income taxes
Corporate tax rate differences
7
33
Impacts of the changes in tax rates
(3)
1
Use or recognition of tax attributes
16
19
Adjustments to tax expense from previous years
6
21
Settled tax litigations
-
90
Non-deductible expenses
(19)
(8)
Withholding taxes (net of Corporate Income tax benefit)
(58)
(56)
United States tax components
Foreign Derived Intangible Income (FDII) deduction
37
31
Other
-
(13)
Provision for income taxes
(458)
(115)
Effective tax rate
26.6%
12.7%
1
2
1 Tax attributes includes tax losses and tax credits, both for the use of previously unrecognized attributes as for prior years attributes recognised this year for expected
utilisation in future years.
2 This represents the beneficial impact of two litigations finalised before tax courts in 2022.
Excluding previous years\u2019 adjustments and the impacts of the tax litigations to income tax expense, the effective tax rate
would have been 27.9% in 2023 and 27.3% in 2022.
Deferred tax assets and liabilities
Changes in deferred tax assets/(liabilities), net
Year ended December 31,
(millions of euros)
2023
2022
Opening balance of deferred tax assets/(liabilities)
(232)
(446)
Income taxes
18
231
Expenses and income directly recorded in equity and other comprehensive income
25
(14)
Changes in foreign currency translation adjustments and other
(8)
(3)
Closing balance of deferred tax assets/(liabilities), net
(197)
(232)
Components of deferred tax assets and liabilities
Year ended December 31,
(millions of euros)
2023
2022
Deferred tax assets
Recognizable deferred taxes
Tax attributes
89
98
Of which
Universal Music US and its subsidiaries
7
8
Universal Music UK and its subsidiaries
45
51
Universal Music and its subsidiaries in the rest of Europe
19
19
Universal Music and its subsidiaries in the rest of the world
18
20
Other
Of which
610
448
non-deductible provisions
87
61
employee benefits
120
37
working capital
148
149
Other
255
201
Set-off deferred tax
(137)
(90)
Total gross deferred tax assets
562
456
Deferred taxes, unrecognized
Tax attributes
(64)
(82)
Of which
Universal Music US and its subsidiaries
(6)
(6)
Universal Music UK and its subsidiaries
(23)
(38)
Universal Music and its subsidiaries in the rest of Europe
(17)
(18)
Universal Music and its subsidiaries in the rest of the world
(18)
(20)
Other
(19)
(26)
Total deferred tax assets, unrecognized
(83)
(108)
Recorded deferred tax assets
479
348
Deferred tax liabilities
Asset revaluations
(172)
(198)
Working capital
(172)
(163)
Financial instruments
(286)
(124)
Other
(183)
(185)
Set-off deferred tax
137
90
Recorded deferred tax liabilities
(676)
(580)
Deferred tax assets/(liabilities), net
(197)
(232)
1 1 2 3 4 5 1 As shown in this table, the amounts of gross tax attributes (including tax losses and tax credits) were estimated at the end of the relevant fiscal years. As a result, the amount of tax attributes shown in this table and the amount reported to tax authorities at the time of the filing of the tax returns may differ, and if necessary, may need to be adjusted in this table at the end of the following year. \u20ac19 million of the unrecognized gross tax attributes will expire within 5 years. In addition to the unrecognized deferred tax assets in this table, deferred tax assets have not been recognised in respect of gross tax attributes for \u20ac1,069 million (2022: \u20ac1,279 million), as it is not probable that there will be future taxable profits within the entities against which these can be utilised. 2 These tax liabilities, stemming from asset revaluations and resulting from the purchase price allocation of entities acquired by UMG, are cancelled upon amortization or divestiture of the related assets and do not and will not generate any current tax liabilities. 3 Primarily related to the deferred tax liabilities stemming from the revaluation of the investments in Spotify, Tencent Music Entertainment and other investments. 4 No liability has been recorded for the withholding tax to be suffered on any group entities' future dividend distributions of available earnings as of December 31, 2023 as the impact is not material. 5 As a result of applying the Deferred Tax related to Assets and Liabilities arising from a Single Transaction - Amendments to IAS 12 the December 31, 2022 balances show a gross up of the previously recorded net deferred tax assets on leases (from \u20ac26 million to \u20ac106 million) as well as a deferred tax liability of \u20ac80 million (previously nil). As a legally enforceable right to offset exists with the same taxation authority these positions have been ultimately netted.
Pillar Two
UMG has carried out a study on the financial impact of the Pillar Two rules on future years. Based on the currently
available information UMG estimates that this impact is not material. UMG will closely monitor the legislative
developments and guidance issued to assess potential changes in the impact on the Pillar Two rules.
Tax litigation
In the normal course of their business, UMG is subject to tax audits by the relevant tax authorities in the countries
in which it conducts or has conducted business. Various tax authorities have proposed ordinary adjustments to the
financial results reported by UMG in prior years, under statutes of limitation applicable to UMG. In litigation situations,
UMG's policy is to pay the taxes it intends to contest, and to seek a refund through appropriate legal proceedings.
Regarding ongoing tax audits, no provision is recorded where the impact that could result from an unfavourable outcome
cannot be reliably assessed. To date, UMG believes that these tax audits are unlikely to have a material impact on the
Group's financial position or liquidity.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-401": { "value": "Income taxes and income tax paid by geographic area
Year ended December 31,
(millions of euros)
2023
2022
(Expense)/income
Current
U.S.
(224)
(185)
UK
(30)
(24)
Rest of Europe
(117)
(127)
Rest of the world
(105)
(11)
(476)
(347)
Deferred
U.S.
89
9
UK
12
(1)
Rest of Europe
(105)
189
Rest of the world
22
35
18
232
Income taxes
(458)
(115)
1 1 Included the deferred tax charge relating to the revaluation gain recorded through profit or loss related to the investments in Spotify, Tencent Music Entertainment and other listed investments for an aggregate expense amount of \u20ac111 million in 2023, compared to \u20ac166 million benefit in 2022 Deferred tax assets and liabilities Changes in deferred tax assets/(liabilities), net
Year ended December 31,
(millions of euros)
2023
2022
Opening balance of deferred tax assets/(liabilities)
(232)
(446)
Income taxes
18
231
Expenses and income directly recorded in equity and other comprehensive income
25
(14)
Changes in foreign currency translation adjustments and other
(8)
(3)
Closing balance of deferred tax assets/(liabilities), net
(197)
(232)
Components of deferred tax assets and liabilities
Year ended December 31,
(millions of euros)
2023
2022
Deferred tax assets
Recognizable deferred taxes
Tax attributes
89
98
Of which
Universal Music US and its subsidiaries
7
8
Universal Music UK and its subsidiaries
45
51
Universal Music and its subsidiaries in the rest of Europe
19
19
Universal Music and its subsidiaries in the rest of the world
18
20
Other
Of which
610
448
non-deductible provisions
87
61
employee benefits
120
37
working capital
148
149
Other
255
201
Set-off deferred tax
(137)
(90)
Total gross deferred tax assets
562
456
Deferred taxes, unrecognized
Tax attributes
(64)
(82)
Of which
Universal Music US and its subsidiaries
(6)
(6)
Universal Music UK and its subsidiaries
(23)
(38)
Universal Music and its subsidiaries in the rest of Europe
(17)
(18)
Universal Music and its subsidiaries in the rest of the world
(18)
(20)
Other
(19)
(26)
Total deferred tax assets, unrecognized
(83)
(108)
Recorded deferred tax assets
479
348
Deferred tax liabilities
Asset revaluations
(172)
(198)
Working capital
(172)
(163)
Financial instruments
(286)
(124)
Other
(183)
(185)
Set-off deferred tax
137
90
Recorded deferred tax liabilities
(676)
(580)
Deferred tax assets/(liabilities), net
(197)
(232)
1
1
2
3
4
5
1 As shown in this table, the amounts of gross tax attributes (including tax losses and tax credits) were estimated at the end of the relevant fiscal years. As a result, the
amount of tax attributes shown in this table and the amount reported to tax authorities at the time of the filing of the tax returns may differ, and if necessary, may need
to be adjusted in this table at the end of the following year. \u20ac19 million of the unrecognized gross tax attributes will expire within 5 years. In addition to the unrecognized
deferred tax assets in this table, deferred tax assets have not been recognised in respect of gross tax attributes for \u20ac1,069 million (2022: \u20ac1,279 million), as it is not
probable that there will be future taxable profits within the entities against which these can be utilised.
2 These tax liabilities, stemming from asset revaluations and resulting from the purchase price allocation of entities acquired by UMG, are cancelled upon amortization or
divestiture of the related assets and do not and will not generate any current tax liabilities.
3 Primarily related to the deferred tax liabilities stemming from the revaluation of the investments in Spotify, Tencent Music Entertainment and other investments.
4 No liability has been recorded for the withholding tax to be suffered on any group entities' future dividend distributions of available earnings as of December 31, 2023 as
the impact is not material.
5 As a result of applying the Deferred Tax related to Assets and Liabilities arising from a Single Transaction - Amendments to IAS 12 the December 31, 2022 balances show a
gross up of the previously recorded net deferred tax assets on leases (from \u20ac26 million to \u20ac106 million) as well as a deferred tax liability of \u20ac80 million (previously nil). As a
legally enforceable right to offset exists with the same taxation authority these positions have been ultimately netted.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-364": { "value": "
Note 7. Earnings per share
Year ended December 31,
(millions of euros and shares, except per share data)
2023
2022
Net profit attributable to equity holders of the parent
1,259
782
Weighted average number of shares outstanding (after deduction of treasury shares) during
the year
1,819
1,813
Potential dilutive effects related to share-based compensation
23
3
Diluted weighted average number of shares
1,842
1,816
Earnings per share
(in euros)
Basic earnings per share
0.69
0.43
Diluted earnings per share
0.68
0.43
", "dimensions": { "concept": "ifrs-full:DisclosureOfEarningsPerShareExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-402": { "value": "
Note 8. Goodwill
Changes in goodwill
Year ended December 31,
(millions of euros)
2023
2022
Balance as at January 1
Goodwill, gross
1,678
1,567
Accumulated impairment losses
(100)
(87)
Goodwill, net
1,578
1,480
Changes in book value:
Acquisitions
93
19
Impairment losses
-
(7)
Foreign currency translation adjustments
(47)
86
Total changes
46
98
Balance as at December 31
Goodwill, gross
1,720
1,678
Accumulated impairment losses
(96)
(100)
Goodwill, net
1,624
1,578
Goodwill by cash generating unit
Year ended December 31,
(millions of euros)
2023
2022
Recorded Music
779
709
Music Publishing
745
769
Merchandising & Other
100
100
Closing balance
1,624
1,578
Cash generating units
For impairment testing, goodwill is allocated to cash-generating units, which represent the lowest level at which the
goodwill is monitored internally for management purposes. The cash-generating units correspond to the operating
segments as disclosed in Note 3 above.
Goodwill impairment test
UMG conducted the full annual impairment test in the fourth quarter of 2023.
The goodwill was tested for impairment by comparing it with a recoverable amount. The recoverable amount is
determined as the higher of the value in use determined by the discounted value of future cash flows (Discounted Cash
Flow method (DCF)) and the fair value (less costs to sell), determined on the basis of market data (stock market prices,
comparable listed companies, comparison with the value attributed to similar assets or companies in recent acquisition
transactions). For a description of the methods used for the impairment test, please refer to Note 2. In 2023 and 2022, the
recoverable amounts of cash generating units were determined using their value in use.
Key assumptions used in the impairment tests for the cash-generating units were sales growth rates and the rates used
for discounting the projected cash flows. These cash flow projections were determined using management's internal
forecasts that cover an initial period of 2024 to 2028 that matches the period used for our strategic planning process, after
which a terminal value was calculated. The sales growth rates used to estimate cash flows are based on:
\u2022 past performance, including the label pool revenue forecasts derived from commercial agreements with customers;
\u2022 external market growth assumptions among which is the overall population and corresponding growth in streaming
penetration rate among the population;
\u2022 expected market share developments;
\u2022 industry long-term growth averages.
Key assumptions
2023
2022
Compound Extrapolation Compound Extrapolation
In % per yearAnnual Revenue revenue growth Pre-tax Annual Revenue revenue growth Pre-tax
Growth rate after 2028 discount rates Growth rate after 2027 discount rates
2024-2028 2023-2027
Recorded Music
6.6%
3.3%
10.0%
5.0%
3.4%
9.8%
Music Publishing
5.9%
3.3%
10.0%
3.9%
3.4%
9.8%
Merchandising
9.1%
2.1%
10.0%
10.8%
2.0%
9.8%
The annual impairment test for Recorded Music, Music Publishing and Merchandising showed significant headroom and
management did not identify an impairment for these CGUs. The sensitivity analysis around the key assumptions in
the impairment tests have indicated that a reasonably possible change in any of the assumptions would not cause the
recoverable amount to be less than the carrying value. Impairment losses in 2022 presented in the tables above relates
to a disposal of a minor operation within Music Publishing.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGoodwillExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-432": { "value": "Note 8. Goodwill Changes in goodwill
Year ended December 31,
(millions of euros)
2023
2022
Balance as at January 1
Goodwill, gross
1,678
1,567
Accumulated impairment losses
(100)
(87)
Goodwill, net
1,578
1,480
Changes in book value:
Acquisitions
93
19
Impairment losses
-
(7)
Foreign currency translation adjustments
(47)
86
Total changes
46
98
Balance as at December 31
Goodwill, gross
1,720
1,678
Accumulated impairment losses
(96)
(100)
Goodwill, net
1,624
1,578
Goodwill by cash generating unit
Year ended December 31,
(millions of euros)
2023
2022
Recorded Music
779
709
Music Publishing
745
769
Merchandising & Other
100
100
Closing balance
1,624
1,578
Cash generating units For impairment testing, goodwill is allocated to cash-generating units, which represent the lowest level at which the goodwill is monitored internally for management purposes. The cash-generating units correspond to the operating segments as disclosed in Note 3 above. Goodwill impairment test UMG conducted the full annual impairment test in the fourth quarter of 2023. The goodwill was tested for impairment by comparing it with a recoverable amount. The recoverable amount is determined as the higher of the value in use determined by the discounted value of future cash flows (Discounted Cash Flow method (DCF)) and the fair value (less costs to sell), determined on the basis of market data (stock market prices, comparable listed companies, comparison with the value attributed to similar assets or companies in recent acquisition transactions). For a description of the methods used for the impairment test, please refer to Note 2. In 2023 and 2022, the recoverable amounts of cash generating units were determined using their value in use. Key assumptions used in the impairment tests for the cash-generating units were sales growth rates and the rates used for discounting the projected cash flows. These cash flow projections were determined using management's internal forecasts that cover an initial period of 2024 to 2028 that matches the period used for our strategic planning process, after which a terminal value was calculated. The sales growth rates used to estimate cash flows are based on: \u2022 past performance, including the label pool revenue forecasts derived from commercial agreements with customers; \u2022 external market growth assumptions among which is the overall population and corresponding growth in streaming penetration rate among the population; \u2022 expected market share developments; \u2022 industry long-term growth averages. Key assumptions
2023
2022
Compound Extrapolation Compound Extrapolation
In % per yearAnnual Revenue revenue growth Pre-tax Annual Revenue revenue growth Pre-tax
Growth rate after 2028 discount rates Growth rate after 2027 discount rates
2024-2028 2023-2027
Recorded Music
6.6%
3.3%
10.0%
5.0%
3.4%
9.8%
Music Publishing
5.9%
3.3%
10.0%
3.9%
3.4%
9.8%
Merchandising
9.1%
2.1%
10.0%
10.8%
2.0%
9.8%
The annual impairment test for Recorded Music, Music Publishing and Merchandising showed significant headroom and management did not identify an impairment for these CGUs. The sensitivity analysis around the key assumptions in the impairment tests have indicated that a reasonably possible change in any of the assumptions would not cause the recoverable amount to be less than the carrying value. Impairment losses in 2022 presented in the tables above relates to a disposal of a minor operation within Music Publishing. Note 9. Content assets (catalogues and royalty advances) and other intangibles Net book value
December 31, 2023
Accumulated
Asset value, gross amortisation and Net book value
(millions of euros) impairment losses
Catalogues (of music and publishing rights)
5,845
(2,825)
3,020
Royalty advances (to artists and repertoire owners)
2,634
-
2,634
Content assets
8,479
(2,825)
5,654
Other intangible assets
585
(405)
180
December 31, 2022
Accumulated
Asset value, gross amortisation and Net book value
(millions of euros) impairment losses
Catalogues (of music and publishing rights)
5,732
(2,674)
3,058
Royalty advances (to artists and repertoire owners)
2,577
-
2,577
Content assets
8,309
(2,674)
5,635
Other intangible assets
489
(370)
119
Changes in content assets and other intangibles
Catalogues (of Royalty
music and advances (to Other Total intangible
publishing artists and intangibles assets
rights) repertoire & advances
(millions of euros) owners)
Balance December 31, 2021
2,982
2,380
96
5,458
Amortisation
(233)
-
(35)
(268)
Impairment
(10)
-
-
(10)
Additions
137
1,187
54
1,378
Disposals
(3)
-
-
(3)
Recoupments
-
(1,122)
-
(1,122)
Business combinations
6
-
1
7
Changes in foreign currency translation adjustments
179
132
3
314
and other
Balance December 31, 2022
3,058
2,577
119
5,754
Amortisation
(236)
-
(40)
(276)
Impairment
7
-
-
7
Additions
264
1,319
103
1,686
Disposals
(1)
-
-
(1)
Recoupments
-
(1,201)
-
(1,201)
Business combinations
19
-
-
19
Changes in foreign currency translation adjustments
(91)
(61)
(2)
(154)
and other
Balance December 31, 2023
3,020
2,634
180
5,834
", "dimensions": { "concept": "ifrs-full:DisclosureOfImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-365": { "value": "Note 8. Goodwill Changes in goodwill
Year ended December 31,
(millions of euros)
2023
2022
Balance as at January 1
Goodwill, gross
1,678
1,567
Accumulated impairment losses
(100)
(87)
Goodwill, net
1,578
1,480
Changes in book value:
Acquisitions
93
19
Impairment losses
-
(7)
Foreign currency translation adjustments
(47)
86
Total changes
46
98
Balance as at December 31
Goodwill, gross
1,720
1,678
Accumulated impairment losses
(96)
(100)
Goodwill, net
1,624
1,578
Goodwill by cash generating unit
Year ended December 31,
(millions of euros)
2023
2022
Recorded Music
779
709
Music Publishing
745
769
Merchandising & Other
100
100
Closing balance
1,624
1,578
Cash generating units For impairment testing, goodwill is allocated to cash-generating units, which represent the lowest level at which the goodwill is monitored internally for management purposes. The cash-generating units correspond to the operating segments as disclosed in Note 3 above. Goodwill impairment test UMG conducted the full annual impairment test in the fourth quarter of 2023. The goodwill was tested for impairment by comparing it with a recoverable amount. The recoverable amount is determined as the higher of the value in use determined by the discounted value of future cash flows (Discounted Cash Flow method (DCF)) and the fair value (less costs to sell), determined on the basis of market data (stock market prices, comparable listed companies, comparison with the value attributed to similar assets or companies in recent acquisition transactions). For a description of the methods used for the impairment test, please refer to Note 2. In 2023 and 2022, the recoverable amounts of cash generating units were determined using their value in use. Key assumptions used in the impairment tests for the cash-generating units were sales growth rates and the rates used for discounting the projected cash flows. These cash flow projections were determined using management's internal forecasts that cover an initial period of 2024 to 2028 that matches the period used for our strategic planning process, after which a terminal value was calculated. The sales growth rates used to estimate cash flows are based on: \u2022 past performance, including the label pool revenue forecasts derived from commercial agreements with customers; \u2022 external market growth assumptions among which is the overall population and corresponding growth in streaming penetration rate among the population; \u2022 expected market share developments; \u2022 industry long-term growth averages. Key assumptions
2023
2022
Compound Extrapolation Compound Extrapolation
In % per yearAnnual Revenue revenue growth Pre-tax Annual Revenue revenue growth Pre-tax
Growth rate after 2028 discount rates Growth rate after 2027 discount rates
2024-2028 2023-2027
Recorded Music
6.6%
3.3%
10.0%
5.0%
3.4%
9.8%
Music Publishing
5.9%
3.3%
10.0%
3.9%
3.4%
9.8%
Merchandising
9.1%
2.1%
10.0%
10.8%
2.0%
9.8%
The annual impairment test for Recorded Music, Music Publishing and Merchandising showed significant headroom and management did not identify an impairment for these CGUs. The sensitivity analysis around the key assumptions in the impairment tests have indicated that a reasonably possible change in any of the assumptions would not cause the recoverable amount to be less than the carrying value. Impairment losses in 2022 presented in the tables above relates to a disposal of a minor operation within Music Publishing.
Note
9. Content assets (catalogues and royalty advances) and other
intangibles
Net book value
December 31, 2023
Accumulated
Asset value, gross amortisation and Net book value
(millions of euros) impairment losses
Catalogues (of music and publishing rights)
5,845
(2,825)
3,020
Royalty advances (to artists and repertoire owners)
2,634
-
2,634
Content assets
8,479
(2,825)
5,654
Other intangible assets
585
(405)
180
December 31, 2022
Accumulated
Asset value, gross amortisation and Net book value
(millions of euros) impairment losses
Catalogues (of music and publishing rights)
5,732
(2,674)
3,058
Royalty advances (to artists and repertoire owners)
2,577
-
2,577
Content assets
8,309
(2,674)
5,635
Other intangible assets
489
(370)
119
Changes in content assets and other intangibles
Catalogues (of Royalty
music and advances (to Other Total intangible
publishing artists and intangibles assets
rights) repertoire & advances
(millions of euros) owners)
Balance December 31, 2021
2,982
2,380
96
5,458
Amortisation
(233)
-
(35)
(268)
Impairment
(10)
-
-
(10)
Additions
137
1,187
54
1,378
Disposals
(3)
-
-
(3)
Recoupments
-
(1,122)
-
(1,122)
Business combinations
6
-
1
7
Changes in foreign currency translation adjustments
179
132
3
314
and other
Balance December 31, 2022
3,058
2,577
119
5,754
Amortisation
(236)
-
(40)
(276)
Impairment
7
-
-
7
Additions
264
1,319
103
1,686
Disposals
(1)
-
-
(1)
Recoupments
-
(1,201)
-
(1,201)
Business combinations
19
-
-
19
Changes in foreign currency translation adjustments
(91)
(61)
(2)
(154)
and other
Balance December 31, 2023
3,020
2,634
180
5,834
Royalty advance payments, net on the Consolidated Statement of Cash Flows consists of additions and recoupments from the changes in content assets table above. The significant music catalogues and publishing rights were acquired through business combinations of BMG Publishing (BMG) and EMI Recorded Music (EMI). The BMG catalogue was acquired in 2007 with a fair value of \u20ac1,241 million and has carrying amount of \u20ac308 million (2022: \u20ac378 million) with a remaining useful life of 4 and 34 years for the respective catalogue components. The EMI catalogue was acquired in 2012 with a fair value of \u20ac1,046 million, and has a carrying amount of \u20ac559 million (2022: \u20ac626 million) with a remaining useful life of 9 and 39 years for the respective catalogue components.", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-445": { "value": "Note 9. Content assets (catalogues and royalty advances) and other intangibles Net book value
December 31, 2023
Accumulated
Asset value, gross amortisation and Net book value
(millions of euros) impairment losses
Catalogues (of music and publishing rights)
5,845
(2,825)
3,020
Royalty advances (to artists and repertoire owners)
2,634
-
2,634
Content assets
8,479
(2,825)
5,654
Other intangible assets
585
(405)
180
December 31, 2022
Accumulated
Asset value, gross amortisation and Net book value
(millions of euros) impairment losses
Catalogues (of music and publishing rights)
5,732
(2,674)
3,058
Royalty advances (to artists and repertoire owners)
2,577
-
2,577
Content assets
8,309
(2,674)
5,635
Other intangible assets
489
(370)
119
Changes in content assets and other intangibles
Catalogues (of Royalty
music and advances (to Other Total intangible
publishing artists and intangibles assets
rights) repertoire & advances
(millions of euros) owners)
Balance December 31, 2021
2,982
2,380
96
5,458
Amortisation
(233)
-
(35)
(268)
Impairment
(10)
-
-
(10)
Additions
137
1,187
54
1,378
Disposals
(3)
-
-
(3)
Recoupments
-
(1,122)
-
(1,122)
Business combinations
6
-
1
7
Changes in foreign currency translation adjustments
179
132
3
314
and other
Balance December 31, 2022
3,058
2,577
119
5,754
Amortisation
(236)
-
(40)
(276)
Impairment
7
-
-
7
Additions
264
1,319
103
1,686
Disposals
(1)
-
-
(1)
Recoupments
-
(1,201)
-
(1,201)
Business combinations
19
-
-
19
Changes in foreign currency translation adjustments
(91)
(61)
(2)
(154)
and other
Balance December 31, 2023
3,020
2,634
180
5,834
Royalty advance payments, net on the Consolidated Statement of Cash Flows consists of additions and recoupments from the changes in content assets table above. ", "dimensions": { "concept": "ifrs-full:DisclosureOfPrepaymentsAndOtherAssetsExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-403": { "value": "Note 9. Content assets (catalogues and royalty advances) and other intangibles Net book value
December 31, 2023
Accumulated
Asset value, gross amortisation and Net book value
(millions of euros) impairment losses
Catalogues (of music and publishing rights)
5,845
(2,825)
3,020
Royalty advances (to artists and repertoire owners)
2,634
-
2,634
Content assets
8,479
(2,825)
5,654
Other intangible assets
585
(405)
180
December 31, 2022
Accumulated
Asset value, gross amortisation and Net book value
(millions of euros) impairment losses
Catalogues (of music and publishing rights)
5,732
(2,674)
3,058
Royalty advances (to artists and repertoire owners)
2,577
-
2,577
Content assets
8,309
(2,674)
5,635
Other intangible assets
489
(370)
119
Changes in content assets and other intangibles
Catalogues (of Royalty
music and advances (to Other Total intangible
publishing artists and intangibles assets
rights) repertoire & advances
(millions of euros) owners)
Balance December 31, 2021
2,982
2,380
96
5,458
Amortisation
(233)
-
(35)
(268)
Impairment
(10)
-
-
(10)
Additions
137
1,187
54
1,378
Disposals
(3)
-
-
(3)
Recoupments
-
(1,122)
-
(1,122)
Business combinations
6
-
1
7
Changes in foreign currency translation adjustments
179
132
3
314
and other
Balance December 31, 2022
3,058
2,577
119
5,754
Amortisation
(236)
-
(40)
(276)
Impairment
7
-
-
7
Additions
264
1,319
103
1,686
Disposals
(1)
-
-
(1)
Recoupments
-
(1,201)
-
(1,201)
Business combinations
19
-
-
19
Changes in foreign currency translation adjustments
(91)
(61)
(2)
(154)
and other
Balance December 31, 2023
3,020
2,634
180
5,834
Royalty advance payments, net on the Consolidated Statement of Cash Flows consists of additions and recoupments from
the changes in content assets table above.
The significant music catalogues and publishing rights were acquired through business combinations of BMG Publishing
(BMG) and EMI Recorded Music (EMI). The BMG catalogue was acquired in 2007 with a fair value of \u20ac1,241 million
and has carrying amount of \u20ac308 million (2022: \u20ac378 million) with a remaining useful life of 4 and 34 years for the
respective catalogue components. The EMI catalogue was acquired in 2012 with a fair value of \u20ac1,046 million, and has
a carrying amount of \u20ac559 million (2022: \u20ac626 million) with a remaining useful life of 9 and 39 years for the respective
catalogue components.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-366": { "value": "
Note 10. Property, plant and equipment
Land Equipment Other Assets under Total
(millions of euros) and buildings and machinery fixed assets construction
Cost
Balance as at January 1, 2023
241
119
78
20
458
Additions
3
3
3
38
47
Transfers and reclassifications
17
16
1
(34)
-
Disposals
(16)
(15)
(6)
-
(37)
Changes in foreign currency translation
(3)
(1)
(2)
-
(6)
adjustments and other
Balance as at December 31, 2023
242
122
74
24
462
Depreciation and impairment losses
Balance as at January 1, 2023
(135)
(99)
(57)
-
(291)
Depreciation during the year
(18)
(9)
(7)
-
(34)
Disposals
15
15
6
-
36
Changes in foreign currency translation
2
1
1
-
4
adjustments and other
Balance as at December 31, 2023
(136)
(92)
(57)
-
(285)
Carrying amount
As at January 1
106
20
21
20
167
As at December 31
106
30
17
24
177
Land Equipment Other Assets under Total
(millions of euros) and buildings and machinery fixed assets construction
Cost
Balance as at January 1, 2022
234
111
74
9
428
Additions
4
4
1
24
33
Transfers and reclassifications
5
5
3
(13)
-
Disposals
(5)
(4)
(2)
(1)
(12)
Changes in foreign currency translation
3
3
2
1
9
adjustments and other
Balance as at December 31, 2022
241
119
78
20
458
Depreciation and impairment losses
Balance as at January 1, 2022
(120)
(90)
(51)
-
(261)
Depreciation during the year
(18)
(10)
(7)
-
(35)
Disposals
5
3
3
-
11
Changes in foreign currency translation
(2)
(2)
(2)
-
(6)
adjustments and other
Balance as at December 31, 2022
(135)
(99)
(57)
-
(291)
Carrying amount
As at January 1
114
21
23
9
167
As at December 31
106
20
21
20
167
", "dimensions": { "concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-367": { "value": "
Note 11. Leases
Changes in the rights-of-use
Year ended December 31,
(millions of euros)
2023
2022
Opening balance
318
388
Depreciation
(72)
(74)
Additions
78
25
Disposals
(1)
(26)
Foreign currency translations and other
(7)
5
Closing balance
316
318
Lease liabilities
Year ended December 31,
(millions of euros)
Note
2023
2022
Opening balance
423
501
Additions
77
26
Disposals
(1)
(26)
Accretion of interest
5
14
14
Payments
(94)
(100)
Of which interest
(14)
(14)
Of which principal
(80)
(86)
Foreign currency translations and other
(9)
8
Closing balance
410
423
Maturity of lease liabilities
Year ended December 31,
(millions of euros)
2023
2022
Maturity
< 1 year
86
77
Between 1 and 5 years
217
228
> 5 years
107
118
Lease liabilities
410
423
Cash outflow for leases and lease-related expenses
Total cash outflow and expenses for the leases of real-estate with maturity shorter than 12 months and expense relating
to low-value assets recorded in the Statement of Profit or Loss amounted to \u20ac19 million for the year ended December 31,
2023 (compared to \u20ac18 million for the year ended December 31, 2022).
", "dimensions": { "concept": "ifrs-full:DisclosureOfLeasesExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-404": { "value": "Changes in the rights-of-use
Year ended December 31,
(millions of euros)
2023
2022
Opening balance
318
388
Depreciation
(72)
(74)
Additions
78
25
Disposals
(1)
(26)
Foreign currency translations and other
(7)
5
Closing balance
316
318
", "dimensions": { "concept": "ifrs-full:DisclosureOfQuantitativeInformationAboutRightofuseAssetsExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-368": { "value": "
Note 12. Investments in equity affiliates
UMG has certain interests in joint ventures and companies where UMG has significant influence. The main company
over which UMG had significant influence at the reporting date was Vevo LLC (Vevo). Vevo is a global music videos and
entertainment services platform and its country of incorporation is the United States. UMG owns 49.2% of the voting
interest and the carrying amount of this investment was \u20ac68 million on December 31, 2023 (2022: \u20ac74 million).
Change in value of investments in equity affiliates
Year ended December 31,
(millions of euros)
2023
2022
Opening balance
156
109
Acquisitions
74
47
Write-downs
-
(2)
Income/(loss) from equity affiliates
-
(2)
Change in other comprehensive income
(4)
6
Dividends
(4)
(2)
Translation difference
-
-
Closing balance
222
156
", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-446": { "value": "Note 12. Investments in equity affiliates UMG has certain interests in joint ventures and companies where UMG has significant influence. The main company over which UMG had significant influence at the reporting date was Vevo LLC (Vevo). Vevo is a global music videos and entertainment services platform and its country of incorporation is the United States. UMG owns 49.2% of the voting interest and the carrying amount of this investment was \u20ac68 million on December 31, 2023 (2022: \u20ac74 million). Change in value of investments in equity affiliates
Year ended December 31,
(millions of euros)
2023
2022
Opening balance
156
109
Acquisitions
74
47
Write-downs
-
(2)
Income/(loss) from equity affiliates
-
(2)
Change in other comprehensive income
(4)
6
Dividends
(4)
(2)
Translation difference
-
-
Closing balance
222
156
Note 26. List of consolidated entities
The Consolidated financial statements comprise the assets and liabilities of 372 legal entities. Set out below is a list of
material subsidiaries, representing more than 75% of UMG's consolidated sales.
All the entities are 100% owned.
Legal entity name Principal country of business
Universal Music Group N.V.
Netherlands
Universal Music Group, Inc.
United States
Universal Music Group Holdings, Inc.
United States
UMG Recordings, Inc.
United States
Universal International Music B.V.
Netherlands
Universal Music Entertainment GmbH
Germany
Universal Music LLC
Japan
Universal Music Holdings Ltd.
United Kingdom
Universal Music Group Treasury S.A.S.
France
UMG does not have subsidiaries that have non-controlling interests that are material for its Consolidated
financial statements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestsInOtherEntitiesExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-433": { "value": "Note 12. Investments in equity affiliates UMG has certain interests in joint ventures and companies where UMG has significant influence. The main company over which UMG had significant influence at the reporting date was Vevo LLC (Vevo). Vevo is a global music videos and entertainment services platform and its country of incorporation is the United States. UMG owns 49.2% of the voting interest and the carrying amount of this investment was \u20ac68 million on December 31, 2023 (2022: \u20ac74 million). Change in value of investments in equity affiliates
Year ended December 31,
(millions of euros)
2023
2022
Opening balance
156
109
Acquisitions
74
47
Write-downs
-
(2)
Income/(loss) from equity affiliates
-
(2)
Change in other comprehensive income
(4)
6
Dividends
(4)
(2)
Translation difference
-
-
Closing balance
222
156
", "dimensions": { "concept": "ifrs-full:DisclosureOfJointVenturesExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-405": { "value": "Note 12. Investments in equity affiliates UMG has certain interests in joint ventures and companies where UMG has significant influence. The main company over which UMG had significant influence at the reporting date was Vevo LLC (Vevo). Vevo is a global music videos and entertainment services platform and its country of incorporation is the United States. UMG owns 49.2% of the voting interest and the carrying amount of this investment was \u20ac68 million on December 31, 2023 (2022: \u20ac74 million). Change in value of investments in equity affiliates
Year ended December 31,
(millions of euros)
2023
2022
Opening balance
156
109
Acquisitions
74
47
Write-downs
-
(2)
Income/(loss) from equity affiliates
-
(2)
Change in other comprehensive income
(4)
6
Dividends
(4)
(2)
Translation difference
-
-
Closing balance
222
156
", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInAssociatesExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-406": { "value": "Note 13. Capital and financial risk management Capital risk management UMG objectives when managing capital are to safeguard UMG\u2019s ability to continue to create value for shareholders, support the sustainable growth of the Group, and maintain a capital structure that optimizes its cost of capital. As a result, UMG endeavours to maintain a satisfactory economic return for its shareholders and guarantee economic access to external sources of funds. During 2023, UMG maintained its Baa1/BBB Long Term Credit Ratings from Moody's and S&P. The syndicated RCF financial covenant requires that UMG maintain Baa2/BBB long term ratings with Moody\u2019s and S&P. UMG and its subsidiaries are not subject to external capital requirements, other than the financial covenants as disclosed above. To support this strategic goal, UMG management remains focused on the robust performance of the Free Cash Flow, a non-IFRS measure as defined in the definitions in the Appendix to the Annual Report, and effective Working Capital management, details on both are presented below.
Free cash flow
Year ended December 31,
(millions of euros)
2023
2022
Operating profit
1,418
1,600
Amortisation and depreciation expense
382
377
Non-cash share-based compensation expense, net of employees tax withheld
429
107
Impairment (reversal)/charge on intangible assets
(7)
17
Changes in provision, net
18
65
(Gain)/loss on sale of assets
(26)
2
Adjustments
796
568
Royalty advance payments, net of recoupments
(100)
(148)
Other changes in net working capital
164
(33)
Net cash provided by/(used for) operating activities before income tax paid
2,278
1,987
Income tax paid
(393)
(255)
Net cash provided by/(used for) operating activities
1,885
1,732
Net cash provided by/(used for) investing activities
(622)
(520)
Repayment of lease liabilities and related interest expenses
(94)
(100)
Interest, net
(77)
(30)
Other cash items related to financing activities
(10)
4
Free cash flow
1,082
1,086
Changes in working capital
1
Changes
December Changes in Business in foreign December
31, 2022 operating combinations currency Other 31, 2023
working capital translation
(millions of euros) adjustments
Inventories
163
52
-
(5)
-
210
Trade accounts receivable
2,014
309
3
(41)
(39)
2,246
and other
Of which:
Trade accounts receivable
580
102
3
(16)
(23)
646
Expected credit losses
(62)
13
(1)
2
(1)
(49)
Working capital assets
2,177
361
3
(46)
(39)
2,456
Trade accounts payable
(5,150)
(527)
(9)
134
(159)
(5,711)
and other
Other non-
current liabilities
(437)
2
(40)
5
(245)
(715)
Working capital liabilities
(5,587)
(525)
(49)
139
(404)
(6,426)
Net working capital
(3,410)
(164)
(46)
93
(443)
(3,970)
2
3
1 Excludes content investments.
2 Mainly includes the change in net working capital relating to content investments, capital expenditures and other investments.
3 Total inventory obsolescence expense for the period was \u20ac59 million.
1
Changes
December Changes in Business in foreign December
31, 2021 operating combinations currency Other 31, 2022
working capital translation
(millions of euros) adjustments
Inventories
99
62
-
2
-
163
Trade accounts receivable
1,803
203
1
11
(4)
2,014
and other
Of which:
Trade accounts receivable
550
22
1
4
3
580
Expected credit losses
(46)
(14)
-
-
(2)
(62)
Working capital assets
1,902
265
1
13
(4)
2,177
Trade accounts payable
(4,875)
(226)
(2)
(113)
66
(5,150)
and other
Other non-
current liabilities
(769)
(6)
(3)
(14)
355
(437)
Working capital liabilities
(5,644)
(232)
(5)
(127)
421
(5,587)
Net working capital
(3,742)
33
(4)
(114)
417
(3,410)
2 3 1 Excludes content investments. 2 Mainly includes the change in net working capital relating to content investments, capital expenditures and other investments. 3 Total inventory obsolescence expense for the period was \u20ac69 million. ", "dimensions": { "concept": "ifrs-full:DisclosureOfObjectivesPoliciesAndProcessesForManagingCapitalExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-369": { "value": "
Capital risk management
During 2023, UMG maintained its Baa1/BBB Long Term Credit Ratings from Moody's and S&P. The syndicated RCF financial
covenant requires that UMG maintain Baa2/BBB long term ratings with Moody\u2019s and S&P.
UMG and its subsidiaries are not subject to external capital requirements, other than the financial covenants as
disclosed above.
Note 16. Cash position and borrowings Cash position
Year ended December 31,
(millions of euros)
2023
2022
Cash and cash equivalents
413
439
Bank overdrafts
(26)
(1)
Cash and cash equivalents in the statement of cash flows
387
438
UMG operates in a number of territories where regulations do not authorise participation of local entities to the UMG global cash pooling. Only dividends and intra-group invoices are available to extract cash from these territories. The amount of cash held by UMG entities in these countries amounted to \u20ac394 million as of December 31, 2023. Borrowings and other financial liabilities
December 31, 2023
December 31, 2022
(millions of euros)
Total
Long-term
Short-term
Total
Long-term
Short-term
Bonds
1,808
1,774
34
1,004
987
17
Drawn revolving
-
-
-
125
125
-
credit facilities
Commercial papers
197
-
197
929
-
929
Bank overdrafts
26
-
26
1
-
1
Other
73
52
21
191
1
190
Borrowings at
amortized cost
2,104
1,826
278
2,250
1,113
1,137
Cash and cash equivalents
(413)
-
(413)
(439)
-
(439)
Derivative financial assets
(2)
-
(2)
(1)
-
(1)
Net debt
1,689
1,810
New borrowings In July 2023, UMG issued \u00a57 billion (\u20ac45 million) of senior notes due on July 5, 2038 with a coupon of 1.61%. In June 2023, UMG issued \u20ac750 million of senior unsecured notes due on June 13, 2031 with a coupon of 4.00%. In March 2023, UMG entered into a short-term bilateral floating rate \u20ac500 million revolving credit facility. The facility matures 12 months from the signing date. In February 2023, UMG extended the original maturity of the syndicated floating rate \u20ac2 billion revolving credit facility. The maturity date was extended for two years up to April 26, 2028. All other conditions remained unchanged. Movements of borrowings
Drawn
Term facility revolving Bonds Bank Commercial
Other debt
Total
credit overdrafts papers
(millions of euros) facilities
Balance December 31, 2021
998
1,447
-
13
-
137
2,595
New borrowings
8
1,722
1,004
1
3,117
87
5,939
Repayments
(1,006)
(3,126)
-
(13)
(2,188)
(34)
(6,367)
Translation differences and other movements
-
82
-
-
-
1
83
Balance December 31, 2022
-
125
1,004
1
929
191
2,250
New borrowings
-
1,075
794
26
4,738
34
6,667
Repayments
-
(1,200)
-
(1)
(5,469)
(145)
(6,815)
Translation differences and other movements
-
-
10
-
(1)
(7)
2
Balance December 31, 2023
-
-
1,808
26
197
73
2,104
", "dimensions": { "concept": "ifrs-full:DisclosureOfBorrowingsExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-434": { "value": "Changes in working capital 1
Changes
December Changes in Business in foreign December
31, 2022 operating combinations currency Other 31, 2023
working capital translation
(millions of euros) adjustments
Inventories
163
52
-
(5)
-
210
Trade accounts receivable
2,014
309
3
(41)
(39)
2,246
and other
Of which:
Trade accounts receivable
580
102
3
(16)
(23)
646
Expected credit losses
(62)
13
(1)
2
(1)
(49)
Working capital assets
2,177
361
3
(46)
(39)
2,456
Trade accounts payable
(5,150)
(527)
(9)
134
(159)
(5,711)
and other
Other non-
current liabilities
(437)
2
(40)
5
(245)
(715)
Working capital liabilities
(5,587)
(525)
(49)
139
(404)
(6,426)
Net working capital
(3,410)
(164)
(46)
93
(443)
(3,970)
2 3 1 Excludes content investments. 2 Mainly includes the change in net working capital relating to content investments, capital expenditures and other investments. 3 Total inventory obsolescence expense for the period was \u20ac59 million. 1
Changes
December Changes in Business in foreign December
31, 2021 operating combinations currency Other 31, 2022
working capital translation
(millions of euros) adjustments
Inventories
99
62
-
2
-
163
Trade accounts receivable
1,803
203
1
11
(4)
2,014
and other
Of which:
Trade accounts receivable
550
22
1
4
3
580
Expected credit losses
(46)
(14)
-
-
(2)
(62)
Working capital assets
1,902
265
1
13
(4)
2,177
Trade accounts payable
(4,875)
(226)
(2)
(113)
66
(5,150)
and other
Other non-
current liabilities
(769)
(6)
(3)
(14)
355
(437)
Working capital liabilities
(5,644)
(232)
(5)
(127)
421
(5,587)
Net working capital
(3,742)
33
(4)
(114)
417
(3,410)
2 3 1 Excludes content investments. 2 Mainly includes the change in net working capital relating to content investments, capital expenditures and other investments. 3 Total inventory obsolescence expense for the period was \u20ac69 million. ", "dimensions": { "concept": "ifrs-full:DisclosureOfAllowanceForCreditLossesExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-370": { "value": "Changes in working capital 1
Changes
December Changes in Business in foreign December
31, 2022 operating combinations currency Other 31, 2023
working capital translation
(millions of euros) adjustments
Inventories
163
52
-
(5)
-
210
Trade accounts receivable
2,014
309
3
(41)
(39)
2,246
and other
Of which:
Trade accounts receivable
580
102
3
(16)
(23)
646
Expected credit losses
(62)
13
(1)
2
(1)
(49)
Working capital assets
2,177
361
3
(46)
(39)
2,456
Trade accounts payable
(5,150)
(527)
(9)
134
(159)
(5,711)
and other
Other non-
current liabilities
(437)
2
(40)
5
(245)
(715)
Working capital liabilities
(5,587)
(525)
(49)
139
(404)
(6,426)
Net working capital
(3,410)
(164)
(46)
93
(443)
(3,970)
2 3 1 Excludes content investments. 2 Mainly includes the change in net working capital relating to content investments, capital expenditures and other investments. 3 Total inventory obsolescence expense for the period was \u20ac59 million.
1
Changes
December Changes in Business in foreign December
31, 2021 operating combinations currency Other 31, 2022
working capital translation
(millions of euros) adjustments
Inventories
99
62
-
2
-
163
Trade accounts receivable
1,803
203
1
11
(4)
2,014
and other
Of which:
Trade accounts receivable
550
22
1
4
3
580
Expected credit losses
(46)
(14)
-
-
(2)
(62)
Working capital assets
1,902
265
1
13
(4)
2,177
Trade accounts payable
(4,875)
(226)
(2)
(113)
66
(5,150)
and other
Other non-
current liabilities
(769)
(6)
(3)
(14)
355
(437)
Working capital liabilities
(5,644)
(232)
(5)
(127)
421
(5,587)
Net working capital
(3,742)
33
(4)
(114)
417
(3,410)
2
3
1 Excludes content investments.
2 Mainly includes the change in net working capital relating to content investments, capital expenditures and other investments.
3 Total inventory obsolescence expense for the period was \u20ac69 million.
Note
14. Trade and other receivables
Year ended December 31,
(millions of euros)
2023
2022
Trade receivables
1,986
1,765
Other receivables
260
249
Trade receivables, net of value allowance
2,246
2,014
Year ended December 31,
(millions of euros)
2023
2022
Current
1,895
1,698
Overdue 0-30 days
58
46
Overdue 31-150 days
25
21
Overdue >150 days
8
-
Trade receivables, net of value allowance
1,986
1,765
For the movements of the expected credit loss allowance and the credit risk management policies and procedures of UMG please refer to Note 13. ", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-371": { "value": "Financial risk management UMG business activities expose the Group to financial risks, including credit risk, liquidity risk, and market risk. Market risk comprises three types of risk: interest rate risk, foreign currency risk and other price risks. These risks are inherent to how UMG operates as a multinational with locally operating subsidiaries. To manage these risks, UMG has developed specific policies. The essence of measuring the performance of these policies is to strike a balance between managing risks and contributing to the financial results of UMG. UMG policies are risk-averse in that regard. Enforcement of procedures related to financial risk management is carried out by UMG Group Treasury in line with the guiding principles of the Group Treasury Policies. Credit risk Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by falling to discharge an obligation. UMG's maximum credit risk exposure is equal to the carrying amounts of Trade and other receivables, refer to Note 14, and Cash position and borrowings, refer to Note 16, as presented in the Statement of Financial Position. Also, for the derivatives and assets at fair value via profit and loss, the maximum exposure to credit risk at the end of the reporting period is equal to the carrying amount, refer to Note 18 . The maximum credit risk exposure on guarantees issued corresponds to their nominal amounts, as presented in Note 17 .UMG aims to centralize its cash management with its Tier 1 banks, of which all the banks have credit ratings of minimum of A-. UMG performs ongoing evaluations of the financial and non-financial condition of UMG customers and adjusts credit limits when appropriate. In instances where a customer's creditworthiness is determined not to be sufficient to grant the required credit limit, there are several mitigation tools that can be utilized to close the gap, including reducing payment terms, cash on delivery, prepayments and pledges on assets.
UMG\u2019s operational subsidiaries have set up procedures and systems to track their trade accounts receivable and recover
outstanding amounts. In addition, some subsidiaries have insured their main client credit risks worldwide with a leading
credit insurer.
Liquidity risk
Liquidity risk is the risk that UMG will not be able to meet its financial obligations as they fall due.
The primary objective of liquidity management is providing sufficient cash to enable UMG to meet its liabilities when due,
under normal and stressed conditions, without incurring losses.
Neither the aged receivables of individual customers, nor the profile of the accounts receivable portfolio per segment,
impose a significant threat to UMG\u2019s liquidity planning.
UMG Treasury provides for the short-term day-to-day cash management needs of the Group by organizing sweeps
between international cash poolings. For medium term financing requirements, UMG Group Treasury determines the
Group's overall debt position and its planned evolution based on the Group\u2019s 13-month rolling cash forecast. A liquidity
analysis is performed to ensure the proper funding is in place to face medium-term needs.
Cash is pooled up to UMG NV from all territories participating in the international cash pooling arrangement. Cash is
extracted from countries outside the cash pooling through dividends or upstream loans.
The objectives of liquidity management are to repay UMG's external debt and to pay UMG's dividend to the Group's
shareholders. The list of permitted banks for liquidity management includes nine banks with minimum rating of A-.
The liquidity analysis includes a buffer of \u20ac400 million to provide for intra-month treasury swings and the incompressible
treasury float. Adequate bank facilities are available as backup for Commercial paper. The maturity schedule for long-
term external debt is maintained above 3 years and the current average maturity for long term external debt is 5 years.
UMG Treasury ensures central compliance with financial covenants, pari-passu, and negative pledge clauses.
Total cash and cash equivalents position as at December 31, 2023, is disclosed in Note 16
.
Contractual obligations and
their timing are disclosed in Note 17
.
In addition, as at December 31, 2023, UMG has undrawn Revolving Credit Facilities
(RCF) of \u20ac2,301 million.
Market risk
Market risk is the possibility that an entity will experience losses due to factors that affect the financial markets. Market
risk includes currency risk and interest rate risk as addressed below, but also risk of change in fair value of the financial
instruments, including those traded on the active markets. At December 31, 2023, UMG held financial instruments
measured at fair value as disclosed in Note 18, where the exposure of the risk and sensitivity are presented.
UMG risk management policies cover refinancing risk to ensure that under any market circumstances, UMG can
refinance its debt on time and a reasonable cost. The objectives of refinancing risk management are to benefit from
sufficient flexibility granted by the access to capital markets (in particular, Euro commercial papers, private placement
and bond markets) and not rely solely on bank borrowings.
Interest rate risk
Interest rate risk is the risk of the fair value or future cash flows of a financial instrument fluctuating because of changes
in the market interest rates. Financial instruments included in borrowings create an inherent interest rate risk.
UMG seeks to limit the period over which it is exposed to interest rate risk on the Group's borrowings. The preferred
method of hedging interest rate risk is issuing long-term fixed-rate bonds. The use of interest-rate plain vanilla
derivatives is also authorized. The list of authorized instruments includes interest rate swaps, FRAs, caps, and floors.
As for currency risk management, interest rate hedging operations are handled solely by UMG Treasury according to
the Group\u2019s strategic goals set by the Group Chief Financial Officer. The speculative use of interest rate derivatives is
strictly prohibited.
As of December 31, 2023, UMG had a ratio of fixed-rate debt to total outstanding debt of approximately 85%. A sensitivity analysis conducted in January 2024 on the gross debt portfolio shows that if short term EURIBOR were to increase instantaneously by 0.5% from their level of December 31, 2023, with all other variables held constant, the total change in annualized interest expense result would be \u20ac1 million. Foreign currency risk As any multinational group, UMG is exposed to transactional foreign currency risk on committed and forecast cash flows, that are denominated in a currency other than the transacting entity's functional currency. UMG is also exposed to translational risk, resulting from the translation of foreign operations into Euros. The main currencies that drive UMG's foreign currency risk are U.S. Dollar, British Pound and Japanese Yen. UMG\u2019s exposure to foreign exchange transactional risk is greatly limited due to the offsetting of inflows and outflows in local currencies to the extent possible as a natural hedge. UMG Treasury mainly manages foreign currency risk exposure on balance sheet positions, primarily cash concentrations in non-Euro currencies held under the Group's cash pooling arrangements. UMG Treasury's foreign currency risk management policy is to hedge recognized assets and liabilities denominated in foreign currencies above a predefined threshold. UMG uses forward exchange rate contracts and foreign exchange swaps to manage this exposure. All material foreign currency balance sheet exposures are offset by derivatives, so potential foreign currency rate fluctuations as of December 31, 2023 would have no significant impacts on UMG\u2019s financial results. UMG did not apply hedge accounting to these derivatives in 2023 or 2022. Currency derivatives are not used for speculative purposes. The average maturity of these contracts is one month. The table below summarises the net nominal value of the foreign currency balance sheet exposure and foreign exchange rate derivatives used to offset it as of December 31, 2023.
(millions of euros)
USD
GBP
JPY
Other
Total
Nominal value of Balance sheet exposure
535
475
106
412
1,528
Foreign exchange rate derivatives
(535)
(475)
(106)
(412)
(1,528)
Net exposure
-
-
-
-
-
Beginning in 2023, foreign currency translation risks are hedged to a limited extent, as the underlying currency positions are generally considered to be long-term in nature. If a hedge is entered into, it is accounted for as a net investment hedge.
Contractual obligations
The table below analyses UMG\u2019s financial liabilities into relevant maturity groupings based on their contractual
maturities. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12
months equal their carrying balances as the impact of discounting is not significant. Interest on long-term debt is based
on floating rate adjustments according to market expectations.
Total minimum future
Minimum future payments as of December 31, 2023 payments as of
Payments due in
(millions of euros)
Total
1 year
2-5 years
After 5 years
December 31, 2022
Borrowings and other
financial liabilities
2,449
274
735
1,440
2,506
Lease liabilities
463
94
251
118
472
Music royalties to artists and
repertoire owners
3,957
3,944
13
-
3,542
Creative talent and employment
603
362
240
1
470
agreements and others
Other payables
1,411
949
55
407
1,156
Consolidated statement of
financial position items
8,883
5,623
1,294
1,966
8,146
Contractual
1,595
815
737
43
1,562
content commitments
Other commitments
287
82
135
70
244
Total off-balance
1,882
897
872
113
1,806
sheet commitments
Total
10,765
6,520
2,166
2,079
9,952
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialRiskManagementExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-407": { "value": "
Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by falling to
discharge an obligation.
UMG's maximum credit risk exposure is equal to the carrying amounts of Trade and other receivables, refer to Note 14,
and Cash position and borrowings, refer to Note 16, as presented in the Statement of Financial Position. Also, for the
derivatives and assets at fair value via profit and loss, the maximum exposure to credit risk at the end of the reporting
period is equal to the carrying amount, refer to Note 18 . The maximum credit risk exposure on guarantees issued
corresponds to their nominal amounts, as presented in Note 17
.
UMG aims to centralize its cash management with its Tier 1 banks, of which all the banks have credit ratings of minimum
of A-.
UMG performs ongoing evaluations of the financial and non-financial condition of UMG customers and adjusts credit
limits when appropriate. In instances where a customer's creditworthiness is determined not to be sufficient to grant the
required credit limit, there are several mitigation tools that can be utilized to close the gap, including reducing payment
terms, cash on delivery, prepayments and pledges on assets.
UMG\u2019s operational subsidiaries have set up procedures and systems to track their trade accounts receivable and recover outstanding amounts. In addition, some subsidiaries have insured their main client credit risks worldwide with a leading credit insurer. ", "dimensions": { "concept": "ifrs-full:DisclosureOfCreditRiskExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-409": { "value": "Liquidity risk Liquidity risk is the risk that UMG will not be able to meet its financial obligations as they fall due. The primary objective of liquidity management is providing sufficient cash to enable UMG to meet its liabilities when due, under normal and stressed conditions, without incurring losses. Neither the aged receivables of individual customers, nor the profile of the accounts receivable portfolio per segment, impose a significant threat to UMG\u2019s liquidity planning. UMG Treasury provides for the short-term day-to-day cash management needs of the Group by organizing sweeps between international cash poolings. For medium term financing requirements, UMG Group Treasury determines the Group's overall debt position and its planned evolution based on the Group\u2019s 13-month rolling cash forecast. A liquidity analysis is performed to ensure the proper funding is in place to face medium-term needs. Cash is pooled up to UMG NV from all territories participating in the international cash pooling arrangement. Cash is extracted from countries outside the cash pooling through dividends or upstream loans. The objectives of liquidity management are to repay UMG's external debt and to pay UMG's dividend to the Group's shareholders. The list of permitted banks for liquidity management includes nine banks with minimum rating of A-. The liquidity analysis includes a buffer of \u20ac400 million to provide for intra-month treasury swings and the incompressible treasury float. Adequate bank facilities are available as backup for Commercial paper. The maturity schedule for long- term external debt is maintained above 3 years and the current average maturity for long term external debt is 5 years. UMG Treasury ensures central compliance with financial covenants, pari-passu, and negative pledge clauses. Total cash and cash equivalents position as at December 31, 2023, is disclosed in Note 16. Contractual obligations and their timing are disclosed in Note 17. In addition, as at December 31, 2023, UMG has undrawn Revolving Credit Facilities (RCF) of \u20ac2,301 million. Contractual obligations The table below analyses UMG\u2019s financial liabilities into relevant maturity groupings based on their contractual maturities. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant. Interest on long-term debt is based on floating rate adjustments according to market expectations.
Total minimum future
Minimum future payments as of December 31, 2023 payments as of
Payments due in
(millions of euros)
Total
1 year
2-5 years
After 5 years
December 31, 2022
Borrowings and other
financial liabilities
2,449
274
735
1,440
2,506
Lease liabilities
463
94
251
118
472
Music royalties to artists and
repertoire owners
3,957
3,944
13
-
3,542
Creative talent and employment
603
362
240
1
470
agreements and others
Other payables
1,411
949
55
407
1,156
Consolidated statement of
financial position items
8,883
5,623
1,294
1,966
8,146
Contractual
1,595
815
737
43
1,562
content commitments
Other commitments
287
82
135
70
244
Total off-balance
1,882
897
872
113
1,806
sheet commitments
Total
10,765
6,520
2,166
2,079
9,952
", "dimensions": { "concept": "ifrs-full:DisclosureOfLiquidityRiskExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-408": { "value": "Market risk Market risk is the possibility that an entity will experience losses due to factors that affect the financial markets. Market risk includes currency risk and interest rate risk as addressed below, but also risk of change in fair value of the financial instruments, including those traded on the active markets. At December 31, 2023, UMG held financial instruments measured at fair value as disclosed in Note 18, where the exposure of the risk and sensitivity are presented. UMG risk management policies cover refinancing risk to ensure that under any market circumstances, UMG can refinance its debt on time and a reasonable cost. The objectives of refinancing risk management are to benefit from sufficient flexibility granted by the access to capital markets (in particular, Euro commercial papers, private placement and bond markets) and not rely solely on bank borrowings. Interest rate risk Interest rate risk is the risk of the fair value or future cash flows of a financial instrument fluctuating because of changes in the market interest rates. Financial instruments included in borrowings create an inherent interest rate risk. UMG seeks to limit the period over which it is exposed to interest rate risk on the Group's borrowings. The preferred method of hedging interest rate risk is issuing long-term fixed-rate bonds. The use of interest-rate plain vanilla derivatives is also authorized. The list of authorized instruments includes interest rate swaps, FRAs, caps, and floors. As for currency risk management, interest rate hedging operations are handled solely by UMG Treasury according to the Group\u2019s strategic goals set by the Group Chief Financial Officer. The speculative use of interest rate derivatives is strictly prohibited. As of December 31, 2023, UMG had a ratio of fixed-rate debt to total outstanding debt of approximately 85%. A sensitivity analysis conducted in January 2024 on the gross debt portfolio shows that if short term EURIBOR were to increase instantaneously by 0.5% from their level of December 31, 2023, with all other variables held constant, the total change in annualized interest expense result would be \u20ac1 million. Foreign currency risk As any multinational group, UMG is exposed to transactional foreign currency risk on committed and forecast cash flows, that are denominated in a currency other than the transacting entity's functional currency. UMG is also exposed to translational risk, resulting from the translation of foreign operations into Euros. The main currencies that drive UMG's foreign currency risk are U.S. Dollar, British Pound and Japanese Yen. UMG\u2019s exposure to foreign exchange transactional risk is greatly limited due to the offsetting of inflows and outflows in local currencies to the extent possible as a natural hedge. UMG Treasury mainly manages foreign currency risk exposure on balance sheet positions, primarily cash concentrations in non-Euro currencies held under the Group's cash pooling arrangements. UMG Treasury's foreign currency risk management policy is to hedge recognized assets and liabilities denominated in foreign currencies above a predefined threshold. UMG uses forward exchange rate contracts and foreign exchange swaps to manage this exposure. All material foreign currency balance sheet exposures are offset by derivatives, so potential foreign currency rate fluctuations as of December 31, 2023 would have no significant impacts on UMG\u2019s financial results. UMG did not apply hedge accounting to these derivatives in 2023 or 2022. Currency derivatives are not used for speculative purposes. The average maturity of these contracts is one month. The table below summarises the net nominal value of the foreign currency balance sheet exposure and foreign exchange rate derivatives used to offset it as of December 31, 2023.
(millions of euros)
USD
GBP
JPY
Other
Total
Nominal value of Balance sheet exposure
535
475
106
412
1,528
Foreign exchange rate derivatives
(535)
(475)
(106)
(412)
(1,528)
Net exposure
-
-
-
-
-
Beginning in 2023, foreign currency translation risks are hedged to a limited extent, as the underlying currency positions are generally considered to be long-term in nature. If a hedge is entered into, it is accounted for as a net investment hedge. ", "dimensions": { "concept": "ifrs-full:DisclosureOfMarketRiskExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-462": { "value": "Interest rate risk Interest rate risk is the risk of the fair value or future cash flows of a financial instrument fluctuating because of changes in the market interest rates. Financial instruments included in borrowings create an inherent interest rate risk. UMG seeks to limit the period over which it is exposed to interest rate risk on the Group's borrowings. The preferred method of hedging interest rate risk is issuing long-term fixed-rate bonds. The use of interest-rate plain vanilla derivatives is also authorized. The list of authorized instruments includes interest rate swaps, FRAs, caps, and floors. As for currency risk management, interest rate hedging operations are handled solely by UMG Treasury according to the Group\u2019s strategic goals set by the Group Chief Financial Officer. The speculative use of interest rate derivatives is strictly prohibited.
As of December 31, 2023, UMG had a ratio of fixed-rate debt to total outstanding debt of approximately 85%. A sensitivity
analysis conducted in January 2024 on the gross debt portfolio shows that if short term EURIBOR were to increase
instantaneously by 0.5% from their level of December 31, 2023, with all other variables held constant, the total change in
annualized interest expense result would be \u20ac1 million.
Foreign currency risk
As any multinational group, UMG is exposed to transactional foreign currency risk on committed and forecast cash flows,
that are denominated in a currency other than the transacting entity's functional currency. UMG is also exposed to
translational risk, resulting from the translation of foreign operations into Euros. The main currencies that drive UMG's
foreign currency risk are U.S. Dollar, British Pound and Japanese Yen.
UMG\u2019s exposure to foreign exchange transactional risk is greatly limited due to the offsetting of inflows and outflows
in local currencies to the extent possible as a natural hedge. UMG Treasury mainly manages foreign currency risk
exposure on balance sheet positions, primarily cash concentrations in non-Euro currencies held under the Group's
cash pooling arrangements. UMG Treasury's foreign currency risk management policy is to hedge recognized assets and
liabilities denominated in foreign currencies above a predefined threshold. UMG uses forward exchange rate contracts
and foreign exchange swaps to manage this exposure. All material foreign currency balance sheet exposures are offset
by derivatives, so potential foreign currency rate fluctuations as of December 31, 2023 would have no significant impacts
on UMG\u2019s financial results. UMG did not apply hedge accounting to these derivatives in 2023 or 2022. Currency derivatives
are not used for speculative purposes. The average maturity of these contracts is one month.
The table below summarises the net nominal value of the foreign currency balance sheet exposure and foreign exchange
rate derivatives used to offset it as of December 31, 2023.
(millions of euros)
USD
GBP
JPY
Other
Total
Nominal value of Balance sheet exposure
535
475
106
412
1,528
Foreign exchange rate derivatives
(535)
(475)
(106)
(412)
(1,528)
Net exposure
-
-
-
-
-
Beginning in 2023, foreign currency translation risks are hedged to a limited extent, as the underlying currency
positions are generally considered to be long-term in nature. If a hedge is entered into, it is accounted for as a net
investment hedge.
Borrowings and other financial liabilities
December 31, 2023
December 31, 2022
(millions of euros)
Total
Long-term
Short-term
Total
Long-term
Short-term
Bonds
1,808
1,774
34
1,004
987
17
Drawn revolving
-
-
-
125
125
-
credit facilities
Commercial papers
197
-
197
929
-
929
Bank overdrafts
26
-
26
1
-
1
Other
73
52
21
191
1
190
Borrowings at
amortized cost
2,104
1,826
278
2,250
1,113
1,137
Cash and cash equivalents
(413)
-
(413)
(439)
-
(439)
Derivative financial assets
(2)
-
(2)
(1)
-
(1)
Net debt
1,689
1,810
", "dimensions": { "concept": "ifrs-full:DisclosureOfDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-411": { "value": "
Note 15. Trade and other accounts payable
Year ended December 31,
(millions of euros)
2023
2022
Trade accounts payable
118
138
Music royalties to artists and repertoire owners
3,944
3,523
Accrued expenses
389
401
Other payables
852
711
Trade and other accounts payable
5,303
4,773
Current contract liabilities
408
377
Trade accounts payable and other
5,711
5,150
Out of the total amount of \u20ac377 million recognized in contract liabilities at the beginning of 2023, \u20ac321 million has been
recognized as revenue for the year ended December 31, 2023. The total amount of current and non-current contract
liabilities as at December 31, 2023 is \u20ac428 million.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredIncomeExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-372": { "value": "Note 15. Trade and other accounts payable
Year ended December 31,
(millions of euros)
2023
2022
Trade accounts payable
118
138
Music royalties to artists and repertoire owners
3,944
3,523
Accrued expenses
389
401
Other payables
852
711
Trade and other accounts payable
5,303
4,773
Current contract liabilities
408
377
Trade accounts payable and other
5,711
5,150
Out of the total amount of \u20ac377 million recognized in contract liabilities at the beginning of 2023, \u20ac321 million has been recognized as revenue for the year ended December 31, 2023. The total amount of current and non-current contract liabilities as at December 31, 2023 is \u20ac428 million. ", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherPayablesExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-436": { "value": "Note 15. Trade and other accounts payable
Year ended December 31,
(millions of euros)
2023
2022
Trade accounts payable
118
138
Music royalties to artists and repertoire owners
3,944
3,523
Accrued expenses
389
401
Other payables
852
711
Trade and other accounts payable
5,303
4,773
Current contract liabilities
408
377
Trade accounts payable and other
5,711
5,150
Out of the total amount of \u20ac377 million recognized in contract liabilities at the beginning of 2023, \u20ac321 million has been recognized as revenue for the year ended December 31, 2023. The total amount of current and non-current contract liabilities as at December 31, 2023 is \u20ac428 million. ", "dimensions": { "concept": "ifrs-full:DisclosureOfAccruedExpensesAndOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-410": { "value": "
Cash position
Year ended December 31,
(millions of euros)
2023
2022
Cash and cash equivalents
413
439
Bank overdrafts
(26)
(1)
Cash and cash equivalents in the statement of cash flows
387
438
UMG operates in a number of territories where regulations do not authorise participation of local entities to the UMG
global cash pooling. Only dividends and intra-group invoices are available to extract cash from these territories. The
amount of cash held by UMG entities in these countries amounted to \u20ac394 million as of December 31, 2023.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-435": { "value": "Cash position
Year ended December 31,
(millions of euros)
2023
2022
Cash and cash equivalents
413
439
Bank overdrafts
(26)
(1)
Cash and cash equivalents in the statement of cash flows
387
438
UMG operates in a number of territories where regulations do not authorise participation of local entities to the UMG global cash pooling. Only dividends and intra-group invoices are available to extract cash from these territories. The amount of cash held by UMG entities in these countries amounted to \u20ac394 million as of December 31, 2023. ", "dimensions": { "concept": "ifrs-full:DisclosureOfRestrictedCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-459": { "value": "TS Borrowings and other financial liabilities
December 31, 2023
December 31, 2022
(millions of euros)
Total
Long-term
Short-term
Total
Long-term
Short-term
Bonds
1,808
1,774
34
1,004
987
17
Drawn revolving
-
-
-
125
125
-
credit facilities
Commercial papers
197
-
197
929
-
929
Bank overdrafts
26
-
26
1
-
1
Other
73
52
21
191
1
190
Borrowings at
amortized cost
2,104
1,826
278
2,250
1,113
1,137
Cash and cash equivalents
(413)
-
(413)
(439)
-
(439)
Derivative financial assets
(2)
-
(2)
(1)
-
(1)
Net debt
1,689
1,810
New borrowings In July 2023, UMG issued \u00a57 billion (\u20ac45 million) of senior notes due on July 5, 2038 with a coupon of 1.61%. In June 2023, UMG issued \u20ac750 million of senior unsecured notes due on June 13, 2031 with a coupon of 4.00%. In March 2023, UMG entered into a short-term bilateral floating rate \u20ac500 million revolving credit facility. The facility matures 12 months from the signing date. In February 2023, UMG extended the original maturity of the syndicated floating rate \u20ac2 billion revolving credit facility. The maturity date was extended for two years up to April 26, 2028. All other conditions remained unchanged. Movements of borrowings
Drawn
Term facility revolving Bonds Bank Commercial
Other debt
Total
credit overdrafts papers
(millions of euros) facilities
Balance December 31, 2021
998
1,447
-
13
-
137
2,595
New borrowings
8
1,722
1,004
1
3,117
87
5,939
Repayments
(1,006)
(3,126)
-
(13)
(2,188)
(34)
(6,367)
Translation differences and other movements
-
82
-
-
-
1
83
Balance December 31, 2022
-
125
1,004
1
929
191
2,250
New borrowings
-
1,075
794
26
4,738
34
6,667
Repayments
-
(1,200)
-
(1)
(5,469)
(145)
(6,815)
Translation differences and other movements
-
-
10
-
(1)
(7)
2
Balance December 31, 2023
-
-
1,808
26
197
73
2,104
", "dimensions": { "concept": "ifrs-full:DisclosureOfDebtSecuritiesExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-437": { "value": "Note 17. Contractual obligations and other commitments UMG\u2019s material contractual obligations and contingent assets and liabilities include: \u2022 Contractual content commitments. UMG routinely commits to pay agreed amounts to artists and other parties upon delivery of content or other products. Until the artist or the other party has delivered his or her content or until the recoupment of an advance, UMG discloses its obligation as an off-balance sheet commitment; \u2022 Certain contractual obligations relating to the UMG\u2019s business operations, including leases and off-balance sheet commercial commitments, such as long-term service contracts and purchase or investment commitments; and \u2022 Commitments related to UMG\u2019s financing: term loan and drawn committed bank credit facilities. Contractual obligations The table below analyses UMG\u2019s financial liabilities into relevant maturity groupings based on their contractual maturities. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant. Interest on long-term debt is based on floating rate adjustments according to market expectations.
Total minimum future
Minimum future payments as of December 31, 2023 payments as of
Payments due in
(millions of euros)
Total
1 year
2-5 years
After 5 years
December 31, 2022
Borrowings and other
financial liabilities
2,449
274
735
1,440
2,506
Lease liabilities
463
94
251
118
472
Music royalties to artists and
repertoire owners
3,957
3,944
13
-
3,542
Creative talent and employment
603
362
240
1
470
agreements and others
Other payables
1,411
949
55
407
1,156
Consolidated statement of
financial position items
8,883
5,623
1,294
1,966
8,146
Contractual
1,595
815
737
43
1,562
content commitments
Other commitments
287
82
135
70
244
Total off-balance
1,882
897
872
113
1,806
sheet commitments
Total
10,765
6,520
2,166
2,079
9,952
", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-452": { "value": "Note 17. Contractual obligations and other commitments UMG\u2019s material contractual obligations and contingent assets and liabilities include: \u2022 Contractual content commitments. UMG routinely commits to pay agreed amounts to artists and other parties upon delivery of content or other products. Until the artist or the other party has delivered his or her content or until the recoupment of an advance, UMG discloses its obligation as an off-balance sheet commitment; \u2022 Certain contractual obligations relating to the UMG\u2019s business operations, including leases and off-balance sheet commercial commitments, such as long-term service contracts and purchase or investment commitments; and \u2022 Commitments related to UMG\u2019s financing: term loan and drawn committed bank credit facilities. Contractual obligations The table below analyses UMG\u2019s financial liabilities into relevant maturity groupings based on their contractual maturities. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant. Interest on long-term debt is based on floating rate adjustments according to market expectations.
Total minimum future
Minimum future payments as of December 31, 2023 payments as of
Payments due in
(millions of euros)
Total
1 year
2-5 years
After 5 years
December 31, 2022
Borrowings and other
financial liabilities
2,449
274
735
1,440
2,506
Lease liabilities
463
94
251
118
472
Music royalties to artists and
repertoire owners
3,957
3,944
13
-
3,542
Creative talent and employment
603
362
240
1
470
agreements and others
Other payables
1,411
949
55
407
1,156
Consolidated statement of
financial position items
8,883
5,623
1,294
1,966
8,146
Contractual
1,595
815
737
43
1,562
content commitments
Other commitments
287
82
135
70
244
Total off-balance
1,882
897
872
113
1,806
sheet commitments
Total
10,765
6,520
2,166
2,079
9,952
Note 25. Litigation In the normal course of its business, Universal Music Group is subject to various lawsuits, arbitrations and governmental, administrative or other proceedings (collectively referred to herein as \u201cLegal Proceedings\u201d). However, based on the information currently available, UMG believes that the outcome from these Legal Proceedings will not have a material impact on UMG's consolidated results of operations and financial position.
Note 28. Audit exemptions
UMG has provided guarantees to the following subsidiaries, incorporated in the Netherlands, under the registered
number indicated, under section 403 of Book 2 of the Dutch Civil Code. As these companies\u2019 financial data is consolidated
within these financial statements, the Dutch entities are allowed to prepare abridged financial statements which are
exempt from publication and audit.
Company
Name Number
Universal International Music B.V.
31018439
Universal Music Publishing International B.V.
31037866
Universal Music Publishing B.V.
32101966
CMHL B.V.
32140273
Universal Production Music B.V.
85798479
In addition UMG has provided guarantees to the following subsidiaries, incorporated in Germany, under the registered
number indicated, under section 264 paragraph 3 of the German Commercial Code. The financial data for these
companies are also consolidated within these financial statements therefore the German entities are allowed to prepare
abridged financial statements which are exempt from publication and audit.
Company
Name Number
Arabella Musikverlag GmbH
HRB 110271
Centre Stage Artist Management GmbH
HRB 66733
Deutsche Grammophon Gesellschaft mbH
HRB 138012
Dreiklang-Dreimasken, B\u00fchnen- und Musikverlag Gesellschaft mit beschr\u00e4nkter Haftung
HRB 110736
G. RICORDI & Co. B\u00fchnen- und Musikverlag GmbH
HRB 153334
Musik Edition Discoton, Gesellschaft mit beschr\u00e4nkter Haftung
HRB 110249
Rob. Forberg Musikverlag GmbH
HRB 153343
Rondor Musikverlag G.m.b.H.
HRB 89705
Sheffield Music GmbH
HRB 221164
UNIVERSAL / MCA Music Publishing GmbH
HRB 85574
Universal Music Entertainment GmbH
HRB 86559
Universal Music GmbH
HRB 158632
Universal Music Publishing GmbH
HRB 87411
Universal Production Music GmbH
HRB 113037
", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-373": { "value": "
Note 18. Financial assets and liabilities
The following table shows the carrying amounts and fair values of financial assets and liabilities according to their fair
value hierarchy. Based on the nature, maturity or the magnitude of the amounts, UMG considers that the fair value
of trade and other receivables, short-term deposits, loans receivable, borrowings, trade and other payables are not
materially different from their carrying value.
Fair value hierarchy is based on the transparency of the inputs used and is as follows:
\u2022 Level 1: fair value measurement based on quoted prices in active markets for identical assets or liabilities;
\u2022
Level 2: fair value measurement based on observable market data (other than quoted prices included under Level 1),
being for example, price on the last transactions on over-the-counter (OTC) markets; and
\u2022
Level 3: fair value measurement based on valuation techniques using inputs for the asset or liability that are not
based on observable market data.
December 31, 2023
Fair value
Carrying
Level 1
Level 2
Level 3
(millions of euros) amount
Financial assets at fair value through profit and loss
Listed equity securities
1,227
1,227
-
-
Other financial assets
75
-
55
20
Trade and other receivables
-
-
-
-
Financial assets at fair value through other
comprehensive income
Listed equity securities through OCI
-
-
-
-
Unlisted equity securities
20
-
-
20
Financial assets at amortised cost
Trade and other receivables
2,246
-
-
-
Other financial assets
205
-
-
-
Total financial assets
3,773
1,227
55
40
Financial liabilities at fair value through profit and loss
Trade and other payables
(4)
(4)
-
-
Other non-current liabilities
(35)
(5)
-
(30)
Financial liabilities at amortised cost
Trade and other payables
(5,707)
-
-
-
Bonds
(1,808)
(1,808)
-
-
Borrowings, excluding bank overdrafts and bonds
(270)
-
-
-
Other non-current liabilities
(680)
-
-
-
Total financial liabilities
(8,504)
(1,817)
-
(30)
December 31, 2022
Fair value
Carrying Level 1
Level 2
Level 3
(millions of euros) amount
Financial assets at fair value through profit and loss
Listed equity securities
597
597
-
-
Other financial assets
51
-
31
20
Trade and other receivables
1
-
1
-
Financial assets at fair value through other
comprehensive income
Listed equity securities through OCI
1
1
-
-
Unlisted equity securities
19
-
-
19
Financial assets at amortised cost
Trade and other receivables
2,013
-
-
-
Other financial assets
22
-
-
-
Total financial assets
2,704
598
32
39
Financial liabilities at fair value through profit and loss
Trade and other payables
-
-
-
-
Other non-current liabilities
-
-
-
-
Financial liabilities at amortised cost
Trade and other payables
(5,150)
-
-
-
Bonds
(1,004)
(987)
-
-
Borrowings, excluding bank overdrafts and bonds
(1,245)
-
-
-
Other non-current liabilities
(437)
-
-
-
Total financial liabilities
(7,836)
(987)
-
-
1
1 Includes transfer of \u20ac31 million of equity securities from level 2 to level 1.
Listed equity portfolio
December 31, 2023
Number Average Stock Change Cumulative
of shares Ownership purchase market Carrying in value unrealized Sensitivity
held interest price price value over captial at +/- 10 pts
the period gain/(loss)
(thousands) (\u20ac/share)
(millions of euros)
Spotify
6,487
3.27%
6.58
171.36
1,112
629
1,069
+111/-111
Tencent
12,246
0.78%
na
8.22
101
5
101
+10/-10
Music Entertainment
Other
14
(4)
14
Total
1,227
630
1,184
1,2
3
1 Includes acquisition fees and taxes.
2 na: not applicable.
3 Includes revaluation gains, net of liabilities, of \u20ac425 million in 2023 as recognized in Note 5.
December 31, 2022
Number Average Stock Change Cumulative
of shares Ownership purchase market Carrying in value unrealized Sensitivity
held interest price price value over captial at +/- 10 pts
the period gain/(loss)
(thousands) (\u20ac/share)
(millions of euros)
Spotify
6,487
3.30%
6.58
74.41
483
(856)
440
+48/-48
Tencent
12,246
0.76%
na
7.80
96
22
96
+10/-10
Music Entertainment
Other
18
18
18
Total
597
(816)
554
1,2
3
1 Includes acquisition fees and taxes.
2 na: not applicable.
3 Includes revaluation losses, net of liabilities, of \u20ac617 million in 2022 as recognized in Note 5.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentsOtherThanInvestmentsAccountedForUsingEquityMethodExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-456": { "value": "Note 18. Financial assets and liabilities The following table shows the carrying amounts and fair values of financial assets and liabilities according to their fair value hierarchy. Based on the nature, maturity or the magnitude of the amounts, UMG considers that the fair value of trade and other receivables, short-term deposits, loans receivable, borrowings, trade and other payables are not materially different from their carrying value. Fair value hierarchy is based on the transparency of the inputs used and is as follows: \u2022 Level 1: fair value measurement based on quoted prices in active markets for identical assets or liabilities; \u2022 Level 2: fair value measurement based on observable market data (other than quoted prices included under Level 1), being for example, price on the last transactions on over-the-counter (OTC) markets; and \u2022 Level 3: fair value measurement based on valuation techniques using inputs for the asset or liability that are not based on observable market data.
December 31, 2023
Fair value
Carrying
Level 1
Level 2
Level 3
(millions of euros) amount
Financial assets at fair value through profit and loss
Listed equity securities
1,227
1,227
-
-
Other financial assets
75
-
55
20
Trade and other receivables
-
-
-
-
Financial assets at fair value through other
comprehensive income
Listed equity securities through OCI
-
-
-
-
Unlisted equity securities
20
-
-
20
Financial assets at amortised cost
Trade and other receivables
2,246
-
-
-
Other financial assets
205
-
-
-
Total financial assets
3,773
1,227
55
40
Financial liabilities at fair value through profit and loss
Trade and other payables
(4)
(4)
-
-
Other non-current liabilities
(35)
(5)
-
(30)
Financial liabilities at amortised cost
Trade and other payables
(5,707)
-
-
-
Bonds
(1,808)
(1,808)
-
-
Borrowings, excluding bank overdrafts and bonds
(270)
-
-
-
Other non-current liabilities
(680)
-
-
-
Total financial liabilities
(8,504)
(1,817)
-
(30)
December 31, 2022
Fair value
Carrying Level 1
Level 2
Level 3
(millions of euros) amount
Financial assets at fair value through profit and loss
Listed equity securities
597
597
-
-
Other financial assets
51
-
31
20
Trade and other receivables
1
-
1
-
Financial assets at fair value through other
comprehensive income
Listed equity securities through OCI
1
1
-
-
Unlisted equity securities
19
-
-
19
Financial assets at amortised cost
Trade and other receivables
2,013
-
-
-
Other financial assets
22
-
-
-
Total financial assets
2,704
598
32
39
Financial liabilities at fair value through profit and loss
Trade and other payables
-
-
-
-
Other non-current liabilities
-
-
-
-
Financial liabilities at amortised cost
Trade and other payables
(5,150)
-
-
-
Bonds
(1,004)
(987)
-
-
Borrowings, excluding bank overdrafts and bonds
(1,245)
-
-
-
Other non-current liabilities
(437)
-
-
-
Total financial liabilities
(7,836)
(987)
-
-
1 1 Includes transfer of \u20ac31 million of equity securities from level 2 to level 1. Listed equity portfolio
December 31, 2023
Number Average Stock Change Cumulative
of shares Ownership purchase market Carrying in value unrealized Sensitivity
held interest price price value over captial at +/- 10 pts
the period gain/(loss)
(thousands) (\u20ac/share)
(millions of euros)
Spotify
6,487
3.27%
6.58
171.36
1,112
629
1,069
+111/-111
Tencent
12,246
0.78%
na
8.22
101
5
101
+10/-10
Music Entertainment
Other
14
(4)
14
Total
1,227
630
1,184
1,2 3 1 Includes acquisition fees and taxes. 2 na: not applicable. 3 Includes revaluation gains, net of liabilities, of \u20ac425 million in 2023 as recognized in Note 5.
December 31, 2022
Number Average Stock Change Cumulative
of shares Ownership purchase market Carrying in value unrealized Sensitivity
held interest price price value over captial at +/- 10 pts
the period gain/(loss)
(thousands) (\u20ac/share)
(millions of euros)
Spotify
6,487
3.30%
6.58
74.41
483
(856)
440
+48/-48
Tencent
12,246
0.76%
na
7.80
96
22
96
+10/-10
Music Entertainment
Other
18
18
18
Total
597
(816)
554
1,2 3 1 Includes acquisition fees and taxes. 2 na: not applicable. 3 Includes revaluation losses, net of liabilities, of \u20ac617 million in 2022 as recognized in Note 5.", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-453": { "value": "Note 18. Financial assets and liabilities The following table shows the carrying amounts and fair values of financial assets and liabilities according to their fair value hierarchy. Based on the nature, maturity or the magnitude of the amounts, UMG considers that the fair value of trade and other receivables, short-term deposits, loans receivable, borrowings, trade and other payables are not materially different from their carrying value. Fair value hierarchy is based on the transparency of the inputs used and is as follows: \u2022 Level 1: fair value measurement based on quoted prices in active markets for identical assets or liabilities; \u2022 Level 2: fair value measurement based on observable market data (other than quoted prices included under Level 1), being for example, price on the last transactions on over-the-counter (OTC) markets; and \u2022 Level 3: fair value measurement based on valuation techniques using inputs for the asset or liability that are not based on observable market data.
December 31, 2023
Fair value
Carrying
Level 1
Level 2
Level 3
(millions of euros) amount
Financial assets at fair value through profit and loss
Listed equity securities
1,227
1,227
-
-
Other financial assets
75
-
55
20
Trade and other receivables
-
-
-
-
Financial assets at fair value through other
comprehensive income
Listed equity securities through OCI
-
-
-
-
Unlisted equity securities
20
-
-
20
Financial assets at amortised cost
Trade and other receivables
2,246
-
-
-
Other financial assets
205
-
-
-
Total financial assets
3,773
1,227
55
40
Financial liabilities at fair value through profit and loss
Trade and other payables
(4)
(4)
-
-
Other non-current liabilities
(35)
(5)
-
(30)
Financial liabilities at amortised cost
Trade and other payables
(5,707)
-
-
-
Bonds
(1,808)
(1,808)
-
-
Borrowings, excluding bank overdrafts and bonds
(270)
-
-
-
Other non-current liabilities
(680)
-
-
-
Total financial liabilities
(8,504)
(1,817)
-
(30)
December 31, 2022
Fair value
Carrying Level 1
Level 2
Level 3
(millions of euros) amount
Financial assets at fair value through profit and loss
Listed equity securities
597
597
-
-
Other financial assets
51
-
31
20
Trade and other receivables
1
-
1
-
Financial assets at fair value through other
comprehensive income
Listed equity securities through OCI
1
1
-
-
Unlisted equity securities
19
-
-
19
Financial assets at amortised cost
Trade and other receivables
2,013
-
-
-
Other financial assets
22
-
-
-
Total financial assets
2,704
598
32
39
Financial liabilities at fair value through profit and loss
Trade and other payables
-
-
-
-
Other non-current liabilities
-
-
-
-
Financial liabilities at amortised cost
Trade and other payables
(5,150)
-
-
-
Bonds
(1,004)
(987)
-
-
Borrowings, excluding bank overdrafts and bonds
(1,245)
-
-
-
Other non-current liabilities
(437)
-
-
-
Total financial liabilities
(7,836)
(987)
-
-
1 1 Includes transfer of \u20ac31 million of equity securities from level 2 to level 1. Listed equity portfolio
December 31, 2023
Number Average Stock Change Cumulative
of shares Ownership purchase market Carrying in value unrealized Sensitivity
held interest price price value over captial at +/- 10 pts
the period gain/(loss)
(thousands) (\u20ac/share)
(millions of euros)
Spotify
6,487
3.27%
6.58
171.36
1,112
629
1,069
+111/-111
Tencent
12,246
0.78%
na
8.22
101
5
101
+10/-10
Music Entertainment
Other
14
(4)
14
Total
1,227
630
1,184
1,2 3 1 Includes acquisition fees and taxes. 2 na: not applicable. 3 Includes revaluation gains, net of liabilities, of \u20ac425 million in 2023 as recognized in Note 5.
December 31, 2022
Number Average Stock Change Cumulative
of shares Ownership purchase market Carrying in value unrealized Sensitivity
held interest price price value over captial at +/- 10 pts
the period gain/(loss)
(thousands) (\u20ac/share)
(millions of euros)
Spotify
6,487
3.30%
6.58
74.41
483
(856)
440
+48/-48
Tencent
12,246
0.76%
na
7.80
96
22
96
+10/-10
Music Entertainment
Other
18
18
18
Total
597
(816)
554
1,2 3 1 Includes acquisition fees and taxes. 2 na: not applicable. 3 Includes revaluation losses, net of liabilities, of \u20ac617 million in 2022 as recognized in Note 5.", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-438": { "value": "Note 18. Financial assets and liabilities The following table shows the carrying amounts and fair values of financial assets and liabilities according to their fair value hierarchy. Based on the nature, maturity or the magnitude of the amounts, UMG considers that the fair value of trade and other receivables, short-term deposits, loans receivable, borrowings, trade and other payables are not materially different from their carrying value. Fair value hierarchy is based on the transparency of the inputs used and is as follows: \u2022 Level 1: fair value measurement based on quoted prices in active markets for identical assets or liabilities; \u2022 Level 2: fair value measurement based on observable market data (other than quoted prices included under Level 1), being for example, price on the last transactions on over-the-counter (OTC) markets; and \u2022 Level 3: fair value measurement based on valuation techniques using inputs for the asset or liability that are not based on observable market data.
December 31, 2023
Fair value
Carrying
Level 1
Level 2
Level 3
(millions of euros) amount
Financial assets at fair value through profit and loss
Listed equity securities
1,227
1,227
-
-
Other financial assets
75
-
55
20
Trade and other receivables
-
-
-
-
Financial assets at fair value through other
comprehensive income
Listed equity securities through OCI
-
-
-
-
Unlisted equity securities
20
-
-
20
Financial assets at amortised cost
Trade and other receivables
2,246
-
-
-
Other financial assets
205
-
-
-
Total financial assets
3,773
1,227
55
40
Financial liabilities at fair value through profit and loss
Trade and other payables
(4)
(4)
-
-
Other non-current liabilities
(35)
(5)
-
(30)
Financial liabilities at amortised cost
Trade and other payables
(5,707)
-
-
-
Bonds
(1,808)
(1,808)
-
-
Borrowings, excluding bank overdrafts and bonds
(270)
-
-
-
Other non-current liabilities
(680)
-
-
-
Total financial liabilities
(8,504)
(1,817)
-
(30)
December 31, 2022
Fair value
Carrying Level 1
Level 2
Level 3
(millions of euros) amount
Financial assets at fair value through profit and loss
Listed equity securities
597
597
-
-
Other financial assets
51
-
31
20
Trade and other receivables
1
-
1
-
Financial assets at fair value through other
comprehensive income
Listed equity securities through OCI
1
1
-
-
Unlisted equity securities
19
-
-
19
Financial assets at amortised cost
Trade and other receivables
2,013
-
-
-
Other financial assets
22
-
-
-
Total financial assets
2,704
598
32
39
Financial liabilities at fair value through profit and loss
Trade and other payables
-
-
-
-
Other non-current liabilities
-
-
-
-
Financial liabilities at amortised cost
Trade and other payables
(5,150)
-
-
-
Bonds
(1,004)
(987)
-
-
Borrowings, excluding bank overdrafts and bonds
(1,245)
-
-
-
Other non-current liabilities
(437)
-
-
-
Total financial liabilities
(7,836)
(987)
-
-
1 1 Includes transfer of \u20ac31 million of equity securities from level 2 to level 1. Listed equity portfolio
December 31, 2023
Number Average Stock Change Cumulative
of shares Ownership purchase market Carrying in value unrealized Sensitivity
held interest price price value over captial at +/- 10 pts
the period gain/(loss)
(thousands) (\u20ac/share)
(millions of euros)
Spotify
6,487
3.27%
6.58
171.36
1,112
629
1,069
+111/-111
Tencent
12,246
0.78%
na
8.22
101
5
101
+10/-10
Music Entertainment
Other
14
(4)
14
Total
1,227
630
1,184
1,2 3 1 Includes acquisition fees and taxes. 2 na: not applicable. 3 Includes revaluation gains, net of liabilities, of \u20ac425 million in 2023 as recognized in Note 5.
December 31, 2022
Number Average Stock Change Cumulative
of shares Ownership purchase market Carrying in value unrealized Sensitivity
held interest price price value over captial at +/- 10 pts
the period gain/(loss)
(thousands) (\u20ac/share)
(millions of euros)
Spotify
6,487
3.30%
6.58
74.41
483
(856)
440
+48/-48
Tencent
12,246
0.76%
na
7.80
96
22
96
+10/-10
Music Entertainment
Other
18
18
18
Total
597
(816)
554
1,2 3 1 Includes acquisition fees and taxes. 2 na: not applicable. 3 Includes revaluation losses, net of liabilities, of \u20ac617 million in 2022 as recognized in Note 5.", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-374": { "value": "
Note 19. Equity
Share capital
UMG has an authorized share capital of \u20ac27,000 million divided into 2,700,000,000 ordinary shares with a nominal value
of \u20ac10 per share. On December 31, 2023, the issued and fully paid share capital consisted of 1,821,665,441 ordinary shares
with a nominal value of \u20ac10 per share (2022: 1,813,512,742 ordinary shares with a nominal value of \u20ac10 per share).
Additional paid-in capital
Additional paid-in capital represents the premium paid in excess of the par value of shares at the time of the issuance of
new shares.
Treasury shares
As at December 31, 2023, UMG held 214,235 shares (2022: 214,235 shares) as Treasury shares.
", "dimensions": { "concept": "ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-412": { "value": "Share capital UMG has an authorized share capital of \u20ac27,000 million divided into 2,700,000,000 ordinary shares with a nominal value of \u20ac10 per share. On December 31, 2023, the issued and fully paid share capital consisted of 1,821,665,441 ordinary shares with a nominal value of \u20ac10 per share (2022: 1,813,512,742 ordinary shares with a nominal value of \u20ac10 per share). ", "dimensions": { "concept": "ifrs-full:DisclosureOfIssuedCapitalExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-414": { "value": "Additional paid-in capital Additional paid-in capital represents the premium paid in excess of the par value of shares at the time of the issuance of new shares. ", "dimensions": { "concept": "universalmusicgroupnv:DisclosureOfAdditionalPaidInCapital", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-415": { "value": "Treasury shares As at December 31, 2023, UMG held 214,235 shares (2022: 214,235 shares) as Treasury shares.", "dimensions": { "concept": "ifrs-full:DisclosureOfTreasurySharesExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-413": { "value": "
Dividend Distribution
On May 11, 2023 the shareholders approved a dividend distribution of \u20ac0.27 per ordinary share, corresponding to a total
distribution of \u20ac492 million, payable in June 2023.
On July 26, 2023 the directors approved an interim dividend distribution of \u20ac0.24 per ordinary share, corresponding to a
total distribution of \u20ac437 million payable in October 2023.
UMG plans to annually declare and pay dividends to all holders of the Shares on a pro-rata basis in two semi-annual
instalments, in the aggregate amount of no less than 50% of UMG's net profits realized during the relevant financial year,
subject to agreed non-cash items. UMG intends to pay an interim dividend in the fourth quarter of each financial year,
after the publication of the half-year figures of the Group, and a final dividend in the second quarter of the following
financial year, to be paid following approval of the UMG's financial statements at its Annual General Meeting.
A proposal will be submitted to the 2024 Annual General Meeting of Shareholders to pay a dividend of \u20ac0.27 per ordinary
share corresponding to a total distribution of \u20ac492 million, in cash, from the 2023 retained earnings, payable in Q2 2024.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDividendsExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-375": { "value": "0.27", "decimals": 2, "dimensions": { "concept": "ifrs-full:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersPerShare", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR/xbrli:shares" } }, "fact-376": { "value": "492000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwners", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "fact-416": { "value": "
Note 21. Provisions
Year ended December 31,
(millions of euros)
Note
2023
2022
Post-retirement employee benefits
22
166
166
Royalty audit claims
129
126
Deferred employee compensation
31
31
Restructuring costs
19
16
Litigations
21
5
Other
56
50
Provisions
422
394
Deduction of current provisions
(122)
(103)
Non-current provisions
300
291
Based on the historical utilisation rate, UMG expects the royalty audit claims provision will be utilized mainly within the
next 5 years.
Movements in provisions
(millions of euros)
Restructuring
Litigation
Royalty audit claims
Other
Total
Balance as at January 1, 2023
16
5
126
50
197
Additions
27
16
43
16
102
Utilizations
(24)
-
(20)
(14)
(58)
Releases
-
-
(17)
(6)
(23)
Changes in foreign currency
-
-
(3)
10
7
translation adjustments
Balance as at December 31, 2023
19
21
129
56
225
Current
19
16
59
9
103
Non-current
-
5
70
47
122
Note 25. Litigation In the normal course of its business, Universal Music Group is subject to various lawsuits, arbitrations and governmental, administrative or other proceedings (collectively referred to herein as \u201cLegal Proceedings\u201d). However, based on the information currently available, UMG believes that the outcome from these Legal Proceedings will not have a material impact on UMG's consolidated results of operations and financial position. Note 28. Audit exemptions UMG has provided guarantees to the following subsidiaries, incorporated in the Netherlands, under the registered number indicated, under section 403 of Book 2 of the Dutch Civil Code. As these companies\u2019 financial data is consolidated within these financial statements, the Dutch entities are allowed to prepare abridged financial statements which are exempt from publication and audit.
Company
Name Number
Universal International Music B.V.
31018439
Universal Music Publishing International B.V.
31037866
Universal Music Publishing B.V.
32101966
CMHL B.V.
32140273
Universal Production Music B.V.
85798479
In addition UMG has provided guarantees to the following subsidiaries, incorporated in Germany, under the registered number indicated, under section 264 paragraph 3 of the German Commercial Code. The financial data for these companies are also consolidated within these financial statements therefore the German entities are allowed to prepare abridged financial statements which are exempt from publication and audit.
Company
Name Number
Arabella Musikverlag GmbH
HRB 110271
Centre Stage Artist Management GmbH
HRB 66733
Deutsche Grammophon Gesellschaft mbH
HRB 138012
Dreiklang-Dreimasken, B\u00fchnen- und Musikverlag Gesellschaft mit beschr\u00e4nkter Haftung
HRB 110736
G. RICORDI & Co. B\u00fchnen- und Musikverlag GmbH
HRB 153334
Musik Edition Discoton, Gesellschaft mit beschr\u00e4nkter Haftung
HRB 110249
Rob. Forberg Musikverlag GmbH
HRB 153343
Rondor Musikverlag G.m.b.H.
HRB 89705
Sheffield Music GmbH
HRB 221164
UNIVERSAL / MCA Music Publishing GmbH
HRB 85574
Universal Music Entertainment GmbH
HRB 86559
Universal Music GmbH
HRB 158632
Universal Music Publishing GmbH
HRB 87411
Universal Production Music GmbH
HRB 113037
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherProvisionsContingentLiabilitiesAndContingentAssetsExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-447": { "value": "Note 21. Provisions
Year ended December 31,
(millions of euros)
Note
2023
2022
Post-retirement employee benefits
22
166
166
Royalty audit claims
129
126
Deferred employee compensation
31
31
Restructuring costs
19
16
Litigations
21
5
Other
56
50
Provisions
422
394
Deduction of current provisions
(122)
(103)
Non-current provisions
300
291
Based on the historical utilisation rate, UMG expects the royalty audit claims provision will be utilized mainly within the next 5 years. Movements in provisions
(millions of euros)
Restructuring
Litigation
Royalty audit claims
Other
Total
Balance as at January 1, 2023
16
5
126
50
197
Additions
27
16
43
16
102
Utilizations
(24)
-
(20)
(14)
(58)
Releases
-
-
(17)
(6)
(23)
Changes in foreign currency
-
-
(3)
10
7
translation adjustments
Balance as at December 31, 2023
19
21
129
56
225
Current
19
16
59
9
103
Non-current
-
5
70
47
122
Note 22. Post-retirement employee benefits In accordance with the laws and practices of each country in which it operates, UMG participates in, or maintains, employee benefit plans providing retirement pensions, post-retirement health care, life insurance and other post- employment benefits to eligible (former) employees and such of their beneficiaries who meet the required conditions. Post-retirement benefits are provided for substantially all employees through defined contribution plans, which are integrated with local social security, or defined benefit plans, which are generally managed via group pension plans. The plan funding policy implemented by UMG is consistent with applicable government funding requirements and regulations. Refer to Note 4 for the contribution to defined contribution plans. Post-employment benefits covered in this note relate to defined-benefit pension and other post-retirement defined benefit plans, including medical plans and life insurance. The benefits provided by these plans are based on employees\u2019 years of service and compensation levels. Refer to the table below for the present value of the net defined benefit obligations and plan assets per country as at 31 December.
2023 2022
Obligation Fair value of Net obligation/ Obligation Fair value of Net obligation/
(millions of euros) plan assets (asset) plan assets (asset)
Germany
136
(1)
135
134
(2)
132
U.S.
18
-
18
19
-
19
Other
38
(35)
3
41
(39)
2
Total
192
(36)
156
194
(41)
153
of which
assets related to employee
benefit plans
(10)
(13)
liabilities for employee
benefit plans
166
166
Germany
The post-retirement benefit plans in Germany aim to provide pension benefits to eligible (former) employees and such
of their beneficiaries who meet certain conditions. The total obligation as presented above includes multiple plans, from
which three are material. These plans are closed to new entrants since 2003 and earlier. In accordance with current
regulations, these plans are not funded and are not covered by the plan assets. The main risks for UMG relate to changes
in discount rates.
United States
The defined benefit liability in the United States mainly relates to the post-retirement medical care benefits. Post-
retirement medical benefit plans in the United States are not covered by plan assets in accordance with local laws
and practices.
Cash flow impact for 2024
In 2024 UMG expects a cash outflow of \u20ac13 million in relation to all defined benefit plans.
Net defined benefit obligations/(assets)
Movements of the net defined benefit obligations and plan assets for the year ended on December 31, are presented in
the table below.
2023 2022
Fair value Net Fair value Net
Note
Obligation
of plan obligation/ Obligation of plan obligation/
(millions of euros) assets (asset) assets (asset)
Opening balance
194
(41)
153
427
(219)
208
Current service cost
4
2
-
2
3
-
3
(Gain)/loss on settlements
-
-
-
-
-
-
Other
-
-
-
-
-
-
Impact on selling &
2
-
2
3
-
3
administrative expenses
Interest cost
5
7
-
7
6
-
6
Expected return on plan assets
5
-
(1)
(1)
-
(3)
(3)
Impact on other financial income
7
(1)
6
6
(3)
3
Included in the statement of profit
9
(1)
8
9
(3)
6
or loss
Actuarial losses/(gains) related to:
Experience adjustments
(3)
-
(3)
10
51
61
Financial assumptions
9
-
9
(111)
-
(111)
Demographic assumptions
(1)
-
(1)
1
-
1
Included in other
comprehensive income
20
5
-
5
(100)
51
(49)
Contributions by employers
-
(12)
(12)
-
(12)
(12)
Benefits paid by the fund
(2)
2
-
(121)
121
-
Benefits paid by the employer
(12)
12
-
(12)
12
-
Foreign currency and other
(2)
4
2
(9)
9
-
Closing balance
192
(36)
156
194
(41)
153
of which
wholly or partly funded benefits
33
38
wholly unfunded benefits
1
159
156
assets related to employee
(10)
(13)
benefit plans
liabilities for employee benefit plans
166
166
1 Included a current liability of \u20ac13 million as of December 31, 2023 and \u20ac14 million as of December 31, 2022
Assumptions used in the valuation of the net defined benefit liability The mortality tables used for UMG\u2019s major defined benefit schemes in Germany are Richttafeln 2018 G K. Heubeck. Other key assumptions used in the valuation of the net defined benefit plans liability are: rate of compensation increase, discount rate, and expected return on plan assets. The weighted-average assumptions used to calculate the defined- benefit obligation as of December 31 were as follows:
Germany
U.S.
Weighted average of all plans
2023
2022
2023
2022
2023
2022
Discount rate
3.50%
3.75%
5.28%
5.00%
3.51%
3.58%
Inflation rate
2.00%
2.00%
na
na
2.00%
2.00%
Rate of compensation increase
2.50%
2.50%
na
na
2.39%
1.93%
Duration of the benefit obligation
9.6
10.4
(in years)
na: not applicable. A 50 basis point increase (or a 50 basis point decrease, respectively) to the 2023 discount rate would have led to a decrease in the defined benefit obligation of \u20ac9.1 million (or an increase of \u20ac9.9 million, respectively), assuming all other assumptions remain unchanged. Pension plan assets allocation
Year ended December 31,
(millions of euros)
2023
2022
Insurance contracts
54%
55%
Equity securities
21%
20%
Debt securities
15%
14%
Diversified funds
0%
0%
Cash and other
10%
11%
Total
100%
100%
", "dimensions": { "concept": "ifrs-full:DisclosureOfProvisionsExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-377": { "value": "
Note 23. Share-based compensation plans
In 2022, UMG received formal approval from its shareholders to implement an equity plan, the UMG Global Equity Plan.
Under the plan, Restricted Stock Units (RSUs) and Performance Stock Units (PSUs) are granted to senior executives to align
the interests of the employees of UMG with its shareholders\u2019 interests by providing them with an additional incentive to
improve UMG's performance and increase its share price on a long-term basis. In addition, the Annual Incentive Plan
(AIP) for these senior executives was modified such that all or a portion of the payment under the plan may be settled in
equity at the discretion of UMG. In 2023, the equity plan was extended to additional executives and a number of senior
management personnel, resulting in the issuance of additional RSUs, PSUs and also Performance Stock Options (PSOs).
UMG Restricted Stock Units (RSUs)
Starting in the last quarter of 2022, and continuing for each year of service under the term of their contracts, certain
senior executives and senior management are granted RSUs, being a right to receive shares upon vesting. The awards
have vesting periods of 2.5 to 8 years and will vest in 3 equal instalments if the service condition is fulfilled. The total
number of RSUs granted as at December 31, 2023 was 17.06 million and the grant date weighted-average UMG N.V. share
market price was \u20ac21.50.
In addition, a one-off RSU award was granted to certain senior executives and senior management with an average 15
months vesting period in 2 equal instalments. The total number of these RSUs granted was 9.66 million and the grant
date weighted-average UMG N.V. share market price was \u20ac21.18.
There was a number of RSUs granted with slightly different service conditions. The grant date weighted-average UMG
share market price was \u20ac22.67 per share corresponding to the total fair value of \u20ac51 million of such awards.
The share rights are dividend-bearing during the service period. The total expense for these awards recognised in 2023
was \u20ac469 million (2022: \u20ac74 million) and the total equity reserve at December 31, 2023 was \u20ac308 million (2022: \u20ac78 million).
UMG Performance Stock Units (PSUs)
Starting in the last quarter of 2022, and continuing for each year of service under the term of their contracts, certain
senior executives and senior management are granted PSUs, being a right to receive shares upon vesting. The vesting of
these rights is subject to service, market and non-market performance conditions.
For these PSUs, the total number of shares delivered will range from 0% to 200% of the number of PSUs granted based
on certain performance conditions tailored to each participant. These include non-market performance conditions: target
compound annual growth rate for revenues (Revenue CAGR) and Adjusted EBITDA (Adjusted EBITDA CAGR) and a market
performance condition: relative total shareholder return (TSR). In addition, the employee must remain in continued
service for a three-year period. The share rights are dividend-bearing during the performance period.
The total number of PSUs granted as at December 31, 2023 is 5.09 million and the weighted average grant date fair value
per award was \u20ac25.45. The grant date fair value was estimated taking into account the market performance condition.
There was a small number of PSU awards with slightly different service and performance conditions. The estimated grant
date UMG share market price of \u20ac25.81 per share corresponding to the total fair value of \u20ac18 million of such awards.
The total expense for these awards recognised in 2023 was \u20ac47 million (2022: \u20ac5 million) and the total equity reserve at
December 31, 2023 was \u20ac52 million (2022: \u20ac5 million).
Annual Incentive Program (AIP)
In 2022, the AIP for senior executives, which was previously settled only in cash and accrued throughout the year, was
modified to allow UMG the choice of whether to settle in cash, shares, or a combination of the two. Such modification
did not change the fair value of the award compared to the previously accrued AIP payable. UMG expects to settle 50%
of the AIP in cash and 50% in shares. UMG has a constructive obligation to settle 50% of the award in cash. The total AIP
expense for the full calendar year starting January 1, 2023, being the start of the service period for the 2023 award, was
\u20ac47 million (2022: \u20ac42 million) with the cash-settled AIP accrual amounting to 50% of the total expense.
The vesting conditions of the AIP awards are a one-year service period and certain internally measured performance
conditions including Adjusted EBITDA, revenue and cash flow from operations (CFFO). The amount received can vary
between 0% and 200% of the on-target amount based on the actual performance against these performance criteria.
The number of shares granted is based on the total value of the award and UMG\u2019s share price on 15 March. The total fair
value of the equity-settled portion of the total AIP is \u20ac25 million (2022: \u20ac21 million).
UMG Performance Stock Options (PSOs)
During the first half of 2023, PSOs were granted to a senior executive.
The PSOs are subject to a service condition and a market condition. Under the service condition, the options will vest
annually in four substantially equal instalments on each of the first four anniversaries of the grant date, subject to
the senior executive\u2019s continued employment by UMG on those dates. The market condition requires that certain stock
price hurdles be met before the PSOs become exercisable. The stock price hurdles are met as follows: one-third of the
PSOs each becomes exercisable at hurdle prices of \u20ac26.50, \u20ac30.00 and \u20ac38.00, respectively, based on the preceding 30-day
average closing price of UMG N.V. shares. The senior executive must be employed by UMG on the occurrence of the stock
price hurdles. As a result, the PSOs vest at the later of completion of service condition or the stock price hurdle. Awards
will forfeit if the relevant stock price hurdle is not met in the five-year period following the grant date. The PSOs will
be equity-settled.
The PSOs were granted on March 30, 2023 at a total fair value of \u20ac45.9 million ($50 million), the grant date fair value
used for recognising the expense on these awards. In accordance with the PSO terms, the number of options issued was
determined at a later valuation date, April 30, 2023. As of this valuation date, a Monte Carlo simulation was performed to
determine the number of options to be issued so that the per unit fair values summed in total to the grant date fair value.
The valuation exercise simulated the stock price of UMG over the contractual term, taking into account the terms and
conditions on which the options were granted, expected dividend distributions and the historical volatility of UMG. UMG\u2019s
historical volatility was also benchmarked against the long-term volatility of other listed groups considered comparable
to UMG.
The number and weighted average exercise price (WAEP) of, and movements in, share options during 2023 were
as follows:
2023
Number (thousands)
WAEP
Outstanding at 1 January
-
na
Granted during the year
8,625
\u20ac 19.81
Forfeited during the year
-
na
Exercised during the year
-
na
Expired during the year
-
na
Outstanding at 31 December
8,625
\u20ac 19.81
Exercisable at 31 December
-
na
The weighted average remaining contractual life for the share options outstanding as at December 31, 2023 was
4.34 years.
The weighted average fair value of options granted during the year was \u20ac5.3.
The range of exercise prices for options outstanding at the end of the year was \u20ac19.81.
The following table lists additional inputs to the Monte Carlo model used for the PSOs for the 2023 awards granted:
2023
Dividend yield (%)
2.00
Expected volatility (%)
34.60
Risk free interest rate (%)
2.64
Weighted average share price at valuation date (\u20ac)
19.81
The dividend distribution during the lifetime of the option has been estimated based on historical and forecasted data
and is not necessarily indicative of yield patterns that may occur. The expected volatility reflects the assumption that
the historical volatility over a period similar to the life of the options is indicative of future trends, which also may not
necessarily be the actual outcome.
The total expense for these awards recognised in 2023 was \u20ac10 million and the total equity reserve at year end was
\u20ac10 million.
Estimated future tax obligation
An estimate of the amount that UMG expects to transfer to tax authorities to settle the employees\u2019 tax obligations in
relation to all RSU, PSU, PSO and AIP is \u20ac439 million (2022: \u20ac51 million).
All Employee Award
In October 2022, each eligible employee of UMG was granted 100 shares to be vested at the end of one-year service
period. The grant date share price was \u20ac17.25 per share. A total of 0.75 million shares was granted with the majority
vesting in October 2023.
The total expense for these awards recognised in 2023 was \u20ac9 million (2022: \u20ac4 million) and the total equity reserve at
year end was \u20ac0 million (2022: \u20ac4 million).
UMG shares granted upon separation from Vivendi and direct listing on the Euronext Amsterdam
A total of 762,095 UMG shares, constituting a recognition award, were granted and vested to the Executive Vice President,
Chief Financial Officer and President of Operations, Boyd Muir immediately after the UMG\u2019s listing date. These shares
will settle over three years, from which one third was settled in 2021, a further third was settled in 2022 on the first
anniversary of UMG listing and the final third settled in 2023 on the second anniversary of the UMG listing. The grant
date fair value of these shares was estimated at UMG\u2019 share market price as of that date and was \u20ac25.25 per share. UMG
recognised an expense of \u20ac19 million in profit and loss for the year ended December 31, 2021. The awards were fully
vested in 2021 and hence there was no further cost of this award in 2023. The final tranche was settled in 2023. There is a
total equity reserve of \u20ac0 million as at year end 2023 (2022: \u20ac11 million).
Vivendi Share Awards
In 2023, UMG recognised \u20ac0 million expense (2022: \u20ac1 million) relating to legacy Vivendi share based payment plans for
awards granted prior to UMG\u2019s separation from Vivendi. No additional awards will be granted from these plans.
UMG-Vivendi Performance Awards
In 2021, to compensate for any effect of the UMG separation on the Vivendi share price, UMG announced that it will
issue its own shares for every Vivendi share earned by the UMG participants of Vivendi\u2019s performance share plans,
which were granted in 2017 \u2013 2020 while UMG was part of Vivendi. The amount of Vivendi shares (and accordingly UMG
shares in 1-to-1 ratio) estimated to be vested for the 2020 ongoing plan will be further adjusted at the end of the original
performance period of Vivendi\u2019s performance share plans. In relation to this award a total expense of \u20ac0 million was
recognised in 2023 (2022: \u20ac2 million) and total equity reserve of \u20ac2 million (2022: \u20ac15 million) as at year end 2023.
", "dimensions": { "concept": "ifrs-full:DisclosureOfSharebasedPaymentArrangementsExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-378": { "value": "
Note 24. Related parties
UMG\u2019s related parties include the Corporate Executives and non-executive board members
Corporate Executive compensation
As of December 31, 2023, UMG's Corporate Executives are comprised of 9 (2022: 9) members, of which 2 (2022: 2) were
Executive Directors on the UMG N.V. board. The Corporate executives are as defined in the Appendix of the Annual Report.
The Executive directors are also members of the UMG N.V. board. Their aggregate compensation is presented in the
table below.
Year ended December 31, 2023
Other Corporate Executive Corporate
(millions of euros) Executives Directors Executives
Short-term employee benefits
18
29
47
Post-employment benefits
-
-
-
Other long-term benefits
2
-
2
Termination benefits
-
-
-
Share-based payments
70
38
108
Corporate Executives
90
67
157
Year ended December 31, 2022
Other Corporate Executive Corporate
(millions of euros) Executives Directors Executives
Short-term employee benefits
18
50
68
Post-employment benefits
-
-
-
Other long-term benefits
-
-
-
Termination benefits
-
-
-
Share-based payments
33
-
33
Corporate Executives
51
50
101
Refer to the Remuneration Report section in the Annual Report for more detail.
Non-executive board compensation
As of December 31, 2023 UMG's non-executive board received director fees of \u20ac1 million (2022: \u20ac1 million).
Other related-party transactions
Other related parties include:
\u2022 companies fully consolidated by UMG. The transactions between these companies have been eliminated for the
preparation of UMG\u2019s Annual Financial Statements;
\u2022 companies over which UMG exercises a significant influence or has joint control;
\u2022 all companies that are controlled or jointly controlled by Corporate Executives or their close relatives;
\u2022 minority shareholders exercising a significant influence over UMG\u2019s subsidiaries; and
\u2022 all companies that have a significant influence over UMG.
As of December 31, 2023, transactions with Vivendi are still qualified as transactions with related parties under IAS 24.
UMG distributes its cash surpluses to shareowners through dividends and share capital reductions (please refer to
Note 19 ). Vivendi and UMG had previously entered into a transition and services agreement in connection with the
separation, the terms of which Vivendi and its subsidiaries will provide to UMG, and UMG will provide to Vivendi and its
subsidiaries, on an interim, various transitional basis services as applicable, including but not limited to: (i) a limited
selection of treasury related services and applications; (ii) a limited selection of accounting services and accounting
software related services and applications; (iii) taxation related services; and (iv) certain employee related principles in
connection with the direct listing on the Euronext Amsterdam. This transaction and services agreement ceased in the
first half of 2023.
The balances and transactions with the parties described above are summarised in the table below:
December 31, 2023
(millions of euros)
Associates
Shareholders
Other
Total
Statement of Financial Position
Assets
Trade accounts receivable
52
4
1
57
Non-current financial assets
105
-
-
105
Royalty advances
-
-
-
-
Liabilities
Trade accounts payable
-
-
-
-
Statement of Profit or Loss
Revenue
268
8
2
278
Cost of revenues
-
-
-
-
Selling, general and administrative expenses
(2)
(2)
-
(4)
Services billed by Shareholders included in profit and loss
Share-based compensation plans
-
-
-
-
December 31, 2022
(millions of euros)
Associates
Shareholders
Other
Total
Statement of Financial Position
Assets
Trade accounts receivable
49
6
-
55
Non-current financial assets
17
-
-
17
Royalty advances
-
-
25
25
Liabilities
Trade accounts payable
-
1
-
1
Statement of Profit or Loss
Revenue
275
13
-
288
Cost of revenues
-
(4)
-
(4)
Selling, general and administrative expenses
(2)
(3)
(5)
Services billed by Shareholders included in profit and loss
Share-based compensation plans
-
(1)
-
(1)
Note 26. List of consolidated entities The Consolidated financial statements comprise the assets and liabilities of 372 legal entities. Set out below is a list of material subsidiaries, representing more than 75% of UMG's consolidated sales. All the entities are 100% owned.
Legal entity name Principal country of business
Universal Music Group N.V.
Netherlands
Universal Music Group, Inc.
United States
Universal Music Group Holdings, Inc.
United States
UMG Recordings, Inc.
United States
Universal International Music B.V.
Netherlands
Universal Music Entertainment GmbH
Germany
Universal Music LLC
Japan
Universal Music Holdings Ltd.
United Kingdom
Universal Music Group Treasury S.A.S.
France
UMG does not have subsidiaries that have non-controlling interests that are material for its Consolidated financial statements.", "dimensions": { "concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-417": { "value": "Note 24. Related parties UMG\u2019s related parties include the Corporate Executives and non-executive board members Corporate Executive compensation As of December 31, 2023, UMG's Corporate Executives are comprised of 9 (2022: 9) members, of which 2 (2022: 2) were Executive Directors on the UMG N.V. board. The Corporate executives are as defined in the Appendix of the Annual Report. The Executive directors are also members of the UMG N.V. board. Their aggregate compensation is presented in the table below.
Year ended December 31, 2023
Other Corporate Executive Corporate
(millions of euros) Executives Directors Executives
Short-term employee benefits
18
29
47
Post-employment benefits
-
-
-
Other long-term benefits
2
-
2
Termination benefits
-
-
-
Share-based payments
70
38
108
Corporate Executives
90
67
157
Year ended December 31, 2022
Other Corporate Executive Corporate
(millions of euros) Executives Directors Executives
Short-term employee benefits
18
50
68
Post-employment benefits
-
-
-
Other long-term benefits
-
-
-
Termination benefits
-
-
-
Share-based payments
33
-
33
Corporate Executives
51
50
101
Refer to the Remuneration Report section in the Annual Report for more detail. Non-executive board compensation As of December 31, 2023 UMG's non-executive board received director fees of \u20ac1 million (2022: \u20ac1 million). ", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutKeyManagementPersonnelExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-379": { "value": "
Note 25. Litigation
In the normal course of its business, Universal Music Group is subject to various lawsuits, arbitrations and
governmental, administrative or other proceedings (collectively referred to herein as \u201cLegal Proceedings\u201d). However, based
on the information currently available, UMG believes that the outcome from these Legal Proceedings will not have a
material impact on UMG's consolidated results of operations and financial position.
", "dimensions": { "concept": "universalmusicgroupnv:DisclosureOfLitigation", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-439": { "value": "Note 25. Litigation In the normal course of its business, Universal Music Group is subject to various lawsuits, arbitrations and governmental, administrative or other proceedings (collectively referred to herein as \u201cLegal Proceedings\u201d). However, based on the information currently available, UMG believes that the outcome from these Legal Proceedings will not have a material impact on UMG's consolidated results of operations and financial position. Note 28. Audit exemptions UMG has provided guarantees to the following subsidiaries, incorporated in the Netherlands, under the registered number indicated, under section 403 of Book 2 of the Dutch Civil Code. As these companies\u2019 financial data is consolidated within these financial statements, the Dutch entities are allowed to prepare abridged financial statements which are exempt from publication and audit.
Company
Name Number
Universal International Music B.V.
31018439
Universal Music Publishing International B.V.
31037866
Universal Music Publishing B.V.
32101966
CMHL B.V.
32140273
Universal Production Music B.V.
85798479
In addition UMG has provided guarantees to the following subsidiaries, incorporated in Germany, under the registered number indicated, under section 264 paragraph 3 of the German Commercial Code. The financial data for these companies are also consolidated within these financial statements therefore the German entities are allowed to prepare abridged financial statements which are exempt from publication and audit.
Company
Name Number
Arabella Musikverlag GmbH
HRB 110271
Centre Stage Artist Management GmbH
HRB 66733
Deutsche Grammophon Gesellschaft mbH
HRB 138012
Dreiklang-Dreimasken, B\u00fchnen- und Musikverlag Gesellschaft mit beschr\u00e4nkter Haftung
HRB 110736
G. RICORDI & Co. B\u00fchnen- und Musikverlag GmbH
HRB 153334
Musik Edition Discoton, Gesellschaft mit beschr\u00e4nkter Haftung
HRB 110249
Rob. Forberg Musikverlag GmbH
HRB 153343
Rondor Musikverlag G.m.b.H.
HRB 89705
Sheffield Music GmbH
HRB 221164
UNIVERSAL / MCA Music Publishing GmbH
HRB 85574
Universal Music Entertainment GmbH
HRB 86559
Universal Music GmbH
HRB 158632
Universal Music Publishing GmbH
HRB 87411
Universal Production Music GmbH
HRB 113037
", "dimensions": { "concept": "ifrs-full:DisclosureOfContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-418": { "value": "Note 26. List of consolidated entities The Consolidated financial statements comprise the assets and liabilities of 372 legal entities. Set out below is a list of material subsidiaries, representing more than 75% of UMG's consolidated sales. All the entities are 100% owned.
Legal entity name Principal country of business
Universal Music Group N.V.
Netherlands
Universal Music Group, Inc.
United States
Universal Music Group Holdings, Inc.
United States
UMG Recordings, Inc.
United States
Universal International Music B.V.
Netherlands
Universal Music Entertainment GmbH
Germany
Universal Music LLC
Japan
Universal Music Holdings Ltd.
United Kingdom
Universal Music Group Treasury S.A.S.
France
UMG does not have subsidiaries that have non-controlling interests that are material for its Consolidated financial statements.", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInSubsidiariesExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-380": { "value": "
Note 27. Statutory auditors fees
Fees for audit services include the audit of the financial statements of the UMG and its subsidiaries. Fees for other audit
services include review of interim financial statements, sustainability, and other audits. Fees for tax services include tax
compliance and tax advice. Fees for other non-audit services include agreed-upon procedures and advisory services.
Fees for tax and other non-audit services are related to the network outside the Netherlands and are in accordance with
local independence regulation.
Year ended December 31,
(millions of euros)
2023
2022
Ernst & Young Deloitte Ernst & Young
Accountants LLP Accountants B.V. Accountants LLP
Audit of UMG and its subsidiaries
8
4
6
Other statutory services
-
-
-
Tax services
-
-
-
Other non-audit services
-
-
-
Total
8
4
6
1
1 At the 2023 AGM, Ernst & Young Accountants LLP was appointed as the sole external auditor of UMG from 2023 to 2025. Total fees charged by the Dutch organization of
Ernst & Young was \u20ac4 million (2022: \u20ac2 million). Total fees charged by the Dutch organization of Deloitte in 2022 was \u20ac2 million.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAuditorsRemunerationExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-381": { "value": "Note 28. Audit exemptions UMG has provided guarantees to the following subsidiaries, incorporated in the Netherlands, under the registered number indicated, under section 403 of Book 2 of the Dutch Civil Code. As these companies\u2019 financial data is consolidated within these financial statements, the Dutch entities are allowed to prepare abridged financial statements which are exempt from publication and audit.
Company
Name Number
Universal International Music B.V.
31018439
Universal Music Publishing International B.V.
31037866
Universal Music Publishing B.V.
32101966
CMHL B.V.
32140273
Universal Production Music B.V.
85798479
In addition UMG has provided guarantees to the following subsidiaries, incorporated in Germany, under the registered number indicated, under section 264 paragraph 3 of the German Commercial Code. The financial data for these companies are also consolidated within these financial statements therefore the German entities are allowed to prepare abridged financial statements which are exempt from publication and audit.
Company
Name Number
Arabella Musikverlag GmbH
HRB 110271
Centre Stage Artist Management GmbH
HRB 66733
Deutsche Grammophon Gesellschaft mbH
HRB 138012
Dreiklang-Dreimasken, B\u00fchnen- und Musikverlag Gesellschaft mit beschr\u00e4nkter Haftung
HRB 110736
G. RICORDI & Co. B\u00fchnen- und Musikverlag GmbH
HRB 153334
Musik Edition Discoton, Gesellschaft mit beschr\u00e4nkter Haftung
HRB 110249
Rob. Forberg Musikverlag GmbH
HRB 153343
Rondor Musikverlag G.m.b.H.
HRB 89705
Sheffield Music GmbH
HRB 221164
UNIVERSAL / MCA Music Publishing GmbH
HRB 85574
Universal Music Entertainment GmbH
HRB 86559
Universal Music GmbH
HRB 158632
Universal Music Publishing GmbH
HRB 87411
Universal Production Music GmbH
HRB 113037
", "dimensions": { "concept": "universalmusicgroupnv:DisclosureOfAuditExemptions", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-382": { "value": "
Note 29. Subsequent events
In February 2024, UMG announced agreements to invest in Chord Music Partners (\u201cChord\u201d), NTWRK and Mavin Global
(\u201cMavin\u201d). Total cash consideration for these investments will be approximately \u20ac450 million. UMG expects to account for
its investments in Chord and NTWRK as associates using the equity method. UMG expects to account for its investment in
Mavin as a business combination. The NTWRK and Chord transactions closed in March 2024 while the Mavin transaction
remains subject to regulatory approval and is expected to close later in 2024.
", "dimensions": { "concept": "ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory", "language": "en", "entity": "scheme:724500GJBUL3D9TW9Y18", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } } } }