Paris-headquartered music company Believe has published its financial results for the first half of 2024 (the six months ending June 30).
Believe, which trades on the Paris Euronext, generated revenues of EUR €474.1 million (approx. USD $510m) in H1 across its entire business.
According to Believe‘s filing, issued on Thursday (August 1), the company’s H1 revenues grew by €58.7 million, from €415.4 million in H1 2023, reflecting an increase of 14.1% YoY.
On an organic/constant currency basis, Believe’s revenues grew 12.3% YoY, which includes what it reported were “currency headwinds embedded” in its Premium Solutions division’s digital sales.
Adjusted organic growth amounted to 15.4% YoY in H1 2024.
Believe reported on Thursday that its “paid streaming trends were solid” in the first half of the year “and still enhanced by price increases by several large digital platforms in Q4 [2023]”. It added, however, that “ad-funded streaming monetization remained weak, notably in Asia”.
Believe breaks down its global operations into two divisions:
- (i) DIY distributor TuneCore (referred to as ‘Automated Solutions’ in its results); as well as
- (ii) The performance of its core premium label and artist services operation (referred to as ‘Premium Solutions’)
The company’s ‘Premium Solutions’ revenues grew 13.5% YoY – from €388.5 million in H1 2023 – to €440.9 million in H1 2024. On an organic basis, ‘Premium Solutions’ revenues grew 11.7% YoY.
Believe reports that its paid streaming trends “remained solid” throughout H1, while ad-funded streaming activities “remained subdued notably in Asia and did not recover at the end of Q2 [2024] as initially anticipated by the Group”.
Meanwhile, according to the company’s latest financial results, in H1 2024 its Automated Solutions division’s revenues grew 23.4% YoY to €33.2 million. On an organic basis, Automated Solutions revenues grew 20.5% YoY.
Believe also breaks down its revenues geographically and reported strong growth in the Americas and Europe.
The company saw 24.7% YoY revenue growth in Europe (excluding France and Germany), generating €152 million in the region in the first half of the year. Europe represented 32.1% of Believe’s total revenues in H1.
The company said that it recorded strong growth across Eastern Europe and in Spain, while its “activity remained solid in Italy” and “revenues in Turkey significantly increased” in H1.
Believe said that its performance in the UK “was penalized” by the reallocation of Sentric‘s revenues to the US in Q2 2024, which “therefore hampered the comparison basis with Q2 2023 as all Sentric revenues were then allocated in this market”.
The company explained in its filing: “Sentric revenues are now split by region thanks to greater integration in the Group’s systems, while they were previously accounted for in Europe excl. France and Germany. This was completed in Q2 [2024] and most of revenues were reallocated to the US.”
Believe acquired $51 million-valued Sentric from Utopia Music in March 2023.
Elsewhere in the world, Believe’s revenues in the Americas grew by 21.8% YoY to €73.9 million and represented 15.6% of the company’s total revenues in H1 2024.
Believe noted that the level of its business activity was strong in Mexico, while Brazil “recorded a slowdown” in its revenue growth.
In France, Believe’s revenues grew 17.9% YoY to €78.4 million in H1 2024 and accounted for 16.5% of the wider company’s revenues.
In Asia Pacific and Africa, revenues grew 3.7% YoY to €116.3 million which represented 24.5% of the company’s revenues in H1. According to Believe’s filing, the company experienced a “slow start to the year as a result of the weaker ad-funded streaming market”, but that it returned to revenue growth in Q2.
Believe said that its performance in Greater China and Japan was “strong throughout [H1]”. Elsewhere in the region, Believe said that its revenues “were up slightly in India and down in several Southeast Asian markets, as the two regions are more dependent on ad-funded streaming”.
Finally, in Germany, revenues were down 1.2% YoY in H1 to €53.5 million and accounted for 11.3% of the company’s revenues. In Germany, Believe said that its “digital sales were slightly up” in Q1 2024 and “further progressed” in Q2.
It added, however, that non-digital sales “continued to decline” in the market in H1 “on the back of Believe’s proactive decision to accelerate its exit from contracts that were too heavily reliant on physical sales and merchandising”.
“Despite persistent market headwinds in some of our key territories, Believe continued to generate solid profitable growth during the semester.”
Denis Ladegaillerie, Believe
Elsewhere at Believe, the company reported an Adjusted EBITDA of €31.3 million, up 29.3% YoY, or a margin of 6.6%, up +80bps YoY.
The company’s net cash at the end of June 2024 was €183.6 million.
Other highlights noted by the company for the first half of the year included the simplified public tender offer initiated by Upbeat Bidco, the consortium formed by funds managed by TCV, EQT X and Denis Ladegaillerie, which was completed in June.
According to Believe, at the time of its earnings release after the market closed today, the consortium held 96.02% of Believe’s share capital.
Believe also announced that going forward, it will only publish interim and full-year results and no longer release quarterly revenue results.
Denis Ladegaillerie, Founder and CEO of Believe, said: “Despite persistent market headwinds in some of our key territories, Believe continued to generate solid profitable growth during the semester.
“We pursued our strategic roadmap to build the best artist development company in the music industry, while finalizing the restructuring of our capital structure providing us with greater financial flexibility and partners who can accelerate our profitable growth story.
“Believe is in good stead for the next phase of growth and industry consolidation.”
Looking towards the second half of 2024, Believe said that “paid streaming increase continues to be very resilient, but will not be uplifted by significant price increases in the second half of the year”.
It added: “Ad-funded streaming growth is assumed to remain stable in H2 [2024] versus H1 [2024].
“While Believe expects to continue to gain market share in H2’24, it is unlikely to be able to fully mitigate the effect of the slightly softer than expected market growth outlook in H2 [2024] (driven by weaker ad-funded and no additional DSP price increases.”Music Business Worldwide