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2、s does and seeks to do business with issuers covered in its research reports.As a result,investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.Investors should consider this report as only a single factor in making their investment d

3、ecision.Refer to important disclosures on page 8 to 10.Analyst Certification on page 6.Price Objective Basis/Risk on page 6.12875279 Universal Music Group Three lessons we learnt from looking at 1H25 market data Maintain Rating:UNDERPERFORM|PO:23.00 EUR|Price:24.94 EUR Maintain Underperform,PO 23 We

4、 see three main lessons from the data published by several local recorded music trade bodies(US,Japan,Germany,France,Italy,Spain).(1)Subscription is resilient and US volumes have picked up.More negatively,markets with lower subscription penetration are already exhibiting signs of maturity.(2)Ad-supp

5、orted and video streaming challenges continue apace.(3)UMG outperformed the market in 1H25,but possibly due to non-recurring factors.We maintain our Underperform given unattractive risk/reward as shares trade on 2.5%FCF yield,versus high quality Media compounders on 3.5-5%.#1 US volumes picking up,b

6、ut slowdown elsewhere Subscription streaming is both the biggest(50%)and fastest revenue contributor in absolute in all markets in 1H25,except in Japan.For the US specifically,we are encouraged to see subscription volumes growth of 6%YoY and 5%vs YE24,recovering from a softer 2024,potentially reflec