Pershing Square Activist Presentation Deck
Universal Music Group: Investment Thesis
UMG is a high-quality business with a decades-long runway for
revenue and earnings growth
Attractive business model
Capital-light, rapidly growing royalty on greater global consumption and
monetization of music
UNIVERSAL
UNIVERSAL MUSIC GROUP
Double-digit revenue growth outlook
Massive addressable market, strong customer value proposition, and
dominant market position
Global consumer adoption of streaming creates long runway of predictable,
recurring revenue growth
High rate of revenue growth should drive significant margin expansion
Large fixed-cost base creates significant operating leverage
UMG guiding to "mid-twenties" EBITDA margin in the mid-term (vs. ~21% today)
Capital structure and capital allocation not yet optimized
UMG's current valuation represents a significant discount to intrinsic value and does not reflect
the company's attractive business characteristics and runway for sustained earnings growth
Source: Company filings.
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