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Despite the COVID-19 pandemic, the company says it just had its best first half since launching in 2008.

The pandemic-causing economic downturn didn’t slow down BMG as the music company posted a 4.8% increase in revenue to €282 million euros ($310.8 million) at the mid-year point ended June 30, up from €269 million ($303.9 million) in the year-earlier period.

The music operation of German conglomerate Bertelsmann also managed to hold its own in terms of profit, posting €49 million in earnings before interest, taxes, depreciation and amortization, the same amount it had in the first half of 2019. But with profit levels holding steady while revenue grew, that resulted in EBITDA margin falling to 17.3% from 18.1% in the prior half year results.

The results represent the company’s “best first-half result since it was founded in 2008,” according to a BMG statement. “It came despite the forced closure of 19 offices worldwide due to the pandemic.

BMG CEO Hartwig Masuch added in a statement “To deliver a record result in the midst of a pandemic is a remarkable achievement. It is a testament to our artist-centric business model, but also to our 926-strong team worldwide who went to extraordinary lengths to maintain service to our artist and songwriter clients.”

The company said that the growth of digital helped it to outpace the downturn, with digital now accounting for 59% of revenue, up from 56% in the first half of 2019.

That means digital revenue grew to €165.2 million ($182 million), up from €150.1 million ($169.5 million). Within that recorded music streaming grew 26%, but the company didn’t break out revenue numbers.

“Thanks to dynamic growth in music streaming, further facilitated by the company’s broad and highly digital setup, any lost revenues due to postponed releases or disruptions of physical distribution were more than compensated for,” according to the company’s mid-year report.

However, the pandemic did have an impact on Bertelsmann’s overall operations as the parent reported €488 million ($537.8 million) in net income on revenues of €7.85 billion ($8.65 billion), versus the year-earlier corresponding six month period in 2019 when the company posted €502 million in net income ($567.1 million) on revenues of €8.6 billion ($9.73 billion). That represents an 8.9% drop in revenue and a 2.8% decrease in net income.

Getting back to BMG, the company reported that Germany comprised 13.9% of revenue, France, 6.1%, the U.K. 11.8% and Europe as a whole 42.1% while the U.S. contributed 49.6% of revenue and other countries, 8.2%.

The company said that its recorded music business, which Billboard estimates is roughly a third of volume, enjoyed successes from releases by KSI, hip-hop duo Run The Jewels, reggae singer Conkarah, and newcomer Curtis Waters, while new signings included Aloe Blacc, Jason Mraz, Run The Jewels and CHAII.

Meanwhile, the company’s music publishing operations — about two-thirds of BMG volume — enjoyed strong performances from Lewis Capaldi, the rock band Blossoms, the rappers Ufo361 and NAV, as well as Tame Impala from Australia, according to the company’s report.

BMG reported that during the first half of the year, the company signed global deals with Dark Horse Records, the label owned by the George Harrison estate; and Britain’s ITV studios, while launching Renew Records, focusing on Americana music; The company also expanded into Canada’s production music sector, signing a cooperation agreement with MatchTune, the music-to-video platform; and increased its range of artist services by moving into the neighboring rights business.

This story uses a currency translation of €1 euro to $1.102 dollars for 2020 and €1 euro to $1.1297 dollars for 2019, the average currency exchange experienced and reported by Bertelsmann.

https://www.billboard.com/articles/business/9443349/bmg-earnings-2020-first-half-revenue-profit-up-pandemic/

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