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Introduction Warner Music Group Corp. (the Company ) was formed on November 21, 2003. We are the direct parent of WMG Holdings Corp. ( Holdings ), which is the direct parent of WMG Acquisition Corp. ( Acquisition Corp. ).
10.35% operating margin is respectable but not wide. ROIC at 11.76%. Suggests the business covers its cost of capital, but doesn't point to a wide moat.
Revenue grew 4.4%, steady but not accelerating. Margins contracted 2.5pp, which offsets some of the top-line progress.
Free cash flow declined 16% versus the prior year, cash generation momentum has weakened. ROIC dropped from 14.94% to 11.76%, capital efficiency is deteriorating.
Profitability & Returns
Revenue (TTM)
$7.13B
▲ +4.4% YoY
Net Income (TTM)
$452M
▼ -16.1% YoY
Op. Margin
12.12%
▼ -2.5pp YoY
ROIC
13.77%
▼ -3.2pp YoY
Cash Flow & Balance Sheet
FCF (TTM)
$729M
▼ -15.5% YoY
Op. Cash Flow (TTM)
$843M
▼ -10.1% YoY
Net Debt
$4.20B
Cash & Equiv.
$741M
5Y CAGR: +8.5%
5Y CAGR: +7.4%
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