Cost-cutting sees EMI earnings rise
EMI Music today said earnings more than trebled after slashing costs and launching new releases from the likes of Lily Allen and Coldplay.
The group posted underlying earnings of £163m (€182.8m) for the year to the end of March - its first full year under the ownership of Guy Hands' private equity group Terra Firma.
EMI, which also counts artists including Katy Perry and Robbie Williams, has seen its overheads cut heavily after Terra Firma launched a "revolutionary" overhaul in the wake of its £3.2bn (€3.5bn) takeover in 2007.
Terra Firma led a boardroom clear out and axed a third of EMI's workforce under a pledge to save £200m (€224.3m) a year.
Its swingeing cost cutting and ruthless private-equity approach is thought to have sparked a near-revolt among artists amid reports Terra Firma had launched a clamp down on excessive business lunches and told artists to work harder.
However, EMI today sought to reassure its plan was bearing fruit, confirming it was still "firmly on track" to save £200m (€224.3m), while it said moves to offset the impact of digital downloading had paid off, with turnover from non-physical formats now accounting for more than 35% of group income.
However, total sales, up 4% to £1.07bn (€1.2bn), were largely boosted by the weak pound and EMI admitted that with currency movement stripped out, its performance lagged behind the wider market, down 10%.
Market share dipped to 9.5% from 9.7% the previous year, although EMI said it boosted its position in the US.
The group did not provide any bottom line figures or details on debt levels.
Elio Leoni-Sceti - hired by Terra Firma last year as the new chief executive of EMI's recorded music division - said the group could not afford to be "complacent".
"There is still a great deal of work to be done to restore EMI to its former greatness," he added.
The group secured a number of top sellers in the past year, including Coldplay's 'Viva La Vida' album, which it claimed was the most successful album globally in 2008.
It has a line-up of new releases for the year ahead, including new albums from Kylie Minogue, Gorillaz and Robbie Williams, as well as a digitally re-mastered release of the Beatles back catalogue scheduled for September.
