EMI Has Highest Cash-Flow Margin in the Industry

Despite Standalone Status, EMI Has Highest Cash-Flow Margin in the Industry


"Always the bridesmaid, never the bride" is a phrase that’s been used to describe EMI Group, in light of three separate failed merger attempts. Yet despite its standalone status, the company is more profitable than any of its major label competitors, Chairman Eric Nicoli said at this week’s UBS media confab. According to The Hollywood Reporter, EMI’s cash-flow margin for the most recent 12-month period is at 14.6 percent – the same as industry leading Universal Music Group. And that, says Nicoli, "demonstrates our ability to flourish as a standalone company."
It was Nicoli’s first presentation since EMI lost out to an investor group lead by Edgar Bronfman Jr. to purchase Warner Music Group. Such an acquisition "would have enabled us to move faster along our chosen strategic path," Nicoli said. However he characterized the acquisition as "undoubtedly desirable" but "not imperative for EMI." Later, in an interview, Nicoli suggested that Bronfman’s purchase of WMG would have a positive impact on EMI. "The multiple paid for Warner certainly suggests that the value of EMI’s standalone music company may be somewhat higher than the current public market value," he said. The way Nicoli sees it, the fact that investors paid $2.6 billion for WMG is "a sign, perhaps, that we’re not alone in believing in the future of the music industry and the prospects for EMI."