环球音乐集团：魔瓶已开

Christophe Cherblanc+41 582 723 540christophe.cherblanc@bernsteinsg.com Universal Music Group Annick Maas+44 20 7676 6683annick.maas@bernsteinsg.com RatingOutperform Christopher Pancur+44 20 7676 7280christopher.pancur@bernsteinsg.com Price Target Specialist Sales 29.00 EUR UMG.NA Kiran Shah+44 20 3547 1533kiran.shah@bernsteinsg.com UMG: The genie is out of the bottle UMG shareholders should thank Pershing Square for its wake-up call. They now sit in acomfortable position for the next few months: either PS plan does get through after a Boardapproval and a two-thirds majority shareholders vote, or is turned down (the definitivepositions of Bollore and CEO Sir Lucian Grainge remain unknown at this stage). In the latterscenario we would expect corrective action by the board and the company, addressing at leastsome of the pain points called out by Pershing Square. We identify UMG as a 2Q Best Idea:we see low downside and still a >50% upside to our €29 fair value, based on our unchangedview : UMG is a 7% top-line & 10% bottom line growth company, with low annual volatility andcyclical exposure. Investment Implications What to make of Pershing Square proposals?PS 7 April call detailed the argumentslaid out in its Action Plan. In this report we examine in depth the issues highlighted by PS,including the Bollore overhang, listing venue, the capital allocation framework, monetizationof peripheral assets, and explicit per share objectives. We agree with the need to betterexplain capital allocation and the downside/upside on advances and catalogs acquisitions,but are more conservative on operating leverage (hence Bernstein growth algo being slightlyless aggressive than Pershing Square) and are mixed on the need for more disclosure (fine inprinciple, but with potential counterproductive effects given the quarterly volatility integralto Music). Ultimately, we fully agree on the scope for a multiple re-rating and stress thatthe focus on capital allocation and related issues largely reflects the welcome absence offundamental problems. See details within report Whether there is a need for a merger to implement these measures is now openfor debate: that is fine for shareholders.We argued in our 7 April report that PershingSquare was a welcome wake-up call, but that its proposals could be achieved in the currentstructure. This may be a moot point as the risk/reward to shareholders is compelling: eitherthe plan does get through after a Board approval and a two-thirds majority shareholdersvote, or is turned down (the definitive position of Bollore and CEO Sir Lucian Grainge remainunknown at this stage). In the latter scenario we would expect corrective action by the boardand the company, addressing the pain points identified by Pershing Square. We stress PSwould also be a “winner” in the latter scenario, vindicating its aggressive approach. DETAILS Recent reports: 7 Apr 2026 - UMG: Pershing Square is a welcome wake-up call, but proposals can be achieved in the current structure6 Mar 2026 - UMG : Underwhelming FY25 operating leverage and cash conversion...but improving industry backdrop in 202628 Nov 2025 - Week End Media Blast: Why my Associate does not know Earth, Wind & Fire...but likes France Gall5 Nov 2025 - The Long View: Challenging AI concerns - Trust and ROI beat "wow" effect30 Oct 2025 - UMG 3Q25: Delivering the goods - Accelerating on AI & IP protection31 Jul 2025 - UMG: Zooming out from the quarterly volatility integral to the Music industry22 Jul 2025 - Quick Take: UMG - Towards a potential US listing18 Jun 2025 - Universal Music Group (UMG): Operating in a sweet spot is great — Graduating into a best-in-class status is even better EXHIBIT 1:What to make of the issues identified by Pershing Square? Source: Pershing Square UNCERTAINTY CONCERNING BOLLORÉ GROUP’S 18% STAKE IN THE COMPANY Pershing Square comment is fair as the issue has been consistently raised in discussions with investors. Pershing Square priorintent to monetize its stake also created an overhang, but that will be addressed by PS indicating it will effectively increase itsposition at a €22 per share value. Bollore has meanwhile behaved Bollore-like, ie has never disclosed its precise intents. At the time of leaving UMG board inJuly 2025, Cyrille Bollore indeed indicated that Bollore was seeking flexibility and could “decrease” or “increase” its stakedepending on circumstances. The company has understandably never disclosed potential exits /entry points (we note Bolloredid buy shares in Summer 2024 when the stock fell to the low 20s), and we surmise its decisions will be driven by valuations and potential reinvestment opportunities. Lack of the latter was mentioned when Bollore announced on 17 March a €4.2bnspecial dividend (still leaving a >€1bn net cash position): Combined with UMG depressed share price this suggests the Bolloreoverhang “risk” was and remains extremely low at current levels. Cynics would observe that the over